July Report Shows Soft Summer for Home Sales!

Naples, Fla. (August 30, 2024) – Closed sales of properties in Naples during June and July declined compared to the same months in 2023. According to the July 2024 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), overall closed sales during July decreased 2.6 percent to 608 closed sales from 624 closed sales in July 2023. Furthermore, pending sales activity reported for July decreased 15.7 percent, convincing broker analysts who review the report that we can expect similar closed sales performance in August.

“We can’t expect every year will be a record breaker,” said Mike Hughes, Vice President and General Manager for Downing-Frye Realty, Inc. “Overall, the first half of 2024 has been average for sales. We still have buyers who want to be here, and new listings have remained strong, which provides even more options for buyers this summer.”

Chasing Yesterday’s Wave

Broker analysts reviewing the monthly Market Reports have been comparing NABOR® data from 2019 to data reported in 2024 – pointing to the fact that 2019 was the last year when our housing market activity was “normal” (pre-pandemic). Budge Huskey, CEO, Premier Sotheby’s International Realty, pointed out, “If we compare year-to-date [2024] market results to 2019, sales are down 16 percent. For July, we are down 29 percent compared to July 2019.”

Priced Right to Sell

Precisely put by Huskey, “inventory levels have returned to more historically normal levels yet well above where we were the last couple of years. With the additional competition for sellers, too many still expect to receive aspirational prices when we have fewer buyers seeking greater values.”

On average, home values in Naples have increased 50 percent since 2019, due in large part to the buying frenzy of the pandemic. But it’s over. Inventory has increased substantially, and sellers need to heed their REALTOR®’s recommendation to price their homes competitively for today’s market. Factors such as high interest rates and high insurance premiums are creating financing obstacles for a large number of buyers. Additionally, the number of cash sale transactions is decreasing, 51.9 percent in July compared to 61.2 percent in January 2024.

“Prices are coming down incrementally, not significantly, but there is indication in the July report that more negotiations are taking place in both the low- and high-end price points of the market,” said Dominic Pallini, Broker at Vanderbilt Realty, Inc. The percent of list price received in July decreased 1.4 percent to 94.8 percent from 96.1 percent in July 2023.

Median closed price during both June and July decreased .8 percent. In July, the overall median closed price was $590,000 compared to $595,000 in July 2023. For both summer months, reductions in the median closed price of single family homes drove the overall median closed price decrease. Conversely, the median closed price of condominiums increased in June and July.

“If interest rates come down too much, like around 5 to 5.5 percent, we will likely see a rise in prices,” added Pallini. “In my experience, we need to have at least 12 months of inventory before we see prices hold steady during rate drops.”

The NABOR® July 2024 Market Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. NABOR® sales statistics are presented in chart format, including these overall (single-family and condominium) findings for 2024:

 Old Habits are Hard to Break

According to Cindy Carroll of Carroll & Carroll Appraisers & Consultants, LLC, Naples has two distinct markets right now. “There is plenty of inventory within five miles of the beach, but virtually none east of Collier Boulevard. The rate of growth in Golden Gate Estates and in and around Ave Maria today is unreal.”

A venerated property appraiser, Carroll confirmed Huskey’s comment about less motivated sellers in Naples adding that she tracks inventory levels throughout Naples and is seeing behavior that is reminiscent of 30 years ago when people listed their homes during winter season, and if it didn’t sell cancelled the contract before summer. “For instance, Aqualane Shores had 3.5 years of inventory in January 2024, but in July it had 1.6 years of supply. This drop is not due to sales because we see a large number of the same properties re-added to the market each winter. But this behavior is not occurring in Golden Gate Estates, where demand is outpacing supply.”

Sellers should be forewarned: If you are attempting to time the market because you believe you can get a higher price for your home when more buyers are predicted to be in town during the winter season, you may regret your decision. More inventory will require sellers price homes more competitively and entertain more buyer negotiations.

As Hughes put it, “The specter of declining interest rates cuts both ways. If buyers wait until interest rates drop, prices are likely to increase. Likewise, if a seller waits to list a home during winter season, the added competition may also put downward pressure on the price.”

Sales activity in the Naples area housing market during the off-season summer months is historically lower than sales activity reported during its high-visitor winter season. The days on market in June increased 56 percent to 78 days from 50 days in June 2023.

If you are looking to buy a home, income producing property or sell a house in Naples, contact me. My abilities stretch way beyond just listing the house. I provide a concierge approach to selling your house starting with an accurate market comparison, creating your listing with exceptional marketing tools, managing all showings, negotiate offers, contingencies plus so much more!

~ Felicia, xoxo