Posted on Monday, December 29, 2014
It appears the Naples real estate buyers went back up north for the December Holidays or simply took a time out for the month – not unusual really. All of our tracking areas as well as well as the overall market softened slightly (All data comes from the Matrix MLS as of 12/29/14).
We will break it down by neighborhood for you but the very short story is the market supply remains low and we expect prices to continue to rise.
Why do we expect prices to rise? Supply and demand for starters. The inventory of existing homes is at 6.2 months – far below the 12 month price equilibrium point. At this supply level we expect prices to rise.
Will the buyers put up with these prices? Yes, so far. Closet to ask ratios remain below 4% although volumes dropped 5% in the month. If the buyers were growing shy we would expect the closed to ask ratio to widen along with the volume drop but we will keep an eye on things.
Another reason we see buyers tolerating the higher prices is the average days on market for a property dropped to 34 days so property is moving more quickly. Well priced properties in good condition still fly off the shelves, sometimes with multiple offers as supply remains tight. One of our clients saw an offer in one day from first listing recently.
The market is moving along nicely but are we in a bubble? We do not think so. With short supplies, closed ratios tight and days on market dropping buyers still support this market. Remember during the last bust condo prices dropped almost a full year BEFORE the single family home bust. Today we see condo prices remaining flat over last month at $212,680. Good so far.
Ok the big market is good but let’s look at the numbers neighborhood by neighborhood and better understand our market in detail in this beautiful paradise we call Naples.
Before we start remember twelve months inventory is the historic market price equilibrium meaning inventories below this number should cause prices to rise and inventory levels above twelve months should put downward pressure on prices. Supply and Demand. Easy stuff really.
Our first neighborhood stop is Old Naples. This month 12% more properties were on the market and volumes remained stable so months inventory rose to 11.58 months. Start looking for more price stability in Old Naples.
Pelican Bay is a different story. Here inventories remain very tight at 6.16 months and very supportive of price increases. 117 properties remained on the market and purchasing dropped a bit but Pelican Bay remains the area most likely to see price increases in all the areas we track.
Windstar on Naples Bay saw 6 new properties come on the market with no change in purchasing volumes so months supple rose a bit to 9+ months. We expect continued price increase at this supply level.
Due to recent sales the Crayton Road area saw a reduction to 255 properties available but the volume trend is lower and months inventory rose to 7+ months – a lever still very supportive of price increases.
The Royal Harbor area saw four new properties come on the market with even volumes so month supply increased to 16+ months – a level where we would expect future price decreases. The nearby neighborhoods of Oyster Bay and Golden Shores are going along ok however. It could be the pace of house flipping and spec home building has finally caught up to the market in Royal Harbor.
Golden Shores area is a very small market but inventories remained at four months – very supportive of price increases. The sister neighborhood of Oyster Bay to the north saw a home come on the market at $900 per square foot and quite a market increase. Readers will know this is where we are building our two new on water Key West and British West Indies homes. Interesting. Call us at 239.95.3921 and we will tell you about them.
Port Royal and Aqualane Shores inventories increased to 17+ months as we see more homes on the market on slightly less buying volume. We expect downward price pressures here. If you want top end luxury living in Naples these areas are offer good options and we see this as a buyer’s market at these inventory levels.
In addition to our monthly neighborhood analysis we would like to provide a few more points of view to help our sellers and buyers.
The big market dynamic of new construction is finally here. After the bust and the demise of many a builder it took a while for the new home builders to bounce back. By bounce back I mean once they were ready to return they still needed to draw up new floor plans to match new market preferences, obtain permits, clear land and build infrastructure, hire the sales teams and build homes. Well they did all that and boy are homes selling. So much so they are finally putting a real dent in the existing home market. It is estimated (and it is only an estimate as these figures are very hard to track) about 50% of all new home sales right now are new construction.
Now here is the interesting part. Even with 50% of the buyers going to new construction, and three months of slow season, resale inventories are only at 6+ months and very supportive of further price increases.
A few things sellers need to know. Aggressively priced properties in poor condition are not selling very well. You are competing with beautiful new construction and a recent price run up on pre-existing homes. Don’t get to greedy if you need to sell your home or you may be on the market for a while even in these “boom” times. Price it well and keep it in good condition and get on the 30 day “days-on-market+ trend.
The buyers in this market better be ready when they find that best Naples address for them. Why? Because buyers are competing in a short supply world with other buyers. Cash is king and a pre-approved financing letter is helpful but whatever you do – get with a real estate team like ours who knows this market, get a great online search tool like the one we can provide for no charge, and be ready to make a same day offer when you find your place. Well priced properties in good condition are selling very fast in this market.
So … the hot market continues and prices should continue to rise. A welcome change from the recent past!
The new edition of our eBook “Understanding Naples Real Estate” is now available making predictions for the 2015 Naples real estate market as well as offering up advice to sellers and buyers.
To get your free copy go to https://www.naplesbestaddresses.com/offer/ .
Want to know more about living in Naples, Florida? We have toured and owned property in Naples for thirty-eight years and know we can help you out. Please give us a call at 239.595.3921.
Hope to meet and talk with you soon,
Mark Goebel PA, Nan Goebel PA and David Goebel, PA Co-Founders of the Naples Best Addresses team
Coldwell Banker Mark Goebel, PA and Nan Goebel, PA REALTOR Coldwell Banker 5th Avenue South
Mobile: 239.595.3921 239.595.3920
No legal, investment, or tax advice is being given in this Blog. Consult with legal, financial and tax professionals before acting on any real estate transaction. Actual real estate price and sales results are subject to market forces and are not completely predictable. The writings of this Blog are intended for the sole use of our clients. We are pleased to announce a portion of our real estate earnings go to support the The Naples Botanical Garden, Habitat for Humanity Collier County, The Race For The Cure Citrus Ride, The Seacrest Country Day School and The Naples Winter Wine Festival. Some of the data relating to Naples homes for sale and Naples real estate for sale on the NaplesBestAddresses.com website comes in part from the Broker reciprocity program of M.L.S. of Naples, Inc. The properties displayed here may not be all the properties available through the MLS reciprocity Program. This information is deemed reliable but is not guaranteed. Buyers and sellers are responsible for verifying all information about their purchase prior to closing. Mark Goebel, PA is a REALTOR with Coldwell Banker on 5th avenue in Naples, Florida with 35+ years of visiting and living in Naples. After 25 years at Accenture, Mark retired as a managing director and spends his time helping non profits and building a Naples real estate team with his wife Nan. Talk to Mark and Nan about life in Naples and why they chose this place to live full-time over all others and enjoy Naples real estate. Contact us to learn more about Naples real estate trends, the florida rental market, Naples design ideas like coastal contemporary and transitional designs or just get a feel for the place like Naples Florida population trends.