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May 2017 Market Updates

Cape New Construction Permits Spike - 45% Bump Over 2016 Q-1

429 New Home permits were issued in Cape Coral for the first quarter of this year, a 45% increase over the same period in 2016, and more than double the permits of Q1 2015.. These permit numbers are quite welcome, as more new homes will help keep inventory at a reasonable level, which in turn will keep prices from rising too high - too fast.
 
On a yearly basis the new home permits would equate to about 1,700 new homes being built per year in the city. The U.S. Census Bureau projects approximately 10,000 people per year will relocate to Cape Coral for each of the next ten years. This means we need about 3,200 new homes built per year, and that does not include "seasonal home owners". Based on these calculations, new homes are being built at about half  of anticipated need. Tom: the number of new homes needed in the Cape is a big reason I expect lot prices to keep rising at double digit appreciation rates.
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Rise in Cape Coral Million Dollar Home Sales
 
In the first four months of this year there have been 17 homes sold in Cape Coral that were listed for $1 M or more, with six of these high-end sales occurring just in April. In all of 2016 only 28 homes were at the $1 Million mark. The highest priced home sale this year was $2.2 Million at Tarpon Point Estates. Tom:At this rate, the Cape may well have more than 50 home sales that reach the $1 Million threshold.
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Increased Importance of 3rd Car Garage in New Homes
 
We are seeing a growing number of new homes with 3-car garages, and most of the time it's not to park a 3rd car. No, the reason many new construction homeowners are yearning for a 3-car garage home is for storage. Many northerners who have large basements and/or attics are needing the extra garage space for storage. Taller garage ceilings also allow for overhead storage racks. Sue: We think in the coming years a 3-car garage will be viewed as almost a necessity, similar to when 2-car garages replaced 1-car garages, which were common in the early homes built here in the 60's & 70's.
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Facts & Stats
 
Florida Residents get Good Services for Taxes Paid: If ROI (return on investment) is applied to taxes, a Wallethub study ranks Florida third in the nation for the value residents get from the state taxes they pay. For the analysis, 23 metrics to compare the quality and efficiency of state-government services across five categories - education, health, safety, economy, and infrastructure and pollution.  
 
Cape Homes Continue Upward March: Average Cape Coral home prices in April were $287,000, a 13% increase from April 2016. Inventory remained below 4 months - a continued shortage of available homes for sale.
 
Florida #5 in U.S. for Commercial Development: By sector, the state is third in retail, third in warehouse/flex sectors and seventh in office space. NAIOP Research Foundation measured GDP, salaries and wages, and jobs created and supported from the development and operations of commercial real estate.
 
U.S. Home Inventory Drops to 2.7 Months in March: According to RE/MAX National Housing Report, the average inventory of homes for the country was only 2.7 months. The number of Days on Market before a sale contract is signed was only 64 days. Both of these indicators are way below normal. Although they are national averages, they bode well for SWFL because many people who plan to buy here soon need to sell their current home in other states.
 
Lenders Highly Optimistic about 2017:  A survey of 200 lenders by Lenders One Cooperative, found that 94% of lenders expect an increase in mortgage loans this year, up from 62% in 2016. 59% of lenders expect an increase in first-time homebuyers this year. Tom: first-time homebuyers are a crucial component to a healthy real estate market.
 
Home Sellers in Q1 see Nice Price Gain: ATTOM Data Solutions reports that homeowners who sold in the first quarter of 2017 realized an average price gain of $44,000 since purchase - an average 24% return on the purchase price. This was the highest average price gain in terms of both dollars and percentage returns since the third quarter of 2007.
 
Homeowners Staying Put Longer: A new report shows that homeowners who sold their home in the first quarter of the year owned for an average of 7.97 years. Before the great recession, homeownership averaged 4.26 years. Tom: My take on this longer than normal homeownership tenure is due to 3 reasons:1. Lost Equity - many owners were underwater until recently (a small percentage still are), thus could not afford to sell their homes. 2. Low interest rates - people who locked in when interest rates were in the 3 to 3.5% range are now reluctant to sell and buy a home with a higher interest rate. 3. Low inventory - owners don't want to move without confidence that they'll be able to find a suitable replacement home.
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Found - Extra Time!
 
Although there are many retirees in Cape Coral, not everyone is lucky enough to be at that stage and some of us are still plugging away at full time jobs. If you've ever wished you could clone yourself so you'd have extra time to run errands, grocery shop, meet repairmen or a delivery truck, etc., well we can recommend an excellent solution. For about $30/hour for most services, Michele Gibson will happily help you with these and other tasks so you can have more free time to actually enjoy some of the wonderful leisure activities available to us in SW Florida. Why should retirees have all the fun?!! We can personally attest to Michele's reliability, honesty and pleasant personality. You can reach Michele at 239-707-8792.
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April 2017
Cape Home Prices Rise by 18% / Inventory Drops Below 4 Months - Cape Coral Already Making Top U.S. Lists in 2017 - Rising Home Prices & Increase in Interest Rates Will Make Home Buying More Costly in a Year

March 2017
Forbes Names Cape Coral #1 For Potential Growth . . . Again - Lee County Crime Rate Drops in 2016 - Royal Tee Golf Club to Re-Open

February 2017
SW Florida Home Prices Keep Rising - But Inventory Finally Improves - Cape Royal Homeowners Buy Royal Tee Golf Course - Florida's Population Keeps Rising, But 8 States Lose Residents

January 2017
Cape Coral Home Prices Increase 10% in 2016 - Cape Coral Home Prices Rise 72 Straight Months - New Home Permits Skyrocket   

December 2016
Seven Islands Project OKd by Cape Council - SW FL Now Has 12 Month Real Estate Season - U.S. Home Prices Pass Pre-Recession Peak

November 2016
Inventory Shortage Eases Slightly But Not Prices - Upscale Duplexes Being Built on Cape Coral Lots - Homebuyers Losing Taste for McMansions

October 2016
Cape Coral Again Leads Nation in Highest Rental Rate Increase - Environmental & Political Pressure to Clean Caloosahatchee River - Protect Your Florida Homestead

September 2016
Fla Has 4 Top 10 Retirement Cities - Unique Condo Community Being Developed in Downtown Fort Myers - Update on Chiquita Boat Lock Removal

August 2016
Atlanta Braves Eye Training Camp In Collier County - Frontier Airlines Will Service Punta Gorda Airport - Cape Coral Mid Year Stats

July 2016
Assessed Property Values Released By Appraiser - Caloosahatchee Releases Update - National Builder Eyes Former Cape Golf Course

June 2016
Too Soon To Retire But Don't Want To Pay Future Higher Prices? - Real Estate Owned Via Self Directed IRAs - Flipping Is Out; Long Term Investing In

May 2016
Cape Coral Racks Up More Top 10 Ratings - Gallup Survey: RE The Best Investment - Retirees Come to Cape Coral In Droves

 

TIMING THE REAL ESTATE MARKET 2017

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Tom & Sue Demogenes

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