Real estate is considered an essential business here in Florida, but while Naples real estate can still be performed, the landscape has definitely changed. For instance, we are not permitted to conduct in-person open houses, and frankly, that is understandable. Many showings are being conducted virtually using tools like Facetime and Zoom. In-person showings, when requested, require all parties to take precautions, including wearing masks and gloves, particularly when a residence is owner occupied.
Through all this, though, Naples real estate has continued, just at a more modest pace.
Here are some observations:
- Pace of Showings Draws Closer to 2019 – Showings have steadily increased over the past five weeks and, for the week ending May 10, were just 12% shy of the same week last year. By comparison, in early April, showings were down 72%.
- New Sales Increase 27% From Prior Week – Newly pended sales increased 27% week-over-week and, for the week ending May 10, were 18% below the same week in 2019. Only four weeks ago, new sales were down by 67%.
- Uptick in New listings – The rate at which new listings have entered the market has increased by an average of 17% per week over the past three weeks.
- Continued Modest Decreases in Inventory – Listing inventory has been slowly decreasing since March and, with 11,515 listing on the market as of May 10, has declined by 8%.
- $1M+ Market Impacts – Pre-Covid, year-to-date sales for $1 million-plus properties were ahead of last year by 50%. Post-Covid, $1 milliion-plus sales are down 40%, a 90-point drop. By the same comparison, post-Covid sales under $1 million are down 57 points.
Summary: Nearly all metrics are moving in a positive direction. Both showings and pended sales continue to post week-over-week increases and are drawing close to 2019 levels. Price reductions are still well below both 2019 and pre-Covid 2020 levels. Listing withdrawals are holding steady at normal levels, and new listings are posting modest increases generally consistent with the same period last year. Months of supply is 5.15 months.
It’s still too early to start discounting the long term effects of COVID-19 on the market, but I am appreciative to practice real estate in Naples and Southwest Florida.
As the numbers indicate, people are returning to our area rather quickly. Buyers who originally planned to make a purchase in March or April are reemerging into the marketplace. Pricing is holding steady. And our market is proving that it is resilient.
March numbers remained strong with closed sales up 15.7% from 2019 and year-to-date sales were up 20%. We knew this wouldn’t hold up for April and it didn’t with closed sales down 27.4% from last year. Closed sales for May are also likely to fall short. However, should the current upward trends in showings and newly written sales continue, the severity of year-over-year monthly closed sales shortfalls should subside in coming months.
We are also seeing evidence of seller confidence. There’s been no surge in price reductions. In fact, between March 15 and May 10, there were 57% fewer price reductions than for the same period last year. Additionally, listing inventory has not increased as some might have predicted. As sales slowed, so did the new listing activity. Inventory has declined by 8% since February. Now, as the pace of new sales is increasing, so too is the pace of new listings, helping to keep inventory levels in check.
How will we look 30 days, 60 days and beyond? No one has a crystal ball, but experts are saying that the combination of low interest rates, low inflation, the stock market coming back up, pent-up demand due to COVID-19, and low inventory all add up to the rest of the year being positive.
This begs the question: Might we have a second chance at season this year?