By Robert Nardi
Overall closed sales of existing homes in Naples for February increased 62 percent to 1,307 closed sales from 807 closed sales in February 2020. Broker analysts reviewing the February 2021 Market Report were not surprised at the increased momentum. Many report buyers are scooping up the available inventory of homes in all geographic locations within Naples almost as fast as they come onto the market. Inventory fell 68.8 percent in February to 2,224 homes from 7,127 homes in February 2020. According to the report, single-family homes continue to be in high demand, so many buyers pivoted to condominiums in February. As a result, the condominium market experienced a 75.7 percent increase in closed sales and a 66.6 percent decrease in inventory. And unlike 2005/2006, activity is not a result of ‘manufactured wealth’. Sales today are done with real money, which is why home values in our area are finally increasing.
It has been a challenge for buyers to find existing properties for sale in all price categories and finding new home purchasing options is diminishing. Builders report a significant shortage in materials for new home construction, i.e., windows, lumber, piping, etc. New home communities are near completion, so we see many put their last lots up for bid.
It is not surprising that February saw pending sales of existing homes in Naples skyrocket 50.7 percent to 2,299 pending sales from 1,526 pending sales in February 2020. In comparison, there were more pending sales (2,299) at the end of February than inventory (2,224), resulting in a drastic drop in supply as the February report revealed our area now has only a 2-month supply of homes available to buyers. The NABOR® February 2021 Market Reports compare 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 ( CLICK HERE ) for those that like statistics.
As of late, it has been so competitive that many buyers are purchasing homes with cash as it provides leverage during the sale. This occurrence often happens in multiple offer situations because financing can often weaken an offer. Therefore, buyers use cash to purchase and later refinance to enjoy the low-interest rates once the sale is complete. Not surprisingly, cash sales accounted for 57.9 percent of all closed sales during February.
All I can say is, “Wow!” This season has been on fire. I think what added fuel to the fire was COVID restrictions up North/East coast, winter weather, and the realization that Northern/East coast states real estate and state taxes significantly increased.
Ironically, the news reported that tourism was down 18% in Southwest Florida; however, they counted hotel occupancy. They were not looking at rentals. The beginning of 2021 saw the Nardi Realty rental department boom, with almost 75% of our rentals being from the beginning of January through the end of March. Usually, it would be one- or two-month rentals. If you were down here during season, there certainly was not any less traffic. In fact, to me, it felt even more congested. And even the restaurants were packed, and it was a challenge to make a reservation.
Property values have increased based on supply and demand. Some “pennywise” people have noticed this increase in value and have decided to “cash in” by selling their property. They plan to rent for a couple of years and then get back into the market. However, Southwest Florida property seemed undervalued for many years, and our prices have finally caught up to what they should be today. Plus, you have the added perk of fantastic weather, the ability to eat most of your meals outside, and work remotely. I guess that is why many call the Southwest Coast of Florida the “Paradise Coast.”
Surprisingly, this year, quite a few renters who stayed through the end of March decided to extend through April and even May. Why go home?
If you are interested in our availability or would like to book a rental, please access www.BuyNaples.net or you can call Corine Bordges, my Rental Operations Manager, directly at 239-206-6457. We always give first preference to those booked with us this year; however, some have decided not to renew. Corine would have the most current availability.
Spring has finally sprung! Please stay healthy and safe. Hopefully, we will be able to see you soon!