Lee County Median Home Price on the Rise!

It’s a very positive sign, but I wouldn't start celebrating just yet. The median price of an existing home sold in Lee County climbed 11% to $101,900 in March from February’s $91,500.  The word from the experts say decreasing foreclosures and an upswing in higher-end home sales are responsible. Sales stats released by the Naples Area Board of Realtors indicate the median price for March was $170,000 which is down from $190,000 in March 2010. In a separate report, the National Association of Realtors said investors were responsible for driving up U.S. home sales last month, putting down cash to grab cheap homes at risk of foreclosure. But purchases made by first-time buyers, crucial to a housing recovery, fell. Lee’s median price drew cautious optimism from chief economist of Metrostudy, which tracks subdivision sales in markets throughout Florida. I think that this is somewhat encouraging, but I’m always quick to add that median prices are not always what they seem and very hard to interpret. More sales of newer homes in nicer neighborhoods are a part of the mix. That doesn’t necessarily mean that everybody’s home value rose in that period. Demand particularly in Cape Coral was good in March for more expensive homes with several over a million dollars sold in Cape Coral. Another factor is the continuing fall in the number of mainly low-end houses put back for sale by lenders that took them back in foreclosure. Clarus MarketMetrics report shows that 52.4% of homes sold in March were owned by banks compared with 56.3% in February. In addition, with fewer low-end foreclosures to buy, competition is strong and prices for those properties have risen. Clarus shows a median price for a bank-owned sales in March was $70,000, which is up from $66,636 in February. Most are asking, "Will the trend continue?" The real question is when the banks finally get their arms around the mortgage foreclosure mess along with their paperwork issues, will there be a wave of foreclosures or a steady stream over time? I don't have a crystal ball, but my personal opinion is we will continue to see a steady stream. As the prices of existing homes continue to rise, it will be easier for new construction to compete. There were 219 new housing starts in the first quarter of 2011 in large subdivisions, compared with 178 the previous quarter. In the national market, the median sales price rose in March to $159,600 from February, but it is down 5.9% from a year earlier. Foreclosures or short sale rose to 40% of all home purchases and cash sales accounted for 35% of all sales. Most of these purchases are being made by investors who target cheap properties in areas hit hard by foreclosures.