Here are the 5 things you need to know about the Naples real estate market 4.16.20. Whether you’re buying, selling or just keeping an eye on the market, it’s been a doozy of a twist over the past 42 days since my last post. Today I’ll go over aspects of how it affected our market. I’ll talk briefly about what’s happening now because it’s going to change quickly and discuss what I’m seeing and hearing on the street.
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If you read my last post about the 5 things you wanted to know in March, you already know our market was strong but looking a little sketchy after the stock market did that weirdo bi-polar thing it did. Once that took place, we saw more reductions at bigger discounts which can be a common occurrence in March. Then, you know what happened. The whole damn world shut down…sigh. That put a huge damper on everything.
- Sellers stalled reductions
- Buyers stalled deals
- Some buyers backed out of deals
- Some sellers punted off the market
Very little took place even though every major real estate outlet will tell you, “Buyers are still buying”! They aren’t lying…we’re still selling. All of the buyers I’m currently working with are still on board.
Based on web stats many of us tuned into something other than Naples real estate for a few weeks. While online traffic didn’t stop, it certainly wasn’t great. Emails, calls and everything else slowed way down.
How the Naples Real Estate Market Moved In March
March 2019 vs March 2020
- Price Reductions: Down nearly 31%
- Pending Sales: Down nearly 25%
- Sold: Up 11%
- New Listings: Down nearly 8%
- Terminations: Up 25%
- Withdrawn: Up 25%
Reductions: Nobody wants to reduce a price when there’s something wickedly crazy going on. Why? Neapolitans like to make a splash when there’s a party, not when they feel like they’re the only ones in the pool.
Pending Sales: Many agents have mentioned they were right there when the buyer said, “Uh…be right back”.
Sold: Many of these buyers were already hard and most didn’t want to lose their deposits. Plus, how long could this thing possibly go on? We’re still asking that question. Anyway, a large majority of pending contracts held on through closing just like April but I’ll get to that.
New Listings: This is the first group to say “Mmmm…let’s wait and see”. Can you blame them?
Terminations and Withdrawn: Some opted out because what’s the point of a self-quarantine if you’re having open houses?
Many high-rise buildings and some communities are not allowing visitors through gates or inside buildings. Some areas have taken it to unprecedented levels. Needless to say, while it’s hard to sell stuff you can’t show, it’s not impossible. I just put one of my listings under contract this week.
Where Are We Now?
I’ve been on a few conference calls where most agents talk about how buyers and sellers are exceptionally level-headed right now. My clients are behaving the same way. They discussed how buyers are anxious to get the balls rolling again and you know what, it shows.
My web stats this week over last week have excelled beyond belief. Is it restlessness or excitement that someday we will once again be free to roam about the country? I’m guessing it’s a little of both.
I’ve had a couple of agents mention something about buyers asking about “blood in the waters” and “looking for big deals”. Hold your horses, team. We’re not there yet. Most Brokers, selling agents and sellers are totally waiting and seeing what happens when the gates are unlocked.
Buyers: If traffic is heavy and sales start flying, it’s going to be difficult to flex muscles. The absolute worst thing you can do right now is to run through town throwing terrible offers at everybody. This town is smaller than you think. If you’re this buyer, I’ll tell you how to slice up your deal but you’re going to have to call me about it.
Sellers: If traffic is light and you’re having showing problems, it might be time to look at how you’re marketing your property.
Where Are We Going?
I think it’s going to take a minimum of 30 days of freedom before we find out what sort of interest is still lingering. Some owners won’t look at results until next season just like any other year because many owners head back north and go into a full-blown hibernation only to awake next October. Don’t forget Naples sellers have a HARD time rolling back prices and no trouble at all increasing them. It’s going to take ample evidence for owners to come to terms with a new lower market if that is where we’re going.
How Do You Get A Great Deal?
I had a call the other day from a vibrant young man who has his eyes set on a condo in Park Shore. There are two GREAT ways to cut a fantastic deal in this market.
- Sign up for property notifications on all of your favorite locations. YES, my email links are finally working now! For those few select people who want their properties to go away, they’ll tell you usually through a sizeable reduction but act fast. Everybody will be watching for these and striking quickly if it’s a real knock out.
- See all of your options and let me pre-negotiate with the listing agents. I’ve lost count on how many terrific deals I’ve put together after stubborn sellers finally decided to have their agent call me back with a new-found interest in putting a deal together. This scenario is a bit more labor-intensive but these deals are never announced publicly and always occur because you and I were in the right place at the right time. Some sellers are VERY MINDFUL of their neighbors and their neighbors are VERY MINDFUL of where the seller has priced their property. Sellers don’t want static from neighbors because their price is “too low” but if their desire to sell outweighs their neighbors’ opinion, they will cut a better deal on the down-low.
Financing and Appraisals
Banks are taking back all of that newly found flexibility as they pucker for foreclosures. Talking about Naples foreclosures, we did not get hit like other areas of Florida and while we may see some in areas around Naples, we will see very few in the most luxurious locations. During the financial crisis, there were less than 5 in Pelican Bay as an example. Naples has a huge percentage of buyers who pay cash so don’t expect the buyer pool to dry up. If the stock market takes a dump, some buyers are going to get stuck there until the market rebounds but we also have several smart buyers who have already cashed out. Their pockets are lined and they’ll be ready.
Appraisers were having trouble before the virus came with several reports from agents around Naples complaining about how appraisals weren’t coming in as expected. Buyers look at this as a terrific opportunity to renegotiate but sellers don’t. Some sellers will reject a renegotiation and hold out for a better buyer and that’s why deals with loan contingencies on great properties aren’t received as well in the first place.
Be Careful With Your Walk Away Approach
Some buyers like to take an approach like, “Well I don’t know if I want to go forward and I don’t know how many other buyers there are right now…” It’s a muscle flex to warn, hey, I could walk you know?! Unfortunately, a buyer’s biggest competitor in times like these may not be another buyer. The most common response to this battle is: “I don’t care. Worst case scenario is I keep it and use it myself”. Most often the seller is the biggest competitor.
I hope you got at least 5 meaningful points out of this Naples real estate update. If I missed the questions burning in your mind, give me a jingle or shoot me a text. In the meantime, stay safe enjoy yourselves and hopefully you and I will be enjoying all of what we love most about Naples, Florida!
Shannon Lefevre, PA
Your Naples Smart Girl!