Steve Koffman Real Estate Blog

Our listings are changing

    As our inventory in Cape Coral has reduced from the last several years, it is interesting to note the composition of our current single family home listings in MLS. We are seeing the active listings move very strongly to traditional sellers versus bank owned or short sales.  The chart below shows our current breakdown of listings.

                          Active         Pending (%)          Total

 Normal             1231            448  (27%)           1679

REO                      67               131  (66%)            198

Short Sale           126              622  (83%)           748     

  This information clearly shows buyers continued push to buy properties they view as “distressed”. Note that of the 198 REO (bank owned) listings 66% are under contract. These homes typically sell very quickly often with multiple offers. Buyers love REO's but we are continually seeing a decline in bank listings.  Another striking bit of data is short sales; it was not long ago that buyers shied away from short sales due to the time and difficulty in closing. As the data shows above, buyers are now focusing strongly on short sales as evidenced by 83% of short sale listings being under contract.  A couple of factors which, we believe, drive that number is a seller’s greater willingness to get under contract quickly as the ultimate price is eventually agreed to by the bank and bank's increasing willingness to take a short sale instead of foreclosing. The other of course is that due to the approval process a short sales stays pending for 4 to 5 times as long as a normal or REO sale. 

    This is clearly showing a trend towards a more “normal” buyer and seller market.

 

Steve Koffman

 

Boker/Associate

Century 21 Sunbelt Realty,Inc

239-443-5191  Steve@Koffman.com

 

Cape Coral Lots

Cape Coral is currently approximately 45% developed so has many thousands of undeveloped lots available for growth. Our current population of about 160,000 will eventually grow to 400,000 at total build out. The land in Cape Coral is generally plotted into individual home building sites. There are also a lesser number of plotted multifamily sites as well as commercial sites. Lot sales peaked in the beginning of 2005 near the apex of the real estate boom. This was driven first by the demand for building sites for both spec homes and supporting the major Cape Coral population growth. Sales later became driven by speculation and the resale of lots at a profit. Once the boom stopped, sales also stopped and prices started the drop to today’s levels.

Cape Coral Gulf Access Lots

Cape Coral has 400 miles of canals many of which allow boating to the Gulf of Mexico. The chart below shows the history of the median sales prices and sales.

   In 2011, 94 lots sold with a median sale of $55000. This compares to $64000 in2010. The slow demand continued to bring down prices. A possible positive trend is that looking at pending sales we see a median listing price of $65000 so we see buyers possibly moving to higher priced lots. The lots without contracts have a median price of $98000 almost 50% higher than pending prices. There are currently 525 lots on the market with less than 10 per month closing, so we remain in an oversupply market. 

Cape Coral Off Water Lots

 We saw little movement in lots without waterfront in 2011. These lots make up the majority of lots available in Cape Coral. The chart below shows our history from the boom to through 2011. 

  The median price of a sold off water lot decreased to $5000 vs. 2010 price of $6200. The continued low demand pushed prices down. The median price pending lots is $5900 so as these close we may also see closed sale prices increase some. The median price of unsold lots is $13000, so we would expect these prices will need to come down to find buyers.

Fresh Water Lots

   Cape Coral has an expensive network of fresh water lots which provide casual boating, fishing and also allows drainage of Cape Coral during the summer rainy season. In our peak, 166 to 175 lots sold each month. Current demand is generally less than 20 per month. The history is shown below. We have been a fairly flat period for almost two years.

The median price of 2011 sales was $11000 which was a decrease from $12900 in2010. The lack of demand vs. inventory drove the decrease. The pending sales have a list price of $10900 which is slightly less than 2011 sales.  This may indicate prices are still weakening for freshwater lots.

Steve Koffman

Broker/Associate

Century 21 Sunbelt Realty, Inc

239-443-5191 Steve@koffman.com

2011 Gulf Access Condo Update

Cape Coral has a large number of condos which are located on gulf access canals. Most of these condos allow boating from either behind the condo or from a marina on site. The condo complexes range from newer luxury high rise buildings in upscale communities to small typically two story developments built in the1980’s.  The major condo developments of Cape Harbour and Tarpon Point were built from 2005-2007 which increased the supply of luxury condos tremendously.  These are resort type communities with shops, restaurants and entertainment. 

Sales Volumes Up for 2011

   The condo market peaked in 2005 with 403 gulf access condo’s selling in MLS. 2006 saw a sharp drop to 124 units sold. At the same time, many units were being sold as new construction which reduced MLS sales.  In 2011, we saw an increase in the number of condos with gulf access which sold through MLS. There were 335 condos sold which was up from 242 and 254 the previous two years.  It appears we do have increasing demand for people looking for vacation condos.

