Naples Best Addresses
June 2013 Newsletter
Summertime in Naples is a favorite time of year of ours. The waters are warm, the sunsets are spectacular, and the upcoming fireworks at Naples pier are wonderful, whether you watch them from the land or the sea. Naples is truly a year round paradise.
Could An Inventory Shortage Slow Down The Naples Real Estate Market?
In a word, yes. A simple study of supply and demand in a market tells us supply shortages will drive up prices until some new equilibrium is reached . A good way to view this in real estate is to look at the “days in inventory” figure and compare it to price trends and volume trends (take note of the word trends here). So … let’s take a look.
Supply has decreased. Looking at the Naples, Florida marketplace one of the first to decline in the downturn and one of the first to bounce back we see all of these forces at work. Supply, or days in inventory, has decreased to 5.28 months tightening up the market from supply levels above one year or more in recent months (all data sources from Sunshine MLS for the “All Naples Area where we see this morning 4,091 properties for sale, 9,296 sold in the last year, giving 5.28 months inventory).
Prices have not increased however. The supply tightening in Naples, Florida drove up prices in the last few months as volumes held even or increased. But what about this morning? Well prices are starting to hold even. The average price (Sunshine MLS again) remains around $500,000. We did not see another price jump in June even as supply remain low.
Volumes are dropping. Look no further than volume behavior to explain the price stall in a constrained market. Sold listings dropped from 1050 to 800, new listings dropped from 900 to 850 and pending sales dropped from 1100 to 950 – all Sunshine MLS data for June.
Feels like choking to me. Supply is down but decreasing volumes tells us the market is not accepting the past price increases and prices have stalled. What else could be at work here?
It could be the summer off season is slowing the market but this was not the case last year.
Could it be the rise in interest rates? Partially but the interest rate increases arrived late in June – too late to significantly impact the numbers and a short term an interest rate climb can motivate buyers to move feeling they better jump in before further increases.
Ask those of us working on the ground here in Naples with buyers day to day and they will tell you a lot buyers are finding little to chose from that meets their criteria (price just being one) and they are biding their time waiting for new properties to come on the market.
So what? Well the so what is if you are a seller you may start finding it tough to sell again. How can this be in a tight market? Well with volumes dropping, prices may have run past the buyer’s budgets so make sure you are priced right for your location and condition. If you are a buyer you are going to need to be flexible as there is less to chose from and prices are up. Be ready to buy quickly if that perfect place shows up (pre-approval, quick decisions) as multiple offers are likely present for desirable property.
New construction in Windstar on Naples Bay
As we have also been reporting, there is new construction popping up all over town as demand for Naples continues to grow. A new development of 64 carriage homes has been approved at Windstar. The new properties will abut Haldeman Creek and will have a kayak storage and launch area. These properties should be breaking ground by January to be ready in 2014. Please contact us if you would like more information.
Another Tax Break For Florida – Florida Homestead Law Now Allows Rentals
In the past, if you declared a homestead exemption, you were not allowed to rent out your home. For communities that host national sporting events, this was a problem for homeowners who would like to rent out their property for a week.
Starting this month, however, property owners may rent their homesteads for up to 30 days every year without jeopardizing their homestead exemption. However, they lose the protection of this safe harbor if they rent their property more than 30 days per year for two consecutive years. The law is still unclear regarding how many days beyond the 30-day safe harbor period one can rent in a single year without triggering abandonment of homestead. This is good news for homeowners in FL.
As we move into the Fourth of July let us never forget the men and women who gave the ultimate sacrifice so that we may truly be free. And many, many thanks to those who serve – especially in our family – who stand on the wall for us this day.
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All the best,
Nan Goebel, PA
Coldwell Banker RE
Mark Goebel, PA
Coldwell Banker Real Estate
If you are currently working with a Realtor, this is not a solicitation.
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Nan Goebel | Coldwell Banker RE | 550 5th Ave S | Naples | FL | 34102