By Robert Nardi
According to the November 2020 Market Report, released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), the Naples real estate market continues to see an upward trend in both showings and closed sales. In November 2020, there were 36,508 showings, which represents a 43 percent increase over the same period in 2019. Closed sales for the overall market increased 58.8 percent to 1,126 closed sales in November 2020, up from 709 closed sales in November 2019.
The sustained market demand places pressure on real estate pricing, with notable increases in median and average closed prices of homes when comparing month over month statistics. At $669,409, the year-to-date average closed sales price in November 2020 reflects a more accurate and modest growth with a 12.7 percent increase over November 2019 year-to-date average closed sales price of $594,065.
The NABOR® November 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 who like statistics.
What does this all mean?
We are getting many East coasters flocking to Southwest Florida because they are dealing with high taxes in their home state, are locked down by COVID, and are working remotely permanently. They are seeking asylum in here with our lower taxes and our beautiful subtropical weather. With this influx of people, demand is much higher, and our supply is low. When this happens, prices go up, and therefore, it becomes a sellers’ market. However, sellers must realize that their homes need to appraise for a mortgage contingency to be approved. Since mortgage rates are at an all-time low, many cash buyers have decided to take advantage of the historic low-interest rates. Unfortunately, if it does not appraise, most people would move-on because they will not overpay. I scratch my head in disbelief when I see sellers raise their prices. With the internet and all the technology out there, we could certainly see this price increase. When negotiating, most buyers would start at the original price to strategize an offer, not the new “higher price” listing. Because of this tight market, sellers are only willing to come down 1-3% from their asking price. This market is a bit tough on buyers because the inventory is low and the “good ones” are under contract in a day. My best advice to buyers is to work closely with a REALTOR® and let him/her know what you are looking for and act on it quickly, or else it will be gone. My best advice to sellers is to price his/her home to sell based on sold comps in his/her neighborhood; not active, not pending, but sold properties. If sellers price their home too high, even in this market, it will not sell.
The Seasonal Rental Market
The seasonal rental market in Southwest Florida is booming. 75% of our seasonal rentals arrived on January 2021 and are staying until March 31, 2021. Having this large volume of 3-month rentals is unprecedented. In past years, some would rent for 1, 2, or 3 months. Why three months? People are currently working remotely and are now informed by their employer not to expect to be back in the office until June 2021. Southwest Florida has a tremendous number of amenities, the ability to dine outside practically every meal of the day, and of course, are incredible sunny and warm subtropical weather. Why stay in the cold, locked down, and nowhere to go?
Please keep my Firm in mind if you are either looking to Buy, Sell or Rent. We are a full service residential real estate firm. We do it all!
I wish you a healthy, happy & prosperous New Year from my family to yours!