Steve Koffman Real Estate Blog

2011 Statistics and trends

After just finishing 2011, we would like to share these observations and trends in the Cape Coral single family home market. This was a year of transition with inventories shrinking, reo’s continuing to reduce in number and total sales slowing slightly. Cape Coral still remains with great opportunities for purchase of homes or condos at nearly the bottom of historical pricing.

Inventories

2011 continued the trend of reducing inventories with unsold single family homes dropping from 4412 in 2009 to 3812 in 2010 and further to 2677 in 2011. This is the lowest we have seen in 5 years. This is definitely the trend we need to see to turn around our market. 

Sales

2011 was another strong sales year for single family homes in Cape Coral. There were 5377 sales which, although down from 2010 and 2009, is still a strong market.  We saw about a 16% increase in gulf access home sales with a corresponding drop in off water homes. This partially reflects a lower number of reo or bank owned sales which are typically off water homes.

Reo’s,  short sales and traditional sales  

During 2011 we saw movement away from reo sales to traditional sales with normal sales increasing from 38% to 48% of the home sale market, Reo sales dropped from 41% to 30%. Short sales stayed about constant at 22% of sales. We saw reo inventory decrease with a lowered number of foreclosures being filed in 2011 compared to record levels in previous years.  We do not know exactly where foreclosure numbers will be for 2012 but we do expect a continued decline in foreclosures. 

In the upcoming weeks, we will expand  information on the different market segments in Cape Coral. 

 

Steve Koffman

Broker/Associate 

Century 21 Sunbelt Realty, Inc

239-443-5191  Steve@koffman.com

 

 

 

Thoughts for 2012

Hello,

   I thought you might be interested in my thoughts as provided to the local newspaper concerning local the real estate market for Lee County for next year.

Question:  What do you expect from the year ahead?

Answer:  During 2011 the Lee County real estate market continued the slow and methodical healing process.  We saw inventory levels declining primarily due to decreases in the number of foreclosed properties coming on the market.  While overall sales were down approximately 8% in 2011 compared to 2010, the average sales price was up about 12%.  I would expect to see 2012 resemble 2011.  With fewer distressed properties keeping inventory levels lower, there should be upward pressure on pricing as buyers compete over the lower number of homes on the market.  Recent increases in sales prices are mostly due to fewer lower priced foreclosures selling.

 

I would not expect to see any dramatic trends occurring over the next year.  The process continues to be slow and there is no evidence that we will see huge changes in the near future. 

Question:  What are going to be the key issues or make-or-break factors?

Answer:  The unknown variable continues to be the flow of foreclosures.  Recent slight increases in the number of new foreclosures at the Lee County courthouse do not lead me to believe we will see a “second wave”.   Should we see dramatic increases in the new foreclosures we could expect to see the healing process slow down even more.

The economy both locally and throughout the US will dictate how many boomers are able to make the move to Florida.  Improvement in the economy can increase demand and speed the healing in Lee County.

Steve Koffman

Koffman & Associates, Inc.

Century 21 Sunbelt Realty

506 SW 47th Terrace

Cape Coral, FL  33914

W 239-443-5191

Steve@koffman.com

 

 

 

Preseason sales trends in Cape Coral

  Heading into our traditional “season” here in Cape Coral, we are at our lowest inventory in over 4 years. Basically we are less than half of our peak inventory.  Over the past several months, our inventory seems to be stabilizing with only a few less listings coming onto the market that what are selling. Right now we have 2518 single family homes on the market.  

   In November, our market sold 328 single family homes. This is down from a peak of 500-600 coming out of last winter season. We expect to also see a volume increase during this year’s winter months.  Our sales normally peak March to May as “season” comes to a close. 

   What does this mean to buyers and sellers? For buyers, the reduced inventory has meant much more buyer competition at the low end of the market. There is a noticeable difference in the homes at lowest prices; a good home at the bottom of market pricing will have multiple offers. Eventually, prices will rise but so far they have been fairly steady for the past 30 months.  For the higher end buyer, there is still a good supply of homes to choose from.   For sellers, our trends show that we are still in an oversupply status vs. buyers.  Fortunately, we still have good solid demand so that a seller who is willing to be correctly priced can reasonably expect to sell. 

Steve Koffman

Broker/Associate

Century 21 Sunbelt Realty, Inc

239-443-5191  Steve@koffman.com

 

How much does home rear exposure matter?

Does home rear  exposure matter?

