November 2024 Naples Real Estate Market Update

Hello, this is Renee Han, your Naples real estate expert. It is Friday night. It has been a long day. It has been a long week. So we're gonna breeze through this together. This is your monthly Naples real estate market update. We're gonna hit some of the highlights and I encourage you to flip all the way through Tide Talk to see other important information, not just about the market, but what's going on in Naples in general. If I can ever be of assistance, you know where to find me. Let's start with taking a look at, again, this is November data. We're always looking a month in arrear to make sure that the month closed out and that we're— we've got complete information. So November 2024 saw a 23% increase in new listings in the Naples housing market. This brought the overall inventory up 32.4% to 5,368 properties to choose from for buyers compared to 4,052 properties in November 2023. This surge in inventory was obviously met with eager buyers. Um, people love to have choices without question, and And so you'll see when we get down in the report a little bit, there was a little bit of an uptick in pending sales, not closed sales, but pending sales. And this was the first uptick in 5 years. So a little bit of good news. COVID-19 pandemic and hurricanes certainly disrupted market trends in recent years. It has been what I call a fluid market. What does that mean? It means it's been new territory every inch of that journey across those consecutive years. So it makes it complicated to do year-over-year comparisons. So to provide better For historical context, Naples Area Board of Realtors tends to use 2019 as a benchmark for analyzing data. Encouragingly, November's report shows some positive momentum and stability in key areas. That's good news. Inventory is finally back to where it was in April 2020, so inventory growth is expected to continue through December, and this will continue to again provide more options, for buyers during the high season, the winter season. And at the end of the day, if you're trying to stimulate some buying activity, having options to choose from is certainly one good way to do that. Now, while inventory grew, the overall median close price did see a decrease. It decreased only slightly by 1.7%. So instead of $585,000 in November in '23, it dropped to $575,000. Um, again, that's the median close price across all areas in Naples across all price points and across all types of buildings. This drop was driven predominantly— the 1.7% drop that I'm speaking of— by the condominium market. So the median prices with condos declined by 10.8%, even as the single-family homes market median price actually rose by 2.8%. So if you're selling a single-family home, it is behaving differently than condos. We've talked about that, if you happen to be a client of mine, um, at great lengths. The month's supply of homes rose to 8.1% compared to in November 2023, it was sitting at 5.5 months. Now you're going to see big swings in that. That is at a very high level. When you get into communities or even sections in Naples, you can see very, very different, uh, months of inventory. Price adjustments have also been on what I would call a noteworthy trend. There were 1,288 price reductions reported for the month of November. So aspirational pricing reminiscent of 2020, 2021 levels is giving way to a more realistic valuation. So if you are one of those sellers that is holding on to values from the last couple of years, you're just going to find yourself either not selling at all or staying on the market longer. It's the harsh reality of where we are from a pricing perspective. Interest rates have remained a key factor. So a quote from Dr. Shelton Weeks, who sits at FGCU, Florida Gulf Coast University, they She predicted, uh, rates may stabilize to about 6.5%. When I looked this morning, the annualized percentage rate was sitting just under 7%. And again, if we see some upside in that, it could attract more second home buyers as the stock market performance does kind of bolster consumer confidence. So even though we are a heavy cash market, we all know that what's happening in the mortgage arena does indicate things that are happening in the broader financial arena as well. Pending sales rose 10.7%, so I talked about that earlier. So in November 2023, there were 661 homes that went under contract during the month. This year in 2024, we had 732 homes that went under contract, so that was the increase of 10.7%. However, as I said earlier, closed sales actually declined, and they declined by 18.4%, totaling 448 closes in the month of November versus the year earlier where it was 549 closes. So just about 100 closes difference. That's, you know, that's pretty significant when you're using a base of, of 448 and 549. Days on market also increased. It's sitting at 83 days compared to 59 days a year ago, but it's still below the 92 days recorded in November of 2019. So if you're comparing to 2019, it looks a little bit— not much, but a little bit better. We anticipate that listings withdrawn earlier this year by the way, of which I had several, will be returning to the market soon. So you're going to see some continued upticks in inventory, and that's always a fine balancing act between buyer activity and offers and inventory. So it could further impact days on market metrics as well as some pricing and, uh, other things. So the condominium sector saw 27.9% rise in new listings. So we just talked about They've had some pricing erosion there, but the inventory went up by 27.9%. So pushing inventory up 41.7%. So new listings went up 27.9%. Overall inventory went up 41.7%. So there were 2,709 units available for sale. And again, we're talking about condominium sector in 2023, November. Versus last year, which was sitting at about $1,900. Mandatory structural inspections for most Naples condominiums, um, have been successfully completed, but not all of them. So to avoid challenges faced by older condos on Florida's East Coast, we've got to make sure that these condo buildings are getting their milestone and structural, um, integrity, uh, inspections and reports done. We, starting in January, are going to have new requirements at excuse me, on the selling side to make those reports required. And we can talk more about that if you end up listing a home with me, because that's a whole nother topic. So rebuilding reserves— keep in mind there's a lot of requirements coming down about building up your reserves, and it may increase costs for owners of older units. We cannot overstate the importance of strategic pricing giving these dynamics, and the condo market is just going to be strapped with that much more focus on that. Insurance continues to influence our market. We've talked about that numerous times. Older roofs may lead to insurability concerns. The same thing, by the way, is true with things like older AC units and older water heaters. I have seen insurance companies refuse to provide insurance policies, and if you've got a mortgage and you can't obtain insurance It's a challenge. So, you know, those things will often prompt sellers to do things like lower prices rather than delay sales. Proactively work with an independent insurance broker to make sure you address any potential— and not only address, but assess any potential obstacles. Just because you have your home insured doesn't mean an insurance company is going to write a new policy on it. And that's one thing that I hear a lot from sellers. They're like, well, I have insurance. They may be grandfathering you, and they may either not be willing to renew or write a new policy on it or increase the cost substantially. You need to be prepared for that, thinking about it, talking to the insurance company about it, because your potential future buyers are absolutely looking at it and we'll see that as a potential obstacle. So increased competition, by the way, among insurers in Florida is, is expected to ease some future price spikes over time. So that's good news. Um, November 2024 market report underscores that again our, our market continues to be, um, agile. It is fluid. I would say it's adaptable to a certain extent and continues to be attractive to future, future buyers wanting to get to warmer climates and the lifestyle we hear. So as sellers adjust pricing strategies and will— and buyers gain more options, you know, people, industry experts are predicting a, a relatively strong start to 2025. So we'll see as we round the corner into the new year. I just want to be, um, very, uh, realistic about some of the challenges. I know we want to feel good about the market, and this is absolutely a great place to buy, but I cannot say it again and again and again and enough. Sellers, you have got to be aware of what's going on in the market. Your buyers are. The days of you dictating a high price and not attractive, uh, terms with a buyer are few and far between, and all you're going to do is make your sale harder and harder. So it's time to make sure you grip the new reality of what's going on. Um, I think we're going to have some surges in inventory, and, and if I was predicting it, I think they're going to outpace the buyer traffic enough that there is going to probably be more pricing favorability than we even have today. But that's Renee's assessment, you know. Don't take my word for it. Watch the market, get connected with me or another qualified agent, and keep a finger on the else. Uh, if I can ever be of assistance, again, Renee Han, your Naples real estate expert. You can find me at 239-287-2576, or you can find my information on yournaplesexpert.com. Thanks and have a fabulous weekend and a great New Year, by the way. Happy New Year!