In this monthly market update, Naples real‑estate expert Renee Hahn reviews January 2025 data and explains the forces shaping the local market. She reports that closed sales rose 12% year‑over‑year while pending sales fell 8%, inventory surged 40% and new listings climbed 23%. Median home prices increased 9% overall but condo prices dropped 2.7%. Hahn attributes the shift to recent hurricanes, higher insurance and association costs, inflation, and elevated mortgage rates, noting that a large portion of the market is owner‑occupied, which cushions the impact. She characterizes the current environment as a buyer’s market, warning sellers that over‑pricing will lead to long days on market and that price‑right‑sizing is essential. Condos face extra pressure from reserve‑study requirements and rising fees, driving steeper price declines. Hahn concludes by offering her services to help buyers secure fair deals and sellers price and market homes effectively, emphasizing realistic expectations and the need for distinctive value propositions in a competitive inventory‑rich market.
Chapters
Hello, this is Renee Han, your Naples real estate expert, bringing you the monthly Naples real estate market update. We're gonna hit a few things. I'm gonna glance down at my notes here, but I first wanna wish you a happy February as we get ready to close that out. I am continuing to be just amazed at how quickly time goes, and we have had some beautiful weather here in Naples. So if you're not here in town, maybe you should be thinking about getting to town. Now let's get on with the, market update. I'm gonna start with the good news. Okay? The good news is that overall closed sales increased 12% in January of 2025 versus January of 2024. That's good news. We had more closed sales. So that means the end of the year was a strong end of the year because most of those obviously didn't come on the market in January. Now, not that I wanna be bleak, but now I need to level out that positive feedback and say, However, overall pending sales went down 8% year over year. So again, think about this. Closed sales went up. That means we had a good strong end of 2024 relative to the one before, but pending sales went down during the month. So that means we didn't have as many contract homes go under contract in January of 2025 as what went under contract in January of the prior year. What makes that feel even more, um, exacerbated— because I'd love to be celebrating that overall closed sales went up 12%, declare it a win, and that would be awesome— but get this, folks, overall inventory increased 40% January to January. So you've got end of the year sales did well, 12% higher, pending sales 8% lower in January, and then you've got this boom of 40% more inventory. And that, folks, is why the market feels the way it feels. It's, it's frustrating for sellers right now who aren't seeing showings, who aren't seeing offers. And it's because you had this 2024 carryover of inventory that didn't sell during the year. Because even though, you know, we celebrate that January sales was high compared to January of the last year, 2024 was not a great real estate year in terms of overall market activity. So you had carryover into the busy season, and now you've got inventory going up 40%. That's big. New listings went up 23%. So, you know, I produce a daily market update stat where I look at how many houses went under contract yesterday and how many came on the market. And what you see happening is the gap is getting bigger and bigger because more homes are coming on market than are going under. It's simple math, folks. So I don't wanna be doom and gloom. What I would say is, look, we are still in a wonderful market down here in Naples. It is a beautiful place to be. People are not going to stop wanting to come here and purchase real estate. But the reality is we had a lot of headwind. We had a basketful of hurricanes, which is unusual for us to have in such a small amount of time. From that came increased insurance costs. It came increased assessments if you own anything close to the Gulf., um, and are in an association. You've got inflationary pressure right now. You've got mortgage rates that were up. There were just a lot of what I would call bad guys. That's headwind. But we are lucky enough to live in a place where so many people own their properties outright. If you have this kind of pressure and you are a highly leveraged market in terms of mortgage, it would be much more devastating to us. But we've got a strong population, a strong draw of people coming here. You just have to know that the buyer demand has softened and it might continue to soften. And what I tell people is I don't think this is a short-term shift. The amount of inventory we're seeing and the pace of sales being what it is, it's going to take a while before this balances back out again. So I wouldn't be looking for a quick fix. Um, the reality is it's going to be a tough market. Look at median closed price for the overall market went up 9%, but it actually decreased 2.7% for condos. So condos are