Cape Coral is a city located in Lee County, Florida, and has a population of approximately 200,000. This report provides an overview of the housing market trends in Cape Coral as of January 2023, including median sale prices, average days on the market, number of homes sold, and migration and relocation trends.
Cape Coral Housing Market Trends in 2023
The housing market in Cape Coral, Florida, has seen steady growth over the years, and in 2023 it continues to remain a balanced market, with a good supply of homes available for sale. This report provides an overview of the housing market trends in Cape Coral as of January 2023, based on reports from Redfin and Realtor.com.
Housing Market Trends
According to Redfin, the median sale price of homes in Cape Coral was $400,000 in January 2023, which is a 5.3% increase compared to the previous year. The average sale price per square foot was $237, up 3.3% compared to the previous year. Homes in Cape Coral receive an average of 2 offers and sell in around 37 days on the market, which is an increase compared to 13 days last year. There were 360 homes sold in January 2023, a decrease from 558 homes sold the previous year. The Cape Coral housing market is considered somewhat competitive, with a Redfin Compete Score of 51 out of 100.
Competitive Market
Some homes in Cape Coral receive multiple offers, while others sell for about 3% below the list price. Hot homes can sell for around the list price and go pending in around 12 days. Nearby cities, such as Sarasota and Tampa, have a higher level of competition in their housing markets.
Migration and Relocation Trends
Across the nation, only 1% of homebuyers searched to move into Cape Coral from outside metros. The top three metro areas where homebuyers searched to move from were Chicago, Boston, and New York. Of the homebuyers in Cape Coral, 61% searched to stay within the Cape Coral metropolitan area. The most popular destinations among Cape Coral home buyers were Sarasota, Tampa, and Asheville.
Schools
Homes in Cape Coral are served by the Lee County School District, which has a GreatSchools Rating of 8 out of 10. Some of the highly-rated elementary schools in the area include Cape Elementary School, Gulf Elementary School, Diplomat Elementary School, Caloosa Elementary School, and Trafalgar Elementary School.
Home Values in Cape Coral, FL
According to Realtor.com, the median listing home price in Cape Coral, FL was $449.9K in January 2023, which is a 13.9% year-over-year increase. The median home sold price was $400K, which is slightly lower than the median listing home price. This indicates that there might be room for negotiation between buyers and sellers. However, the sale-to-list price ratio was 96.98%, indicating that homes in Cape Coral, FL sold 3.02% below the asking price on average in January 2023.
Median Days on Market
The median days on market for homes in Cape Coral, FL was 80 days in January 2023. This means that on average, homes take about 80 days to sell. The trend for median days on market in Cape Coral, FL has gone down since last month, and slightly up since last year. This indicates that the demand for homes in Cape Coral, FL is strong, but there is still a good supply of homes available for sale.
There are currently 5,976 homes for sale in Cape Coral, FL, with 432 newly listed within the last week, providing buyers with a range of options to choose from. Overall, the Cape Coral housing market in 2023 continues to remain a balanced market, with steady growth in home prices.
Cape Coral Housing Market Forecast 2023
Despite the strong demand for housing, Cape Coral is still considered a relatively affordable housing market compared to other cities in Florida, such as Miami and Tampa. However, Cape Coral is not without its challenges. The city is located in an area that is prone to natural hazards and environmental risks such as storms, floods, heat risks, droughts, and fires. Homebuyers should consider these factors when purchasing a home in the area and make sure to have appropriate insurance coverage.
According to Zillow, the Cape Coral housing market has continued to show strong growth in the last twelve months, with the average home value at $378,976, a significant 11.4% increase from the previous year. This growth is reflected in the median sale-to-list ratio of 0.975, indicating that homes are selling for close to their asking price.
However, a small percentage of homes (14.2%) are being sold over the listed price, while a large percentage of homes (66.6%) are being sold under the listed price. It means that buyers may have more bargaining power in negotiating the price of a home. However, this doesn't mean that all homes will be sold for less than the asking price or that buyers can make lowball offers.
The spring season tends to see an uptick in home buying activity, as more buyers tend to enter the market during this time. This increased demand may lead to a higher percentage of homes selling for at or above the asking price, as buyers may need to compete with each other for desirable properties in Cape Coral.
Homes in Cape Coral are going pending quickly, with the median days to pending at 33 days, indicating that homes are being snatched up quickly in the current market. Zillow's Home Value Index (ZHVI) is a useful tool for understanding how the Cape Coral housing market is performing. The ZHVI is based on monthly changes in property-level Zestimates, and it captures both the level and home values across a wide variety of geographies and housing types.
It's important to note that while the housing market in Cape Coral is currently strong, it's important to work with a local partner who can help navigate the complexities of the local market.
The Forecast
The Cape Coral-Fort Myers housing market is expected to experience strong growth in 2023, with a projected appreciation of 4.5%, according to a report from Veros Real Estate Solutions. This makes it the fourth strongest-performing market in the United States. The market is expected to benefit from high demand and a limited supply of homes.
The report from Veros Real Estate Solutions is based on their VeroFORECAST model, which evaluates home prices in over 300 of the largest housing markets in the country. The model uses a range of economic, housing, and geographic variables to predict home value trends. This growth is expected to be driven by high demand for homes in the area, as well as limited supply.
