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Seller’s market in dry lot homes, buyer’s still rational

August 31, 2018
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

We will begin this week by wrapping up last week's column with the number of closed sales and median sales prices for dry lot homes in July. Then we will finish our monthly market review by covering the numbers for the monthly supply of unsold Cape Coral homes. But first, we would like to take a few seconds to mention a recent media report about a 59 percent year-over-year surge in foreclosure starts in the Cape Coral-Fort Myers real estate market in the month of July. We will go into more detail about this next week, but for now, we would say this report was a great example of how easy it is to take a market statistic out of context in order to "sell a headline" on the Internet and create sensationalized news.

To finish last week's column, there were 313 closed sales in the Cape Coral dry lot home segment in July, up 4.68 percent from 299 sales in July 2017, but down 3.4 percent from 324 homes sold in June of this year. Through July 31, there have been an average of 308.71 dry lot homes sold per month in the Cape so far in 2018, or 11.85 percent above the average of 276 homes sold per month over the first seven months of 2017. So the number of dry lot homes being sold in the Cape remains solid.

Monthly median sales prices in the Cape Coral single-family dry lot home segment have remained above $200,000 for 17 consecutive months, dating back to March 2017. However, in 2018, monthly median sales prices have stayed in a narrow 3.6 percent price range between a low of $210,750 and a high of $218,335. In the month of July, the median sales price was $213,500 for dry lot homes, or only 1.72 percent above the $209,900 posted in July 017, and virtually flat with the $213,698 recorded in June of this year. Despite being range bound, through July 31 the median sales price in this segment has averaged $214,123 per month in 2018, or 5.5 percent higher compared to the average median sales price of $202,962 per month over the first seven months of 2017.

Moving to this week's topic, the supply of unsold single-family homes in the overall Cape Coral market for the month of July rose 20 percent to 6 months, from 5 months in both July 2017, and from June of this year. However, year-to-date through July 31, the unsold supply in our overall market has averaged 6.14 months in 2018, which was 2.38 percent lower than the average of 6.29 months of unsold supply over the first seven-months of last year. With the unsold supply above six months so far in 2018, the overall Cape Coral single-family home market remains in neutral market conditions. We have listed each separate market segment below, so you can see how they compare to the overall Cape Coral market.

Gulf access canal homes

In the Cape Coral gulf access canal home segment, the monthly supply of unsold homes was at 8 months in July, which was up 33.33 percent from the 6 months of unsold supply in June of this year, but equal to the 8 months of unsold supply in July of last year. On a year-to-date basis, through July 31, the supply of unsold gulf access canal homes sitting on the market in Cape Coral has averaged 8.86 months in 2018, which was 3.06 percent lower than the average of 9.14 months over the first seven months of 2017. Lower is better when it comes to the unsold supply, but with an average of 8.86 months so far this year, the gulf access home segment remains in the higher end of a neutral market.

Sailboat access canal homes

The sailboat access canal home segment, which is a subgroup of gulf access homes, also saw an increase in unsold supply in July, moving 28.57 percent higher to 9 months from 7 months in June of this year. This increase was somewhat balanced by the fact this July came in even with the 9 months of unsold supply from July of last year. There was also a similar pattern in this segment to the gulf access homes shown above, in that the year-to-date numbers for the unsold supply have averaged 8.86 months through July 31 of this year, which was down 4.63 percent from the average of 9.29 months of unsold supply over the first seven months of 2017. The level of unsold supply in Cape Coral sailboat access homes has this segment placed firmly in the upper end of a neutral market at this point in 2018.

Freshwater canal homes

In the Cape Coral freshwater canal home segment, the monthly supply of unsold single-family homes was 16.67 percent lower in July, with 5 months of unsold supply compared to 6 months of unsold supply in both June of this year and July of last year. As we pointed out in last week's column, this segment had a nice spike higher in the number of closed home sales in July, which likely played the biggest role in the decline of the supply of freshwater canal homes sitting on the market unsold. Through July 31, there was a 15.34 percent drop to an average of 6.29 months of unsold supply in this segment so far in 2018, as compared to an average unsold supply of 7.43 months over the first seven months of 2017. This average unsold supply of 6.29 months puts the freshwater canal segment in the lower end of a neutral market at this point in the year.

Dry lot homes

In July, the supply of unsold dry lot (non-canal) homes in the Cape was at 5 months, which was flat with the 5 months of unsold supply in June of this year, but 25 percent higher than the 4 months of unsold supply in July 2017. Through July 31, the unsold supply in this segment has averaged 5.57 months in 2018, which is 11.4 percent higher than the average of only 5 months of unsold supply over the first seven-months of 2017.

The dry lot home segment, which has the lowest median sales price of our single-family home property segments in the Cape, remains the only portion of our home market that is in a seller's market with a lower monthly supply of unsold homes.

Despite the fact this segment is in a seller's market, buyers are still remaining rational in what they are willing to pay for a home. If a dry lot home has been sitting on the market unsold for much more than two weeks, it is very likely overpriced and the longer it sits on the market, the more likely it will need a fairly significant price reduction to attract an offer from a qualified buyer.

(The July 2018 sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County as of Aug. 19, 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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