Burning Rubber 1955 Chrysler 300C
The buying season in Naples is going by in a flash! Given the number of private jets that continue to land at our airport we estimate that the pace (within a certain part of our market) will likely continue at least until Easter. Extreme weather patterns plagued the rest of the country this winter and likely contributed to the increased number of visitors to Naples. Our usual jet set crowd that we refer to as our snow birds probably hosted more than one northern house guest this season as well!
The official numbers have come in fast and strong as statistics tabulated by the Naples Area Board of Realtors in January and February 2014 outline some very interesting nuances in our market:
- The year kicked off with a swell in the luxury condo market; sales in the $ 1- 2 million category increased by 40 percent while inventory dropped by 17 percent.
- In January 2014 pending sales increased 66 percent for condominiums in the $2 million + category and cash sales in this category doubled from a year ago.
- The overall inventory declined 15 percent in January and 15 percent again in February
- The under $300,000 price segment in February saw a 20 percent decrease versus a 12 percent decrease in inventory for all other price segments combined.( $300,000-$500,000 $500,000-$1M and $2M+)
- The median closed price for properties under $ 300,000 was noted at $ 242,000 in January and $ 245,000 in February; an increase of 18 percent over 2013 figures.
- The median closed price for properties under $2Million remained unchanged from a year ago at $ 540,000.
The Need for Speed
The majority of reported activity has occurred at either end of the market (under $ 300,000 or over $ 2M) with condos in the $ 2M category leading the way. How can a market be so divided and still continue to showcase inventory declines over consecutive months? The answer we believe is down to one thing. Pent up demand. Buyers in Naples have been watching and waiting for quite some time for the perfect time to strike. Based on the statistics, they are a striking! With a limited supply of inventory and the relative availability of mortgage products the entry level market is eager to buy now. The upper end of the market has possibly been spurred by the harsh reality of Mother Nature. The past winter season solidified for many their interest that a permanent escape to our slice of paradise is worth a premium. The “need” surrounding a $ 2M+ condo purchase differs greatly from a starter home priced under $ 300,000 yet the link that connects these segments is motivation. Lack of available options creates a high level of motivation as does the increase in pricing that is inevitable when inventory declines and new available options are nowhere to be found. Scarcity in the under $ 300,000 category has been compounded by the sharp reduction in the number of short sales and foreclosures. These non-traditional sales now comprise only 12% of our market versus 22% from a year ago.
Steady in the Middle
The solace in our market can be found in the middle where properties priced over $300,000 and under $ 2M reported no change in the overall median closed price ($540,000) since a year ago. While this statistic may at first glance seem uninteresting, upon closer examination we believe that this is where the strength in our market lies. This middles ground is the bedrock of value in the Naples market. Homes and condominiums within these price segments are being purchased and sold at a fluid pace. Currently the average property remains on the market for 94 days. While it would be ideal if more properties entered the market, the scarcity that exists bodes well for both camps. Sellers are keenly aware of the figure that is required to sell their property. Overpriced listings are stand out in Technicolor as buyers are cognizant of the scarcity within the market and are willing to watch and wait.
The steadiness within the middle of the market keeps every player focused on the reality of what is achievable and what may be a pipe dream. As this feverish pace continues at all price points and within all property types one thing is blissfully clear ; property options in Naples continues to keep all of us intrigued as what our neighbors, friends and family choose to buy and sell in Paradise…and when!
There were 40 contracts initiated every day on average in February throughout Collier County. Agents within Downing-Frye Realty, Inc. placed 1200 listings under contract in the first 100 days of the year. Closed sales volume within the brokerage firm during the first quarter of 2014 was $ 454 million, an increase of 7 percent over the first quarter in 2013.