Naples Real Estate Report
June 30, 2015

 

Naples Real Estate Market Summary

The Naples real estate market is driven by second home buyers. And these second homes buyers have driven Naples home sales to new levels.:

  • Home sales are at a very good pace
  • Naples average home prices continue to rise – but remain far below peak year prices.
  • Inventory of homes listed for sale is at an all-time low.
  • Builders are tripping over each other bringing new homes to market.
  • Sales of new construction is strong.
  • Foreclosures and Short Sales are at the lowest level since first being tracked.
  • Buyers have confidence that their equity is protected and are confident about future gains.

"Naples Area Leads State In Job Growth" - Naples Daily News, March 28, 2015

 

Home Sales

The number of home sold in the Naples area during the first six months of 2015 was virtually the same as the first six months in 2014.This is not surprising as there are few homes available for sale. Plus buyers have many new construction options available to them.

Naples Home Sales
Six Months Ending June 30

Distressed sales (foreclosures and short sales) make up a much smaller percentage of sales. For examples, distressed sales represented 55% of $200,000 and under home sales in 2011. For the first 6 months in 2015, total distressed sales were just 9% of all Naples area home sales.

Distress Sales as a Percent of Sales
Six Months Ending June 30

Naples Home Prices

The Naples average home selling price continues to grows. With an average price of $578,000 for the six month period ending June 30, 2015, a 9% increase over 2014.

Average Home Selling Price Six Months Ending June 30

Price changes in lower priced homes has been very dramatic. At one time, homes selling for under $200k, represent over 50% of all home sales. For the first six months of 2015, home under $200k represented under 30% of all homes sold. Homes that sold for $200k a couple of years ago, are selling for much more.

Naples Percent of Homes Sales by Price Range
Six Months Ending June 30

Home sales in Naples are brisk, particularly at the lower price points. This can been seen by looking at the available supply. Based on recent sales there is just a 50 day supply of homes available listed for $200,000 or less.

Naples Available Housing Supply

Another way to see the rise in home values is looking at the least expensive home sales, and the most expensive homes sales The following charts shows the top selling price in the buyer group that purchased the least expensive homes, and the bottom selling price of those that purchased the highest priced homes in the area.

Home Sales Price by Bottom and Top Quartiles
Six Month Period Ending June 30

In 2011, the highest priced home, in the group of buyers buying the least expensive homes was $110,000. In 2015 it was $203,625. Prices nearly doubled in the bottom priced home group. In the highest priced home group, the lowest priced home went from $380,000 to $545,000, a 43% increase.

Naples 2014 Real Estate Sales Report

Naples set another record for the number of homes sold. Year 2014 was the third consecutive year of setting a record for the number of homes sold.

Naples Home Sales by Year

Naples Home Prices

Year over year average home selling prices increased 14% in both year 2014 and 2013.

Average Home Selling Prices

As can be seen on the graph above, 2014 average home selling prices are below a 3% average growth rate starting in year 2002.

Average Prices By Area

Naples covers a large geographic area, and average prices include multi-million dollar condos, as well as homes in outer wetlands with low values. Let see how regions would vary by beach, west of Interstate 75 and east of I75.

The beach area has the highest home values in Naples. The average home selling price beach homes, bottomed much later than the rest of Naples, but has also recover at a faster rate. The beach average pricing in 2014 is similar to year 2005 average pricing, while the rest of Naples is at 2004 pricing or later.

Average Homes Price by Areas

While the beach area represented just 16% of home sales in 2014, it accounted for 43% of the total sale values.

Values vs. Number of Sales
Year 2014

This small group of buyers, buying very expensive properties, drive the high average home price. If we look the the median price, (where 50% of buyers paid less than the median and 50% paid more) we see most buyers purchased their Naples home way below the average price.:

Naples Median Price of Home Sales

While the average Naples home selling price in 2014 was $507,000, 50% of home buyers paid under $266,000.

Home Price Recovery Trends

All Naples home sectors are in a rising price situation. Home values in some sectors did not fall as hard as others. The sectors the fell the hardest were the least expensive homes, they are the one rising quickly.

Let's compare home prices of a desirable second home community and for a community with a majority of local working residents.  Pelican Marsh condos owners, would consist primarily of second home residents. Single family homes in Golden Gate City, Naples Manor and Naples Park, would have a majority of local working residents.

Pelican Marsh Condos vs. Local Workforce Single Family Homes
Average Home Selling Values

As shown in the chart above, Pelican Marsh values did not drop as steep, while the local workforce home have a greater recovery climb.

In the chart below, we compare the 20% of buyers who purchased the least expensive homes available and the 20% of buyers that purchase the most expensive homes. In 2011, those buying the least expensive homes available, paid $95,000 or less. In 2014 that same group of buyers, buying similar homes paid $155,000 or less.

 

Home Prices in Second Home Neighborhoods

Here is a sampling of neighborhoods with a high concentration of second homeowners, and recent price changes.

Average Selling Prices

Condo Trends

Because Naples is second home community, it has a very high percentage of condo homes - 67%. Tens of thousands of smaller two bedroom condos were built in the 70s, 80s and 90s. Many buyers during the 2000s were mostly focused on new construction or newer built condos and ignored those early built condos. As time went on, the availably of new kept getting further away from the Naples core.

There is a trend of buyers returning to the older built two bedroom condos. The reason being:

  • There are no new two bedroom condos available for less than $400k. They are not being built, except for the bundled golf communities.
  • Except for the very higher priced condos, anything new is a long distance from the Naples core.
  • Existing two bedroom condos are in the best Naples location.

Some buyers are preferring the better location the older condos provide, and either updating the condo or remodeling them.

Average Selling Price - Two Bedroom Condos - Under 2,000 Sq. Ft.
Non-Golf   Central Naples Area

 

 

Selling Prices vs. List Price

I often get asked, how much of a discount should a buyer expect off of list price. Currently the average is around 4%. This rate is similar to 2002 before the explosion in home prices, probably suggesting that Naples is in a balance market between sellers and buyers.

Average Discount Off of List Price

While the average discount is 4%, the actual range of discounts vary by price range, and by how well the home is priced. If the home is priced high, the discount will be higher. If the home is aggressively priced based on other closed comparable, the discount will be smaller.

Naples Cash Buyers

When the easy credit policies of the early 2000s were halted, cash buyers entered the Naples market in big numbers.

Percent of Naples Sales with Cash Buyers

Cash buyer  represent a large segment of second home buyers. There were more cash buyers in 2014 than total buyers in 2008.

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