Geri and Bob Quinn

In our column one year ago, we provided some predictions that were being made by Lawrence Yun, the chief economist with the National Association of Realtors. Back then, Yun was discussing the fact that in the January 2023 NAR pending home sales report, the year-over-year number of pending sales in the U.S. had declined by 24.1% versus January 2022. He pointed out that the sharp rise in mortgage rates in 2022 had created additional affordability issues that eliminated a lot of buyers from the market.

Yun was also quick to point out his relative optimism going into 2023 based on the sudden decline in mortgage rates back in December 2022 and into January 2023, which resulted in a positive market shift with consecutive month-over-month increases in pending home sales in those months. He noted that, “buyers responded to better affordability from falling mortgage rates in December (2022) and January (2023),” and he went on to predict that 30-year fixed mortgage rates would continue steadily dropping down to an average rate of 6.1% in 2023, before continuing even lower to an average rate of 5.4% in 2024.

Our comment was that we hoped the NAR would be correct in its predictions, but we expressed concerns that the high levels of inflation were likely to prove to be much more “sticky” than most market and economic experts were predicting. Based on that, we felt that the Fed was likely to keep a “wet blanket” on the housing market by being forced to raise interest rates higher for longer last year in their ongoing war on inflation.

As we all now know, the Fed stuck to its higher for longer mantra on interest rates in 2023, and mortgage rates rocketed higher to the 8% range last year. According to Bankrate and Freddie Mac, the interest rates on 30-year fixed rate mortgages averaged 7% for the year in 2023, and not the steady decline to 6.1% the NAR was predicting. We won’t even mention their prediction from a year ago calling for an average mortgage rate of 5.4% in 2024, outside of saying “we’ll take the over” on that one.

We are bringing all of this up because we are seeing something very similar happening again so far this year, with just about every expert expecting substantially lower interest rates this year and focussing on housing affordability based solely on mortgage rates, while mostly ignoring the higher costs for insurance, taxes, HOA and condo association fees, and just about everything else in life.

As of Tuesday, Feb. 27, there were 422 active condo listings in the Cape through the MLS at asking prices ranging from $149,000 to $3.9 million. The median condo list price came in at $299,000. The number of active condo listings through a Realtor is up 16.6% from the 362 listings back on Jan. 2 of this year, and they are 88% higher than the 224 active condo listings a year ago on Feb. 28, 2023, when the median list price was at $319,950 for Cape Coral condos.

Currently, 258 of the 422 active condo listings, or 61% of our market are priced at $325,000 and under, including 46 condo units listed below $200,000. We have a total of 56 condos currently listed for $500,000 and above, including 15 units priced at $1 million or more. One year ago there were only 11 units listed for less than $200,000 in the Cape, while there were 51 condos listed for more than $500,000 with 15 of those units priced above $1 million.

As of Tuesday, Feb. 27, there were 86 Cape Coral condos under contract as pending sales at prices ranging from $150,000 to $1.299 million, with the current median pending sales price at $265,000. A total of 60 of the 86 pending sales, or 70 percent of the market, were priced at $325,000 and below with 13 of these units under $200,000. Eight pending sales were priced at $500,000 and above, with only one of them topping the $1 million mark.

On Jan. 2 of this year there were 42 pending condo sales in the Cape with the median pending sales price at $284,000. One year ago on Feb. 28, 2023, there were 97 pending condo sales in the Cape and the median pending sales price came in at $300,500. Back then, there were 64 units under contract at $325,000 and under, including nine priced below $200,000. A total of nine units in the Cape were pending above $500,000 a year ago, with the two highest-priced pending condo sales at $1.65 million and $1.795 million.

In the overall Cape condo market, there were 27 closed sales in the month of January, which was 3.8% higher than the 26 closed condo sales in January 2023, but 27% below the 37 sales in December. The January median sales price came in at $282,000 for the overall Cape Coral condo market, which was 22.6% above the $230,000 posted in January 2023, and 5.6% higher than the $267,000 in December. The overall monthly supply of unsold condos in the Cape came in at 18 months in January, which was 63.6% higher than the 11 months of supply registered in both January 2023, and in this past December.

Gulf access canal condos

In the Cape Coral gulf access canal condo segment, which includes all “saltwater” canal condos, there were 11 closed sales in January. This was 37.5% above the eight condos sold in January 2023, but 35.3% below the 17 sales in December. The January median sales price came in at $310,000 in this segment, which was 4.6% below the $325,000 posted in January 2023, and 1.6% lower than the $315,000 in December. The unsold supply was 20 months in January, which was 42% more than the 14 months in January 2023, and 100% above the 10 months of supply in December.

Direct sailboat access canal condos

In the Cape’s 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 six closed sales in January. This was 100% more than the three sales in January 2023, but 53.8% less than the 13 sales in December. The January median sales price was $340,000 in this segment, or % above the $330,000 from January 2023, and even with the $340,000 this past December. The level of unsold supply came in at 20 months in January, which was 9.1% below the 22 months of supply in January 2023, but 150% above the eight months of unsold supply in December.

Dry lot condos

In the Cape Coral dry lot (non-canal) condo segment, there were 12 closed sales in January, which was 20% lower than the 15 condos sold in January 2023, and 33.33% below the 18 sales in December. The January median sales price came in at $212,500 in this segment, which was 1.2% above the $210,000 posted in January 2023, but 3.6% below the $220,500 in December. The level of unsold supply for dry lot condos came in at 18 months in January, which was 100% more than the nine months of supply in January 2023, and 63.6% above the 11 months of unsold supply in December.

As a side note, there were four sales in January for landlocked freshwater canal and lake condos with a median sales price of $266,250 and 12 months of unsold supply.

The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Feb. 25, 2024, 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 44 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.