Posted on Monday, August 28, 2017
You don’t often see a price pop in the so called “off season” but this month’s performance is another sign we have have a larger year round population and strong summer tourism. Sold prices are up, inventories in most communities are good, and the luxury market shows some strength. The seller’s are really working to move property however as days on market is increasing again – this time to a four year high – and significant price concessions continue. Read all about these trends in August along with some interesting views for the upcoming season.
One year ago the median Naples property sold for $367,000. This month was a bit of an anomaly as prices popped to $443,000 due mostly to a spike in the luxury segment. Smoothing these results over two years, we see a 10% price increase for the last two years – a terrific market. Clearly the buyers showed up as more people leave here year round and summer tourism is strong.
At the heart of property price behavior in any real estate market is supply and demand. The Naples market inventory softened ever so slightly to 5.91 months but still very supportive of further price increases. The “law” of supply and demand held true this month with some significant price increases and the future looks bright.
This time last year supplies were 6.30 months – almost identical to today. So all other things being equal we should see a similar early season market to 2016. There may be important differences though. For example, the Fed raised rates this summer and we may see some mortgage rate increases and some buying headwinds. We will see.
If there is a challenge to the market now it is on the sell side. Seller’s are working very hard right now to move homes. The average price reduction from original price to sold price to actually sell a home is at 11% – higher than we like to see. Also concerning is days on market climbed to 72 days – a level we have not seen since August of 2013. The market is trading OK and supportive of price increases but at slower rates. As a comparison to last year, “days on market” were only 53 days vs. 72 days today – so you can see some year to year slowing.
Luxury property may have found some footing this month after a very tough few months of falling prices and slowing sales. Average prices increased slightly to $4,050,000 from $2,950,000 greatly pushing average prices in the overall market. Inventories climbed to 12 months from 10.48 months, however, so there is no real support for future luxury price increases in the short term. Buyers looking for luxury real estate in Naples right now take note – we may be forming a “bottom” with increased prices and firming inventories. Tune in next month to follow this trend or call us at 239.595.3921 to discuss it further.
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. Going from strength to strength Coldwell Banker is rolling out its new Global Luxury Brand and I am here to tell you it is very impressive. Luxury home sellers AND buyers will enjoy the new offerings. Please contact us at 239.595.3921 to see how we do it.
Our readers will remember the Great Recession started with condo prices falling a full year before single family home prices. As a result, condo prices may be a “canary in the mine” indicator to foretell future trends. So what happened this month? It looks OK to us. Average condo prices essentially stayed the same at $250,000 this month vs. $252,000 last month. Inventories look great at 5.79 months. Let’s keep an eye on this one though and see if those prices can bounce back up in the next few months in the face of short supply.
We all know real estate is local, so what is happening in different neighborhoods? Let’s take a look. Oh good, more data!
Olde Naples – We have a wonderful lot for sale at the corner of Gordon Drive and 13th Avenue south (see photo above). A gentleman from New York City called on the lot this week and two families on holiday also expressed interest – solid interest. Someone is going to build their forever home on this one. One of the best locations available is Collier County. Please take a look.
Who doesn’t like Olde Naples? The “Urbans” love to walk everywhere – beach, shops, restaurants with no car or even a scooter. But … is real estate selling at these prices? Absolutely – 65 homes sold in the last 120 days. Inventories increased slightly to 9.29 months however and we need to watch this trend. So far things look good and there is modest support for increased prices here.
Pelican Bay – Our property sale for a very nice gentleman was a delight this this past season. We find this neighborhood in one of the strongest positions in Naples. Inventories are at 4.49 months and lead all neighborhoods in our analysis this month. there is very strong support for future price increases 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”
You really need to walk though the heritage center in the club house and see the story. Nancy Lopez, The Shark, Larry Bird and many notables added a lot to this club over the years. This lifestyle is having a favorable impact on the neighborhood. Bids are now out for a new development with performing arts right across the street (I should hear more about this in three days!), the Naples Botanical Garden pulled in over 200,000 visits this past year AND our friend Rebecca at 360 Market is hitting it out of the park with new dining and on water experiences.
So how is the Windstar on Naples Bay inventory? Excellent! Tightening to 6.0 months at this time with 15 homes are on the market and 10 sold in the last 120 days. 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!
Crayton Road – “The charm of this near north side neighborhood away from the maddening crowd is truly wonderful”
Challenging Pelican Bay for the tightest supply, Crayton Cove comes in this month at 5.68 months – very good news for future prices here. Keep your eyes open in this area as the buyers may be looking slightly north of town again for those luxury homes and any old properties in need of repair may be torn down – we will see!
Royal Harbor – “On water living and walkable to town and new development on the way”
The “Urbans” have spoken. Royal Harbor went from strength to strength and followed last report’s positive news with a further drop in inventory to 5.82 months – mimicking Crayton Cove but with more on-water options. Another interesting trend 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”
The supply news is a little tougher here. Inventories have climbed to 17.88+ months and are now above the theoretical equilibrium point. We expect downward pressure on prices at this point. People are buying here – in fact they bought 17 properties in the last 120 days alone – but we need to see inventories tighten to become more comfortable with price supports.
Marco Island – “island life and the beach at Tiger Tail offer a remarkable experience”
Hooray again for Marco island! Inventories remained below equilibrium at 9 months so we still see support for modest price increases. I spoke with with a Marco Island realtor last week to gain more “on the ground” perspective. 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.
What we continue to find interesting and challenging about 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. Unfortunately things slowed further this month and inventories climbed this month to 30 months. At this inventory level we expect downward pressure on prices.
Readers often ask us “what is going on around town with new construction?” Well, the short answer is we are seeing a lot of activity – perhaps we are overbuilt slightly? Some builders have halted designs in favor of new designs favoring less expensive homes and rentable units. It is tough to capture real data from the developers but the scuttlebutt remains “we are a little far out over our skis” – meaning overbuilt.
So our market showed a nice price increase this month although selling speeds slowed and price concessions remain. Our inventory looks good and we are forecasting overall price increases in the coming months. We seem to be in a great position to start the season.
Please give us a call if you are considering buying or selling in Naples. We would love to help you!
One final note – our readers know our statistics are based on three month trailing averages to smooth month to month affects so please take this into account when reading our views.
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