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First quarter supply of unsold homes lowest since 2013

May 1, 2020
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

This week we will be taking a look at the monthly inventory, or what we refer to as the monthly supply of unsold Cape Coral single-family homes, for the month of March and the first quarter of this year.

As noted in the headline, the main takeaway from these monthly home supply numbers is that they are mostly much lower than we have typically seen in recent years during our peak "seasonal months" when our area is packed with winter visitors. This lower than usual first quarter supply was due to the fact we came into 2020 off of a lower than normal fourth quarter supply of unsold homes due to a record number of sales in 2019, followed by a record first quarter of closed home sales in the Cape. This lower level of inventory may help stabilize our home prices this year, offsetting the decline in prices that some potential home buyers are anticipating because of the COVID-19 economic stresses. The key word being "may," because there are likely to be a lot of moving parts regarding the impact of the numerous resulting economic dislocations in the coming months.

Here is what we are currently seeing on the ground in the Cape's real estate market. The number of showing appointments scheduled by agents at homes currently listed for sale have increased over the past several weeks, after falling off of a cliff following the social distancing shutdowns in the second half of March. We are also fielding a steady stream of buyer interest inquiries from around the country, which is likely creating a fairly solid level of future pent-up demand. These two things are both positive trends for future sales.

In addition, homes are still going under contract with buyers, and home sales are still closing, although our preliminary research is indicating a decline in sales of about 21 to 25 percent year over year in April, to a level of around 380 to 400 homes sold in the Cape versus 504 homes sold in April of last year. Hopefully, this declining sales curve will flatten out at this level, or improve in May and June. This is something we will be monitoring and reporting on throughout the upcoming months, using current factual market driven data.

We continue to see buyers behaving in a very rational manner when it comes to finding homes that are priced reasonably to the current market, and the coronavirus issues have made some buyers more cautious and prudent. As an example, we were recently putting together an offer for a buyer and as we were preparing to email them the purchase contract for their electronic signatures, they decided to hold up because of concerns about their job security.

In the overall Cape Coral single-family home market, the monthly supply of unsold homes in March came in at 5 months, which was 28.57 percent lower than the 7 months of supply registered in both March 2019, and in February of this year. In the first quarter of 2020, the level of unsold supply in the Cape has averaged 6.67 months, which was down 25.89 percent versus the average supply of 9 months in the first quarter of last year, but up 17.64 percent from the average of 5.67 months of supply in the fourth quarter of 2019. This was the lowest level of first quarter unsold supply in the Cape's overall home market since it came in at an average of 4.67 months in the first quarter of 2013. We are currently straddling the 6 month home inventory line between being in a neutral market or in a seller's market.

Gulf access canal homes

In the Cape Coral single-family gulf access canal home segment, the monthly supply of unsold homes for March came in at 7 months, which was 22.22 percent lower than the 9 months of supply registered in both March 2019, and in February of this year. In the first quarter of 2020, the level of unsold supply for gulf access homes in the Cape averaged 8.67 months, which was down 29.68 percent versus the average supply of 12.33 months in the first quarter of last year, but 13.04 percent higher than the average of 7.67 months of supply in the fourth quarter of 2019. This was the lowest level of first quarter unsold supply in this segment since it averaged 7.67 months in the first quarter of 2013. This segment is currently in more of a neutral market range.

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 for March came in at 7 months, which was 12.5 percent lower than the 8 months of supply in March 2019, and 22.22 percent below the 9 months of supply in February of this year. In the first quarter of 2020, the level of unsold supply for sailboat access homes in the Cape averaged 8 months, which was 31.45 percent less than the average supply of 11.67 months in the first quarter of last year, and down 7.73 percent from the average of 8.67 months of supply in the fourth quarter of 2019. This was the lowest level of unsold supply in this segment for a first quarter since the supply averaged 8 months in the first quarter of 2013. This segment is also currently in more of a neutral market range.

Freshwater canal homes

In the Cape Coral single-family freshwater canal home segment, the monthly supply of unsold homes for March came in at 4 months, which was the lowest level of supply in March since back in 2012, when it came in at only 3 months. At 4 months, this March was 42.86 percent lower than the 7 months of supply registered in both March of 2019, and in February of this year. In the first quarter of 2020, the level of unsold supply in this segment averaged 7.33 months, which was down 26.7 percent versus the average 10 months in the first quarter of last year, but up 4.71 percent from the average of 7 months of supply in the fourth quarter of 2019. The first quarter of 2020 matched the more recent first quarter low of 7.33 months of average supply from back in 2018. This segment is in more of a neutral market, possibly heading towards more of a seller's market this summer.

Dry lot homes

In the Cape Coral single-family dry lot (non-canal) home segment, the monthly supply of unsold homes for March came in at 4 months, which was 33.33 percent lower than the 6 months of supply in both March 2019, and in February of this year. In the first quarter of 2020, the level of unsold supply for dry lot homes in the Cape averaged 5.67 months, which was down 29.13 percent versus the average supply of 8 months in the first quarter of last year, but 13.4 percent higher than the average of 5 months of supply in the fourth quarter of 2019. We have to go back to 2015 in this segment to see both a 4-month level of supply in the month of March, and an average first quarter unsold supply level of 5.67 months. This segment is firmly in a lower inventory seller's market.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of April 20, 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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