Naples Florida Real Estate
Naples Real Estate Overview
- Naples real estate sales remain on fire
- The best real estate values in Naples sell quickly, poor values get left behind for online searches
- Available real estate listings in Naples has been steadily decreasing
- Naples area home prices have bottomed out
- Buyers are buying Naples Real Estate with confidence that their equity is protected.
Naples Real Estate Sales Remain Hot - The Opposite of National Trends
The Naples Real Estate Market is not the US housing market. Naples has nothing in common with Peoria IL or Allentown PA. Any US housing statistic or outlook report is irrelevant to what has been, and is happening in the Naples housing market.
Naples home sales are at record levels, available home inventories are decreasing and very bottom pricing has occurred. This is a result of a flood of savvy opportunistic buyers looking for investment or locking in that second home purchase for their future retirement.
Number of Naples Florida Home Sales
Years 2000 to 2011
The source of the information in the chart above, and those shown below is from the proprietary database compilation of SunshineMLS, LLC - Naples' Multiple Listing Service. The accuracy of this information on Naples Florida Real Estate is not warranted or guaranteed.
Who are all these buyers, where do they come from, and what is their motivation in buying Naples Florida real estate? Approximately 50% are local residents, who can now afford a Naples home due to rock bottom pricing, and they include many investor-only buyers. The rest are second home buyers, jumping on the great deals available.
Second home buyers come mostly from the Northern climates, looking for relief from their winter weather. Also there is a fairly high concentration of foreign buyers, because of low pricing and favorable exchange rates on their money.
Where Naples Second Home Purchasers Live
Naples Real Estate Buyer are Paying Cash
These opportunistic real estate buyers are mostly cash buyers, moving money from poor earning assets into highly attractive long term real estate investments. Sixty-eight percent of all homes purchased in 2011 have been with cash buyers. A phenomenal rate. A Naples only rate.
Fueling this cash purchase of Naples real estate is the general consensus by buyers that current pricing represents an over reaction to nation trends, that is not representitive of Naples longer term second home demand trends.
Naples Cash vs. Mortgage Buyers
Year 2011
What about getting a mortgage? A mortgage for a second home can make a lot of sense. Why not when interest rate have been bouncing around historic lows?
Naples vs the US Housing Market
The Naples housing market and economy is driven by second home buyers. Not by local employment, agriculture, heavy industry, shipping or high finance.
Ten thousand Baby Boomers reach 65 each day for the next 19 years. Those are the kind of dynamics that drive the Naples housing market. So when US Today, CNN, MSNBC, etc. report on US housing forecasts, they are not specific to the Naples housing market.
In 2008 they reported US home sales declined 13% (Naples was up 22%). In 2009 they reported US home sales increase 5% (Naples increased 50%). In 2010 they reported US home sales decreased 5% (Naples was up another 13%). Looking at the three year trends. US homes sales were 13% lower in 2010 vs 2007, while Naples was 103% higher.
The number of home sales in Naples have been at historic highs. Once again, due to low pricing and demand at those price levels.
Naples Florida Home Sales
The surge in the Naples Florida real estate sales can be attributed to current low price levels. Some homes in Naples have recently been selling at price levels not seen in over a decade. And they have been selling quickly. Properties priced under $200,000 have been very hot sellers. More homes sold in Naples under the $200k price range during years 2009, 2010 and 2011 than any other year on record!
Naples Florida Real Estate Sales Under $200k
Fifty-four percent of all home sales in Naples during 2011 were less than $200,000. But while that was the majority of the transactions for 2011, it was just a small percentage of the total real estate market value sold.
Real Estate Sale Transactions Vs. Total Market Value
Year 2011
Homes selling for over $1 million represented just 7% of home sales, but 43% of the total market value of homes sold in Naples.
