Naples Market Report · August 2020
Summer Housing Market Momentum
Expected to Continue into Fall
Naples, Fla. – Closed sales activity in the Naples area housing market maintained steady momentum through August with a 35.2% increase in overall closed sales to 1,098 closed sales from 812 in August 2019. According to the August 2020 Market Report released by the Naples Area Board of REALTORS® (NABOR®), homebuying activity in Naples during the last three months exceeded activity reported in the first three months of 2020, more typically known as our peak resident season. Broker analysts reviewing the report predict this momentum, driven from more closed sales, more new pending sales, and more new listings compared to a year ago, will set the Naples area housing market up for continued positive performance into the fall months.
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The market report showed August had the highest month-over-month increase in pending sales compared to any other month reported in 2020, with a 70.4% increase to 1,479 pending sales from 868 pending sales in August 2019. Not surprising, homebuyers seeking single-family homes continued to tilt the scales in August as the report showed a 76.4% increase for this home category, while pending sales of condominiums increased 63.9%.
In comparison, this summer’s closed sales have eclipsed our peak season’s closed sales as there were a combined 3,133 closed sales reported during June, July and August compared to a combined 2,659 closed sales reported in January, February and March.
August’s inventory decreased 29.1% to 4,174 properties from 5,887 properties in August 2019. However, despite the month-over-month drop in inventory during August, there were more new listings added over the summer months than new listings added during the peak season months. Broker analysts were quick to point out that some of the new listings added during the summer were likely listings that had been pulled off the market during the Great Lockdown, which occurred in April and May.
“Increased buyer demand is helping to move some of our old inventory,” said Adam Vellano. This increased buyer demand is illustrated by the number of days on the market in August, which decreased 5.9% to 96 days compared to 102 days in August 2019. The report also showed the Naples area has only 184 single-family homes under $300,000 available to buyers. Inventory for single-family homes between $300,000 and $500,000 decreased 54.9% in August 2020 to 446 single-family homes from 990 single-family homes in August 2019.
Check out the August 2019 Market Report here.
Vellano remarked that “incentives offered by new home builders after the lockdown restrictions were lifted are starting to go away and these new home prices are also increasing.”
Phil Wood, added that “81%  of the total price changes reported in August  were decreases in price. But, there were fewer price decreases in August than in June or July. These price decreases indicate that some homeowners might have overpriced their homes when they initially listed them and the adjustments in August now reflect more competitive prices. That’s not to say that these homeowners won’t see prices increase again as agents report many multiple offer situations occurring across all price categories.”
Overall median closed prices in August increased 26.7% to $399,000 from $315,000 in August 2019. Single-family home median prices increased 15.7% to $457,000 from $395,000 in August 2019, and condominium median closed prices increased 18.4% in August to $290,000 from $245,000 in August 2019.
However, keep in mind that the median closed price is a figure that is “in the middle,” as half of homes listed are above this price and exactly half are below this price. Broker analysts reviewing the report were quick to point out that one sale of a high-worth property (e.g., $2 million+) during a given month can greatly influence this figure, and that it doesn’t mean all home prices increased. As such, when evaluating pricing trends, brokers prefer to use the 12-months ending median closed price statistics. For the 12-months ending August 2020, the median closed price increased 5.4%. Interestingly, using this metric, the August report showed median closed prices for homes between $300,000 and $2 million have actually decreased.
“I think we’ve turned a corner and can safely say that we are now in a seller’s market,” said Bill Coffey. “We have 4.8 months of inventory and median closed prices are on the rise.” Florida Realtors® considers the benchmark for a balanced market (favoring neither buyer nor seller) is 5.5 months of inventory.
|CATEGORIES||Aug 2019||Aug 2020||CHANGE|
|Total closed sales (month/month)||812||1,098||+35.2%|
|Total pending sales (homes under contract) (month/month)||868||1,479||+70.4%|
|Median closed price (month/month)||$315,000||$399,000||+26.7%|
|Total active listings (inventory)||5,887||4,174||-29.1%|
|Average days on market||102||96||-5.9%|
|Single-family closed sales (month/month)||421||583||+38.5%|
|Single-family median closed price (month/month)||$395,000||$457,000||+15.7%|
|Condominium closed sales (month/month)||391||515||+31.7%|
|Condominium median closed price (month/month)||$245,000||$290,000||+18.4%|
According to Vellano, “buyers seeking single-family homes were on the rise this summer because of changing lifestyle preferences caused by the pandemic. Plus, those who now work from home or have children that attend school from their homes want more space. Once we have a better understanding of how to medically treat people with coronavirus and have a vaccine for it, I think people will begin to explore condominium living again.”
The August report confirms Vellano’s statement, as sales of properties priced above $2 million increased the most (18%) compared to other price categories tracked in August.
“This is a great time for high-end buyers to invest in real estate,” said Wood. “Because interest rates are low, a 50% deposit on a $2 million home means loan payments could be as low as $4,200 a month!”
Geographically, closed sales of properties in the Naples Beach area (34102, 34103, 34108) during August increased 84.4% and saw an 82% increase in median closed price; the South Naples area (34112, 34113) reported the most new listings in August, with a 32.7% increase; and the East Naples area (34114, 34117, 34120, 34137) reported the biggest drop in months of inventory to 2.9 months of inventory in August from 6.4 months of inventory in August 2019.
The August report shows sellers are at an advantage with decreasing inventory and rising prices.
Check out the Naples Market Report for July 2020 here.
If you are looking to buy or sell a home in Naples, contact Taber at Calusa Bay Properties – Calusa Bay Properties is one of the top selling real estate firms in Southwest Florida. We specialize in new home construction within the Pelican Bay community.
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This report was provided by NABOR®