Tom Demogenes
Tom and Sue Demogenes
Luxury Waterfront Team
Cape Coral, FL 33914

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November 2017 Market Updates

Interesting Florida/Cape Coral Population Stats
Since World War II, Florida has gone from the 27th most populated state to 3rd, moving ahead of New York last year. According to Forbes, nine of the fastest growing cities in the U.S. are in Florida. The two main reasons people began flocking to the Sunshine State back in the 1950's were air conditioning and bug eradication. A/C and pest control allowed people to comfortably live & vacation in the Florida year round as opposed to only in the winters.
When we moved to Cape Coral in 2001 there were 90,000 residents. In less than 17 years the full-time population in the city has doubled to over 180,000. The U.S. Census Bureau projects that the Cape's population will double again in less than 20 years. Cape Coral/Ft Myers recorded the most explosive population growth in the U.S. each of the last two years, and a remarkable five years out of the last 13 years. Quite impressive.
The reasons the Cape will likely continue to have a "small town feel", despite an increasingly high population are threefold: 1. the city is very large in area (2nd largest in Florida). 2. The Northwest and Northeast quadrants still have much undeveloped land, and the most importantly: 3. Approximately 95% of Cape Coral homes, commercial, and industrial properties are one level structures, with a very low percentage of multi-level properties. Tom: Although there are constant efforts by local governmental leaders to bring more commercial and industrial business to the city (with some success), I believe Cape Coral will continue to be primarily a "bedroom community", with minimal industrial business or high rise structures, like Ft Myers, Bonita and other neighboring cities have.
Despite Irma, Local Unemployment Rate Drops to 3.5%
Despite the fact that SW Florida is in the traditional slowest hiring time of the year, combined with Hurricane Irma temporarily putting hiring to a halt, Lee County unemployment rate dropped to 3.5% in September according to the Florida Department of Economic Opportunity. This is below the state unemployment rate of 3.8% and the U.S. rate of 4.1%. Our neighboring counties, Charlotte and Collier Counties, each stand at 3.9% unemployment rate.
SWFL has not seen such low unemployment rates for a decade. As we approach the holidays and our high tourist season, we may well see unemployment rates drop into the two's. Rates at 4% or lower indicate full employment, which typically means upward pressure on wages, as there is greater competition for workers. Tom: Our area already has a shortage of workers, especially blue collar workers, and this will likely tighten even more in the next few years as builders struggle to keep up to strong housing demand.
How Credit Scores Affect Your Mortgage Rate
Without a high credit score, you won't qualify for the best mortgage rates. Barclays and Citibank report that "if you have a FICO credit score of 700-plus, you'll get a pretty good rate". The lending industry carves up the credit score scale into 20-point increments. 700 is considered good, 720 and above is considered excellent, and at 760 or above you will be offered the best interest rates available.
If your score is in the 640 range or lower, you might have difficulty getting a traditional loan from a bank or online lender.  The effect of the difference in rates may not seem significant at first, but just a quarter of a point difference on a $350,000 home can add about $500 dollars to the yearly loan cost. Sue: a reminder that we can recommend an outstanding local loan officer who has professionally handled millions of dollars of loans for our clients, and as a client of ours he will pay your appraisal fee (approximately $500)
Bubble? Nowhere in Sight for U.S. Housing Market

U.S. housing markets are expected to remain healthy through at least the end of 2018, with no housing bubble in sight and no projection of home prices falling - according to a recent report by The Housing and Mortgage Market Review. A statistical model based on recent market indicators suggests that over the next two years, the probability of U.S. home price declines is just 4% - an unusually low number. The trend reflects broad-based favorable fundamentals, such as a tightening job market, relatively low interest rates, a low number of homes for sale, and an overall housing shortage.

Global Chief Economist, Dr. Ralph G. DeFranco reports: "People waiting for home prices to fall before buying may want to change their strategy, as the overall housing market is expected to stay strong for the foreseeable future". HaMMR also finds some recent concern about U.S. home prices hitting all-time highs is overblown, because after adjusting for inflation, national home prices are still 10% below their prior peak. Tom: As mentioned in past reports this year, Cape Coral/Ft Myers home prices are still about 25% below previous peak prices (Jan 2006), and I feel we will not see a slowdown in prices until we at least reach those last peak prices.
Giving Thanks
To show appreciation and support for the community, on November 12th our office, RE/MAX Realty Team is hosting their 3rd Annual Community Thanksgiving Dinner at the Veterans Foundation. We will gladly be participating to lend a hand. All are welcome to partake with an emphasis on Veterans, public safety personnel, seniors, families in need or those who find themselves alone for Thanksgiving. Meals will be served beginning at noon on a first come, first served basis until food runs out. The Veterans Foundation is located at 4820 Leonard St, Cape Coral.  
Facts & Stats
Disproportionate Price Gains for Entry-Level Homes: Nationwide reports that price gains since the real estate recovery are higher for homes in the lowest price tier. Lower priced U.S. homes increased in value by 56% over the last five years, while the home values in the highest tier increased 33% over the same period.
This disproportionate scenario has also played out in Cape Coral/FT Myers and other local cities during the recovery, except with much higher increases at all price levels. Five years ago off-water homes could be purchased for $100,000, and gulf-access homes could still be purchased for under $300,000. Comparable homes are now 45% to 120% higher, with higher prices expected due to low inventory and strong housing demand.  
Uptick in Childless Couples May Boost Condo/Smaller Home Market: According to the CDC, women between the ages of 18 and 44 years old are having fewer children since data collection began 108 years ago. With fewer couples having children, their housing needs will differ from previous generations who tended to have bigger families. Condos, townhomes and smaller homes may become a more popular option among those who have few, or no children.
Florida Is Even Less Likely to see Home Prices Drop: A report from Arch Mortgage Insurance states that Florida will remain the best economic performer in the South for at least another year, led by tourism, residential and public construction. The reports find that home prices have only a 2% chance of falling in the Orlando and Tampa metropolitan areas over the next two years, an extremely low-risk level.

October 2017
Irma Slows Down Sales But Not Prices - Nor-Tech Hi-Performance Boats To Locate World Headquarters In Cape Coral - Homesteaded Properties Will See Assessed Values Increase by 2.1%

September 2017
Cape Coral Dodged A Bullet - Some Lenders Will Stop Requiring Traditional Appraisals - Homeowners Only Break Even By Selling Their Home Without A Realtor

August 2017
Can't Find the Perfect Model Home to Build? - We Have Solutions - Investors Focusing on Build-to-Rent Homes - Cape Coral in Top 100 Cities For First-Time Homebuyers

July 2017
Be Very Careful When Selecting A Local Builder - Cape Home Inventory Drops To Three Months - Zero Down Loans Make A Comeback 

June 2017
Home Sales Still Strong For Low & Mid-Priced Homes - Cape Coral Named One of the Best U.S. Cities for Boaters - Homeowners Sue Zillow Over Low Home Value Estimate

May 2017
Cape New Construction Permits Spike - Rise In Cape Coral Million Dollar Home Sales - Increased Importance Of Third Car Garage

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


Tom Demogenes | 239-357-3312 | Contact Us 
4100 SW 27th Pl - Cape Coral, FL 33914
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