The Cape Coral housing market, situated in the picturesque state of Florida, offers a blend of competitive dynamics and unique trends that set it apart from other real estate landscapes. Whether you're a prospective buyer, seller, or simply someone interested in the housing market trends, understanding the current state of affairs in Cape Coral can provide valuable insights. In this article, we will delve into the recent trends, market forecasts, and competitiveness that impact the Cape Coral housing market.
Cape Coral Housing Market Trends in 2023
The Cape Coral housing market has experienced some fluctuations in recent times, offering both challenges and opportunities for potential buyers and sellers. According to Redfin, in June 2023, the median sale price of homes in Cape Coral was $405,000, reflecting a decrease of 5.9% compared to the previous year. This decrease might raise eyebrows, but it's essential to keep in mind that real estate markets can be influenced by a variety of factors such as economic conditions, supply and demand, and even seasonal trends.
The average time a home spends on the market has also shown changes. Homes in Cape Coral are currently selling after an average of 40 days, which is a significant increase from the mere 11 days it took last year. These changes in the time homes spend on the market highlight the evolving dynamics of buyer behavior and market demand.
Competitiveness and Pricing
The competitiveness of the Cape Coral housing market is evident in the Redfin Compete Score™, which rates the area's competitiveness on a scale of 0 to 100. With a score indicating “somewhat competitive,” it suggests a balance between buyer interest and available inventory. Some homes even receive multiple offers, indicating pockets of high demand.
Sale-to-list price ratios provide insight into negotiation dynamics. In the current market, homes are typically sold for around 3% below the list price. This data indicates that buyers might have some room for negotiation, but the relatively small percentage suggests that sellers still hold some leverage.
Migration Trends
Understanding migration patterns is crucial in comprehending the broader housing market landscape. Inbound migration data reveals that 1% of homebuyers nationwide are looking to move into Cape Coral from outside metropolitan areas. The top cities contributing to this migration trend are Chicago, New York, and Miami.
Conversely, outbound migration data indicates that some residents are leaving Cape Coral for various destinations. The most popular cities for outbound migration are Sarasota, Tampa, and Asheville. These patterns shed light on where residents might be seeking new opportunities or lifestyle changes.
Good Time to Buy Real Estate in Cape Coral
There are several factors that are contributing to the buyer's market in Cape Coral. The rising interest rates are making it more expensive to borrow money, and the stock market is also down, which has made some people less confident about their financial future. Additionally, the number of homes for sale has increased, which is giving buyers more options.
If you are looking to buy a home in Cape Coral, now is a good time to do it. Home prices are still relatively affordable, and there are plenty of homes to choose from. However, it is important to act quickly, as the market is expected to continue to soften in the coming months.
Here are some additional things to keep in mind when considering the Cape Coral housing market:
- The cost of living in Cape Coral is slightly higher than the national average.
- The weather in Cape Coral is warm and sunny year-round.
- Cape Coral is a popular tourist destination, so there is a lot of traffic and congestion during the winter months.
- The school district in Cape Coral is ranked above average.
Overall, the Cape Coral housing market is a good option for buyers who are looking for a relatively affordable home in a warm and sunny climate. However, it is important to do your research and understand the market conditions before making an offer.
Cape Coral Housing Market Forecast 2023-2024
The Cape Coral housing market stands as a dynamic arena, shaped by a myriad of factors, from economic conditions to local influences. In the quest to make informed real estate decisions, comprehending the current market status and future projections becomes paramount. Zillow's comprehensive data offers valuable insights into the Cape Coral housing market, encompassing average home values, market changes, and anticipated forecasts. Let's delve into the specifics of the Cape Coral housing market forecast for 2023.
Current State of Home Values
The core of the Cape Coral housing market lies within its average home value, currently standing at $400,515. This figure, however, reflects a significant 7.5% decrease over the past year, signaling the market's responsiveness to various influences that have shaped its trajectory.
Zillow's predictive insights unveil a 0.973 median sale-to-list ratio as of May 31, 2023, offering insights into the correlation between home prices and their listing values. Furthermore, the percentages of sales occurring over and under the list price, at 11.5% and 73.8% respectively, shed light on the negotiation strategies at play within the market.
Speed of Transactions
The rapidity with which homes transition from listing to pending status is an important marker of market vitality. As of June 30, 2023, the median days to pending homes is at 32 days. This statistic speaks volumes about the pace of property movement and the market's equilibrium.
Cape Coral MSA Housing Market Forecast
Looking ahead, the Cape Coral MSA (Metropolitan Statistical Area) housing market forecast offers a glimpse into future trends. As of June 30, 2023, a forecasted increase of 0.5% is projected by July 31, 2023. This projection, extending through to June 30, 2024, anticipates a cumulative rise of 6.2%, illustrating the market's anticipated trajectory.
Navigating the Cape Coral Housing Market Landscape
As the Cape Coral housing market continues to evolve, equipping oneself with data-driven insights becomes a strategic asset. The Cape Coral housing market forecast for 2023, as provided by Zillow, serves as a valuable resource for both buyers and sellers. From the trajectory of home values to market changes and transactional dynamics, this data empowers individuals to navigate the market with well-informed decisions.
Another forecast shows that 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: Historically, Cape Coral has experienced periods of strong growth in its real estate market due to its attractive waterfront properties, favorable climate, and desirable location in Southwest Florida. However, the sustainability of long-term growth in any real estate market depends on various factors, including economic conditions, population growth, job opportunities, infrastructure development, and market demand.
- 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
