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Cape’s top first quarter luxury condo sales of 2019

April 19, 2019
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

This week we will continue our homage to the late Robin Leach, in our Cape Coral version of "Lifestyles of the Rich & Famous," with the first quarter results for the high-end of our condominium market. For our purposes, we searched for condos in Cape Coral that were sold by a Realtor for $500,000 or more, during the first three months of 2019.

The first thing of note about the Cape's $500,000-plus luxury condo market, is that the number of closed sales in the first quarter of 2019 were down 60 percent, with only four condos sold at this luxury price point, versus 10 closed sales over the first 3 months of 2018. However, as we saw with the single-family home market last week, we are already on track during the month April to register a higher number of closed luxury condo sales in the second quarter of this year, compared to the first quarter, so the trend of stronger closed condo sales from April through June looks to be intact in the higher-end of our market. The final sales prices of these four closed condo sales ranged from a low of $570,000 to a high of $900,000 versus a price range from $509,250 to $835,000 for the 10 sales in the first quarter of 2018.

All four of the closed sales in the first quarter of this year were located in the Southwest Cape, with the three highest priced units in the high-rise condos in the Tarpon Landings section of Tarpon Point Marina, and the lowest priced unit located in Cape Harbour. These four luxury condos were bought for cash, compared to the first quarter of last year, when six of the 10 high-end condo sales were bought for cash and four were purchased with conventional loans. As we mentioned in this column last week, this illustrates that there are segments of our real estate market which are unlikely to be negatively impacted by rising interest rates, because a lot of the buyers coming to our area are capable of paying cash.

Here are a couple of more details about these four condo sales. The oldest in this group was located in Cape Harbour and it was a first floor unit built in 2004, while the two highest-priced units in Tarpon Point Marina were both built in 2006, and the fourth unit of the group was built in 2007. The initial listing price on all four of these luxury condos would meet the definition of being "reasonably-priced," in that none of them needed any price reductions to attract a buyer, and the final sales prices all came within a range of only 4.2 percent to 9.91 percent less than the initial list prices. At a time when it is not uncommon to see homes and condos requiring multiple price reductions before ultimately selling for anywhere between 12 to 25 percent below their initial list prices, this was an indication that both the agents and the sellers were reasonable in their approaches to pricing these units to the current market.

On a sales price per square foot basis for these four condo sales, the low was at $244.11 per square foot, and the high was at $295.28 per square foot. As a comparison, the per square foot sales price in the Cape's high-end single-family home market, which was in last week's column, ranged from a low of $266.68 per square foot to a high of $604.84 per square foot for a riverfront home built in 2018.

The most interesting story behind the sale of one of these condos occurred with the second highest-priced sale in the first quarter of this year, for a luxury unit located in the riverfront Tarpon Landings high-rise, which was sold for $850,000 in January. The seller in this recent sale bought this unit for $835,000 in cash back in March 2018, so they sold this condo for only 1.8 percent more than they bought it for. This would translate into a net loss after the seller paid their typical expenses related to a sale. Several of the highlights featured with this roughly 3,000-square-foot, 3 bedroom, 3 1/2 bathroom unit with a den, include the fact that each of the bedrooms are en suite, and this unit is said to have amazing sunrise and sunset water views from every room. The detailed property information in the listing reports from the sales in 2018 and 2019, both highlighted the over $170,000 in upgrades made to this unit, although it appears that these upgrades were made by a prior owner.

This unit was also sold for $800,000 back in June 2015, at which time the listing information also stated that the unit had been "totally remodeled and upgraded." The sales history on this condo unit gets even more interesting the further one looks back at the records, as it illustrates the boom, bust and recovery periods of our real estate market over the last 13 years. But before we go back for a look at the boom and bust years, we can see that the recovery in the Cape's luxury condo pricing has seemed to slow a bit, by looking at these three sales in 2015, 2018 and 2019. As noted above, the person who bought this unit in 2015 for $800,000 managed to sell it for $835,000 almost three years after purchasing it. This works out to an increase in price of only 4.38 percent, so this seller would have sold for a net loss after seller-related expenses, making it two consecutive sales on this unit with net losses for the prior owner, as we have seen recent prices flattening out in our market.

Now we will go back to day one for a look at the boom and bust years with this condo, which was built in 2006. The first two sales on this unit were a classic simultaneous flip that was fairly common during the market boom, where the records indicate that an investor bought this newly built condo for $822,100 on Oct. 6, 2006, and sold it to an individual for $1,065,000 on the very same day for a mark-up of 29.55 percent. This occurred near the peak of our market, and the person who bought the condo for over $1 million eventually went into foreclosure, with the bank buying it back for $272,500 in July 2010. As the bank tried to sell this unit, it was advertised as "needing a heavy rehab," and the next buyer bought it from the bank in January 2011, for $350,000. This buyer did the $170,000 of remodeling work to this unit and eventually sold it for $800,000 in June 2015, or for about 128 percent more than they bought it for out of the foreclosure.

The takeaway on all of this, is that despite a solid market recovery, we have not reached the peak price point of just over $1 million that was paid for this unit in 2006, although one could argue that we have exceeded the somewhat more realistic "pre-flipped" price point of $822,100 from October of 2006.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, FL, as of April 14, 2019. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral condominiums, townhouses, and villas, and 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 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 39-years. Geri has been a full-time REALTOR since 2005, and Bob 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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