Florida - Florida real estate for sale - Cape Coral real estate purchase - market trends
After a tremendous boom in the US real estate market, real estate prices collapsed dramatically in 2007/2008, particularly in the California and Florida regions. The following chart shows the development of real estate prices in the 20 metro areas of the USA - an incredible boom followed by a crash in real estate prices in 2007-2009:
A look at the Case-Shiller House Price Index since 2000 clearly shows the development of the devastating real estate bubble in the USA, which peaked in July 2006 at 206.52 index points. House prices doubled between 2000 - 2006, after which the bubble burst caused by massively increasing interest rates. After the expiration of government aid to stabilize the real estate market in April 2010, the negative reaction came promptly: in March 2011, after a significant interim recovery, a new low was reached after the outbreak of the crisis (double dip). In December 2011, a new low in average US real estate prices was noted and a third low of 136.64 points was reached in March 2012 (triple dip).
Since the beginning of 2013, there have been clear upward outbreaks in real estate prices on a broad front. Since its low after the real estate crisis in March 2012 (136.64 index points), real estate prices have recovered very significantly. The current S&P Case-Shiller House Price Index of the 20 metro areas shows that in January 2018 the price level almost reached the peak of the real estate boom in 2006. The statistical data usually comes two months late and refer accordingly to the situation two months ago.
Even the Corona pandemic had no negative impact on the price trend of real estate in Florida. On the contrary, real estate prices in Florida continue to rise steadily and are in an intact upward trend. In July 2021, home prices increased 19.2 percent from the same month last year, according to the Federal Housing Finance Agency (FHFA). A declining inventory of homes, a running out of land and historically low mortgage rates drove prices higher. More and more people are leaving the metropolitan areas of the U.S., companies are settling and are boosting real estate prices significantly. The rise in remote work caused by the pandemic will continue even after the pandemic is over, focusing many people's attention on the Sunshine State not only as a vacation spot, but also as a permanent residence.
Again the advice from T. Harv Eker: “Don’t wait to buy real estate, buy real estate and wait.”
If you want to invest in U.S. real estate, the search for a suitable property is very simple: Almost all properties for sale are listed in a central database (MLS). Therefore, ask an experienced broker you trust to look for a suitable house, apartment, or vacant land.
Real estate prices in Cape Coral exceed the top of 2006
In Southwest Florida, real estate in Cape Coral was hit especially hard after prices had literally exploded during the previous boom years. As most buyers had financed Cape Coral properties on a short-term loan basis, many homeowners experienced increasing financial difficulties as interest rates subsequently rose. While real estate prices in the U.S. have only been recovering since 2013, the turnaround in Cape Coral, Lee County, was already initiated at the beginning of 2011.
A comparison of property prices in Cape Coral using the chart below shows that the percentage increase in property prices in Cape Coral since the beginning of 2012 has developed almost in parallel with price developments in Miami or Naples, but at a significantly more favorable price level. The chart also shows that prices have now returned to the highs of 2006 and in some regions have significantly exceeded them.
Real estate prices (off-water homes) Cape Coral - all years of constructionIn October 2010, the average price for an off-water home with pool in Cape Coral was $136,000 and in January 2022 it was $449,950. In January 2023 the average price in Cape Coral was $475,000. In a 12-month comparison, prices in Cape Coral for an off-water pool home rose 5.6% from January 2022 to January 2023. In a 24-month comparison, prices in Cape Coral for an off-water pool home rose 44% from January 2021 to January 2023.
Trend: Overall, the market in this segment is in an intact upward trend since October 2010.
Real estate prices (Gulf access homes) Cape Coral - all years of constructionAfter the peak of over $700,000 at the time of the hype in February 2006, prices bottomed in August 2011 at $295,750. In January 2022 the average price for a Gulf access home in Cape Coral was $800,000 and in January 2023 it was $790,00. In a 12-month comparison, prices in Cape Coral for a Gulf access home dropped by 5.6% from January 2022 to January 2023. In a 24-month comparison, prices in Cape Coral for a Gulf access home rose 27.6% from January 2021 to January 2023.
Trend: Overall, the market in this segment is in an intact upward trend since August 2011.
Off-water Homes in Cape Coral - starting at $450,000 (average Location)
Existing properties without access to the Gulf of Mexico can be purchased for $450,000 (average location).
Gulf Access Homes in Cape Coral - $620,000 (average location)
Existing properties with access to the Gulf of Mexico can be purchased for $620,000 (average location) or $700,000 upwards (good locations).
