Posted on Saturday, February 28, 2015
(there are some strong numbers to report this month – catch this market if you can!)
Chase it if you can – the Naples real estate market continues on a rapid pace. In fact there are signs the market is actually accelerating as there remains strong support for further price increases.
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 snow flies, folks head south and the local farmer’s market booms)
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 are still short at 6.35 months and shrinking, volumes increased last month at a 20%+ annual rate, and prices over the last twelve months were up 20%+.
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 6.35 months. This is stronger than the 6.50 months figure last month and far below the 12 month price equilibrium point. At 6.35 months we expect prices to rise.
(buyers flock to this one at market introduction and we were under contract in days)
Will the buyers put up with these newer and higher prices? Maybe. We see some cracks in the armor of seller’s pricing as the “Original Price to Sold Price” ratios widened to 4.1% from 3.6% last month. Translation? Sellers are backing off their original prices somewhat and/or buyers are doing a better job negotiating. As we enter March – typically the hottest month of the real estate season – we may see this ration tighten up. We will see.
How long does it take to sell a place in this market? Well no change here from last month – 40 days on average. 40 days is 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 jump AGAIN by an unbelievable amount to $275,000 from $240,000. Readers will remember two months ago average condo prices were at $212,680. Are you kidding? That’s a 29%+ increase in two months or well over 100%+ annualized. Translation? We are in for a full doubling of condo prices this year at this pace. Wow. We will see if it holds.
(this country living home on 2+acres minutes from the Gulf of Mexico went under contract last month)
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. Other than a widening price-to-sold-price ratio we don’t see much yet.
(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 purchase volumes backed off 3%+ off an unbelievable 22+% jump last month while new offerings remained the same at 152 properties. Inventories climbed slightly as a result to 10.67 months but still sightly supportive of price increases.
Pelican Bay remains one of the strongest markets in Naples with an inventory plunging down to 5.11 months from 6.02 months last month. Purchase volumes increased 7% in a month! The least expensive single family home for sale in Pelican Bay is now over $1,000,000 – quite a milestone. In this month’s analysis Pelican Bay remains (again) the area most likely to see price increases in all the areas we track.
(on water views are fetching bigger prices – like this lake view close to the Gulf of Mexico)
More property went up for sale in Windstar on Naples Bay but purchase volumes increased even faster and inventories fell to 9.14 months from 11+months last month. With the buying resurgence (27% volume increase this month!) and supply tightening look for rising prices here.
We see a similar pattern in the Crayton Road area as supply levels dropped under 7+ months – a level very supportive of future price increases. Only 263 properties are available in this area – down from 368 properties only a year ago.
After some softening in prior months The Royal Harbor area bounced back significantly. Inventories were cut in half to twelve months and volumes rose 50% in a month! We are back to supply levels where we expect prices to move sideways for a while. It seems like the buyers saw the on-water market and higher inventories as a bargain and hit it hard.
(custom on-water homes like 1520 Curlew are going up to meet demand – talk to us about it )
The Golden Shores area is a very small market and single family homes are tough to find. The current supply level? Only 6 months and a level where we expect future price increases. The sister neighborhood of Oyster Bay to the north saw a home come on the market for $900 per square foot and quite a market increase. Readers will know this is where we are building our two new on water Key West and British West Indies homes. Interesting. Call us at 239.95.3921 and we will tell you about them.
Port Royal and Aqualane Shores inventories improved again to 14+ months from 16+ months showing more support for prices. Purchase volumes jumped 20%+ in a month. When people ask are people really buying properties at these prices? Lots without homes are going for $5,000,000+. The answer is yes – and increasingly so. If you want top end luxury living in Naples, Port Royal and Aqualane Shores are among the best.
This month we are adding Marco Island to our market watch. For our readers unfamiliar with the 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)
Looking at the total Marco Island market volumes popped 20% last month and inventories fell to 11 months plus. We are close to equilibrium here but some price increase is possible.
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 34 months supply here is very high – too high in fact – for a real estate market. We may see more supply increase as volumes last month fell 30%+. This is a market in transition and we expect falling prices. Falling prices for on water homes with great views. Buyers take note.
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 and better be ready to jump on the properties they like)
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.
(check out our ebook to better understand real estate here)
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 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.
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