Eric and Linda Shelman

A "Normal Market." It's hard to define.

When Linda and I arrived here in Cape Coral in 2002, we didn't know what to expect. We got our real estate licenses and went to work. Having never been Realtors before, it was simply "nose to the grindstone" and try to develop relationships. Help ANYONE who needs it, no matter their price range.

We needed to build our business. That's how you do it. Hit the streets and work.

We got past that 1st sale, and were encouraged. Early in our careers, we had some deals fall through, some buyers "cheated" on us and went elsewhere, buying a For Sale By Owner, calling on another Realtor sign in some yard, or using multiple Realtors without telling us. We used to let it get to us.

But some more knowledgable agents told us there was always another buyer or seller behind that one, so you have to put it behind you and not take it to heart. So that's what we did. Hard at first, but they were right. There was always another deal, and that was the focus.

Then things began escalating big time as loans became easier and easier to get. 2003 passed, we changed agencies, and then 2004 came. Sales started jamming! We were so busy, and worked with many, many people. So many investors were buying land -- particularly freshwater-front lots in Cape Coral that had been $12,000 when we arrived, and kept increasing until they were $150,000 in early 2005! Speculation homes were being built hand over fist, and if you stood in any one spot in North Cape Coral, and turned in a circle, you would see no fewer than FIVE homes under construction. That is absolutely true.

So it was an investor driven market, and we knew it . . . but everyone was making a lot of money -- not only the Realtors like us, but the people who put their money out there and flipped properties in mere weeks, often earning 30% to 70% in quick turnarounds.

There were those who actually moved here . . . construction was booming, and buying was easy, so our population blossomed from just over 100,000 people to around 160,000 in just a few short years! This was encouraging, because it meant the boom was not exclusively investor driven . . . right?

Sort of. But mostly wrong. Jobs depend on growth, and when growth stops and jobs go away, so do the people. Add to that the adjustable rate mortgages folks were taking, the minimal investment they had to make to obtain the "American Dream," and the very clear point in time -- August 2005 -- that the investors decided to get out, and you have the end of the boom.

That was over four years ago. We were the number one growth area in the nation, and we were the first to hit the wall. Is Cape Coral any less desirable than it was then? No. Are prices back to a point where the boom began? Yes. That's the good news.

Investors are back, and they are buying the foreclosures quickly, and with cash. This makes it tough for those who actually want to move here to compete -- banks are taking the cash offers over financed ones. I've personally had multiple buyers become disheartened and give up after making up to 15 offers on different homes, only to lose them all to other buyers.

Listings? Harder to get, too. Those who do not have to sell in this low-priced market aren't. Bank foreclosure listings tend to go to the same companies -- whether they are responsive and good agencies or not. In short, this market has become very tough for many Real Estate agencies, as the old adage goes, "Listers are Lasters." If you have listings, you get buyers, and everything balances nicely.

Literally hundreds of small agencies have gone by the wayside . . . and even some pretty established Real Estate companies are now gone. Many of the model homes that once lined Cape Coral Parkway and Chiquita Parkway are closed and for a while, were overgrown and just plain sad looking. Today, most are now just residences.

So - what is our new "normal" market? We will not likely know for some time. We need to get rid of the foreclosures first so that building begins anew. Jobs will then return in the construction sector, and new communities may once again spring up. The Cape Coral CRA (Community Redevelopment Agency) may then return to the once grandeur plans they had to beautify and enhance our city to become a destination rather than a bedroom community across the river from Fort Myers.

So what exactly is "normal?" I'm not so sure we've actually experienced it since around 2003 when things began to pop, and prior to that, we were newer agents so did not have enough experience in the market to judge. I do know agents who worked this area before that, and they had taken 2nd jobs a few times in those years to make ends meet.

So, I'm sorry that this article really draws no conclusions, but I believe it is a good and accurate recounting of what we've gone through in Cape Coral -- a city with over 400 miles of waterways, and one in which I just love living. The people are good, the restaurants and stores are now plentiful, and the weather remains fantastic.

It is still Paradise here in the City of Cape Coral! And we welcome you to experience it.

Thanks for reading!

Eric

This article is courtesy of By MCKENZIE CASSIDY, mcassidy@breezenewspapers.com

Cape Coral home sales are undoubtedly on the rise, yet experts point out that the inventory of empty residences isn't dwindling as quickly as some would expect.

According to a report from Florida Realtors and the University of Florida Bergstrom Center for Real Estate Studies, September home sales in the Fort Myers-Cape Coral metropolitan area increased by 77 percent when compared to September 2008.

