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Year-to-date break down of Cape Coral condo prices

June 8, 2018
By BOB and GERI QUINN - Homing In , Cape Coral Daily Breeze

This week, we thought we would give you some additional insight into our condo market by providing you with a breakdown of the sales prices for Cape Coral condos so far in 2018. We will also get into some of our "forensic price analysis" about the market to better illustrate what we mean when we say "a lot" of homes, or in this case, condominiums, are overpriced and ultimately end up selling for 10 to 15 percent, or more, below their initial listing prices. Let's begin with a closer look at the price ranges for closed condo sales.

Through June 3 of this year, sales prices on Cape Coral condominiums have ranged from a low of $55,000 to a high of $835,000 and so far during 2018, just over 80 percent of all condo sales in the Cape have been at prices below $250,000. The sweet spot for condo sales prices this year has been in the $100,000 to $199,999 price range, which has made up a total of 58.46 percent of the Cape's condo market sales. The higher end of our condo market, which we will broadly define for our purposes today as $379,000 and above, is dominated by the condo properties in Cape Harbour and Tarpon Point Marina. These sailboat access communities with marinas along the river, make up 90 percent of all sales in this price range. The condos in Tarpon Point Marina, and more specifically in the Tarpon Landings high rises, have almost complete control of the upper end of the condo price points in our market.

For example, if we include all condos sold for $500,000 and above in the Cape so far in 2018, we end up with 18 condos on this list, which is about 5 percent of our total condo sales. Tarpon Landings dominates this category by holding 11 of the top 18 spots, while condos in Cape Harbour hold six of these spots. A condo in Paradise Point, on the river at the end of Beach Parkway in the Southeast Cape, was the only "outsider" in the mix, when it managed to grab a spot in the top 18, with a sales price of $525,000 back in February.

Digging deeper into the high end market dominance, if we narrow the list down to the top 10 highest priced condo sales in Cape Coral so far this year, they ranged in sales prices from $620,000 to $835,000. In this grouping, the condos in Tarpon Landings not only had eight of the top 10 spots, with only two spots going to condos in Cape Harbour, but they also captured the top four slots. Those top four places in the standings had final sales prices ranging from $750,000 to $835,000.

Now let's look at the top of the condo market from a forensic price analysis point of view, to see how many of these units were overpriced when they were first listed for sale and by how ?much. To do this, we compared the initial listing price to the final sales price to see how many condos in this group ended up selling for at least 10 percent, or more, below their initial list price. After going through the data, we found that out of the top 18 closed condo sales so far in 2018, eight of these sales, or 44.44 percent, closed at prices ranging from 11.66 percent to 30.69 percent below their initial list prices. The other 10 sales in this group of condos were sold in a reasonably priced range of between 2.14 percent and 9.99 percent below their initial list prices, with five of these sales closing at a price within 5 percent of their initial list price.

We uncovered several points of interest with this group of 18 high end condo sales. First, with the eight overpriced condos, six of them required multiple price reductions before they attracted a buyer, while one had a single price reduction and one other did not make any price reductions. The condo that did not make a price reduction sold for 12.2 percent below its initial list price. As a rule, the overpriced condos took longer to sell, compared to the other 10 condos in this group that had a more reasonable initial listing price. Out of these 10 condos, only two of them had to make a price reduction and any unit with an initial list price within 8 percent of the final sales price did not need to make a price reduction. The units priced most realistically to the market went under contract with a buyer in less than 30 days after being listed for sale.

Also, out of this group of 18 condos which sold for $500,000 and up, there were 11 cash buyers, six buyers who financed with conventional loans and one buyer who used seller financing for their purchase.

When we examined the top 10 highest priced Cape Coral condo sales so far this year, five of them, or 50 percent, ended up selling for more than 10 percent below their initial list prices. Four of these five "overpriced" listings had to make multiple price reductions before reaching their optimal listing price at which they were able to attract a buyer. The fifth overpriced listing in this group, made a single price reduction of 5.89 percent off of the initial list price, before attracting a buyer. However, following this price reduction, it took seven additional months for this condo to be sold, and the final sales price was $49,000 or another 6 percent below their reduced price.

To put all of this into some perspective, the condos we just analyzed are condos that have been sold, so we are able to confirm if they started out overpriced by 10 percent or more.

Our random sampling found that 44 to 50 percent of these condos fell into this overpriced category and they almost always required at least one price reduction of more than 5 ?percent, if not multiple price reductions, before they could attract a buyer. Keep in mind this does not include all of the overpriced homes we see sitting on the market unsold for extended periods of time. So when we say our market has a larger supply of overpriced homes and condos listed for sale, and a smaller supply of reasonably priced homes available on the market, this is how we are making that determination. Most buyers have a good feel for our market and they are remaining very rational, which is why reasonably priced homes sell quickly and overpriced homes just sit on the market until they reduce their price enough.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County as of June 3, 2018. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral condominiums, and it does not include information for single family homes. 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 Quinn's 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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