Nominal Fluctuations Throughout 2nd Quarter 2018 Equals Stability
The big talk this quarter in Naples real estate second quarter was the milestone $48.8 million sale of a beachfront estate in Naples, a record-breaker for our area Multiple Listing Service (MLS). Even more interesting than the sale itself, was the fact that a second buyer was considering an offer on that property shortly before it went under contract in the MLS, according to area brokers.
Pending Sales in Naples Real Estate Second Quarter
Pending sales are an important leading market indicator. Before we break down the current pending sales numbers, let’s look at a little history of second quarter activity.
In 2007 and 2008, the Naples market had roughly 1,500 pending sales. Jumping ahead to the robust years of 2013-2015, our market had 3,100 pending sales; 2016 saw 2,500 pending sales; and in 2017 and 2018 we were and are at 2,700, which leads area brokers to believe we are back to some sort of normalcy.
Overall pending sales are tracking very close to last year. For instance, when looking at second quarter 2017 and second quarter 2018, the market is only down a nominal 1% from last year, with 2,770 residences going under contract in second quarter 2017 versus 2,733 residences going under contract in second quarter 2018.
And when comparing 12 months ending June 2017 and 12 months ending June 2018, the market is only down 3%, 9,457 residences versus 9,160.
When you break it down by single-family homes and condos, pending sales were down 6% quarter over quarter for single family (1,417 versus 1,338) and up 3% for condos (1,353 versus 1,395).
In single-family homes, the total number of pending sales by price point were as follows:
$0 to $300,000 — 284 or 27% down from first quarter 2017
$300,000 to $500,000 — 507 or 4% up over first quarter 2017
$500,000 to $1 million — 299 or 7% down over first quarter 2017
$1 million to $2 million — 124 or 4% up over first quarter 2017
$2 million plus — 124 or 22% up over first quarter 2017
Naples Beach (zip codes 34102, 34103 and 34108) came out on top with a 5% increase in pending single-family homes this quarter over first quarter 2017, followed by South Naples.
In condos, the pending sales were as follows:
$0 to $300,000 — 819 or 5% up over first quarter 2017
$300,000 to $500,000 — 317 or 9% up from first quarter 2017
$500,000 to $1 million — 159 or 5% down over first quarter 2017
$1 million to $2 million — 67 or 23% down over first quarter 2017
$2 million plus — 33 or 32% up over first quarter
Central Naples (zip codes 34104, 34105 and 34116) led the way this quarter for pending sales followed by Naples Beach and North Naples.
Inventory Levels and Days on Market in Naples Real Estate Second Quarter
While other markets around Florida and around the country are struggling with low inventory levels, Naples has a healthy number of residences for sale, with 6.97 months of inventory (a balanced market, experts say, is 12 months of inventory). As of the end of June, there were 2,601 single-family homes for sale and 2,564 condos.
With a total of 5,165 properties for sale in Naples (as of the end of June), there are plenty of choices for buyers in the resale market. Looking back, about 4 years ago, we were tight on inventory. In fact, 2014 saw 4.57 months of inventory and 2015 saw 4.51 months. In 2016, we jumped to 6.72 months, 2017 to 6.95 months, and in 2018 we are currently at 6.97 months.
Our days on market have been holding steady at 96 days showing we are stable quarter over quarter.
Some Final Observations
What’s interesting, is in most recent days, there have been more price reductions in the MLS than new listings coming on the market, which has helped spur activity. Roughly 72% of our inventory has been on the market less than 6 months with the remaining 28% on for more than 6 months.
Single-family homes are leading the market even though area brokers thought condos would given the nature of our buyers. But, as it turns out, retirees are looking for more permanent residences here.
The low-end of the market, properties priced under $300,000, was down this quarter and last quarter by 7% and 6%, respectively. This price point is desirable to those retirees on a fixed income and to boomerang buyers, which is why the decrease is puzzling to brokers.
If you are considering moving to Naples or selling your Southwest Florida home, I’d love to chat with you.