Posted on Tuesday, December 29, 2015
(on water newly constructed properties like this one are drawing a lot of attention)
I know, I know I checked the numbers twice. The average single family Naples home sold for $321,000 twelve months ago – this past month the average sales price was $425,675. 32%+ folks. That’s some single year appreciation.
After a couple of months of increased prices – but at declining rates – we are right back to our old ways, up, up and up. There are a few caution signals we will speak to in this blog but we see more room for rising prices especially in certain buildings and neighborhoods.
Most sub markets here are actually better off than last year even after the summer months. More year round families and professionals, boomer retirements, fantastic climate, great lifestyles and favorable tax treatments keep the Naples real estate market growing.
Over the last twelve months the average Naples area property selling price increased 32+% with single family homes out pacing condos slightly. Volumes are still running at 97% of last year at this time. Not much of a slow down from peak season trends. Interesting.
The winter season is now on. After a brief time out between Thanksgiving and Christmas, traffic is again picking up. At these lower inventory levels and solid volumes the 2016 season promises to put fuel on the fire and drive prices higher.
(Season must be starting. Some “way cool” cars are rolling off the trailers)
Readers of the blog will know as long as you have good volume and the market is actually trading supply levels should forecast the short-term price trend. We stand at 6.47 months supply – well below the theoretical 12 month “equilibrium” level. So what? Look for prices to keep going up this season AND remember prices trends differ street by street and building by building so get with us and let us help you figure it out.
(Offers and showings continue on our on-water properties – new construction, on the water is tough to beat)
Readers of the blog know we take a look at Naples real estate market trends at month end – including 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, equity markets and weakening in some national real estate sub-markets but today’s combination of Naples short property supplies and strong purchase volumes holding through the summer we say prices will continue to rise for a while.
The inventory of existing homes is at 6.47 months. This is slightly weaker than last month’s 6.24 figure but far below the 12 month price equilibrium point. At 6.47 months we expect prices to rise – a lot. So far this “supply based” forecasting method is proving accurate over the last twenty-four months.
(well priced condos like this one move quickly)
Will the buyers put up with these newer and higher prices? Yes for now. In fact buyers stepped up to the table strongly again this month as “Original Prices to Sold Prices” were within 3.6% of asking price and tighter than last month’s 3.7% spread. Translation? Sellers are getting more and more of what they want.
This is a great time to sell as serious buyers remain in the market. If you are thinking about selling call us at 239.595.3921 – so far the sellers are still winning in this market with tight close to ask ratios and low inventories.
Another market confidence booster … property is selling speed is accelerating. Average property “selling speed” improved to 36 days from 41 days. Properties have not sold this quickly in quite some time. Properties sales are still moving along nicely but they need to be priced right and in good condition.
(Naples provides some great lifestyles – return from the Gulf Of Mexico to your back yard and walk over to the Naples Bay Resort for some Spa treatments and a nice meal)
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 rise 13% IN ONE MONTH and inventories rose to 5.69 months. Translation? It could be the “pricier” stuff is just selling faster or there may be some market strengthening but at this inventory level we think condo prices still have room to rise.
One final statistic to watch for future predictions – foreclosure rates. Some of our volume is due to out court based system and bank abilities to speed up and slow down the process but it useful to look at this for a minute. Both cont and single family foreclosure rates increased slightly. Foreclosed condos are now 28 vs. 25 last month and foreclosed single family homes are now 50 vs. 45. Last we checked there were ZERO foreclosed condos west of US 41 (think Gulf of Mexico) and only 3 Single Family homes. Once again, location matters. So what? Well the foreclosure rate is pretty darn good right now so no hint of future slow down here.
Are we in a bubble? Here is a question we get a lot – especially with the equity market corrections this fall, a strong dollar knocking out some international buyers and a very iffy interest rate picture. Even with all that … we do not think we are in a real estate bubble here. Why? With short supplies, good “original price to sold price” ratios, and days on market at accelerating levels it is clear the market is solid and prices should continue to rise for a while. We will keep watching right along with you and check our early indicators but we think we are good for now.
