In Recovery And In Demand
The area that is now known as Lehigh Acres was once just cattle land. Chicago businessman, Lee Ratner, was seeking a tax shelter after selling his profitable pest control business. Not wanting to shell out most of his profits due to capital gains, he purchased 18,000 acres of land in eastern Lee County Florida after determining that ranching was a solid investment. He named it Lucky Lee Ranch.
Since those days, the boundaries of Lehigh Acres now covers over 60,000 acres, including the former runways of Buckingham Army Airfield (a major army air force training base closed at the end of World War II). What used to be pastureland where Ratner’s cattle once grazed and the old airfield used to be has been divided into 152,000 lots (0.25 acre to 0.50 acre lots) for housing stretching along over eleven thousand miles of roads. Did you know that in 1997 nearly 90% of Lehigh Acres lots remained vacant?
Housing Boom, Bust, and In Recovery
New construction surged in Lehigh Acres due to rising housing prices. The peak was from 2003 to 2007, with more than 7,500 new homes constructed in 2006. The number of homes built during this period exceeded the total number of homes constructed during the preceding 50 years according to a New York Times article from February 2009.
Then the great real estate boom, as across much of the country, went bust. In late 2005, median home prices in the Ft. Myers area peaked at $322,300. Then, just three years later, the price plummeted to $106,900 in May of 2088. Our area became reliant on construction jobs. With these no longer available, it pushed the unemployment rate in Lehigh Acres and Fort Myers to 14% by the summer of 2009. Property values in Lehigh Acres dropped 25% in 2008, and another 50% in 2009. Now, in August 2012, we see the Ft. Myers area Median List Price is $130,000 and the Median Sales Price is $129,900 with a List/Sales Price at 99%. [Click to see MLS Median List-Sales Price pdf]. Just one year ago in August 2011, the Median List Price was $99,900 and the Median Sales Price was $99,000 with a List/Sales Price percentage at 94%. The List Price as compared to Sales Price tells us that sellers are getting closer to asking price than they were just a year ago.
Median Home or Sales Price Explanation
Often people ask me what the term “median home or sales price” means. The Median Sales Price is the half-way point between the numbers of properties sold in a month. The median home price can be quite different depending on what sample group of homes we are comparing so don’t confuse the term and think that it means the same thing as the “average” home price! If we are comparing homes in a particular area where the homes are very evenly distributed, the mathematical result and “average” price might be very close. However, if the homes sold were more to one end or the other of a price spectrum, then the median price and the average price could be very different. If you go to one of the free sites like Zillow, Trulia, or Movoto, they consider their charts “Average/Median List Price” and “Average/Median Sales Price” as if the “average” and “median” statistics are always the same. This is why their numbers can at times vary widely and not match our MLS Statistics. Download and compare the above MLS Median List-Sales Price pdf to this representation by Zillow. See the differences? Sometimes the data is off by tens of thousands of dollars. Trust the MLS! [Click here to see Zillow Median Home Price pdf].
To help clarify, it is better to compare average List Price to average Sales Price, and Median List Price to Median Sales Price. If the area of homes has extreme values, it can skew an average. So to see what’s going on in a particular market, it helps to throw out the extreme numbers in order to reach a more meaningful number.
Example: Five homes in a neighborhood sold for $180,000, $220,000, $275,000, $290,000 and $800,000. The average is $353,000, but would this really be indicative of the price of homes in the neighborhood? Of course not. But if we throw out the $800,000 extreme case, the average price is $241,250 — almost a $112,000 difference! Obviously, $241,250 is a better indicator. Also, percentage changes in the average and median over a period of time show trends.
Statistics can be very useful but are often misunderstood or could be misleading. Not all real estate professionals have a clear understanding of how to use and interpret statistics — this is not a part of our training — but if they know their neighborhoods, they can give good advice on the market value of a home. A good question to ask your real estate professional is, “How do you determine market value?”
Lehigh Acres statistics show us that we now have a population of 86,784, that’s a population increase of 159.6% in the past ten years (according to the US Census Bureau statistics for 2010), that the number of active listings in Lehigh Acres dropped by 9.2% from the previous month (July). The median number of days active properties have been listed is 55. This is significantly shorter than the national average. The number of sales increased by 178.6% from the previous month. What does this really mean for our market? We have a decrease in inventory with high demand (so we are in a seller’s market) and we need more listings! Sellers are happy having a very short time on the market before they sell and home prices are going up.
If you would like a free Comparative Market Analysis to see what your home might sell for or are thinking about listing your home for sale, contact me. We need more listings!