The city of Cape Coral was officially born in 1957, and what has happened there over the last sixty-five years regarding the housing market has seen many ups and downs.
The market is often ranked in connection with the Fort Myers Standard Metropolitan Statistical Area market, (SMSA), but that does not always tell the true story of what is happening on the Cape. The booming city, the largest between Tampa and Miami, is quickly realizing its own prominence.
Over the last 2 years, specifically, the real estate market here has seen a robust increase in sales and a big jump in the average home sale price, much like other areas around the U.S. But the question is, will that continue, or is it cooling along with other markets, and at what pace?
In real estate, longevity is the name of the game. If you invest in real property, whether you plan to live there or just hold it as an investment, the savvy buyer knows that you will likely see a positive return on your investment.
The gamble is in riding out any dips in the market and wait for it to return. The real estate market is cyclical, and smart investors know that with the good can come the bad.
When the developers of Cape Coral’s real estate sales team were flying prospective buyers down from up north and putting them up in the Cape Coral Country Club and hosting dinners at the Cape Coral Yacht Club to show them the benefits of buying land and building there, you could buy a canal-front homesite for around $1,500.00, with terms of $50.00 down and $50.00 per month.
While there have been dips in the market, it is safe to say that the long-term financial benefit to owning property on the Cape has proven to be a positive one.
No one has a crystal ball, despite the abundance of real estate professionals who have shared their opinions based on their research of key economic indicators and other factors like the number of home sales and building permits pulled, past history over a long period of time, building material costs and availability and many other factors.
Cape Coral is no different and has been consistently ranked by multiple nationally recognized sources as one of the most active and fastest growing markets in the country in terms of real estate values and population growth.
But what is happening now?
A Look at Cape Coral Housing Statistics
Is Cape Coral a Buyer’s or Seller’s Market?
There are several indicators that point to the current situation in the Cape Coral real estate market.
It is true that the frenzied seller’s market and inflated prices have “cooled.” Redfin reports that Cape Coral ranks as number 11 in terms of cooling prices. They report a drop in the average sales price of a home there of 18.1% and a 16.9% drop in the number of sales as of July 2022 when compared with July 2021.
Real estate website Movoto reports that February 2022 saw the peak of average sales price at $519,900 in Cape Coral, and in August 2022 that cooled slightly to $449,000. But the good news is that number has remained consistent for the last 5-month period.
Rocket Mortgage reports that Cape Coral is still very much a seller’s market, even if it is adjusting. The median sales price in July 2022 was up 30% from July 2021, and the average days on the market in June 2022 was 18.
Perhaps the most accurate indicator is the Cape Coral Permit Department, for the second time in 2022, issued a temporary stop to issuing building permits while they work to handle the existing backlog of applications.
As of August 2022, the offices will close on Fridays so staff can work on the existing backlog of 7,000 permit applications, and they plan to add over 20 new staff before the end of 2022.
Hundreds of contractors and sub-contractors are upset and under a lot of pressure because of the hold up, and homeowners are more than frustrated by the delays, but it does indicate the continuation of growth in the real estate market.
Yet another study was conducted by researchers at Florida Atlantic University called A Note on the Estimation of the Degree of Over- or Under-Pricing of Housing Markets Relative to their Long-Term Pricing Trend.
This was published in the Journal of Housing Research. That study reports the Fort Myers Metro area, which includes Cape Coral, was the third most overvalued market in the country as of July 2022.
But while some people are still offering 1 or 2% over asking price to get a home, the days of paying as much as 10 or 20% over asking price appear to be over.
There are now more homes available than in the peak of the COVID pandemic, and interest rates have gone up, causing many potential buyers to wait it out until just the right house comes along as opposed to getting into a bidding war and paying far too much.
For Cape Coral sellers, there is no need to worry about getting top dollar for your home. The FAU report shows a Zillow Home Value Index, (ZHVI), of $430,000.00 but an “expected” price average of $265,142.00 as of July 2022, so sellers are still realizing impressive increases in their home values, even if not at the unrealistic pace of 2021.
Cape Coral Housing Market Future Still Looks Bright
When Cape Coral was nothing but raw, undeveloped dirt and the first of the 400 miles of canals were being dredged, there were no plans for any individual, gated communities or subdivisions.
Each individual homesite, measuring 80 by 125 feet, would be marketed to targeted northern prospects individually. Now, there are about a dozen gated, single-family home communities in the Cape, with several more on the drawing board.
Beginning in 2019 and continuing at a robust pace in 2022, the development of apartment complexes has exploded, with more than thirteen, large-scale rental communities sprouting from the ground and plans for many more now in the pre-construction phase.
Another positive market sign is the announcement of a new mixed-use development in the South Cape at the corner of Cape Coral Parkway and Southeast 8th Court, The Cove at 47th.
Developers received city approval for building 19,000 square feet of commercial space for restaurants, shops, and other businesses with 285 luxury apartments on the floors above. The developers said they hope to break ground in 2022 and complete the project in late 2023.
Cape Coral, Southwest Florida’s largest city and ranked by Forbes as the hottest housing market in the country in 2021, continues to represent a seller’s market.
Prices are becoming more realistic and driven less by the lack of available properties. While every market experiences their cyclical ups and downs, Cape Coral seems destined to be one of the country’s most desirable places to call home.