CWL ~ Cape Coral/SW FL Real Estate Report August 2024

 

Cape Coral/Lee County June Home Prices Drop Again

 

As we’ve been projecting for a few months, Cape Coral and Lee County are experiencing the summer home price doldrums. MLS stats indicate that prices will likely drop a bit more in the next few months before high-season and  interest rate decreases arrive. Cape Coral home prices are getting close to the $453K low mark of this new cycle.

 

Bank of America: Housing Market ‘Stuck’ until at least 2026

The bank said home prices will stay high and go even higher and the housing shortage will persist. And mortgage rates may not fall much – even if the Fed finally delivers long-delayed interest rate cuts. Home prices spiked during Covid-19 and then the Fed’s war on inflation sent mortgage rates surging. 

 

The one-two punch has made it an historically unaffordable time to buy a home. The median price of a previously owned U.S. home climbed in May (and June & July) for the 11^th month in a row to a record $419,300 – up 6% from a year earlier. B of A expects home prices will climb by 4.5% this year and then by another 5% in 2025.

 

One other major problem keeping inventory low is the “lock-in-effect”, homeowners with a low interest rate who are unwilling to give up that appealing rate. B of A feels that the “lock-in-effect” could persist for eight years. And because those homeowners aren’t moving, the supply of existing homes on the market is limited. Tom: The silver lining of the lock-in-effect is that it is keeping inventory somewhat at bay, thus avoiding a severe price crash similar to the mid-2000s. 

 

Fort Myers in Top 3 Florida Cities to Buy in Next 5 Years

According to a Real Estate Agent survey conducted by GoBankingRates, Fort Myers is one of the top areas where Florida homebuyers should purchase property in the next five years. 

 

Not too long ago, Fort Myers/Cape Coral had a reputation for being retirement towns. However, the cities have shifted to offering more diverse activities, including recreation, dining and cultural sightseeing, to attract an increasingly younger demographic. According to U.S. News & World Report, the median age of a Fort Myers resident is 45 years old. 

 

Compared to cities like Miami, there’s a lot of land still available in Fort Myers/Cape Coral for residential development. And, it’s a less expensive alternative than pricier cities in SWFL like Naples or Marco Island. Jenna: Home prices in SWFL are as low as they've been in several years. We're here to help you purchase a home at these favorable prices. 

 

America’s Renter Population is Growing

Redfin: The number of renter households in America grew 1.9% year over year in the 2^nd quarter to a record 45.2 million. That’s over three times faster than the number of homeowner households, which grew .6% to a record 86 million. 

 

Renter households have formed faster than homeowner households for three straight quarters partly because home buying costs have risen much faster than rents. Nationwide, just over one-third of households in the U.S. are renter households – a figure that has remained fairly steady over time. 

 

 

The median apartment asking rent increased less than 1% year over year in June, while the median monthly mortgage payment jumped roughly 5%. America still faces a housing shortage, but the recent boom in multifamily construction has helped narrow the gap. Multifamily building completions are at historic highs because many projects started during the pandemic housing frenzy are just now being finished. 

Tom: The abundance of new Cape Coral/Fort Myers apartment developments in the last few years has contributed to tamping down home prices. Fortunately, we're seeing a decrease in the number of complexes being completed, and they are not being rented as quickly, or for the high rental prices they were getting a few years ago. 

  

Facts & Stats and Tom’s Musings

New technology is Cleaning Waterways in SWFL: A company called Clean Earth Rovers is using water-cleaning robots to clean fish kills, red tide, oil spills and algal blooms. The ‘Roomba’ for waterways will clean a spill event in 40 minutes that used to take 4 to 6 hours.

 

There are currently six Clean Earth Rovers in Florida, but talks are in progress with more companies and municipalities. 

 

Florida Remains Top International Buyer Preference: Fla. continued to be the top selection for international buyers, with 20% of that buyer market. At 13%, Texas ranked second, and California was the remaining state with triple digits at 11%. Canada, China, Mexico and India were the top international home buyers. 

 

The number of homes purchased by international buyers dropped 36% from 2023 and the lowest number since tracking began in 2009. Despite the decrease in number of sales, the average home purchase price of $780,300 was the highest ever recorded. 

 

Florida Dominates for First-Time Buyers: A new WalletHub survey found Florida is home to six of the top 10 cities for first-time buyers, and Cape Coral was the 2^nd ranked city for newbie buyers. Nine Fla. cities ranked in the top 20. The survey looked at 300 cities using 22 key metrics, including home prices, taxes, and crime rates. 

 

How Low Must Rates Go to Break Lock-In Effect? Nearly 50% of existing homeowners said rates need to drop below 5% to feel comfortable buying a new home. Six out of 10 current mortgages have rates below 4%. Redfin expects rates to only decline to about 6.6% by the end of this year. Lisa: Can we expect rates to hit that magical 5% sometime in 2025? We can only hope.

 

Be Safe: Our team hopes you and your families experienced minimal impact from Hurricane Debby, and may we be so lucky that it was the last one to visit us for at least the rest of this year.