   Absolutely, yes and no!  Some buyers will insist that they must have a certain rear exposure, to them it absolutely matters. Many times buyers will insist on south or west exposure. We did a little data diving to see if we could uncover any statistical truths from the past two years of sales in MLS. We chose to look at the southeast and southwest areas of Cape Coral and compiled sales of gulf access pool homes. On the average, these homes were almost identical in size. The actual sales statistics of 534 homes gave us some real data.

    Rear exposure        Number of sales        Median List Price       Median Sale Price

     South                             136                                $352,450               $321,250

     East                                125                                $325,000               $320,000

     West                              143                                $330,000               $320,000

     North                             130                               $322,400               $300,000

 

    As you can see, buyers paid almost identical prices for south, east and west exposures. Only north exposure showed lower median sale price 6.25% lower than other exposures.  One critique we hear of north exposure is that the pool area can be shaded and colder during the winter. The other side of that is a little more summer shade.  It is interesting that sellers with south exposure appeared to price their homes nearly 8% higher than east exposure homes but had to settle for virtually the same sale price.  Bottom line is there are buyers for all exposures but statistically buyers pay a little less for north exposure.   All are close enough that the individual home features are still the biggest factor on price not the rear exposure.

 

Steve Koffman

Broker/Associate

Century21 Sunbelt Realty, Inc

239-443-2463  Steve@koffman.com

www.koffman.com

A quick synopsis of 2010 home sales in Cape Coral

2010 Synopsis for Cape Coral

 2010 was a great year for sales in Cape Coral. A total of 5908 closed sales were listed through the MLS which is a pretty remarkable number especially since we started the year with 4301 listings and ended with 3787. At first it sounds like we sold more than we had for sale!  This says a lot about the state of our market. Our inventory went down 514 homes because while 5908 closed 5394 came onto the market. The attached chart shows our trends.

 

 

 We had significant things occur in our market in 2010.

1.  The large number of foreclosed and preforeclosure homes remained dominant with new homes continuing to flow into the market.  The “shadow inventory”, homes somewhere in foreclosure process but not yet on market, still exists and it is difficult to establish exactly how big that number is.  Indications are that the foreclosure peaks may be declining.
2. Tax incentives for first time buyers caused the number of spring sales to jump from March through June and we felt a buyer drop when those incentives expired. A lot of existing buyers got pulled ahead.
3. Historically low prices and interest rates afforded many renters the chance to become homeowners. The same low prices made real estate investment as rental property practical.
4. Investors as well as resident homeowners caused strong competition on homes which were priced at very bottom of competitive range for their market. Homes priced above a competitive level received almost no buyer attention.
5. For the first time in a couple of years, we saw investors who had successfully bought low priced homes, did some rehab,  and resold.
6. A statistical stabilization of median sale prices throughout almost all segments of our home sale prices may indicate we have reached the bottom of price declines.

Where are we heading?

     It will take time and economic growth to absorb our excess homes and then let market pressure start to cause real increases in value. Fortunately, we are still a great destination for value and weather for potential retirees and we should see continued growth and home sales to people from outside our area. Our local economy will probably not draw significant numbers of new job seekers for a few years. Our expectation is that our values will remain relatively stable for the next couple years and after our excess inventory of homes get absorbed by population growth we will start to see real price improvement.

Steve Koffman

Broker/Associate

Century21 Sunbelt Realty

239-443-2463  Steve@koffman.com

A look into Cape Coral Florida Home Market

Cape Coral Off water sales trends

   A look at sales data for off water home in Cape Coral shows us a lot about buyer preferences and seller motivation.  The chart below shows data on our current listings in Cape Coral, Fl for non waterfront homes.

	Median List Price	% Active	%  Under Contract	# of Listings	Median Pending Price
REO Homes	$75,000	49%	51%	522	$71,700
Short Sales	$80,500	39%	61%	1139	$79,500
Traditional	$121,450	80%	20%	991	$104,950

 

    This data tells us a number of things. Buyers are still very much drawn to distress properties both short sales and reo or bank owned homes with over 50% of those homes are under contract. Only 20% of traditional home sellers have a contract on their homes.  Distressed homes are priced significantly lower than traditional with banks and short sale sellers being motivated to sell at what buyers are willing to pay.  Reo homes are priced 38% below traditional sellers. Although some of the price difference is in condition of the homes, the difference is striking.  It is also noteworthy to see that the traditional homes under contract are priced significantly lower than the median price.  With buyers having so many options, they are not willing to pay a premium price and homes priced above the median price for comparable home have no chance to sell.

