Market Watch: Cape Coral, FL Home Appreciation Spikes 1st Quarter 2012

We’ve been saying it for quite a while now and we are not alone. Those that are in the real estate industry in SWFL especially within Cape Coral that don’t have their heads buried in the sand realize that there has been significant improvement recently in the home sale prices. However, what we say is not always heard and sometimes falls upon deaf ears.

In an attempt to bring visual to our words and thanks to the data compiled by HousingAlerts.com  we are about to show you just how far Cape Coral has jumped within this past quarter compared to the past year and even as far back as 10 years ago. We shouldn’t leave out the fact that it’s not only Cape Coral that jumped but also Fort Myers. As we have advised many times in the past, the statistics just further prove that we know what we are talking about.

Whenever you have an area that gets hit hard in a market slump, they are usually the first to also start to recover. It’s been proven time and time again over decades and although the results of this data are not surprising to us, the fact still remains that Cape Coral, Fort Myers and surrounding communities are in an upward swing and that’s music to any investor’s ears.

Quarterly results are much better for market cycle indication than annual results because these indicators can get buried in annual data. Quarterly home price appreciation rates are calculated by comparing current prices with those of three months prior. The percentage rate is then multiplied by four to make it comparable to other annual-based figures.

Cape Coral/Fort Myers came in first in the list of total regional home appreciation for 2012 spiking to 18% followed by Port St. Lucie. It came in 4^th out of 384 cities across the nation. Just two short quarters ago Cape Coral/Fort Myers ranked 76 regionally and 369th. That’s pretty impressive. All signs point to Bonita Springs being next on the list and it will be interesting to see where Cape Coral/Fort Myers stand in the following quarter. Have a look at the statistical data received from Housing Alerts below that details what we have reported in this article and be sure to contact us if you are interested in investing in the SWFL area!

Cape Coral – Fort Myers- Lehigh Acres  

- the most appreciated area in the country in 4Q of 2011 – 18% annulised

See below the trends analysis:

Details:

Typically, home price appreciation rates are calculated on an annual basis by comparing the current prices to those of 12 months earlier. By using this longer time span, it ‘smoothes out’ the month-to-month fluctuations and produces a more ‘stable’ rate of appreciation. However, when markets are volatile, this one year ‘average’ appreciation rate can also hide important market changes.

For example, if home prices increased 10% in the first quarter, 5% in the second quarter, were flat in the 3rd quarter and then plummeted 15% in the fourth quarter, the annual appreciation rate would be ‘zero.’ The severe market crash that occurred in the last quarter was completely hidden in the annual number! You’d be unaware of what was really happening for another year!

To make sure we aren’t missing important market cycle indicators that could be buried in the annual numbers, we look at quarterly results. Quarterly home price appreciation rates are calculated by comparing current prices with those of three months earlier. This percentage rate is then multiplied by four (or ‘annualized’) to make it comparable with other annual-based figures.

Analyzing appreciation rates by using shorter time periods is like viewing the market through a magnifying glass. Small quarterly changes get amplified four-fold and there is much more volatility and ‘noise’ you’ll have to ignore but… it’s perfect for uncovering subtle market changes invisible to those relying only on annual calculations.