Naples, Fla. (May 31, 2024) – After months of increasing inventory, April saw a notable rise in closed sales, climbing 3.8 percent to 999 closed transactions compared to 962 in April 2023. This achievement marks the first time since June 2021 that monthly closed sales have outpaced those of previous years. According to the April 2024 Market Report by the Naples Area Board of REALTORS® (NABOR®), which monitors home listings and sales in Collier County (excluding Marco Island), a significant driver of this uptick was the 2,365 price reductions in April, which encouraged more buyer activity. Furthermore, new listings grew by 16.3 percent, with 1,335 new listings in April compared to 1,148 in the same month last year.

“There are three factors that could positively influence our market if they move in the right direction: mother nature, insurance, and interest rates,” noted Mike Hughes, Vice President and General Manager for Downing-Frye Realty, Inc. “However, these are beyond our control.”

Broker analysts, including Dominic Pallini from Vanderbilt Realty, Inc., suggest that "interest rates are likely to stay above 5 percent for a considerable time." Jeff Jones of Keller Williams Naples mentioned a silver lining in the insurance sector, with "nine new companies recently entering the Florida market, and 19 others planning to lower rates or at least not increase them in 2025."

The New Average

The pandemic boosted the appeal of the Naples lifestyle, depleting the inventory for homes priced under $300,000. In April, only 315 homes were available in this price range. On the other hand, the demand for luxury properties has surged, especially for homes priced between $500,000 and $1.5 million, where inventory increased by 68.1 percent compared to April 2023, with 2,410 homes now available in this category.

“The average closed price in Naples now exceeds $1 million,” stated Budge Huskey, CEO of Premier Sotheby’s International Realty.

The report highlights that the Naples Beach area significantly contributed to the overall average price growth. In April, the average closed price of single-family homes in the Naples Beach area (zip codes 34102, 34103, 34108) surged by 61.6 percent to $4,309,475 from $2,666,512 in April 2023. Nonetheless, many properties in this area sold for less than the original list price, with single-family homes achieving 93.3 percent and condominiums 94.8 percent of the list price, indicating that sellers are adjusting prices to align with market conditions.

Future Fit & Forward

The April report reveals that the average monthly inventory in Naples has returned to pre-pandemic levels. Inventory surged by 68.1 percent to 5,240 properties from 3,118 in April 2023, and the months' supply of homes increased to 7.3 months. Huskey commented, “Typically, we begin to see prices slide once the months' supply exceeds six months, but this isn’t happening in our market today. Inventory is growing, and prices remain stable.”

“Home values have doubled since 2019,” said Cindy Carroll of Carroll & Carroll Appraisers & Consultants, LLC. “And there’s no indication that homeowners are at risk of losing this growth in value.” Carroll pointed out that while some areas might see slight value decreases, these wouldn’t be significant enough to revert to pre-pandemic prices. “The number of price reductions each month indicates that initial listing prices are still too high. If a home isn’t priced competitively when it’s listed, sellers will likely need to lower the price to meet market demand.”

Mike Shoaff, Realtor at REMAX Hallmark downtown Naples FL, emphasized, “It’s time to move past the COVID years. Compared to 2019, we are thriving today with higher inventory, lower days on market, and significant increases in overall home values.”

As more affluent buyers discover Naples, broker analysts do not anticipate a significant drop in the median closed price. For April, the overall median closed price rose by 4 percent to $650,000 from $625,000 in April 2023. Nonetheless, price adjustments are evident in specific markets. April saw 2,365 price reductions, which brought the median closed price for single-family homes down by 3.2 percent to $793,750 from $820,000 in April 2023.

The NABOR® April 2024 Market Report offers a detailed comparison of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation. The report includes an overall market summary, with sales statistics presented in chart format, showcasing the dynamic and evolving Naples real estate landscape.

If you would like more information on real estate trends based on a specific community or area, I would be happy to narrow down the details. Feel free to contact me at mshoaff.remax.com.