By Robert Nardi
The Naples Board of REALTORS® released the December and Year-End 2021 Market Reports, which tracks home listings and sales within Collier County (excluding Marco Island). Demand for the Naples lifestyle eclipsed all expectations and helped break several home-sales records in 2021. The year ended with a 25.8 percent increase in overall closed sales and a 20.3 percent increase in median closed price (year over year). However, it appears that the Naples housing market is going through a transformation, and the last 18 months of record sales activity will not be sustainable in 2022 based on available inventory.
Sellers of homes located in Naples capitalized on a long wave of pent-up buyer demand in 2021, a year that exceeded many NABOR® records, including over $17 billion in home sales, a 52 percent increase from 2020. The closed sales momentum reached its zenith just as summer arrived but began to dim when inventory could no longer meet the rapid pace of demand during the second half of 2021. As a result, there were 20 percent fewer closed sales (6,109) from July to December than January through June (9,414). According to NABOR®’s Market Reports, 487,677 showings and 15,523 closed sales occurred in 2021. Strong buyer demand devoured the inventory, resulting in a 76.6 percent decrease in the number of homes for sale to a record low of 1,042 properties from 4,462 properties at the end of 2020. Strong buyer demand and a declining inventory influenced the median closed price (year over year) during 2021, which increased 20.3 percent to $445,000 from $370,000 in 2020. Rising home values in Naples inspired many sellers in 2021, as reflected in the 17.4 percent annual increase in average closed prices to $807,695 from $688,091 in 2020
In 2021, pending sales listings increased 14.8 percent to 18,664 pending sales from 16,254 pending sales during 2020. However, like closed sales activity, much of the pending sale activity occurred during the first half of the year when inventory was more plentiful. The NABOR® December and Year-End 2021 Market Reports compare single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and include an overall market summary. NABOR® sales statistics are in chart format ( CLICK HERE ).
During July and August, when families with children tend to relocate, close sales of single-family homes outpace condominiums during the year. The data indicate that home-type preferences shifted in 2021 to condominiums, as shown by an increase in closed sales of 37.2 percent to 8,206 condominiums from 5,979 condominiums in 2020. Condominiums in the $500,000 to $1 million price range reported the highest increase (97.8 percent) in closed sales compared to all other home types and price ranges tracked by NABOR®. Furthermore, the final sales price over the list price rose to 98.6 percent in 2021. During November and December, this figure was reported to be over 100 percent in the condominium market
What does this all mean…
It means that the Naples housing market was on fire in 2021 and now cooling down only because of our depleted inventory. There is still strong demand but very little inventory. For example, on February 10th, 2022, there were only 885 units available for sale in Collier County, based on our MLS data. This lower number of units is genuinely unbelievable because, in years past, we usually had anywhere from 5000 to 6000 units available with less demand. So, prices went up only marginally.
The shift of people desiring single-family homes vs. condominiums occurred because when COVID broke out, no one wanted to share common elements. For example, pools, elevators, etc., so at that time, single-family homes were desirable. However, as time has gone on, the shift to condominiums was natural because of price points and accessibility. As you can see from the report, home prices increased 17.4% for single-family homes, which pushed people out of that segment.
Demand is not going to curb at all in 2022. Why? Employers are now telling employees that they are no longer needed in the office and will work remotely indefinitely. Hence, Southwest Florida becomes incredibly attractive to these remote workers because of its weather, beaches, lifestyle, and tax structure. There is no state tax and city tax (unless you live in the City of Naples). Our sales tax is 6% with an added 1% surtax (7% in total). In addition, in Collier County, real estate taxes are the lowest in Florida, only 1.25%. In many states, the tax structure is much higher.
Time to sell…
If you are thinking of selling, this is the time to strike. You will most likely garner an excellent price based on the low supply and high demand. It would be in your best interest to hire a REALTOR© to navigate this market so they could help you get top dollar. Please feel free to reach out to me at 239-293-3592 or send an e-mail to Robert@NardiRealty.com with any questions.
If you would like to perform property searches, please feel free to click on BuyNaples.net .
Please stay warm and healthy this winter. Just think Spring is around the corner!