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Cape’s summer supply of unsold homes is tightening

July 28, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

In analyzing the Cape Coral real estate market, one of the statistics we discuss on a regular basis is the monthly inventory, or what we refer to as the supply of unsold homes currently listed for sale in our market. This statistic helps to determine if a particular segment of our market is considered to be in a buyer's market, a seller's market, or a neutral market. It can provide insight into whether one side in a real estate transaction has an edge over the other side in the negotiations for the purchase or sale of a home. This statistic can play a key role in determining the price being offered by a buyer or accepted by a seller, along with the terms and conditions that are acceptable to both sides, and whether one side should consider making any concessions to get a deal completed, or simply hold firm.

If our recent seasonal patterns hold true to form, this would mark the fourth consecutive year where the peak supply of unsold homes was reached in the first quarter of the year, with a decline in the supply beginning in the month of March, on the way to an even tighter supply in the summer months. The trends we are seeing with the supply of unsold homes in Cape Coral through the first half of 2017 seem to be pointing to an increased tightening across the board. As the supply tightens, we expect the competition to heat up between buyers for the limited supply of reasonably-priced homes at various price points throughout our market.

In the month of June, the supply of unsold homes in the overall Cape Coral single-family home market was at 5 months, which was the same as a year ago, in June 2016, while also matching the monthly supply in May of this year. On a quarterly basis, the second quarter of this year had an average supply of 5.33 months, which was also the same amount of supply as recorded in the second quarter of 2016, however, it was 33.38 percent lower than the 8 months supply of unsold homes from the first quarter of this year.

On a monthly and quarterly basis, we are currently in a seller's market, however, on a year-to-date basis, through June 30, with an average supply 6.67 months of unsold homes available for sale, we are in more of a neutral market. This is 2.34 percent lower than the 6.83 months of unsold supply over the first 6 months of 2016. These numbers reflect that the seasonal trend towards a lower supply of homes on the market is in place this year.

Gulf access

canal homes

As we move into the higher priced gulf access canal home segment of our market, we are noticing several things about the supply of unsold homes so far this year. First, the seasonal shift towards a lower supply in the second quarter remained in place, and second, the monthly supply of unsold homes in this segment is running higher than the overall market, which is consistent with the market trends since 2014. One difference is, we are seeing the lowest supply of unsold gulf access homes so far this year, compared to the last four years.

In June, the supply was 7 months, down 12.5 percent versus 8 months in June 2016, and 22.22 percent lower than in May of this year. The second quarter, with an average supply of 7.67 months of unsold gulf access homes, was 14.78 percent lower than the 9 months of supply in the second quarter of 2016, and 30.27 percent below the average of 11 months in the first quarter of this year. On a year-to-date basis, through June 30, the average supply has been 9.33 months, which was 13.85 percent lower than the average supply of 10.83 months over the first 6 months of 2016. Although this has the gulf access canal home segment planted firmly in a neutral market, the conditions for a seller in this segment are showing signs of improvement compared to the three previous years.

Sailboat access

canal homes

The Cape Coral sailboat access canal home segment, which is a subgroup of gulf access canal homes, is following the same trends in supply as gulf access homes. In June, the supply of unsold sailboat access canal homes was down 10 percent to 9 months, compared to 10 months of supply in June 2016, and it was 18.18 percent lower than the 11 months supply in May. The second quarter averaged 8.67 months of supply, down 16 percent versus an average of 10.33 months from both the second quarter of 2016, and the first quarter of this year. Through June 30, the supply of unsold sailboat access homes averaged 9.5 months, which was an improvement of 19.7 percent compared to the average supply of 11.83 months over the first 6 months of last year. The market conditions are showing signs of improvement for someone trying to sell a sailboat access home, and despite having the highest supply of unsold homes of any specific property type in Cape Coral, this segment has shifted from a buyer's market into the higher-end of a neutral market at mid-year.

Freshwater canal homes

The seasonal trends are also present in the Cape Coral freshwater canal home segment, as the supply of unsold homes dropped to 5 months in June, down 28.57 percent from 7 months in June 2016, and 16.67 percent lower than the 6 months of supply in May of this year. In the second quarter, the supply of unsold freshwater canal homes averaged 6 months, which was flat with the second quarter of 2016, but 35.69 percent lower than the average supply of 9.33 months in the first quarter of this year. Through June 30, the unsold supply has averaged 7.67 months for the year, which was identical to the first 6 months of 2016, so this segment is working its way into the lower end of being in a neutral market after spending the first two months of 2017, in a buyer's market with 11 months of inventory in each month.

Dry lot homes

Cape Coral single-family dry lot (non-canal) homes is the only property segment firmly entrenched in a seller's market, as the supply of unsold homes in 2017, is closely tracking the action from last year. In June, there was only a four-month supply, which matched both June of 2016, and May of this year. In the second quarter, the supply of unsold dry lot homes ticked up 8.25 percent to an average of 4.33 months, versus four months of supply in the second quarter 2016, while declining by 27.83 percent from an average of six months in the first quarter of this year. Through June 30, the average supply of unsold dry lot homes in the Cape has been 5.17 months, down 3 percent from an average supply of 5.33 months over the first 6 months of 2016. The action between buyers waiting to pounce on any reasonably priced dry lot homes is the most competitive in our current market, because of the tight supply, combined with this dry lot property segment having the lowest median sales price in Cape Coral, with an average of $201,764 per month in the first half of 2017.

(The June 2017, sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, as of July 16, 2017, and it was compiled by Bob and Geri Quinn. 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 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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