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Irma likely to impact near-term home sales and supply

October 6, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

As expected, we continued to see more Cape Coral home sales close during the last week of September, in the aftermath of Irma, reaching 238 for the month as of Oct. 1, compared to the total of only 144 homes sold as of Sept. 25. This number will likely continue somewhat higher due to slow month-end reporting by agents and data corrections, before we put together our report on September statistics sometime around mid-October. As it currently stands, the 238 closed sales so far in September put us 42.22 percent below the year-to-date average number of 411.88 homes sold per month over the first 8 months of 2017.

Since Hurricane Irma hit our area back on Sept. 10, there were 168 single-family home sales closed in Cape Coral in the 20-day period following the storm, through Sept. 30. As we mentioned last week, in most cases, it takes about 30 to 45 days for the sale of a home to close from the time it goes under contract as a pending sale, so these closings were most likely on homes that went under contract in late July or August, prior to the storm. There is also at least some level of a backlog of homes with delayed closings, while waiting to have Irma-related damage repaired and for re-inspections.

Also, as of Oct. 1, there were 148 Cape Coral single-family homes that went under contract with a sale pending in the 20 days following Irma's arrival, through Sept. 30. There were also 76 homes that went under contract with a sale pending in the first 10 days of September, giving us a preliminary total of 224 homes going under contract in September. We also had what we will call a quiet period, as one would expect, with no real estate activity just prior to, and after the storm. This slowdown in pending sales, along with the quiet period, should be reflected in a below average number of closings within the next 30 to 45 days, with some adjustments as the backlog of prior pending sales gets cleared up.

We may also see a temporary tightening of supply in homes listed for sale, as some sellers may take their homes off of the market while they make storm-related repairs. But this could easily be offset by the fast approaching seasonal effect, when we typically start seeing more homes going up for sale in October through March. We may also see some additional sellers come to market, as they throw in the towel on living in Southwest Florida after experiencing the stress, risk and costs associated with going through a hurricane.

In the overall Cape Coral single-family home market for all property types, the year-to-date supply of unsold homes listed for sale on the market has averaged 6.25 months through Aug. 31, which is 2 percent lower than the average of 6.38 months over the first 8 months of 2016. This places our current overall market in the lower end of a neutral market, after starting the year with a 9-month supply in both January, and February. The month of August marked the fourth straight month with an unsold supply of 5 months, matching the identical pattern in 2016. In normal market conditions, we would expect a similar monthly supply number for September, before the seasonal effect comes into play with a higher monthly supply showing up in October, as the early bird sellers try to beat the larger crowd of sellers who put their homes on the market beginning in January.

Gulf access canal homes

The unsold monthly supply of Cape Coral gulf access single-family homes listed for sale continued to trend to a lower level than last year, but still remains solidly in a neutral market, with a higher monthly supply of homes for sale than the overall market. Year to date, through Aug. 31, the average unsold supply in this segment was 8.88 months, which was 15.43 percent lower than the average unsold supply of 10.5 months over the first 8 months of 2016. The unsold supply for the month of August was 7 months, or 22.22 percent lower than the 9 months of unsold supply back in August 2016, and 12.5 percent lower than the 8 months of supply in July of this year. The peak month for unsold supply of gulf access homes so far in 2017, was 14 months back in January.

Sailboat access canal homes

There has been a 24.5 percent year-to-date decrease in the unsold supply of Cape Coral sailboat access canal homes, to an average of 9.25 months of supply for sale on the market after the first 8 months of 2017, compared to 12.25 months of unsold supply through August 2016. This segment, which has an 8-month average median sales price of $432,806 in 2017, also has the highest monthly supply of unsold homes in the Cape Coral market, and it currently remains in the higher end of a neutral market. This is compared to a year ago when sailboat access homes were stuck in a buyer's market, with an even higher level of unsold monthly supply. In the month of August, the supply was down 38.46 percent to 8 months, versus a 13-month supply in August 2016.

Freshwater canal homes

Cape Coral freshwater canal homes were the only property segment to have a higher monthly supply of unsold homes listed for sale in 2017, compared to last year. The August supply was up 20 percent to 6 months, versus a 5-month supply in August 2016, and year to date, through Aug. 31, the average monthly supply was up 3.57 percent to 7.25 months, compared to an average of 7 months last year. This segment is currently in a neutral market, after beginning this year in a buyer's market with an 11 month supply of unsold homes in both January and February.

Dry lot homes

Single-family dry lot (non-canal) homes in Cape Coral continue to have the lowest monthly supply of unsold homes available for sale, and it is the only property segment currently in a seller's market. Dry lot homes also have the lowest median sales price in the Cape, with a year-to-date average of $203,829 over the first 8 months of 2017. This is the one segment where a buyer can expect to be in stiff competition with other buyers for the limited supply of reasonably priced homes, especially at prices of $250,000 and below. Year to date, through Aug. 31, the average supply was 5 months, which was the same as in 2016. August was the fourth straight month with the unsold supply holding steady at 4 months, which matched the unsold supply from August 2016. We expect this supply to stay tight and in a seller's market through year-end, before increasing with the seasonal effect in January.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Sept. 23, 2017, unless otherwise noted, and it was compiled by Bob and Geri Quinn. It includes information specifically for Cape Coral single-family homes, not including condominiums, foreclosures or short sales. The data and statistics are believed to be reliable, however, they could be updated and revised periodically, and are subject to change without notice. The Quinn's are a husband and wife real estate team with Century 21 Birchwood Realty Inc., in Cape Coral. They have lived in Cape Coral for over 38 years. Geri has been a full-time Realtors since 2005, and Bob, who also holds a Certified Financial Planner designation, joined with Geri as a full-time Realtor in 2014. Their real estate practice is mainly focused on Cape Coral residential property and vacant lots.)



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