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How low can it go in Cape’s ‘limbo’ home inventory? 

By BOB & GERI QUINN - Homing In | Apr 1, 2021

Geri and Bob Quinn

Cue the calypso music and line-up for the 2021 spring break version of the “inventory limbo,” as the Cape Coral real estate market continues to test just “how low it can go” when it comes to the monthly supply of unsold homes and the current level of active listings. The record low level of inventory has created a strong seller’s market in every property segment, leaving a lot of buyers stuck in limbo as they compete against other buyers over a limited number of available homes listed for sale. As buyers try to squeeze their way under the ever lowering inventory bar with creative maneuvers, the quickest and most flexible buyers are usually the ones succeeding in having their offers accepted by sellers. Many of the remaining buyers are left to regroup, learn from their experience and adjust their strategy, while waiting for the next best home, condo or vacant lot to pop up as a new listing. 

At the same time, other potential buyers are finding themselves left in an “affordability limbo,” as the short supply of available homes has squeezed prices higher, often above their comfort zone. Unfortunately, this group has been all but eliminated from the home buying process, especially if they choose to remain rational in analyzing the likely purchase price versus multiple offers, along with things such as the costs for home improvements, maintenance, taxes and insurance. 

From a seller’s perspective, the fact is that in our current market it is virtually impossible to underprice a home, because anything priced properly to the market or priced below the market, will be immediately swarmed by potential buyers. It has been our experience that when a new listing is activated in the Multiple Listing Service, it is also picked up immediately through every Internet real estate service known to man, and the first showing appointments are getting scheduled within hours. It is not uncommon to have at least three to five showing appointments scheduled on the first day on the market and to receive multiple full price, or better, offers within the first several days. 

As of March 29, there were 335 active single-family home listings in the Cape at prices ranging from $199,900 to $3.85 million. This level of active listings was only 2.9 percent below the 345 active listings on March 1, but 6.69 percent higher than the 314 active listings from just five days earlier on March 24. Hopefully, we have hit the bottom when it comes to the abnormally low home inventory levels, but as we mentioned above, there are still a lot of buyers actively looking for a home, so we would not be surprised to see another dip in active listings. As another point of reference, to illustrate the continued tightening of the inventory of available homes for sale in Cape Coral in 2021, there were 502 active listings on Jan. 18 of this year, and 632 active listings back on Dec. 21, 2020. Currently, there are 1,311 single-family homes under contract with buyers in the Cape as pending sales (1,322 if we include short sales and foreclosures).

In the overall Cape Coral single-family home market, the monthly supply of unsold homes came in at 4 months in February. This was 42.86 percent lower than the 7 months of unsold supply in February 2020, and even with the 4 months of supply registered in January of this year. In the first two months of 2021, the monthly level of unsold supply in the Cape’s overall single-family home market has averaged 4 months, which was 46.67 percent less than the average of 7.5 months of unsold supply in January and February 2020. 

Indirect gulf access canal homes

In the Cape Coral single-family indirect gulf access canal home segment, which covers homes with at least one bridge for boaters to go under in the canal system, the monthly supply of unsold homes came in at 3 months in February. This was 62.5 percent lower than the 8 months of unsold supply in February 2020, and even with the 3 months of supply in this segment in January of this year. In the first two months of 2021, the monthly level of unsold supply for indirect gulf access homes has averaged 3 months, which was 70 percent less than the average of 10 months of unsold supply in January and February 2020. 

Direct sailboat access canal homes

In the Cape Coral single-family direct sailboat access canal home segment, which represents homes without any bridges in the canal system, the monthly supply of unsold homes came in at 3 months in February. This was 66.67 percent lower than the 9 months of unsold supply in this segment in February 2020, and it was even with the 3 months of supply in January of this year. In the first two months of 2021, the monthly level of unsold supply in this segment has averaged 3 months, which was 64.71 percent less than the average of 8.5 months of unsold supply in January and February 2020. 

Freshwater canal homes

In the Cape Coral single-family freshwater canal home segment, which consists of landlocked canals with no access to the river or the Gulf of Mexico by boat, the monthly supply of unsold homes came in at 3 months in February. This was 57.14 percent lower than the 7 months of unsold supply in February 2020, and even with the 3 months of supply registered in January of this year. In the first two months of 2021, the monthly level of unsold supply in this segment has averaged 3 months, which was 66.67 percent less than the average of 9 months of unsold supply in January and February 2020. 

Dry lot homes

In the Cape Coral single-family dry lot (non-canal) home segment, the monthly supply of unsold homes came in at 4 months in February, which was 33.33 percent lower than the 6 months of supply in February 2020, and even with the 4 months of unsold supply in January of this year. In the first two months of 2021, the monthly level of unsold supply in this segment has averaged 4 months, which was 38.46 percent less than the average of 6.5 months of unsold supply in January and February 2020. 

Next week we will go deeper into what sellers can expect to see from buyers when they are making offers on their home, and how to sort through multiple offers, along with some observations about our current market conditions. We will also discuss why sellers should avoid situations where an agent claims to have a buyer for your home to entice you to sign a listing agreement.

The sales data for this article was obtained from the Florida Realtors® Multiple Listing Service Matrix for Lee County, Fla., as of March 21, 2021, 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 Quinn’s 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.