January condo sales down, listings and pending sales up
The big news release in real estate this week was that on a national level the number of pending home sales in the month of January increased by 8.1 percent from December, marking the second consecutive month-over-month gains in homes going under contract with a buyer. In this report from the National Association of Realtors, Chief Economist Lawrence Yun stated that the reason for this positive market shift “was because buyers responded to better affordability from falling mortgage rates in December and January.” In the press release Yun also said, “home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur, but an annual gain in home sales will not occur until 2024.”
He added that, “home prices will be steady in most parts of the country with a minor change in the national median home price.”
The NAR is predicting median existing home prices will be stable versus the previous year for most markets in the U.S., with a 1.6% home price decrease in 2023, and an estimated 3.1% price increase in existing home prices in 2024. They are also forecasting that new construction home prices will increase by 1.3% in 2023, and bump up by another 2.8% in 2024 due to higher costs for land acquisition and construction materials.
This NAR pending home sales report for January also showed that year-over-year pending sales actually declined by 24.1%, as the sharp rise in mortgage rates in 2022 created additional affordability issues that eliminated a lot of buyers from the market. The NAR is expecting the economy to hold its own this year and to continue adding jobs in 2023 and 2024, to go along with their view that the 30-year fixed mortgage rate will steadily drop to an average of 6.1% in 2023 and 5.4 percent in 2024. However, Yun still thinks annual existing home sales will decline by 11.1% this year before rebounding by 17.7% in 2024. He also expects new construction home sales will drop 3.7% year-over-year in 2023 before increasing by 19.4% in 2024.
We hope the NAR has it right, but the potential wet blanket regarding the positive trends in pending sales and the NAR’s optimistic predictions is the fact that mortgage rates have again recently spiked higher and the Fed will likely be forced to raise interest rates higher for longer in its war against high inflation that is proving to be much more “sticky” than most market and economic experts have predicted.
Locally, we are seeing similar trends in the Cape Coral condominium sector as outlined in the NAR’s report on the national housing numbers, with the number of condos under contract with buyers as pending condo sales increasing by 25.9% from 54 pending sales in the pipeline on Jan. 5 of this year, to 68 pending sales by Jan. 31. As of Feb. 28, the Cape’s pending condo sales surged to 97 condos in the pipeline waiting to be finalized as closed sales. The median pending sales price in our condo market came in at $300,500 with 48 units priced at $300,000 and under, including nine condos below $200,000. There are currently only two pending condo sales in the Cape priced above $1 million, with 7 other units pending from $509,000 to $834,900 to go with a total of 24 condos under contract between $335,000 to $475,000. By comparison, one year ago on March 1, 2022, there were 99 pending condo sales ranging in price from $130,000 to $980,000. About two years ago on March 15, 2021, there were 173 condos under contract with buyers in Cape Coral.
Moving over to active listings, as of Tuesday, Feb. 28, there were 224 active Cape Coral condominium listings through a Realtor in the Multiple Listing Service at prices ranging from $169,900 to $3.9 million. The number of active condos listed for sale is up 31% from 171 listings on Jan. 5, and it is 474% higher than the 39 condos that were on the market a year ago on March 1, 2022. As a point of reference, two years ago on March 15, 2021, there were 102 active Cape Coral condo listings in the MLS at list prices ranging from $99,000 to $740,000. The median list price for condos in the Cape is currently at $319,950. About two months ago on Dec. 26, the median list price was $315,000 and one year ago on March 1, 2022, it was $320,000. Right now there are 99 condo listings at $300,000 and under, with 44 of the units in this price grouping listed above $275,000 and 11 of these units priced below $200,000. The 16 highest-priced condos in the Cape are all in Tarpon Landings with list prices ranging from $997,000 to $3.9 million for a penthouse unit.
In the overall Cape condo market, there were 26 closed sales in the month of January, which was 50.9% lower than the 53 closed condo sales in January of 2022, and 40.9% below the 44 sales in December. The January median sales price came in at $230,000 for the overall Cape Coral condo market, which was 16.4% below the $275,000 posted in January of 2022, and 15.6% lower than the $272,450 in December. The overall monthly supply of unsold condos in the Cape came in at 11 months in January, which was 266.7% higher than the 3 months of supply registered in January of 2022, and 120% above the 5 months of unsold supply in December.
Gulf access canal condos
In the Cape Coral gulf access canal condo segment, which includes all “saltwater” canal condos, there were 8 closed sales in January. This was 71.4% lower than the 28 condos sold in January 2022, and 27.3% below the 11 sales in December. The January median sales price came in at $325,000 in this segment, which was 14% above the $285,000 posted in January 2022, but 30.9% lower than the $470,000 in December. The level of unsold supply came in at 13 months in January, which was 550% more than the 2 months of supply in January of 2022, and 85.7% above the 7 months of unsold supply in December.
Direct sailboat access canal condos
In the Cape Coral direct sailboat access canal condo segment, which is a subgroup of gulf access condos where boaters have no bridges to go under in the canal system to reach open water, there were only 3 closed sales in January. This was 81.3% below the 16 condos sold in January 2022, and 50% less than the 6 condos sold in December. The January median sales price came in at $330,000 in this segment, or 2.3% above the $322,500 posted in January 2022, but down 39.2% from $542,450 in December. The level of unsold supply came in at 21 months in January, which was 600% more than the 3 months of supply in January 2022, and 200% above the 7 months of unsold supply in December.
Dry lot condos
In the Cape Coral dry lot (non-canal) condo segment, there were 15 closed sales in January, which was 11.8% lower than the 17 condos sold in January 2022, and 37.5% below the 24 sales in December. The January median sales price came in at $210,000 in this condo segment, which was 2.4% above the $205,000 posted in both January 2022, and in December. The level of unsold supply for our dry lot condos came in at 9 months in January, which was 200% more than the 3 months of supply in January 2022, and 80% above the 5 months of unsold supply in December.
The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Feb. 26, 2023, unless otherwise noted. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral condominiums, townhouses and villas, and it does not include any single-family homes, 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 43 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.