The median home price for Cape Coral homes in September 2009 was $89,700 and a total of 1,321 homes were sold.

And although this is a sign that more people are purchasing homes than ever since the economic crash, Bill Demay, a Realtor at Century 21 in Cape Coral, said the home inventory isn't decreasing as quickly as expected.

"Our inventory has been going down slowly," said DeMay. "Inventory is going slow because there are additional homes that need to be sold, but aren't on the market."

Cape Coral inventory has remained between 6,000 in 2007 and approximately 4,000 this year. Sales have risen sharply - between 400 or 600 per month on average - but the amount of vacant homes hasn't decreased dramatically.

DeMay said inventory isn't changing much because many homes are in the middle of the foreclosure process and haven't been put on the market yet. At the same time, some buyers are simply shifting residences, leaving their old home empty and keeping vacant numbers the same.

"You have a big back-log of houses sitting out there and are still part of the foreclosure process, or people who are in trouble with their houses," he said. "What is really happening is that we sell 400 to 450, and new ones come and take their place."

According to DeMay, the market will only be cured when more people move to Cape Coral. And as the inventory is sold off, new construction and industry jobs will come to the city as well.

"We were highly construction and new home driven and that stopped," he said.

Home prices are allowing many people to buy a home who could never afford one before. National home prices were down 10.1 percent in August 2009, according to First American CoreLogic, an improvement from a decline of 11.6 percent in July and 14.1 percent in June.

Prices in the Fort Myers-Cape Coral metropolitan area were down 17.18 percent in August 2009 from the same month last year.

According to an index of the local home prices, by August 2010 they will be down 9.91 percent. First American CoreLogic is predicting that prices will hit bottom in March 2010 and will begin to increase.

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NOW ... my take on the article above.

I am very surprised to see the summation that our inventory has not dropped as much as many expect. It could well be that the prices, which HAVE increased already, have done so at a rate beyond what buyers will tolerate! I ran a search for homes under $82,000, built between 2000 and 2009, with 3 Bedrooms, 2 Baths, and a 2-car garage. If I eliminated SHORT SALES, only 51 homes came up. THAT is a huge reduction. Once I included Short Sales, 98 came up. That means 47 are short sales.

Considering that almost 400 of the homes in this category are currently UNDER CONTRACT, and in the last 90 days almost 300 in this category have SOLD, our current inventory situation is deficient, and way below demand. Multiple offers are still common, and 55% of them sold AT or OVER asking price, indicating strong demand. Of short sales, almost 47% were sold AT or OVER asking price. Of REO or DIRECT sales, 60% sold AT or OVER asking price.

I focus on this category of home, as it is the type that is driving most of the sales in the city. Yes, there are some excellent deals on Gulf Access Waterfront homes, but that inventory is also diminishing. Season has just begun, too - this means our out-of-area visitors will likely snap many of these remaining homes up while they're here. This also points out that the record sales that have been happening here were taking place in our OFF SEASON! That's a big point.

So there you go ... a mini-analysis of the Cape Coral Breeze article.

Thanks for Reading!

Kind Regards,

Eric

Final installment on Gulf Access Waterfront Homes. These are all pool homes, 1600 sq ft and larger, no "year built" specified (Area is mostly newer), 2-4 car garage, 3+ Bedrooms, 2+ Baths, All located on waterways with access to the Gulf of Mexico!

This area is more rural, but still close to shopping and restaurants. I get downtown from my home in NW Cape Coral in about 18 minutes - and that's in drive-time traffic. Carrabba's, Shrimp Shack, Foster's Grille, Publix, Beef O'Brady's, Kohl's, Michael's Crafts, and many other places are just 10 minutes away, as are drug stores and gas.

The best thing about this area IS the more recent construction. You're unlikely to have a home built in 1970 next door -- most of them are way further south. Vacant lots abound - including many Gulf Access waterfront lots, some with seawalls - but I don't mind that, either. I have vacant lots on either side of my home, and guess what? When someone eventually builds, it'll be a brand new home - right?

So let's get started. The first thing I discovered was the DIRECT SALE sellers here are still somewhat unrealistic in their pricing.

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D I R E C T S A L E S T A T I S T I C S

DIRECT SALE LISTINGS (Not Short Sales, Not Bank-Owned): 32

Breakdown: Median List Price: $509,436. Median Sq Ft: 2511. Price/Sq Ft: $204.00. Days On Market/Cumulative Days on Market (DOM/CDOM): 200/253. 84% of Total Category Listings.

