Naples Real Estate Market Update 4/28/22

Hello Naples Friends!
Do I have a doozy of an update for you! There are some real nuggets of information you’re going to find interesting if you’re planning on buying or selling Naples real estate sometime within the next year. I’ll start by saying, if you want to buy Naples real estate sooner than later, between now and the second week of September is going to be your best time to do it. Lots of buyers have already taken their minds off the Naples real estate market with intentions to gear up next October. One of my great philosophies is “you have to be where everybody else isn’t if you want the best deal.” Once October rolls around, sellers are going to get confident and negotiations are going to tighten with hopes of another strong seasonal buying flurry. There will be more buyers to compete with so make it easier on yourself by striking now. There are a good group of sellers who want to sell now. Those are the opportunities to watch for. If you haven’t signed up for property notifications, you could miss out on price reduction alerts and big deals!

Price Reductions

As projected, we saw more normalcy closing out the end of the season with some interesting price reductions. Price reductions are up 203% compared to this time last year. This is a practice we haven’t seen in the past few years but economic and world issues are putting some listing agents and sellers on point. Please read the details here. Not every seller is slashing prices, not every seller is overpriced! If you came for a bloodbath, you’re way too early. What it does mean is there are going to be some Sellers who have no problem re-positioning their price to get their Naples property off their balance sheet for a variety of reasons. On the luxury side of the market, this is typically due to the fact that sellers can “pay” to make it go away and they likely have other things they want to do (or already did) with their money.

Interestingly, some of these reductions aren’t causing a mad offer flurry like they once did. This is in part due to the fact that some of those properties were priced way over the realm of reality. This can fuel the uncertainty of the value of the home for both the listing agent who could be drained from marketing the property way longer than expected and the Seller who fully expected ten full price cash offers four minutes after hitting the market. It’s not going to be too long before we start hearing Sellers cry about how their home isn’t bringing what their neighbor’s home brought. Agent firings will be on the rise as a result. Once we see plenty of that, agents will stop suggesting pie in sky pricing.

I always find it interesting when listing agents who have a big share in a Naples neighborhood start encouraging all of their sellers to reduce. We are just at the beginning of this phenomenon but I’ve identified two agents who have practiced this already. It tells me how they’re feeling about the market and gives me insight into how I can negotiate for my buyers. The same goes for those agents who are still listing high-priced properties. Confidence or lack thereof has a great deal to do with negotiations. Ask me more about this.
There’s a buying strategy here newer agents know nothing about. Now is a good time to work with an agent who has been in the market for at least six years if not more.

Discounting At The Closing Table

This is nearly the time of the trend buyers who missed buying opportunities will find out what the winning buyer paid for the property of interest and proclaim, “I would have bought it for that”. Naples Sellers are NOTORIOUS for not looking motivated on their list price but discounting at the closing table. Sometimes those discounts are absolutely insane. We aren’t necessarily there yet but in comparison, there wasn’t a great deal of discounting during the past year with the average list price to sales price ratio running over 100%.
Peeking at what closed this past week, (this is almost unfair as an overwhelming majority of those sales pended during the high season) list price to sales ratios are literally all over the road. Let’s check the breakdown:

Naples Closed Sales Past Seven Days

Over List: 90 – 33%
List Price: 87 – 32%
Under List: 94 – 34%

Last month 44% closed for more than the list price.

Negotiating Changes

Agents are back in the practice of actually negotiating for their clients after taking a long hiatus. Buyers and buyer’s agents (oddly enough) are asking for comps. If your buyer’s agent has to ask for comps, run far away from that agent. They’re either super lazy or they don’t know how to do their job. Your buyer’s agent should be able to easily provide you with comps and understand the value of what you’re thinking about purchasing without question.

Besides prices, buyers are able to successfully negotiate repairs and get the seller to perform or give credits. During the ultimate peek of the market, sellers weren’t being so negotiable.

