Is the Real Estate “Shift” Done Shifting?
The real estate “shift” is a concern on everyone’s mind who owns or plans to buy real estate, and I’m often asked about it. If you were unlucky enough to be in the midst of the last SWFL shift starting in early 2006 and ending early 2011, that was not even what could be called a seismic shift. That was a full-blown 8.0 earthquake and tsunami combined. During my long real estate career, I’ve experienced five market cycles, so here is my take as to why I believe we will survive this shift just fine:
1. U.S. Census Bureau Population Projection: 10,000 (net) people moving to Cape Coral alone for each of the next 10 years (not including seasonal owners). In my opinion, this is the most overriding factor as to why our real estate market will be sustainable.
2. “Tax Exodus”: As reported in February’s Market Update, of the numerous residents that are leaving high-tax states, a good number will be coming to SWFL.
3. New Construction: Unlike the last downturn, aka “Crash”, neither builders nor investors are putting up an overabundance of “spec homes”. As an example, per #1 above, Cape Coral alone needs at least 3,000 new construction homes a year to satisfy demand, and for the last two years, we are averaging 2,100 new homes per year. Leading up to the crash builders and investors were putting up 7,500 + homes a year, far too many to meet demand.
4. Lending: Although lenders are gradually loosening lending qualifications, they are not giving out stupid loans as they did preceding and contributing to the crash. Hopefully, banks have learned a valuable lesson
5. Interest Rates: The Federal Reserve is holding interest rates at bay, but even if rates eventually increase to 5 or 6% that is still on the historically low side, and I don’t think reasonable rate increases will stall the real estate momentum in SWFL for reasons mentioned above.
6. Viability: In the last year and a half our area endured Hurricane Irma and the worst green algae/red tide in history. We survived these two highly negative events, along with the “market shift” that started early last year. Despite these two serious negative events, local home prices rose by 7% in 2017 and 2% in 2018…and a 3% price increase for the first quarter of 2019. Tom: if that was our SWFL “shift”, or we’re still in the midst of it, then rest easy my friends. We will be just fine. See sales stats in the next article.
SWFL Home Prices Continue to Rise During “Shift”
Cape Coral: Home prices rose from $280,000 last March to $290,000 this March. List to sale price was 97.2%. Q1 Stats: In Q1 2018, Cape home prices were $282,000 versus $291,000 in Q1 2019, a modest 3% gain, but impressive if we are supposed to be in a market shift. Tom: I expect 2019 SWFL home prices to be higher some months and lower some months than in 2018, but my January projection of 2019 being within 2 or 3% in either direction of 2018 home prices is fairly accurate thus far.
Ft Myers & Ft Myers Beach – Q1 Stats: There were 850 home sales in Q1 compared to 975 sales in 2018, and prices increased slightly, from $341K to $344K. Listing vs Sales price was 96.2%.
Reviews.com: Cape Coral #29 “Safest City in U.S.”
Reviews.com published its 2019 list of “Safest Cities in the U.S.” and Cape Coral was ranked #29. 454 cities were analyzed to find which cities are safest based on FBI data. Whether you’re a family with young children or retirees looking for a place with relatively low-crime to call home, it’s reassuring to know that Cape Coral ranks in the top 6% of safest cities in America.
Thank You to Our Fabulous, Loyal Clients
Once again you have enabled us to have a productive month. Even if we are unable to reach out to all of you individually, please know that we deeply appreciate your trust and your referrals of family and friends looking for experienced and honest Realtors in SWFL. We’ll never let you down and we’ll continue to earn that #1 spot on Angie’s List out of 7,500 SWFL Realtors.
Facts & Stats
Cape Coral Population Approaches 200,000 Residents: After surpassing Tallahassee and Ft Lauderdale with a current population of 195,000, Cape Coral is on track to surpass 200,000 residents before the end of the year. As the eighth most populated city in the state, it won’t be long before the Cape's population passes by more Florida cities. Thankfully, we have such a large land area that it does not feel as congested as many heavily populated cities....at least not in the off-season.
Fla. Buyers Spark Almost 1 in 10 Mortgage Requests: Lending Tree reports that 9.1% of all mortgage requests were for homes in Florida, and moving companies report that 12.4% of all requested destinations were in the Sunshine State. Builder Magazine calls Florida’s growth “explosive”.
U.S. Median Listing Price Hits $300 K for First Time: Realtor.com reports that homes advertised on their website crossed into uncharted territory in March, increasing 7% year-over-year and hitting $300,000 for the first time ever.
Mortgages Soon to be Easier for Self-Employed: Freddie Mac and Fannie Mae, the two largest sources of mortgage money in the U.S. are making loans for the self-employed easier and quicker to apply and qualify for. Both organizations have rolled out automated underwriting technology changes for lenders that take a lot of the guesswork and risk out of the approval process for the self-employed.
Local Real Estate Market Holding Steady - Massive Income Tax Exodus - Beach Business Strong Again
Governor DiSantis Keeping His Word About Improving South Florida Water Quality - Local Real Estate Market Snapshot - Cape Coral & Punta Gorda Two Fastest Growing U.S. Retirement Towns
2018 Wrap Up And 2019 Expectations - SWFL Million Dollar Home Sales Stay Strong - Gov. DeSantis Signs Order To Fight Algae And Red Tide
SWFL Real Estate Has Another Positive Month - Chiquita Boat Lock Removal Update - Snowbirds Arrived Early
Why Aren't Homeowners Becoming Sellers? - Local Real Estate Prices on Upswing Again in Oct - Kiplinger: Fla. #4 Tax-friendly State – and Top 3 Are Cold - Hurricane-Proofing Fla. Homes Worth the Cost
More Accolades Heaped On Cape Coral And Ft Myers - Cape Population Likely To Reach 200,000 Full-Time Residents In 2019 - FL Ranks 4th In U.S. For High-Earners And Affluent Families
Local Real Estate Market Holding Steady - Kiplinger Ranks Fla. No 8 for Job-Growth Rate - U.S. Tax Overhaul Causing High-Income People to Flee Many States
Chiquita Boat Lock Update - 2018 Property Tax Rates Released - 95% Likelihood Home Prices Will Rise Over Next Two Years
Low & Mid-Priced Home Sales Very Strong in Cape Coral - Baby Boomers Top Retirement Concerns - New $25K Florida Homestead Property-Tax Break on Nov. 6 Ballot
Cape Coral/Ft Myers 2nd “Best Place People are Moving to in 2018” - Cape Home Prices Rise $22K Over May 2017 – Ft Myers/FtMyers Beach Up $40K & Construction Costs Rising - Florida Ranks No.1 as “Best State for Military Retirees”
Cape Coral Real Estate Bounces Back from Weak 1st Quarter - Tax Reform Already Boosting Demand for Florida Real Estate - Keep Interest Rates in Perspective
Home Prices And Sales Numbers - Florida's Stringent Building Codes Thwarted Hurricane Damage - Foreign Buyers Still Loving The Sunshine State