Inventory is Rising!

By Robert Nardi

New listings in Naples during September increased 27.3 percent to 937 new listings from 736 new listings in September 2022, making pre-season buyers very happy. According to the September 2023 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), overall inventory continues to increase. For September, inventory for the single-family home and condominium markets increased 13.2 percent to 2,793 properties from 2,468 properties in September 2022. The report also demonstrated that pre-season homebuying is starting earlier every year as pending sales (homes under contract) in September increased 18.7 percent to 735 pending sales from 619 in September 2022 and 687 in September 2019 (pre-pandemic). The median closed price in September increased 3 percent to $571,500 from $555,000 in September 2022. Interestingly, the September report indicated 723 price reductions compared to 80 monthly price increases. Therefore, September was a great month to purchase a home in Naples based on the price reductions and the increased inventory.

 

What does this mean?

 

The report showed that September's average closed price increased by over 13 percent (month over month). While appreciation rates decelerate across all markets, Naples continues to command top values for quality properties. The NABOR® September 2023 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 presented in chart form (CLICK HERE ) for those who would like to see all the numbers.

 

I looked at the current active inventory in November 2023, and we have just over 3,480 units. This inventory is up from last month's inventory of 2,900 units. In an even market, active listings should be around 6000. I believe the growing number of actives is because our "Days on Market" is increasing. Hence, the reason why in September 2023, there were 723 price reductions. The inventory is not moving as quickly as in the past. Buyers are hesitant to buy because there are a lot of uncertainties out there. They fear higher mortgage rates, whether we are starting a recession (which we are not), two major wars to contend with, and the fear of inflation (which has calmed down considerably). These fears are buyers of homes $1M and below who will most likely seek a mortgage. Higher-end properties are selling because most people pay cash at a higher level. They are not buying a $2M property and mortgaging $1.6 Million at a 7.5% to 8% interest rate. If it were 8% after thirty years, they would pay over $2,600,000 in interest.

 

My best advice is to speak to your local bank or mortgage lender. You may want to consider a 5/1 ARM, which is a type of 30-year mortgage loan that has a fixed interest rate for the first five years (generally a lower rate than a 30-year fixed mortgage) and then adjusts on an annual basis based on market conditions and an additional amount from the lender. It is a hybrid mortgage that combines the features of a fixed-rate loan and a variable-rate loan. The "5" means the number of years with a fixed rate, and the "1" indicates how often the rate adjusts after that.

 

Another thought would be to seek out new construction. Some builders would like to move their product and, in doing so, may offer mortgage rates as low as 5.65%. In addition, with new construction, you may be able to "negotiate" a better price if it is a "spec" home. A "spec" home is when the builder is "speculating" that a buyer will come along and purchase a finished property.

 

If you are interested in selling, buying, or renting, please feel free to contact me directly at 239-293-3592 or send an email to  Robert@NardiRealty.com .

 

 

I wish everyone a Happy and Healthy Thanksgiving! My favorite holiday of the year!