There is a REAL shortage of tradesmen to do those repairs so be careful how you’re negotiating here. These issues can lead to serious letdowns if your agent doesn’t already have a huge book of reputable people to assist you. This is another reason why working with a tenured, successful Naples REALTOR can be a valuable resource.

Inventory Increases

There are 1,379 active listings in Naples real estate market today. During the season we dipped well under 1,000 for several weeks in a row. Inventories are creeping up for several reasons. Buyers aren’t climbing over people to throw offers at properties that are priced entirely too high. We have several listings that aren’t in the ballpark right now causing those sales to slow down. I see evidence of a slower market in nearly every price range.

Time On The Market

Market time is also on the rise proving buyers aren’t as “gung ho” to strike a deal. Our MLS is showing the median market time in Naples was 6 days in March. Here’s a breakdown of average market time in a few of my favorite neighborhoods:
Current Active Days On Market

Aqualane Shores – 89
Bay Colony – 17
Coquina Sands – 55
Grey Oaks – 36
Mediterra – 26
Naples Cay – 225
Old Naples – 79
Park Shore – 68
Pelican Bay – 42
Pelican Marsh – 27
Port Royal – 80
Quail West – 63
Tiburon – 29

Ironically, Bay Colony was the last market to slow down during the last downward trend as well.

Our most affordable locations aren’t doing much better.

Naples Park – 27
Naples Manor – 53
Golden Gate City – 64

Be Wary Of Blanket Real Estate Messages

Many conglomerate real estate experts are posting all sorts of blanket messages that are giving inaccurate or old messages. Real estate IS local and this is where the misinformation coupled with misunderstanding takes place.

Corelogic

They just released this pretty graph explaining the Odds of regional home prices dropping over the coming year. According to their study, Collier County has a very low chance of prices dropping and here we are with price reductions up over 200%. Ok.

Zillow

Already adjusted their forecast from 16.5% growth to 14.9% between February and March proving they still don’t know what’s going on. In fairness, I wouldn’t listen to any company that lost 880 million speculating the same market they talk about. Would you?

National Association of Realtors

They got it mostly right. On April 20, 2022, Lawrence Yun, NAR’s chief economist wrote, “However, sellers should not expect the easy-profit gains and should look for multiple offers to fade as demand continues to subside.” Multiple offers have already faded here. Today, only 10 out of 54 listings (18%) went pending within 3 days of market time. That’s less than half the number we saw on the same day last year.

Turn To A Local Expert

That’s why it’s imperative to talk with a Naples real estate market leader who has the courage to tell it like it is because many will tell you it’s always a good time to buy and sell. I don’t know how many indicators there are to gauge the strength or weakness of a market because I’ve never stopped and counted. I do know there are ample indications that can lend clues to where we’re going. I discuss many of them here on my Naples Real Estate blog and go even more in-depth with my clients. The best indication is what we see, hear and experience on the street. Isn’t that really what you’re hiring us for in the first place?

Naples Real Estate Market Expectations

Buyers

As I mentioned earlier, there will be great buying opportunities this summer and more opportunities to capture your quest. Negotiations will be easier and concessions will be greater. Keep your eyes out or call me so I can do that for you. Some of the best properties will bounce off the market as the realization hits owners that they’re not going to get their price. If you’re in the ultra-luxury market in Naples, Florida. Now is the time to do it!

Sellers

If you’re thinking about selling your Naples real estate. Put it on the market now! Many of your competitors will wait til next season expecting bigger returns. List your property with someone who knows how to market and who has the wherewithal to help buyers move to a purchasing decision. There are lots of new agents with pretty good listings who have no idea how to maneuver through this changing market. Poor advice will cost sellers an enormous amount of money before it’s all said and done. The smartest sellers know their best chance for the best terms is a result of who’s going to bat for them.

I hope you gained some valuable insight from my Naples real estate market update. Please contact me to complete all of your real estate objectives!

Best Regards,

Shannon Lefevre, PA
Your Naples Smart Girl!
239-595-6223

Naples Real Estate Market Update 4/28/22