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How's The Naples Real Estate Market? Booming.

Posted on Monday, July 27, 2015

1480 Curlew Master

(New British West Indies On-Water Construction with Fabulous Living Spaces)

Despite some weakening in the national real estate market, the Naples market continues to boom. Over the last twelve months the average Naples area property selling price increased 18%+. More growth against tight supply should continue to push prices up. Purchase volumes dropped back to may levels this month and supplies increased slightly to 3.63 months – a level very supportive of continued price increases.

1480 Curlew - Pool shot

(Offers are starting to come in on our Curlew properties – new construction, on the water is tough to beat)

Readers of the blog will know we take a  look at Naples real estate market trends at month end – a very detailed look for all you analytics.

Are we in for a continued boom? We think so. Firstly, prices are highly likely to continue to rise in the next few months. We have some concerns about world events as always and a weakening national market (just reported) but today’s combination of short supply and strong purchase volumes say prices will continue to rise for a while.

The inventory of existing homes is at 3.63 months. This is slightly weaker than last month but far below the 12 month price equilibrium point. At 3.63 months we expect prices to rise – a lot.

4650 Yacht Harbor Drive Lanai

(well priced condos like this one moved off the market quickly this season)

Will the buyers put up with these newer and higher prices? Yes for now. In fact buyers seem to be losing their nerve a bit as “Original Prices to Sold Prices” were 3.8% – same as last month. Translation? Sellers are getting what they want.

As we enter August we typically see some slow down as the market takes a breather from high season.  I am not so sure this year.  Traffic is still moderate, parking is easier but not much, churches are full and I think more people are staying longer  – or in fact year round.

This is a great time to sell as serious buyers remain in the market and many parents look for new homes before the start of the school year. Buyers love the fact homes are more accessible with the decrease in floor traffic. Get out there and take a look – so far the sellers are still winning in this market with tight close to ask ratios and low inventories.

Property “selling speed” at 39 days on market is slightly slower than last month but not bad. Properties are still moving off of the shelf.

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(even the farmer’s markets are drawing good business in season)

Another market sign to watch – condo prices. Remember during the last bust condo prices dropped almost a full year BEFORE the single family home decline. We like to look at condo prices as a good leading indicator. This past month we saw condo prices fall to $258,000 from $270,000 and inventories rose to 2.86 months. Translation? There is some market weakening here but at this inventory level we think condo prices still have room to rise.

The market is moving along nicely but are we in a bubble? This is a question we get a lot – in fact I heard it out on the boat just last month. We do not think we are in a bubble. With short supplies, good “original price to sold price” ratios, days on market at OK levels and condo prices rising it is clear the market is again strengthening and prices should continue to rise for a while. Will the party end one day? Of course. Perhaps suddenly. This is a boom and bust town. But “not yet.”  Watch the numbers with us as cracks will appear unevenly in the figures as the next bust approaches. At these low supply levels and volume increases the market looks great for now.

Ok the big market is good but what about the numbers neighborhood by neighborhood ? All real estate is local – as readers of our blog know very well – and all we talked about so far are averages in the big market. We need to dive deeper into each neighborhood to understand this beautiful paradise we call Naples. Let’s go … Oh boy, more data!

Our first neighborhood stop is Olde Naples. Just when we thought things might be slowing here supplies dropped further and inventories fell to 5.36 months. Wow.

Pelican Bay supplies are quite frankly the lowest we have seen in a long, long time. Anywhere. Supplies bounced back a little to 1.45 months but this is still an extremely low level. Buyers looking at Pelican Bay better be ready to make a very good offer right off the bat.

IMG_0419

(on water views are fetching bigger prices – like this beautiful on-water old Key West style home on Naples Bay)

Windstar on Naples Bay continued its strong showing as inventories stayed near the 1.12 month level with only 7 properties available – down from 32 properties just four months ago.  Things are popping here even with new developments offering new construction right next door.

marina

(Life at Windstar on Naples Bay can be pretty amazing)

The Crayton Road area saw a modest 8% volume did and supplies rose slightly to 2.74months.  To give you any idea of the change here over the last several months there are only 173 properties available in this area – down from 368 properties only a year ago.

The Royal Harbor area inventory of single family homes stands at at 3.75 mont – up slightly from last month but still at a level very supportive of price increases. Look for more price appreciation again in Royal Harbor.

IMG_0412

(custom on-water homes with master suites looking out on the water are in big demand – like 1520 Curlew in the Royal Harbor area)

Port Royal and Aqualane Shores inventories decreased to 11.84 months. At this inventory level we expect prices to hold level here – still a good market and good support.  When people ask are people really buying properties at these prices? The answer is yes people are paying theses prices. If you want top-of-the-line luxury living in Naples, Port Royal and Aqualane Shores are among the best.
Marco Island saw solid gains again this month with inventories falling further to 6.58 months. We should start to see price increases on Marco. For our readers unfamiliar with the Marco Island area why not take a drive down there and take a look. When you cross over the Big Marco River on the Jolly Bridge (named for a judge – not a feeling – but I like the irony) and descend to the island you will love the local feel. Houses and condos may be less pricey and boating, golf and tennis and that incredible beach offer a great lifestyle.

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(take the short car ride down to Marco and see some additional property options – or go by boat)

What we find interesting on Marco is the luxury single family home market – defined as properties above $2,000,000. Many of these properties offer incredible bay views and buyers may be on firmer footing here than in Naples.  At 24+ months supply we expect price decreases here. Sooner or later the buyers are going to discover Marco Luxury.

In addition to our monthly neighborhood analysis we would like to provide a few more points of view to help our sellers and buyers.

IMG_0073

(the new construction boys are busy but existing home sales continue to strengthen)

The big market dynamic of new construction continues. 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, inventories of existing homes are still falling and very supportive of further price increases. What a market!

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 your neighbor’s well priced 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 40 day “days-on-market+ trend.

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(buyers better be ready to buy when well priced properties come on the market)

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.

The Naples Best Addresses Co-Founders 1:2015

(The International Award Winning Naples Best Addresses Team at Coldwell Banker)

So … the hot market continues and prices should continue to rise but each sub-market (neighborhood and condo building) are starting to differ more widely. You gotta love boom times! A welcome change from the recent past!

Why not pick up the phone and catch up with us and let us know how you are doing? Just give us a call at 239.595.3920 (Nan) or 239.595.3921 (Mark) or 239.285.2038 (David).

Please also consider reading our book “Understanding Naples Real Estate” to get you started on a real estate search https://www.naplesbestaddresses.com/offer/ or just give us a call about things to do here.

All the best,
Nan, Mark and David Goebel, PA’s
Co-Founders Naples Best Addresses
Coldwell Banker
Mark Goebel, PA and Nan Goebel, PA
REALTOR Coldwell Banker 5th Avenue South
Mobile: 239.595.3921 239.595.3920
NaplesBestAddresses.com
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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.
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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 and son David. Talk to Mark, Nan and Dave 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.