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Unsold saltwater condo supply improves in 3rd quarter

November 15, 2019
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

In September, one of the takeaways about the overall Cape Coral condo market was that on a year-to-date basis, the average monthly level of the unsold condo supply was higher across the board in all of our property segments after the first nine months of this year, compared to last year. Keep in mind that having a higher level of unsold supply than a year ago would tend to be viewed as more of a negative, while a lower level of unsold supply would be a positive. This increase in the average supply levels nine months into 2019 is a direct result of the unusually high level of unsold inventory that was sitting on the market in January and February, when we also had a lower than usual number of closed sales. These two weak months at the beginning of the year led to a weak first quarter, which leads us to put more weight on the much improved market results from March through September.

Just how bad was it in the first quarter of this year? As an example, in our overall condo market, we had the highest level of first quarter unsold inventory since the first quarter of 2010, while the total number of first quarter closed condo sales were the worst since the first quarter of 2014. These poor results at the beginning of this year were likely due to a spillover effect from the impact of the water quality issues in the river, canals and along much of the Florida coastline during the second half of last year. But, as the water quality improved this year, along with mortgage interest rates moving lower until just recently, much of our real estate market has managed to return to more normal levels of activity.

This was evidenced in our recently completed third quarter results, where the unsold condo supply was substantially lower and the number of closed sales were much higher in the Cape's gulf access and sailboat access canal condo segments this year compared to the third quarter of last year. Again, these improved positive results in our saltwater condo market likely coincided with the improved water quality this year. However, the third quarter supply of dry lot condos sitting on the market unsold in the Cape has spiked higher this year compared to last year, while the number of dry lot condos sold in the third quarter dropped sharply compared to last year.

Despite these results, the dry lot condo segment still has the lowest level of inventory in our condo market, so this could be more of a function of higher prices for dry lot condos creating affordability issues for some buyers. Even though median sales prices for dry lot condos have remained in a fairly tight price range over the last 17 months, or so, they have moved about 30 percent higher since December 2016, when they averaged $101,988 per month versus an average of $133,111 per month in today's market.

Looking at the overall Cape Coral condominium market, the monthly supply of unsold condos came in at 6 months in September, which was 14.29 percent lower than the 7 months of unsold supply in both September 2018, and in August of this year. In the third quarter, the overall unsold supply of condos in the Cape averaged 6 months, which was flat with the 6 months of supply in the third quarter of 2018, but 5.82 percent higher than the average of 5.67 months of unsold supply in the second quarter of this year. Through Sept. 30, the supply of unsold condos in the overall Cape market has averaged 7 months in 2019, or 16.67 percent higher than the average of 6 months of supply over the first nine months of 2018. This places our overall condo market firmly in a neutral market.

Gulf access canal condos

In the Cape Coral gulf access canal condo segment, the monthly supply of unsold condos came in at 8 months in September, which was down 11.11 percent from the 9 months of unsold supply in September 2018, and even with the 8 months of unsold supply in August of this year. In the third quarter, the monthly supply of unsold condos in this segment averaged 7.33 months, which was 29.04 percent lower than the average of 10.33 months of unsold supply in the third quarter of 2018, but 4.71 percent higher than the average of 7 months of supply in the second quarter of this year. Through Sept. 30, the supply of unsold gulf access canal condos in the Cape has averaged 8.89 months in 2019, or 11.13 percent higher than the average of 8 months of supply over the first nine months of 2018. This has the gulf access condo segment in the higher end of a neutral market.

Sailboat access canal condos

In the Cape Coral sailboat access canal condo segment, which is a subgroup of gulf access condos, the monthly supply of unsold condos came in at 12 months in September, which was 9.1 percent higher than the 11 months of unsold supply in September 2018, and 20 percent above the 10 months of unsold supply in August of this year. In the third quarter, the monthly supply of unsold condos in this segment averaged 9.67 months, which was 27.46 percent lower than the average of 13.33 months of unsold supply in the third quarter of 2018, but 26.08 percent higher than the average of 7.67 months of supply in the second quarter of this year. Through Sept. 30, the supply of unsold sailboat access canal condos in the Cape has averaged 10.67 months in 2019, or 11.61 percent higher than the average of 9.56 months of supply over the first nine months of 2018. This has sailboat access condos in a higher inventory buyer's market.

Dry lot condos

In the Cape Coral dry lot (non-canal) condo segment, the monthly supply of unsold condos came in at 5 months in September, which was 25 percent higher than the 4 months of unsold supply in September 2018, and even with the 5 months of unsold supply in August of this year. In the third quarter, the monthly supply of unsold condos in this segment averaged 4.67 months, which was 29.67 percent above the average of 3.67 months of unsold supply in the third quarter of 2018, and equal to the average of 4.67 months of supply in the second quarter of this year. Through Sept. 30, the supply of unsold dry lot condos in the Cape has averaged 5.33 months in 2019, or 16.89 percent higher than the average of 4.56 months of supply over the first nine months of 2018. This places the dry lot condo segment solidly in a lower inventory seller's market, with less than 6 months of unsold supply available for sale.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Nov. 3, 2019. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral condominiums, townhouses and villas, and it does not include single-family homes, short sales or foreclosures. 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 40 years. Geri has been a full-time Realtor since 2005, and Bob 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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