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The Cape Coral condominium market remains deeply entrenched in a low inventory seller's market, as the condo supply has all but fallen off of a cliff over the past several years with both sales and prices hitting record levels.
Over the past several years, the most dramatic shifts in the condo supply have occurred in the "saltwater" canal property segments, which have gone from high inventory buyer's market conditions to low inventory seller's markets. The best example of this is in the direct sailboat access canal condo segment, where the monthly unsold supply averaged 10.58 months for the year back in 2018, and 9.75 months of supply for the year back in 2019. As you will see below, the supply started to tighten dramatically in 2020 with the COVID shutdowns, before shrinking to a record low level in 2021. But before we get into the year-end condo supply numbers, let's take a quick look at interest rates.
Pretty much every economic and market pundit in existence is now expecting the Jerome Powell-led Federal Reserve to begin raising the interest rate on the Federal Funds Rate at their next meeting in March, as they try to reign in the stubbornly high rates of inflation which they helped create. So far The Fed has just been "talking about" making a dramatic policy shift to this ultra short-term, overnight lending rate, but as is usually the case, "the market" for interest rates has already started moving higher in anticipation of The Fed's next move. For example, as of last week, the average interest rates on 30-year fixed-rate mortgages had climbed to 3.55 percent, and this past Wednesday morning it stood at 3.74 percent. Back on Dec. 30, this rate was 3.11 percent, so it has climbed up by 63 basis points making mortgage rates 20 percent higher so far this year. About a year ago, it was at 2.73 percent.
Mortgage rates are generally tied to the Benchmark 10-year Treasury Note rates, which touched 1.97 percent intraday on Feb. 8. On Dec. 30, the 10-year Treasury was at 1.52 percent, so we have seen rates spike by 29.6 percent. When COVID hit back in 2020, the 10-year Treasury dropped to a low of 0.52 percent on Aug. 4 of that year. Along with the movements in the 10-year Treasury Note rates and Federal Reserve policy shifts, the key things to keep an eye on for the housing market are oil prices, the Russia-Ukraine situation, the inflation numbers and the job market numbers. We will go deeper into this next week.
As of Feb. 8, there were only 31 active condo listings in Cape Coral through a Realtor in the Multiple Listing Service at prices ranging from $160,000 to $995,000. The second highest priced Cape condo was listed for $699,000 and the third highest was at $581,900. There were four available condo units priced under $200,000 and the median list price for condos in the Cape was $319,900. There are currently 92 condos under contract with buyers as pending sales, with the lowest priced pending sale at $130,000 for a 700-square-foot, one-bedroom, one-bathroom unit that was on the market for only three days. The highest-priced current pending condo sale was at $1.085 million after five days on the market for a 3,048-square-foot fifth floor turnkey unit in Tarpon Landings with three bedrooms, a den and 3 1/2 bathrooms, plus a three-car garage. The seller bought this unit for $950,000 in November 2021.
There were no short sales or foreclosures in our current condo market.
To illustrate how tight the condo inventory has become, a year ago there were 149 condos listed for sale through a Realtor in the Cape, at prices ranging from $99,000 to $1.875 million with 125 pending condo sales in the pipeline. While back on Nov. 1, 2020, there were 202 active condo listings in Cape Coral.
In the overall Cape Coral condo market, the monthly supply of unsold condos came in at 2 months in December, which was 50 percent lower than the 4 months of unsold supply in December 2020, but even with the 2 months of supply in November 2021. In the fourth quarter, the overall unsold supply of condos in the Cape averaged 2 months, which was 45.5 percent below the average of 3.67 months of supply in the fourth quarter of 2020, and 14.2 percent lower than the average of 2.33 months of unsold supply in the third quarter of 2021. Through Dec. 31, the supply of unsold condos in the overall Cape market averaged 2.5 months for the year in 2021, or 57.8 percent less than the average of 5.92 months of supply for the full year in 2020.
Gulf access canal condos
In the Cape Coral gulf access canal condo segment, which includes all saltwater canal condos, the monthly supply of unsold condos came in at 3 months in December. This was 50 percent higher than the 2 months of unsold supply in both December 2020, and in November 2021. In the fourth quarter, the unsold supply of condos in this segment averaged 2.67 months, which was even with the average of 2.67 months of supply in the fourth quarter of 2020, but 33.5 percent above the average of 2 months of unsold supply in the third quarter of 2021. Through Dec. 31, the supply of unsold gulf access condos in the Cape averaged 2.5 months for the year in 2021, or 55.2 percent below the average of 5.58 months of supply for the full year in 2020.
Direct sailboat access canal condos
In the Cape Coral sailboat access canal condo segment, which is a subgroup of gulf access condos with no bridges in the canal system, the monthly supply of unsold condos came in at 4 months in December. This was 100 percent higher than the 2 months of unsold supply in both December 2020, and in November 2021. In the fourth quarter, the unsold supply of condos in this segment averaged 3.33 months, which was 11 percent above the average of 3 months of supply in the fourth quarter of 2020, and 42.9 percent higher than the average of 2.33 months of unsold supply in the third quarter of 2021. Through Dec. 31, the supply of unsold sailboat access condos in the Cape averaged 2.67 months for the year in 2021, or 59.4 percent lower than the average of 6.58 months of supply for the full year in 2020.
Dry lot condos
In the Cape Coral dry lot (non-canal) condo segment, the monthly supply of unsold condos came in at 1 month in December, which was 83.3 percent lower than the 6 months of unsold supply in December 2020, and 50 percent below the 2 months of supply in November 2021. In the fourth quarter, the unsold supply of condos in this segment averaged 1.67 months, which was 68.7 percent below the average of 5.33 months of supply in the fourth quarter of 2020, and 37.5 percent below the average of 2.67 months of unsold supply in the third quarter of 2021. Through Dec. 31, the supply of unsold dry lot condos in the Cape averaged 2.75 months for the year in 2021, or 57.2 percent lower than the average of 6.42 months of supply for the full year in 2020.
The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Jan. 27, 2022, 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, unless otherwise noted. 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 42 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.