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Year-to-date unsold condo supply higher versus 2018

June 14, 2019
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

We are reaching the point in the year where there is a divergence between the monthly levels of unsold supply, which are lower, and the levels of the year-to-date averages of unsold supply, which are higher. This puts our market in a position where it often provides two different readings, with the shorter term single-month picture looking better than the four-month totals for the year-to-date averages. When this difference in the unsold supply numbers occurs, the market usually does not react immediately to the improving single-month results, because of a hangover effect from the higher year-to-date averages. You can see a good example of this below, in the numbers for the Gulf and sailboat access canal condo segments, where the unsold supply in the month of April was at a neutral market level, but so far in 2019, the four-month average of unsold supply was at a much higher buyer's market level of inventory. In either case, the bottom line in our current market is that the only condos that get sold are those that are being offered at a reasonable price, and these reasonably priced condos tend to sell very quickly. At the same time, the longer a condo sits on the market unsold, the more likely that it is significantly overpriced.

The quick market overview regarding the level of unsold condo supply in the Cape is that it was lower in April than it was in March of this year, and the supply was equal to or lower than it was in April 2018, both of which are good things. However, on a year-to-date basis through the end of April, the average monthly levels of unsold condo supply in the Cape are running much higher than they were over the first four months of the year in 2018. If this pattern holds, it could become a concern, especially for someone trying to sell their condo, because a higher level of unsold supply creates more competition between sellers and it can put some downward pressure on prices.

Remember, in our current market, it is better to have a lower level of unsold supply, and when the monthly level of unsold supply is less than six months, it is considered to be a seller's market. When the unsold supply is between six and nine months, it is more of a neutral market, while a supply level over nine months would be considered a buyer's market. The specific details about the unsold supply for each segment of our condo market follows.

In the overall Cape Coral condominium market, the monthly supply of unsold condos came in at 6 months in April, which was flat with the 6 months of unsold supply in April 2018, but down 14.29 percent from the 7 months of condo supply in March of this year. However, in the first four months of 2019, the supply of unsold condos in the overall Cape market was higher, averaging 8.5 months, which was up 41.67 percent compared to the average of 6 months of supply over the first four months of last year. This level of unsold supply places our overall condo market in more of a neutral market.

Gulf access canal condos

In the Cape Coral Gulf access canal condo segment, the monthly supply of unsold condos also came in at 6 months in April, which was flat with the 6 months of unsold supply in April 2018, and down 25 percent from the 8 months of unsold condo supply in March of this year. In the first four months of 2019, the supply of unsold Gulf access canal condos in the Cape averaged 10.75 months, which was 59.26 percent higher than the average of 6.75 months of supply over the first four months of last year. This leaves us with a significant divergence between the very short-term monthly number for the level of unsold supply in April, at 6 months, and the year-to-date average of 10.75 months of supply over the first four months of 2019. So despite the shift to a lower level of unsold supply in April, the heavier weighting leans towards the four-month average level of supply, which leaves this segment in a "still feels like" a higher inventory buyer's market for now.

Sailboat access canal condos

In the Cape Coral sailboat access canal condo segment, the monthly supply of unsold condos followed suit by coming in at 6 months in April, which was actually down 14.29 percent compared to the 7 months of unsold supply posted in April 2018. The unsold supply of 6 months this April was also 45.45 percent lower than the 11 months of unsold condo supply in March of this year. These were both positive short-term results. However, in the first four months of 2019, the supply of unsold sailboat access canal condos in the Cape averaged 12.5 months, which was a whopping 78.57 percent higher than the average of 7 months of supply over the first four months of 2018. This significant divergence between the very short-term monthly unsold supply number in April, at 6 months, and the much higher year-to-date average of 12.5 months of supply over the first four months of 2019, makes us lean heavily towards saying this segment is in a "still feels like" a buyer's market for now.

Dry lot condos

In the Cape Coral dry lot (non-canal) condo segment, the monthly supply of unsold condos came in at 5 months in April, which was flat with the 5 months of unsold supply in April 2018, and 28.57 percent lower than the 7 months of unsold condo supply in March of this year. In the first four months of 2019, the supply of unsold dry lot condos in the Cape averaged 6.25 months, which was 19.05 percent higher than the average of 5.25 months of supply over the first four months of last year. So back in 2018, after the first four months of the year, this segment was in a seller's market with less than 6 months of inventory, while this year we are in a slightly higher supply, neutral market, but likely heading back towards seller's market conditions sometime this summer.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of June 1, 2019. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral condominiums, townhouses, and villas, 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 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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