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Cape unsold home supply still a ‘Tale of Two Cities’

December 29, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

In the Cape Coral single-family home market, we continue to see a "Tale of Two Cities," as it relates to the monthly supply of unsold homes in our market. One issue splitting our real estate market into what is effectively two different cities, is the disproportion between the unsold supply of homes based on different property types within the Cape. The second split is the tight supply of reasonably-priced homes versus the larger supply of overpriced homes.

There could be any number of reasons why we seem to have a larger supply of overpriced homes sitting on the market. One reason may have to do with the fairly widespread use of a more general, "broad overview" approach with the Cape's market statistics. Using a broad statistical approach is a relatively fast and easy way to provide market information and analysis to consumers, but it is also less likely to generate an accurate and useful picture of the unique market dynamics specific to the various property segments in Cape Coral.

This is why we believe it is important to drill down into the Cape Coral numbers and analyze our real estate market by specific property segments, instead of using the easier to calculate "broad overview" approach. When we drill down below the surface, we are more likely to come away with a different, more accurate, realistic and useful view of our current market conditions. To illustrate this, let's look more closely at the monthly supply of unsold homes listed for sale on the market. This statistic can provide homebuyers, and sellers, with an indication of whether we are experiencing the conditions typically found in a buyer's market, a seller's market, or a neutral market, which may help determine how aggressive one can be in negotiating the price and terms on the purchase or sale of their home.

If we simply provided you with the typical broad overview approach for the overall Cape Coral single-family home market, we would be reporting that the monthly supply of unsold homes came in at 7 months in November, which was the same as in November 2016, and also unchanged from the previous month of October. We would also tell you that so far in 2017, we have been averaging 6.36 months of unsold supply for the year, which is the same level of supply we had over the first 11 months of 2016. These numbers would place the Cape Coral home market firmly within neutral market conditions, where neither the buyer, nor the seller, would have an advantage over the other in the negotiating their deal.

But when we drill down deeper into the numbers and analyze our market on a specific property type basis, we often come away with a very different, and arguably more accurate, view of the market. For instance, by drilling down, we would discover that the typically much more expensive sailboat access canal home segment is experiencing drastically different market conditions than our overall market. While our typically lower priced dry lot (non-canal) homes are the only segment of our market currently considered to be in a seller's market that is very competitive between buyers, especially for reasonably priced homes below $250,000. Here is what our single-family home market looks like, when we drill down into the numbers.

Gulf access canal homes

Despite experiencing a 71.43 percent rise in the monthly supply of unsold single-family gulf access canal homes from 7 months of supply back in August, to 12 months of supply in the month of November, this property segment actually has a lower unsold supply on the market today compared to a year ago. Year to date, through Nov. 30, the average supply of unsold gulf access homes was 9.18 months, or 15.16 percent lower than the average supply of 10.82 months over the first 11 months of 2016. Based upon the last five years, we expect the supply to move higher into January, when the first quarter of the year typically becomes a buyer's market in this segment, with an excessive amount of seasonal supply listed for sale.

Sailboat access canal homes

The Cape Coral single-family sailboat access canal home segment had the sharpest rise in the supply of unsold homes listed for sale, spiking to 18 months of supply in November from 11 months in October. This was also 125 percent above the 8 months of supply from back in August, however, we are still below last year's unsold supply levels. As of Nov. 30, the average monthly supply of unsold sailboat access homes was at 10.18 months, which was 18.88 percent below the average of 12.55 months of unsold supply over the first 11 months of 2016. This segment will likely move deeper into a buyers market in January.


canal homes

The supply of unsold Cape Coral freshwater canal homes listed for sale remains firmly in a neutral market with a year-to-date average supply of 7 months through Nov. 30. This is only 1.3 percent higher than the average supply of 6.91 months over the first 11 months of 2016. Based upon what we have experienced over the last four years, we would anticipate the unsold supply to increase in the first quarter of 2018, before settling back into a lower, steady level of supply sometime around March or April of next year.

Dry lot homes

The supply of unsold Cape Coral dry lot (non-canal) single-family homes listed for sale on the market has remained slightly higher than a year ago, ever since Hurricane Irma came through our area in September. Through Nov. 30, the average unsold supply of dry lot homes was 5.18 months in 2017, which is 5.5 percent higher than the average of only 4.71 months of supply over the first 11 months of 2016, but well below the supply in our overall market.

(The November sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, FL, as of Dec. 17, 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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