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. Given the current dynamics, Cape Coral's housing market can be characterized as displaying elements of both buyer's and seller's markets. While buyers may benefit from a median sale price lower than the national average and opportunities to negotiate below list prices, sellers enjoy the advantage of competitive pricing for desirable properties and the potential for quick sales.
Cape Coral Housing Market Trends in 2024
How is the Housing Market Doing Currently?
According to Redfin, in February 2024, Cape Coral witnessed a 2.4% decrease in home prices compared to the previous year, with properties selling at a median price of $400,000. Interestingly, homes are spending an average of 82 days on the market, a significant increase from 41 days in the preceding year.
Despite this, there was a slight uptick in the number of homes sold, with 440 properties changing hands in February, up from 432 in the same period last year.
Furthermore, Cape Coral's median sale price remains 6% lower than the national average, indicating potential affordability for aspiring homeowners. However, the market's competitiveness is evident, with homes typically selling in 69 days and some receiving multiple offers.
How Competitive is the Cape Coral Housing Market?
The Cape Coral housing market exhibits competitiveness, as reflected in the average time homes spend on the market and the occurrence of multiple offers. On average, homes sell for about 3% below the list price and go pending in approximately 69 days. However, certain properties, deemed “hot homes,” can command prices close to the list price and go pending in a mere 25 days.
Moreover, metrics such as the sale-to-list price ratio and the percentage of homes sold above list price provide insights into market dynamics. The sale-to-list price ratio currently stands at 96.5%, reflecting a 0.55-point decrease year-over-year. Meanwhile, 8.2% of homes sold above list price, representing a 1.5-point decrease from the previous year.
Are There Enough Homes for Sale to Meet Buyer Demand?
Despite the market's competitiveness, there are indications of ample inventory to meet buyer demand. However, trends in migration and relocation offer valuable insights into future market dynamics. From January to March 2024, 37% of homebuyers in Cape Coral expressed interest in moving out of the area, while 63% aimed to stay within the metropolitan vicinity.
Interestingly, only 1% of homebuyers from across the nation searched to move into Cape Coral from outside metropolitan areas. Among the top metros contributing to inbound migration are Miami, Chicago, and New York, suggesting a diverse influx of potential buyers.
Is Now a Good Time to Buy a House 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 2024 and 2025
According to Zillow, the Cape Coral housing market exhibits a median home value of $388,303, experiencing a marginal decrease of 1.5% in the past year, with properties typically pending in approximately 51 days. As of February 29, 2024, the market recorded 5,025 properties available for sale, alongside 943 new listings.
Exploring further, the median sale price stands at $298,333 as of January 31, 2024, while the median list price is slightly higher at $355,967, recorded on February 29, 2024. Additionally, the median sale-to-list ratio, an essential metric indicative of market competitiveness, is at a robust 0.962 as of January 31, 2024.
Moreover, scrutinizing sales behavior reveals that 8.9% of transactions surpassed the list price, whereas the majority, comprising 78.1% of sales, occurred under the list price during the same period, reflecting the nuanced dynamics within the Cape Coral real estate landscape.
Deciphering the Cape Coral MSA Housing Market Forecast
Delving into the broader forecast for the Cape Coral Metropolitan Statistical Area (MSA), encompassing Lee County in Florida, the projection signifies a modest growth trajectory. Forecasts indicate a marginal decrease of 0.1% by March 31, 2024, followed by stabilization leading into May 31, 2024, and subsequent growth of 2.2% by February 28, 2025.
Defined as a geographical region comprising multiple adjacent counties, the Cape Coral MSA encapsulates the housing market dynamics of Lee County, one of Florida's populous counties. With its expansive territory and diverse demographics, the MSA's housing market serves as a significant economic driver, attracting both local and international interest.
The housing market's magnitude within the Cape Coral MSA is noteworthy, characterized by a substantial inventory of properties and a robust demand-supply dynamic. This underscores the region's pivotal role in the broader real estate landscape of Florida.
Are Home Prices Dropping in Cape Coral?
While the Cape Coral housing market has witnessed a modest decline in home values over the past year, the extent of this decrease is marginal, reflecting a relatively stable market environment. However, it's essential to monitor market trends closely to discern any significant shifts in pricing dynamics.
Will the Cape Coral Housing Market Crash?
At present, there are no imminent signs indicating an impending housing market crash in Cape Coral. The market exhibits resilience, characterized by a balanced supply-demand dynamic and a gradual adjustment in home prices. However, it's crucial for stakeholders to remain vigilant and adapt to evolving market conditions.
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
