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Cape’s luxury home market remains solid at mid-year

By Staff | Jul 10, 2020

It is time once again for our tip of the hat to Robin Leach, the late host of “Lifestyles of the Rich and Famous,” as we peel back the mask on the first half of 2020 for a toast of champagne wishes and caviar dreams by taking a quick look back at the Cape Coral luxury home market. For our purposes, this market segment consists of homes that have sold for $1 million and up. This makes up 1.09 percent of the 2,483 single-family home sales in the Cape through June 30 of this year, which compares to 2019, when this segment made-up only 0.75 percent of the 2,658 total Cape home sales at mid-year.

In our high-end luxury home market, the first half of 2020 turned into a battle between the impact of the social distancing shutdowns during the second quarter of this year, versus the lagging impact that the water quality issues of 2018 had on the sales numbers in the first quarter of 2019. At mid-year of 2019, there were a total of 20 closed home sales in the Cape at prices of $1 million and above, with only seven sales being registered during the first quarter of that year. The abnormally low number of luxury home sales at the beginning of 2019 was directly related to the fall-out from the algae in the canals and red tide along the beaches. Fast forward to 2020, where we posted 12 first quarter luxury home sales in the Cape, followed by 15 such sales in the COVID-19 impacted second quarter of this year. So at the midpoint of 2020, luxury home sales are now 35 percent ahead of last year, with a growing likelihood of a wild second half of the year ahead of us on a lot of fronts.

Sales prices in our luxury home market have ranged from $1 million to $2,225,000 in the first half of 2020, with the median sales price in this segment coming in at $1.17 million, which was just $5,000 or 0.43 percent above the median sales price of $1.165 million registered in the first half of last year. During the first half of 2019, there were two home sales above $2 million, with the highest-priced sale coming in at $2.55 million, while we have recorded three sales above $2 million in 2020, with the highest priced sale so far this year noted above. In the first six months of last year, 70 percent of the luxury sales were bought with cash and 30 percent were financed. So far in 2020, cash deals in this segment dropped to 56 percent of sales and financed deals moved up to 44 percent of sales. This shift in the method of purchase in our luxury market could be due to the combination of “cheap” money in the form of record low mortgage rates, along with the possible desire of some people to hold onto more cash for the foreseeable future.

At mid-year, 14 of the 27 luxury home sales were in the Southwest Cape, while 12 were in the Southeast Cape, and one was on Old Burnt Store Road, North, in the Northwest Cape. All 27 were on water, with one being a landlocked waterfront property in Tarpon Estates, while five others were riverfront homes, and four were indirect gulf access homes needing to go under one bridge in the canal system before reaching the river. In addition, five of these 27 homes were “sailboat access,” with no bridges to the river, but they had to go through the boat lock near Rum Runners on the Southwest Spreader Canal, and 12 were direct sailboat access homes with a short distance and a clear path to the river.

There are 12 other homes in the Cape’s luxury segment currently under contract with buyers as pending sales. So the third quarter of this year appears to be well on the way towards continued solid sales results, although the highest-priced of these pending home sales currently in the pipeline will likely be below $1.699 million.

The top home sale in the first half of this year was for a home in the Yacht Club neighborhood in the southeast section of the city, which went under contract with a buyer as a pending sale on May 27, before being finalized as a closed sale in a cash deal for $2,225,000 on June 25. The seller originally bought this property, situated on a corner lot at the end of a cul-de-sac with 263 feet of water frontage on intersecting canals, back in April 2009 for $600,000. At the time of that purchase there was a 2,247-square-foot, 4-bedroom, 2-bathroom pool home located on this site, which had been built in 1967. According to the records, a demolition permit was pulled in September 2011, followed by a new home construction permit on Jan. 30, 2012.

The construction of this then newly built custom home, with approximately 4,001 square feet of living area and 9,447 square feet of total area, was completed in 2013. This home features 4 bedrooms, 4 1/2 bathrooms, with an oversized air conditioned 4-car garage, plus an additional 1-car garage. The kitchen area was set up for entertaining, and features top of the line Miele appliances. The lanai and pool area creates an incredible space with over 4,000 square feet of outdoor screened-in area, featuring a travertine pool deck to go with the gas heated infinity edge pool and spa overlooking the wide canal, an outdoor kitchen and a gas fireplace. The dock, with composite decking, includes a captain’s walk; a tiki hut; a new, covered 28,000-pound boat lift; plus a separate, covered 10,000-pound-boat lift and a personal watercraft lift. There is also an additional 60-foot boat slip and boathouse, along with too many other indoor and outdoor features to include here.

The owners attempted to sell this home for $2.499 million beginning in March 2016, and had no luck finding a buyer after dropping the price by 20 percent to $1.999 million in April 2016. They took another shot at selling this home in 2017, starting out at $2.199 million and eventually coming back down to $1.999 million before taking the home off of the market again. However, the third time proved to be the charm as they listed the home for sale again in November 2019 for $2.395 million, so the closing sales price of $2.225 million in June of this year was only $170,000 or 7.1 percent below their initial list price on this go around. Going back to their first attempt to sell this home back in March of 2016, their ultimate sales price this year was $274,000 or 10.96 percent below their first list price of $2,499,000.

As can often happen with a unique property, this looks like a case of the seller needing to be patient enough for the right, unique buyer to come along who would require the benefit of 857 square feet of air-conditioned garage space and 1,231 square feet of total garage space. The lesson here is that the difficulty with this sale probably had less to do with the price, and more to do with the custom garage space eliminating the vast majority of potential buyers.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of July 5, 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.)