July Home Sales Hit the Sweet Spot

Naples, Fla. (August 25, 2017) – REALTORS® in Naples sold more existing homes in July (682) than they did in January (603) or February (613), a statistical reality that busts an old myth that home sales stall in the summer. In fact, overall closed sales in the market’s sweet spot (homes priced between $300,000 and $500,000) increased 32 percent in July. Broker analysts reviewing the July 2017 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which track home listings and sales within Collier County (excluding Marco Island), said a 9 percent increase in closed sales during July was very good, but the continued reduction of inventory, especially in the single-family home market, is cause for concern as it limits choices for buyers.

One segment of the market that brokers are watching closely is the $300,000 and below single-family home market, which saw pending sales decrease 24 percent, closed sales decrease 19 percent, and inventory decrease 2 percent in July. In fact, the entire single-family home market is getting stretched thin as inventory tightens. In July, inventory rose just 3 percent overall, but single family home inventory decreased 1 percent.

Bill Coffey, Broker Manager of Amerivest Realty Naples, pointed out, “The July report showed the median closed price for homes under $300,000 was the highest since 2008. However, the median closed price for homes over $300,000 was the lowest reported in 9 years!”

According to the report, overall median closed prices in July increased 6 percent to $319,000 from $300,000 in July 2016. For homes in the $300,000 and below price category, the median closed price increased only 3 percent to $225,000 from $219,000 in July 2016. And for homes above $300,000, the median closed price decreased 7 percent to $485,000 from $524,000 in July 2016.

Many broker analysts reviewing the July report agreed that an increase in conventional sales (homes purchased with financing) is a good sign that first-time homebuyers are gaining a foothold in the market. As such, the July Market Report showed total closed sales were split almost equally between cash sales and conventional sales.

Kathy Zorn, broker/owner, Better Homes and Gardens Real Estate Pristine, said she is optimistic that the third quarter closed sales will finish ahead of the second quarter, and pointed to activity in the $500,000 to $1 million price category, which saw the overall pending sales increase 44 percent in July from July 2016. “The median closed price went down 16 percent for condos in this $500,000 to $1 million price category. I believe this is a reflection of smart pricing strategies finally taking hold.”

For months, broker analysts and NABOR® have warned against setting unrealistic pricing, a strategy that Dominic Pallini, NABOR® President and Broker at Vanderbilt Realty, said can “hurt a homebuyer because a home is often overlooked if it’s overpriced.”

High prices are a strategy that can work in an accelerating market, but it’s risky. A home might sit for months without an offer and sellers typically end up marking the price down, perhaps lower than it should have sold for in the first place. A licensed REALTOR® uses real-time MLS data that can help a seller hit the sweet spot when setting the listing price: a price that’s high enough to reflect the home’s value, but attractive enough to gain buyer attention and get it sold quickly.

Another segment that brokers are watching closely is the number of days on the market it takes for a property to sell, which is on the rise and hit 105 days in July. One reason for this could be cosmetic. According to Brenda Fioretti, Managing Broker at Berkshire Hathaway HomeServices Florida Realty, “Many homebuyers are looking for a coastal, contemporary look, not the Mediterranean or Tuscan look that dominates much of the existing home market and appears dated. Sellers must either consider making renovations to meet the light, coastal look buyers want or reducing the home’s price in order to stay competitive with the new construction product that reflects this new coastal, contemporary style.”

Geographically, pending and closed sales activity in South Naples in July outperformed all other areas, showing a 36 and 35 percent increase, respectively. With respect to property type, single-family homes in North Naples saw the most impressive activity in its pending and closed sales (23 and 45 percent, respectively); possibly as a result of a 14 percent decrease in its median closed price and a 3 percent decrease in its inventory.

“Because inventory dropped 1 percent in the single-family home market in July, this may be the first sign that we are not far from a shift in the market,” said Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll & Carroll, Inc., who went on to add, “the housing market is cyclical, and the rate of inventory increase has been trending down since December. If this behavior continues and we go below our lowest inventory point (3,563), which was in July 2014, I predict we’ll shift from a buyer’s to a seller’s market and probably start to see prices increase again.”

