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Keeping Cape home prices in proper perspective

August 17, 2018
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

One of the best ways to illustrate where we are today with Cape Coral single-family home prices is to compare them to the high and low prices of the last bull and bear market cycle in real estate. Since two of the biggest initial concerns expressed by most of the buyers we are coming across usually involves how much home prices have increased, and if they can still find a home priced at a reasonable value, this brief lesson in the recent pricing history of our real estate market can help a buyer gain a better perspective and feel for our market.

The vast majority of potential buyers, many of whom are exploring our market for the first time from all over the world via the Internet, are maintaining a very rational approach when it comes to what they are willing to pay for a home in our market. Many serious buyers are looking for a home that is in "move-in ready" condition, and they are more than willing to pay a current fair market value for this type of home. If a home is not clean, or if it requires a lot of upgrading and remodeling because the features are old, outdated or not well-maintained, most buyers will expect it to be priced at a discount, or they will cross it off of their list.

Here is a brief overview about the recent history of our real estate market beginning from around 2003, following the tech wreck in the stock market, as real estate prices in Cape Coral went into a full-fledged bull market. This eventually grew into a wildly irrational phase during which prices were pushed to insane levels by "flippers," before eventually topping out with very few people realizing the punch bowl had been taken away from the party. This lead to a wildly erratic period of declining prices in what turned into a brutal bear market in both stock market and real estate prices, until prices plunged to a bottom. At that point, home prices began a lengthy and erratic climb higher, before eventually stabilizing and beginning a steady and more rational move higher. As we have been noting recently, home prices have now been flattening out for a period of time, and we will address this more in future columns. To put numbers to this, here is a price comparison for each segment of our home market.

In the overall Cape Coral single-family home market, the median sales price has averaged $238,492 per month over the first six months of 2018. This compares to a median sales price averaging $273,706 over the first six months of 2006, as home sales prices in the Cape were just beginning their initial sell-off. The median sales price in the overall Cape Coral single-family market eventually hit the bottom at $115,000 in the month of September 2010, at which point prices began their bumpy ride higher. More recently, median sales prices have been mostly stuck bouncing around in a trading range since they reached $235,500 in December 2016, with prices mostly stagnant and flattening out so far in 2018.

Gulf access canal homes

In the Cape Coral single-family gulf access canal home segment, the median sales price has averaged $434,333 per month over the first six months of 2018. This compares to a median sales price that averaged $610,483 over the first six months of 2006, as median sales prices started their plunge from the $698,000 posted in the month of January 2006. The median sales price in the Cape's gulf access canal home segment bounced around erratically for the next five years, hitting a monthly low of $249,900 in January 2009, before rallying and then retesting this low in August 2011, when it dipped back down to $250,000. In 2013, the median sales price managed to hold above $300,000 per month for the entire year, and 2017 was the first year in the recovery that the median sales prices for gulf access homes held above $400,000 per month for an entire year.

Sailboat access canal homes

In the Cape Coral single-family sailboat access canal home segment, which is a subgroup of gulf access homes, the median sales price has averaged $448,000 per month over the first six months of 2018. This compares to a median sales price that averaged $699,667 over the first six months of 2006, as median sales prices in this segment started their plunge from the $793,000 posted in March 2006. The median sales price for sailboat access homes in the Cape hit their single month bear market bottom at $223,500 in January 2009, but then moved higher in an erratic fashion without retesting this low. Prices started showing more stability in 2013, which was the first year of the recovery in which sailboat access homes held above $300,000 for the entire year, and it took until 2017 for median sales prices to hold above $400,000 in each month of the year.

Freshwater canal homes

In the Cape Coral single-family freshwater canal home segment, the median sales price has averaged $278,309 per month over the first six months of 2018. This compares to a median sales price that averaged $339,538 over the first six months of 2006, as median sales prices in this segment started their plunge from the $382,000 posted in March 2006. The median sales price for freshwater canal homes in the Cape hit their bear market bottom at $129,500 in July 2009, and following an erratic price recovery, this segment retested this low again in September 2010, when prices retreated back to $130,550. Although the freshwater canal segment has occasionally climbed above $300,000 in a single month, it has yet to come close to firmly establishing itself above this price level during the market recovery.

Dry lot homes

In the Cape Coral single-family dry lot home segment, the median sales price has averaged $213,835 per month over the first six months of 2018. This compares to a median sales price that averaged $258,800 over the first six months of 2006, as median sales prices in this segment started their plunge from the $268,000 posted in February 2006. The median sales price for dry lot homes in the Cape hit their single month bear market bottom at $93,500 in January 2011. As prices stabilized during the recovery, the monthly median sales price in this segment has flattened in a range between $200,000 and $218,335 since March 2017.

(The mid-year 2018 sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County as of July 14, 2018. It was compiled by Bob and Geri Quinn and 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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