Cape Inventory Rose in September – A Future Concern?
We are getting very close to the well-known “balanced market” of 6-months supply of homes. Somewhat surprisingly, C.C. home prices rose slightly from August despite the higher inventory. If inventory continues to expand, we can expect the inevitable drop in home prices.
Lee County home prices experienced a slight 2% drop from Dec 2022 the previous low price point of the current cycle, although with a 6% increase in the number of home sales.
Cape Coral - Dec 2022 vs. September 2023
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Dec 2022 (Low Point This Cycle) |
September 2023 |
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Cape Coral |
351 Sales $465,000
|
411 Sales $486,000 + 17 % + 4.5 % |
Lee County - Dec 2022 vs. September 2023
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Dec 2022 (Low Point This Cycle) |
September 2023
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Lee County |
987 Sales $547,000 |
1045 Sales $538,000 + 6 % - 2 % |
Cape Coral Gulf-Access Homes: Sept witnessed a nice increase in the number of C.C. gulf-access home sales from August. Sept had 66 sales versus 48 in August, but a fairly steep drop in the average price from $929K to $852K
C.C. $1M+ Homes: September was a near mirror of August’s upper-end home sales with 18 $1M+ homes sold at the exact same sales price of $1,336,000
Confused Buyers? No Wonder with Today’s Headlines
Real estate prices are going back up, one news headline says. No, they’re dropping, says another. Confused buyers don’t know whether to move quickly or step back. Some mid-summer headlines from highly reputable sources:
Zillow: “Home values reach new peak as owners hang on to houses”
Core Logic: “U.S. Annual Home Price Growth Drops to Lowest Rate in 11 years in May"
National Assoc of Realtors (NAR): “Existing-Home Sales Fell 3.3% in June; Monthly Median Sales Price Reached Second-Highest Amount Ever”
Redfin: “U.S. Home Prices Rise for the First Time in Nearly Five Months".
If you look at these headlines it is easy to understand homebuyers’ uncertainty. The info is different because they don’t all measure the same information, nor specific geographical areas. Jenna: Just like the weather, all real estate is local. So, in addition to reading our monthly report, feel free to contact us with any questions about our SWFL market.
NAR Economists: 2024 Better than Rest of 2023
Dr. Lawrence Yun, the highly regarded Chief Economist for National Association of Realtors,along with two other economists spoke to Naples Realtors recently. Yun says mortgage rates could hit 8% later this year – but he expects around 6% by spring. Tom: Although I hold Dr. Yun in the highest esteem, I should point out that early this year Dr. Yun projected that interest rates would top out at 7% by the end of 2023, a rate that has long gone by.
Dr. Brad O’Connor, chief economist with Florida Realtors, said that Florida, and Collier County in particular, are doing better than many areas in the U.S., and better than in many past years. “The underlying demand for moving into Florida is still quite high, and the desire to move to Florida from other states will be a permanent trend”.
Previous Low Mortgage Rates Creating Housing Dilemma
Buyers complain about too-few sellers selling – but some homeowners want to move yet feel frustrated that an ultra-low mortgage rate has locked them in. According to Realtor.com, 82% of homeowners felt locked in by their existing low-rate mortgage.
A recent report from Zillow, states homeowners were nearly twice as willing to sell their home if their current mortgage rate is 5% or higher, but 80% of mortgage holders have a rate below 5%. As a result, many homeowners who would otherwise choose to downsize, leave their starter home, or move to a new location are opting to remain in place, keeping those homes out of the inventory pool. A reduced supply creates a more competitive market and keeps prices at a higher level. Tom: Today’s high interest rates create a dual problem. Fewer buyers qualify for a high-interest loan, or are simply unwilling to pay double previous low rates. And, homeowners with an existing low interest rate are justifiably unwilling to give up those favorable rates in exchange for a much higher interest rate should they sell and move.
Cape Coral Featured on “My Lottery Dream Home”
Recent Powerball winners immediately knew that some of their winnings would go towards purchasing a home in Cape Coral, one of the remaining places in Florida offering reasonably priced coastal living. The show's host David Bromstad was able to find them several homes in their $350 - $450K range (for an off-water home).
Bromstad refers to Cape Coral as “a slice of paradise that’s still surprisingly budget-friendly.
Sue: We’ve watched several episodes of HGTV’s “My Lottery Dream Home”, so it was interesting and exciting that Cape Coral had been chosen by these lucky winners and would be featured on the hit TV show.
Two Local Resorts Make Favorite Florida List
Given that Hurricane Ian blew through SWFL barely a year ago, it is quite a tribute that both the Pink Shell Beach Resort & Marina (#15) in Fort Myers Beach, and the Hyatt Regency Coconut Point Resort & Spa (#8) in Bonita Springs made an award-winning travel publication list - Conde Nast’s Readers Favorite Florida Resorts.
A true beachfront resort with Matanzas Pass on one side and the Gulf of Mexico on the other, Pink Shell evolved from a single cottage built in 1950 to an expansive 12-acre beach resort and marina.
Coconut Resort & Spa is known for its water attractions spreading over three acres featuring a Lazy River, five waterslides, including a pair of dueling speed waterslides and an inner tube water slide.
It’s nice to know we wouldn’t have to travel far to stay at either of these beautiful top Florida resorts.
Facts & Stats and Tom’s Musings
Don’t Wait for a Rate You Like Better: Economists advise against waiting for rates to drop for one main reason – when rates drop more buyers will be in the market and home prices will once again escalate. If you purchase now and rates drop by a decent margin you can refinance, but if home prices increase there is nothing you can do about that.
Start Spreading the News - Fla. Tops NY in Home Values: Study: Fla. leaped past New York to be 2nd highest in U.S. housing values, trailing only California. S Fla. (No. 5) and Tampa (No. 18) made the top 20 “most valuable metros” list. S. Fla. (Miami area) pushed Washington D.C. out of the top five. N.Y. City, Los Angeles, San Francisco and Boston were the 4 priciest metros.
Fla. Getting New Private Flood Insurance Company: An AI- based, Next Gen cloud platform, Titan Flood, plans to offer private flood insurance with the ability to provide quotes “in seconds”. Leveraging hyper-automation, Tital helps homeowners understand their true flood exposure, saving them time and money, while offering a fast, simple way to buy insurance protection online. Lisa: The ability for homeowners to get faster, easier, less expensive online insurance will be a huge relief for many of our SWFL clients and for future homeowners..
1 in 5 Millennials Fear They’ll Never Own a Home: A survey found 18% of millennials and 12% of Gen Zers feel they’ll never own a home due to student loan debt, high home prices, high interest rates, and the inability to raise the down payment.
26% of Gen Z adults and 52% of millennials currently own their home, compared to 71% of Gen Xers and 79% of baby boomers. 40% of Gen Zers and millennials are working a second job to save for their down payment, and about 25% plan to use a cash gift from family.