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Nationwide home prices and supply versus Cape

June 30, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

According to a recent report from the National Association of Realtors, nationwide median existing home prices hit a new record high of $252,800 in May of this year, which topped the previous high of $247,600 for median prices set in June 2016. In Cape Coral, our overall median home sales price was $225,000 in May, as prices have continued to work higher, but have yet to regain their old highs as our market has stabilized in a largely rational manner. This has kept us in a "steady as she goes" market, where prices are higher, but buyers feel they can still find enough value in the right home when they purchase it.

The NAR also said the supply of unsold homes listed for sale nationwide increased a bit in May compared to April, reaching 1.96 million existing homes for sale, but it was more than 8 percent below last year. This current level represents 4.2 months worth of inventory, and while the number of buyers looking for a home remained at robust levels with the current demand indicating sales should be stronger, except some would-be buyers are having to delay or postpone their home search because of the low supply. We are seeing something similar in Cape Coral, in that the buyers are out there, but they are finding a limited supply of reasonably-priced homes listed for sale, so they often continue to patiently watch and wait.

In the overall Cape Coral single-family home market, the year-to-date monthly supply of unsold homes through the end of May 2017, has averaged 7 months, down 2.86 percent versus an average supply of 7.2 months over the first 5 months of 2016. This places us in a neutral market overall, but we are seeing the usual trend of the monthly supply of unsold homes heading lower towards a seller's market in the second quarter of this year. In the month of May, the supply was 5 months, which was down 16.67 percent from 6 months of supply in April, and flat with May 2016. Since 2014, the monthly supply of unsold homes has hit its highest level each year in the first quarter, then declined to its lowest level by the third quarter. It then starts moving back higher in the fourth quarter, on the way up to the peak for the following year in the first quarter. At this point, this trend appears to be holding in the overall market, but it does vary by property-type.

Gulf access canal homes

In the Cape Coral single-family gulf access canal home segment, the year-to-date monthly supply of unsold homes through the end of May 2017, has averaged 9.8 months, or 14 percent lower than the average supply of 11.4 months over the first 5 months of 2016. This also places the gulf access canal home segment in more of a neutral market, compared to being in a seller's market a year ago. In the month of May, the supply was down 10 percent to 9 months versus 10 months in May 2016, but it was 28.57 percent higher than in April of this year, when the supply was 7 months in this segment. The trend of hitting the peak level of supply in the first quarter, followed by a lower supply in the second quarter is still in place, as the second quarter of this year is running 36 percent lower than the first quarter. We are also seeing 15.8 percent less supply in the second quarter of this year, compared to 2016.

Sailboat access canal homes

In the Cape Coral single-family sailboat access canal home segment, in 9 of the previous 10 years, the supply of unsold homes listed for sale has been lower in the second quarter of the year than in the first quarter. But where this segment has deviated from other parts of our market, is that this pattern is typically followed by a sharp increase in supply in the third quarter of the year. Since 2007, the monthly supply of sailboat access homes has declined by an average of 37.7 percent from the first to the second quarter of each year, only to increase by an average of 42 percent from the second to the third quarter.

So far in the second quarter 2017, the supply of unsold homes in this segment was down 26.1 percent from the first quarter, so this trend looks to still be in place again this year. In the month of May, the supply of unsold homes was 11 months, which was flat with last year, but 83.33 percent higher than the 6 months of supply in April of this year. Year-to-date, through the end of May, the supply of sailboat access canal homes has averaged 9.6 months, or 21.31 percent lower versus the average of 12.2 months over the first 5 months of 2016. So this year is currently in the upper end of being more of a neutral market, compared to being firmly in a buyer's market at this point last year.

Freshwater canal homes

In the Cape Coral single-family freshwater canal home segment, year-to-date through May 2017, the supply of unsold homes has averaged 8.2 months, or 5.13 percent higher than the average of 7.8 months of supply in the first 5 months of 2016. This places freshwater canal homes firmly in a neutral market so far this year. For the month of May, the unsold supply of 6 months was 20 percent higher than the 5 months of supply in May 2016, and it was 14.3 percent lower than the 7 months of supply in April of this year. So far, in the second quarter of 2017, the supply of unsold freshwater canal homes is running 18.2 percent higher than a year ago, but we are seeing the same trend of a lower second quarter supply compared to the first quarter of this year, with a 40.9 percent decline, quarter-over-quarter.

Dry lot homes

In the Cape Coral single-family dry lot (non-canal) home segment, year-to-date through May 2017, the supply of unsold homes listed for sale on the market has averaged 5.4 months, down 3.57 percent from the 5.6 months of average supply over the first 5 months of 2016. This means the dry lot home segment is the only portion of our single family home market that is currently in the "seller's market" category, and it is where the limited supply of "reasonably-priced" homes will tend to immediately attract a large number of eager buyers willing to offer full price or more. As a seller, if you are not receiving a lot of showing activity on a steady basis from potential buyers in the first 30 days your home is listed for sale, there is a very high probability that "the market" views your home as being overpriced and it is unlikely to be sold without making a serious price reduction.

In May, the supply of unsold dry lot homes was 4 months, which was flat with a year ago, but down 20 percent from the 5 months supply in April 2017. So far, the supply in the second quarter of 2017, is running 12.5 percent higher than the same time frame in 2016, but it is continuing to track the trend of being 30.77 percent below the first quarter of this year.

(The May 2017, sales and market data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, as of June 15, 2017, and from other outside sources. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral single-family homes, and it does not include 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 Century 21 Birchwood Realty Inc., in Cape Coral. They have lived in Cape Coral for over 37 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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