August 2023 Prices Holding Steady!

By Robert Nardi

Inventory is selling quickly, and prices are stable in the Naples housing market. According to the August 2023 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), closed sales of homes in Naples during August increased 17 percent compared to July closed sales, and 1.9 percent to 702 closed sales from 689 closed sales in August 2022. Brokers who reviewed the Market Report are confident sales during the second half of 2023 could outperform sales during the second half of 2022 unless we experience another major disaster like a hurricane. Another promising factor that supports this expectation is the steady rate of new listings, which increased 2.6 percent in August and contributed to the 7.2 percent increase in inventory for the month. Prices are holding, and we will be near the historical 8% yearly appreciation.

The median closed price in August increased 5.2 percent to $605,000 from $575,000 in August 2022. However, according to the August report, activity in the condominium market fueled many of the increases reported. As such, there was a 7.7 percent increase in the median closed price in the condominium market compared to a 2.2 percent decrease in median closed sales price for the single-family home market; a 10.1 percent increase in new condominium listings compared to a 3 percent decrease in new single-family home listings; and a 25.5 percent increase in condominium inventory compared to a 3.7 percent decrease in single-family home inventory. The report showed 54 days on the market compared to 31 days in August 2022.

The NABOR® August 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 in chart format (CLICK HERE) for those who want to see all the data.  

What does this all mean?

It means that Naples, FL, continues to be resilient even after having a major hurricane last year and with mortgage rates climbing. The real reason prices are holding steady is because of our lower inventory. Naples' housing inventory currently has 2880 properties for sale. An even market would be hovering around 6000 properties for sale. Demand continues to occur here, just at a lesser pace. Less demand and inventory equate to prices holding steady. Why is there less inventory? People are "stuck" in their current properties because they have a low mortgage interest rate. Most interest rates for years were between 2.75% and 3.25%. Their mortgage payment would double if someone wanted to move for an extra bedroom or a third-car garage. Most people can't afford that. Plus, since the hurricane, it has been a challenge to find insurance, and if you did find insurance for a new property, it would be higher than what you are currently paying. Let's face it: the only people who are moving are the ones that have to based on life changes. Some of those life changes are newborns, divorce, death, and the elderly who can no longer live alone. Older adults have the best advantage because they have owned their homes for years and most likely have accumulated much equity. In addition, there certainly are plenty of 55-plus communities here. There is a wide variety they could choose from. These communities are all different and allow an array of living packages. There could be a "buy-in" and rent like an apartment. Another could be a much larger "buy-in," they build the property to suit, but it reverts to the community upon death. The last one is you buy a fee simple property. If death occurs or you decide to move, you can sell the property.

Seasonal Rentals

Summer and seasonal rentals have been slower than in the past. For years, with COVID-19 rearing its ugly head, many people chose Florida as a destination. For the most part, we were an open state with many outdoor dining opportunities, and people could be social and not wear masks like the rest of the country. We had an increasing number of bookings for both seasonal and summer rentals. No one wanted to be in their home state due to COVID-19 restrictions. COVID-19 mandates started disappearing at the beginning of 2023. When the summer of 2023 approached, we realized that bookings for both summer of 2023 and seasonal rentals for 2024 were down significantly. Why? No more COVID-19 mandates preventing people from traveling. They wanted to venture out and do something different. I am sure you noticed everyone went to Europe this summer; Italy was the most prevalent vacation destination. Since potential tenants now have other options to travel, along with the hike in seasonal rental costs, the demand for seasonal rentals has lessened. 

If you are considering buying, selling, or renting, don't hesitate to contact me with any questions. You can call me directly at 239-293-3592 or send an e-mail to Robert@NardiRealty.com.

Happy Fall!