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A look at shifting price dynamics in Cape Coral homes

April 13, 2018
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

Over the last 12 years, we have seen the market dynamics in the Cape Coral single-family home market go through significant changes as our real estate market shifted from a very unstable, irrational market to the current, much more stable and rational market. As one of the nation's epicenters of the real estate boom and bust, it was estimated that during the boom years, roughly 40 percent of all new homes in Cape Coral and Lee County were being built by investors looking to flip homes to other investors.

Vacant residential lots also skyrocketed in price, as another group of investors started buying the cheapest residential lots they could find, easily flipping them to other investors for quick profits. We also saw a different segment of investors buying up older homes and quickly remodeling them, often flipping them to another investor at a nice profit within several months. Unfortunately, the lure of easy money created an oversupply of real estate experts, and what was once believed by many to be a sure thing, turned into a wild game of musical chairs with extremely painful consequences for a lot of people when the music stopped.

After witnessing the devastating market collapse in Southwest Florida and going through the painful recovery period, we managed to emerge from the dark side of the moon and began the slow process of returning to normal. So this week we are going to look back over the last 6 years, as our market recovery took hold, and show you how the dynamics have shifted in the Cape Coral single-family home market. To do this, we are going to look at the number of homes sold in various price ranges dating back to 2012 and comparing it to 2017.

Let's begin with a market overview from back in 2012, when there were 1,690 Cape Coral single-family homes sold through a Realtor, as either a short sale or a foreclosure. This level of distressed home sales totaled 35.59 percent of all homes sold that year, so even as the market was showing signs it was in recovery mode, we were still having to clear out a significant supply of problem properties. Comparing that to last year, there were only 196 homes sold in the Cape as a short sale or a foreclosure, which totaled 3.98 percent of all homes sold in 2017.

When we eliminate short sales and foreclosures from these results and look only at "normal," non-distressed home sales, there were 4,732 homes sold in 2017, or 54.69 percent more than the 3,059 normal homes sold in 2012. When the distressed sales are added back into the numbers, there were 4,928 single-family homes sold in 2017, or only 3.77 percent more than the 4,749 total homes sold in 2012. So distressed sales were a big part of the market.

Next, to help illustrate how much our market has changed, we broke the numbers down to isolate just the short sales and foreclosures from back in 2012, versus 2017. In 2012, the hottest price segment, accounting for 74 percent of all distressed sales, was from $50,000 to $150,000. In addition, almost 93 percent of all Cape Coral distressed home sales in 2012, in the single-family home market, were priced below $250,000.

By 2017, the prices on short sales and foreclosures had shifted higher, with 75 percent of all short sales and foreclosures falling within a price range from $100,000 to $250,000. In addition, 92 percent of all Cape Coral single-family distressed home sales were priced below $350,000 last year.

Looked at another way, back in 2012 there were 54 short sales and foreclosures sold below $50,000 and another 334 sold between $50,000 and $75,000. There were also another 460 distressed home sales back in 2012, priced between $75,000 and $100,000. By comparison, in 2017 there were no Cape Coral homes sold in short sales or foreclosures priced under $75,000 and only five such homes were sold between $75,000 and $100,000.

We have seen a similar price shift in our "normal" market when we eliminate short sales and foreclosures from the numbers in comparing 2012 to 2017. For example, in 2012 there were 598 regular, or non-distressed homes sold for under $100,000 versus only 5 such homes sold in 2017. This under $100,000 price range made up almost 20 percent of the normal sales total in 2012, while dropping to only a fraction of a percent in 2017 homes sold.

The hottest price segment in the normal market back in 2012, making up 31 percent of all Cape Coral homes sold, was from $100,000 to $150,000. While in 2017, the hottest price range in the normal market, with 57 percent of all homes sold, was between $150,000 and $250,000. Overall, 90.59 percent of all normal sales in 2012 were below $350,000 compared to only 81.28 percent in 2017, as price points have shifted higher.

Moving up in price from $350,000 to $500,000 in normal, non-distressed home sales, a total of 6.34 percent of Cape home sales were in this price range back in 2012, versus 11.96 percent in 2017. When we moved up in price to $500,000 and above, only 3 percent of normal home sales were in this price range back in 2012, including 15 homes sold at $1 million and above. While in 2017, a total of 6.76 percent of homes sold were at $500,000 and above, with 42 homes selling at $1 million and above.

To summarize the price shifts in our market, we have seen the really low end of our market prices disappear, as short sales and foreclosures have become a much less significant part of our market. In addition, the hottest price segments in Cape Coral have shifted higher as our market has recovered and stabilized, and although we have seen an increase in sales in higher end homes, the Cape is currently dominated by homes sold for under $350,000.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, as of April 9, 2018, and it was compiled by Bob and Geri Quinn. It includes data and statistics specifically for Cape Coral single family homes, which is believed to be reliable, however, it could be updated and revised periodically, and it is 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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