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Cape’s monthly supply of unsold homes trends lower

June 1, 2018
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

In the overall Cape Coral single-family home market, the monthly supply of unsold homes has been following its seasonal pattern towards a lower supply. This typically begins in the month of March and continues into the second quarter of the year. In April, the monthly supply of unsold homes in the overall market declined to 5 months from 6 months back in March, but the more notable decline in the supply number was the 37.5 percent drop from the peak months of January and February of this year, which each had 8 months of unsold supply. This is all part of the seasonal effect in our real estate market.

This April also came in below the 6 months of unsold supply posted a year ago, in April of 2017, and through April 30, on a year-to-date basis, we are averaging 6.75 months of unsold supply, which is about 7 percent lower than the average unsold supply of 7.25 months over the first four months of 2017. This means our overall single-family home market is firmly locked into neutral market conditions, where neither a buyer, or a seller, has an advantage over the other in negotiating the terms or price on the purchase or sale of a home.

Seeing these lower numbers in the monthly supply of unsold homes is a good thing for our market, especially when you consider that the number of Cape Coral homes sold so far this year has been very strong. On the surface, the lower numbers for the monthly supply of unsold homes, combined with the strong results in the number of homes sold this year, would seem to indicate a seller could demand and hold out for a higher price on their home, but this has not necessarily been the case in our market. We continue to see a distinct divide between having a fairly limited supply of reasonably priced homes listed for sale and a much larger supply of overpriced homes listed for sale. When a home is priced reasonably to the market, especially at price points from around $325,000 and below, it will go under contract with a buyer within days or weeks of being listed.

One of the reasons a lot of sellers want to list their home for sale at a higher price is because they figure a buyer is going to make a low offer and the seller wants to "leave enough room" to negotiate with the buyer. But the reality in our market is that this approach of building in a cushion for price negotiations often means a seller will not receive any offers and their home will sit on the market unsold, until they make adequate price reductions to attract a serious buyer. Whereas, homes that are priced reasonably to the market for the age, condition and location of the home, will usually be sold fairly quickly and for a price that is very close to the list price. For many sellers, finding the optimal listing price to attract a buyer can become a painful experience in price reductions.

Here is a look at the markets within the market, so you can see how each property segment compares to the current overall Cape Coral home market.

Gulf access canal homes

The monthly supply of unsold Cape Coral single-family gulf access canal homes also followed the seasonal trends, decreasing by 30 percent to a 7 month supply in April, from 10 months of unsold supply in March, while plummeting by 46 percent from the peak level of 13 months from back in January of this year. The 7 months of unsold supply this April matched the supply level from April of 2017, however, on a year-to-date basis through April 30, the average unsold supply of 10.5 months was 5 percent higher than the average of 10 months of unsold supply over the first four months of 2017, placing this segment in a buyer's market.

Sailboat access canal homes

In the Cape Coral sailboat access canal home segment, the monthly supply of unsold homes was at 7 months in April, which was also down 30 percent from 10 months in March of this year, but 16.67 percent higher than April of 2017, when the supply came in at 6 months. The peak level of unsold supply so far in 2018 was 11 months back in both January and February. Year-to-date through April 30, the monthly supply of unsold sailboat access canal homes has averaged 9.75 months, which was 5.4 percent higher than the average of 9.25 months over the first four-months of 2017. This puts this segment in the high-end of a neutral market, bordering on a buyer's market.

Freshwater canal homes

The Cape Coral freshwater canal home segment is currently in a neutral market for the year, however, we have seen a dramatic decline in the monthly supply of unsold homes in this segment during April. This has the potential to shift this group into a seller's market within the next several months. The unsold supply was only 4 months in April, which was 42.86 percent less than the 7 months of unsold supply posted in April 2017, and it was 33.33 percent below the 6 months of supply in March of this year. This April came in 55.6 percent below the peak of unsold supply in the freshwater canal segment, which was at 9 months in January of this year. Through April 30 of this year, the monthly supply of unsold freshwater homes has averaged 6.5 months, which was 25.71 percent below the average of 8.75 months over the first four months of 2017.

Dry lot homes

After hitting an unusually high single month peak of 8 months of unsold supply in February, the Cape Coral single-family dry lot (non-canal) home segment has quickly returned to form ?by posting 5 months of unsold supply in the months of March and April. This matched the 5 months of unsold supply from April 2017, barely leaving this segment in a neutral market with a year-to-date average supply of 6 months through April 30th, which was 4.35 percent above the average of 5.75 months of unsold supply over the first four months of last year. Based upon past performance, we expect the dry lot segment to move back below 6 months of unsold supply in the month of May, to once again become the only part of our single family home market to be in a lower inventory, seller's market.

(The April 2018 sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County as of May 21, 2018. It was compiled by Bob and Geri Quinn and 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 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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