By Robert Nardi, Broker/Owner
In the first year after a two-year interruption in regular activity caused by the COVID-19 pandemic, the Naples real estate market is stable in terms of value. Still, buyers have fewer homes to choose from, and prices have elevated. As pandemic restrictions loosened in 2022, sellers and buyers pivoted their attention from the housing market to the travel market. As a result, and according to the December 2022 and 2022 Annual Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), overall closed sales in 2022 decreased 34.8 percent to 10,156 properties from 15,570 properties in 2021. And while inventory is beginning to rebound, increasing 106.3 percent to 2,465 properties in December 2022 from 1,195 properties in December 2021, broker analysts reviewing the report are uncertain where and when an influx of inventory will arrive to meet our pre-pandemic levels. The report showed only 105 homes for sale below $300,000 in December compared to 1,816 in December 2019. Demand for the Naples lifestyle remained constant in 2022, and low inventory pressed median closed prices upward. The median closed price in December 2022 increased 13.9 percent to $575,000 from $505,000 in December 2021. Looking back at December 2019, the median closed price was $344,255, and inventory was double what it is today.
Demand for homes in 2022 kept REALTORS® busy looking for new listings, which dropped 8.4 percent to 13,577 compared to 14,819 in 2021. Many homeowners, especially those who purchased homes below $300,000 or at low-interest rates, are now unable to afford a change in local address due to the increase in mortgage rates. Then, in the wake of Hurricane Ian, the Naples real estate market pivoted again in the fourth quarter of 2022. Homes that suffered damage fell into two categories depending on their age and the Federal Emergency Management Agency (FEMA) 50 percent rule. (The FEMA 50 percent rule, as part of the National Flood Insurance Program, mandates that if a home incurs substantial damage — determined when repair costs total or exceeded 50 percent of the property’s market value. Then, the owner must bring up the property to current building codes and floodplain regulations.) This mandatory rule will affect older homes in the Moorings, Park Shore, and Naples Park areas. The owners may choose not to rebuild and sell the property “As-Is.” If this is the case, it most likely will be priced at “land value.”
The NABOR® December 2022 Market Report compares single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. NABOR® sales statistics are presented in chart format. For those of you who wish to see the entire chart/statistics, please send an e-mail to Robert@NardiRealty.com.
What does this all mean?
It means, once again, we are moving toward a balanced market. Are people still buying? They are, but at a slower pace which is why inventory is rising. The economic factors affecting our market include fears of inflation and recession and increasing mortgage rates, which are still over six percent on average. In addition, if you factor in insurance, assessments, and taxes, the cost of buying a home today in Naples is a lifestyle that some people, unfortunately, cannot afford. On the other hand, Naples’s lifestyle and weather are a huge draw for retirees or people who can work remotely and want to get out of the cold and enjoy what they love, like tennis, golf, pickleball, jogging, walking, etc.
Speaking of interest rates
I would not let the interest rates deter you from purchasing. You could always get an adjustable 5-year mortgage rate, significantly lower than the 6.5%, 30-year rate. Even if you finance for 15 years, your mortgage rate will be lower. My advice is to seek a mortgage professional who can help you navigate through lowering your starting interest rate.
Many can structure a loan based on your solvency, monthly income, and credit score for you to acquire your “piece of paradise.”
Rentals
Nardi Realty has a large rental department. We have over 120 annual rentals and over 150 seasonal rentals. This season many people booked for three months, January through March. In other years, many just reserved for one or two months. Why? Because many come down not only to participate in what they love to do but because these three months become their socialization instead of being cooped up in their home up north, with a foot of snow and cold temperatures. I have lived here for over 21 years, and the Florida sunshine and activities make you vibrant, making you feel younger. You are thriving daily! Hence, our rental department is busy. If you, a friend, or family member wish to book a rental for March or April 2023 or 2024, you can call Sheri Martin at 239-571-6189, Rental Administrator. She can assist you with your search, or you can access www.BuyNaples.net and create your own.
Have an amazing March!
Nardi Realty
3400 TAMIAMI TRAIL N. STE 103, NAPLES, FL 34103
239-293-3592 | www.NardiRealty.com