Posted on Monday, May 01, 2017
One year ago the median Naples property sold for $319,995. This month we are at $360,000 for a very nice 12.5% pop in year over year prices. Tourist season did its work folks – combined with natural demand, nationally ranked high population growth, the #1 US environmental rating and solid US Equity markets all combined to drive buyers to buy in the Florida sunshine. And get this … there may be more to come as supplies remain low :).
Do results differ by property type? by neighborhood? by all sorts of things? Absolutely. We better take a look at these numbers piece by piece because there are some big differences in the details!
At the heart of property price behavior in any real estate market is supply and demand. The Naples market inventory tightened to 7+ months due to a 12%+ increase in sales volumes. This improves over last month’s 9.07 months figure as smaller and tighter supply drives prices. This time last year supplies were the same so the market seems to be keeping up. Inventories at today’s level are supportive of further price increases but support varies neighborhood by neighborhood.
Let’s look at price reductions. Although buyers pay about 4% less than asking price for a listed property right now, the sellers worked to get to a deal by reducing prices ahead of time. Sellers reduced prices from their original position only 2.3% – a lot better than in prior months. Clearly the buyers were taking prices closer to original asking price.
The luxury market is weaker than the general market – something we reported all season. Naples luxury properties (defined as properties listed above $2,000,000) have an inventory level of 16.09 months – too big for price supports. As we predicted over the last few months, luxury prices are falling – 2.86% this month, – 1.56% last month and -7.96 months two months ago (based on YOY price changes). That folks is good enough to call a trend, especially with the high inventories. Many buyers are shying away from high priced homes. Average median prices in this category are trying to hold above $3,000,000 – but we will see. We need buyers to buy and inventories to tighten!
Despite the challenging luxury market, we are pleased to report Coldwell Banker captured the largest market share of luxury property sales in the State of Florida for the year ending 2016. We are number one! Please contact us to see how we do it.
Another data point to watch – property selling speed. Now it takes 59 days to sell a Naples property (on average) compared to 60 days last month. Slightly better but hardly worth noting. We were hoping for something better given tight supplies in the general market. Buyers are buying but they sure are taking their time making up their minds!
The canary is still singing sweetly! 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. Average condo prices rose and inventories tightened – just what we like to see see. Yes, the canary clearly had a cold in January but the bird is just fine now, thank you.
We all know real estate is local, so what is happening in different neighborhoods? Oh good, more data!
Olde Naples – We have a new vacant lot for sale at the corner of Gordon Drive and 13th Avenue south. Are you kidding me? Someone is going to build their forever home on this one.
Our first neighborhood stop is Olde Naples. Who doesn’t like Olde Naples? The “urbans” love to walk everywhere – beach, shops, restaurants with no car or even scooter. But … is real estate selling at these prices? Well, things improved this month. Inventories dropped again to 8.86 months down from 10+ months from last report. These levels are now supportive of small price increases in the next few months – but beware the luxury market!
Pelican Bay – We sold another one here this month and are so pleased to help a fine Gentleman and his family 🙂
Pelican Bay quite frankly is running hot again – nice! Inventories tightened again to 6.6 months from 9+ months. At this level we expect very strong support for price increases. Very good news here.
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”
We spent a wonderful evening with friends on the Keewaydin beach just two nights ago. What a sunset. This lifestyle is having a favorable impact on the neighborhood. Less than four months inventory folks! About as hot as it gets. If homes are not selling here they are either priced too high or need a condition update or both. Inventories do not get much tighter than this. And do not forget, when you buy here you get Tom Fazzio’s first Florida golf course and a yacht club all on Naples Bay! The surrounding area booms with the new development and a recently announced Opera House. A great option for many people.
Crayton Road – “The charm of this near north side neighborhood away from the maddening crowd is truly wonderful”
I would have thought with the challenge to luxury property markets Crayton Road would find challenge – nope, inventories tightened further to 10 months! This is very good news for future prices. Keep your eyes open in this area as the buyers may be looking slightly north of town again for those luxury homes – we will see!
Royal Harbor – “On water living and walkable to town and new development on the way”
The Urbans have spoken. Royal Harbor had a very strong showing. Inventory dropped to 8 months and the market is again supportive of price increases here. The area holds so much future promise with a walkable culture coupled with new commercial developments in the area. If you are in town you can see the “Trio” development coming out of the ground at US 41 and Davis. On water, single family homes, convenience to 5th avenue, a spa within walking distance and an ever-increasing Naples “downtown” footprint – there is a lot to like in this area.
Port Royal and Aqualane Shores – “one of the finest enclaves anywhere”
Somewhat challenged by luxury market headwinds in Naples, Port Royal and Aqualane Shores inventories are still over 13 months. People are buying here but not fast enough to push down supply from last month. At this inventory level we see some slight, very slight downward price pressure.
Marco Island – “island life and the beach at Tiger Tail offer a remarkable experience”
Hooray for Marco. Inventories improved again to 10 months and the market is now supportive of some price increases. 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.
What we continue to find interesting on Marco Island is the struggling luxury single family home market – defined as properties above $2,000,000. Many of these properties offer incredible bay views and yet inventories are 16 months+ and prices should fall. If you like the Island the market should adjust and you could find some real deals here – call us!
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 new construction right now, this is a good time to be looking.
So our market is built momentum right through tourist season. Will the international buyers look past the strong dollar and deliver a strong summer real estate season? We will see. Just what we would need to keep the new momentum going!
Please give us a call if you are considering buying or selling in Naples. We would love to talk with you!
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