DIRECT SALE UNDER CONTRACT, NOT YET CLOSED: 6

Breakdown: Median List Price: $357,466. Median Sq Ft: 2216. Price/Sq Ft: $162.00. Days On Market/Cumulative Days on Market (DOM/CDOM): 154/306. 32% of Total Category Listings.

DIRECT SALES SOLD IN LAST 90 DAYS: 3

Breakdown: Median List Price: $375,167. Median Sq Ft: 2890. List Price/Sq Ft: $146.00. Days On Market/Cumulative Days on Market (DOM/CDOM): 82/82. Median Sale Price: $349,667. Sale Price/Sq Ft: $136.00 37.5% of Total Category Listings.

Note the disparity between what the DIRECT SALES are listed for (median figure) and where the SOLD properties came out. Median ASKING price for the still ACTIVE homes is $204.00! The Median SOLD price per square foot is only $136.00. Most of these sellers are going to have to come to their senses unless they have an awfully special property with every amenity under the sun.

As indicated, many of these homes were built between 2004 and 2007, so likely in our peak market -- loans easy to get, prices high, and now far below where they were. The $68.00 per square foot variance between what sellers are asking and where the homes are selling is a big number, and it will need to adjust to bring those 32 listings to the point where buyers show enough interest to make an offer.

Last, people are often willing to pay more for a home that is well-tended and in excellent condition, so this figure will undoubtedly be higher than Short Sales and Bank-Owned properties -- but how much depends on the house, and whether it will appraise, or is a CASH deal.

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B A N K - O W N E D S T A T I S T I C S

BANK-OWNED ACTIVE LISTINGS: 2

Breakdown: Median List Price: $331,950. Median Sq Ft: 2258. Price/Sq Ft: $162.00 Days On Market/Cumulative Days On Market (DOM/CDOM): 83/174. 5% of Total Category Listings.

BANK-OWNED UNDER CONTRACT: 1

Breakdown: Median List Price: $173,000. Median Sq Ft: 2089. Price/Sq Ft: $83.00 Days On Market/Cumulative Days On Market (DOM/CDOM): 107/107. 5% of Total Category Listings.

BANK-OWNED SOLDS - Last 90 days: 4

Breakdown: Median List Price: $312,925. Median Sq Ft: 2650. List Price/Sq Ft: $121.00 Days On Market/Cumulative Days On Market (DOM/CDOM): 76/76. Median Sale Price: 309,350. Sale Price/Sq Ft: $119.00 50% of Total Category Sales.

First, it's a good idea to take STRONG note of the LOW NUMBER of Bank-Owned properties in this area/market category. There are ONLY two active bank-owned properties here! Just 1 under contract, and only 4 having sold in the last 90 days. But also note how much closer the banks are to where the homes are actually selling, with regard to pricing accuracy.

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S H O R T S A L E S T A T I S T I C S

SHORT SALE LISTINGS: 4

Breakdown: Median List Price: $346,375. Median Sq Ft: 2390. Price/Sq Ft: $143.00. Days On Market/Cumulative Days On Market (DOM/CDOM): 61/151. 11% of Total Category Listings.

SHORT SALES UNDER CONTRACT: 12

Breakdown: Median List Price: $301,658 Median Sq Ft: 2359. List Price/Sq Ft: $127.00. Days On Market/Cumulative Days On Market (DOM/CDOM): 263/339. 63% of Total Category Listings.

SHORT SALE SOLDS: 1

Breakdown: List Price: $346,500. Sq Ft: 2417. Price/Sq Ft: $145.00. Days On Market/Cumulative Days On Market (DOM/CDOM): 392/392. Sale Price: $346,500. Sale Price/Sq Ft: $143.00 12.5% of Total Category Solds.

Again, we see VERY few Short Sale homes in this category of home and area. There are only 4 available! Why are so many under contract? Well, because they take so long they will accumulate over time. Why did so few close in the last 90 days? They are a tough closing because so often the buyers give up after waiting a few months, and just move on. The benefit of Short Sales in ANY category of home is that you may be up against less competition, as people are unwilling to miss other nice homes while they WAIT and WAIT on banks to make the decision on the short sales.

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So I hope this analysis helps you get some idea of the market in NORTHWEST Cape Coral waterfront properties. Your best hope to get one of these seems to be working with some Direct Sale sellers who may have been on the market a long time, and are finally willing to consider any offer.

It is clear that at those asking prices, these owner-occupied homes are seeing little buyer traffic. That alone would make you unique ... and if you make a "decent" offer, they just might not want to see you disappear.

Thanks for reading!

Eric

This is my second installment -- and this time we're doing SE Cape Coral Gulf Access Waterfront Homes.

