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A look at real life shock and awe home pricing stories

March 16, 2018
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

In this column, we frequently discuss how when we track Cape Coral homes from their original list prices to their actual final sales price, we often find they end up selling for 10 to 15 percent, or more, below their initial listing price. We also discuss that when we are out there looking at homes with qualified buyers, we tend to see an oversupply of overpriced homes on the market, and a much more limited supply of "reasonably priced" homes listed for sale. We usually wrap up our conversation by stating that most buyers are remaining very rational in what they will pay for a home in our market, and that if "the market" perceives a home as being "reasonably priced," it will generally go under contract with a buyer fairly quickly. However, overpriced homes will sit on the market as unsold supply until the asking price is reduced enough to attract a buyer.

So when we saw some recent news out of the nearby Naples real estate market, which was discussing some of its recent high-priced home sales, we thought we would take a closer look at the numbers to see what we would find.

The highest priced Naples home sold so far in 2018 was a recently renovated 1993 home in the Port Royal neighborhood, with 8,302 square feet of living area, described as a "true work of art." According to the information in the Multiple Listing Service, this home was originally designed by one of Naples most revered architects, Kasimir Korybut, and this "masterpiece" was originally constructed and recently renovated by A. Vernon Allen Builder Inc. This home was listed for sale at $16.5 million on Nov. 13, 2017, and it went under contract with a buyer after just 16 days on the market, which indicates this home was "reasonably priced." The sale was a cash deal, and it was finalized on Feb. 16, at a closing price of $16.1 million, which was $400,000 or only 2.42 percent below the initial listing price.

Despite being the highest priced sale in Naples so far in 2018, it was noted that this was below the highest priced Naples home from 2017, which was a newly constructed 9,512-square-foot home in Port Royal. This home, which was built in 2016, was first listed for sale on Jan. 19, 2016, for $22.95 million and on Feb. 14, 2017, it had its second price reduction, bringing the list price down to $19.95 million. The home went under contract with a buyer several months later, on April 20, 2017, with the sale being finalized as a cash deal on May 2, 2017, at a closing price of $17.7 million. This sales price was $5.25 million, or 22.88 percent below the original list price.

Moving back to this year, the second highest priced home sold in Naples thus far in 2018 was another home in the Port Royal neighborhood, which was originally listed for sale on Aug. 30, 2017, for $11.995 million. The price was reduced by $595,000 to $11.4 million on Nov. 30, 2017, and after this 4.96 percent price reduction, it went under contract with a buyer on Jan. 11, 2018, after 134 days on the market. The sale was finalized on Feb. 26, at a closing price of $10.5 million, which was 7.89 percent below the reduced list price, and $1.495 million or 12.46 percent below the original list price. The seller of this home sold it for a slight loss after expenses related to the sale, compared to what they bought it for back in June of 2014.

The third highest priced sale in Naples so far this year was for a penthouse condo in Le Rivage, on Gulf Shore Boulevard North. This 8,233-square-foot, gulf-front penthouse unit encompasses the entire 23rd floor of the building and provides 360 degree floor-to-ceiling window views. It was first listed for sale on Dec. 3, 2015, at $12 million, and came off the market on July 1, 2017, after two price reductions lowered the listing price to $9.995 million. It was put back on the market at this lowered price on Oct. 19, 2017, and went under contract with a buyer in less than a month, on Nov. 14, 2017. The sale of this unfurnished penthouse condo was finalized as a cash deal at $7.875 million on Jan. 11, 2018. This was $2.12 million, or 21.21 percent, below the reduced asking price, and $4.125 million or 34.38 percent less than the original list price.

Bringing things back to our area, the highest priced sale in Cape Coral so far in 2018 was for a more modest 4,330-square-foot riverfront estate home built in 2012 on an 0.80 of an acre lot in the gated Tarpon Estates neighborhood inside Tarpon Point Marina. This home was originally listed for sale on Jan. 5, 2014, at $3.4 million, and it has been on and off the market multiple times since, with the most recent listing beginning on Nov. 14, 2016, at $2.3 million. This price was reduced by 13.09 percent to $1.999 million on June 16, 2017, and the home went under contract with a buyer about six months later, on Dec. 1, 2017. The sale was finalized on Feb. 14, 2018, at $1.625 million or 29.35 percent below the recent starting point of $2.3 million. Going back to the original listing in 2014, this home ended up selling for $1.775 million or 52.21 percent below the original list price of $3.4 million.

According to the records, the developer and builder of this home actually tried to get over $3.9 million for this home back in 2012. Nothing short of a stunning miscalculation of the market, which helps illustrate another frequent point we make about how difficult it can be to make an accurate determination of the value of home because of the opaque nature of real estate market. Without a transparent and ongoing flow, real time pricing data and information, putting an accurate price, or valuation, on a home can be heavily influenced by opinions, which can lead to some significant pricing errors. Knowing how to read and properly analyze the market, is a critical component in trying to determine more accurate price ranges.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, as of March 13, 2018, and it was compiled by Bob and Geri Quinn. 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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