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Median home prices up, while market remains rational

November 22, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

One of the most frequently asked questions we receive from people looking to buy a home in Cape Coral is about current home prices and values compared to our last market peak. These potential buyers know they missed out on the deal of the century when our housing market hit rock bottom, but at a time when some markets around the country have raced back above record high prices, buyers want to get a sense that our market still has enough value remaining in it. From a pricing perspective, it is obvious we have come a long way from the market bottom, but the tone of our market, which is much different today than it was 10 to 13 years ago, when it became a market gone wild, brings added value to the equation.

In the overall Cape Coral single-family home market, the median sales price in October was up 8.93 percent to $233,000 versus $213,900 in October 2016. We are on track to have our second straight year where the median sales price in our overall single-family home market was above $200,000 in every month of the year. Prior to this, the last time we had a year with every individual month above $200,000 was back in 2006. At that time, the year-to-date median sales price was averaging $266,301 per month over the first 10 months of 2006, or 15.83 percent above our 2017 year-to-date average, through Oct. 31, of $229,908.

The peak month in the overall Cape Coral single-family home market occurred in January 2006, with a median sales price $285,450. We then went through a period of just under 5 years of price declines to hit the single month low in the cycle of $115,000 in October of 2010, which was the same year median sales prices bottomed out with a yearly average of $126,940 per month.

Regarding the tone of the current market, it remains very rational in several respects, which is a good thing, unless you are trying to sell an overpriced home. First, despite the struggle buyers have had over the last several years with trying to find "reasonably priced" homes for sale in our market, they have remained patiently rational in their refusal to "chase up" after overpriced homes. In this rational market, homes priced properly for their condition, features and marketability, will attract buyers and will often be sold quickly. Overpriced homes will tend to languish on the market unsold, until the owner makes an adequate price adjustment.

Another indication of this being a rational market is the general lack of individuals who are building spec homes in the single-family market, with the intentions of flipping them to other over eager buyer. The spec home business seems mostly confined to various home builders who start putting up a new home and try to attract a buyer who is having difficulty finding a reasonably-priced existing home to buy. This is creating more competition for any seller who has their home overpriced and it is a stark contrast to the wildly irrational conditions in the last housing boom, where it was estimated that upwards of 40 percent of all new homes in Cape Coral were being built by speculators. Back then, with a belief that home prices could never go down, the lure of easy money provided a growing line of wannabe real estate tycoons, until it all collapsed under its own weight with Ponzi-like precision.

Gulf access canal homes

In the Cape Coral gulf access canal home segment, the median sales price was $427,000 in October, or 13.87 percent higher than the $375,000 in October 2016, making this the first time since 2006, that gulf access median sales prices have been above $400,000 in every month so far this year. In October 2006, the median sales price was 27.52 percent higher, at $544,500 versus this October, and the peak month was in January 2006, at $698,000. We then went through a 5 1/2 year decline, that included a double bottom, hitting a monthly low of $249,900 in January 2009, followed by a bounce up to $360,000 in November 2009, only to suffer a second leg back down to $250,000 in August 2011. This was the same year gulf access median sales prices hit a yearly bottom with an average of $298,185 per month, while in 2006, the yearly average through Oct. 31, was $576,440 per month compared to the first 10 months of 2017, with a median sales price averaging $422,558 per month.

Sailboat access canal homes

Cape Coral sailboat access canal homes, which are a subgroup of gulf access homes, had a median sales price of $425,000 this October, up 19.55 percent versus $355,500 in October 2016. Back in October of 2006, the median sales price was $505,905 for sailboat access homes, which was down from $793,000 in the peak month of March 2006. This was followed by a nearly 3-year decline to a low of $223,500 in January 2009, which also marked the yearly bottom for median sales prices with an average of $299,233 per month in 2009. This compares to the average median sales price of $635,395 per month over the first 10 months of 2006, versus our current 2017 median sales price, through Oct. 31, with an average of $439,595 per month. We also appear headed for our first year since 2006, with every month coming in with a median sales price of over $400,000 in this property segment.

Freshwater canal homes

The median sales price for Cape Coral freshwater canal homes was down 7.78 percent to $290,500 this October, versus $315,000 in October 2016. Back in October 2006, the median sales price was $344,950 for freshwater canal homes, which was down from $382,000 in the peak month of March 2006. This was followed by a plunge in median sales prices to two monthly market lows of $129,500 in July of 2009, and another of $130,550 in September of 2010. On an annual basis, freshwater canal homes bottomed out at a median sales price averaging $169,450 per month for the year in 2011. This compares to the average median sales price of $336,758 per month over the first 10 months of 2006, versus our current 2017 median sales price, through Oct. 31, averaging $279,870 per month.

Dry lot homes

For Cape Coral dry lot homes, the median sales price was up 8.3 percent to $210,000 this October, versus $193,900 in October 2016. Back in October 2006, the median sales price was $242,750 for dry lot homes, which was down from $268,000 in the peak month of February 2006. This was followed by an almost 5-year collapse in median sales prices to a low of $93,500 in January of 2011, which was the same year this segment hit bottom on an annual basis, with a median sales price averaging $104,706 per month for the year in 2011. This compares to the average median sales price of $252,900 per month over the first 10 months of 2006, versus our current 2017 median sales price, through Oct. 31, averaging $205,537 per month.

So despite higher prices, the Cape Coral market still appears to hold a reasonable amount of value for buyers and seems to be far from being an overheated.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County as of Nov. 19, 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 Quinns 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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