1. A Pandemic
The past two weeks I have spent my time answering questions as best I can regarding what we are seeing in the Real Estate market based on the current Pandemic. This will likely be something that we will look back on for decades to come to review the successes and mistakes made while handling this situation in every type of market. If you like so many others have questions about our market call me or email me.
But… I don’t want to discuss this right now. Right now, I want to look back on our market. I want to take a few minutes of your time to look at the long ball of real estate from 2015 through 2019. Today let’s take a slice of the pie and review what’s happened. Specifically, I want to look at Cape Coral Single Family Homes with no pool and not on the water (canal front property). I have numbers for pool homes and canal front homes but those can be discussed at another time.
2. Half of A Decade in Review
In 2015 the Average sold price for a Cape Coral home with the specs I discussed sold for $164,557. The other averages? The total number of sales was 1,815. 3 bedrooms, 2 baths with 1,668sqft. The days on the market average at 43 days and the price per square foot sits at $124.40. What’s also interesting to me is the Sales Price VS. List Price (SP/LP) at the time of Sale. The sales price average at 98.68% of the list price. Keep that specific percentage in mind.
Moving onto 2016. The average sales price jumps to $183,633. There were 1,886 total sales. The price per square foot drops to $111.73. How can that be? This happens when we see the number of slightly larger homes selling more than the number of smaller homes. The average square footage makes a minor change to 1,675sqft. But overall, the larger homes brought the price per sqft down a bit. Days on market look similar at 40 days but the SP/LP sits at 98.14%.
2017 shows some continuing trends. Sales are up to 2,066 per year. The sales price average moved to $198,758 and the price per sqft moved to 118.88. The sqft average was 1710sqft. Days on market sits at 49 days and we are still looking at 3 bedroom 2 bathrooms. How about the SP/LP? 98.11%. This puppy is not moving. 2018 doesn’t show much of a change there either at 98.03%. The sales price averages went up again to $212,246 and days on market took 5 days more than 2017 but still, we sit in that 98% range for List price compared to the sales price. 2019 is the first year we see the LP/SP percentage fall into the 97% range but barely. 2019 LP/SP was at 97.96%.
3. Consensus Says…
There is a lot of information we can glean from these numbers. We can see the market making shifts in different directions including larger homes being more prevalent or fewer homes being sold within a certain year. We can see the days on market slowly tick upward or the price per sqft slide around from $110-$126 per/sqft. But one piece of data regarding the averages stays consistent. The Sales Price to List price ratio at the time of sale is at 98%. What does this mean? Why would I spend my time looking into these numbers to end with just this one little nugget of information? At the end of the day when a house is listed at the appropriate market price, it sells, and it sells within 2% of that price point.
Every week. Every month, and Every year I speak with sellers who are worried about buyers wanting to gouge them down 5, 10, 15, 20 percent from their asking price. We have all heard the term. Wiggle Room. Now I can certainly appreciate the sentiment. I would never want to show my cards only to be undercut by someone looking to get a “good deal”, but the numbers are straightforward. When listed at the point of receiving solid offers on average you will typically sell within 2% of the asking price. This is why as a listing agent I spend hours and hours figuring out what property is worth via Comparable Market Analysis. The market slowly moves in directions and that is influenced by a lot of factors that are out of our control. But when it comes to getting a property sold at the market value I always suggest listing as close to market as possible. You can always decline a low ball offer, but you cannot decline, counter nor accept an offer that you haven’t received.
Now with all things, there are going to be exceptions, and this does not mean that I believe all sellers should list their property right where a CMA comes in at. I mainly wanted to show that the fear of being lowballed is one that we can allow to keep us from achieving our goals.