If you are weighing the pros and cons of buying or selling a home in the coming months, let The Wakelin Realty Team of Amerivest be your guide. We can help you do a market comparison and determine a fair and reasonable listing price. We can also identify properties best suited for your needs and negotiate a purchase price that fits your budget.

May Shines for Naples

Naples, Fla. (June 16, 2017) – Overall closed sales of homes in May shined brighter than any other month previously reported in 2017, with an impressive 23 percent increase to 1,027 closed sales in May 2017 from 838 closed sales in May 2016. Likewise, overall pending sales (homes under contract) also outperformed activity reported in the last four months. Leading broker analysts who reviewed the May 2017 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), are quite confident that real estate agents will be very busy this summer.

“If May’s momentum continues, this year will turn out better than last year,” said Mike Hughes, Vice President and General Manager for Downing-Frye Realty, Inc. “Home sales during the summer months have become stronger over the past few years. We are no longer seeing a huge disparity in activity between winter and summer like we once did.”

One familiar obstacle summer buyers will face again this year is a reduction in available inventory. Whereas the market saw a 26 percent increase in inventory in January 2017 to 6,393 homes from 5,091 in January 2016, the May report showed only a 4 percent increase to 5,404 homes in May 2017 from 5,207 homes in May 2016. Inventory increases are leveling off. Many broker analysts who track activity on a daily basis report that they have witnessed upwards of 900 listings disappear from the Southwest Florida MLS since May 1st.

“This type of behavior is short sighted,” said Hughes. “Those who let a listing expire at the end of our winter season are missing a huge opportunity to sell their property during the summer months.” Hughes added that our area attracts a variety of buyers during the summer such as international travelers, families from Northern states, and those relocating from other parts of Florida.

Comparatively, the overall median closed price decreased 8 percent in January, while the May report showed an increase of 5 percent to $355,000 in May 2017 from $338,000 in May 2016. Incidentally, January’s median closed price was $314,000. If the logic behind removing a listing at the end of season is based on old beliefs that a property will obtain a higher sale price during the winter months, then sellers need to examine the May statistics more closely. According to NABOR reports, there were 424 more closed sales during May than January.

“Buyers during the summer are more serious,” said Wes Kunkle, President and Managing Broker at Kunkle International Realty. “In season, we get a lot of traffic, but it’s mostly lookers. In the summer, people are ready to buy. They ask real buyer questions, and most often have financing in place.”

As noted by Coco Amar, a managing broker at John R. Wood Properties, activity in the $2 million and above price category has really picked up strength this year. As reflected in the report, overall pending sales in the $2 million and above price category increased 52 percent in May. There were also 78 closed sales of homes in this price category in May 2017, up from 36 closed sales in May 2016. And while the overall median closed price for homes above $300,000 increased 8 percent to $590,000 in May 2017 from $547,000 in May 2016, the overall median closed price for this top reported price category decreased 8 percent to $2,950,000 in May 2017 from $3,220,000 in May 2016.

The May report also showed overall inventory increased 4 percent to 5,404 homes in May 2017 from 5,207 homes in May 2016. Homes in the $300,000 and below price category had the highest inventory increase of all other price categories, reporting a 12 percent increase to 1,551 properties in May 2017 from 1,391 properties in May 2016. While still an increase over last year, the rate of the market’s overall inventory increase is tempering. In fact, brokers are concerned that housing options in some geographic areas, such as in the Central Naples single family market, may start to pinch sales as this area experienced a 50 percent increase in single-family closed sales during May, but had only an 8 percent decrease in inventory.

According to Kathy Zorn, broker/owner of Better Homes and Gardens Real Estate Pristine, “Buyers who are looking for a condominium in the Naples Beach or North Naples area this summer may encounter some challenges as these areas are running low on inventory.” Zorn pointed out that in North Naples there was a 47 percent increase in closed sales of condominiums during May, a 26 percent increase in pending sales of condominiums during May, and only a 9 percent increase in inventory. The situation is even more alarming on the beach, as both pending and closed sales of condominiums increased by double digits, but its inventory rose only 1 percent in May.

