Geri and Bob Quinn

As our local housing market continues to hold its ground at levels well below the post-COVID market highs in a post-hurricane recovery to slower, more normal historical sales levels, the biggest wildcards in our real estate market in the near term seem to be from outside influences.

A number of economic and market pundits have been forecasting clear blue skies ahead based on the belief that the recent banking “turmoil” would force the Jerome Powell-led Federal Reserve to abandon its “higher interest rates for longer” fight against inflation in favor of a more stimulative “lower interest rates sooner” policy. This group of pundits believed that the high levels of inflation had not only been contained, but that inflation was well on the way to significantly lower levels. They also viewed last month’s sudden banking crisis as being “contained” and limited to nothing more than some pesky turmoil.

With oil prices reaching 16-month lows several weeks ago, the inflation picture was indeed looking much brighter until the OPEC nations shocked the system by announcing production cuts earlier this week causing oil prices to spike higher. With talk of oil prices potentially moving back towards $100 per barrel, inflation concerns reignited and could end up forcing the Fed to go back to its “higher interest rates for longer” policy. This, combined with other factors, seems to be leading to the growing economic risks of Stagflation and the possibility of deeper recession. In addition, some economists are expecting tighter lending standards and the potential for a debt crisis to lead to a contraction in the availability of credit for businesses and consumers. Several prominent people, including the CEO of banking giant JP Morgan Chase, Jamie Dimon, have been expressing their views that the banking crisis is far from over, which would seem to indicate that we are likely in for a bumpy landing.

Locally, we continue to see some bright spots in the Cape Coral real estate market as the number of overall closed home sales continues to rise based on the preliminary numbers for the month of March. Although the number closed single-family home sales in the Cape are down substantially from a year ago when there were 686 closed home sales in March 2022, versus 465 so far this March (this number will likely be adjusted higher as more end of the month sales are reported), sales have made an impressive move higher from the post-Hurricane Ian low of 223 sales last October.

Also of note, the number of closed home sales in the Cape this March have hit their highest level since there were 477 sales posted last July as the impact of the Federal Reserve’s aggressive interest rate hikes and its war on inflation started taking their toll on our market prior to Ian stunning our area on Sept. 28. Our all-time single monthly high for closed home sales in Cape Coral occurred in April 2021, when 739 sales were booked.

For their part, median sales prices for single-family homes in the Cape have been flattening out at levels that are well below last year’s best month, which was in April when the median sales price topped out at $470,000 for our overall market. The preliminary number for the median sales price this March is $415,000, and if this number holds, it will mark the first time since April 2020 that a median sales price for a given month came in lower versus the same month from the previous year. One year ago, in March 2022, the median sales price in the Cape’s overall single-family home market was $420,000. Unless there is a huge upside spike in median sales prices for closed sales this April, we would expect to begin seeing somewhat weaker and more negative year-over-year median sales price comparisons for the next several months. Some of the weakness in median sales prices is due to the continued below market sales prices of storm-damaged homes.

Some additional good news showed up in the pending sales numbers, which experienced a late-month surge in March. Two weeks ago we noted a slight dip in pending sales based on our weekly market survey, but as of April 4 there were 920 pending sales for Cape Coral single-family homes, up 8.2% from the 850 pending sales on March 21. Three months ago on Jan. 3, there were only 522 pending sales in the pipeline. So we have had a solid “season” from January through March, as our market continues to establish its equilibrium in the aftermath of the scorching hot post-COVID market boom, higher interest rates and the post-Hurricane Ian recovery.

About one year ago on April 12, 2022, there were 1,024 Cape Coral homes under contract as pending sales, including 83 homes at $1 million and above. Today, the 920 pending sales range in price from $175,000 to $3.9 million, with 51 homes under contract with a buyer at $1 million and above, and 582 homes or 63.3% of our market at $450,000 and under. The median pending home sales price in the Cape is at $410,000 (the same as two weeks ago).

Shifting over to the number of active listings in the MLS for Cape Coral single family homes, there were 1,439 homes available on the market as of April 3, which was down 2.8% from the 1,481 active listings two weeks ago, but up 177% from the 519 active listings a year ago on April 12, 2022. Current list prices range from $240,000 to $4.231 million, with the median list price edging higher to $529,900 from $524,900 two weeks ago and up from $509,873 back on Jan. 3 of this year. One year ago on April 12, 2022, the median list price was $595,500 on the way to its peak of $610,000 on April 19 of last year (based on our weekly market survey).

There are currently 523 active home listings in the Cape at $450,000 and under, with 13 of these listings priced below $300,000. At the other end of the spectrum, there are 202 homes listed for more than $1 million, with only 17 of these homes priced above $2.5 million. Back on Jan. 3 of this year, there were 151 Cape Coral homes listed at $1 million and above, and one year ago on April 12, 2022, there were only 95 home listings in the Cape at $1 million and above. Our million dollar home listings really started to increase after the market hit its peak and economic concerns grew as the Fed raised rates.

We continue to see increased interest in Cape Coral real estate from out-of-town buyers searching for homes over the Internet. While some of these potential buyers are looking to buy a home now, many are telling us they are monitoring our market hoping to see prices come down. Homes that are priced properly to the current market for their age, location, square footage and condition are likely to see immediate showing activity and will tend to get a competitive offer fairly quickly. Most buyers that we are coming across are still looking to find a home that has already been updated and remodeled and that is in move-in ready condition.

The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of April 3, 2023, 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 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.