Posted on Wednesday, May 30, 2018
If there is one thing to take away from the Naples real estate market in May it is this; supplies tightened, single family home prices continue to rise and condo prices are pulling back a bit.
What a start to the summer of 2018. Year over year single family home prices were up 2%, condo prices fell again, this time 9% and the total market was off 5.56%. Sellers worked a little harder with slightly increased discounts but properties were moving as days on market were stable and inventories tightened to set up future price increases.
Here are a few highlights:
This is a great time to buy, sell, or rent a home in Naples as many properties exchange hands as season draws to an end.
The highlights above may be all you need to know for now about Naples real estate, but please keep reading. The overall market is one of the best in a while but as our readers know results vary by neighborhood, property type and many other factors. We need to get into the numbers to show you how things are going. Here we go!
One year ago the median Naples property (single family and condos) sold for $360,000. This month we are at $340,000 – down slightly. But … look at the difference in single family homes and condos! Year over year single family homes prices are up 2+%. Year over year condo prices are down 9+%. We spotted the trend a few months ago with single family prices rising and condo’s decreasing. Is this a shift to year round living? Perhaps a shift away from HOA fees as some single family homes have no HOA fees? We’ve seen this single family vs. condo trend developing for a while and we certainly hear it at our open houses. It seems like people are more interested in single family homes right now – we need to keep an eye on this one.
As our readers know, at the heart of property price behavior in any real estate market is supply and demand. The Naples market inventory is 6+ months, tighter than last month’s 7+ months. If historic supply and demand forces hold true we should see further price increases in the near term. Any supply level under 12 months tends to be positive to prices.
There may be important demand shifts in the months ahead so keep reading our newsletter! At the time of this writing the US Ten Year Treasury backed off of 3+% highs, the Fed remained aggressive hinting at more rate hikes, and the stock market struggled. We certainly see uncertainty. We may see more mortgage rate increases. So what? Mortgage rates are rising and will probably continue to rise in the face of market uncertainty. Demand may slow in the face of uncertainty and rate increases but so far our great weather and lifestyle bring in the buyers. Something to watch.
Another potential shift in buyer demand …. the US Dollar is again at multi month highs. So what? About 21% of our market buys in foreign currency so increasing US dollar strength makes our property look more expensive. Will our Western European and Canadian buyers take a pause? Not yet, but something else to watch.
Let’s look at price reductions for more interesting news. Sellers are again working hard to move property with average discounts to original price rising to 8%. This could be end of season “clearance” behavior as sellers wanted to move property before summer – but it is something to watch. Sellers are going to have to price property right in this market!
Another interesting area to look at – The Luxury Market. We now have a Luxury rally taking place after months of slow sales. Naples luxury properties (defined as properties listed above $2,000,000) sold for a lot more money this month and inventories tightened to 10+ months – a level supportive of price increases again. What a rally! Luxury homes may be back.
Readers will remember condo prices fell a full year before single family home prices in the Great Recession so condos may be a “canary in the mine” indicator to foretell future trends. So what happened this month? Inventories tightened to 7+ months BUT condo prices fell again – this time over 9% on the backs of last month’s 7% drop. We do not like to see this. Inventories are ok but average selling prices are falling. The canary is sick and we need to see a recovery this summer – so we will need to keep an eye on the bird!
We all know real estate is local, so what’s happening in different neighborhoods? A lot of variation! Let’s take a look.
Olde Naples – Who doesn’t like Olde Naples? Walk to the beach, retail shops and restaurants needing no car or even a scooter. The real estate pace improved this month. Inventories tightened to 8+ months from 9+ months – we should see support for prices in the months ahead. Nice to see our favorite town in such good shape!
Pelican Bay – Back to its old and positive ways this season, Pelican Bay is again a hot market. Inventories tightened to 5+ months from 6+ months – right where this area finished season last year. A new club house, fabulous beach amenities and some great homes. We’ve seen this neighborhood run hot for a while now.
Windstar On Naples Bay – “A one of kind community with a yacht club, a golf course and a private shuttle to Keewaydin Island – all on Naples Bay”
So how is inventory in Windstar? 5+ months and tighter than 10+ months at last report. We expect prices to rise here in the short term. When you buy in Windstar on Naples Bay you get Tom Fazzio’s first Florida golf course, a yacht club, some great tennis teams and a private beach on Keewaydin Island. And … residents and non-residents alike may purchase well priced boat slips right on Naples Bay!
The good news in Windstar makes our listing at 3569 Windjammer Circle #2014 even more desirable – 7 groups at last weekend’s open house. Give us a call on this one – it could be a great buy for you or your friends.
Crayton Road – “The charm of this near north side neighborhood away from the maddening crowd is truly wonderful.” The current 5+ month inventory improved over last month’s 7+ month level so we expect price increases here in the short term. What a fantastic place to live – West of US 41, beach proximity and just north and just south of some fabulous restaurants. Beautiful spec homes built over the last few years are snatched up by the market in these times.
Royal Harbor – “On water living and walkable to town and new development on the way” Royal Harbor inventory is at 5+ months tightening from 6 months last month. We’ve rarely seen Naples inventories this low in recent months. We expect very strong support for price increases in this area in the months ahead. There is a lot to like in Royal Harbor.
Port Royal and Aqualane Shores – “one of the finest enclaves anywhere” Great news here – sales rallied and inventories fell to 10+ months from 14+ months. Now stop right here for a minute. This data means prices in this beautiful area should start to rise again – fantastic news for the luxury home seller – we in fact helped sell a wonderful home here and plan to close in June.
Need help with on-water Luxury Living? Just let us know. We have many ideas – and we can deliver.
Marco Island – “Island life and the beach at Tiger Tail offer a remarkable experience.” Inventories tightened to 8+ months from 9+ months last month so expect some support for price increases here. Houses and condos may be less pricey here compared to Naples and include incredible boating, golf, tennis and beach lifestyles. Check it out with us – there is a lot to love about Marco Island. Our colleagues at Marco Island Coldwell Banker provide excellent service.
We are constructing a beautiful new on-water single family home on Marco Island at 424 Driftwood Court. We do not have it on the MLS yet but wait until you see the plans. Call us for more information on this one. If you are a boater or just like on water living with beautiful southern and eastern exposures please get in touch with us.
Marco luxury homes also rebounded significantly! Many of these properties offer incredible bay views and inventories are now at only 14+ months – much better than figures like 70+ months in recent times. Clearly Marco Luxury is back.
The Marco Island single family market priced $500,000 to $2,000,000 is very interesting right now. In fact, inventories in this price range tightened again to 8+ months from 11+months last month. So what? Unlike the upper end of the market we see support for increased prices on Marco for these well priced homes – the sweet spot of the Marco single family home market right now.
And the story on new construction? The big market dynamic of new construction continues and perhaps we are now overbuilt slightly. It is tough to capture real data from the developers but the scuttlebutt is “we are a little far out over our skis” meaning overbuilt. There are an estimated 18 new communities in Collier County at a variety of price points with some fantastic floor plans. Developers offer some nice incentives to encourage sales.
If you are considering buying newly constructed homes right now, this is a good time to be looking. Please give us a call. We would love to listen and help.
Another interesting trend in Naples new construction … rental units. We see Lely building up its rental offerings and a new extended stay hotel is going up on US 41. Rents are rising.
Can we help you find your 2018-2019 seasonal rental or perhaps a year round rental? Just let us know, we would be pleased to help.
Please give us a call if you are considering buying, selling or renting. We would love to listen to you and help.
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