In analyzing the monthly supply of unsold single-family homes in Cape Coral for the month of August, and over the first eight months of 2020, it has become clear that our local real estate market is being driven by a combination of factors. We are experiencing a “mini-boom” of sorts, with unusually strong, record-setting home sales so far in the second half of this year, as the historically slower paced third quarter will end up posting a new record for the number of closed home sales. We will also most likely set a new third quarter record for having the lowest monthly level of unsold home supply, as an unusually short supply of available active listings is creating a supply versus demand mismatch in a market with strong buyer interest. This has shifted the Cape Coral single-family home market into a seller’s market with one caveat — buyers are still remaining rational with what they will pay for a home. So this has not turned into a crazy, name any price and it will be sold type of seller’s market.  

Before we dig deeper into the August unsold home supply numbers, we will address some of the factors contributing to what we are defining as the mini-boom currently occurring in our market. The primary reason we are calling it a mini-boom is because we are not seeing the completely out of control and irrational market boom conditions reminiscent of the days back in 2004 through 2007. Just in case you are new to Southwest Florida, this was a time when “investors” were confident that if they bought a home, condo or vacant lot in Cape Coral or Lehigh Acres today, they could flip it for a profit to another “investor” some three months later. Back then, market analysts estimated that 40 percent of the new homes being built locally were spec homes just being flipped between investors with no end user who would actually occupy the home. This process kept repeating itself until the music stopped and the painful reality set in that there were no chairs remaining for those still in the game.  

Our current mini-boom is being driven by a number of factors, including a significant amount of pent-up buyer demand ever since the dramatic sales decline related to the nationwide COVID-19 social distancing shutdowns back in April and May. Since then, a lot of out-of-town buyers have accelerated their plans to buy a home in Florida by 5 to 10 years. We are also seeing a lot of buyers coming to our area from the east coast of Florida to get away from the overcrowding and high prices over there. Record low interest rates on mortgages are another factor, along with much lower taxes in Florida versus other parts of the country. The social unrest and rioting in a number of large cities is also driving people to our area. And the technological advances that are enabling a lot of people to live anywhere and work remotely are also playing a role in our mini-boom. We also hear a lot of people say that if another pandemic shutdown occurs this winter, they would rather be “stuck” in Florida.   

As of Sept. 28, there were 728 active listings for sale in the Cape’s overall single-family home market (731 if we include short sales and foreclosures) at asking prices ranging from $157,000 to $3,995,000. The preliminary numbers for closed homes sales in the month of September appear likely to easily surpass 500 sales, and they have already topped their 2019 level on the way to setting a record for the month. In addition, the pipeline is still full in the Cape, with 1,230 homes under contract with buyers as pending sales (1,244 including short sales and foreclosures), all but ensuring a strong finish to 2020.   

In the overall Cape Coral single-family home market, the monthly supply of unsold homes for August came in at 4 months, which was 20 percent lower than the 5 months of supply in August 2019, but up 33.33 percent from the 3 months of supply in July of this year. In the first eight months of 2020, the level of unsold single-family home supply in the Cape has averaged 5.38 months, or 18.85 percent less than the average supply of 6.63 months over the first eight months of 2019. 

Gulf access canal homes

In the Cape Coral single-family gulf access canal home segment, the monthly supply of unsold homes for August came in at 4 months, or 33.33 percent lower than the 6 months of supply in August 2019, and even with the 4 months of supply in July of this year. In the first eight months of 2020, the level of unsold supply in this segment averaged 7 months, which was 23.33 percent lower than the average supply of 9.13 months over the first eight months of last year. This segment is on pace to be in a seller’s market in the third quarter, as the monthly level of unsold supply has plunged since beginning this year to record low levels  in this segment for the months of July and August.

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 August came in at 4 months, which was 42.86 percent lower than the 7 months of supply in August 2019, and 20 percent below the 5 months of supply in July of this year. In the first eight months of 2020, the level of unsold supply in this segment averaged 7 months, which was 25.37 percent less than the average supply of 9.38 months over the first eight months of last year. This segment is also on pace to be in a seller’s market in the third quarter of this year, as its unsold supply has moved much lower compared to both the first half of 2020, and all of last year, while reaching its lowest supply level ever for the months of July and August. 

Freshwater canal homes

In the Cape Coral single-family freshwater canal home segment, the monthly supply of unsold homes for August came in at 3 months, which was 25 percent lower than the 4 months of supply in August 2019, and even with the 3 months of supply in July of this year. In the first eight months of 2020, the level of unsold supply in this segment averaged 5.88 months, which was down 14.53 percent versus the average supply of 6.88 months over the first eight months of last year. This has the freshwater canal home segment currently positioned in a seller’s market with its lowest August supply level ever.  

Dry lot homes

In the Cape Coral single-family dry lot (non-canal) home segment, the monthly supply of unsold homes for August came in at 4 months, which was 20 percent lower than the 5 months of supply in August 2019, but 33.33 percent above the 3 months of supply in July of this year. In the first eight months of 2020, the level of unsold supply in this segment averaged 4.75 months, which was 24 percent lower than the average supply of 6.25 months over the first eight months of last year. This segment remains firmly in a seller’s market with less than 6 months of inventory, and at somewhat lower but typical levels for dry lot homes. 

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Sept. 20, 2020, unless otherwise noted. 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 41 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.)