How’s The Naples Real Estate Market? Holding Its Own Through The Off Season and Equity Market Volatility

dish

(Stone Crab season is only two+ weeks away.  Yum).

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 here 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 14+% with single family homes out pacing condos slightly.  September – another so called “off season” month – saw 74% of “in season” peak volumes. Not much of a slow down from peak season trends.  Interesting.

The word on the street is season is again starting. Traffic is up and those restaurant reservations are starting to back up – particularly like the new hot places at Local, Charred and La Bazenne.

My friend Rich in his Austin Healey

(Season must be starting.  Some “way cool” cars are rolling off the trailers)

More growth against tight supply should continue to push prices up. Purchase volumes are running at in-season March levels – not bad. Supply levels slightly to 4.55 months from 4.13 months – a level very supportive of continued price increases.

1480 Curlew - Pool shot

(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. We have some concerns about world events, equity markets and weakening in some national real estate sub-markets but today’s combination of Naples short property supplies and strong purchase volumes holding through the summer we say prices will continue to rise for a while.
The inventory of existing homes is at 4.55 months. This is slightly weaker than last month’s 4.13 figure but far below the 12 month price equilibrium point. At 4.55 months we expect prices to rise – a lot.

260 Banyan Blvd Naples FL-large-001-2-front-1499x1000-72dpi

(well priced condos 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 table strongly again this month as “Original Prices to Sold Prices” were within 3.6% of asking price and tighter than last month’s 4% spread. Translation? Sellers are getting more and more of what they want.

In September we typically see some slow down in volumes as the market takes a breather from high season. The current 74%-of-peak pace is not much of a breather and we are surprised and pleased to see the summer market finish so strongly.  October will be interesting to watch.  Car traffic is still moderate, parking is easier but not much, churches are full and those new home construction trucks are seemingly everywhere.  I think more people are back early.

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” improved to 45 days from 46 days – not bad. Properties sales are still moving along nicely but they need to be priced right and in good condition.

1520 Curlew Boat In The Back

(Naples provides some great lifestyles – return from the Gulf Of Mexico to your back yard and walk over to the Naples Bay Resort for some Spa treatments and a nice meal)

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 3.99 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.

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.

Ok the big market is good but what about the numbers neighborhood by neighborhood ? All real estate is local – and this is especially true this month. 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 8.68 months from 6.94 months – better than last year but something to keep an eye on. Will high season beat back supply? Probably. Even at these inventory levels we still expect prices in Olde Naples.

Pelican Bay supplies are  the lowest we have seen in a long, long time. Anywhere. Supplies bounced back a little to 3.09 months but this is still an extremely low level. Buyers looking at Pelican Bay better be ready to make a very good offer right off the bat.

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(on water views are fetching bigger prices – like this beautiful on-water old Key West style home on Naples Bay)

Inventories at Windstar on Naples Bay rose to 5.09 months – far better than 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!

marina

(Life at Windstar on Naples Bay can be pretty amazing)

The Crayton Road area finally eased up after last month’s red hot showing. At 4.17 months we are up from 2.13 months and volumes pulled back.  To give you an idea of the change here over the last several months there are only 168 properties available in this area – down from 368 properties only a year and half ago. Wow.

The Royal Harbor area inventory of single family homes stands at at 9 months – up from last month but still supportive of price increases. Look for more price appreciation again in Royal Harbor.

IMG_0412

(custom on-water homes with master suites looking out on the water are in big demand in the Royal Harbor area right now)

Port Royal and Aqualane Shores inventories increased again to 17 months from 12.17 months – not what we want to see as we rise above the equilibrium point. So what? Well theoretically, prices should start pulling back at these 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 continues to soften as inventories rose to 7.62 months from 6.74 months but … even at these levels we should see price increases on Marco. 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.

IMG_0073

(take the short car ride down to Marco and don’t be afraid to tear one down and build our own place down there)

What we find interesting on Marco is the struggling 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 48 months inventory from 24+ months last month we should see falling prices. Buyers be ready if you like the Island and you are looking for a great place. Sooner or later buyers are going to discover Marco Island Luxury.

In addition to our monthly neighborhood analysis we would like to provide a few more points of view to help our sellers and buyers.

HFH House #2 (Plancher) B

(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. Consider all the new construction around town that is a lot of real estate selling in thirty days.

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 homes like this are competing with beautiful new construction and your 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 40 day “days-on-market+ trend.

260 Banyan Blvd Naples FL-large-008-9-patio-1499x1000-72dpi

(buyers better be ready to buy when well priced properties like this one come on the market)

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 (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 Naples Best Addresses Co-Founders 1:2015

(The International Award Winning Naples Best Addresses Team at Coldwell Banker)

So … the hot market continues and prices should rise. 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 http://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
Coldwell Banker
Mark Goebel, PA and Nan Goebel, PA
REALTOR Coldwell Banker 5th Avenue South
Mobile: 239.595.3921 239.595.3920
NaplesBestAddresses.com
Facebook: NaplesBestAddresses
Youtube http://www.youtube.com/user/naplesbestaddresses?feature=results_main

naples best addresses logo

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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 donate a portion of our real estate earnings to support the The Naples Botanical Garden, Habitat for Humanity Collier 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.

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