Posted on Monday, January 30, 2017
One year ago the median Naples property sold for $320,000. This month we are at $305,000, a 4%+ year over year price decrease. Natural demand, the beginning of tourist season, increased demand for single family homes and solid US Equity markets all combined to drive buyers to buy in the Florida sunshine but at a rate slower than new listings.
At the heart of property price behavior in any real estate market is supply and demand coupled with inventory levels. The Naples market inventory increased slightly to 10.02 months this period over 9.68 months last month, marking the sixth straight month of inventory increases. This time last year supplies were much tighter at 7.37 months. Inventories at today’s level are still supportive of 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 had to work very hard to get there. Sellers reduced prices from their original position a whopping 24.7% from the original price so as you can see sellers are working a lot harder to get those home sold.
There is also a large inventory of luxury properties right now – both in Naples and on Marco Island. Naples luxury properties (defined as properties listed above $2,000,000) have an inventory level of 28 months – a level likely to require price reductions unless something changes. We will see the what the future bears here but luxury properties are a tougher sell right now.
We are so 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. Smaller price concessions from the sellers are running in concert with faster selling speeds. Now it takes 50 days to sell a place (on average) about equal to last month. No big change here.
And what about the condo market, what are we seeing there? Average condo prices fell in December to $265,000 from last month but they are still up a couple of percentage points over the last twelve months. Not bad.
Inventories in the condo market are good at 10.29 months are steadily rising. We need more sales volume to keep this in check or condo prices will flatten out. Readers will remember condo prices ran along flat these last few months – so finally the number played out and condo prices are back on the mend.
We all know real estate is local, so what is happening in different neighborhoods? Oh good, more data!
Olde Naples – “I made up my mind to move to Naples as soon as I stepped out on that beach.”
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 were better this month. Inventories dropped to 11 months from 12 months and we have some support for price increases again. Nice.
Pelican Bay – “I love the tram to the beach and eating at the beach club!”
Pelican Bay saw inventories tighten to 15.68 from 16 – still too high and we expect downward price pressure. This is a great place to live with many amenities and an awesome beach lunch club. Take a look – there are some great values 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”
This community is the big winner in December with supplies dropping from 18 months to 10 months. The running of the buyers put Windstar back in solid position to play out the season.
Crayton Road – “The charm of this near north side neighborhood away from the maddening crowd is truly wonderful”
Crayton Road area inventory stayed at 16 months again and we expect more price pull backs here – just like many of the beach communities. 16 months is just a little rich but what a great place to live.
Royal Harbor – “On water living and walkable to town and new development on the way”
The Royal Harbor inventory stayed at 12 months again causing us to conclude this neighborhood is at price equilibrium – sales kept pace with new listings and prices held steady. The area holds so much future promise with the rise of the “Urbans” and a walkable culture coupled with new commercial developments in the area. 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. Look for stable prices here.
Port Royal and Aqualane Shores – “one of the finest enclaves anywhere”
Port Royal and Aqualane Shores inventories improved a great deal to 25 months from last month’s figure of 32 months. Prices are likely to fall here but the market is starting to firm up. We will see if the buyers can out pace the sellers next month.
Marco Island – “island life and the beach at Tiger Tail offer a remarkable experience”
Marco Island inventories remained at 14+ months – same as last month. For all my dear friends and realtors on Marco who bust my chops on these numbers, take heart! – the Island is a great place to live. 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 but expect some price pull backs here.
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. Inventories improved only slightly to 27 months from 28+ months but down from an eye-popping 100+ months not too long ago. If you like the Island and you are looking for a great place, prices should continue to drop here. The market is adjusting but you could find some real deals here with 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 off to a very modest start this year. Over all supply is short enough to support prices but we experienced a slight price pull back this month. We need to keep an eye on inventory levels and hope buyers accelerate their activity through season.
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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