Season is code word for madness in Naples. Over the past few years “madness” has been reserved to reference the crowded streets, restaurants and beaches as seasonal visitors inhabit our slice of paradise between January and March. This year “madness” has also reserved for the real estate buying frenzy that is unfolding before our eyes.
Since January 1, 2013 there have been 1,522 closed sales in Naples and an additional 2,564 properties are under offer. The current total available inventory stands at only 5,497 properties at time of press. Annual inventory figures for all properties in 2010 were reported at 9,125; an astounding 3,600 properties have been absorbed in the last 36 months. Dr. Shelton Weeks, Department Chair of Economics and Finance at Florida Gulf Coast University commented, “changes in inventory at some point may become an issue and a continued decline in inventory will produce some upward pressure on prices”.
The national real estate market has recognized that a lack of inventory exists. Lawrence Yun, National Association of Realtors’ chief economist, recently commented “buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country”.
Here are the Highlights: February 2012 to February 2013 annual comparisons as reported by the Naples Area Board of Realtors.
- The median closed price increased 17 percent from $ 180,000 in 2012 to $ 211,000 in 2013.
- Pending sales increased 20 percent in the $ 300,000 to $500,000 category.
- Pending sales increased 26 percent in the $ 1million to $ 2 million category.
- Pending sales in the Naples coastal area increased 15 percent and closed sales increased 16 percent.
*pending sales are noted as contracts that have been accepted but have not closed.
The momentum in the local Naples real estate market began to build in September 2012 and the initial results of the buying surge were reported by Naples Meridian in February 2013. The wave of buyer interest has continued into March which can feel like a “make or break” month. Anxious buyers tend to purchase in February, the busiest month of the year in Naples. March is the month of reflection; buyers who understand that the market has outperformed expectations carefully consider their options. Many now realize that they will have to spend more to buy what they want and others are astounded that prices in their preferred neighborhoods have risen significantly since their last visit. On the flip side, sellers are very curious as to buyer behavior as they perceive that if offers are not received before Easter then it is unlikely that their property will sell. The result of not selling within the “season” often implies that discouraged sellers will remove their properties from the market until late autumn. Price reductions may be the happy medium that will bring buyers and sellers to the table, both parties are anxious yet only time will tell who will cave into the madness.
The Local Pulse:
Naples Meridian is associated with Downing-Frye Realty, a large local firm and our General Manager, Michael Hughes shared the following information last week:
“Through March 7, 2013 Downing-Frye agents have turned in 858 pending sales compared to 796 for the same period last year. The strongest sector increase from January 1- March 7 2013 has been the $ 250,000 – $ 500,000 sector with 244 pending sales being submitted compared to 185 pending sales last year. The $ 1Million category has remained unchanged and overall sales volume is up 10%.”
We will continue to track the local buyer and seller behavior as we round out the season and will bring you the results as the madness draws to a close!