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Lower first quarter condo supply, and COVID-19 impact

May 15, 2020
By BOB & GERI QUINN - Homing In , Cape Coral Daily Breeze

Today we are taking a look at the numbers for the monthly supply of unsold Cape Coral condominiums in the month of March and for the first quarter of 2020. The main takeaways are that we have a lower supply of unsold condos sitting on the market now, compared to last year, and having a lower supply of condos available for sale in our market can create more competition between interested buyers. This could help put some price support underneath condo values if we continue to see a strong buyer interest in our market and a bounce of increased activity off of the shutdown lows. The uncertainties with the virus, and its effects on the economy and the job market, remain wildcards for just about everything, as we appear headed towards record high levels of unemployment and underemployment.

But before we get into the numbers for the unsold condo supply, we thought we would provide an additional COVID-19-related sales update about our condo market.

For the year in 2019, there were a total of 689 closed condo sales in Cape Coral. Just for some perspective, in the Cape the combined total of condos sold plus single-family homes sold during 2019 came to 6,027 sales. So condo sales made up 11.43 percent of these particular "dwelling" sales last year. Moving into the sales numbers for 2020, based on the preliminary results we are seeing for the month of April, the number of closed condo sales in the Cape will likely be about 40% lower than the 78 sales in April of 2019, and the 4 month total for closed sales through April 30 of this year looks like it may be about even to 3% below the total of 228 condo sales over the first four months of 2019.

In analyzing the near-term effects of the COVID-19 social distancing shutdowns on the Cape's condo market, we ran some comparisons of the closed condo sales from March 1 through May 10. As we mentioned last week, the month of March posted strong numbers with a total of 70 closed condo sales. Since most condos go under contract with a buyer as a pending sale some 30 to 45 days before being finalized as a closed sale, these 70 sales in March were already in the pipeline prior to the social distancing shutdowns. This is reflected by the fact that these 70 sales were split evenly between the first and second halves of March, with no drop off after the shutdowns went into effect. Breaking this down, in the month of March, these 70 sales work out to an average of 2.258 condo sales per day.

The first impact of the COVID-19 shutdowns in our condo market came into play during April, where the preliminary number of closed condo sales was 44, for an average of 1.467 sales per day. This was a decline in sales of 43.59 percent from the 78 closed sales in April 2019, and a drop of 37.14 percent from the 70 sales in March of this year. In addition, the preliminary condo sales number for the first 10 days of May, with the data taken as of May 13, showed a dozen closed sales for an average of 1.2 sales per day. Please note that it is common for these preliminary numbers to move a bit higher as they get adjusted for slow reporting and corrections, but compared to an average number of sales totaling 2.419 per day for the entire month of May 2019, this May is clearly off to a weak start.

In the overall Cape Coral condo market, the monthly supply of unsold condos in March came in at 5 months, which was 28.57 percent lower than the 7 months of supply in March 2019, and 16.67 percent lower than the 6 months of supply in February of this year. In the first quarter of 2020, the level of overall unsold condo supply in the Cape has averaged 6.67 months, which was down 28.51 percent versus the average supply of 9.33 months in the first quarter of last year, but up 11.17 percent from the average of 6 months of supply in the fourth quarter of 2019. Since the preliminary condo supply numbers for the overall Cape market in April appear to be coming in a bit higher, we're going to call it a neutral market for now.

Gulf access canal condos

In the Cape Coral gulf access canal condo segment, the monthly supply of unsold condos in March came in at 5 months, which was 37.5 percent lower than the 8 months of supply in March 2019, and 28.57 percent below the 7 months of supply in February of this year. In the first quarter of 2020, the level of unsold condo supply in this segment averaged 6.67 months, which was down 45.9 percent versus the average supply of 12.33 months in the first quarter of last year, and 4.71 percent below the average of 7 months of supply in the fourth quarter of 2019. The last time the first quarter supply of unsold gulf access condos came in this low was in 2018, with an average of 7 months. The preliminary condo supply numbers for April in this segment also appear to be coming in a bit higher, so gulf access condos in the Cape are currently in a neutral market.

Sailboat access canal condos

In the Cape Coral sailboat access canal condo segment, which is a subgroup of gulf access condos, the monthly supply of unsold condos in March came in at 5 months, which was 54.55 percent lower than the 11 months of supply in March 2019, and 28.57 percent lower than the 7 months of supply in February of this year. In the first quarter of 2020, the level of unsold condo supply in this segment averaged 7.33 months, which was down 50 percent versus the average supply of 14.67 months in the first quarter of last year, but 9.9 percent above the average of 6.67 months of supply in the fourth quarter of 2019. The last time the first quarter supply of unsold sailboat access condos came in this low was also in 2018, with an average of 7 months. The preliminary unsold condo supply numbers in this segment for April are coming in a bit higher, so this segment is in a slightly higher neutral market range.

Dry lot condos

In the Cape Coral dry lot (non-canal) condo segment, the monthly supply of unsold condos in March came in at 6 months, which was 14.29 percent lower than the 7 months of supply in March 2019, but 20 percent higher than the 5 months of supply in February of this year. In the first quarter of 2020, the level of unsold condo supply in this segment averaged 6.33 months, which was down 5.1 percent versus the average supply of 6.67 months in the first quarter of last year, but 35.55 percent above the average of 4.67 months of supply in the fourth quarter of 2019. The preliminary condo supply numbers for April in this segment look to be a bit higher, leaving dry lot condos in the Cape in a neutral market.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of May 2, 2020, unless otherwise noted. 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 any data for single-family homes, foreclosures or short sales. 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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