Posted on Sunday, October 25, 2015
(Sold prices for beautiful new construction on-water properties are rising rapidly)
Prices are up 19.23% over the last twelve months here in Naples. Maybe I should stop writing the blog right now and just get back out there! 19%+ price increases in twelve months are big news no matter where you live.
Three hundred new properties hit the market this month providing welcome relief to buyers out shopping as returning residents and locals put their place up for sale. With inventories still short at five+ months and volumes strong we expect prices to rise in the next few months in Naples.
After several months of “off season” summer weather and the continuing wild ride in global financial markets you would think the Naples real estate market might take a breather – not so fast. Most sub markets 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 19.23% with condos out pacing single family homes slightly. October – the last of the so-called “off season” months saw stronger volumes than last year. So before I just move on isn’t that amazing? The US equity markets are barely up, we will not mention international markets and yet the sunny Naples real estate market is booming right now.
The word on the street is we are going to see a big season again. Hotel bookings are up, traffic is up and home builders and investors are having trouble finding enough subs to build.
(Season must be starting. Some “way cool” cars are rolling off the trailers. This beauty is getting a rebuild to be ready for the Naples car show this season. Looks pretty darn good right now.)
More growth against tight supply should continue to push prices up. Purchase volumes are running at February, in-season levels – not bad. Supply levels are up slightly again this month to 5.26 months from 4.55 months supply last month – still a level very supportive of continued price increases.
(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 as strong volumes continue to work across short supplies.
(well priced condos with space for visiting kids 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 plate strongly again this month as “Original Prices to Sold Prices” were within 3.6% of asking price – the same tight level as last month so no weak knees here.
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.
Average property “selling speed” held at 45 days – another sign the market is holding together very well. 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 get out and enjoy the Naples night life)
We took a look at our own Naples Best Addresses selling records this month and found properties listed with us are 25%+ more likely to sell than the market average – further proof our marketing methods are working and we are good at property pricing. If you are thinking of selling why not talk with us and let us take a look at the potential of your place in this market?
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 fall slightly and inventories rose to 4.7 months. Translation? It could be the “cheaper” stuff is just selling faster or there may be some market weakening but at this inventory level we think condo prices still have room to rise. This is the second month in this pattern so let’s keep an eye on it. So far the canary is still singing.
Are we in a bubble? Here is a question we get a lot – especially with the equity market corrections. 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 OK 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.
Watch your neighborhood trends! If there ever was a time in the Naples real estate market to watch trends street by street this is it. Readers of the blog will know we are starting to see big divergences in sub market performances.
What does this mean? Some of the markets we track have only four months inventory and should see big price jumps in the months ahead. However two of the areas we track have multi-year supplies and should see price drops. Most neighborhoods are beating last year’s results but a few are showing strain. 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. Inventories rose here to 10.7 months from 8.68 months approaching that 12 month equilibrium point but not yet. Will high season beat back supply? Probably. Even at these inventory levels we still expect prices to climb in Olde Naples.
Pelican Bay supplies are finally coming back to reality now up to 5+ months but still very supportive of price increases. Buyers looking at Pelican Bay better be ready to make a very good offer right off the bat.
(on water views are fetching bigger prices – like this beautiful on-water old Key West style home on Naples Bay we sold two weeks ago)
Inventories at Windstar on Naples Bay rose to 9 months+ – a lot like last year’s 8 month level. Things are popping here even with new developments offering new construction right next door. 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 is still running red-hot showing 4.77 months after last month’s 4.17 months showing. To give you an idea of the change here over the last several months there are only 180 properties available in this area – down from 368 properties only a year and half ago. Wow.
The Royal Harbor area is warming up again as we saw inventories tighten to 8 months from 9 months. Look for more price appreciation again in Royal Harbor.
(our condo options right now are very appealing – beautiful entrances in the middle of a small town mini community with movie theaters and popcorn stands – all in the year round Florida sun)
Port Royal and Aqualane Shores inventories improved slightly to 16+ months from 17 months but this is too high to support prices and we should see price decreases. If you do not believe start at 2nd street at 5th ave south and drive south and start counting the for sale signs on both sides of the street. So what? Well theoretically, prices should start pulling back at these supply levels. When people ask are people really buying properties at these prices? The answer is yes people are paying but in decreasing numbers. Maybe season will turn things around here.
Marco Island saw the fourth straight month of waking with inventories now up to 8 + months. We should see price increases here but in slowing amounts. 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 check out the crab boats working the stone crab season)
We still find the Marco market interesting in 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. Rising to 55 months from 48 months inventory we should see falling prices – we are four times the theoretical market equilibrium. Buyers who like to haggle with sellers might find some room in Marco luxury right now.
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. 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 over priced are competing with beautiful new construction and their 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 45 day “days-on-market+ trend.
(buyers better be ready to buy when well priced properties like this one come on the market – we put this beautiful place under contract in four days)
Buyers in this market better be ready when they find a “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 Sterling Award Winning Naples Best Addresses Team at Coldwell Banker)
So … the hot market continues – prices up 19% in one year, are you kidding me!? You gotta love strong real estate markets as they benefit tradesmen, real estate professionals and property owners alike – and yes trickle down earnings do 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
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.