Inventory Growing Fast!

By Robert Nardi

Data in the January 2024 Market Report showed invigorated confidence in the Naples area housing market for sellers and buyers. Overall inventory continued to climb for six consecutive months, resulting in a 58.8 percent increase in homes for sale in January, or 4,639 properties from 2,921 in January 2023. Fueled by a 29.1 percent increase in new listings year over year, January showings doubled compared to showings reported in December 2023. The first month of the year also saw serious sellers taking action to capture increased buyer attention with 1,804 price decreases, a 122.7 percent increase compared to December’s 810 price decreases. The report showed 6.4 months of inventory for January compared to .9 months in January 2022, when frenzied pandemic buying began to simmer. While pending sales in January decreased 7.5 percent to 1,010 pending sales from 1,092 pending sales in January 2023, pending sales activity for January increased 73.2 percent compared to pending sales activity reported in December 2023.

The January 2024 Market Report also showed that average sales prices decreased 7.8 percent compared to January 2023, partially attributable to the slower pace of luxury sales. Values have increased approximately 60 percent over the last three and a half years in our market, so if there is a small price reduction, most sellers will still enjoy a very healthy profit at the time of the sale.

First-time homebuyers and those seeking homes under $500,000 will be pleased to know that inventory in this price range increased 58.6 percent in January. Inventory for condominiums priced under $300,000 increased 112 percent during the month. Notwithstanding, because Naples is paradise, inventory for condominiums over $5 million increased 182.6 percent in January.

NABOR® January 2024 Market Report compares 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 in chart format (CLICK HERE, for all the statistics.

What does this all mean?

A buyer’s intent has shifted from pandemic years of wanting a home in Naples to wanting “the right” home in Naples. With more inventory available, buyers are now considering affordability factors that may influence insurance coverage: the age of the home, the age of the roof, storm protection, claim history, and whether the home lies in a flood zone. If buyers are contemplating an older home, it is best to consider the insurance cost up-front. Ask the seller what they currently pay for insurance. If the home has a 15-year-old shingle roof, it can be insured at a higher rate. In addition, to continue to get insurance each year after that, the roof would need to be inspected and have a “pass.”  After 20 years, the shingle roof would need to be replaced. If it is 20 years old, it can be a challenge for clay tile roofs. Most buyers would need to seek a third-party insurance provider like “Lloyds of London” to insure it, but the insurance cost could increase significantly. Hence, insurance costs are a significant factor when purchasing a home.

If a buyer purchases new construction, it has all the up-to-date hurricane building codes, and insurance coverage is much less. However, most of our new construction is farther southeast and northeast. So, you will be farther from 5th Avenue South, Downtown Naples. 

On the seller side, additional factors influencing list price include mortgage rates, master fees, community fees, social membership obligations, current or future assessments, etc.

On the bright side, our inventory is increasing, and buyers now have many more properties that they could choose from. In addition, Southwest Florida is a fantastic place to live. The glimmering Gulf of Mexico, sunshine, and beaches are superb. Your quality of life is excellent here.

Lastly, to assist with offsetting some of the insurance costs I discussed earlier, if you are a full-time resident, you do not pay state income tax. In addition, Collier County has the lowest real estate taxes in the state. It is only 1.25% of the assessed value of a home. Lastly, with homesteading your property here (your primary domicile), your real estate taxes can only go up 3% of the assessed value for the rest of your life.

 

If you need assistance with purchasing, selling, and renting, please get in touch with me at 239-293-3592 or via e-mail at Robert@NardiRealty.com. You can also perform your searches at BuyNaples.Net. I wish you and yours a fantastic spring!