Posted on Sunday, February 26, 2017
One year ago the median Naples property sold for $324,750. This month we are at $325,000 for a very modest .08%+ year over year price increase. Natural demand, high season, the #1 US environmental rating and solid US Equity markets all combined to drive buyers to buy in the Florida sunshine.
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 10.09 months this period over 10.02 months last month, marking the seventh straight month of inventory increases. This time last year supplies were much tighter at 8.65 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 17.93% 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 24.42 months. As we predicted over the last two months this inventory level is reducing luxury home prices – 7.96% YOY at the time of this writing.
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. Price concessions from the sellers are running in concert with tough selling conditions. Now it takes 53 days to sell a Naples property (on average) compared to 50 days last month. We do not like to see selling speed slow downs in the peak of season.
What about the condo market, what are we seeing there? Average condo prices rose this month to $270,000 from $262,500 or 2.86% – nice! Inventories in the condo market are good at 10.31 months and now holding steady. 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 slipped this month. Inventories dropped to 13.33 months unfortunately and are now at a level no longer supportive of current prices.
Pelican Bay – “I love the tram to the beach and eating at the beach club!”
Pelican Bay is rolling again. Inventories tighten to 12.72 months from 15.68 last month and 16 months before that – we now expect support for current prices here. 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 again this month. Inventories dropped to 7.2 months last month dropping form 10 months the prior month and 18 months before that – the market is very supportive of price increases here.
Crayton Road – “The charm of this near north side neighborhood away from the maddening crowd is truly wonderful”
Crayton Road area inventory improved to 14.74 months from stayed at 16 months – still unsupportive of current prices but improving. Perhaps next month we get to equilibrium – we will see!
Royal Harbor – “On water living and walkable to town and new development on the way”
The Royal Harbor inventory improved to 10.33 months dropping from 12 months and is now supportive of price increases again. 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. 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”
Port Royal and Aqualane Shores inventories improved to 21 months but the market is telling us prices must drop here. 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 and the month before that. 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 are now up to a whopping 53 months! Only 7 sales in the last 120 days and 93 properties on the market something has to give. 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 it is not the real estate season of the last two years. 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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