Hello, Naples Fans!
I hope you enjoyed your time in sunny Naples, Florida this season and if you missed us, I hope you’re making plans to join us next year! I know some of you have already left, are currently making preparations or perhaps holding back for part of the sweetest time of the year Naples has to offer.
Let’s get started with the update!
Here’s an April snapshot comparison between last year and this year:
|1 million+ Naples Market||2016||2017|
|Contract Back Outs||10||26|
|Withdrawn From Market||62||72|
* For comparison purposes the time line is 4/1/16-4/26/16 to 4/1/17-4/26/17 because well…the month isn’t over yet.
Listings are slowing down. I think this has a lot to do with sellers are starting to come to grips with the reality of a shrinking market and aren’t as confident our summer months are going to produce as much traffic as recent years past.
Sales are down 8%. That’s not that bad on the surface…
Expired listings are down but the percentage isn’t worth expanding on.
Back outs are more than double compared to last year. Ok, that’s a problem. That tells me buyers are getting a little squirrely. I’ve seen it myself. It could also mean sellers are still a little over confident when it comes to negotiating repairs but my bet is a majority of these deals are dying because of buyer’s cold feet. Yup, it is heartbreaking for sellers and agents but a natural occurrence during a market like this.
Pending contracts are up 16%. We saw an explosion of traffic the last 4-5 weeks of the season which was a welcome stream of activity considering January, February and a large portion of March was DOA. This can fool people into thinking the market is changing direction. My guess is that it’s typical end of season deal hunting and buttoning up properties for next season before people punt out of town.
Price Increases dropped over 50% compared to 2016. Certainly not a surprise!
Price decreases were up 30% in April. A neck breaking 1,234 price reductions were made this season. That’s up 26%! There were some really hard to discredit deals to be had this season and buyers responded with acceptable offers. People made some great things happen this year, both on the seller and buyer side. If last year was the year for tiny little bumps down, this was the year where $300,000, $500,000 even $1,000,0000 slashes in price happened nearly on the daily. My email box was peppered with “dramatic price drop” (in fact I just got one). While some people are getting tremendous deals, others are finding the property they were hoping would be around for awhile is gone. Each market is different and to treat Naples as a whole is a big mistake. If you’re thinking about buying in Naples this post season or summer, you would be wise to know exactly what’s going on with the market and keeping a keen eye on properties you may have already selected because there are still buyers buying.
Withdrawn and Terminations from the market are on the rise to the tune of 14% compared to last year. Remember when I said some people will get tired and give up? Here we are. If the market continues to slow…which I’m not sure it will in some locations, you may see more of this. Depending on where you are you’ll want to know the market conditions for your specific property before pulling the plug. There can be lower inventory than you realize putting your property in a much greater position. Buyers, don’t be surprised if when the seller decides to punt out of the market they choose not to come back. Sometimes their objective changes so when they’re out, they’re all the way out for the foreseeable future.
Let’s talk briefly about inventories:
Troubled locations that could offer the most buyer accommodation:
Port Royal sitting on 2 years of inventory! Now some people would think, well…then I won’t buy anything in there right now. Some people run from a burning building while other run towards it. Looking at the average list price to sales price ratio it looks a little like more of the same. Average list to sales price ratio is coming in at a predictable and unexciting 91% for the properties that have closed during the past 12 months. Honestly, who cares about a 9% discount?
If you look at the original list price, you’ll see the average original list price to closed price ratio is actually 86% and if you break it down individually, some people even got north of a 20% discount with the winner negotiating his deal at a mere 64% of original list price. To put it into real terms for you, a property once listed at $24,900,000 not too terribly long ago closed in the third week of March for only $15,750,000. There were 3 deals this past year that traded in the 70%-79% ratio so yes, there are deals to be had here.
Mediterra Single Family has 30 months of inventory on the market. This market at first glance looks like Port Royal but when you dig deeper you’ll see that guy who got 69% of original list price. Starting at $5,990,000 and ending at $4,150,000…just $700,000 short of adjusted list price. Just because it’s marketed for a price doesn’t mean the owner won’t negotiate but you may have to hunt for it! 3 buyers this year have already gotten 70%-80% off original list and the more you wait the less opportunity there is.
The other thing you need to consider is what is going on in the neighborhood this summer!
Bay Colony is remodeling their most coveted beach club AND the Bay Colony Golf Estates clubhouse this year. Bay Colony residents are coming back next season with a whole new set of modern amenities and if you think there won’t be a higher demand for those properties, you better think again!
There are two ridiculous deals in those neighborhoods right now! You should call me if you like Bay Colony!
Some Naples luxury neighborhoods are performing quite well!
Pelican Bay single-family homes only have 10 months of inventory with 9 homes pending right now! For that reason, only one buyer has had the opportunity to kiss a negotiation between 70% and 80%. The average original list price to closed price ratio is stronger than the other two at 89%.
Are there deals to be had in Pelican Bay? Yes! I mean if the house that’s been more on the market than off since 2012 can attract a buyer then any of them can, right?
So here’s the moral of the story! If you’re in the market to buy a Naples property and you want to buy safe, you can go with myself or a member of my team who will tell you exactly what you’re looking at or you can go with the guy down the street who will tell you, “oh hey ya the Naples market is always on fire, never depreciates and you’re doing the absolute most right thing no matter where you buy”. Who do you want in your corner?
Your best time to buy in the next 9 months is RIGHT NOW. There are owners who wanted to sell this season but didn’t! Before the rain starts, before you get extra busy with summer plans before the stock market takes a big dump…LET’S DO THIS!
Shannon Lefevre, PA
Your Naples Smart Girl!