ANNUAL MARKET REVIEW FOR 2016

 

Naples / Bonita Springs / Estero / Marco Island Market Area

 

NAPLES, BONITA SPRINGS AND ESTERO

Closed Sales

The number of closed sales in 2016 decreased 12% to 11,582 from prior year, making it the lowest year- end sales volume since 2011, the beginning of this expansion cycle. The number of closings above $1 million decreased 14.7% over 2015 with 1,069 sales at the end of 2016 vs 1,253 at the end of 2015. The segment above $5 million decreased 30% year-over-year.

Inventory Levels and New Listings

Inventory increased 34.6% in 2016, in the combined Naples, Bonita Springs, Estero market. This is the largest percentage increase in inventory since the depths of the recession in 2008. The supply of condominiums increased 35.8%, while single family homes increased at a rate of 33.6% over the same period last year. It should be noted that John R. Wood Properties does not include manufactured product or time share condominiums in our analysis.

Availability of single family homes and condominiums increased in all price segments, with the largest increase noted in the product segment under $350,000. Product priced between $350,000 and $850,000 had the largest supply of inventory, representing over 40% of the total current inventory and an increase of 22% over the prior year.

The largest increase in condominium supply was product priced under $350,000. The largest increase in single family supply was for product priced between $350,000 and $850,000 and between $2 million and $5 million.

The sum of new listings placed on the market during 2016 was 20,392, up 9% over 2015, and the highest since 2010.

Pended Sales

The number of sales pended during the year was 13,578, down 24% from the prior year and the lowest annual total since 2012. All price categories reflected decreases, with properties priced at $350,000 or below showing the smallest decrease, and down only 10% from 2015. It is important to note that not all pended sales close. However, this benchmark along with current inventory has proven to be the best leading indicator of market direction.

Summary

Year-end evidence indicates that market direction has shifted from one that was in balance at the end of 2015, to one that is trending to an oversupply at the end of 2016. Some segments are already well above a one year supply. This market dynamic favors buyers, who now have a greater supply of available options for purchase. This shift is a notice to sellers that pricing strategy must be adjusted to reflect current market conditions.

 

MARCO ISLAND

Closed Sales

The number of closed sales in 2016 decreased 14% to 843 from 982 at year end 2015. This sales volume is the lowest since 2011, the beginning of the current expansion cycle. Properties priced above $1 million decreased 12.8% over 2015, with 149 sales at the end of 2016 vs 171 at the end of 2015.

Inventory Levels and New Listings

Inventory increased 22% in 2016 compared to last year, with the year-end inventory the highest since 2014. The supply of condominiums increased 20% over the same period last year with single family inventory increasing 23%.

Marco Island real estate is distinguished by its view and its open water access. The following summary provides insight into the availability and pricing of single family homes and condominiums based on their view. Inventory data by view has been calculated since September 2016.

Single family inventory with Direct Access has increased 17.5% and list prices have increased 5% since September. Indirect Access homes have increased 8.6% in inventory with a 5.2% reduction in average list price. Available homes with Inland and Golf Course views have increased 46% and 25% respectively with asking prices lower by 5%.

Condominium inventory with Direct Access has increased by 43% and list prices have dropped 2%. Indirect Access condominiums posted a 26% increase in inventory and a 10% reduction in overall asking price. Beachfront high rise condominiums account for the largest product offering on Marco Island. Current inventory is 6.8% higher than September 2016 with the current offering price relatively stable, down less than 2%.

Pended Sales

The number of sales pended during 2016 was 879, down 27% from 2015 and the lowest annual total since 2008. The Marco Island real estate market is heavily influenced by second home buyers and the reduction in pended sales is a reflection of the overall market softening. It is important to note that not all pended sales close. However, this benchmark along with current inventory has proven to be the best leading indicator of market direction.

Summary

The same market dynamics are evident on Marco Island that we see in Naples, Bonita Springs and Estero. The supply of waterfront properties with boating access posted the greatest increase on Marco Island over the past year. Beachfront condominiums, which generally cater to the very seasonal market, have also increased, but not to the same level. Overall, the market favors the buyer and sellers should be aware of this price shift.

Source:  John R. Wood Properties

 

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2016 Year-In-Review – Naples Florida Real Estate Blog

Source: 2016 Year-In-Review – Naples Florida Real Estate Blog

 

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November Market Report: Southwest Florida

Of the 30 neighborhoods that we monitor for single family homes in the Naples, Bonita Springs, Estero and Marco Island markets, 17 now have supplies that are at one year levels or above, with several above the two-year level.  For condos, only 6 of 25 monitored neighborhoods are at one year levels or above, and none are above the two-year level.  Our neighborhood snapshot reports (shown at bottom) tell a very clear story about the increasing inventory and months-of-supply in key Southwest Florida real estate markets.  See below for the November Southwest Florida real estate market report.

