Geri and Bob Quinn

As we head for the home stretch in 2020, the top of mind question in the Cape Coral real estate market is, will we see the typical mass influx of seasonal sellers come to the market to list their homes for sale in January? In a “normal season,” before COVID, the number of active listings in Cape Coral and throughout Southwest Florida usually ramps up in January through March, as homeowners try to benefit from the crowds of winter visitors in hopes of selling their homes. As such, during January and February we usually see a big increase in the monthly supply numbers resulting in more homes sitting on the market unsold with the competition heating up between sellers as they try to attract buyers. Then, in the month of March, the number of closed home sales typically increases because of the approximate 30 to 60-day lag time from when a home goes under contract with a buyer as a pending sale until it becomes finalized as a closed sale. Historically, this pattern usually leads to the second quarter of every year registering the highest number of closed sales. Again, that is in a normal year and as we move deeper into the new abnormal in year two A.C., there is no guarantee we will return to the normal B.C. years anytime soon.    

This brings us to the main takeaway from this week’s column, which is, in the recently completed month of October we had the lowest numbers for the monthly supply of unsold homes, ever, in Cape Coral for the month of October. And it appears that we will end 2020 with record low levels of unsold supply in the fourth quarter, as well. This growing issue of having an abnormally low inventory is being driven by record levels of home sales in the second half of this year, as our usually predictable historic home sales patterns have been turned upside down in the year of COVID. Following the plunge in home sales in April and May during the COVID shutdowns, we quickly got back on track for another record year of home sales once the state of Florida was opened up for business again. In fact, we will likely top last year’s record of 5,340 home sales by the end of this November, and with no sales slowdown currently on the horizon, a return to a normal season with increased levels of supply in January would be a welcome sight.

To help illustrate this supply shortage, as of Nov. 23, there were only 668 active listings of single-family homes for sale in the Cape at list prices ranging from $169,000 to $3,995,000. When one considers that in the last four months (July through October) we have averaged 596 closed sales per month, an influx of new listings could help refresh the market by enabling more buyers to find a home to their liking. In addition, the number of closed sales looks to remain solid for the immediate future based on the current pipeline of 1,109 pending sales under contract with buyers, most of which should be finalized as closed sales in the next 30 to 60 days. When we include short sales and foreclosures, there were a total 672 active listings, with the Cape’s lowest priced distressed home listed for $137,000. 

In the overall Cape Coral single-family home market, the monthly supply of unsold homes for October came in at 3 months, which was 50 percent lower than the 6 months of supply in October 2019, and flat with the 3 months of supply in September of this year. In the first 10 months of 2020, the level of unsold single-family home supply in the Cape has averaged 4.9 months, or 23.44 percent less than the average supply of 6.4 months over the first 10 months of 2019. With the level of unsold supply averaging only 3.25 months from July through October, versus an average of 6 months of supply in the first half of this year, the overall Cape Coral single-family home market has shifted from a neutral market to a lower inventory seller’s market, as the supply of homes listed for sale in the Cape has tightened. 

Gulf access canal homes

In the Cape Coral single-family gulf access canal home segment, the monthly supply of unsold homes for October came in at 3 months, or 66.67 percent lower than the 9 months of supply in October 2019, and 25 percent below the 4 months of supply posted in September of this year. In the first 10 months of 2020, the level of unsold supply in this segment averaged 6.3 months, which was 29.21 percent lower than the average supply of 8.9 months over the first 10 months of last year. With the monthly unsold supply level in this  segment averaging only 3.75 months between July and October, versus an average of 8 months of supply in the first half of this year, we have clearly shifted to a lower inventory seller’s market heading into the home stretch of 2020.   

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 October came in at 4 months, which was 50 percent lower than the 8 months of supply in October 2019, and flat with the 4 months of supply in September of this year. In the first 10 months of 2020, the level of unsold supply in this segment averaged 6.4 months, which was 29.67 percent less than the average supply of 9.1 months over the first 10 months of last year. This segment is also currently in a seller’s market, averaging only 4.25 months of inventory from July through October after finishing the first half of this year with an average supply of 7.83 months. 

Freshwater canal homes

In the Cape Coral single-family freshwater canal home segment, the monthly supply of unsold homes for October came in at 3 months, which was 62.5 percent lower than the 8 months of supply in October of 2019, and flat with the 3 months of supply in September of this year. In the first 10 months of 2020, the level of unsold supply in this segment averaged 5.3 months, which was down 22.06 percent versus the average supply of 6.8 months over the first 10 months of last year. This has the freshwater canal home segment currently positioned in a seller’s market with its lowest October supply level ever, and the average supply has been at 3 months from July through October, versus an average of 6.83 months of supply over the first six months of this year.  

Dry lot homes

In the Cape Coral single-family dry lot (non-canal) home segment, the monthly supply of unsold homes for October came in at 3 months, which was 40 percent lower than the 5 months of supply in October 2019, and flat with the 3 months of supply in September of this year. In the first 10 months of 2020, the level of unsold supply in this segment averaged 4.4 months, which was 26.67 percent lower than the average supply of 6 months over the first 10 months of last year. This segment remains firmly in its typical seller’s market range with less than 6 months of inventory. The level of unsold supply has averaged only 3.25 months from July through October, compared to an average supply of 5.17 months in the first half of 2020.  

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Nov. 16, 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.)