Posted on Saturday, August 29, 2015
(Summer days in Naples can be pretty sweet – The Lady Chadwick on Barrier Island waters)
After a wild ride in the US equity market this week and tropical storm Erica on the way, we find the Naples real estate market still booming. 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 18%+. This month in the so called “off season” we volumes still running 82% of “in season” peak – unbelievable really. No summer doldrums here. Another local and I were remembering the days when fifth avenue shops would actually close for the summer. No longer.
More growth against tight supply should continue to push prices up. Purchase volumes dropped back to May levels this month and supplies increased slightly to 4.13 months – 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 will know we take a look at Naples real estate market trends at month end – 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 4.13 months. This is slightly weaker than last month but far below the 12 month price equilibrium point. At 4.13 months we expect prices to rise – a lot.
(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 4% – about the same as last month. Translation? Sellers are getting what they want.
In August we typically see some slow down as the market takes a breather from high season. The current 82%-of-peak pace is not much of a breather and we are surprised and pleased to see the summer market so strong. September 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 staying longer – or in fact year round.
This is a great time to sell as serious buyers remain in the market and many parents look for new homes before the start of the school year. Buyers love the fact homes are more accessible with the decrease in floor traffic. Get out there and take a look – so far the sellers are still winning in this market with tight close to ask ratios and low inventories.
Property “selling speed” at 46 days on market is slightly slower than last month but not bad. Properties sales are still moving along nicely.
(summer is a great lifestyle here in Naples – the local lobster season is filling the tables (source: wiki images)
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 to $235,000 from $258,000 and inventories rose to 3.42 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.
The market is moving along nicely but are we in a bubble? This is a question we get a lot – especially when the equity markets fell out of bed last week. We do not think we are in a real estate bubble here. 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. 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 – as readers of our blog know very well – and all we talked about so far are averages in the big market. We need to dive deeper into each neighborhood to understand this beautiful paradise we call Naples. Let’s go … Oh boy, more data!
Our first neighborhood stop is Olde Naples. Inventories rose here to 6.94 months – about where we left it last April. At these levels we still expect prices in Olde Naples.
Pelican Bay supplies are quite frankly the lowest we have seen in a long, long time. Anywhere. Supplies bounced back a little to 2.09 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.
(on water views are fetching bigger prices – like this beautiful on-water old Key West style home on Naples Bay)
Windstar on Naples Bay continued its strong showing as inventories stayed near the 2.35 month level with only 10 properties available – down from 32 properties just five months ago. Things are popping here even with new developments offering new construction right next door.
(Life at Windstar on Naples Bay can be pretty amazing)
The Crayton Road area beat the overall trend and saw inventories tighten further to 2.13 months on accelerating volumes – a very impressive performance in August. Could this be the next “hot” area passing up Pelican Bay for top prize right now? We will see. To give you any idea of the change here over the last several months there are only 201 properties available in this area – down from 368 properties only a year ago.
The Royal Harbor area inventory of single family homes stands at at 4.33 months – up slightly from last month but still at a level very supportive of price increases. Look for more price appreciation again in Royal Harbor.
(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 to 12.17 months. At this inventory level we expect prices to hold level here – still a good market and good support. When people ask are people really buying properties at these prices? The answer is yes people are paying theses prices. We attended a wonderful evening function at a private residence on Rum Row last week – If you want top-of-the-line luxury living in Naples, Port Royal and Aqualane Shores are among the best.
Marco Island held even this month with inventories staying around 6.74 months. We should start to see price increases on Marco. For our readers unfamiliar with the Marco Island 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 may be less pricey and boating, golf and tennis and that incredible beach offer a great lifestyle.
(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 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 24+ months supply we expect price decreases here. Sooner or later the buyers are going to discover Marco 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.
(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 better be ready to buy when well priced properties come on the market)
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.
(The International Award Winning Naples Best Addresses Team at Coldwell Banker)
So … the hot market continues and prices should continue to rise. You gotta love boom times! 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
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
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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 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.
