September 2024 Naples Real Estate Market Update with Renee Hahn

I can hardly believe it's already November. With so much packed into this year between hurricanes, the election, and everything else, it seemed to pile up. I can truly say I'm looking forward to 2025 and getting 2024 behind us. So let's talk about what we are seeing on the real estate front. We're going to start with overall inventory. The overall inventory of homes in Naples increased 37.3% in September to 4,288 properties compared to last year September, which came in at 3,123 properties. That's a, a pretty sizable increase when you think about 37.3% year over year in inventory. The month supply of homes also went up, so 50% compared to last year this time. Which definitely those two things, again, increased inventory and supply, um, it gives buyers a distinct advantage. So if you think about months of supply, it refers to the number of months it would take for the current inventory of homes on the market to sell given the current pace of sales. So lower levels of month supply tend to push prices up, while higher month supply tend to put downward pressure on prices, whereas a balanced housing market is typically when the supply of homes for sale is roughly equivalent to the demand. And that's really what we would call a balanced market, where neither buyers nor sellers command an advantage and prices will tend to be stable. But again, you can see a trend in the direction of favorability leaning towards the buyer, and that's evident both in terms of months of supply as well as inventory.

Now, according to September 2024 market report, which of course all of this is produced by the Naples Area Board of Realtors because they will track home listings and sales for all of Collier County minus Marco Island, and they indicated that the rise in inventory has been met with buyer interest as indicated by pending sales. So we did have a little bit of an uptick not much. We just talked about 37.3% increase in inventory and, uh, 50% increase in months of supply, whereas the increase in pending only went up— I'm sorry—

1%.

So in 2023 September, it was 619 pending sales. In this September, we only had 622.

So given the increase in inventory, I would say you should fully expect to see more price decreases. Um, we've not seen huge losses in value, but you're definitely going to start to see a little bit more price erosion, if you will. So as we near the traditional high season, I'm actually already seeing early signs that more sellers are entering the market in the coming months in the anticipation of, you know, the usual high increase in visitor traffic for the winter. Preseason buyers are always encouraged to take advantage of increased price property selections because there's more to choose from. So if you're thinking about getting in the market and you've been putting it on pause, it could be a good time for you to pick that back up and reinvigorate your search because you've got to— you're going to have a lot more options. And we just talked about there's going to be favorability for buyers. So the big question at hand is if supply will actually exceed demand over time, because we're all kind of banking on what historically happens, which is the activity on the buyer front goes up with the high season, but we don't have any way of knowing for certain if, you know, how that buyer traffic is going to shape up for the season.

And if the sales and listing traffic continues to outpace exponentially the The buyer traffic, well, that's just going to further exacerbate the fact that it's a bit of a buyer's market right now. So you think about last season during the high season, it was a low— I, I called it the, the high season that never got high. Um, so again, we're anxiously waiting to see how things are going to fare as we go into the season. If I had a crystal ball, believe me, I'd be making all kinds of investment decisions, but I don't. So I can only watch for early indicators. This past week we've started to see traffic pick up a little bit. You're seeing more car carriers, commute times are getting a little bit longer, so something to keep in mind. Now, while overall closed sales decreased— so we talked about pending went up a whopping 1%— closed sales actually decreased 13.2% in September.

So we had 527 closed sales this September versus last year at the same time it was 607. Um, we also had a rise in days on market, so it jumped up from 59 in September of 2023 on average to 83 this September. Now keep in mind, I think that's a little misleading because I can't tell you how many properties I go in and I see that are for 150 days or more, 200, sometimes up to 300. So the average is a little misleading because it averages out at 83 days, but don't be mistaken, there are a lot of homes that are taking way longer to sell. So if you think about the monthly pending sales data, it's, it's, you know, significantly contributing factor to the overall housing market health. We're currently optimistic that the recent increase in pending sales may continue to improve over the next 6 months, but no guarantees. Um, so we're, you know, suggesting there could be a positive outlook for the housing market. Now showings in September were also down 11%. So when you think about the sales cycle, right, you look at closed sales is affected by pending, it's— and pending is affected by showings. So if showings is down 11%, pendings is up 1%, but closed sales were down— what did I say— 13.2%. There's still going to be some lag to when we see this actually pick up, if you will. Now, the overall median closed price in September did increase 2.4%. It went from $575,000 in September of 2023 to $580,000. $588,560 in 2024. So that's at least good, but what that's an indicator of is for those that sold, what did they sell at? And there are still sales happening, but they're slim and few between. So that's not necessarily a good indicator of, of value insulation, if you will, because there's still a really high number of, of price decreases going on. So Just keep that in mind. And that's still pretty far above the median closed price that was reported in September of 2019, which came in at $325,000. Now, some of that again is a mix thing. Um, I'm— and, and by the way, I'm still seeing a gap between what buyers are willing to pay and what sellers have been willing to adjust their prices to. So even with all the price adjustments we see going on all the way all over, there's still a lot of holdouts. I have made some buyer offers that the responses really shocked me in some cases, um, with how unwilling the sellers were to even negotiate off of their sales price in some cases. So, you know, I'm hearing from a good number of sellers that they're going to continue to wait until, you know, the, the, the— or excuse me, a good number of buyers that are going to wait and for the sellers to come to grips with the market and adjust accordingly. So if and when these sellers reenter the market, which will likely be in the next few months, we're going to see a surge in inventory. And unless they adjust the sellers', you know, pricing strategy to stay competitive, we're going to continue to see lackluster closed sales. And so sellers are encouraged to adopt price strategies that reflect today's competitive market. I cannot say that enough. Coming on the market at a too high of rate and thinking you're just gonna drop it later is not gonna get you the answer you want.