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 volumes the market looks good for now.
Ok the big market is good but what about the numbers neighborhood by neighborhood ? All real estate is local – and this is especially true this month. Some neighborhoods are fighting higher inventories and we expect price pull backs while others are on a real price climb. We need to dive deeper into each neighborhood to understand real estate in this beautiful paradise we call Naples. Let’s go … Oh boy, more data!
Our first neighborhood stop is Olde Naples. Who doesn’t like the charm of this place But … is real estate selling at these prices? Yep. Inventories decreased here to 10.64 months tightening up the picture, firming up future price increase potential and improving over the last few months. Nice. Will high season beat back supply further? Probably.
Pelican Bay supplies at 8.81 months – good for price increases but the longer term trend is a little worrying. Pelican Bay has seen six straight months of 3 month trailing inventory increases. Nothing to be alarmed about. Price appreciation potential is there but Pelican Bay is no longer the red-hot area it was a last year.
Inventories at Windstar on Naples Bay increased dramatically to 40+ months as only two properties sold in the last 120 days. Some of this is the “law of small numbers” where just a small change makes a big difference but still, that is a lot of inventory. In my open house today in Lely some potential buyers of mine asked me where to go next – I gave them a lot o options but this is one area I would check out. Don’t forget to check out the golf greens and those fantastic club house renovations!
(Life at Windstar on Naples Bay can be pretty amazing)
The Crayton Road area continues to ease up with supply increasing to 6.36 months from 5.85 months last month. To give you an idea of the change here over the last several months there are only 229 properties available in this area – down from 368 properties only a year and half ago. Wow.
One area with tightening supplies and increasing price potential is Royal Harbor single family homes. Supplies here shrunk to 8.8 months from 10.86 months and no wonder – on water, single family homes, convenience to 5th ave new and an ever-increasing Naples “downtown” foot print there is a lot to like. Look for more price appreciation again in Royal Harbor.
(great restaurants abound with many new options this season)
Port Royal and Aqualane Shores inventories increased again to 20 months from 19.5 months – not what we want to see as we rise above the equilibrium point. So what? Well theoretically, prices should start pulling back at these levels. When people ask are people really buying properties at these prices? The answer is yes – in fact 16 properties sold in the last 120 days here. This is a fantastic community and season is likely to improve volumes.
Marco Island continues to soften as inventories rose to 11.2 months from 10.4 months but … even at these levels we should see slight price increases on Marco. Houses and condos may be less pricey on the island compared to Naples and boating, golf and tennis and that incredible beach offer a great lifestyle.
(take the short car ride down to Marco and don’t be afraid to tear one down and build your own place down there)
What we find continue to find interesting on Marco is the struggling 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. Inventories finally started to fall here to 42 months from 48 months and 6 properties in this price category sold in the last 120 days. Buyers be ready if you like the Island and you are looking for a great place. Sooner or later buyers are going to discover Marco Island 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.
(the new construction boys are busy but existing home sales are running along fine)
The big market dynamic of new construction continues. 20+ homes sold in one month at the Isles of Collier Preserve this summer. Consider all the new construction around town that is a lot of real estate selling in thirty days.
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 solid 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. Sellers of homes like this are competing with beautiful new construction and your neighbor’s well priced homes. Don’t get too greedy if you need to sell your home or you may be on the market for a while even in these good times. Don’t give it away of course but price it well and keep it in good condition to get on the 36 day “days-on-market+ trend.
(buyers better be ready to buy when well priced properties like this one come on the market)
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 (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. Speed wins here and the old adage “Time Kills All Deals” in full force in this seller’s market.
(The International Award Winning Naples Best Addresses Team at Coldwell Banker)
So … the hot market continues and prices should rise. You gotta love strong real estate markets as they trickle down earnings and wash over the whole community. 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
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 Count and The Naples Winter Wine Festival.
Some of the data related 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 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.