The buying frenzy the Naples housing market experienced during the past year has simmered and is being replaced with what brokers say will be our new normal: a low inventory market with fast turnover of quality homes priced right. According to the July 2021 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), inventory decreased 77.2 percent to 1,295 homes in July 2021 compared to 5,672 homes in July 2020, but demand continues to be steady as there were only 30 fewer closed sales and just a 2 percent drop in showings.
“Low inventory is holding back our market’s potential,” said Dominic Pallini, Broker at Vanderbilt Realty, who contends that July’s total home sales would have been much better if we just had the inventory. “New listings help to replenish our inventory each month, but it’s unlikely we will see inventory levels anywhere near what they need to be anytime soon again. Home demand has simply outpaced our capacity, which is why we are seeing a big rise in home values during the summer.”
The median closed price in July increased 28.8 percent to $469,950 from $365,000 in July 2020. The median price is the price at which 50 percent of the homes sold were above that price, and 50 percent were below.
“People are asking when prices will go down again,” said Molly Lane, Senior Vice President at William Raveis Real Estate, “but in reality, compared to other luxury markets around the country, Naples has been undervalued far too long. We are finally catching up to where our prices should be as a premier luxury home destination.”
As this new reality sets in, clues that buyers and sellers are adapting to a new normal can be found in recent Market Reports. “The percent of list price received has been over 99 percent for the last three months,” said Mike Hughes, Vice President and General Manager for Downing-Frye Realty, Inc. “This shows us that sellers are setting realistic prices and buyers are accepting these values as fair because offers are at near asking prices.”
Adam Vellano, a Naples Sales Manager at Compass Florida, responded by pointing out, “For sellers, this new market reality means a home for sale today is likely to receive a contract within a few weeks. If it doesn’t, the home is either priced too high or it has deficiencies that need attention.”
Brenda Fioretti, Broker Associate at Berkshire Hathaway HomeServices Florida Realty, added, “Even homes that are not so attractive are finding buyers this summer. So if you’ve been reluctant to sell because your home needs updating or repairs, now would be a good time to sell it and buy another home in Naples. That’s because the average home price in Naples has increased 25 percent since January so even if you pay 99 percent of list price for a new home, your ‘not so perfect’ home is going to enjoy the same gain in value when it sells too. Your
equity from the price appreciation can help power your next move.”
Even though overall pending sales in July dropped 21.5 percent to 1,135 pending sales from 1,446 pending sales in July 2020, and overall closed sales dropped 2.6 percent to 1,142 closed sales from 1,172 closed sales in July 2020, activity in the high-end luxury home market picked up speed during the month as reflected in a 32.6 percent increase in closed sales for homes over $1 million, and a 17.1 percent increase in pending sales for single family homes valued over $1 million in July.