Cape Home Prices Rise by 18% - Inventory Drops Below 4 Months
Average Cape Coral home prices in March were $293,000, the highest price in 9 years. This is an 18% increase over March 2016, when average home prices were $248,000. Available homes have fallen sharply in just one month - from 6.2 months of inventory in February to 3.9 months in March. Based on market activity, inventory may fall even lower over the next 3 to 4 months - traditionally the strongest real estate months in our area. Tom: The local housing market is steam-rolling along and picking up more momentum each month. If one more out-of-stater tells me that Cape Coral/Ft Myers has a depressed real estate market, and they would like to buy a "steal", I believe I'll yank out the last remaining hairs on my head.
Cape Coral Already Making Top U.S. Lists in 2017
After a year when Cape Coral landed on at least two dozen top lists in 2016, the city is picking up in 2017 right where it left off. Cape Coral has made five U.S. lists already this year, including the top spot on Forbes.com list of "Fastest Growing Cities" in the U.S., an honor that the Cape notched twice during the mid 2000's. Here are the top lists so far in 2017 for Cape Coral"
* Trulia ranked Cape Coral No. 2 on "Top 10 Cities Where People are Moving in 2017"
* Cape Coral landed at #75 on Millenial Finance's list of "Top 150 Cities for Millenials"
* Forbes.com has Cape Coral in the No. 1 spot for "Fastest U.S. Growing Cities in 2017"
* Cape Coral is No. 15 on Milken Institute list for "Best Performing Cities' in 2016 for Large Cities"
* Cape Coral is No. 34 on the LendEDU.com list for "Best Cities to Start a Family".
Sue: This is an impressive list so early in the year, with numerous more honors sure to follow.
How Will Housing Change Over the Next Decade?
Here is a 10-year housing outlook according to Lawrence Yun, chief economist of the National Association of Realtors:
Rising populations and a growing job market will likely release a pent-up demand in housing
U.S. population is currently about 325 million, and projected to increase to 352 million residents in 10 years
Rental demand will flatline
Adults in their 30's and 40's will grow by 12%. Americans in their 50's are forecast to drop by 4 million. The biggest population increase is expected to be age 65 years or older. This age group is expected to increase from the current 51 million to 69 million, a whopping growth of 35%
Housing demand in warm weather areas, and income-tax free states like Florida, Tennessee and Texas are set to boom in the next decade. Tom: this stat in particular bodes well for SW Florida's economy and real estate market for the next 10 years.
The national median home price will go from $234,000 in 2016 to $330,000 in 2027
Rising Home Prices & Increase in Interest Rates Will Make Home Buying More Costly in a Year
Based on market indicators, we're expecting home prices in the Cape Coral/Ft Myers area to increase 8 to 10% by the end of the year (even higher for vacant lots). The Federal Reserve is widely expected to raise interest rates twice more this year. Combined, these two factors will make homes significantly more costly for loan buyers each month. Additionally, there will be increased insurance costs and property taxes associated with higher home prices.
Tom: We make more commission if clients buy in the future, but we are happy to forego the nominal extra commission if it means our clients save tens of thousands of dollars on their home purchase and carrying costs.
Chiquita Boat Lock Update
Will removal of Cape Coral's Chiquita boat lock finally become a reality? All indications point to yes! There are several steps still left in the process, but the removal is definitely on a forward trajectory. The City must apply to the Florida Department of Environmental Protection (FDEP) for a permit for removal, which they did on 10/31/16. Request for further info was given to FDEP on 02/14/17. Steps left in the procedure are as follows:
+ FDEP has 30 days to review the additional info and they can request additional info as many times as they see fit.
+ FDEP has to give the permit or deny it within 90 days of receiving a complete application.
+ Once they are happy with the permit application FDEP then issues a Notice of Intent to issue the permit.
+ A petition to challenge the issuing of the permit can be filed within 21 days of the Notice of Intent, and timing to resolve such a petition can fluctuate.
The good news is that the City has illustrated there will be no adverse effects to the water quality when the lock is removed, so no further delays for water quality improvement studies are needed.
We're sure all of you living behind the lock are as excited as we are about the eventual elimination of the lock and looking forward to a quicker, more pleasurable boating experience out to open waters. We will report when we know that the lock is definitively scheduled for removal.
Cleaner River & Waterways on the Way - Here's How You Can Help
We know you've all heard about and/or seen the brownish water in our canals, Caloosahatchee River and beaches, and that you understand that the diminished water quality stems from discharges from Lake Okeechobee into the Caloosahatchee and St. Lucie Rivers. Bills have been filed in the Florida Senate (SB10) and House (HB761) aiming to stop releases into these rivers and instead send the water south to Everglades National Park, Florida Bay and the Keys, a fix which has been recommended by over 200 Everglades scientists. By signing the Now or Neverglades Declaration you can show your support for these bills. Simply click here to sign the declaration.
Facts & Stats
U.S. Housing Starts at Highest Level in 10 Years: Single-family production increased 6.5% to 872,000 units in February - its highest reading in nearly a decade. Single-family homes continue sprouting up despite being tempered by access to lots and a shortage of labor. Tom: this trend is in line with strong construction activity in SWFL.
Homeowners Get Nice Equity Bump in 2016: One million U.S. borrowers gained home equity in 2016, according to a recently released report by CoreLogic. About 63% of all homeowners saw their equity increase last year. Now, 93.8% of all mortgaged properties - about 48 million homes - are in positive territory.
Average home equity rose by $13,700 during 2016, with Texas having the highest percentage of homes with positive equity at 98.4%. Nevada had the highest percentage of homes with negative equity at 13.6%, followed by Florida (11.6%).
Will Increase in Interest Rates Affect SWFL Home Sales?: We are not seeing any evidence of home sales drop-off. In fact, it appears that the bump in interest rates is pushing many "fence-sitters" to finally take action, as evidenced by the stats in our lead article. Tom: It is my estimate that our local real estate market will not be adversely affected until interest rates hit at least 6%, which is unlikely to happen in the next 12 to 18 months. Also, keep in mind that about 50% of Cape Coral waterfront home buyers purchase via "all cash", thus interest rates do not affect these buyers.
U.S. Housing Inventory Lowest Level in at Least 18 Years: Economists think the spring home sale season will be the most difficult for buyers in almost 20 years, as inventory is extremely low. At the start of the year the number of homes for sale hit the lowest level since the National Association of Realtors began tracking sales data in 1999. So far this year, homes sell on average eight days faster than last year.