Criteria Used: 1500 to 10,000 sq ft Living Area. No "year built" specified. 3-5 Bedroom, 2-4 Bath, 2-3 Car Garages.

We'll start with an analysis of the ACTIVE listings (Homes still available) and we'll break down each category, starting with TOTAL numbers, then individually with Direct Sales, Bank-Owned, and Short Sales.

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Total ACTIVE Listings: 187

Median List Price: $475,634

Median Square Footage: 2173

Median Price-per-sq ft: $212.00

Median Days On Market/Cumulative Days On Market: 155/219 (This takes into account past listings on a particular property that either terminated or expired, but did NOT sell, and adds those days to CURRENT days on market.)

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Now, the individual breakdown of the ACTIVE listings:

Direct Sale Listings (NOT Short Sale, NOT Bank-Owned): 142 (76% of Total)

Median List Price: $496,506

Median Square Footage: 2152

Median Price-per-sq ft: $224.00

Median Days On Market/Cumulative Days On Market: 161/231

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Bank-Owned Listings: 7 (3.7% of Total)

Median List Price: $261,086

Median Square Footage: 1905

Median Price-per-sq ft: $137.00

Median Days On Market/Cumulative Days On Market: 35/35

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Short Sale Listings: 36 (19.25% of Total)

Median List Price: $343,530

Median Square Footage: 2244

Median Price-per-sq ft: $154.00

Median Days On Market/Cumulative Days On Market: 130/174

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Above we see a huge disparity between the pricing of short sales and bank-owned sales when compared to "direct sales." Consider that banks and "realistic" Realtors are pricing the former -- based on market analyses, and the owners are often pricing the latter.

Consider this: "Much of the direct sale stalemate is caused by buyers' demands for bargains, and the sellers' fantasies of what their homes were once worth." I saw this statement in a newspaper article talking about the overall market back when NOTHING was selling, and applying it to direct sale homes is now appropriate, I believe.

Also consider that short sellers know they're walking away with nothing, so are not as concerned with the final price unless their bank requires that they repay the difference between what they owe and what the home sells for. For investment properties, banks are less willing to do that, and will often create a repayment program. This category of home is NOT the primary investor's market, however ... which is why direct sales account for 76% of these listings.

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Now let's take a look at the Southeast Cape Coral homes UNDER A PURCHASE CONTRACT, BUT NOT YET CLOSED:

Total UNDER CONTRACT: 99

Median List Price: $286,238

Median Square Footage: 2030

Median Price-per-sq ft: $140.00

Median Days On Market/Cumulative Days On Market: 159/194

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Now, the individual breakdown of the UNDER CONTRACT Homes:

Direct Sale Listings (NOT Short Sale, NOT Bank-Owned): 21 (21% of Total)

Median List Price: $334,943

Median Square Footage: 2027

Median Price-per-sq ft: $163.00

Median Days On Market/Cumulative Days On Market: 125/165

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Bank-Owned UNDER CONTRACT: 18 (18% of Total)

Median List Price: $216,176

Median Square Footage: 1937

Median Price-per-sq ft: $112.00

Median Days On Market/Cumulative Days On Market: 21/32

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Short Sale UNDER CONTRACT: 60 (60% of Total)

Median List Price: $290,210

Median Square Footage: 2059

Median Price-per-sq ft: $140.00

Median Days On Market/Cumulative Days On Market: 212/252

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Once again, we see the Days on Market are much higher for Short Sales - primarily due to bank delays on answering offers - which are often unexpected unless the seller did proper preparation, i.e., hardship letter, market analysis, negotiation with bank, etc.

We also see a huge difference in pricing between Direct Sales and the Short Sale/Bank-Owned. Many of these banks are just wanting to get these bad loans off the books, so they answer offers quickly. Multiple offers are VERY common here. On the other side, if you want less competition, the short sales might make you wait, but you'll likely be up against fewer competing offers.

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And finally, we'll take a look at SOLD Gulf Access Waterfront properties in Southeast Cape Coral.