NAPLES, BONITA SPRINGS/ESTERO

Southwest Florida real estate market reportClosed Sales

During the 12 months ending October 31, 2016, the Naples, Bonita Springs and Estero markets had a total of 11,528 closings, which is 13% lower than the prior 12-month period when there were 13,258 closings. The price segment between $500,000 and $1 million remained relatively stable, showing less than a 3% decrease. The overall year-to-date closed sales were also down slightly at 9,749 vs. 11,314 YTD 2015. This represents a 14% sales pace reduction from last year. Closed sales priced above $2 million fell 23% year-to-date when compared to the same period in 2015 and during the past 12 months, sales in this price category are down 18% (385 vs 472).

New Listings/Inventory

Available inventory on November 1, 2016 for the Naples, Bonita Springs and Estero markets consisted of 6,537 units, up from 6,081 units last month reflecting a 31% increase over November 1, 2015. During the 12 months ending October 31, 2016, there were 20,124 new listings added to this market, which is an 8.8% increase over the same 12-month period in 2015.

Average and Median Sales Price

Average price of closed sales in the Naples, Bonita Springs and Estero market during the month of October was slightly lower year-over-year, while the median closed price is up 4% for the month. The average sales price over the past 12 months remained approximately the same as the prior 12 months at $519,491, while the average price of sales above $2 million fell 4.7%, from $3,872,674 to $3,691,985.

Southwest Florida real estate market reportMARCO ISLAND

Closed Sales

During the 12 months ending October 31, 2016, the Marco Island area had 827 closings, down from 992 closings for the same period last year. For year-to-date closed sales, there were 713, down from 868 during the same period in 2015.

New Listings/Inventory

Available inventory on November 1, 2016 for the Marco Island market consisted of 662 units compared to 629 units last month. During the full 12 months ending October 31, 2016, there were 1,514 new listings added to the Marco Island market, which represents a 10.8% increase over the same period last year when there were 1,366 new listings added.

Average and Median Sales Price

The average price of closed sales in the Marco Island market during the month of October remained consistent with October 2015, decreasing less than 2%, while the median price for the month increased 5%.  The average sales price over the past 12 months also remained stable at $726,000 vs. $738,000 a year ago.

*Marco Island statistics are obtained from the Marco Island MLS system and include only those sales and current listings on Marco Island and Key Marco

NAPLES, BONITA SPRINGS/ESTERO MARKET SNAPSHOT

Southwest Florida real estate market report

Southwest Florida real estate market report

Southwest Florida real estate market report

Source:  John R. Wood Properties

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Expect Rising Mortgage Rates in December

Mortgage Rates Rate Volatility

 

The average cost of a Thanksgiving meal (serving 10) this year is $49.87. That’s down from $50.11 last year, according to the American Farm Bureau Federation.

 

Stocks continue to rise, once again hitting new all-time highs, while bonds continue to see yields increase. Rising bond yields contribute to higher mortgage rates.

 

It is now 100% expected that the Fed will increase policy rates in December. Forecasts for next year already have the Fed raising policy rates 3 more times.

 

Existing home sales rose in October to their highest levels in more than 9 years. It’s yet to be seen if rising mortgage rates can slow down demand in November.

 

New home sales were down slightly in October, but it’s expected to be only a temporary setback. Sales were still 17.8% higher than the same time last year.

 

Median home prices dipped 1.35% from September to $232,000 for existing homes. However, prices were still 6% higher than October of last year.

Source:  New Penn Financial, LLC

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Purchase contracts: Deposit required to seal the deal?

Purchase Contract deposit required
Aqualane Shores Home

Working in real estate in Naples Florida I am asked: Is earnest money required to make a contract legal and binding. The answer: no.

Deposits are often provided as evidence of a buyer’s commitment to the purchase, but they are not required by law. A binding contract to purchase real estate only requires consideration. Consideration is defined as something of value offered for something else of value.

According to the Florida Bar, “The formation of a contract is accomplished when there is an offer and acceptance between the contracting parties of the exchange of ‘consideration’ (that is, something of value). This offer and acceptance are sometimes referred to as a ‘meeting of the minds.’ If the parties have not reached a meeting of the minds, then there is no agreement.” In the case of a real estate purchase contract, the consideration the buyer is offering is the purchase price in exchange for the deed to the property.

