Photo courtesey of Salvatore Pinto and associates
The Naples real estate market continues to absorb buyer demand within various price points at a staggering pace. Touted in some circles as the Billionaires coast, acquiring property in Naples, FL has often been viewed as purchasing a premium asset. Given the latest Q1 2015 figures this choice asset just ticked up a notch as steady buyer demand has transferred from single family homes to condominium purchases.
Our view is that this shift is rooted in a variety of key factors; price, location, availability and hassle free living. Single family home values have risen at an impressive rate as noted by the Naples Board of Realtors that produced a comparison between 1Q 2014 and 1Q 2015 statistics:
- Closed single family home sales increased 14% ($ 300,000-$500,000 category)
- Median closed price for homes $2M + increased 11 percent (from $2.8M to $3.2M)
- Pending sales for the overall single family home market increased 5 percent
Even with the fever of single home buys the fluctuation in inventory levels are indicative of the drastically diverse buyer segments in our market; full time buyers (under $ 300,000), seasonal owners (500K +) and the jet set crowd where property options begin at $2M +.
- Inventory dropped 28% for single family homes priced under $ 300,000
- Availability of inventory in the $ 500-$1M category increased 21%
- Overall inventory decreased 3 % from 4,405 homes (1Q 2014) to 4,273 homes (1Q 2015)
Neighborhood Watch
Availability of single family homes in close proximity to the beach and downtown 5th Avenue remained consistent year on year. The big influx of inventory is now on offer in small pockets just north of downtown within the Coquina Sands, Moorings and Park Shore neighborhoods. Niche speculative builders acquired and demolished older Florida ranch properties and are banking that their newly built spacious coastal homes will be snatched up before the end of the year. The North Naples area has witnessed an increase in retail options and restaurants, these amenities coupled with the proximity to the beach has proven to be very attractive to buyers. Inventory for single family homes in North Naples increased 8 percent over the past year which bodes well for builders in this part of town as several new developments are in the early stages of build.
Value Bullseye
Cindy Carrol, VP of Naples based Carrol and Carrol Real Estate Appraisers and Consultants noted in a recent local economic summit that generally an increase in real estate values in Naples are associated with its precise location, which she pinpoints as areas in close proximity to the beaches and downtown Naples. Carrol expressed that single family home values in some neighborhoods have surpassed 2005 levels which she viewed as the crest of the Naples real estate market during the boom years. Carrol estimates that single family home prices have begun to level out and that condominiums, in comparison, have not experienced large price increases which she attributes to financing constraints and unpaid association fees due to outstanding foreclosures.
If the condominium market is relatively depressed as compared to the single family home market then by our estimation condominiums located within close proximity to the beaches, downtown 5th Avenue, restaurants and other amenities are the next boom in our market.
The recent statistics supports that this collective theory is gaining speed;
- Pending sales in the condominium market throughout Naples increased 1 percent
- Inventory for condominiums in the $ 2M + category increased 77 percent from 39 in (1Q 2014) to 69 in 1Q 2015)
- Inventory for condos in downtown Naples and along Gulfshore Blvd Drive decreased 23% with a median price closed sales price of $ 552,000.
Location, price and availability are all valid factors that tip the scale towards a condominium purchase versus a single family home option. Yet the seasonal buyer also views the sense of freedom and safety of leaving their residence under lock and key until they return as a big incentive to seek out a condominium versus a single family home. This core market has always been an active segment though slightly overshadowed by the latest single family home buying spree. Given that 73 percent of all properties purchased in the first quarter of 2015 were cash sales, buyer demand and the rate of purchase for condominium in premium downtown locations or with Gulf views are the next target for buyers.
The “season” in Naples has receded slightly as warmer temperatures are here to stay. Though we believe that with 47 new listings added to our market at time of press and the European crowd set to descend in a matter of days, the summer “season” may be one for the books.
We at Naples Meridian look forward to keeping you posted on the latest changes in the Naples real estate market. As the exclusive agent representing the 5th Avenue South condominium project; Olde Naples Residences we are keenly interested in how the nuances of the downtown condominium market play out.
Olde Naples Residences has two move in ready condominiums available in the heart of 5th Avenue south priced from $ 725,000. Click here to see all our downtown Naples listings.