Broad Strokes
As real time data of the pandemic cases in Florida and across the South increases the reality of the health of the real estate market in Naples remains in flux. Yet the overarching sentiment is that our nucleus is resilient. While we have witnessed and endured dreadful economic and social impacts such as 9/11 and Hurricane Irma, long standing data proves that the Southwest Florida market is last to absorb the impact and early to recover.
Data from May reported a stability in pricing throughout all price points and an overall decrease in inventory of 27.2 percent. While a 5.8 month supply of single family homes was noted, the influx of buyers from Northern states since early June has eroded the supply. A Pew Research Center study released in June found that 3% of U.S. adults (7.7 million people) have moved temporarily or permanently since the start of the COVID-19 crisis. Buyers are descending on our area with grand concentrations from New York, New Jersey, Philadelphia and Chicago. Further afield we understand that people from California who previously were planning on moving to Texas or Colorado are seeking the sunshine, outdoor lifestyle and high standard of living that Naples offers. On that same thread, Miami and Fort Lauderdale residents have begun to take trips westward as they are eager to leave their high-rise lifestyles behind. Inventory is on the down slope with no real indication of sizable inventory increases in the short term. Many sellers are distracted with their own lives, and feel uncertain of the pandemic and its duration. If these were typical economic times, we would be speculating when prices would begin to increase yet given the vast uncertainty, instead some properties are receiving multiple offers while others are being snatched up via virtual tours or by day visits where all parties wear masks, gloves and conduct appointments six feet apart.
The Vista Further Afield
Even with a grand influx of purchasers and scarce inventory buyers who experience price tag sticker shock are turning to new construction in developments on the periphery of Naples. Communities that offer amenities and “never lived in” homes offer a distinctive appeal, while the rush to purchase in rural environments satisfies the psychological need for distance. The community of Ave Maria located 40 miles outside of Naples has seen an increase of 35% in sales since last year. The town of Babcock Ranch located on the edge of Lee County reported 100 new sales between April and June of this year. While only time will tell if a vast number of city dwellers enjoy a quieter setting in the long term, the luxury of space coupled with reasonable pricing is enough for now.
The Summer Beat
In the month of June data from our board reported 512 buyers placed deposits and agreed on purchases in Naples. Everything from one bedroom condos to multi-million dollar estates have been spoken for, and while it will take another 60 days to know for certain how many of these properties will truly trade hands, figures like these make for the beginning of a compelling summer season.
Thus far in the month of July the number of pending sales continues on an upward trajectory as the first twenty two days of the month note 965 listings throughout all parts of Naples are under agreement. The real story as the summer progresses is how many high rise condominiums will go under agreement in the month of August and September. While the proximity to the beach is the primary appeal will buyers fleeing a cramped environment wish to trade that for a water view? Currently, 440 beach area condominiums available for sale ($ 230,000- $ 12M) of which 60 were newly listed as of July 1, 2020.
Highly sought after areas in Naples showed no signs of slowing down. The graph below depicts the number of homeowners who placed deposits beginning in April 2020 and received the keys to their new residences at time of press in July 2020:
Evaluation of Time
The shifting tide of a buyer’s perception of what they need and where they want to reside as a result of COVID-19 pandemic has been a grand benefit to our market. Any progress from this point forward is tied to the uncertainty of the remainder of the year as the pandemic leaves little in terms of predictability. Yet the Naples market is whole in its appeal and has the capacity to provide a wealth of residential options that can satisfy both the short term and long term perspective of buyers who may find great solace breathing the fresh air within our slice of paradise.