Naples Year End Market Report & Forecast
Naples Year End Market Report & Forecast
Brought To You By Barry Brown
Broker Associate, Coldwell Banker
2019 was another year in a long line of good years for Naples Real Estate. My complete Naples Year End Market Report & Forecast is as follows:
Sales were up for the third year in a row at 9,282 units which was slightly lower than the ten year high of 9,361 recorded in 2014. At the same time the sales dollar volume increase to $6,186,351,231 which is the highest it has been in the last 10 years.
Units sold by price range and housing type have been steady or increasing for the last 10 years with the exception of the low end which had a nice run up then dropped off in 2017 before starting to increase at the beginning of last year. I don’t expect any change through the 2020 season and see sales remaining strong.
Inventory, the number of homes on the market, ended the year at 5,176 units. This is 14.5% lower than the 6,054 units at the beginning of the year and is of some concern as the months of supply drop should drop below five in the spring. This presents two problems. The first being that potential buyers will not be able to find something they really like and go home empty handed which is a problem we had in 2014 / 2015. The second is that it creates a sellers market which tends to lead to a higher increase in prices than if healthy. This will bear watching as new construction could help elevate the problem.
Sales prices ended the year strong with the average and median sales prices up 11.7% and 6.1% from the first of the year. However before getting carried away, one needs to know that the average and median sales prices for the year were down 3.0% and .9% . Whether we are up, down or even depends on what measurement and time frame one wants to use.
Looking at prices by dollar range and housing type shows much the same picture, although it is important to remember that the percentages can be distorted by some very large or small sales when comparing periods.
As always, a better picture begins to emerge when we look at list and sales prices by community and housing type. However this does not consider location, size, view, upgrades, etc., all of which are important in determining value. I thought it would be interesting to look at both a ten year and two year window for both all of Naples and individual communities as the same date can yield different results depending on which time period one chooses. For the most part, most of the 75% of the 52 communities I track reached a peak and have tapered off, which I consider more of a timing factor than an overall trend. Note that if I would look at this at the end of the season, we would see a much more positive picture with more communities showing price gains as Naples is very cyclical.
The question as always is, where is the market going? The experts are forecasting appreciation in the 2.2% to 5.4% range.
The three main factors influencing the Naples market are inventory, seller expectations and what a buyer is willing to pay. From an inventory standpoint, it looks like we are going to be facing a very tight market and most likely will see the number of months of inventory decrease into the 4/5 month range which is generally considered a sellers market and results in higher prices. When looking at sellers we see that they have been holding steady in terms of both price and how much they are willing to negotiate. Buyers on the other hand present a dilemma as a tight inventory makes it more difficult to find a unit they love and we run the danger of them going home without buying.
The wildcard in forecasting 2020 is that it is an election year. Generally a presidential election has very little effect on the real estate market. However given the extreme animosity between both sides and the fact that we don’t know whether the choice will be between a conservative and a moderate democrat or a socialist, it difficult to forecast whether the election will have any effect on prices.
That being said, I am forecasting appreciation in the 3% range although this could change as we go through the year. I hope my Naples Year End Market Report & Forecast has been helpful and informative. If I can be of any assistance, please let me know.
Barry L. Brown
550 Fifth Avenue South
Naples Florida 34119
P.S. . If you or anybody you know is looking to buy or sell, feel free to share my Naples Year End Market Report & Forecast with them. If you would like me to add any additional communities to my web site report, just drop me a know and I will me more than happy to do so.
The opinion expressed in the Naples Year End Market Report & Forecast are those of the author and should not be considered to be a specific recommendation. They along with the data are presented to help you make an informed decision. The source of the data is the Sunshine MLS and Naples Board of Realtors.