By Robert Nardi, Broker/Owner
A slight reduction in overall median closed price and fewer new listings during May indicate a window of opportunity for buyers and sellers in the next few months. According to the May 2023 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), the overall median closed price decreased 1.2 percent to $600,000 from $607,500 in May 2022. There were also 1,045 price decreases and a 31.2 percent decrease in new listings reported during the month.
The May report shows a 3.8 percent decrease in the percent of list price received to 96.3 percent compared to 100.1 percent reported in May 2022. The report showed no month-over-month median closed price decrease for condominiums in May, only a 6.5 percent decrease (month-over-month) in the single-family home market. New listings decreased 31.2 percent to 990 from 1,438 new listings in May 2022. Fewer new listings are putting a strain on the overall inventory of homes, which is still recovering from frenzied buying during the pandemic.
Inventory has increased slowly over the last year, averaging 100 new homes monthly. Overall inventory increased 27.6 percent for May to 2,749 homes from 2,155 homes in May 2022. Pending and closed sales during May decreased 4.4 percent and 20 percent, respectively, compared to last year. The report also showed that we were 150 closed sales short of what sold in May 2019 but with half the inventory.
The NABOR® May 2023 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 in a chart format. If you wish to receive a copy, please send an e-mail to Robert@NardiRealty.com.
What does this all mean?
Demand for homes in Naples has remained strong; however, we are still in a very tight market. Our inventory is increasing but at a prolonged rate. Potential Buyers are waiting for prices to drop, but they are not falling. Sometimes we see a big price drop in properties by $50,000 to $100,000, but that is because the properties were priced too high. Some owners were reaching for the sky, but the market dictates where that price should be. For example, the development Park Shore in Naples, FL, currently has single-family homes that are active on the market and are priced from $2.1M to $25M and have had nine closed sales from April 8th to July 8th, 2023. Those sales ranged from $1.85M to $4.90. Six sales were below $2.275M, and four were between $2.89M and $4.9M. Many homes priced out of these ranges have a high “Days on Market,” which indicates that they are still priced higher than they should be. So, you will see prices dropping, but that is because they were priced higher than the market is dictating.
I currently have buyers that want to be near the water and are ready to pounce on new listings once they appear on the Multi-Listing Service (MLS). I look for new daily listings that fit their criteria and set up automated MLS searches. As you know, “The early bird catches the worm.” Since our inventory is still tight, you want to act quickly on new listings that appear. Most of these buyers are not here, so I, as their real estate agent, must do a “face time” with them and tour the home. If they like what they see, we could put an offer in. Yes, “just from a face time,” but the market still dictates this approach.
Interestingly, homes priced at $500,000 to $800,000 are moving slower than higher-end homes. Why? Because of the higher mortgage rates. The higher interest rates are preventing potential Buyers from moving. Why give up a 2.75% to 3.25% interest rate for a 6.8% interest rate? Their mortgage payment would increase 100% to %150 percent. It just knocks potential Buyers out of the market.
On the other hand, higher-end homes are moving because Buyers who can afford to pay cash are doing so. Moreover, the only people moving are those going through a life event; death, marriage, divorce, new job, and the need to move to a senior facility. Seniors are in the best position to move. Many have owned their homes for years and have built up a large amount of equity. They can now put that equity in a bank/financial institution and earn 5% interest on their monies with no risk. The new senior facilities offer different programs, from a small deposit and rent to a large investment and a monthly maintenance fee. The transition for seniors can be seamless.
Any questions?
Please feel free to contact me at 239-293-3592 or via email, Robert@NardiRealty.com.