Trust me, I have seen this rodeo so many times.

Now, in the condominium market, the median closed price in September actually decreased 4.3%. So it went from $470,000 in September of 2023 to $450,000.

Now, one thing I wanna note is prices may be experiencing downward pressure for condominiums, particularly those that are 3 stories or higher. Because— and, and by the way, that are 25 years or older— because the cost of ownership may rise significantly due to both the flood disclosures that are now required on every, um, sale. Uh, we can talk more about that. I won't go long on that here. Just know that now every listing has to have a flood disclosure that, um, is not optional like, like the seller's disclosure has been in the past. It is required. And also insurance costs. Um, when you think about the results of the milestone structural inspections that are due by the end of this year, uh, the end of 2024, they're going to find things in the buildings that need to be addressed. So if the results of those inspections find potential structural problems, that's going to create association situations where they may have to reserve more funds to cover those costs. And buyers are already a little apprehensive when you think about what's gone on in the recent years in terms of insurance insurance costs and assessment costs of condos and other risk factors, that market is definitely seeing a hit. So, you know, word on the street is that some, you know, house hunters, if you will, are going to be less eager to move to Florida because they fear being in the path of a future storm.

Now, many of us have some concern that national news coverage makes it appear as if the damage from the hurricanes was more widespread than it actually is, even though the most significant storm damage was concentrated to a relatively small area along the Gulf Coast. So Naples beachfront and intercoastal areas, you know, experienced some water storm surge and high winds, while the inland regions actually saw much less to no damage. I can tell you my home in the last 3 hurricanes didn't experience any real damage. I had minor yard cleanup, and I mean minor, minor, minor, maybe a cracked tile here and there. That's it. So I live 3.5 miles off the beach again. So the news media has kind of romanticized, if you will, the extent of the damage. So this misinformation being reported, you know, may be contributing to slower market activity in the last quarter of 2024. It is what it is. It's like the perfect storm cooking, no pun intended. You know, the vast majority of our markets, again, were unfazed by these recent hurricanes. By the way, you also have the dynamic of what I would call storm fatigue and street flooding that's convincing a few sellers to move off the water and go inland. But we're not necessarily seeing people move out of the area. They're just— they may be giving up that beach dream and coming in a little bit more. Um, the insurance market, by the way, this is some good news. The insurance market in Florida is showing some early signs of becoming healthier, um, and the reinsurance rates have been a little bit more stable. So there have actually been 10 new insurance carriers that have entered the market, and renewal rates have not increased significantly.

So that's good. Now, if you are considering a move to Naples, Florida, don't hesitate to reach out to me.

Again, Renee Han, your Naples real estate expert.

Or if you're living here already and you might be one of those that wants to make a move, I would be delighted to consult with you on the approach, the timing, and other key variables that might be important in your decision-making. So don't hesitate to reach out. I hope this gives you a good indication of the market update, but I am always happy to get on and talk more specifically about the broad market like we've talked, or even more particulars about your immediate place in the Naples market. So don't hesitate to reach out. My number is 239-287-2576. In the meantime, I'll wish you all a wonderful November, which means the next time you get a message will hopefully be all the way through Thanksgiving and going into the December holidays. So happy Thanksgiving to you and your loved ones. There is so much I am personally thankful for, and one of which, by the way, is being able to still have a really successful, vibrant business despite what an awful year it's been in real estate. And I just thank everybody for that opportunity to serve them. And when the needs arise, give me a call or find me on yournaplesexpert.com. Thanks and have a fabulous day.