Cape Coral Real Estate Blog

Four new bachelor's degrees are on the horizon at Edison State College as it continues transitioning into a four-year institution.

The Pending Home Sales Index, which measures the number of sales contracts signed each month, fell 7.7% to 80.4 from a downwardly revised reading of 87.1 in December. That's the lowest level since tracking began in 2001.

A consensus estimate of analysts polled by Briefing.com predicted a decline of 3.5% to 84.2.

The index is 6.4% below January 2008, when it stood at 85.9.

"Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales," said Lawrence Yun, NAR chief economist, in the report.

Usually a one- to two-month lag exists between a contract and a completed deal. January's pending home sales are likely to be finished in the coming weeks.

The number of contracts signed in January rose more than 2% in the West, but it fell in all other regions: almost 13% in the Northeast, nearly 12% in the South, and more than 9% in the Midwest.

NAR predicts similarly soft sales in the near term, but said it anticipates that cheaper home prices and President Obama's $8,000 first-time home buyer tax credit - part of the Housing and Economic Recovery Act of 2008 - will boost the market.

The report's housing affordability index rose 13.6 percentage points to 166.8, a new record high.

A value of 100 means that a family with the country's median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home. The higher the index, the better housing affordability is for buyers.

The reading shows the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.

"History suggests that home sales can rise even in times of job losses when housing affordability rises," said Yun, adding that he expects sales to turn around by the summer

Lee County's existing-home market experienced a slight dip in sales and prices in October - and that may be good news.

That's because the pace of homes being sold continues to be quick while prices slowly fall.

The price of an existing single-family home in the county sold with the help of a Realtor dropped 2 percent to $139,500 in October while the number of homes sold fell 3 percent to 720, according to statistics released Monday by the Florida Association of Realtors.

Experts aren't saying the real estate market is healthy, but compared to the wild gyrations of the stock market, real estate now seems relatively stable.

Compared to a year ago, sales are strong, said Brett Ellis, a real estate agent with RE/MAX Realty Group in Fort Myers. There were 405 houses sold in October 2007, 44 percent fewer than October 2008.

High sales are good because once the 15,000 houses listed for sale and the 30,000 foreclosure properties backed up in the court system are sold, the laws of supply and demand kick in, he said.

Although October's sales were slightly off September's pace, Ellis said, that could be because those sales were based on deals that went on through August and September - two of the slowest months of the year.

In a separate report issued Monday by the National Association of Realtors, sales nationally of existing homes fell 3.1 percent to a seasonally adjusted annual rate of 4.98 million homes in October, from a downwardly revised pace of 5.14 million in September. Sales had been expected to fall to a rate of 5.05 million, according to economists surveyed by Thomson Reuters.

The national median sales price plunged 11.3 percent from a year ago to $183,000. That was the largest year-over-year drop on record going back to 1968, and the lowest median sales price since March 2004.

Lee County's median price is the lowest since February 2003, when it was $135,900.

That's more good news for the market, Ellis said.

Sales are staying strong because "our prices are where they ought to be" after a long slide following the collapse of the market, he said. The median price reached its all-time high of $322,300 in December 2005.

Still, for people trying to sell a house, competition is heavy from foreclosures and short sales.

"I don't know, man, everybody wants to buy houses," said contractor Mike Kelly, who's trying to sell his house on Devonwood Court in south Lee County for $270,000. "I'm going to cut the price a little bit and then wait. I'm hoping that January through March, in season, maybe they'll get more buyers."

But, he said, it's a tough environment to be selling a house. "Business is really slow, and I don't want to have to eat into my savings."

Kelly's company, Southwest Florida Custom Electronics, installs burglar alarm, camera and sound systems, but demand is soft, he said.

Around the nation, sales were down in October compared to September. But sales were up 40.5 percent in the West compared with October last year, without adjusting for seasonal factors. Buyers in places such as Las Vegas and Orange County, Calif., snapped up distressed properties at bargain prices.

Nationwide, the Realtors group estimates that sales of distressed properties made up 45 percent of all property sales in October.

Having money in the stock market has been a wilder ride than real estate in recent weeks: The Dow Jones Industrial Average sank from 9,625 on Nov. 4 to 7,552 on Nov. 20.