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Understanding the market to separate from the herd

November 17, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

With the New Year right around the corner, we thought this would be a good time to prepare homesellers for what they can expect from the market by providing a refresher course about the seasonal trends in the Cape Coral single-family home market. We come across a number of people at this time of year who are planning to list their home for sale after the first of the year, in hopes of taking advantage of the influx of visitors arriving in Southwest Florida for the winter months. By looking at the numbers and having a better understanding about the seasonal market trends, it may help more sellers set realistic expectations and have a better overall experience in going through the process of getting their home sold.

The first thing for a seller to realize is that by trying to time the market and waiting until the peak tourist season months of January through March to list your home sale, you are actually entering the market in what are often several of the worst months of the year for home sales. There is a bit of a herd mentality in our market, where people have this notion that every business in Southwest Florida has its best months during the crowded tourist season, but that has not been the trend in home sales. This does not mean you should avoid putting your home up for sale after the first of the year, because homes still get sold, but you need to be better prepared to compete on several fronts against your competition to try to separate yourself from the herd. Here are some of the market numbers to know.

Including this year, in the overall Cape Coral single-family home market, over the last 11 years dating back to 2007, the month of January has had the highest number of new listings coming onto the market in 8 of those years. In the three years that January did not claim the top spot for the number of monthly new listings, February and March took the top honors in two of those years, while October grabbed the top spot back in 2009. This means you can pretty much count on a herd of other sellers piling into the market during the first quarter of every year, all hoping to sell their homes, just like you.

As an example, throughout the year in 2016, we averaged 562 new listings coming onto the market per month. However, in January of this year, there were 730 new single-family home listings added to the monthly inventory of homes for sale in Cape Coral, for a 30 percent increase over the average in 2016. This past January was also the biggest month for new listings coming onto the market since January 2008, when 847 new listings hit the market.

On the other side of this equation, if the number of homes sold increased as the number of new listings coming onto the market increased, things would balance out and there would be a lot of happy people in the herd. But unfortunately, January has had the lowest number of homes sold of any month throughout the year dating back to 2009. To top it off, February has been the second worst month of the year, and the first-quarter has been the worst quarter of the year, for the number of homes sold in the Cape for the past four years. So unless these market trends change drastically in 2018, there is a pretty good chance there will be a lot of frustrated sellers in our market who still own their homes when the month of April arrives.

Here is the reality found in the numbers. In each of the last 5 years, the peak months with the highest number of homes sold in Cape Coral have been in either May or June, long after our winter visitors have migrated back north. This year, in 2017, the month of June has been the top month so far, with a total of 491 homes sold, which was 72.28 percent higher than the 285 homes sold back in January.

To further illustrate the market reality, year-to-date in 2017, through Sept, 30, we have averaged 402 homes sold per month in Cape Coral, yet, as noted above, there were only 285 homes sold in January, followed by 293 sold in February, which puts those two months 29 percent and 27 percent below the monthly average, respectively. Looking back over the full year in 2016, we averaged 377.42 homes sold per month, meaning the number of homes sold in January 2017 was 24.49 percent below that average when the herd thought it was the best time to list their homes for sale. Even with the first quarter of 2017 being saved by a record setting month of March, with 471 homes sold, the first quarter of this year was still about 25 percent below the second quarter total of 1,393 homes sold.

When we combine the seasonal herd mentality of home sellers causing a spike-up in new listings coming onto the market in January, with the historical drop-off in sales at that time of year, we end up with a larger supply of unsold homes listed for sale. This is why, in each of the last four years, we have seen the highest levels of unsold monthly supply occurring in January and February, as well as in the first quarter of the year. As a case in point, in the overall Cape Coral single-family home market in 2016, the monthly supply of unsold homes averaged 6.33 months for the year, but the average for January and February of 2017 was 8.5 months of unsold supply, for a seasonal increase of unsold homes of over 34 percent.

So as a seller planning to list his or her home for sale between now and the first quarter of 2018, the best advice we can give you is to get your home prepared to compete against other sellers on the highest level possible, especially if you hope to maximize the value you receive from a buyer. Most of the buyers we come across are looking for a move-in ready home, and if a home is not in that condition, they will be looking to buy it at a discount from the price you think you should receive. Oftentimes we find that a seller's idea of what constitutes move-in ready is not in line with what most buyers consider to be move-in ready.

Take the time now to clean and declutter your home, along with making basic repairs and being sure things are in working order. Also, clean out your garage, get your landscaping trimmed and make sure the outside of your home is looking well maintained. In order to set a realistic price range for your home, you need to get an honest opinion about the condition and marketability of your home, along with advice about what you can do to improve your chances of not only getting your home sold, but getting it sold for the highest possible price.

The sellers who do a better job of preparing their home and who have a better, more realistic understanding of what to expect from the market are more likely to stand apart from the herd and be successful in selling their home this winter.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County as of Nov. 12, 2017, 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 the RE/MAX Realty Team office in Cape Coral. They have lived in Cape Coral for over 38 years. Geri has been a full-time Realtor 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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