If you currently have a home for sale in the Naples market, brokers recommend against terminating the listing during the summer. In fact, there were 875 closed sales in June 2015 and 832 closed sales in June 2016, both higher than the number of closed sales in January (603) and February (613) of 2017.

As a highly desirable second-home location that rarely falls below 70 degrees, Naples will always increase in population during the winter months and then decrease during the summer. But according to county growth reports, the permanent residential population in Naples is also growing steadily. When asked, several brokers say that a large majority of the next season’s part-time residents, along with a host of new permanent transplants, prefer to do their home buying during the summer. So now is the time to seek guidance from The Wakelin Realty Team who can help you market your property correctly to appeal to summer buyers. We can also locate properties that match summer buyer needs and negotiate a purchase price that reflects the market.

Naples, Fla. (May 26, 2017) – Inventory decreased for the second consecutive month and prices continued to remain stable in April, setting into motion a burst in end-of-season sales for homes in the market’s sweet spot – the $300,000 to $500,000 price category. Activity in that price category for both single-family and condominium homes in the resale market continued to outpace all other price categories during the month of April according to the April 2017 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island). And while overall closed sales for the month decreased 5 percent, closed sales for homes in the sweet spot saw a 14 percent increase.

Phil Wood, President & CEO of John R. Wood Properties, pointed out that the April report showed a 41 percent increase in pending sales for homes in the $2 million and above price category. “There were 10 sales over $5 million in April,” said Wood. “This was a good sign we had a very strong season. I think April’s activity sets us up for a good summer.”

Overall inventory in April increased 8 percent to 5,920 homes in April 2017 from 5,480 homes in April 2016. Most notable was a remarkable 35 percent increase in the $2 million and above condominium inventory for April. However, April’s inventory decreased by 470 homes from March’s level, which was 6,390 homes.

The group of brokers reviewing the April Market Report added that homes that are unrealistically priced influenced April’s average days on market, which showed an increase of 35 percent to 97 days in April 2017 from 72 days in April 2016.

“There appears to be a number of sellers who, when pricing their homes, refuse to take into account the added competition from the new construction market,” said Jeff Jones, Managing Broker at the Naples-Park Shore office of Coldwell Banker®. Several other brokers collectively surmised that, in many cases, the selling price is typically 8 to 10 percent below the original asking price. Dominic Pallini, NABOR® President and Broker at Vanderbilt Realty, said, “an influx of new homes onto the market creates additional competition that many sellers don’t take into consideration when pricing their homes to sell.”

In response, Jones said, “Prices overall have remained relatively flat over the last year. Only the homes in the $300,000 and below price category increased in median closed price in the 12-months ending April 2017 from $207,000 to $219,000. There were actually minor decreases in all other price categories above $300,000.”

The last frontier of growth is eastern Collier County where buyers seeking single-family homes have more affordable options. This area, which includes 34114, 34117, 34120 and 34137, saw a 17 percent increase in closed sales to 122 single-family home closed sales in April 2017 from 104 single-family home closed sales in April 2016.

Several brokers commented that financing has become more complex in the last year and may be one reason the days on market have increased. For the 902 homes that closed in April 2017, the majority (65.3 percent) were cash sales and only 34.7 percent were conventional (financed) sales, a statistic that signifies the seasonal wealth factor.

According to Lauren U. Melo, PA, Licensed Real Estate Broker with Florida’s Realty Specialists, who works with many first-time homebuyers including Millennials interested in purchasing REO properties (real estate owned by lenders and bank-owned foreclosure properties), “REO inventory is very low, and 90 percent of it is priced above $150,000.”

On the commercial side of the real estate market in Naples, Bill Poteet, owner and broker at Poteet Properties, said the area has dramatically low industrial property options. “Naples has plenty of office and retail space available, but not much in terms of large commercial space.”

Before you sell your home, seek guidance from the Wakelin Realty Team. We know the local market and can help you price your property correctly. We can also locate properties that match buyer needs and negotiate a purchase price that reflects the market.

