The Cape’s new equilibrium establishes a Goldilocks market
Not too hot and not too cold. A “Goldielocks” market aptly describes the current conditions in our local real estate market which seems to be positioned “somewhere in-between.” For example, home sales and prices are “somewhere in-between” as they are down from the record levels reached from about mid-2020 to mid-2022 in the post-COVID lockdown real estate market spree. But these numbers are up from the hurricane battered levels in the fourth quarter of 2022, and still better than the pre-COVID market levels of 2019. The number of active listings are way up compared to the last several years, but we keep hearing that a lack of supply is still an issue.
Additionally, we are seeing what seems to be a growing number of people and friends wanting to sell their homes and move away from the area for a lot of different reasons, with the hurricane becoming the last motivational straw influencing their decision. At the same time we continue to see a strong interest from out-of-town buyers coming here from all over the country to mostly get away from high taxes and other issues. Through it all we are firmly entrenched in a resilient, not too hot, not too cold market.
Here is a general overview of the current metrics for the Cape Coral single-family home market. The number of active listings continues to edge higher in May and they are up 18% from the beginning of this year, and 116.5% higher than they were one year ago. The median list price is up 5.5% since the beginning of this year, but down 6.4% from $575,000 a year ago. The number of pending home sales has moved lower and has leveled out in the past month, but has increased by 68.8% since the beginning of this year, while declining by 8.4% versus a year ago on May 17, 2022.
Digging deeper into the number of active listings for Cape Coral single-family homes listed for sale through a Realtor in the MLS as of May 16, they have climbed to 1,570 homes on the market from 1,536 last week. Current list prices for homes in the Cape are ranging from a low of $149,900 to buy a partially built new construction home that will need about another $200,000 to bring in a new builder to complete, to a high of $3.995 million for a home in Harbour Preserve. The second lowest priced home is listed for $260,000 and the median list price in the Cape edged up to $538,000 from $535,000 a week ago. About 35%, or 553, of our active listings are for homes priced at $450,000 and under, with 16 of these homes priced below $300,000. At the other end of the spectrum, there are 224 Cape Coral homes listed at $1 million and above, which is up from the 151 homes that were in this million dollar-plus price range at the beginning of this year.
Based on our weekly market survey from May 16, the number of pending home sales in the Cape came in at 881, remaining in a tight range of 881 to 884 pending sales for the past three weeks after dropping from 925 pending sales back on April 18. Price-wise, our current pending sales are ranging from $215,000 to $4.15 million, with the second lowest priced pending sale at $235,000. The median pending sales price edged up to $405,000 on May 16 from $401,999 a week ago. One year ago on May 17, 2022, a total of 962 Cape Coral single-family homes were under contract with buyers as pending sales at prices ranging from $210,000 to $4.495 million, with the median pending sales price at $470,000. Also one year ago, there were 58 pending sales in the pipeline at $1 million and above versus a current total of 36 pending home sales at $1 million and above. At the other end of the spectrum, we currently have 431 Cape Coral homes under contract at $400,000 and under, with 26 of these homes pending for less than $300,000. One year ago there were 355 homes in the Cape under contract at $400,000 and under, including 35 homes priced below $300,000.
Last week one of the market metrics we examined was the median days to sell statistic for Cape Coral single-family homes, which measured the number of days it took for half of the homes on the market to go under contract as a pending sale in fewer days and half in more days. In April of this year that number was 28 days. By comparison, the “average” number of days it took for a home in the Cape to go under contract with a buyer in the month of April was 52 days. The average days to sell is more heavily influenced by homes that sit on the market unsold for a long period of time. To put these two statistics into context, as a seller in April, if your home did not go under contract in less than 28 days, which is the time it took for half of the homes on the market, it was more likely that it would take something closer to the average of 52 days, or longer, for a buyer to emerge and go under contract on your home.
One of the other “tells” for a seller regarding the likelihood that their home will go under contract quickly is tied to the number of showing appointments being scheduled by buyer’s agents. If a home is priced properly to the current market, a seller will likely have a handful of showing appointments scheduled in the first several weeks the home is on the market and they will probably receive an offer from one of those buyers. The showing activity is likely to be much higher on lower priced homes, and lower on higher priced homes. If a new listing is underpriced to the market, the showing activity will be brisk and a seller is likely to receive multiple offers at full price and above. If a new listing is priced properly to the market, a seller will probably get one or two offers within the first several weeks that the home is on the market ranging from full-price to maybe 8% below list price. In general, most buyers are not willing to get into a bidding war with other buyers because they know there are a lot more homes on the market now compared to the past several years. As a seller, if you are not getting any showing appointments in the first two weeks on the market, you are probably overpriced – especially for lower priced homes in our market. There are always exceptions to these rules of thumb, such as with homes that have unique features that are likely to only be attractive to a small number of buyers instead of being attractive to the masses.
Another market statistic that may help a seller get a feel for the time frame it may take to get the sale of their home finalized is the Cumulative Days On the Market (CDOM). This is the total number of days it takes from when a home is first listed for sale until the sale officially goes into the books as a closed sale. In April, the median CDOM was 84 days, meaning half of the closed home sales that were recorded in April went from being listed to pending to a closed sale in less than 84 days and half took more than 84 days. By comparison, in April 2022 the median CDOM in the Cape was 51 days “soup to nuts,” and in April 2021 it was 56 days. Looking back to April 2020, the CDOM was 99 days and in April 2019 it was 100 days. So our current market is slower than the red hot market in 2021 and 2022, but still a bit faster than in 2019 and for the first eight months of 2020.
The average CDOM for Cape Coral single-family homes in April was 125 days, compared to only 78 days in April 2022 and 91 days in April 2021. But back in April 2020, the average CDOM was 144 days and in April 2019 it was 146 days. So again, if a seller gets decent showing activity when their home first goes on the market, there is a better chance they will fall into the half that gets a sale finalized in less than the median number of days. But if they have their home priced too high to the current market, their time frames are likely to get extended out towards the higher average number of days and beyond.
The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of May 8, 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 with Geri as a full-time Realtor in 2014. Their real estate practice is mainly focused on Cape Coral residential property and vacant lots.