May Real Estate Market Stays a Steady Course
Naples, Fla. (June 20, 2014) – The housing market momentum continues to remain strong heading into summer. NABOR® leaders cite four key indicators: 1) Pending sales are up; 2) Closed sales are up; 3) Median closed prices are up; and 4) Days on the market have decreased. Activity for the 12-months ending May 31st reflects consumer confidence in the Naples area real estate market.
In a report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), overall pending sales increased 2 percent year-over-year from 10,723 to 10,905 pending sales in the 12-months ending May 2014, overall closed sales increased 3 percent year-over-year from 9,447 properties to 9,739 properties in the 12-months ending May 2014, and the overall median closed price rose a comfortable 15 percent overall year-over-year from $220,000 to $253,000 in the 12-months ending May 2014. This slow and steady growth trend contributes to the stability factor in our local real estate market.
“May is what Realtors consider a transitional month,” said Mike Hughes, Vice President and General Manager of Downing-Frye Realty. “Seasonal residents are leaving town and the international visitors haven’t arrived yet. It’s not surprising that overall pending and closed sales were down compared to last May due to restricted inventory this year. But over a thousand sales took place in May which is still quite significant.”
“An inventory shortage usually drives down pending home sales,” said Glenn Ginsberg, Broker/Owner of A Delta Realty of Naples, Inc. “For May, a 2 percent increase in overall pending sales is very good considering inventory decreased 8 percent.”
According to the report, May’s inventory was the lowest it’s been since NABOR® started tracking activity in 2007. But the decrease is mainly in the condominium market where inventory decreased 19 percent from 2,294 units in May 2013 to 1,850 units in May 2014. Inventory in the single family home market actually increased 5 percent from 1,968 in May 2013 to 2,069 in May 2014. New home construction is helping to relieve the inventory pressure and moderate price gains, according to NABOR® analysts.
“Brokerages are seeing a significant increase in new construction,” said Brenda Fioretti, Managing Broker at Berkshire Hathaway HomeServices Florida Realty. “And Realtors are involved in new construction sales. Agents have access to all new properties and can present a comparative and objective view to homebuyers.”
Another positive indicator that the Naples area real estate market is balanced was pointed out by Dr. Lawrence Yun, PhD, Chief Economist National Association of Realtors® (NAR®), at NABOR®’s annual Economic Summit in April 2014, where he stated that a market becomes stable when its non-traditional (short-sale or foreclosed homes) sales activity remains under 10 percent. For the second month in a row, non-traditional closed sales in the Naples area are 9 percent of the total closed sales.
The NABOR® May 2014 Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR® May 2014 sales statistics are presented in chart format, including these overall (single-family and condominium) findings:
- Closed sales for single-family homes in the $2 million and above market increased 73 percent from 22 in May 2013 to 38 in May 2014.
- Closed sales for condominiums in the $2 million and above market increased 123 percent from 13 in May 2013 to 29 in May 2014.
- The overall median closed price of homes $300,000 and under increased 13 percent from $150,000 in the 12-months ending May 2013 to $170,000 in the 12-months ending May 2014.
- The median closed price for condominiums in the $2 million and above market increased 5 percent from $2,770,000 in the 12-months ending May 2013 to $2,900,000 in the 12-months ending May 2014.
- The overall average days on market are at 96 for May 2014.
- Overall pending sales increased 34 percent for homes $2 million and above from 41 contracts in May 2013 to 55 contracts in May of 2014.
- Overall inventory decreased 8 percent from 4,262 units in May 2013 to 3,919 units in May 2014.
- Overall inventory for properties under $300,000 decreased 18 percent from 1,761 units in May 2013 to 1,448 units in May 2014.
- Inventory of single family homes in the $300,000 – $500,000 price segment increased 15 percent from 438 homes in May 2013 to 502 homes in May 2014.
Analysts at NABOR® explain that the ongoing activity in the high-end of the market every month is in part a result of continued stock market gains which, coupled with continued low mortgage interest rates, is boosting consumer confidence in investing in the housing marketing and allows a good climate for diversification in real estate investment.
According to Pat Pitocchi, NABOR® president and corporate trainer at Downing-Frye Realty, “This is a great time to buy or sell a home in Naples. The influx of new construction is finally helping the market fill a void where demand is outpacing inventory. But even with nearly 30 new communities being developed in our area, the average days on market in May was at 96 days. So homeowners looking to sell are still at an advantage.”
“Real estate agents have access to all homes for sale,” says Steve Barker, Advising Broker for Equity Realty. “In fact, a large percentage of the newly constructed homes in those 30 developments are being sold by independent Realtors.”
Working with a REALTOR® can benefit both buyers and sellers. While anyone can search the local housing market online, only a REALTOR® has the experience to know whether a specific property is overpriced or underpriced. REALTORS® also provide objective insight into factors that affect the contractual process including things like repairs, appraisals, fees, negotiations, and financing.