New Construction, Gulf Access Home, average location - starting at $620,000 (lot included)
New construction with Gulf access can be purchased for $620,000 (lot, 3 bedrooms, 2 bathrooms, Pool, 3-car garage, boat dock, boat lift). In good locations $700,000 upwards.
When is the right time to buy a property in Florida?
The supply of properties in the upper market segment in good locations in Cape Coral with boat access to the Gulf of Mexico has declined rapidly and the construction of a new home in Cape Coral, Florida is once again becoming the focus of investors.
Many prospective buyers with a budget of $600,000 or more therefore choose to build in Cape Coral, as our current sales in 2020, 2021, 2022 and 2023 show. Today many investors in Cape Coral purchase waterfront lots with boating access to the Gulf of Mexico in good to very good locations (lot price from $200,000 upwards). If you decide on an off-water lot in a good location, you have to calculate around $90,000 as the purchase price. For a new home in a good location you have to calculate $500,000 (incl. lot, house and pool with spa), e.g. the vacation home Coral Cay. In 2009, the following sentence stood at this point on our website:
In 5 years, you will look at the price index with the usual remarks: 'If only we'd bought', but with "if" or "should have" nobody has become rich - ever.In March 2010, we already pointed out the expected price increase and the exchange rate trend in our BLOG. Also in March 2012, the risk of rising prices and the appreciation risk of the dollar were emphasized again. Both forecasts have come true to the disadvantage of European buyers and the dollar became even stronger than expected.
While in 2008 -2011 the exchange rate was still very favorable for the European buyer ($1.40 - $1.55 for one EURO) and the real estate supply was huge due the US real estate crisis, this additional cherry on top is melting away when buying U.S. real estate today. Those who had waited until May 2021 for a weaker dollar to invest in a Florida property find themselves severely disappointed. Real Estate prices had been much higher in 2021 and the trend of the exchange rate US-Dollar/Euro is getting worse again for the European buyer. Currently (April 2022) the exchange rate is $1.10 for one EURO and real estate prices increased even further from 2021 to 2022. Again, one can only repeat the citation made at the beginning, "Don't wait to invest in real estate, invest in real estate and wait."
With inflation is soaring and energy prices are rising due to the Russia crisis, the exchange rate will continue to shift in favor of the US-Dollar. Since the U.S. has been less affected by the Russia crisis than Europe, the European central bank, ECB, will be less aggressiv than the U.S. in fighting inflation. Due to the stable US economy, the FED will raise interest rates much faster than the ECB. This will continue to attract international capital to the safe haven of the USA in the future and cause the US dollar to appreciate. It is therefore quite likely that EURO/US-Dollar parity can no longer be ruled out in the medium term. Should the currency parity occur, an U.S. property will become more expensive for the European buyer by another 10%. In addition, the real estate price spiral will continue to move upwards due to the shortage of US real estate supply.
At the time of the 2008-2011 real estate crisis, it was undoubtedly possible to make real estate bargains in Cape Coral, Florida, if you knew the real estate market exactly and followed the rules of the game. During the housing crisis, a huge amount of homes had fallen to the banks through foreclosure, for sale at a low price as so-called "bank owned properties" (REO). However, the boom in short sales, foreclosures and bank owned properties is now over. Banks have largely reduced their non-performing portfolios.
In 2022, you are facing a drastically declining real estate inventory with rising prices and must be very quick in purchasing decisions as listed properties are rarely on the market for more than 30 days before selling. As a licensed Florida real estate agent, a REALTOR®, we organize and arrange for you all inspections, appraisals, deadlines, tax and financing issues necessary for a real estate purchase or new construction in Florida, without burdening you with these issues. We are on site for you.
If you want to be on the safe side, you buy a house that is still inhabited, carefully maintained by its owners and in top condition and in a top location - even if at first glance it does not seem to be a "real estate bargain". In the medium and long term, however, these properties usually turn out to be the real bargains with above-average price increases only due to the price increase of the property in a top location.
What must be considered with supposed "bargains" in Cape Coral?
The "bargains" are usually in a more or less desolate condition if they have been vacant for some time. To save costs, the owners leave the properties to themselves. Usually the outside facilities are in a bad condition, the palms have dead fronds, the once well-kept lawn is a picture of misery, the pool water has turned green, the air conditioners have been out of operation for weeks or months. This means that follow-up costs can amount to several tens of thousands of dollars. Also, we are here to help connect you with professional companies in our network and organize all necessary formalities of a real estate purchase or a renovation of your property.
If you want to fulfill your dream of a Florida property today, make sure you secure your financing and choose an experienced real estate agent with excellent references who will keep you informed on a daily basis. If the property of your desire appears on the screen, you must be able to act quickly - talk to us.