Comparison to National Trends:
While home prices are expected to depreciate by 0.5% on average across the country in 2023, the Cape Coral-Fort Myers market is projected to experience significant growth. This suggests that the local market is outperforming the national market, which may be due to unique economic and demographic factors in the area.
Hence, the Cape Coral-Fort Myers housing market is expected to perform very well in 2023, with strong growth projected due to high demand and limited supply. This growth is expected to outpace the national average, making the market one of the strongest performing in the country. However, as with any market, there are always risks and uncertainties, and potential home buyers and sellers should consult with local experts to make informed decisions.
Based on the forecast for the Cape Coral housing market in 2023, here are some recommendations for buyers, sellers, and investors:
For Buyers:
- With the projected appreciation of 4.5%, buyers should be prepared to act quickly when they find a home they like, as homes are selling quickly in the current market.
- As the area is prone to natural hazards and environmental risks, buyers should carefully consider these factors and make sure to have appropriate insurance coverage.
- Buyers should work with a local partner who can help navigate the complexities of the local market and provide insights on the best neighborhoods and properties to consider.
For Sellers:
- The strong growth projected in the market is good news for sellers, as demand is high and supply is limited. This may allow sellers to command higher prices for their homes.
- Homes are selling quickly, so sellers should work with a local agent to price their homes appropriately and stage them to appeal to potential buyers.
- Sellers may want to consider listing their homes in the spring or summer when demand is typically highest.
For Investors:
- The strong projected growth in the market makes Cape Coral a potentially attractive location for real estate investors.
- Investors should carefully evaluate potential properties and neighborhoods, looking for areas with high demand and potential for appreciation.
- As with buyers and sellers, investors should work with local partners who can provide insights into the local market and help identify promising investment opportunities.
Top Reasons to Invest in the Cape Coral Real Estate Market
- Affordability: Compared to other cities in Florida, such as Miami and Tampa, Cape Coral offers relatively affordable housing options. This makes it an attractive market for both first-time homebuyers and real estate investors.
- Strong Growth: As mentioned earlier, the Cape Coral real estate market has experienced significant growth in the past year, with home values increasing by 11.4%. The market is expected to continue to grow in 2023, with a projected appreciation of 4.5%.
- Limited Supply: The Cape Coral market is characterized by a limited supply of homes, which is expected to continue to drive demand and appreciation.
- High Rental Demand: The city of Cape Coral is a popular tourist destination, which makes it an attractive market for investors looking to rent out their properties. The city's growing population also contributes to the demand for rental properties. Investing in a rental property in Cape Coral could be a good decision for the right investor. If there is a high demand for rental properties in the area and landlords are likely to find tenants quickly. Furthermore, the projected growth in the Cape Coral housing market in 2023 suggests that rental properties may appreciate in value, potentially increasing the return on investment for landlords. Additionally, Cape Coral's relatively affordable housing market compared to other cities in Florida, such as Miami and Tampa, could make it an attractive location for investors looking to purchase rental properties at a lower price point.
- Natural Beauty and Amenities: Cape Coral is situated on a waterfront and offers access to beaches, water sports, and other outdoor activities. The city also has a vibrant downtown area with shops, restaurants, and other amenities.
- Low taxes: Florida has a reputation for being a tax-friendly state, with no state income tax, no estate tax, and relatively low property taxes. This makes it an attractive destination for retirees and investors looking to maximize their income and minimize their tax burden.
- Landlord-friendly laws: Florida is known for having laws that are favorable to landlords, including quick eviction processes, laws that allow landlords to charge high late fees, and regulations that limit tenants' ability to withhold rent. This creates a more stable and predictable environment for rental property investors, reducing the risk of loss from problematic tenants or legal disputes.
Potential Drawbacks:
- Natural Hazards: As mentioned earlier, Cape Coral is located in an area that is prone to natural hazards such as storms, floods, heat risks, droughts, and fires. This can increase insurance costs and pose a risk to property values.
- Mortgage Interest Rates: The current average 30-year fixed mortgage interest rate is relatively high at 6.94%, which can make it more difficult for buyers to afford homes and impact the demand for properties in the area.
- Local Market Complexities: As with any real estate market, there are complexities and nuances to the Cape Coral market that buyers and investors should be aware of. Working with a local partner who understands the market can help navigate these complexities and ensure informed decision-making.
- Supply Chain Disruptions: Any global supply chain disruptions can impact the availability and pricing of building materials, which can impact construction and renovation projects in the area.
Note that the current high mortgage interest rates could impact the affordability of purchasing a rental property in Cape Coral. Overall, the Cape Coral real estate market presents strong investment opportunities for those willing to navigate the complexities and risks associated with any real estate market. The potential for growth, limited supply, and rental demand makes it an attractive market for both buyers and investors. However, potential buyers and investors should weigh the risks and drawbacks associated with the market and work with local experts to make informed decisions.
Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified.
Sources:
- https://www.redfin.com/city/2654/FL/Cape-Coral/housing-market
- https://www.zillow.com/home-values/30742/cape-coral-fl/
- https://www.realtor.com/realestateandhomes-search/Cape-Coral_FL/overview
- https://www.veros.com/national-housing-market-annual-forecast-goes-negative-for-the-first-time-in-more-than-a-decade
