May home supply still tight, despite increase in listings
The main takeaways from the monthly unsold supply numbers in the Cape Coral single-family home market in the month of May still involve issues with abnormally low levels in our local inventory. This lack of inventory is also a widespread problem in the national real estate market, and as you will see below in the numbers for the Cape, there was a huge decline in our May inventory compared to May 2020, when the number of unsold homes spiked higher during the COVID-19 shutdowns. We have, however, seen an increase in the supply of homes compared to March and April of this year as the number of active listings available for sale in the Cape has been moving a bit higher recently.
In fact, as of Monday, June 28, there were 449 active single-family homes listed for sale in the Multiple Listing Service for Cape Coral, ranging in asking prices from $202,900 to $5.995. The current amount of 449 active listings is 17.85 percent higher than the 381 active listings as of June 1, and it is up 42.99 percent from the 314 available active listings that were on the market back on March 24 of this year. There were also four additional listings posted as short sales and foreclosures in the Cape, with the lowest list price of these at $199,900 for a bank owned foreclosure which is scheduled to go into a multiple bid auction in the near future. There were 955 single-family homes in the Cape currently under contract with a buyer as a pending sale (961 pending sales when we included foreclosures).
Before we get into the specifics of the Cape’s unsold home supply data, we thought we would dig a bit deeper into what some experts are describing as “dysfunctional market conditions” in both the stock market and the real estate market. In overly simplistic terms, this group of analysts and economists believe that the Jerome Powell-led Federal Reserve’s continued easy money policies and market manipulation, in the form of suppressing interest rates at artificially low levels, has been a major reason behind the record price levels of the booming stock and housing markets. These experts believe the Fed’s actions have resulted in too much free cash floating around in the system which is leading to dangerous economic imbalances that are now creating out of control inflation. They fear the Fed is losing control of the situation and may not be able to put the economic genie back in the bottle fast enough if anything goes wrong. At the same time, other experts believe the Fed has everything completely under control and that these issues are largely transitory.
So, much of this economic debate seems to be centering on concerns about rising inflation on goods and services, as well as asset price inflation, and whether or not the Fed’s policies are getting us trapped in another bubble. Bringing the focus back to real estate, a newly released economic report indicates that the cost to rent a home in the U.S. during June posted its biggest price increase on record, while the highly respected Case-Shiller index, indicates that home prices in the U.S. during April have just accelerated at their fastest pace since 2005. These reports are being cited as more proof that inflation is spiraling out of control.
This raises questions about what is being viewed as price complacency in the real estate market, where a lot of buyers remain willing to continue paying higher prices for homes with the belief that home prices will be even higher a year from now. Locally, we are still seeing strong interest from buyers, although a growing number of buyers are being priced out of the market due to affordability issues as a result of the competition bidding up prices. A leveling off of home prices for a while, providing a pause to refresh and an opportunity to consolidate the recent price gains, would probably be a healthy thing for our market. But it will probably take a “surprise” outside event to shock our market prices into leveling off or moving lower.
In the overall Cape Coral single-family home market, the monthly supply of unsold homes came in at 3 months in May. This was 50 percent lower than the 6 months of unsold supply in May 2020, but 50 percent above the 2 months of supply registered in April of this year. In the first five months of 2021, the monthly level of unsold supply in the Cape’s overall single-family home market averaged 3.2 months, which was 48.39 percent less than the average of 6.2 months of unsold supply in the first five months of 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 May. This was 62.5 percent lower than the 8 months of unsold supply in May 2020, and flat with the 3 months of supply in this segment during April of this year. In the first five months of 2021, the monthly level of unsold supply for indirect gulf access homes in the Cape has averaged 2.8 months, which was 66.67 percent less than the average of 8.4 months of unsold supply in the first five months of 2020.
Direct sailboat access canal homes
In the Cape’s single-family direct sailboat access canal home segment, which is for homes without bridges in the canal system, the monthly supply of unsold homes was 2 months in May. This was 77.78 percent below the 9 months of unsold supply in this segment in May 2020, and flat with the 2 months of supply in April of this year. In the first five months of 2021, the monthly level of unsold supply in this segment averaged 2.6 months, which was 67.5 percent less than the average of 8 months of unsold supply in the first five months of 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 May. This was 70 percent lower than the 10 months of unsold supply in May 2020, but 50 percent above the 2 months of supply registered in April of this year. In the first five months of 2021, the monthly level of unsold supply in this segment averaged 2.8 months, which was 61.11 percent less than the average of 7.2 months of unsold supply in the first five months of 2020.
Dry lot homes
In the Cape Coral single-family dry lot (non-canal) home segment, the monthly supply of unsold homes was 3 months in May, or 40 percent lower than the 5 months of supply in May 2020, but 50 percent above the 2 months of unsold supply in April of this year. In the first five months of 2021, the monthly level of unsold supply in this segment averaged 3.2 months, which was 40.74 percent less than the average of 5.4 months of unsold supply in the first five months of 2020.
The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of June 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 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.