Frank Ehrhardt is a broker associate with John R Wood Properties | Christie's International, the #1 luxury real estate company in Southwest Florida! Frank specializes in luxury waterfront properties in Cape Coral, Fort Myers, Sanibel, Captiva, Fort Myers Beach and Pine Island. Contact Frank today at 239-896-3437 for any of your SW Florida real estate needs or email him at FEhrhardt@JohnRWood.com.
Since you posted this video a few days ago, Frank, the real estate landscape has changed dramatically. First, we had the dismal March inflation report. Here we are in what is usually the best selling season of the year, and it appears the Feds most likely won't lower interest rates anytime soon. They may even have to raise interest rates. In addition, this is a major psychological blow to buyers, and we know how significantly perception factors into residential real estate. In response to the inflation report, the stock market has tanked the past few days sucking potential down payment money out of people. I believe we are headed to the bottom and unfortunately, the bottom is a long way off. I see a recession and double digit inflation on the horizon, triggered by all the reckless government spending. Frank, how much has this inflation report changed your views compared to this video you recorded a few days ago? Will sellers finally wake up to reality and start dropping their prices so their listings can sell? Or will inventory levels continue to skyrocket to all-time highs?
Frank, please correct me if I am wrong. The stats regarding numbers of days to sell a house as well as how much a house sells for in regards to list price are worthless. They are worthless because when a house doesn't sell, is pulled off the market, then is relisted again and then sells... the stats don't reflect the first time a house is sold. What I am saying is.. a house is listed for say $200k, doesn't sell for 90 days and is pulled off the market. It is then relisted for $180k and sells for $180k in 10 days. The stats that real estate agents report on this transaction would be that it sold for 100% of listed price and sold in 10 days, rather than reality. In reality, this house sold for 90% of what it was listed for and took 100 days to sell.
A home in our mls has to be off market for at least 30 days to reset the days on market counters. If a listing is ok for 90 days, then relisted the next day, the original listing days would remain with the listing. If the seller waited for 30 days, then the counters would reset to zero.
@@frankehrhardtrealestatebro2941 thanks for the clarification, Frank. That would be an interesting stat to know how many properties are listed, pulled for a month or two or more then relisted. It would be particularly interesting to compare how many times that is happening now compared to prior years.
Insurance costs will be an ongoing issue. The newer the home, the more up to date with current codes and less expensive to insure as a general rule. I'm encouraging all buyers during their inspection period to obtain insurance quotes so that there are no surprises later. We are seeing more carriers enter the state of Florida and Frontline is again writing policies here. Flood insurance will remain expensive.
Frank, I again enjoyed your video. When my wife and I retire and relocate to Florida, we will definitely give you a call. I don't know if you will want to work with us, though. It appears you work with the high rollers, we're just middle classers. I agree with much of what you said, but I think there's storm clouds on the horizon that you haven't considered. Have you looked at what is going on with commercial real estate? All those remote workers that relocated helped Florida residential real estate tremendously. However, remote work has killed the commercial real estate market. The percentage of commercial real estate that is vacant is the highest since The Great Recession and will continue to worsen as leases come up for renewal and companies don't renew. This is going to cause two outcomes, both will be hits to the Florida residential real estate market. Firstly, commercial real estate default is going to create major problems with the banks. This is going to make interest rates rise and will also create a trickle down effect into the residential real estate market. Secondly, many companies are reversing their remote work policy. Remote work is predicted to contract by 8% in the next two years. This is gong to impact all those people that moved to Florida cause they were able to work remote. It will also in effect will mean less jobs in Florida and cause people to migrate to where the jobs are located. Because you work at the high end of the real estate market, I don't think you have the same pulse on the middle and lower end, Frank. In addition to higher insurance, assessments and higher HOAs since Ian are killing the retirees and lower income home owners and prospective home owners. An extra $500 a month is no big deal for the high rollers. It cripples the middle and lower income folks. Lets again look at Seven Lakes.. Less than 6 weeks ago when you did your last video, I mentioned that the Seven Lakes retirement community had 31 condos for sale. You cited the pre-covid level of inventory as 40, so no worries. Frank, there are now 48 condos for sale at Seven Lakes, according to their website!! There was actually 51 yesterday, not sure if the drop to 48 is due to sales or sellers dropping off so they can relist as a "hot new listing" and a re-packaged marketing strategy. Over a 50% inventory increase in less than 6 weeks!! Frank, take a trip out of the swanky neighborhoods you hang out in and see what is going on with the working folk and retirees!! On another youtube video the analyst said that the only thing the southwest Florida market needs for collapse is more inventory. This analysis makes the most sense. Month by month, inventory is growing and prices will inevitably crater. Supply and demand. You appeared more grim in this video compared to last. I thought it was noteworthy that your concession analysis was, "well, at least it won't be as bad as 2008." Maybe not, but anywhere close is a scary thought. The real estate market is always propped up by a false narrative. Every article that I read in the mainstream media is written by an individual who is a so-called "expert in real estate." Translation: their entire livelihood is centered on the real estate market being good. So it is in their best interest to spin real estate news into a positive. Sooner or later, however, reality overcomes spin. We aren't there yet, but are well on our way. Look out below!
3 days later, now 5 more listings - 46 active listings now at Seven Lakes, according to the Seven Lakes website! As inventory is building in southwest Florida, the prices will crash. That is economics 101/supply and demand. If the economy tanks, then we are headed back to 2008.
