Inventory is Going Up!

By Robert Nardi

Overall inventory of homes in Naples for November increased 38.8 percent to 3,795 properties from 2,734 properties in November 2022. Buyers have not enjoyed a level of choice since September 2020. The month also included 1,080 price decreases resulting in a 3.3 percent decrease in overall median closed price. According to the November 2023 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), data showed the housing market is poised to enjoy healthy winter sales.

The November Report showed 1,080 price decreases, the highest in six months. Price deceleration may be happening in parts of Naples as the overall median closed price dropped to $580,000 from $600,000 in November 2022. As such, November was one of four months this year that reported a decrease in median closed prices. In fact, year-over-year price decreases have not been reported since 2019. Area builders have experienced a much slower fall sales market than what was budgeted for the fall months. Sales were lagging behind monthly budgets by approximately 25 percent, and cancellation rates on contracts have hovered around 20 percent due to the higher interest rates.  Therefore, pending sales (homes under contract) in November decreased 13.8 percent to 661 pending sales from 767 pending sales in November 2022. Closed sales also decreased by 6.1 percent to 537 closed sales from 572 closed sales.

The NABOR® November 2023 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. NABOR® sales statistics are presented in chart format (CLICK HERE ).

While monthly inventory levels for single family and condominiums typically increase and decrease in a similar manner, inventory in the condominium home market in November rose by 74.5 percent compared to a 17.4 percent increase in the single-family home market.

What does this all mean?

The current rise in condominium and the single-family inventory were most likely due to post Hurricane Ian repairs that were finally completed making them available for sale. To add fuel to the fire, interest rates and property insurance rates rose, making the cost of maintaining or keeping a home in Florida a challenge for some property owners. However, the tides are changing, and Buyers have more of an opportunity to purchase at a lower price. In addition, there are many positives to owning in Southwest Florida, especially in Collier County. Collier County has the lowest real estate tax rate in the state.  Your property will be taxed at 1.25% of the assessed value.  Plus, if you homestead your property, you’ll get an additional $25,000 (single) or $50,000 (married) deducted from the assessed value. If you do not live in the City of Naples, you will not have to pay city tax.  Lastly, you pay no state taxes. Those savings could and would outweigh some of the higher expenses owning in the state of Florida.  I know some states charge up to 3% of the assessed value for real estate taxes.  For example, if you owned a $500K home in a state that would charge 3%, your real estate taxes would be $15,000 per year.  In Collier County, your taxes would be $6,250. Lastly, the sales tax in Collier County is 6% which is lower than many other states.  My best advice to you is to work with an accountant or tax attorney and form a plan that could derive tax and savings benefits by purchasing in Southwest Florida. And of course, my firm and I are always willing to assist you in anyway we can.

I just want to wish everyone a very Healthy, Happy, & Prosperous New Year!