   Our trend for the past 2 years is having our sales heavily weighted to foreclosed or reo homes. In spite of the very strong sales numbers, the number of reo homes on the market has not dried up as new foreclosures and bank releases have kept the pace with sales. Although we have seen a short term pull back of foreclosure sales due to document signing questions, we expect the flow of foreclosed homes will eventually pick back up.

Steve Koffman

Broker/Associate

Century21 Sunbelt Realty

239-443-2463 Steve@koffman.com

                                                                                                                                                                                                                                                                  

What does “season” mean to sales in Cape Coral, Florida?

 

   In our south Florida terminology, season is that late fall to spring time of year when our population increases with our seasonal residents moving back down from the north. We also have mini “seasons” with added vacation visitors both over the Christmas and Easter holiday periods.  In the real estate profession, we have always felt the influx of added people in the form of more phone calls, website visits and general interest in homes. Although all homes seem statistically to sell at a higher rate during these months, we see strongest sales in gulf access and in waterfront condos.   Our market has seen dramatic movement over the past 5 years both up and down, looking at the past 3 seasons shows us some statistical trends. The chart below shows the % increase in sales for the 4 season related months versus the other 8 months of the year for Cape Coral.

    Gulf Access homes          +31%

    Waterfront condos         +52%

   Does this mean that prices go up during season?  We have not seen that. The greater price trends over the last few years have far outweighed any seasonal effect as we have seen ongoing price reductions in response to high inventories.  What is true is that sellers will have a greater chance of successfully completing a sale during our winter season.

 

Steve Koffman

Broker/Associate

Century21 Sunbelt Realty

239-443-2463  Steve@koffman.com

How much does pricing matter?

  Although it seems obvious to us as Realtors, the importance of pricing is lost on many sellers and possibly some Realtors who advise them. Our market in Lee County is packed with homes for sale in MLS which have no chance of selling.  We did a small data sample of 55 homes, 30 active, 13 sales and 12 pending to illustrate this. By looking at a group of homes of the same size and age with the same basic amenities, we gathered some data.  

  Median list price of active listings (15 above and 15 below this center)                          $84950

  Actual median sales price of sales since 9/1                                                                                $65000

  Max sales price since 9/1                                                                                                                    $84900

  % of 13 homes sold which were priced below the median                                                        100%

 % of homes priced above median which sold                                                                                   0%

 % of 12 homes with pending contracts which were priced below median price                     90%

   This means that half of all homes, those priced above the median, had no chance of selling and if a buyer did write a contract, there is a very good chance the home will not appraise for a loan. It is a hard reality at times for a seller to accept what a buyer is willing to pay.  A seller may hope that eventually buyers will run out of more competitively priced homes.  The truth in our market is that as soon as homes sell added homes come onto the market either from banks or individual sellers. Of the 13 that sold, 12 either were on the market less than 6 weeks or had a recent price reduction including the time to get through closing.    A good agent will counsel a seller of the true price at which they should offer their home if indeed they truly wish to sell it. 

Steve Koffman

Broker/Associate

Century21 Sunbelt Realty, Inc

239-443-2463  Steve@koffman.com

Cape Coral Lot Update

   Lot sale values remain at much lower prices than in the past.  A number of lots still sell each month in Cape Coral. Our highest lot values were in the winter of 2005-2006. This was driven by the height of our investor purchases, which dominated the lot markets. The chart below summarizes what our peak median sales prices for a quarter were as well as the lowest median prices since the fall of 2004. For comparison, the current median sales price for July is included.  Buyers today are still predominately investors, but at a much lower price than our peak values.  We do not expect land values to change significantly until builders and investors see the need to acquire land for new home sales. This will most likely happen as we start to become short of housing inventory for population growth, which will depend on both local economy and with addition of retirees or second homeowners buying here.  

Steve Koffman

Broker/Associate

Century21 Sunbelt Realty

239-443-2463  Steve@koffman.com
 

Cape Coral Sales and Inventory for May

In May we had another very strong sales month for single family homes in Cape Coral. 564 homes closed past month through MLS. Our inventory now stands at 4107 homes. This is down 177 from the end of April which means 383 homes came onto the market to counter the 564 sales. As has been the pattern in the past year, REO or bank owned homes dominated the market with 42% of sales. Traditional sales were 38% and short sales accounted for 20% of sales. Prices remained fairly constant for the month.

Steve Koffman Broker-Associate

Koffman and Associates

Century21 Sunbelt Realty

239-443-2463   Steve@koffman.com

See all the listings at www.koffman.com