Posted on Monday, March 30, 2015
(The International Award Winning Naples Best Addresses Team at Coldwell Banker)
Naples real estate prices are up 20%+ over last year, volumes in March accelerated 70% on an annualized basis and supplies fell below six months – a level very supportive of further price increases. The Naples market is on a roll in high season.
Readers of the blog will know we take a month end look at Naples real estate market trends – a very detailed look for all you analytics.
What’s the bottom line? Naples area prices were up in the metropolitan statistical area 20.7 percent according to Florida Realtors. Wow. That may be all we need to know. Read the full report at http://www.naplesnews.com/business/home-price-hot-streak-continues-in-naples-marco-island_62604934.
For all you detailed oriented folks read on.
(the northern winter was tough but life in the Naples sunshine was fantastic – a big factor in real estate here)
Let’s start with the numbers (All data comes from the Matrix MLS as of 2/28/15) and quite frankly they say the Naples real estate market continues to boom. Inventories shrank further this month to fall below 6 months to 5.83 months. Volumes increased last month at nearly a 70%+ annual rate, and prices over the last twelve months were up 20%+. Wow.
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 could always have a geopolitical event knock the market back but today in Naples the combination of short supply and strong purchase volumes say prices will continue to rise for a while.
The inventory of existing homes is at 5.83 months. This is stronger than the 6.35 months figure last month and far below the 12 month price equilibrium point. At 6.35 months we expect prices to rise.
(buyers flocked to this one at market introduction and we were under contract in days)
Will the buyers put up with these newer and higher prices? Yes for now. In a reversal from last month “Original Prices to Sold Prices” tightened to 3.8% from 4.1% last month. Translation? Sellers are having their way and buyers are paying closer to the original asking price.
As we enter April – typically the last month of the high season we will see what happens here. So far the sellers are winning.
How long does it take to sell a place in this market? Well a little longer than last month as buyers are becoming a little more choosy – 43 days on average vs. 40 days last month – but still darn fast. 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. Remember folks this is an average – and the days-on-market stat can vary widely by property, area and building.
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. This past month we saw condo prices FALL to $244,900 from $275,000 from $240,000. Translation? The condo market finally started to pull back and lower priced condos won the day.
(this country living home on 2+acres minutes from the Gulf of Mexico went under contract is now set to close)
Do not think the condo market is falling apart. It could be lower priced units are just selling fast right now. For example the supply of condos fell to 4.77 month – more scarce than single family homes and a level we would expect more price increases.
Staying with the condo story we had a conversation with an experienced condo flipper last month anticipating the same sort of price jumps through the summer. She must be happy. She may have made 29%+ over the last two months while working on her latest project – that’s cash on cash folks, no leverage!
Ok so condo price behavior – a good leading indicator – says we are ok for now.
The market is moving along nicely but are we in a bubble? This is a question we get a lot – in fact I heard it on the tennis courts again this week. We do not think we are in a bubble. With short supplies, good “original price to sold price” ratios, days on market at OK levels and condo prices rising it is clear the market is again strengthening and prices should continue to rise for a while. Will the party end one day? Of course. 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 volume increases the market looks great for now.
(the condo market is booming and headed for a possible price doubling – we will see)
Ok the big market is good but what about the numbers neighborhood by neighborhood ? All real estate is local and we are talking about averages in the big market. We need to dive deeper into each neighborhood to understand this beautiful paradise we call Naples. Oh boy, more data!
Our first neighborhood stop is Old Naples. This month’s story is the rapid decrease in supply in the last few days of the month as inventories fell to 8+ months – building on a strengthening story from two months ago. Look for more price increases here.
Pelican Bay supplies are quite frankly the lowest we have seen in a long, long time – 3.8 months. Prices should push up strongly from here. Purchase volumes increased 15%+ in a month! You would think with the recent price run up buyers would start to shy away – instead they rushed in even faster.
(on water views are fetching bigger prices – like this beautiful on-water old Key West style home on Naples Bay)
Windstar on Naples Bay also showed a big improvement as supplies fell to less than six months and volumes increased 14% in a single month – wow. Even with new development in the area the resale market in Windstar should see further price appreciation.
The Crayton Road area saw a 20%+ increase in volumes in the month as supplies dropped further. Look for more price appreciation here as well as supply levels dropped under 6+ months – a level very supportive of future price increases. Only 256 properties are available in this area – down from 368 properties only a year ago.
The Royal Harbor area is the come back area of the month. readers will recall this area bounced back significantly last month as inventories were cut in half to twelve months and volumes rose 50% in a month! This month it happened again. Inventories were cut in half again to 6.9 months as buyer poured into the area. Look for more price appreciation again in Royal Harbor.
Port Royal and Aqualane Shores inventories slumped to 15+ months showing some downward pressure on prices. Purchase volumes dropped 8% in a month. When people ask are people really buying properties at these prices? Empty lots without homes are going for $5,000,000+. The answer is yes people are paying theses prices. If you want top-of-the-line luxury living in Naples, Port Royal and Aqualane Shores are among the best.
Marco Island also saw a solid market this month with purchase volumes rising 9%+ and inventories falling to 10 months. We expect prices to move sideways here for a while with some slight support for price increase. For our readers unfamiliar with the Marco Island area why not take a drive down there and take a look. When you cross over the Big Marco River on the Jolly Bridge (named for a judge not a feeling but I like the irony) and descend to the island you will love the local feel. Houses and condos can be less pricey here and boating, golf and tennis and that incredible beach offer a great lifestyle.
(man and dog alike enjoy taking the boat down to Marco Island – but drive if you must)
What we find interesting on Marco is the 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. At 21 months supply there is a lot on the market – but a big improvement over the 34 months supply figure of last month. Volumes rebounded this month into strong positive territory over last month’s decline.
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 continue to strengthen)
The big market dynamic of new construction continues. 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 falling 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. You are competing with beautiful new construction and your neighbor’s well priced 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. Price it well and keep it in good condition and get on the 40 day “days-on-market+ trend.
(buyers better be ready to buy when well priced properties come on the market – a master bedroom view of the water)
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.
So … the hot market continues and prices should continue to rise but each sub-market (neighborhood and condo building) are starting to differ more widely. You gotta love boom times! A welcome change from the recent past!
I hope you have an opportunity to visit or live in Naples or Marco Island. If you would like to know more about living here just give us a call at 239.595.3921.
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.
We look forward to meeting and talking 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
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.