What’s Going On Here?
What a difference a year makes. Just look at your life right now. I probably don’t know you, but I bet things are quite different in your life now versus 1 year ago. I can personally attest to this being true in my life. Last year I had two dogs, now I have one. So on and so on. Some friends of mine were on their 21st home purchase offer about this time last year. I doubt anyone right now is facing that same mountain of offers with interest rates pushing 7% again and inventory in the Overall Naples Market being 126.9% higher in February 2023 than February 2022.
But my feelings don’t matter much, let’s look at the current Pending Transactions below for proof. Aha, there it is, While Pending Transactions (Accepted Buyer Offers) are trending up in February 2023, they are largely down from 1 year ago in the three areas I have chosen to write about today.
Pending Transactions | February 2023 vs February 2022
Overall Naples Market – Down 10.8%
ZIP 34102 – Down 9.4%
Golden Gate City – Down 40.7%
Now, the interesting part, which you can read in other competent real estate blogs as well, is that while inventory is growing and pending sales are shrinking, the Median Sales Price for Southwest Florida is growing. Huh? What about the ‘ol rule of supply and demand? Is Naples immune to this standard of economics? Did DeSantis do this? Well, that is a whole other conversation. But I can tell you that either speculation is a bit out of hand or Naples is still undervalued. Check out the below Median Sales Price stats for Naples and how that compares with the National Median as reported by FRED (Federal Reserve Economic Data):
Median Sales Price | February 2023 vs February 2022
Overall Naples Market – Up 9.1% | $600,000
ZIP 34102 – Up 108.4% | $2,284,267
Golden Gate City – Down 9.5% | $449,000
Q4 National Median Sales Price was at $467,700, basically flat from Q3’s $468,000. I know a lot of people are thinking a big crash is coming. Maybe it is, maybe it isn’t. But why let that fear hold up your life? Look at the FRED graph, anytime there was a downturn, the market came right back up. And if you have a home to sell before you can buy your next, better home, just think that if the market tanks, so will your proceeds that are sitting in your current home as equity. The more important variable here are interest rates if you are financing your next purchase. Also, If you do need to sell your current home to fund your next home, make sure it is priced right and you hire an agent who cares about you. An agent with a heart will do a better job.
I think a big driver of the Median Sales Price increase is from new construction. For example, Metropolitan Aura had starting prices around $1,700,000 last year. Now the starting price is at $2,400,000. The Tides at Bayfront were starting at $1,900,000 last year, now they are at $2,400,000, starting. Reason being that materials shot up, along with everything else, over the last 10 months or so. Concrete, roofing materials, skilled labor. If you want a decent deal on something right now, buy an existing property.
I happen to have a couple of off-market properties in downtown Naples that are pretty good deal. And not because they were flooded during Ian or anything. I just happen to believe that certain parts of Naples are undervalued per my constant research and working IN my business daily. These properties have beautiful views of Naples Bay and another as a NW view above the treeline of the legendary Naples sunsets. They are 1830-2500sqft and have a minimum 3 bedrooms. Contact me if you want to learn more about these off-market properties, or any other listings you might be looking at.
Well, that’s enough of my rambling. Thank you for reading the latest installment of the Naples Housing Market Update. I am here to help, so if you have a home to buy or sell, give me a ring. My office is located on the first floor of the Bayfront Professional Building in the heart of Naples.