NABOR® Market Report Posts Solid First Quarter

Naples, Fla. (April 14, 2017) – It was a busy season for REALTORS® working in Naples as evidenced in the First Quarter 2017 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island). As predicted by broker analysts at the beginning of the year, once sellers began to heed the advice of their agents and reset to reasonable list prices, buyers would react in stride with more solid offers. The statistics reflected this prognosis precisely, and resulted in an increase in overall pending and closed sales, making the first quarter of 2017 as solid as expected.

Noted by Mike Hughes, Vice President and General Manager for Downing-Frye Realty, Inc., and the 2016 REALTOR® of the Year, “The first quarter was a bit of a bumpy ride but the trend line for sales moved upward throughout the quarter with March coming in as a pretty strong month for sales activity. Overall, we ended the first quarter better than last year and I think the local brokers are cautiously optimistic that we might have a decent summer for sales.”

Quite a few broker analysts who reviewed the report agreed with Hughes and said the word on the street is that many buyers who didn’t make a purchase during the first quarter have plans to return to the area during the summer as they anticipate home prices may decrease.

Quarter over quarter, the report showed overall median closed prices increased only 2 percent, driven by a narrow 3 percent increase in the $300,000 and below price category. Yet all other price categories tracked by NABOR® showed decreases or no change at all. One exception was single family homes in the $300,000 to $500,000 price category, which jumped 14 percent in median closed price to $387,000 in the 1st quarter of 2017 from $339,000 in the 1st quarter of 2016.

Collectively, broker analysts agreed that activity in the condominium market during the first quarter of 2017 was impressive. In fact, condominium inventory increased 19 percent, while the single-family home inventory saw an 8 percent increase. The report also showed five times the number of condominiums under $300,000 were available in the first quarter of 2017 than single-family homes in the same price category.

“Inventory is up and prices have come down,” said Budge Huskey, President of Premier Sotheby’s International Realty. “This is an indication that some fundamental economic principles are taking effect in the Naples housing market.”

But according to Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll and Carroll, Inc., monthly inventory levels have increased through March, but at a progressively lower rate each month of the quarter. For example, Carroll said, “In a year to year comparison, single family inventory was up 24 percent in December, 19 percent in January 2017, 9 percent in February, and 8 percent in March. The same trend is mirrored in the condominium market. In the long view, overall inventory increased 35 percent between March 2015 and March 2016, and 23 percent between March 2016 and March 2017.”

However, Bill Coffey, Broker Manager of Amerivest Realty Naples, was quick to point out that a tempering of inventory levels does not mean fewer options for buyers in the coming months. “The condominium market was hot in the first quarter. Both inventory and closed sales increased 19 percent. And overall sales only lagged last quarter because properties were not priced properly, but now we are seeing price adjustments and the statistics are reflecting the correction. We currently have 8.89 months worth of inventory. In February we had over 9 months. This progressive reduction in inventory Cindy is talking about will not curb market activity greatly.”

The Market Report also indicated a trend in how buyers are purchasing homes in Southwest Florida. “In March 2014, cash sales encompassed 74 percent of all sales for the month. In March 2015 it was 73 percent, then 67 percent for March 2016, and finally, in March 2017 cash sales accounted for 64 percent of all sales made in the month,” said Hughes. “In the past few years cash sales have been decreasing and more buyers are financing home purchases.”

Geographically, the market had some hot areas of action during the first quarter of 2017. Of note was Central Naples (34104, 34105, 34116), which saw a 74 percent increase in single-family home inventory to 634 single-family homes in the 1st quarter of 2017 from 364 single-family homes in the 1st quarter of 2016. And the median closed prices for single-family homes in South Naples (34112, 34113) increased 22 percent in the 1st quarter of 2017 to $386,000 from $317,000 in the 1st quarter of 2016.

If you want to sell your home, we know the local market and can help you price your property correctly. The Wakelin Team can also identify properties best suited for buyers and negotiate a purchase price that fits any budget.