Most purchase contracts contain a section to indicate the amount of an escrow deposit and when it’s due. Purchase contracts also usually contain a liquidated damages clause that entitles the seller to keep the deposit if the buyer defaults. Liquidated damages are common in real estate purchase contracts, even though the parties are agreeing what the remedy is for the other side in the event the buyer defaults.

If I as the listing broker receive a contract that is either cash or 100 percent financing with a deposit amount of “0,” I must present it to the seller. This contract is valid despite the lack of an earnest money deposit. I may explain to the seller that because there’s no deposit, there is nothing for the seller to keep as liquidated damages if the buyer defaults. Buyers and sellers can negotiate these terms just like all other terms of the agreement.

Some sellers look at a lack of deposit as unfair. Why, they ask, would they remove their house from the market if the buyer is not serious enough to put down a deposit? A seller certainly may insist on a deposit before agreeing to the contract; this is allowable if the buyer agrees. However, it is not legally required. In addition to a deposit, sellers will also sometimes ask for other requirements like proof of funds or a prequalification letter.

Transactions come in all shapes and sizes.  I advise my clients to have an attorney review the contract,  and also work with a realtor who understands the components of the contract.  Contact me to assist you with your real estate needs in Southwest Florida!

Source: Florida Realtors

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MONTHLY MARKET REPORT FOR SEPTEMBER 2016

Naples / Bonita Springs / Estero / Marco Island Market Area

Click for Full Report
Click for Full Market Report, September 2016

 

 

 

 

 

 

NAPLES, BONITA SPRINGS/ESTERO

Closed Sales

  •   During the 12 months ending September 30, 2016, the Naples/Bonita Springs and Estero market had a total of 11,578 closings, 14% lower than the prior 12-month period when there were 13,388. The largest sales declines were in the price segments below $250,000 (-25%) and above $5 million (-31%). (Ex 1a)
  •   Year-to-date closed sales for Naples/Bonita Springs and Estero were 8,928 at an average price of $522,404 vs. 10,443 at an average price of $527,022 YTD 2015. This represents a 15% sales pace reduction from last year, with pricing stable.
  • Closed sales priced above $2 million year-to-date fell 24% for the Naples/Bonita Springs and Estero market, when compared to the same period in 2015. Over the past 12 months, sales in this price category are down 17% (387 vs 469).New

Listings/Inventory

  •   Available inventory on October 1, 2016 for the Naples/Bonita Springs and Estero markets consisted of 6,081 units, up from 5,839 units last month and an increase of 43% over October 1, 2015.
  •   During the 12 months ending September 30, 2016, there were 19,974 new listings added to the Naples/Bonita Springs and Estero market which is 7.6% more than the same period in 2015. (Ex 1a)

Average and Median Sales Price

  •   Average price of closed sales in the Naples/Bonita Springs and Estero market during the month of September was slightly lower year-over-year, while median closed price is up 5%.
  •   Average price of sales above $2 million fell 3.6% over the past 12 months, from $3,876,415 to $3,736,205. The decrease in the number of sales above $5 million likely impacted this average.

 

MARCO ISLAND

Closed Sales

  •   During the 12 months ending September 30, 2016, the Marco Island area had 844 closings, down 15% from the same period last year where there were 994 closings. (Ex 1b)
  •   Year-to-date Marco Island recorded a total of 667 closed sales at an average price of $694,049 vs. 805 sales YTD 2015 at an average price of $707,234.

New Listings/Inventory

  •   Available inventory on October 1, 2016 for the Marco Island market consisted of a total of 640 units compared to 622 units last month.
  •   During the 12 months ending September 30, 2016, there were 1,513 new listings added to the Marco Island
    market. This represents a 10% increase over the same period last year when there were 1,372 new listings added. (Ex 1b)Average and Median Sales Price
  •  Average price of closed sales in the Marco Island market during the month of September showed no change year-over- year, while the median pricing was up 4% from the same period last year.*Marco Island statistics are obtained from the Marco Island MLS system and include only those sales and current listings on Marco Island and Key Marco.

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Saving to Buy a Home? Do You Know the Difference Between Cost & Price?

As a seller, you will be most concerned with the ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not with price but instead with the ‘long term cost’ of the home.

screen-shot-2016-09-21-at-12-45-36-pm
Saving to Buy a Home

Many economists have pointed to Brexit (Britain’s exit from the European Union) as a reason that interest rates will remain low for the next few months. But Trulia’s Chief Economist Ralph McLaughlin warns that this will not always be the case in a recent post:

“While the departure of the UK from the European Union has driven down the 10-year bond, and thus mortgage rates, we expect them to rebound later in the year as uncertainty over the economic consequences of the departure lifts.”

