Market Watch September 2024

Inventory Increases, Slight Drop in Pricing

The July 2024 Market Report by the Naples Area Board of REALTORS® (NABOR®) is a pivotal source of information, providing key insights into the current state of the real estate market in Naples. The report reveals that closed sales of properties in Naples during June and July declined compared to the same months in 2023. It tracks home listings and sales within Collier County (excluding Marco Island), stating that overall closed sales during July decreased 2.6 percent to 608 closed sales from 624 closed sales in July 2023. Pending sales activity reported for July declined 15.7 percent, leading broker analysts to predict a similar closed sales performance in August. Overall, the first half of 2024 has been averaging for sales. We still have buyers who want to be here, and new listings have remained strong, providing even more buyers options this summer.
 

The impact of the pandemic on the real estate market is profound. If we compare year-to-date [2024] market results to 2019, sales are down 16 percent. For July, we are down 29 percent compared to July 2019 (considered an average year). The surge in demand to relocate to Southwest Florida during the pandemic led to a temporary increase in demand, setting a wave in motion. In response, prices began to increase as inventory vanished, down to 1,042 homes in inventory in December 2021. But this surge was short-lived, and many sellers have slowly adapted to a new reality.
 

Overall, inventory has been climbing for the last 28 months. For July, inventory increased 50.5 percent to 4,352 properties from 2,892 properties in July 2023. There are 6.2 months of inventory available, up 59 percent from 2.9 in July 2023. Conversely, closed sales have declined since July 2021, or 36 months ago. Inventory levels have returned to more historically normal levels yet well above where we were the last couple of years. With the additional competition for sellers, too many still expect to receive aspirational prices when buyers have much more to choose from.
 

What does this mean?
 

On average, home values in Naples have increased 50 percent since 2019 due to the buying frenzy of the pandemic. Unfortunately, the double-digit gains are no longer in stride. Inventory has increased substantially, and sellers must price their homes competitively for today’s market. Factors such as high interest rates and insurance premiums create financing obstacles for many buyers. Additionally, the number of cash sale transactions is decreasing, 51.9 percent in July compared to 61.2 percent in January 2024. Prices are coming down incrementally, not significantly. Southwest Florida is still holding steady.  The percentage of list price received in July decreased 1.4 percent to 94.8 percent from 96.1 percent in July 2023. The median closed price during both June and July decreased by .8 percent. The median closed price in July was $590,000 compared to $595,000 in July 2023. These increments are small, showing that the Southwest Florida market is resilient. There have been no drastic drops in overall pricing.
 

The Fed is set to meet on September 19th, 2024, to discuss a rate drop. This meeting holds significant implications for the real estate market, with a 25% chance that mortgage rates will drop a quarter percent and a 50% chance the rate will drop a half percent. If they do fall, this will likely stimulate property selling and buying. However, the downside is that when demand increases, prices will have a propensity to go up.
  

Are you looking for a seasonal rental? We still have some outstanding properties available. Please call our office no. 239-213-1616 to work with one of our rental specialists or perform your own search at www.BuyNaples.net.
 

If you have any questions or are contemplating buying/selling property, please call me at 239-293-3592 or email me at RobertNardi@aol.com.