certainly getting hit the most because you have things like this structural integrity reserve study. You know, the, the condo associations are going to be held accountable to reserving more money to be able to deal with planned and unplanned recreational— not recreational, but building requirements to continue to function the way it should and avoid problems in the future. That is a real cost. Insurance costs, that is a real cost. Association fees went up. The cost of ownership for a home in Naples is expensive. If you look back to before COVID we were already an expensive market, but COVID kind of did this, you know, it did this. Now we're doing this. And I tell people, you almost have to imagine a camel cut off the hump. You know, we are all licking our wounds because we feel like, oh my gosh, oh my gosh, the values is coming down. I think in January alone we had something like 2,660 homes 68 price decreases. The prices are going to continue to decrease. It is the hard truth. I just saw homes decreasing by millions, not hundreds, not tens, millions of dollars. But you have to remember, yes, that's painful to watch, but you have to think about the starting point, guys. Nobody was complaining when prices went up that fast, right? Nobody was saying, oh my gosh, no, no, no, I, I just refuse to face into the fact that my home is valued it so much more than it used to be. Well, now we want to get upset that the values are coming back down, but cut off the hump. Compare it to before the hump. Yes, they went up really fast, and yes, they are coming down, and guys, they're going to continue to come down. I just told you why. Inventory's high, buyer demand is low, and there's a lot for people to choose from. It's giving its tip to the scales. It is a buyer's market, and I love our Naples Area Board of Realtors. They are there to find the silver lining, and there's a lot of silver lining. But I do want to make sure that those messages of positivity do not confuse you sellers. If you are pricing a home, if you are not getting showings, if you are not getting the outcome you want, it means your house isn't priced to sell. And that is a, a reality. There is just way too much to choose from. And if you want to sell your house, you've either got to have something extra, extra, extra special that's going to get attention. I had a listing that benefited from multiple offers. It was a unique listing in a community. That couldn't be reproduced again. Guess what? Those sell. If you have got a more what I would call mainstream home where somebody could go find, you know, 5, 10, 15, 30, 100 other choices that look very similar to it, then guess what? You don't have a price differential you can substantiate. You need to get on board with a realistic price that's going to get it sold. And the hard part right now is we don't know what that price is because if you look at past price— pricing on sales, which is what we usually use to try to predict the future, it's irrelevant anymore. You can go on the market today and be nestled right amongst your competition where you should be, but if you're all overpriced, none of you are selling. And so nobody wants to be the first to right-size. It doesn't feel good. And then when you right-size, if you're lucky enough to get a sale, you think you're agent underpriced you. No, it means your agent priced you correctly. So again, everybody's going to have to take a little bit of medicine, understand that pricing is going to continue to soften and deteriorate. And if you're serious about getting your home sold, then you need to price it where it's going to get sold, not where it's going to sit like so, so, so many. So with that, I know everybody's hard to let go to past prices, and believe me, my own listings are struggling with this too. I'm getting sales, I often outperform the competition for a number of non-pricing related items, but you know, no great marketing is gonna overcome a pricing issue. So again, you've gotta ask yourself, are you wanting to wait and deal with the short and long-term consequences of sitting on the market, because there are lasting ones, or do you wanna price it to sell and try to find the few buyers that are out there with their pocketbooks open, willing to buy, to stand out and be a value proposition for selling. That's your choice, and I'm happy to partner with you on that at any time and have those tough discussions. It's not a fun place to be, but it is still a great place to live. So if I can be of any assistance to you and your real estate, uh, needs, whether it's on the buying side and you're trying to make sure you get a good price, uh, and purchase so that you're not left holding the purse strings on something that may not be valued the same down the road, Um, or if you're a seller trying to figure out the time to put your property on the market, um, or the price, I'm happy to help you with that. Remember, we're almost halfway through season, folks, and there's still a heck of a lot of inventory. So with that, have a wonderful day, enjoy your weekend, and, uh, we'll talk soon.