The Mortgage Bankers Association (MBA), the National Association of Realtors (NAR) and Freddie Mac all project that mortgage interest rates will increase by close to a full percentage point over the next twelve months.

According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.3% over the next 12 months.

What Does This Mean as a Buyer?

screen-shot-2016-09-21-at-12-43-55-pm
Cost of Waiting to Buy a Home

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.3% predicted by CoreLogic over the next twelve months:

 

 

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Monthly Market Report for August 2016

Naples / Bonita Springs / Estero / Marco Island Market Area

Click for Full Report
Click for Full Market Report, August 2016

NAPLES, BONITA SPRINGS/ESTERO Closed Sales

  •   During the 12 months ending August 31, 2016, the Naples/Bonita Springs and Estero market had a total of 11,713 closings, 12% lower than the prior 12-month period when there were 13,280. (Ex 1a)
  •   Year-to-date closed sales for Naples/Bonita Springs and Estero were 8,068 at an average price of $529,228 vs 9,448 at an average price of $529,539 YTD 2015. This represents a 15% sales pace reduction from last year, with pricing stable.
  •   Closed sales priced above $2 million year-to-date fell 23% for the Naples/Bonita Springs and Estero market, when compared to the same period in 2015. During the past 12 months, sales in this price category are down 14% (399 vs 462).

New Listings/Inventory

  •   Available inventory on September 1, 2016 for the Naples/Bonita Springs and Estero markets consisted of 5,839 units, down from 5,991 units last month and up from 4,198 units a year ago.
  •   During the 12 months ending August 31, 2016 there were a total of 19,736 new listings added to the Naples/Bonita Springs and Estero market which is 6% more than the same period ending in 2015. (Ex 1a)

Average and Median Sales Price

    •   Average price of closed sales in the Naples/Bonita Springs and Estero market during the month of August was the same year-over-year, while median closed price is up 6.7%.
    •   Average price of sales above $2 million has remained approximately the same over the past 12 months, decreasing less than 2% to $3,793,159.

MARCO ISLAND Closed Sales

  •   During the 12 months ending August 31, 2016, the Marco Island area had 850 closings, down 13.4% from the same period last year when there were 982 closings. (Ex 1b)

  Year-to-date closed sales for Marco Island total 599, at an average price of $699,269, vs 805 closed sales YTD 2015 at an average price of $707,234. This represents a reduction in sales volume of 25% and relatively stable pricing year-over-year.

New Listings/Inventory

  •  Available inventory on September 1, 2016 for the Marco Island market consisted of a total of 641 units, compared to 617 units last month.

During the 12 months ending August 31, 2016 there were a total of 1,504 new listings added to the Marco Island market. This represents a 9.6% increase over the same period last year when there were 1,372 new listings added. (Ex 1b)

Average and Median Sales Price

  • Average price of closed sales in the Marco Island market during the month of August rose a modest 1.1% year over year, while the median pricing was up 4.82% from the same period last year.

*The new Marco Island statistics have been obtained from the Marco Island MLS system and include only those sales and current listings on Marco Island and Key Marco.

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Downtown Bonita Springs & Longitude

Downtown Bonita Springs

This Week in Southwest Florida Real Estate we visit downtown Bonita Springs where $18.6 million in improvements and redevelopment are taking shape to become an industrial arts district with new commercial and residential spaces that include a new 48 unit condominium, Longitude.  Visit the link to learn more.

Source: Episode 9: Downtown Bonita Springs & Longitude

Longitude

 

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Video Courtesy of John R. Wood Properties

Monthly Market Report for July 2016

Monthly Market Report for July 2016
Naples / Bonita Springs / Estero Market Area

 

CLOSED SALES                               

Click for Full Report
Click for Full Market Report, July 2016
  •   The number of closed sales through July 2016 is down 16% from the same period in 2015. Sales pace is driven by inventory, demand and pricing.
  • During the past 12 months, closings for properties priced above $2 million declined by 9.7% (410 vs. 454).

NEW LISTINGS/INVENTORY

  •  Available inventory on August 1, 2016 in the Naples, Bonita Springs, Estero combined market consisted of 5,991 units (3,222 single family homes and 2,769 condominiums). This is up from 4,286 units on August 1, 2015.
  • The number of available properties for sale on August 1, 2016 represents 6.1 months of supply based on current absorption rates.

AVERAGE AND MEDIAN SALES PRICE

  • Median price is up 5% for the first seven months of the year ($320,000 vs. $305,000).
  • Average price of closed sales priced above $2 million fell 3% over the past 12 months from $3,900,914 to $3,796,322.

 

 

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“The source of this real property information is the copyrighted and proprietary database of Southwest Florida MLS, Copyright 2015, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”