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Unsold supply of Cape condos varies widely by type

August 11, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

In analyzing the Cape Coral residential real estate market, it would be much easier for us to provide a single, general overview of our market conditions, and leave it at that. But because of the dynamics involved with the different property-types in the Cape, a simplified, singular approach would not provide an accurate reading about the specific market conditions and it could be somewhat misleading to anyone buying or selling a home. So in addition to doing a general overview as a baseline, we break everything down by the major property segments to more accurately reflect the conditions of the markets within our market.

This point can be best illustrated by looking at the mid-year results for the monthly inventory of Cape Coral condominiums for sale on the market, which we refer to as the monthly supply of unsold condos. This statistic can help both buyers and sellers make a better determination about whether a particular segment of our real estate market is more, or less, favorable to their side of the negotiations in the sale or purchase of a home or condo. As you will see below, there are some distinct differences in our condo market, depending upon the type of property involved. We'll begin by looking at the numbers for the overall Cape Coral condo market, followed by a breakdown of the numbers by the major property segments for condos.

In the overall Cape Coral condo market, year-to-date in 2017, through June 30, the monthly supply of unsold condos has averaged 7.17 months, which is about 5 percent higher than the average of 6.83 months of supply over the first 6 months of 2016. In the month of June, the overall condo supply listed for sale on the market was at 7 months, or 12.5 percent less than the 8 months supply in June 2016, and flat with the 7 months of supply in May of this year. In the second quarter of 2017, the supply of unsold condos also averaged 7 months, which was the same as in 2016, but slightly lower than the average of 7.33 months of supply in the first quarter of this year.

This amount of unsold supply places our overall condo market into more of a neutral market, where neither the buyer, nor the seller, has any real advantage over the other in trying to negotiate a better deal for themselves. As we mentioned above, we could end our market analysis right here, with this broad, general overview of the Cape Coral condo market, but it would not provide a truly accurate picture of our market. This is why it is important to drill down deeper into the numbers and break them down by specific property types, which gives us a better look at what is happening "below the surface" of the market.

Gulf access

canal condos

The supply of unsold Cape Coral gulf access condos remains firmly in the upper end of a neutral market, despite a sizeable 22.56 percent decline in supply from 10.33 months in the first quarter of this year, to 8 months of average supply in the second quarter. In 2016, the average second quarter supply was 8.33 months, while the supply in the month of June of this year came in at 9 months, which was the same as in June 2016. The supply this June was 28.57 percent higher than the 7 months worth of unsold condos on the market in May. On a year-to-date basis, through June 30, the average supply of unsold gulf access canal condos stood at 9.17 months, or 17.11 percent higher than the average of 7.83 months of supply over the first 6 months of 2016.

Sailboat access

canal condos

In the Cape Coral sailboat access condo segment, which is a subgroup of gulf access canal condos, the supply of unsold condos listed for sale remains stubbornly stuck in a high-inventory, buyer's market. This was despite a sharp 40 percent decline in supply from 16.67 months in the first quarter of this year, to 10 months supply in the second quarter. In 2016, the average second quarter supply was 10.33 months, while the supply in the month of June of this year came in at 9 months, which was down 30.77 percent from the 13 months of supply in June 2016, but up 12.5 percent compared to 8 months worth of unsold condos on the market in May. On a year-to-date basis, through June 30, the average supply of unsold sailboat access canal condos stood at 13.33 months, or 40.32 percent higher than the average of 9.5 months of supply over the first 6 months of 2016.

By any market measures of unsold supply, buyers continue to be in a much stronger position than sellers, when it comes to negotiating the terms of their purchase in the sailboat access canal condo segment. This means that a seller will be competing directly with other sellers in trying to attract a buyer for their condo, and they may find themselves having to make larger concessions to an interested buyer, in order to get their sailboat access canal condo sold.

Dry lot condos

The supply of unsold dry lot (non-canal) condominiums is at the complete opposite end of the spectrum, with a much lower supply, compared to gulf and sailboat access canal condos. The dry lot condo segment has been in more of a seller's market so far this year, meaning there are more potential buyers competing against each other over a limited supply of available condos listed for sale. This makes it more likely that the seller of a dry lot condo in Cape Coral will have an edge over the buyer in negotiating more favorable terms for the sale of their condo.

In June, the supply of unsold dry lot condos was 28.57 percent lower, at 5 months compared to 7 months of supply in June 2016, and 16.67 percent below the 6 months of supply in May of this year. In the second quarter, the average supply was slightly higher this year, at 5.67 months, up 6.38 percent over the second quarter of last year, when the average was 5.33 months supply, and 13.4 percent above the average of 5 months of supply in the first quarter of this year. Year-to-date, through June 30, the numbers swing back lower, to an average supply of 5.33 months of unsold dry lot condos, which was 13.61 percent less supply than the average of 6.17 months over the first 6 months of 2016.

The differences in the amount of the supply of unsold condos for sale on the market between the different property segments is most likely due to the differences in prices between dry lot condos compared to condos located on canals. In 2017, through June 30, dry lot condos had an average median sales price of $119,663 per month, while gulf access canal condos had an average median sales price of $191,917 per month. Sailboat access canal condos, with the highest monthly supply of unsold units, also had the highest average median sales price of $208,801 per month.

(The June 2017, and second quarter of 2017, sales data for this article was obtained from the Florida Realtor Multiple Listing Service Matrix for Lee County as of July 29, 2017, and compiled by Bob and Geri Quinn. It includes information specifically for Cape Coral low-rise, mid-rise and high-rise condominiums, along with attached and detached villas, and townhouses. It does not include single-family homes, 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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