Swings and Roundabouts Naples Real Estate Keeps on Ticking

swings-and-roundabouts. PicForget about power lunches. Given the way 2016 kicked off a power breakfast is needed to cope with the swings in the stock market, the uncertainty in China, a weakness in foreign purchasing power and the circus act that is unfolding as society grapples to select the next president of the United States.

It is a wonder that seasonal buyers have had time to squeeze in purchasing property along our coastal shores.

Recent statistics provided by the Naples Area Board of Realtors highlight some curious insights into current buying behavior in our market. Figures for January 2016 as compared to January 2015 state that overall pending sales dropped 23 percent.  Examining this number in isolation could signal a sense of panic as pending sales is a barometer of demand in a residential market.

Yet the same statistics report that pending sales within:

Condominiums ($1 million to $2 million) increased 14 percent

Condominiums ($2 million +) increased 100 percent

While overall inventory increased 13 percent to 5,091 homes the average days on market decreased 14 percent to 75 days from 87 days a year prior.

Drilling down to a price category and a precise location is essential to understand the nuances of the Naples real estate market. Buyers seeking a property priced under $300,000 are strapped with limited move in ready options.  Buyers seeking large single family homes with acreage or a developer built home have to search in areas at least 20 miles outside of downtown. Beachside condominiums and homes in prime neighborhoods such as Parkshore, Moorings or any property in downtown Olde Naples continue to be in strong demand and with limited options prices remain high.

To Wait and To See

The primary change from a year ago is that price reductions have set in within the upper end price categories. Eager sellers have recognized that the uncertainty in the market has significantly contributed to delays by residential purchasers. The “wait and see” approach is common consumer behavior when a single element disrupts the status quo, yet when multiple elements of potential disruption are in play the effect is compounded.  Foreign buyers are few and farther between, South American buyers have delayed buying anything and Canadian owners in our area have begun to sell their retreats. While the domestic market has the ability to absorb the inventory of available properties the uncertainty in the greater sphere has caused many to simply pause.

This pause is a stellar opportunity for buyers on the fringe of a price point to take advantage and engage with motivated sellers.  In addition, this respite provides many prospective buyers additional time to review all possible option which may prevent a rush purchasing decision which often leads to buyer’s remorse.

The Macro View

Statistics by definition lack the important component of real time data. Sales and trends are calculated 30-60 days after a transaction takes place and evaluations are solidified utilizing dated information.  The ideal baseline to understand market performance is to review pending sales and recent closed sales as these figures change daily and provide a sense of the pace and tempo within a market. In addition it is essential to get out from behind the desk and experience what is happening within the community. This past weekend the mood seems to have lifted in Naples. Incoming commuter flights were packed, the downtown St Patrick’s Day parade had a record turnout and the beaches were at capacity.  The stock market responded positively to job growth reports, the Brazilian Real has gained ground and the rhetoric on the presidential warpath has slightly cooled down.  Are these observations enough to signal the end of “the pause”?  Is it possible to pin our hopes on coincidence, time or perhaps the luck of the Irish ushering in a sunnier disposition?

What is a fact is that in the last 24 hours 70 new pending sales have been reported and 26 listing have closed. It may be safe to assume that at least a few people will be out dancing a jig and looking forward to new keys dangling in their pocket.

We at Naples Meridian look forward to keeping you posted on the nuances of this ever changing market, as living and playing in this blissful environment is a luxury and a privilege.

Till next time .. Fátima

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