A month ago there was 30 listings at Seven Lakes according to realtor.com Today there are 41. The HOAs have gone up it appears $200 to $350 a month and there's assessments, both due to Ian. Prices are cratering, one unit sold $45,000 less than the originaI $220k asking price! I predict by late summer there will be 75 listings and prices will drop an average of 15% compared to what they are now. This same scenario is probably taking place at many condos in southwest Florida, particularly retirement homes.
The mixer, is actually a pump, the purpose of which is to pump the concrete up and into the forms for the tie beam. However, the Florida code also allows for a block called a (bond beam ) block to be used in lieu of a formed tie beam as shown in the video. I would personally prefer the formed tie beam, especially where large openings like garage doors are involved. But a combination of both methods can also be used.
Condo inventory is soaring in Fort Myers. For example, Seven Lakes had 1-3 available listing at this time last year. There's now THIRTY condos listed for sale in Seven Lakes as I type this post. There's only one that was just listed that indicated damage to the roof from the hurricane. The other 29 are all in great shape and ready for new owners. Unfortunately, there aren't many new owners. The inventory just keep building. Real estate agents always paint rosy pictures. Frank, I'm sorry, I disagree with you. Sale prices always comes down due to supply and demand. Condo inventory in Fort Myers is soaring at a dramatic pace. Prices WILL come down significantly as this year progresses. That's Economics 101. Wait until the panic sets in come the spring when the snowbirds leave.
Hi Roadway - thanks for sharing your thoughts on the current market. Let's take a look at Seven Lakes. You're correct, there are currently 31 listings available and last year, at the end of January, there were only 17 listings available, so nearly doubled. However, last year was when listings were flying off the shelf and sitting only days on the market - the best seller's market in the 12 years I've been in Florida! If we look at 2019, the last "normal" year we had (pre Covid), there were 41 units available in Seven Lakes in January '19. Still below where current inventory sits. With the absorption rate, there is currently a 6 month supply of inventory in Seven Lakes - a more neutral market, but moving towards a buyer's market. Prices in Seven Lakes remain up about 25% from a year ago, down about 25% from the peak in Spring 2022. There's no sense of urgency from buyer's at the moment as they watch interest rates rise and time on market increasing. Having said that, we had an open house for a 4/2 pool home at sub $500k last weekend that had 28 sets of people through. Buyers are out there watching the market carefully. The influx of people into Florida far outweighs people leaving the state. It's almost a stalemate - we'll see which side blinks first! I anticipate a slower spring/summer, but the buyers that have been waiting on the sideline will not want to spend another year in the cold and the rental market prices here certainly are conducive to buy versus rent. if they see any movement down, I think many will jump back into the market. Frank
Hi Frank, thank you for the response. I read yesterday where last month was the biggest drop in home value since 2008. This thing is now hemorrhaging and we're at the beginning of the death cycle, not the end. I was off when I pointed out January as having 1-3 listings at Seven Lakes. Please check February thru December. There was a period of months where it was 1-3 listings available, they were selling so fast. It may have been mid-year. I was looking at the Seven Lakes website, not your MLS numbers. So perhaps that skews.There was low 20s a couple months ago, now 31. Looking at the listing prices, owners are seeing their equity slowly slip away. You can smell the fear. Retired people don't want to ride out the downturn and then ride it back up and sell in 10 years. They may be long dead. They are a what is happening today crowd, not tomorrow. They aren't going back to work to recoup $100K in lost equity. We're not far into this significant downturn explosion, but the circuit breakers are on. The trend line is not good. JP Morgan Chase, Goldman Sachs, Bank of America, and many others are showing home mortgage loan personnel the door en masse. You can tell by the depth of the cuts, the are expecting the worst and it is going to be a protracted downturn. We had a huge influx of people that moved to Florida during Covid fueling the wild upsurge in home values. I read an intuitive article a couple years ago that talked about people that move to Florida. The article detailed that yes, many people move to Florida. But the dirty little secret is that many move back to wherever they came from, typically in the 2-3 year time frame after they arrived. More properties will be hitting the market as they leave and there will be less buyers. Covid is over. Stimulus money is long spent. The reasons are many that those who move to Florida leave; homesickness, hating the Florida heat, a death in the family, and a hurricane. People that are in their 80s that may feel they have another good 3-5 years of life don't want to fight the fight in an area that was bombed out by a hurricane. They want to live the good life and move elsewhere to get it now, not 3-5 years down the road when things return to normal. I wish I shared the real estate agent type enthusiasm, but I'm seeing writing on the wall in indelible ink. I always get a chuckle, no matter what happens, agents always say it is a great time to buy or sell. If Florida floated into the Atlantic ocean, agents would tell us it is wonderful since houseboats are a lot more practical than houses or condos anyways, and everybody that buys a houseboat will have an oceanfront view!
I’m curious as to how no one expected Ian to be this bad. I heard the media reporting that this was a Cat 4 hurricane a day or two before it made land fall.
Hi Randy - I'm going to go into this more in a future video, but I strongly believe that we've heard so many times about storm surge potentially happening and storms getting stronger that we became desensitized to it. For Irma, we were told 15' storm surge for anyone west of 41. Sadly, this time it actually occurred. When we evacuated Tuesday at midnight, we were one of the few cars on the road. When we left for Irma, it was bumper to bumper from CC to Georgia. Took us 12+ hours to get to the FL/GA border.
