July home supply stays low, active listings tick higher
In July, we continued to see abnormally low levels of listing inventory for Cape Coral single-family homes, as reflected by the active listings and the monthly supply of unsold homes. This decline in the number of homes listed for sale started to become somewhat of a concern back in the second half of 2019, as it appeared a new trend towards a tighter supply of homes might be forming. Then, in the second half of last year when Florida was reopened for business following the COVID-19 shutdowns, our unusually low inventory plummeted to record low levels, where it has remained throughout this year.
This short supply of homes has been a direct result of the record-setting pace of home sales we have experienced over the past 12 months as people have been fleeing other states for Florida. This excess in buyer demand and short supply have played a major role in squeezing our home prices up to record levels. The extreme competition between buyers has also been preventing a lot of people from putting their homes up for sale because of their concerns about finding another affordable home to buy or rent, thus compounding the home supply problems.
As we mentioned last week, we have entered a period of time when the year-over-year sales comparisons in our current market will be going up against the record-setting sales numbers from the second half sales boom of last year. This will likely flatten out our sales results going forward for the next 6 to 12 months, and it could make it appear that we are experiencing a bigger slowdown in our market than is actually occurring.
In reality, this “slowdown” will probably be more of a function of the market digesting all of the sales that were brought forward into the first half of this year from today. Barring an “unexpected” outside event causing a sudden collapse to the economy, we are on pace for another record year in sales and our second half slowdown is likely to mean the month-to-month sales numbers will probably be the second highest ever, only behind the record levels of last year.
When it comes to the housing market, we are seeing research and analysis on both sides of the coin regarding the strength of the market going forward versus the potential for a serious housing market correction. Anytime there is a rapid, extreme rise in market prices combined with what we will call crazy, seemingly irrational behavior on the part of buyers, one can make the case for a correction, or a “return to the mean.” Others argue this risk is being offset by the inadequate housing supply across the country and the still record low mortgage interest rates. We seem to be at a point where we could be experiencing a healthy pause in the real estate market, and unless something “breaks” in the economy, the housing market could hold its ground. The biggest wildcard right now seems to be with COVID, the Delta variant and the future unknown mutations versus the vaccines. There are, however, some credible reports that Delta is peaking, although locally we seem to be well behind this curve.
As of Tuesday, Aug. 24, there were 520 active listings of single-family homes for sale in the Cape through the Multiple Listing Service, ranging in asking prices from $180,000 to $5.995 million. When short sales and foreclosures are included, the active listings increased to 524, with the lowest priced foreclosure home listed at $125,500. This home was being sold by Bank of New York Mellon through an online auction. The trend has been towards a gradual increase in active listings since back on March 24 when one of our market snapshots registered the low point of 314 listings. There are currently 921 Cape Coral homes under contract with buyers as pending sales, most of which will be finalized as closed sales within the next 30 to 60 days. A week ago, there were 896 pending home sales in the pipeline. If we include short sales and foreclosures, there are currently a total of 926 pending sales.
In the overall Cape Coral single-family home market, the monthly supply of unsold homes came in at 3 months in July, which even with the 3 months of supply in July 2020, but 50 percent above the 2 months of supply registered in June of this year. In the first seven months of 2021, the monthly level of unsold supply in the Cape’s overall single-family home market also averaged 3 months, which was 46 percent less than the average of 5.57 months of unsold supply in the first seven 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 July. This was even with the 3 months of unsold supply in July 2020, but up 50 percent from the 2 months of supply in this segment during June of this year. In the first seven months of 2021, the monthly level of unsold supply for indirect gulf access homes in the Cape has averaged 2.71 months, which was 62.8 percent below the average of 7.29 months of supply in the first seven 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 4 months in July. This was 20 percent below the 5 months of unsold supply in this segment in July 2020, but up 33.3 percent from the 3 months of supply in June of this year. In the first seven months of 2021, the monthly level of unsold supply in this segment averaged 2.86 months, which was 61.5 percent less than the average of 7.43 months of unsold supply in the first seven 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 2 months in July. This was 33.3 percent lower than the 3 months of unsold supply in both July 2020, and in June of this year. In the first seven months of 2021, the monthly level of unsold supply in this segment averaged 2.71 months, which was 53.5 percent less than the average of 6.14 months of unsold supply in the first seven 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 July, which was even with the 3 months of supply in July 2020, but 50 percent higher than the 2 months of unsold supply in June of this year. In the first seven months of 2021, the monthly level of unsold supply in this segment averaged 3 months, which was 38.3 percent less than the average of 4.86 months of unsold supply in the first seven 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 Aug. 15, 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, unless noted. 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.