Foreclosed Properties are Hot Sellers
Foreclosed homes represents a hot selling real estate segment in the Naples area. They exist throughout the Naples area, but are concentrated mostly in workforce communities such as Golden Gate City and Golden Gate Estates areas. Eighty percent of of homes sales in those communities are either foreclosed or short sale properties
Short Sales are also a segment of sales. A short sale can be a good value, if a buyer is willing to ultimately pay what the property is worth. More on Short Sales Here
Naples Home Sales Mix
Year 2011
Foreclosed homes in desirable second home communities are rare, and if a great value, will sell in days. Half of all all foreclosed properties sell in 20 days or less. Twenty-five percent sell in the first week. There are more foreclosed homes under purchase agreements, then there are listed for sale. The Naples foreclosure market is Super Heated!
The number of new foreclosures coming to the Naples real estate market has settled into much lower levels. Anyone waiting for a second wave of foreclosures in Naples will have a very long wait.
New Foreclosed Home Listings in Naples
Learn more about Naples Florida Foreclosures.
Real Estate Listed for Sale
Because of the Naples home sales surge, the number of homes listed for sale has been decreasing. Naples listings peaked at 12,300 homes listed for sale in 2008. Since then, the number of listings has been following a decreasing trend and is currently below 7,000 homes listed for sale.
Overall, Naples has less than a one year supply of homes available for sale. This is down from over a three year supply a few years ago. The supply of homes available varies greatly by the listed price. For example, for homes listed between $100,000 and $200,000 there is a 6 month supply. For home listed over $1 million, there is a 20 month supply - both cut in half over the past year.
Naples Months Supply of Homes for Sale by Price Range
As of January 2012
The calculation for months supply of homes is based on a calculation of listings vs. homes sold. But the actuality of it, is the month supply is much lower than shown, as in any price range and type, there are only a small number of homes realistically price.
Naples Florida Real Estate Prices are Rebounding
Because of high demand, and shrinking inventory of homes for sale in Naples Florida, Naples home prices are firming up. Home prices have bottomed out, and have risen in most cases in most communities. A buyer today, cannot purchase at the lowest price that some home sold in a particular community in the past year. Those deals are gone.
While today's buyers cannot purchase at the bottom, they are purchasing with the confidence that their Naples real estate equity is secure. And with the belief they will get a very nice return on it.
Homes, communities and pricing vary greatly throughout Naples. Because Naples' beaches and waterways, similar homes located across the street from each other could be valued millions of dollars a part. A comparison of price changes grouped by similar communities, and similar homes is a good of measure of changing home values for the Naples area.
The following chart tracks home prices per square foot for a particular niche within the Naples real estate market. It tracks the average square foot selling price by quarter, for similar size and type properties in the area sold since January 2000.
In Naples, homes prices between communities and neighborhoods can vary greatly based on location, styles, condition and amenities. Home sales in any particular community could be higher or lower than the examples shown here, but in most cases have followed a similar up and down trend.
The charts below presents averages and trends of similar properties. It can only be viewed as a general representation of a particular niche. This information should be used only for general discussion and review purposes and not for determining the merits of any specific buying or selling decision. The selling prices per sq. ft. are representative of the communities included in the sample, and can not be applied arbitrarily to other areas in Naples.
Advice for Buying Naples Florida Real Estate - Buy Smart
If you been thinking about buying real estate in the area for your own personal use and enjoyment, then nearly every community has a few attractive low price leaders. A buyer needs to work with someone very knowledgeable, that is k-n-o-w-l-e-d-g-e-a-b-l-e about Naples real estate, as the pricing and trends are very dynamic.
Prices of homes in the area rose and fell together. When price were skyrocketing, no area got left behind. When prices fell, they all fell.
The price of homes within a community sell within a range based on condition, views, upgrades, etc., and how motivated the seller is. But obviously all homes within an upscale neighborhood sell for more than the homes in a more affordable community. But whether the home was in an upscale neighborhood or a more affordable neighborhood, prices changed together.
The goal of any buyer should be to ensure that they end up with the best price possible, regardless of which property type the buyer prefers.
Advice to Sellers
To sell you need to be totally informed and competitively priced. If you are not willing to sell at the current low values, then it would most likely be worth it to wait. If you need to sell, then you are going to have be aggressively priced, and in some cases might have to compete with foreclosure pricing.
Give me a call for a fair and honest assessment.