TOTAL LAST 90 DAYS SOLD: 86

Median List Price: $309,309

Median Square Footage: 2014

Median LIST Price-per-sq ft: $151.00

Median Days On Market/Cumulative Days On Market: 88/145

Median SALE Price: $289,100

Median SALE Price-per-square foot: $141.00

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DIRECT SALES - LAST 90 DAYS SOLD: 47 (54% of Total)

Median List Price: $338,268

Median Square Footage: 2006

Median LIST Price-per-sq ft: $168.00

Median Days On Market/Cumulative Days On Market: 96/174

Median SALE Price: $311,270

Median SALE Price-per-square foot: $155.00

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BANK-OWNED - LAST 90 DAYS SOLD: 24 (28% of Total)

Median List Price: $254,316

Median Square Footage: 2070

Median LIST Price-per-sq ft: $119.00

Median Days On Market/Cumulative Days On Market: 23/30

Median SALE Price: $253,189

Median SALE Price-per-square foot: $120.00

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SHORT SALES- LAST 90 DAYS SOLD: 15 (17.5% of Total)

Median List Price: $306,560

Median Square Footage: 1949

Median LIST Price-per-sq ft: $146.00

Median Days On Market/Cumulative Days On Market: 170/236

Median SALE Price: $277,085

Median SALE Price-per-square foot: $133.00

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And we're done! My analysis of the sales goes like this: Clearly we have far more DIRECT SALE listings in this category of home than any other type. This results in direct sales accounting for more sales! Look at the Bank-Owned homes available here -- not many! Just 7! That's because they sell FAST when they hit the market, because the banks are pricing them lower than all others.

The bank-owned homes are priced significantly lower than all the others, so attract much attention, and sell fast. Look at the days on market for these! In all cases, they do NOT stay on the market long.

The Direct Sale homes are bringing the highest prices, likely because they are lived-in, well-kept, and look far nicer. Pools in Short Sale and Bank-Owned homes are often green with algae or caged over, and landscaping is overgrown or unkempt. All of these factors come into play here.

Well, I hope THIS analysis helps, too. Next time we'll do the Northwest Cape Coral area -- MY neighborhood. Gulf Access again.

Thanks for reading!

Eric

A gentleman (I'm making assumptions here, but he seems like a decent guy) contacted me recently after having read my blog. He mentioned that I haven't gone over Gulf Access Waterfront homes in my analysis yet - and he was right!

So (we'll just call him Jay) Jay, here it is. Hope it provides some insight into the marketplace. It did for me, because it's quite different than other types of property.

First, it's important to realize there are multi-million dollar homes involved here - not bunches of them, but they are included, and can tweak the numbers a bit. However, if they came into my analysis, they likely appraised, so are valid entries.

Southwest Cape Coral: The Numbers

Specs: 3 to 5 Bedroom, 2 or more Baths, Built 1990-2009, Gulf Access Waterfront Pool Homes, 1600 to 5000 sq ft of LIVING AREA. Did not specify bridge/no bridge, height of bridges, width of canal, lock or no lock to pass through.

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ACTIVE: 170 (5.3% Bank-Owned, 16% Short Sale, 78% Direct Sale.)

Median List Price: $597,449

Median Square Footage: 2468

Median Price Per Square Foot LIST PRICE: $235.00

Median Days On Market/Cumulative Days On Market: (DOM/CDOM): 184/256 (This means previous listings either terminated, expired, etc. and it was relisted - often at a lower price.)

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UNDER PURCHASE CONTRACT: 54 (18.5% Direct Sale, 18.5% Bank-Owned, 68.5% Short Sale.)

Median List Price: $377,329

Median Square Footage: 2320

Median Price Per Square Foot LIST PRICE: $162.00

Median Days On Market/Cumulative Days On Market: (DOM/CDOM): 151/240

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SOLD LAST 90 DAYS: 47 (45% Direct Sale, 27.5% Bank-Owned, 27.5% Short Sale.)

Median List Price: $396,100

Median Square Footage: 2400

Median Price Per Square Foot LIST PRICE: $164.00

Median Days On Market/Cumulative Days On Market: (DOM/CDOM): 112/147

Median Sale Price: $374,400

Median Price Per Square Foot SALE PRICE: $156.00

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The above indictes to me that we still have far more inventory of these homes than we have buyers -- but for you sellers, never fear: Season's Here! Buyers are likely going to see that the times they are a' changin' and may actually pull the trigger this season.

From this analysis, it's clear that mostly what's left ON the market are direct sales, which are those which are NOT Short Sales (Owner trying to sell for less than they owe the bank) or Bank-Owned foreclosures. This typically results in higher pricing, and lower sales, but the homes also show much better than either shorts or bank-owned properties.

It makes an odd kind of sense that most UNDER CONTRACT homes in this category are Short Sales, as they take the longest, and can accumulate.

As for SOLD homes in the last 90 days, we get back to what seems to make sense: Pricing is lower, but the ease-of-buying is far greater on direct sales, which is why they dominate. You can see that the owners who did sell likely lowered their pricing to move - and these lived-in homes outsold the other types by a large margin.

Keep watching over the next couple of days -- I'll be doing Northwest Cape and Southeast Cape.

Hope this helps some of you!

Thanks for reading!

Eric