As we look inside these sales, we see a sharp increase in the number of luxury gulf access which sold in 2011. For the sake of this, we have looked at condos over $250000. The number of sales over doubled. This was for the most part due to Tarpon Point coming back onto the market as well as increased sales in Cape Harbour.  It is very positive that buyer interest has increased for top end condos. 

We also saw a modest increase in lower priced gulf access condos with sales increasing to 247 units sold under $200000 from 213 in 2010.

Median Prices

  Primarily driven by the increase in high end condos, the median price of gulf access condos sold increased from $98500 in 2010 to $110000 in 2011. That increase was primarily statistical versus an actual increase in values. When we look deeper at the condos which sold for under $200000, we see less of a median price increase. The good news is that prices did not drop and sales volumes increased. As you can see below, median sale price increased slightly to $90000 vs. $89000 in 2010. Condos which are on the market but not sold have 27% higher median price than those which sold in 2011. Although there are a lot of differences in condos, it does show buyers preference for the lower priced units.

 Inventory

  There are 160 gulf access condos on the market in Cape Coral. This is a little less than 6 months of inventory but new listings still continue to come on the market. 

 

Steve Koffman

Broker/Associate

Century 21 Sunbelt Realty, Inc

239-443-5191 Steve@koffman.com

 

 

 

 

2011 Cape Coral Gulf Access Sales Update

Cape Coral has an extensive network of canals which lead to the Gulf of Mexico through the Caloosahatchee River. There is a great choice of homes where you can have a boat docked right behind your house. There are choices to cater to all level of boaters as locations range from lots where there is free access without any restrictions to lots where an owner may need to go under bridges and travel for an hour or more to reach open water. Our homes also offer river ,lake or canal views with prices ranging in part with the water views.

Sales Trends

961 Gulf Access homes sold in Cape Coral in 2011 through MLS. As you can see on chart, our annual sales of these homes have stayed fairly constant over the past four years. We did see the number of sales increase by 117 homes from 2010 to 2011. Currently there are 834 active listings, of those only 3% are REO or bank owned and 14% are short sales. The active listings represent a little less than a year’s worth of inventory.

Price Trends

The median price of gulf access homes which sold through MLS in 2011 stayed almost unchanged from 2010. The chart below shows our four year sales trend. It is interesting to note that the median price of unsold homes is 68% higher than sold homes. This reflects the much stronger buyer demand at lower prices. There continues to be less demand for the most expensive homes.

With gulf access homes, there continues to be higher inventory than sales with about 10 months of inventory not counting the new listings which come on the market. This continues to let buyers be selective and is slowing the increases in prices.

 

Steve Koffman

Broker/Asssociate

Century 21 Sunbelt Realty,Inc

239-443-2447 Steve@koffman.com

2011 Cape Coral Off-Water Homes

2011 Off-water Homes

  You will hear the term off-water homes. This basically refers to homes not on canals. Cape Coral has an extensive system of both freshwater canals and gulf access canals.  In 2011, 4158 Off-water homes sold through MLS.  There are currently 1559 active or pending which is 4.5 months supply.  In comparison, 1604 waterfront homes sold and there are 1088 active or pending or 8.1 months supply.  Basically, the demand for off-water homes is 2.5 times greater than for water front homes and that the amount of unsold inventory when compared to demand is 55% less.

Sales Trends

   We have broken the trends down between pool or non pool off-water homes to clarify buyer trends. In 2011, pool homes sold for a median price of $125000, which was $5000 over 2010. It is pretty obvious to see buyers preferences as the homes with contracts are median priced at $129450 while homes without a contract are median priced at $179900 about 40% over homes with contracts.

  Homes without pools sold for a median price of $77000, which was up $1000 from 2010. Homes with current sales contracts but not closed are listed at a median $82000. Just as with pool homes, the homes listed but not yet under contract are priced 40% over homes with contracts at $114500. 

  Sales Volume

  Sales for 2011 continued to decrease due primarily to the reduction in inventory of lower priced homes. This has been due essentially to the reduced volume of foreclosures. There are currently only 49 off-water bank owned homes on the market in Cape Coral without a current sales contract. This compares to 260 a month which were selling in 2009. 

   Where prices go will depend on whether buyers can afford and will choose to increase what they wish to spend on a home. We have seen a definite trend from first time buyers to people either relocating here or buying a second home.  One challenge which exists is that buyers see what past buyers have paid and, if they are obtaining financing, have to deal with appraisals which are based on past sales. We have seen buyer demand going down in terms of reduced sales as the inventory of lower priced homes has decreased.  Prices of homes still remain a bargain compared to the peak of our market.

Steve Koffman

Broker/Associate

Century 21 Sunbelt Realty,Inc

239-443-5191  Steve@koffman.com

 

 

 

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