“You can’t swing a cat and not hit a real estate agent in Naples”. As a proud owner of an orange tabby who earns her keep advising developers and private clients I can appreciate this statement. These days if you dare swing a feline on any given street chances are the poor thing will smack into a new construction coastal home in Naples or one in process of being torn down.
Naples along with the rest of the country is fixated on tearing down and churning out brand new shiny abodes.
The Commerce department reported last month that the new construction home category experienced the best performance since 2007. In July, new home sales increased 12.4 percent which equates to 654,000 annual units. Nationally, demand for housing has surpassed the pace of construction with inventory levels at a 4.3 months’ supply down from 5.2 months a year ago. Geographically, buying shot up by 40 percent in the Northeast and 18 percent in the South. While builders race to increase production and attempt to juggle the rising cost of materials and decreases in quality labor they are still running behind demand. The government confirmed that building permits for homes have climbed 10.6 percent year- to- date, with a quarter of the year outstanding the construction industry and its affiliates are on pace to showcase record numbers.
There is No Place like Home
The allure of Naples is unquestionable. Refined and elegant shopping and dining options abound as this carefree lifestyle is rooted in the ease of enjoying world class leisure activities close to home.
Neighborhoods in Naples with the most allure are at the center of the tear down phenomenon. Buyers prepared to part with millions of dollars seek to secure parcels that offer commanding views and space. The lack of acceptable existing homes and rising land costs over the past few years has driven prices skyward within choice neighborhoods such as Port Royal, Aqualane Shores, Olde Naples, Coquina Sands, Parkshore and the Moorings. Craig Mole, director of building services for the city of Naples remarked that the city saw 139 single family demolitions in 2015. This year 59 more demolitions have been permitted and he expects construction of new construction homes in Naples to remain strong.
Port Royal is the playground for the über elite within our coastal shores. The entry price for a bay front vacant lot is $ 5.2 million and with only ten other lots to choose from a parcel with 100 feet of prime beach frontage is up for grabs for $ 14.95 million. For those ready to tear down and start fresh the least expensive home with 100 feet of beautiful water frontage is on the market for $5.8 million. With these sobering price points the emphasis on location, terrain and usable space take on an entirely new meaning.
New Construction Homes and Tear Down Value Comparisons: Naples, Florida
Coquina Sands, Parkshore & Moorings: Current Market Prices
|Available Lots : 6||$ 1.150 – $4.M|
|Available Tear down homes: 23||$ 875,000- 1.3M|
|Newly Built homes on the market : 36||$ 2.9M- $6.5M|
Olde Naples : Current Market Prices
|Available Lots : 4||$1.3M – $2.49M|
|Available Tear Down Homes: 9||$945,000-1.79M|
|Newly Built homes on the market : 25||$2.9M- $7.6M|
Aqualane Shores: Current Market Prices
|Available Lots : 0||$0|
|Available Tear down homes: 5||$ 2.5M- 3.25M|
|Newly Built homes on the market: 6||$ 4.6M- $7.7M|
Port Royal: Current Market Prices
|Available Lots : 11||$3.9M-$ 14.9M|
|Available Tear down homes: 6||$ 5.3M-$8M|
|Newly Built homes on the market : 10||$ 8.5M- $22.M|
All data supplied by SWFLMLS
Fairy Dust versus Bulldozers
Buyers who feel an affinity for an existing structure and wonder if the renovation path will be simpler than demolishing a structure must consider several factors.
Properties in the most desirable area of Naples are located within a flood zone. The Florida building code requires that renovations cannot be greater than 50 percent of the value of the house before improvements. The Federal Emergency Management Agency dictates the base flood elevation levels for the county. For owners who wish to add an extension or second floor to an existing property the code will require that the entire structure be raised to meet the current elevation levels. The costs associated with these types of changes is often well beyond the 50 percent value level allowed. Homeowners who wish to tackle interior cosmetic renovations may have a greater chance of success yet must be vigilant of the recent increases in material costs and labor which may limit the scope of the project.
While the cost of demolition may be relatively economical the time associated with assembling the dream team of architects, builders and project managers who can obtain the necessary permits and execute the build within a relatively realistic timeframe is the bugbear. The average timeframe between tear down and handover of the realized structure is three years according to accomplished local builders. The value of time in our view is a worth a million dollars as changes in personal dynamics and unforeseen events can be the determining factors of the owner’s view of the success of the build project.
Time and timing have a way to putting all the bulldozer frenzy into perspective. The results of the pending presidential election followed by the onset of the “season” in Naples will aid in determining the future pace of the new construction phenomenon that thus far has felt like a blockbuster movie.
Day in and day out we at Naples Meridian observe and relay the nuances in our ever changing market as living and playing in this blissful environment is a luxury and a privilege.
Till next time .. Fátima
Fatima is the managing principal of Naples Meridian, a group that specializes in providing independent and confidential property consultancy and sales services to property developers, investment groups and individuals.
Naples Meridian is the exclusive marketing and sales agent for the Olde Naples Residences project, a mixed use development project located at 365& 375 5th Avenue South in Naples Florida.