The number of single-family homes coming up for sale in Cape Coral continues to grow, and some Realtors agree that prices will have to keep dropping before the market begins to recover.
More than 5,000 single-family homes are currently for sale in Cape Coral according to data put together by Michael Polly, vice president at Denny Grimes and Company Inc, a local realty firm.
On average, it would take about two years for all the houses on the market to sell if no other homes were to be listed, according to the data.
According to Grimes, prices on homes have to continue to drop because more inventory will continue to come on the market for at least another year through foreclosures and new construction.
"The market is not stabilized," he said. "It's a natural process. The faster we will recover the better off we'll be."
More than 900 permits for construction of single-family homes have been issued this year, according to the city of Cape Coral.
Last year 4,128 permits were issued, and the construction industry hit its single-family peak worth of permits in 2005 with 7,694.
Only 115 permits were issued in April this year, compared to 439 permits last year and 655 permits for new construction in 2005.
Several local banks in the area said they do not release information about foreclosures.
Grimes said that housing prices have fallen back to ‘normal' levels for the Cape market.
"Some price ranges are getting close to the bottom, and banks are short selling," Grimes said. "The good deals are now. Can people win by waiting? Maybe. But they can lose as well."
Tom Sessa of MGC Realty LLC said that people who do not need to sell their house right now should pull it off the market.
"...and those that do need to sell, put it at the lowest possible price you can afford to take," Sessa said.
Virginia Hall, a mortgage banker with Colonial Bank, 1621 W Cape Coral Pkwy, said first-time buyers are what will help move the inventory.
"Young buyers out there who think they can't buy a house, the perfect time is now," Hall said. "These first-time buyers should be breaking down the door. The market is only going to get busier and busier and they are going to lose out on a good opportunity."
Hall said many people are trapped in homes that are too small for them because they cannot find a buyer. She added that first-time buyers would purchase the smaller homes, and those people would upgrade into larger houses, pushing more stock to sell.
Hall also said that mortgage rates, which currently vary from 5.8-6.5 percent, are still some of the lowest rates seen within the last five years.
"There are so many different programs out there to fit almost anyone's budget," Hall said. "If there was more education on home buying, people wouldn't be afraid to make a purchase."
Jeff Miloff of Miloff/Aubuchon Realty said people tend to make purchases after they see some of the for sale signs go down and sold placards come up.
"We need to get the word out that the time to buy is now because prices are at an all-time low," Miloff said. "Everybody is looking at the state of Florida to reduce taxes and make portability possible on Homesteaded properties."
In Cape Coral, the southwest area has the largest inventory of homes, with more than 1250 in the 33914 ZIP code. However, on average 57 homes are being sold there every month this year, with 70 sold in April, according to Denny Grimes & Company's research data.
On average only 23 homes are sold per month this year in the 33991 mid west Cape ZIP code, and 28 homes sold per month this year in the northeast area of the city.
About 40 homes per month this year have been sold in the southeast and northwest areas.
Miloff suggested construction companies are beginning to cater more to the actual people living in the houses and less to investors who were building the homes for resale.
"In different price ranges and different niches, there's still buyers out there," Miloff said.
By DMITRY RASHNITSOV - Published in the Cape Coral Breeze
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