Homing In | A perfect storm? Or is this what normal is supposed to feel like?
Trending
Last week we had some clients in town from the Northeast and they mentioned a friend of theirs had just emailed them a recent local TV news report about the Cape Coral real estate market. The story opened with a reporter commenting on the number of homes for sale in her neighborhood, and that it seemed there are thousands of homes on the market in the city. She interviewed a local Realtor who pointed out the increase in the number of listings on the market from 2,897 in March 2023 to 4,003 in March of this year. This included a combination of single-family homes, condos, townhouses and some new builds and she called the situation as a "perfect storm."
A couple of things with this report caught our eye, so we thought we would dig a little bit deeper into the details.
First, we agree with a lot of the information in the story, although in our humble opinion, we do not think we have reached the type of market dynamics that would qualify as something quite as devastating as a "perfect storm." At least not yet. And the data we provide and report on virtually every week of the year in this column regarding the number of active listings on the market are different from the those quoted in the report. However, we believe this difference in the numbers is likely more about the chosen methodology, while the direction of the trend towards a substantially higher inventory of homes on the market, and the fact that a lot of homes are sitting on the market unsold for a lot longer, are accurate.
As far as the reporter's observations were concerned, she was clearly right over the target about there seeming to be so many homes for sale in the Cape. And the number of open house signs fighting for space on street corners throughout the Cape every weekend is emblematic of a potential problem brewing in paradise. The quantity of open houses is anecdotal evidence that a lot of sellers have been unable to attract a buyer to their homes and the most likely, painful reason they have not received an offer on their home, is simply because buyers think they have their home overpriced to the current market. Period.
Regarding the difference in the numbers for active listings cited in the news report of over the number of homes on the market compared to our lower weekly numbers, there is a "static" monthly active listings report put out through the Multiple Listing Service that provides a cumulative total of the homes that were on the market in a given month. This number is looking backwards, so it tends to be a bit stale, but we think this was where the reported number of active listings came from.
We use a different approach in that we pull the number of active listings that are on the market every Tuesday morning in the predawn hours off of a "live" listings screen in the MLS. These live numbers are constantly being updated throughout the day, which is why we take our weekly market snapshot really early in the morning before other Realtors are entering new information into this database. So our data is the actual real time "live" number of active listings in Cape Coral through the MLS.
As we note in the details below, on May 7, there were 2,791 homes on the market and a week ago there were 438 condos listed for sale, so well below the news report number. We believe our numbers are more accurate and reflective of the current "live" real time active listing numbers.
We can see how a lot of the unsuccessful sellers in our current market would feel like they are being hit by a perfect storm, as the reality sinks in that they will likely end up selling their home for a lot less money than they thought or not get their home sold at all. The famous quote attributed to President Harry S. Truman, when he said, "It’s a recession when your neighbor loses his job; it’s a depression when you lose yours," can easily be modified to fit the perfect storm feelings of frustrated sellers who are having to make multiple price reductions in the hopes of getting their home sold.
But does this really qualify as a perfect storm yet? The reality is that homes are still being sold at a solid pace in our market with the combined number of closed sales in March and April of this year coming in as the third best ever in Cape Coral, behind only March and April of the all-time record setting years of 2021 and 2022. So it would seem that what we are going through right now is more of a return to the pre-COVID years, in what we would call a "this is what normal is supposed to feel like” type of market and not as much of a perfect storm scenario, if you will.
We will continue with these thoughts next week about whether this is a return to the more normal pre-COVID markets by delving into the archives of our past columns and comparing the details of prior perfect storms to today's market. But for now, here is what the numbers looked like on Tuesday for our current active listings and pending home sales.
As of Tuesday, May 7, the number of active listings and pending sales in the MLS for Cape Coral single-family homes have both dipped since our last home market survey two weeks ago. Currently, there are 2,791 homes listed for sale through a Realtor in the Cape with the median list price at $499,000. Of note, the previously highest-priced active listing in the Cape, at $10.9 million, was withdrawn from the market unsold on May 1.
Two weeks ago there were 2,849 homes on the market with a median list price of 499,900. A total of 1,151 or 41% of our current listings are priced at $450,000 and under, with 332 homes listed at $1 million and above. One year ago on May 9, 2023, there were a total of 1,536 single-family homes listed for sale in the MLS with a median list price of $535,000. Looking back two years ago on May 17, 2022, there were only 725 homes on the market with a median list price of $575,000. Based on our weekly market surveys, the highest median list price was $610,000 on April 19, 2022, so the current median list price for Cape Coral single–family homes is now down $111,000 for an 18.2% decline over the past 25 months.
Also as of Tuesday, May 7, there were 843 pending sales in the pipeline through the MLS for Cape Coral single-family homes, down from 872 pending sales two weeks ago. The median pending sales price is unchanged from two weeks ago, coming in at $399,999 or $100,000 below the current median list price of $499,000. This 20% difference between the median list price and the median pending sales price helps illustrate the continued pressure on home prices in our market. Of the current 843 pending sales, a total of 530 homes, or 62.9% of the pending sales are priced at $450,000 and below, with 54 homes under contract at $1 million and above. In addition, 346 homes or 41% of the pending sales are on new homes built in 2023 and 2024. One year ago on May 9, 2023, there were 883 pending sales in the pipeline with a median pending home sales price of $401,999. Two years ago on May 17, 2022, there were 962 Cape Coral homes under contract with buyers. As an additional point of reference, the median sales price in the overall Cape Coral single-family home market was at $470,000 in April 2022, versus $415,000 in April of this year.
The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of May 7, 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.