Statistics are boring. Facts and figures often rattled off to provide the foundation for a point of view. Numbers strung together and crafted to “prove” a point.
It is proving increasingly difficult to ignore the record breaking speed at which the Naples real estate market is churning given the statistics provided by the Naples Area Board of Realtors.
Selling trends comparing 2Q 2014 to 2Q 2015 reinforce the frantic pace of the residential market in Naples.
- Closed Sales are up 38% (Condominiums $300,000-$500,000)
- Inventory is up 32% (Single family homes priced $500,000- $1Million)
- Overall pending sales drop 4%
- Inventory reduces 24% (single family homes under $ 300,000)
- Average days on market drop 20%
Year on year comparisons for inventory figures, sales and days on market point to a steady reduction of available properties regardless of the list price. Anemic inventory levels have sellers holding out for top dollar. Keen buyers are settling for what is available in prime neighborhoods instead of settling for new build options “on the other side of (highway) I-75”.
Blazing Speed clintch win at Audemars Piquett QEII Cup- Hong Kong. Photo courtesey of Ridingwrite
Aggressive investor buyers scooped up properties in need of renovation two years ago and are selling them in the “off season”, hoping to ride the coat tails of this upward trending market. Last week we spoke with a selling agent who confirmed that his overpriced (by 20%) renovated condo listing was on the market now but expected that the market would rise to meet the sellers inflated figure by the end of the year!
This type of seller behavior is common in a marketplace like Naples where buyers and sellers do not “need” to buy or sell. Our economy is substantiated by the recreational lifestyle and buyers who want to live in a prime neighborhood in Naples are going to have to spend more money. Would be buyers who wring their hands over purchasing when the time is right, will likely be priced out of their target price point. That is unless they increase their budget which tends to be the Naples way.
To my investor clients who shake their heads and contemplate moving onto to other greener markets, I offer an option; commercial real estate. It is rather unsexy and void of the drama that plays out on television but the margins are adequate. The sale of Mercato in 2015 , a 13 building multi-use retail/ office and residential complex purchased for $ 240 million by Prudential Real Estate Investors proves that large institutional investors are sold on the long term expectations of the Naples market. The industrial and office segments have long flown under the radar as this town was finding its feet. Yet in many ways as small and large companies relocate to our area the need for all factions of real estate will be required.
Day in and day out we at Naples Meridian observe the nuances in our market as this ever changing environment that locals choose to live and play in is a luxury and a privilege.
Connect with us to determine the optimal investment strategy best suited for your goals.