SWFL & Cape Coral Home Prices Drop to a New Low in This Cycle
Cape Coral and Lee County home prices dropped by a steeper amount than anticipated. The next few months don’t look much more promising. These depressed prices represent a new low in the current cycle. As I’ve mentioned in a few recent reports, it won’t be until early next year that our local market will witness an upswing in prices.
Another troubling sign for Cape Coral is that inventory increased from 5 1/2 to 7 months, the highest inventory level in several years. Current inventory has officially entered "buyer's market" territory. The two hurricanes in early October will further exacerbate sales numbers, prices, and inventory.
Cape Coral Sept 2023 vs. Sept 2024
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Sept 2023
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Sept 2024 |
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Cape Coral |
416 Sales $487,000
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383 Sales $451,000 - 8 % |
Lee County Sept 2023 vs. Sept 2024
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Sept 2023
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Sept 2024
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Lee County |
1084 Sales $537,000 |
957 Sales $481,000 - 12 % |
Cape Coral Gulf Access Homes: Sept 2023 = 67 Gulf Access Sales, Avg Price: $847,000
Sept 2024 = 52 Gulf Access Sales, Avg Price: $828,000
Cape Coral $1M+ Homes: Sept 2023 = 18 $1M+ Sales, Avg Price: $1,336,000 Highest: $2,150,000
Sept 2024 = 8 $1M+ Sales, Avg Price: $1,741,000 Highest: $3,346,000
Note: There was a significant drop in the number of gulf-access and $1M+ home sales from a year ago, although September did have a higher price point of $1M+ homes, which was aided by the $3,346,000 home sale.
Buying Most Affordable Since 2020
Redfin: Housing affordability is improving for the first time in four years. The income needed to afford a home fell because mortgage rates posted their first annual decline in over three years. As of this writing, the average interest rate sits at 6.2%, almost a full point lower than a year ago when rates were 7.07%.
While housing affordability improved in August, the average American household still can’t afford to buy a home. The typical household earns an estimated $83,853 per year, which is 27% less than the $115,454 needed to afford the average U.S. home. February 2021 was the last month when the typical household earned enough to afford the median priced home. Back then, the median household income was $69,000 or 5.5% more than the $65,308 needed to afford a median-priced U.S. home at that time.
Is It Time to Consider a Mortgage Refi?
Mortgage rates haven’t been this attractive in more than a year, so it's good news for some homeowners eager to refinance. However, there’s more to consider than the mortgage rate. It will cost thousands to refinance, and not all the fees can always be rolled into the new loan. Breaking even on the costs of refinancing may take months or years.
Realtor.com reports that some 86% of outstanding mortgages have an interest rate below 6%, and more than 75% have a rate below 5%, so it makes no sense for these fortunate homeowners to refinance. The break-even period on a refi is determined by adding the cost of the refi versus the number of months of interest rate savings it will take to break even. One also needs to consider how long they expect to remain in the home. Tom: Many financial experts
advise that it makes sense to refinance if there is a .5% or .75% difference in loan rates. IMO, based on lender fees and Florida loan related costs, it doesn’t make financial sense unless there is at least a 1% difference in loan rates.
Cape Coral-Fort Myers No. 5 for Home Building
Among Mid-sized Metros
According to a report by Construction Coverage, a website that provides construction software and insurance review, Cape Coral-Fort Myers authorized 30.7 new housing units per 1,000 existing homes. This report found that our local construction ranked #5 in the mid-size markets, with a median sales price of $390,000.
The study revealed that the U.S. housing market has been experiencing a major shortage of housing supply. The lack of supply has been exacerbated by:
· Significant underinvestment in new housing since the Great Recession
· The number of new residential units has recovered too slowly over the last decade, and new permits declined by 25% after peaking in January 2022
· Worker shortage and hindered supply chains made it harder and more expensive to obtain building materials
Lisa: Our area, especially Cape Coral, has more than adequate new housing being built.
Are Pickleball Courts Good for a Home Sale?
Pickleball appears to be setting off a love-hate relationship in real estate. There’s disagreement about whether the sports craze is a benefit for home sales. Some prospective home buyers favor properties near pickleball courts, yet some homeowners who live next to courts complain about the constant popping noise of a wooden paddle hitting a wiffle ball, and the bright lights at night.
An analysis by Financial Samurai suggests property values could decline 10–20% if pickleball courts are constructed across the street from a residence due to the noise; and a property decline by 5 to 10% if one or two blocks away. On the other hand, courts at least three blocks away could be a game-game changer, even possibly pushing up real estate prices by 1% to 5%.
Jenna: The bottom line seems to be it’s a great thing to live near pickleball courts, not so great to liveright next to them.
Facts & Stats and Tom’s Musings
Well, Cape Coral/Fort Myers weathered another one. Safe to bet no one will be naming babies or pets after that son of a gun, Milton. Everyone we’ve interacted directly with has been extremely grateful that we didn’t take a direct hit and that their property damages were far less than anticipated. We are, however, deeply sympathetic to those who weren't as lucky and did sustain more severe damages.
Fannie Mae: Existing Home Sales May Hit 30-Year Low – Analysts say many potential buyers are waiting for affordability to improve. They anticipate rates will average 5.7% by late 2025. Despite a significant decline in mortgage rates and improved supply, existing home sales are not expected to pick up meaningfully through the remainder of 2024, with the annual sales pace now forecast to be the slowest since 1995.
New Homes Create Affordable Options in FLA: Florida is among the top 10 states leading the way in new home construction for volume, affordability and future growth, per Realtor.com. The state is also among the few seeing new construction priced lower than existing homes on a per square foot basis.
Iconic Shell Factory Closes: After 86 years of providing families with enjoyment, the N. Fort Myers iconic attraction center closed on the 29th of Sept. Built in 1938, the 18-acre Florida roadside attraction has entertained multiple generations with amusement-style rides, arcade games, mini golf, wildlife and much more. Tom: Along with a multitude of SW Florida visitors, Sue and I will sadly miss The Shell Factory & Nature Park.
Florida Jobless Rate Stays at 3.3%: Employment in the state leisure and hospitality, education and health services and construction categories continue to grow and outpace the Septnational unemployment rate 4.1%. In August, Florida’s workforce was over 11 million.
Finally… The Chiquita Boat Lock to Be Removed: After years of legal entanglement, the City of Cape Coral is preparing for the removal of the Chiquita Lock, pending receipt of the necessary permit from the Army Corps of Engineers. The lock will remain open to boaters until demolition is started, but will be inaccessible for about 3 months once demolition begins. An exact date has not yet been determined, but this link will provide further information.
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