The Naples real estate market enjoyed another month of increased home values driven mainly by another month of below typical inventory levels. According to the area’s top real estate brokers, resale home inventory in Naples this year will unlikely spike to levels we enjoyed before the pandemic. However, since 2019, the number of new listings each month has remained fairly consistent, with most months enjoying an average of between 1,100 and 1,300 new listings. According to the April 2023 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), overall inventory increased 64.4 percent in April to 2,868 homes for sale from 1,745 homes for sale in April 2022.
“One factor holding back home sales right now is interest rates,” said Mike Hughes, Vice President and General Manager for Downing-Frye Realty, Inc. “Even though a majority of our sales in Naples are cash transactions, many buyers who own a home up north and want to purchase a home in Naples are having a hard time selling their northern home because the pool of potential buyers that can afford a mortgage at today’s rates is limited.”
Interest rates may also be influencing prospective sellers in Naples who currently enjoy a low interest rate on their mortgage too. In April, new listings decreased 25 percent to 1,116 new listings from 1,488 new listings in April 2022. Though many homes in Naples have doubled in value since 2019, providing sellers with a nice profit to use toward their next home purchase. With a hefty down payment, these sellers can minimize their next home’s mortgage obligation to make monthly payments affordable, even at a higher interest rate.
Interestingly, and according to Cindy Carroll of Carroll & Carroll Appraisers & Consultants, LLC, months of inventory is decreasing in communities off the water and east of I-75; a telltale sign that living in close proximity to the beach is not always a required factor of homeownership in Naples anymore. “In January 2019, Port Royal had 1.3 years of inventory; and today it has 1.3 years of inventory. But in January 2019, the Vineyards had 10 months of inventory; and today it has less than a month.” Carroll went on to add that in some areas east of Collier Boulevard (SR 951) there is less than four months of inventory.
As a result of slow inventory gains this year, pending and closed sales activity simmered slightly in April compared to March. Pending sales decreased 18.4 percent to 1,123 pending sales from 1,377 pending sales in April 2022, and closed sales in April decreased 24.2 percent to 947 closed sales from 1,250 closed sales in April 2022.
While the April report revealed 1,128 price decreases occurred during the month, Hughes said, “some price negotiating is happening, though low ball offers are not a good strategy in today’s tight inventory market.”
The report also showed the area’s overall median closed price is not increasing by double-digits each month anymore. In April, the median closed price for single family homes increased 3.1 percent to $825,000 from $800,000 in April 2022. But it’s a different story in the condominium market, where the median closed price increased 14.3 percent in April to $526,000 from $460,000 in April 2022.