Diving into active listings and climbing a wall of worry
Along with tracking our regular Cape Coral home and condo statistics about closed sales, median sales prices and the monthly supply of unsold homes sitting on the market, we have also been providing weekly updates about active listings and pending sales because of the abnormally low inventory levels. Today we thought we would dive down a bit deeper into the active listing numbers to give you a better overview of our single-family home market and we will wrap up with a look at some of the things that could influence our real estate market over the next year.
According to an old saying, markets tend to surprise people by “climbing a wall of worry,” and we will summarize what looks to be a growing list of potential worries.
As of 6 a.m., Tuesday, Sept. 14, there were 551 active Cape Coral single-family homes listed for sale through a Realtor in the Multiple Listing Service at prices ranging from $195,000 to $5.995 million. This compares to the 539 active listings a week ago when the lowest priced home had a price tag of $215,000. There were an additional two active foreclosure listings, which were both within the price range stated above. The number of pending sales ticked higher this week with 936 homes currently under contract with buyers, compared to 929 pending sales a week ago. There are currently an additional five pending sales in the distressed property category, so foreclosures and short sales remain minimal.
Just to provide a different perspective about the 551 active home listings in the Cape, a total of 307 of these listings, or 55.7 percent, were for dry lot (non-canal) homes, while 180, or 32.7 percent, were “saltwater” canal homes providing boater’s access to open water. The other 64, or 11.6 percent, were landlocked freshwater canal and lake home listings. Keep in mind that this is just a snapshot in time and that the number of active listings and pending sales are updated in the MLS in real time and these numbers change throughout the day.
From a price perspective, 78 of these 551 active listings, or 14.2 percent of the total, were for homes priced at $1 million and above, while there were 111, or 20.1 percent of our market, that were listed for under $350,000. Another 183 homes, or 33.2 percent, were priced from $350,000 to $500,000 and 179 homes, or 32.5 percent of Cape Coral homes were currently listed at prices above $500,000 and below $1 million. The current median list price for the 551 single-family homes listed for sale by a Realtor in the Cape is $484,999. This compares to the overall median home sales price in the Cape of $360,000 for the single month of August, while the average median sales price for the first nine months of 2021 came in at $335,794 per month.
Breaking down the 551 currently active listings by the four major quadrants of the city, 60 homes, or 10.9 percent, were for sale in the Northeast Cape, while another 135 homes, or 24.5 percent, were located in the Northwest Cape. The Southeast Cape had 139 active listings for 25.2 percent of the total, and the Southwest Cape topped the other sections of the city with 217 single family home listings, totaling 39.4 percent of our current listing inventory.
In general, the tight supply of homes, and especially the even tighter supply of “move-in ready” homes available for sale on the market, created extreme competition between buyers. This lack of home supply, combined with an extremely strong demand from out-of-town buyers created a short squeeze in our housing market which drove prices to record high levels. However, as we have been noting in this column for several months, the record setting buying frenzy from both the second half of 2020 after the COVID shutdowns ended in Florida, and from the record levels of closed sales in the first half of this year have slowed down a bit. This is in large part due to the fact that the year-over-year sales comparisons in the second half of this year compared to the second half of last year will be difficult to beat. Simply put, even though the number of closed sales for this August was very solid, it will be lower than the blow-out record sales numbers in August of 2020, which is likely to give the appearance that things have slowed down more than they actually have.
As far as where our real estate market is heading for the balance of this year, there are a lot of wildcards in play. One of the first is trying to determine the level of buyer fatigue and the impact of home price shock caused by the absolute craziness we witnessed in the multiple offer bidding wars during the first half of this year. This has clearly caused some qualified buyers to take a step back and reassess their home purchase plans, while rising prices have completely eliminated a number of buyers who are no longer able to afford a home in our market.
As it is with all Realtors, in our own pool of prospective buyers who are looking to move to Southwest Florida, many of them stand no chance of finding what they are looking for within their desired price range. So, unless they are in a position where they are qualified enough to raise the ante on their home purchase price, they will be forced to change their plans and walk away from the table. This fact seems to be supported by recent consumer surveys, which indicate a growing number of people say they are more likely to put off major purchases, such as buying a home in the next six months.
Some of the other concerns which could have an impact on our local real estate market and the overall U.S. economy involve the COVID Delta variant, which, as we mentioned several weeks ago based on some reliable outside research sources, appeared to be reaching its peak. This now seems to be the case locally, although we have personally heard of a lot more people that we know who came down with it on this go-around. The impact of future variants and how they are handled could become a major factor in our market.
Other local issues which play into our market deal with hurricane season and the possible impact of the upcoming changes to flood insurance rates on Oct. 1. Although we have not experienced any problems with buyers and flood insurance, we are hearing some reports from other Realtors that they have had deals fall through because of high flood insurance quotes for closings scheduled for after the first of October. In addition, things such as water quality issues with red tide and algae can hurt real estate sales anywhere it occurs.
Some of the other outside influences that could have a negative impact on the economy and real estate are the continuing supply shortages and subsequent price increases for just about everything. There are some recent reports that the rental rates for container ships have been rising rapidly to record setting levels, which will raise the cost of goods, leaving us to think that this bout of inflation is probably not as “transitory” as some experts are claiming. We are also seeing reports that most Wall Street investment bank economists are making fairly steep cuts to their GDP forecasts, leading to growing warnings about 1970’s-style Stagflation.
The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Sept. 14, 2021. 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 42 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.