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Unsold supply of Cape condos varies by property type

November 10, 2017
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

This week we will be analyzing the different market segments of the Cape Coral condo market to see if they are currently in a buyer's, seller's or neutral market. In general, a lower monthly supply of unsold condos will favor sellers, as it forces buyers to compete against other buyers for a limited supply of available condos. While a higher monthly supply of unsold condos will favor buyers, as it forces sellers to compete against other sellers to try to attract a buyer when there is more a glut of available condos for sale on the market. Having a better understanding about these market conditions, and the unique attributes of Cape Coral real estate, can help both buyers and sellers make better, more informed decisions.

In the overall Cape Coral condominium market, the monthly supply of unsold condos was 12.5 percent lower this September, with a 7-month supply versus an 8-month supply in September 2016, but it was up 16.67 percent compared to the 6 months of supply in August of this year. The supply was also lower in the third quarter of this year compared to 2016, down by 13.64 percent to 6.33 months versus 7.33 months of supply in the third quarter last year, and 5.1 percent lower than the 6.67 months of supply in the second quarter of this year. Through Sept. 30, the year-to-date average monthly supply of unsold Cape Coral condos listed for sale has averaged 6.78 months in 2017, or 3.14 percent lower than the average 7 months of supply over the first 9 months of 2016.

On an overall basis, this puts our condo market firmly in a neutral market, where there is no advantage to either a buyer or a seller when negotiating the price or terms on a purchase or sale of a condo. However, as you will see below, there are some significant differences in the numbers when we break them down for the specific condo property types, illustrating the various market conditions by segments, which creates the markets within our market.

Gulf access canal condos

In the Cape Coral gulf access canal condominium market, the monthly supply of unsold condos was 10 percent lower this September, with a 9-month supply versus a 10-month supply in September 2016, but it was 28.57 percent higher than the 7 months of supply in August of this year. The supply was also lower in the third quarter of this year compared to 2016, down by 23.3 percent to 7.67 months versus 10 months of supply in the third quarter last year, but flat with the 7.67 months of supply posted in the second quarter of this year. The year-to-date supply of unsold gulf access canal condos in the Cape, averaging 8.56 months through Sept. 30, is unchanged from the average supply over the first 9 months of 2016. This places the gulf access canal condo segment a bit deeper into neutral market conditions than the overall market.

Sailboat access canal condos

In the Cape Coral sailboat access canal segment of our condo market, there was an 11-month supply of unsold condos this September, which matched the 11-month supply from September 2016, but it was up 83.33 percent compared to the 6 months of supply in August of this year. However, the third quarter supply was 32.44 percent lower this year compared to 2016, down to 8.33 months versus 12.33 months of supply in the third quarter last year, and down 16.7 percent from the 10 months of supply posted in the second quarter of this year. While the year-to-date supply of unsold sailboat access canal condos in the Cape, averaging 11.67 months through Sept. 30, was 12.3 percent higher than the average of 10.44 months of supply over the first 9 months of 2016.

The large 83.33 percent month-over-month jump in the supply of unsold sailboat access canal condos from this August to September seems to be one of the few condo market statistics that could be tied to Hurricane Irma. This also coincided with the largest drop off in the number of condos sold in any property segment, with closed sales of sailboat access units down 45 percent from August to September. All of this occurred in what had otherwise been the strongest year for the number of closed sales in sailboat access condos in the last 11 years, after posting a dismal five sales in January, for the worst start to a year since 2012.

Despite the vastly improving numbers since the bad start to this year, the sailboat access canal segment of the Cape Coral condo market remains the only condo segment mired in a high inventory, buyer's market trend. With the average year-to-date monthly supply of unsold sailboat access canal condos running some 72 percent above the unsold supply in the overall market, it can create a very competitive situation between sellers who are serious about getting their units sold. This often means a seller may have to be more aggressive in making price reductions or other concessions, in order to attract a buyer away from another competing seller, which tends to put the buyer in a strong position to negotiate a better deal.

Dry lot condos

The Cape Coral dry lot (non-canal) condominium market segment is at the opposite end of the spectrum from the higher-priced sailboat access canal condos, in that they are the only segment of our condo market currently considered to be in a seller's market. This means someone trying to sell their dry lot condo has at least some level of an advantage over a buyer in negotiating a more favorable sales price, or terms of the sale. With an average year-to-date median sales price of $123,998 for dry lot condos over the first 9 months of this year, it does not mean a seller can simply "name their price," and get their unit sold, but condos priced reasonably for the current market conditions in this segment will likely be sold in under 45 days.

The supply of unsold Cape Coral dry lot condominiums continued moving to lower levels across the board, which will likely create even more competition between people who are trying to buy a condo. The September supply of 4 months, was 33.33 percent lower than the 6 months of supply in September 2016, and it was also 20 percent below the 5 months of supply this past August. In the third quarter of this year, there was an average unsold supply of 4.67 months, which was 12.4 percent less than the average of 5.33 months in the third quarter 2016, and 17.64 percent below the average of 5.67 months of supply in the second quarter of this year. Through Sept. 30, the year-to-date unsold supply of dry lot condos in 2017 has averaged 5.11 months, or 13.24 percent lower than the average supply of 5.89 months over the first 9 months of 2016. This is all good news for dry lot condo sellers.

(The September 2017 sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Oct. 29, 2017, and it was compiled by Bob and Geri Quinn. It includes information specifically for Cape Coral condominiums, villas and townhouses, 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 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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