Hurricane Ian and a Balanced Market

By Robert Nardi

Speculation that home sales in October would drop dramatically in Collier County following Hurricane Ian was proven inaccurate as closed and pending sales for the month increased by 23.7 and 8.7 percent. Respectively, compared to closed and pending sales reported in September, according to the October 2022 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island). And even though 525 listings were either terminated, expired, or withdrawn from the Southwest Florida MLS during October, overall inventory increased 72.7 percent to 2,325 properties from 1,346 properties in October 2021.

Admittedly, compared to 2021, a standout year for real estate in Collier County, closed sales in October decreased 24.5 percent to 662 closed sales from 877 closed sales in October 2021. Pending sales (homes under contract) dropped 43.3 percent to 673 pending sales from 1,186 pending sales in October 2021. According to NABOR®’s statistics, October’s overall median closed price held fast at $555,000, the same as was reported in September. But compared to October 2021, the median closed price increased 23.3 percent from $450,000. The statistics showed a 1.6 percent decrease in median closed prices for condominiums between September and October. There was a 26.1 percent increase in new listings in October compared to September, which broker analysts say is typical this time of year. Overall new listings in October decreased by 13.9 percent to 908 from 1,054 in October 2021. Still, new listings for single-family homes soared in October and were just ten properties shy of the 548 new listings reported in October 2021.

The NABOR® October 2022 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 format ( CLICK HERE ) for those who like statistics.

What does this all mean?

Unfortunately, the tragedy of Hurricane Ian and those that received water damage spurred some other types of buyers to the area. Some investors want to swoop down and “catch” a good deal, while others see Southwest Florida as a new opportunity to purchase at a reduced price. Some lower elevated homes West of 41 took a hard hit with flooding. Therefore, owners can either rebuild, re-model or sell the property “As Is” (which means they are not making any repairs). Many have owned their properties for years, with built-in equity. They are either too old or tired or do not want to take on the remedial process.

Also, some sellers have decided that they want to move East of 41 and no longer wish to live near the Gulf of Mexico even though they experienced no damage. And lastly, Hurricane Ian pushed them to move up North to be with family and friends full-time. Therefore, Naples/Southwest Florida housing market is starting to weaken as a Sellers’ market because the overall percent of the current list price received is 96.4 percent and has been declining since April. In a nutshell, more available units are now on the market. There are 2478 available properties for sale in Naples based on NABOR® MLS data (12/10/2022). We are inching our way to a balanced market (around 6000 units), allowing Buyers to negotiate a bit more than in the past. 

Demand for Rentals

As you may have noticed, rentals have taken a life of their own. They have increased in number, and rental payments have increased significantly. The demand for annual and short-term rentals has been overwhelming not only because of trying to find housing for displaced individuals from Hurricane Ian but because of the spur of people who want to rent for three months during the season. You would think that people would not want to come down in season; however, it has been the opposite. Naples/Southwestern Florida is still in demand. People want to experience “paradise” and get away from the cold. Nardi Realty still has some rentals available. If you are considering renting, please call my Rental Administrator, Lilly Fulcher, at 239-571-6189. She can let you know our rental availability, assist with your search, or put you in contact with one of our REALTORS® that specializes in rentals.

In closing, I want to wish all of you Happy Holidays! May your New Year bring you loads of health, happiness, and prosperity.