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Real estate sales down but average prices rise

October 5, 2023
By Garland Pollard

High real estate prices in Boca Grande are giving the rest of the Cape Haze peninsula and the neighboring islands a price boost.

“Palm Island has really gone through the roof in the last three years,” said Brian R. Corcoran, owner and broker for BRC Group. “Anything nice on Palm Island is being snapped up quickly.”

With Gasparilla Island properties about triple the price, Palm Island and Manasota Key are starting to look pretty good for some buyers. Corcoran said that new prospects have begun to understand that there are basic services on Palm Island, as well as paved streets and trash pickup.

Across the market, current buyers are opting to forego conventional financing. “Anything over $3 million is going to be cash,” said Corcoran.

In a low interest period, the mortgage for many had been more of a financial tool, especially in a rising stock market. “They might have been borrowing because the rate was so low,” said Corcoran.

In many resort areas across the U.S., houses are often sold partly as an investment. That is not the case with the market in Boca Grande, where the buyer is the “end user” who is buying purely because this is the place they want to be.

Corcoran did an analysis of Boca Grande island sales so far this year. The number of transactions was down from 70 to 59 so far in 2023, a 16 percent decrease, but the average price per transaction went from $3,345,345 to $4,454,187, a 25 percent increase.

This matches the direction seen across the state, where median house prices are up slightly, but volume is down. Statewide, Florida real estate continues to slow, according to recent statistics from the Florida Association of Realtors. In August, closed sales of existing single-family houses totaled 22,917, down 7.9 percent from August 2022. Existing condominium sales were 9,279, down 7.2 percent. The median sales price of a Florida house in August was $415,000 up two percent, however. 

Locally, for August, for single-family houses, Cape Coral and Fort Myers closed year to date sales prices were down slightly 1.4 percent, to $429,000 and closed sales volume was down 13 percent, to 9,600, according to Florida Realtors statistics.

In the Punta Gorda and Charlotte County area, single family median sale prices for the year so far were down 2.3 percent, to $379,900. There were 3,192 single-family sales, a 19.2 percent drop.

One issue on the island, and in Southwest Florida, is inventory, and the simple economic law of supply and demand. Because of the hurricane, 200 plus units on Gasparilla Island that are still uninhabitable, Corcoran said.

“We don’t have the inventory to sell them,” said Corcoran.

One issue facing all current and potential buyers, and owners is insurance. Some owners are self-insuring, and dropping some coverage.

“Our biggest challenge is going to continue to be insurance,” said Randy  Wojcik, a broker with Boca Grande Real Estate.

In a real estate market anticipating the return of seasonal buyers, island agents are seeing a pre-COVID market. Gone are the bidding wars, but prices have increased.

“It’s more of a normal market,” said broker Carol Stewart of Michael Saunders & Co. “Values are leveling out, but there is always a big demand.”

As Stewart has watched the market here over the last three decades, the average buyer remains somehow connected to Gasparilla.

“It’s pretty much the friends and the friends of friends,” said Stewart. 

A spate of internet and national news stories about Gasparilla Island have increased interest from overseas, though the island has more consideration from buyers in New York and New Jersey. 

The old geographic patterns continue, including the Midwest and northeast, though there is new interest from states like Colorado and Texas. 

“We stay strong in Midwest because they talk to friends,” said Michelle Finley of Parsley-Baldwin Real Estate. 

This week, on the eve of the reopening of The Gasparilla Inn and island restaurants, brokers can look back and see how COVID temporarily changed the market, and created buyer interest through the summer as purchasers sought out a safe place to ride out lockdowns. Family members with children also came here for extended periods, as they could go to school remotely. 

Before COVID, the real estate market was mostly quiet from August to October. That is now true again. 

“The state of Florida went quiet this month,” said Finley. 

The price of island real estate, and accompanying taxes and insurance, have meant that even long-time owners with children who might inherit houses are considering new options. In an Air BnB era, many families are mulling renting their houses part-time through local agencies, which would just not have been done by some in prior generations.

“Their kids maybe aren’t ready to come here full-time,” said Finley. “The kids are more encouraging of rentals.”

The market off island is evolving. There are more listings, as aging owners put properties on sale and north to be near children. Hurricane Ian put a scare in many owners, and their adult children, who could not reach parents after the storm.

In recent weeks, Finley’s property showings off island have been all out-of-state lookers. Wellen Park, for instance, has shaken up the Venice market as it is attracting the so-called “active boomers.”

“Off island this week, our showings have picked up pretty drastically,” said Finley.