Inventory continues to decline – Still a Seller’s Market

A 34.5 percent increase in new listings sparked 19,277 more showings during January compared to new listings and showings reported in December 2021. While an increase in new listings demonstrates a solid start for the real estate market this year, low inventory continues to harness the market’s potential. As a result of tight inventory, January sales activity could not meet the level of sales activity reported in January 2021. Historically, month-to-month sales activity during season ascends through April. But according to the January 2022 Market Report released by the Naples Area Board of REALTORS® (NABOR®), a 74.9 percent decrease in inventory for January to 1,122 homes from 4,474 homes in January 2021 will not provide the same level of sales transactions that occurred last season.

Buyers could explore an inventory that included 1,272 new listings. Those new listings translated to a 32 percent increase in pending sales to 1,373 pending sales during January compared to 1,038 pending sales reported in December. The overall median closed price increased 39 percent in January to $549,000 from $395,000 in January 2021.

The condominium market continued to report sales at an above list price trend for the second month in a row and a 47.2 percent increase in median closed price in January to $427,000 from $290,132 in January 2021. In addition, the median closed price for single-family homes rose 25.1 percent in January to $675,000 from $539,500 in January 2021.

With less than a one-month supply of homes, closed sales during January could not realize the level of activity it experienced a year ago and decreased 27.9 percent to 818 closed sales from 1,134 closed sales in January 2021. Pending sales which reflect the number of new homes under contract, dropped 37.9 percent to 1,373 from 2,210 in January 2021; but, as mentioned above, pending sales in January increased by 335 contracts (32 percent) compared to pending sales reported in December 2021 (1,038). The NABOR®

January 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, including overall (single-family and condominium) findings for 2022. If you wish to receive a copy of this chart, please send your request to Robert@NardiRealty.com.

New lending rules from Fannie Mae and Freddie Mac go into effect April 1, 2022 and add more requirements from those purchasing a second home or condominium. The change, in a nutshell, is that it is going to cost more to procure a loan, and when it comes to investment properties, there is more risk, and they’ll have their specific underwriting process by the lender, therefore, more costly to the mortgagee. So, one way around it would be for you to take a home equity loan from your current primary home to purchase your second or investment property.

What does this mean?
Buyer demand is not likely to slow down anytime soon because homes in Naples are still much more affordable than homes in other parts of states with coastal cities like California, New York, New Jersey, and Massachusetts. It continues to be a strong Seller’s market. Therefore, I encourage owners to sell their properties:
1) that require substantial maintenance to gain the same or more profit from investment dividends,
2) who would be moving to a retirement or assisted living community,
3) who are empty nesters who do not require a large single-family home anymore or,
4) that are second-home owners who would enjoy a profit and purchase a Naples home closer to retirement.

Rentals for next season in demand
It seems everyone wants to live in Southwest Florida in some capacity or another, so much so, that Nardi Realty has a large rental department with over 170 seasonal rentals and over 150 annual rentals. This season we saw many short-term rentals expand their stay to three months beginning January 1, 2022. In years past, we used to see more one or 2-month rentals. The bottom line is that people want to be in Southwest Florida for a longer time. Also, staying here for three months does give the renter the ability to look for property to purchase vs. rent. We give a first-come, first-serve basis regarding their current rental unit for those who have rented this year. If they pass on it, we place someone else within the property. Demand is so high that we have 250 potential renters on a waiting list! Therefore, we need more rentals to fill this gap. I encourage everyone who has a home or condo not to leave it empty. Our One Source Rental team at Nardi Realty can work with you to make it an annual or seasonal rental. Rental prices are at an all-time high. The upside is that rents received can assist you with paying your taxes, insurance, HOA dues, etc.

Please feel free to reach out to me at 239-293-3592 or send an e-mail to Robert@NardiRealty.com with any questions.

Knowledge is power!
Please get in touch with me directly if you wish to find out what your home’s potential list price can be or if you want to explore making your current residence in Southwest Florida a rental by either sending an e-mail to Robert@NardiRealty.com or by calling me at 239-293-3592.

I wish you a great spring!