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January supply of unsold Cape homes comes in lower

February 28, 2020
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

In our column back on Dec. 20 of last year, when discussing our market results for November, we commented that, "Barring any major outside influences, or surprises, which could knock the economy or the housing market off of the rails, the Cape's real estate market appears to be setting up for a solid, albeit rational, year in 2020."

Then in our Jan. 31 column, when we analyzed the numbers for December, the fourth quarter and for the year in 2019, we mentioned that, "Our optimism going into the New Year is further bolstered by the fact that we finished 2019 with some of the lowest inventory numbers that we have seen in years." We followed this up by saying, "Interest rates have been pushed even lower by a recent 'flight to quality' in the U.S. Treasury market due to concerns about the coronavirus. So barring an all out pandemic freezing the global economy, the lower interest rates may create enough extra buying power in our real estate market to help offset much of the usual first quarter increases in supply."

As we are writing our column this week, we appear to be heading towards all-time record low interest rates on the benchmark 10-year U.S. Treasury Note, as the flight to quality in the bond market is accelerating due to growing fears about the spread of the coronavirus. Since mortgage interest rates track the 10-year T-Note, we are likely to see record low mortgage rates in the first half of this year. As we note in our market data below, this is happening at a time when we have a lower than usual supply of homes available on the market. These lower interest rates and a lower, but still adequate inventory of homes, combined with a continued strong buyer interest in Cape Coral, has indeed set us up for another big year in our real estate market, as we expected. However, the key element for sellers still comes down to pricing their home realistically to the market, as buyers remain patiently rational.

But the wild card appears to have been dealt and it is sitting face up on the table for all to see in the form of the coronavirus and its potential impact on the U.S. and global economies. This has the potential to become the ultimate economic disrupter, as by most accounts, we are almost certainly going to see product supply chain disruptions around the world. At this point, nobody seems to have a complete grip on this growing crisis but it could easily create a domino effect throughout the economy, with the potential to put the real estate market on hold. It seems to come down to three things. How much will the virus spread? How long will it last? And, when will an effective vaccine be available? But the fact that they are considering canceling the upcoming Tokyo Olympics is just one sign that things could get a lot worse, before they get better.

In the overall Cape Coral single-family home market, the monthly supply of unsold homes came in at 8 months in January. This was 27.27 percent lower than the 11 months of unsold supply in January of last year, but 60 percent higher than the 5 months of supply registered in December. By comparison, the monthly level of unsold supply averaged 6.25 months in our overall market for the year in 2019.

Gulf access canal homes

In the Cape Coral single-family gulf access canal home segment, the monthly supply of unsold homes came in at 9 months in January. This was 43.75 percent lower than the 16 months of unsold supply in January of last year, and it is the lowest level of unsold supply for gulf access homes in the month of January dating back to 2012, when it came in at 10 months. The supply this January spiked 50 percent higher compared to the 6 months of unsold supply registered in December, which is the common seasonal pattern for the month of January. By comparison, the monthly level of unsold supply averaged 8.5 months in this segment for the year in 2019.

Sailboat access canal homes

In the Cape Coral single-family sailboat access canal home segment, which is a subgroup of gulf access homes, the monthly supply of unsold homes came in at 8 months in January. This was 52.94 percent lower than the 17 months of unsold supply in January of last year, and it is the lowest level of unsold supply for sailboat access homes in the month of January dating back to 2012, when it also came in at 8 months. The level of supply this January was flat with the 8 months of unsold supply registered in December, which was also the lowest level of unsold supply for the month of December since 2012. This unusually low level of inventory for the sailboat access canal home segment breaks the typical seasonal pattern of spiking higher in January. By comparison, the monthly level of unsold supply averaged 9 months in this segment for the year in 2019.

Freshwater canal homes

In the Cape Coral single-family freshwater canal home segment, the monthly supply of unsold homes came in at 11 months in January. This was 8.33 percent lower than the 12 months of unsold supply in January of last year, but a whopping 120 percent higher than the 5 months of supply registered in December. By comparison, the monthly level of unsold supply averaged 6.83 months in this segment for the year in 2019.

Dry lot homes

In the Cape Coral single-family dry lot (non-canal) home segment, the monthly supply of unsold homes came in at 7 months, returning to the more normal January level we have seen since 2015. The supply this January was 30 percent lower than the 10 months of unsold supply in January of last year, when this segment posted the highest level of unsold supply in the month of January since coming in at 9 months back in 2014. We did see the typical seasonal spike to higher inventory levels this January, as the unsold supply was 40 percent higher compared to the 5 months registered in December. By comparison, the monthly level of unsold supply averaged 5.83 months in this segment for the year in 2019.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Feb. 15, 2020. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral single-family homes, and does not include condominiums, 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 40 years. Geri has been a full-time Realtor since 2005, and Bob joined 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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