Geri and Bob Quinn

We are seeing the “seasonal effect” starting to come into play in our market numbers as we move from January into February. Historically, there is usually an influx of new listings in the Multiple Listing Service at this time of year, along with an increase in the number of homes going under contract with buyers as pending sales. We are seeing both of these things right now, as expected. This typically leads to our peak levels in the number of closed home sales for the year sometime during the months of March, April or May, and as a rule, we tend to generate the highest number of closed sales during the second quarter of the year.

Since most homes go under contract with a buyer some 30 to 45 days prior to closing, this means we are fast approaching the “golden hour” for homesellers. In this type of buyer’s market with rising inventories and softening prices, a seller who is willing to get a little more aggressive than another seller with their list price right now stands the best chance of attracting a buyer and getting their home sold.

Being a bit more aggressive with their list price may be more true than ever for a typical Cape Coral homeowner trying to sell their home. Despite the recent decline in mortgage rates from around 8% to back below 7%, affordability is still an issue for a lot of potential buyers when the higher costs for insurance, property taxes and just about everything else are factored in. This often translates into many buyers being able to afford “less home” for their dollar, and in a buyer’s market with a rapidly growing inventory that tends to squeeze sellers by putting additional downward pressure on home prices.

Another huge issue for the typical home seller in Cape Coral is the added competition between the existing home market and the new construction home market. New home builders are offering big incentives to buyers with aggressive price reductions, credits towards closing costs, mortgage rate buy-downs and more, along with offering Realtors bigger commissions for bringing buyers to them. The average Cape Coral homeowner trying to sell their home will be hard pressed to compete on the same level with these builder incentives, and with new construction homes making up about one-third of the current active listings and about 40% of the current pending home sales in the Cape, this is a much bigger problem than most local home sellers realize. In fact, a recent report from the National Association of Realtors indicates that nationally, existing home sales are at their lowest levels since 1995, and when you adjust the number of pending home sales in the Cape (shown below) 40% lower to account for new construction homes, it should be a wake-up call to existing home sellers.

To borrow a famous line that is applicable to the competition the average home seller in the Cape is facing, “Houston, we have a problem.”

It gets even more confusing for sellers to recognize these local market issues because of the conflicting real estate news reported in the national media. Although there are some pockets of a strong real estate market in some areas of the country, the softness in the real estate market is much more widespread than many realize.

We came across another example of this market weakness in the Jan. 26 edition of the Wall Street Journal in an article written by E.B. Solomont, which highlighted the recent sale of an oceanfront estate known as “La Dune” in South Hampton, N.Y. On the surface, it might appear that the sales price of $79 million was a sign that all is well with the swells in the Hamptons, but it turns out this estate property was listed for $150 million back in June 2022, and with no takers at that price, it was sold in an auction. The listing Realtors were confident that $150 million was a great value back in 2022, until the market proved otherwise.

Getting back to our market, in 2023 we saw a slowdown in closed home sales in the second half of the year when mortgage rates suddenly spiked higher. In a normal market, we almost always see a slowdown in sales during the third and fourth quarters of the year, which usually varies depending on the property type. When we looked at the sales for our indirect Gulf access canal home segment (homes with bridges to go under in the canals), we noticed that in the first half of 2023 there were 261 closed sales in this segment, followed by a 36.4% drop to 166 sales in the second half of last year. The last time sales were that weak in the second half of the year in this segment of our market was back in 2014 with only 137 sales recorded. December 2023, with only 17 sales, was the weakest month last year for indirect Gulf access canal homes in the Cape.

Moving on to the current number of active listings for Cape Coral single-family homes in the MLS, the numbers show the seasonal influx so far since Jan. 1. As of this past Monday, Jan. 29, there were 2,746 homes listed for sale in the Cape at prices ranging from $169,000 for a home in need of extensive rehabilitation to $11.9 million for a newly constructed riverfront luxury home. The second lowest-priced home in the Cape is listed for $225,000 and the third lowest-priced home is priced at $254,900. The second highest-priced home is on the market for $6.5 million, while the current median list price came in at $508,903.

The number of active listings is up 12.4% from Jan. 1 of this year, when there were 2,442 homes on the market at prices ranging from $264,900 to $11.9 million, with a median list price coming in at $500,000. About one year ago on Feb. 7, 2023, there were 1,307 active listings in the Cape, so the number of homes on the market has increased by 110% over the past year, and the median list price has dipped slightly from $517,000 a year ago.

Currently, there are 1,066 homes listed for $450,000 and under in the Cape, equalling 38.8% of our market, with 38 of these homes priced at $300,000 and under. At the other end of the price spectrum, we now have 358 Cape Coral homes, or 13% of our market, listed for sale at $1 million and above.

On Jan. 1, there were 973 homes listed at $450,000 and under, along with 295 homes priced at $1 million and up. About one year ago on Feb. 7, 2023, there were only 498 homes in the Cape listed at $450,000 and under, including 15 homes below $300,000 with another 182 listings at $1 million and above.

As of Jan. 29, the number of pending home sales has increased by 40.3% to 599 homes under contract compared to 427 back on Jan. 1, and the median pending sales price is at $420,000 now, versus $414,990 at the beginning of this year. Currently, 362 of the 599 pending home sales are at $450,000 and under, including 33 below $300,000. This is up 34.6% from the 269 homes pending at $450,000 and under on Jan. 1.

Right now there are 39 pending home sales in the Cape at $1 million and above, which is up 39.3% from the 28 pending sales at $1 million and above on Jan. 1. About one year ago on Feb. 7, 2023, there were 744 pending home sales in the pipeline with 478 of them at $450,000 and under, and 31 homes under contract at $1 million and above.

The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, FL, as of Jan. 29, 2024, 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 44 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.