By Robert Nardi
Like many industries, the Naples area real estate market was tested in 2020 when the COVID-19 pandemic hit and shuttered businesses in every community. Fortunately, real estate professionals obtained essential-service designation from the state. The pandemic's effects negatively impacted the housing market during March and April, two months that historically have been the best months for home sales during the year. As lockdown restrictions began to loosen, pent up demand for homes in Naples resulted in more homes sales during the second half of the year than during the first six months.
REALTORS® adapted quickly and became better at marketing using FaceTime, virtual tours, and other creative ways to show properties. According to the annual report, it worked well because pending sales in Naples had an incredible run from July to December, averaging 1,400 pending sales during each of those months.
Pending sales for 2020 increased 28.8 percent to 16,254 pending sales from 12,623 pending sales in 2019. Closed sales for 2020 increased 19.4 percent to 12,300 closed sales from 10,302 closed sales in 2019. There was a 41 percent increase in closed volume year over year, which equated to a remarkable rise from $12.9 billion in 2019 to $18.2 billion in 2020.
Closed sales of homes priced $2 million and above outperformed all other price points tracked by NABOR® in 2020. With a notable 62.4 percent increase over 2019, Ruud said, "the luxury housing market in Naples proved to be an investment of choice in 2020."
Looking at closed sales historically, the desire to experience the coastal lifestyle has been growing in demand for many years as our data shows only 3,973 closed sales in 2007 compared to a whopping 12,300 closed sales in 2020.
While median prices in our area increased significantly [11.4 percent overall], this wasn't out of line with what was witnessed on a national basis because NAR [National Association of Realtors®] reported that median closed prices in America went up 12 percent during 2020.
Average sales prices in the area rose 16.1 percent. I think all would agree that an increase of roughly $100,000 in one year in average sales price in any market is extraordinary."
Median closed prices for single-family homes in the Naples Beach area saw the most significant leap in 2020 with an increase of 27.1 percent. The second half of the year performed much better, which, according to Florida Realtor® data, resulted in a 142 percent increase in closed sales of homes over $1 million in Southwest Florida.
A year ago, we had 7.2 months of supply, and at the end of 2020, we are at 3.1 months of supply. We've gone from a balanced market to a sellers' market in one year.
Because of the popularity of single-family homes, that inventory sector decreased 58 percent in 2020, while the condominium inventory decreased 41 percent.
The NABOR® YE 2020 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 of you that like statistics.
What does this all mean?
It means the Southwest Florida housing market is on fire! Many of the factors contributing to this are:
- More workers are working remotely because of COVID. They can pick & choose where they wish to live.
- Florida is a tax-friendly state. No state taxes. Also, Naples (Collier County) has the lowest real estate taxes in the entire state (1.25%).
- Very inexpensive to borrow money. Some 30-year conventional loans can be as low as 2.675%.
- In the back of some people's minds, they intended to move to Southwest Florida one day. However, with COVID rearing its ugly head, it's the general feeling, "It's either now or never!"
Both long- & short-term rentals are on fire as well. It seems like everyone wants to spend the winter down here this year. Why not? Beautiful weather, white sandy beaches, and you can eat breakfast, lunch, and dinner out if you choose. If you wish to come down still, there are more openings in April than there is in March. You can search our rentals at BuyNaples.Net, or if you need assistance, please feel free to call my Rental Operations Manager, Corine Bordges, at 239-206-6457.
I hope all is well with you and yours and above all, stay safe!