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Unsold supply tracks seasonal trend, below 2017 levels

March 9, 2018
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

We are seeing the typical seasonal pattern for the monthly supply of unsold Cape Coral single-family homes, with an increase of unsold supply this January compared to December. This rise in unsold supply is likely caused by a combination of factors, including a lower number of closed sales in January, along with a rise in new and active listings of homes for sale in the Cape during January compared to December. Over the last four years, the number of active listings in Cape Coral has continued to climb in February, before reaching a peak for the year in March. We seem to be on track with the same pattern so far in 2018, as the number of active listings in February is coming in higher in the month of January.

On a positive note, the supply of unsold homes this January came in lower than in January 2017, so there is a little bit less competition out there between homeowners trying to sell their homes this year. We are, however, still seeing a much larger monthly supply of unsold homes in the higher priced gulf access and sailboat access canal home segments, compared to the rest of our market. This larger supply creates more competition between sellers in these two segments of our market, making it somewhat more difficult for a seller to attract a buyer to their home, while giving buyers more of an advantage in negotiating the purchase price and terms of the deal.

In the overall Cape Coral single-family home market, the monthly supply of unsold homes went up by 60 percent, from 5 months of supply in December to 8 months of unsold supply in January. This increase to 8 months of unsold supply in January matched the level of unsold supply from January 2017, and has our overall market beginning the year firmly in a neutral market range. If we continue following our normal market patterns during the first quarter of this year, we can expect the unsold supply of homes to begin decreasing in March.

Gulf access

canal homes

The monthly supply of unsold Cape Coral gulf access canal homes followed the seasonal trend by increasing 18.18 percent to 13 months in January from 11 months of supply in December. However, the unsold supply of gulf access homes was 7.14 percent lower this January versus January 2017, when the supply was 14 months. This segment is beginning the year in a buyer's market, which is the same way it ended the fourth-quarter in 2017.

Sailboat access canal homes

The monthly supply of unsold Cape Coral sailboat access canal homes in January, at 11 months, was flat with the 11 months of unsold supply in December, but 21.43 percent lower ?versus the 14 months of unsold supply in January 2017. This segment, which is a subgroup of gulf access canal homes, is also beginning 2018 the same way it ended the fourth quarter of 2017, which is firmly in a buyer's market with a higher supply of unsold homes.


canal homes

The monthly supply of unsold Cape Coral freshwater canal homes also followed seasonal trends by jumping 50 percent to 9 months of unsold supply in January, from the 6 months of supply in December. However, the unsold January supply of 9 months for this segment was down 18.18 percent compared to the 11 months of supply in January 2017, so it is beginning this year in the higher end of a neutral market versus last year, when freshwater canal homes started out in a buyer's market with a higher supply of unsold homes.

Dry lot homes

The monthly supply of unsold Cape Coral dry lot homes was tracking the seasonal trends with a 50 percent increase in supply, bumping up to 6 months in January from 4 months of unsold supply in December. This matched the 6 months of unsold supply registered in January 2017, so this segment begins another year in a neutral market after being the only portion of the Cape Coral single-family home market to consistently spend most of the last three years in a lower supply, seller's market.

So what can we expect to see with the Cape Coral single-family home market as we move deeper into 2018? As we mentioned last week, barring any surprise interest rate moves by the Federal Reserve, that might shock the system and the economy, we expect our market to mostly follow the recent trends. If the Fed maintains its telegraphed, gradual interest rate increases, our real estate market may be capable of absorbing this type of orderly increase in mortgage interest rates for an extended period of time. Especially when you consider that a lot of buyers coming into our market tend to be capable of putting larger amounts of cash into their purchases, which can help them offset somewhat higher mortgage rates.

Our recent market trends would lead us to expect the pace of the number of homes sold to begin picking up in March or April and reaching their peak for the year during the second quarter. Over the last five years, the peak month for the number of closed home sales has been in either May or June, and since it usually takes about 30 to 45 days for a home to reach a closed sale status after going under contract with a buyer, our market sales activity should be about ready to accelerate.

We are also continuing to see a lot of out-of-town buyers who have a serious interest in buying a home in Cape Coral, but for the most part, they remain very patient and rational about what they are willing to pay for a home. As we go out and look at homes with these buyers, we are still seeing a large supply of overpriced homes sitting on the market unsold, versus a much more limited supply of reasonably-priced homes. This is why we continue to see reasonably-priced homes, especially if they are priced around $300,000 and under, go under contract with a buyer within only days or weeks after being listed for sale.

(The January 2018 sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, as of Feb. 24, 2018, 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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