Posted on Wednesday, November 26, 2014
Here we are at Thanksgiving and November month end so let’s take a look at the Naples real estate market. How’s the market? We will break it down by neighborhood for you but the very short story is the market is strong and growing stronger. We expect prices to continue to rise.
Why is the Naples market so strong? Supply and demand for starters. The inventory of existing homes fell this month to 5.68 months – far below the 12 month equilibrium point. At this supply level we expect prices to rise.
Will the buyers put up with these prices? Yes, so far. Actual volumes increased 4.53% IN A MONTH and the closed price to asking price relationship stayed right at 96% again. If the buyers were growing shy we would expect this ratio to widen. So far the ratio remains stable.
Furthermore the average days on market for a property dropped to 37 days. So property is moving more quickly. Well priced properties in good condition still fly off the shelves, sometimes with multiple offers as supply remains tight. One of our clients saw an offer in one day from first listing recently.
The market is flying along but are we in a bubble? We do not think so. With volumes increasing and days on market dropping buyers still support this market. Florida is growing in population, credit (although cheap) is somewhat tight and our favorite leading bust indicator is looking good. What leading indicator? Condo prices. Condo prices are the canary in the mine signaling a future drop. Condo prices dropped almost a full year BEFORE the last big bust. What are Condo prices doing now? This month condo prices were flat against last month’s prices and just over $200K – well below the $400K+ prices before the last bust. Good so far.
Ok the big market is good but let’s look at the numbers neighborhood by neighborhood and better understand our market in detail in this beautiful paradise we call Naples. All data comes from the Matrix MLS as of 11/26/14.
Before we start remember twelve months inventory is the historic market equilibrium meaning inventories below this number should cause prices to rise and inventory levels above twelve months should put downward pressure on prices. Supply and Demand. Easy stuff really.
Our first neighborhood stop is Old Naples. This month volumes dropped a bit and inventories climbed to 10+ months in Old Months. This follows a similar softening from last month. We see some support for price increases here but demand may be backing off.
Pelican Bay is a different story. Here inventories remain very tight at 5.85 months and very supportive of price increases. You can tell from these figures Pelican Bay remains one of the strongest real estate markets right now in Naples.
Windstar on Naples Bay showed the biggest improvement in our tracking this month with volumes doubling and inventories dropping 28% to 7+ months. At these levels we should expect rising prices here. New construction within Windstar in the new Regatta Landing neighborhood and nearby at the Isles of Collier Preserve do not seem to be impacting performance here.
Crayton Road area inventories fell to 6+ months on good volume increases showing this area is strengthening. We expect strong support for price increases here.
The Royal Harbor area has finally exceeded equilibrium at 14+ months so we should start to see some downward price pressure – although nearby neighborhoods of Oyster Bay and Golden Shores are going along ok. It could be the pace of house flipping and spec home building has finally caught up to the market here.
Golden Shores area is a very small market but inventories dropped to four months – very supportive of price increases. Readers will know this is where we are building our two new on water Key West and British West Indies homes. In fact, after recent sales last month our two new homes are the ONLY HOMES FOR SALE in Oyster Bay. Interesting. Call us at 239.95.3921 and we will tell you about them.
Now the last time I commented on the next two areas we ended up in the Naples News and some homeowners took some offense, but … Port Royal and Aqualane Shores inventories increased to 14 months from 12 months in October and come November we are still at 14+ months. We expect some downward price pressures here. Sorry folks, numbers are numbers.
The good news in Port Royal and Aqualane Shores is the volume decrease is very small over last month and these two areas hold some of the finest homes in the country. If you want top end luxury living in Naples these areas are two good options.
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 big market dynamic of new construction is finally here. 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, and three months of slow season, resale inventories are only at 5 months. Wow. Can you imagine what season will do to prices here as increasing volumes move against a tight pre-existing home market? Get ready for continued price increases folks.￼
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 a recent price run up on pre-existing 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.
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. Well priced properties in good condition are selling very fast in this market.
So … the hot market continues and prices should continue to rise. A welcome change from the recent past!
Follow along with us as we are adding two more to our favorites next week!
Please give us a call and catch up with us. We would be pleased to help you look at these properties or other offerings. We have toured or owned property in Naples for nearly forty years. We are fortunate to call this wonderful paradise our full-time home
Want to know more about living in Naples, Florida? We have toured and owned property in Naples for thirty eight years and know we can help you out. Please give us a call at 239.595.3921. Also consider reading our book “Understanding Naples Real Estate” to get you started on your real estate search https://www.naplesbestaddresses.com/offer/ or just give us a call about things to do here.
Hope to meet and talk with you soon,
Mark Goebel PA, Nan Goebel PA and David Goebel, PA
Co-Founders of the Naples Best Addresses team
Mark Goebel, PA and Nan Goebel, PA and Dave Goebel
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 County, The Race For The Cure Citrus Ride, The Seacrest Country Day School and The Naples Winter Wine Festival. Some of the data relating 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. Talk to Mark and Nan 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.