Posted on Thursday, March 30, 2017
One year ago the median Naples property sold for $315,000. This month we are at $348,000 for a very nice 10.48% pop in year over year prices. Natural demand, nationally ranked high growth area, 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 improved to 9+ months due to a 10% increase in sales volumes. This improves over last month’s to 10.09 figure as smaller and tighter supply drives prices. This time last year supplies were slighty tighter at 8.52 months so the market seems to be keeping up. Inventories at today’s level are supportive of further 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 9.3% from the original price so as you can see sellers are working a lot harder to get those home sold and all is not so rosey.
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 19.22 months. As we predicted over the last two months this inventory level is reducing luxury home prices – 1.56% YOY at the time of this writing, but gaining strength in recent days.
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 60 days to sell a Naples property (on average) compared to 53 days last month. We do not like to see selling speed slow downs in the peak of season and this is one of the slowest speeds we have seen in recent years.
The canary is still singing sweetly! Readers will remember condo prices fell a full year before single family home prices in the Great Recession so they may be a great “canary in the mine” to foretell future trends. Average condo prices rose and inventories tightened – just what we like to see see in the height of season. No bust yet.
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 improved this month. Inventories dropped to 10+ months from 13+ months and are now supportive of current prices.
Pelican Bay – “I love the tram to the beach and eating at the beach club!”
Pelican Bay continues to roll with its popular beach access and fine homes. Inventories tightened again this period to 9+months from 12+ months last month. This is a great place to live with awesome amenities and 2 beach clubs. 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 made another strong showing this month with inventories dropping under 7 months – very supportive of pries and a sign this neighborhood has a lot to offer. Tom Fazzio’s first Florida golf course and a yacht club all on Naples Bay! The surrounding area booms with the new development and a recently announced Opera House. A great option for many people.
Crayton Road – “The charm of this near north side neighborhood away from the maddening crowd is truly wonderful”
Crayton Road continues to flourish and you will want to see the Coldwell banker’s new luxury listing on Putter Point. The area’s inventory improved to 12+ months for 14+ months and reached thee theoretical “equilibrium” point. We should now see stable prices here.– we will see!
Royal Harbor – “On water living and walkable to town and new development on the way”
We sold a beautiful on-water 3,000 square foot new home to a wonderful couple this month. Now they can enjoy a way to town and an incredible on-water lifestyle. Royal Harbor inventory increased to 11+ months from 10+ months – still supportive of prices but we will need to see some strengthening to support future prices from here. 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 13+ months from 21+ months in one of the strongest showings in a while. Clearly our wonderful town and climate caused a lot of buyers to move in and purchase these wonderful homes. At this inventory level we see some support for current prices.
Marco Island – “island life and the beach at Tiger Tail offer a remarkable experience”
Marco Island inventories improved to 11+ months from 14+ months and are now supportive of current prices. 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. Our colleagues in the Marco Island Coldwell Banker provide excellent service.
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 32 months and although this improves on last month’s 50+ month figure prices should fall. 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 building momentum during our high tourist season. Over all supply is supportive of prices but it is not the real estate season of the last two years. Will the international buyers look past the strong dollar and deliver a strong summer real estate season? We will see. Just what we would need to keep the new momentum going!
Please give us a call if you are considering buying or selling in Naples. We would love to talk with you!