Local Real Estate Market Holding Steady w/Slight Price Increases
Cape Coral homes sold at a stable level for the second month in a row to start the year. Average home prices rose from $294,000 in February 2018 to $299,000 this February. The number of home sales held steady at 350. Cape gulf-access homes saw a very nice bump from $470,000 average price last Feb to $503,000 this Feb.
Inventory, which was at a low of around 3.5 months for several months in early/mid-2018, had reached a two-year high of 8.8 months to start 2019, but is now down to 6.7 months of available Cape homes….and dropping every week. Right now, it is a neutral market but we expect the pendulum to swing back to a seller’s advantage over the next several months. Cape homes are still selling at 97% of asking price. Lower-priced homes are selling at 98-99% of asking price and high-end homes are receiving 94-95% of asking price.
A colder than normal winter, combined with Baby Boomers retiring at the rate of 10,000 a day and the exodus of people from high-tax states described below, are all contributing to a steady SWFL market despite the slight downward “Shift” that some other parts of the country have been experiencing.
“Massive Income Tax Exodus”
When the 2018 Tax Reform Act was enacted, it didn’t initially resonate with residents in high-tax states how significantly it would impact them. Now that they are filing their 2018 Tax Returns many people are getting “sticker shock”. We are getting calls from numerous people in states like NY, NJ, Ill, Conn….and believe it or not, California. A high number of Californians are also moving to Texas, another income tax-free state (but not as warm as Florida in the winter). High-tax states are losing their most productive residents as they are fleeing in droves.
In the past, we had very little interest from Californians looking to relocate here. We’ve received more calls from Californians since the start of this year than we received in the past 15 years combined, and it appears that anyone that can move from high-tax states is not only jumping off the fence, they are leaping over it. Tom:When the law was first enacted in late 2017, I predicted that many people would leave high-tax states once the law actually took effect in 2018, and I've repeated the assertion in some of our Monthly Market Updates. In all honesty, I did not realize the exodus from high-tax states would be at quite this level, and I now realize we have yet to see the full effect. I expect the week after April 15 (tax-filing day) may be the busiest week of my 46-year real estate career, and several months after that to be more active than normal. We welcome disgruntled high-income earners from high-tax states with open arms. Welcome to sunny, income-tax free Florida.
Beach Business Strong Again
Last fall and summer the red tide made 2018 a tough year for SW Florida’s beach business. The waters at Ft Myers Beach and other beaches are clear again and business is bouncing back. Shops, restaurants, and hotels expect to cash in as spring breakers and other vacationers flood into town over the next several weeks.
Tracey Gore, the mayor of Ft Myers Beach, predicts that the business boom will last a bit longer than usual since Easter doesn’t happen until late April. The Lanai Kai, SW Florida’s “spring break central” during March, is almost fully booked for the month.
Sue: The clean water at the beach is excellent news for our environment and our precious wildlife….the heartbeat of our quality of life, tourism and local economy.
Take Me Out To The Ball Game
It’s not too late to take in a game of “America’s favorite pastime” at one of SW Florida’s two Spring Training Parks. It’s a wonderful way to spend a few hours outdoors in our picture-perfect March weather. The ballparks draw large numbers of New Englanders and Minnesotans to the area as vacationers, many of whom eventually wind up purchasing real estate in sunny SW Florida.
The Boston Red Sox’ Florida base or “Fenway South” is JetBlue Park located at 11581 Daniels Parkway Ft. Myers. 2019 season games started February 22 and run through March 23rd. The beautiful ballpark, which cost $77.9 million to build opened in 2012, and with a capacity of 10,823 has about a quarter of the seats that Fenway Boston has. For the full schedule of 2019 JetBlue Red Sox games click here.
Minnesota Twins Spring Training games are held at Hammond Stadium at CenturyLink Sports Complex located at 14100 Six Mile Cypress Parkway, Ft. Myers. The complex is quite sprawling featuring along with Hammond Stadium, five additional playing fields. Completely renovated in 2015, Hammond Stadium and the CenturyLink Sports Complex are recognized as one of Baseball America's Top-5 Spring Training facilities! Twins Spring Training games began Feb 23rd and run through March 30th. For the full schedule of 2019 Hammond Stadium Minnesota Twins games click here.
Facts & Stats
CoastalLiving.com Ranks 10 Happiest Places to Live on the Beach: Cape Coral/Ft Myers Ranked #9.“Cruising along down the Gulf Coast, this quiet and blissful community is rife with sugar-white sand beaches, unspoiled wildlife refuges, and people who report being totally satisfied with basically every aspect of their life”:by Maria Spyker
“Aging in Place” keeps 1.6 M Homes off Market: Freddie Mac identifies a key factor contributing to today’s housing shortage: seniors choosing to age in place much longer than previous generations. The trend of seniors aging in place is likely to grow as both the number of seniors increases and the barriers to aging in place are reduced. Seniors staying in their homes longer will result in lower inventory and higher home prices, especially for younger buyers.
“Bank of Mom and Dad” 7th Larger U.S. Lender: Parents are increasingly helping their adult children buy their first home. A new study shows that the “Bank of Mom and Dad” would be the seventh largest lender in the country. Parents or grandparents supported the purchase of $317 billion worth of property – 1.2 million homes last year. Without the family help, young adults would have to delay their home purchase by an average of three years.
U.S. Homeownership Rate Highest Since 2014: The U.S. Census Bureau reported that U.S. homeownership rate climbed in the fourth quarter to the highest level in nearly five years. 64.8% of American households now own their own homes. The U.S. added 1.7 million owner households in 2018 but lost 167,000 renter households. Homeownership offers a major boost to the economy.
Zestimate Now Off “Only” 4.5%: Zestimate, which had a median error rate of 14% when it started in 2006, is now down to a 4.5% median error rate. Sometimes Zestimate is off significantly more, including the 2016 home sale made by Zillow CEO Spencer Rascoff – who sold his Seattle home for 40% less than his Zestimate.About 1 in 8 Zestimates winds up being wrong by at least 20%. Tom: We’ll stick with much more reliable MLS indicators and local appraisers.
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