Posted on Friday, January 30, 2015
(Past market monsters seem well handled at the current time)
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 detail oriented folks read on.
(the walls go up on a new Naples home)
Let’s start with the numbers (All data comes from the Matrix MLS as of 12/29/14) and quite frankly they say the Naples real estate market continues to boom. Inventories are still short, volumes increased last month at a 10%+ 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 world or national event to knock it 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 6.5 months. This is somewhat softer than the 6.25 months figure last month but still far below the 12 month price equilibrium point. At 6.5 months we expect prices to rise.
Will the buyers put up with these newer and higher prices? Yes, so far. In fact buyers seem to warming up to the idea. “Original Price to Sold Price” ratios tightened to 3.6% from 3.9% last month. Translation? Sellers are getting what they want and more so. Buyers are paying amounts closer and closer to the seller’s asking price. If the buyers were growing shy we would expect the “original price to sold price” ratio to widen along with a volume drop but we see no signs of these things yet.
One concerning sign for the seller’s to note however – property is staying on the market longer. The average days-on-market for a property climbed to 40 days from 34 days so property is moving slightly more slowly. Still 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. Days on market is something to keep an eye on.
Another sign to watch – condo prices. Remember during the last bust condo prices dropped almost a full year BEFORE the single family home bust. This past month we saw condo price jump an unbelievable amount to $240,000 from $212,680. Wow. That is a lot in a month. Additionally a conversation we had with a condo flipper this morning is anticipating the same sort of price jumps through the summer. 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? We do not think so. 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.
(new construction is booming)
Ok the big market is good but let’s look at the numbers neighborhood by neighborhood and better understand our market in detail in this beautiful paradise we call Naples.
Before we start remember all real estate is local – like real local. Prices and trends differ by neighborhood, street and condo building. You really need the next level detail to understand the smaller markets so here we go. Oh boy, more data!
(Saturday Market in Old Naples)
Our first neighborhood stop is Old Naples. This month purchase volume jumped an unbelievable 22+% while new offerings increased only 9+% knocking inventories back down to pre-Christmas levels of 10 months. All of this means more support for more modest to slight price increases.
Pelican Bay remains very strong with an inventory of only 6.02 months. In the last month we saw purchase volume increase 17% and new offerings only 14% so more supply tightening here. 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.
More property went up for sale in Windstar on Naples Bay and supply levels rose to 11+months. We are approaching price stability here (prices move neither up or down) and we are interested to see how the new Regatta Landing and near-by Isles of Colliers Preserve impact Windstar pricing. We expect a steady and stable price pattern here for the next few months.
We see a similar pattern in the Crayton Road area as supply levels climbed slightly to 7+ months – a level very supportive of future price increases. Only 271 properties are available in this area – down quite a bit from last year.
The Royal Harbor area continues to see softening in the single family home market. Inventories climbed for the third month in a row to 20+ months supply – a level where expect to see future price decreases. Much will depend though on the new home/old home market. We expect new construction to continue to do just fine here but old homes to struggle. Flippers may want to watch for a price drop on the older homes if this continues.
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 slightly to 16+ months but remain at a level where we expect downward price pressures here. If you want top end luxury living in Naples these two areas are among the best.
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 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, and three months of slow season, resale inventories are only at 6+ months and very supportive of further price increases.
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.
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. If you would like to know more about living here just give us a call.
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
Coldwell Banker
Mark Goebel, PA and Nan Goebel, PA
REALTOR Coldwell Banker 5th Avenue South
Mobile: 239.595.3921 239.595.3920
NaplesBestAddresses.com
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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 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.
