Luxury Market Still Soaring!

By Robert Nardi

Activity in the Naples area housing market during the Second Quarter of 2018 remained steady in comparison to activity during the Second Quarter of 2017. According to the 2Q 2018 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), overall closed sales increased 2 percent to 2,926 properties in the 2Q of 2018 from 2,880 in the 2Q of 2017. But in the $2 million and above single-family home market, closed sales rose 25 percent in the 2Q of 2018, which—along with other market indicators—leads many broker analysts to believe that interest in luxury homes will remain in high demand.

Available inventory at the end of the 2Q of 2018 was 5,165 properties, just 24 units behind the inventory level at the end of the 2Q of 2017 (5,189 properties).  Inventory rose 15 percent in the $2 million and above condominium market during the 2Q of 2018, which may be a factor in the uptick of pending sales in the luxury condominium market as it rose 32 percent during the 2Q of 2018.  Inventory in other parts of the state and nation are stretched thin, hovering between 3 and 4 months of inventory, but Naples enjoys almost 7 months of inventory.  There were four property sales over $10 million during the 2Q. Brokers analyzing the market report agreed that multiple offers on luxury properties have risen. But whatever factor(s) is driving the increased interest, closed sales of luxury homes over $2 million are positioned to rise again as the stage has been set in the 2Q where pending sales in this price category increased 22 percent for single-family homes and 32 percent for condominiums. The NABOR® Second Quarter 2018 Market Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR® Second Quarter 2018 sales statistics are presented in chart format (CLICK HERE).

The benefits to be a Florida resident!

It appears the luxury market has really taken off.  I think one of the contributing factors is that Florida has no state tax.  This could be a huge savings for some.  Also, if you homestead your property here, there are numerous tax benefits that are just too good to pass up.  For instance, your real estate taxes are reduced by $650 and they are capped at 3% a year.  For example, if you owned a home last year that was appraised at $200,000 and the price this year is appraised at $220,000, your value rose 10% ($20,000 more) so typically you would be taxed 10% higher, however, because you have a homestead property, your real estate taxes can only be increased 3% ($6,000).   Since Collier County real estate taxes are 1.25% (relatively low compared to states like New York, New Jersey & Massachusetts) of the appraised value at the 10% you would pay $2750- $650= $2,100, however, because of homestead rule, you would only pay $2575-$650= $1,925.  It doesn’t look like much, but it could be a large tax savings over time and if you owned a multi-million dollar property, the tax savings would be huge.  Other benefits of a homestead property give married couples a large tax savings in case one should die.  The spouse who dies, his/her portion would merely pass to the other spouse tax free.  No probate.  No inheritance taxes.  And the last significant benefit is that if you were in a law suit, and the winning party was able to put a lien on your Florida home, they could never force you to sell your home.  They would have to wait for their monies until your home ownership changed.  I hightly recommend that you contact a Florida tax attorney or certified public accountant to see if you could benefit by being a Florida resident.

Season is quickly approaching.  If you need a rental or are thinking about purchasing, please feel free to contact me at any time.  My phone no. is 239-293-3592 and my e-mail is Robert@NardiRealty.com.

Finally, we did have some Red Tide in Collier County, but it was small compared to some of the north west coast Florida cities.  In fact, this week it has improved greatly.  Very few signs remain.

 

Enjoy the rest of your summer and looking forward to seeing you in season or sooner!