July Report Shows Soft Summer for Home Sales
Closed sales of properties in Naples during June and July declined compared to the same months in 2023. Broker analysts who review the report say we can expect similar closed sales performance in August.
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.”
“We borrowed sales from the future during the pandemic,” said Wes Kunkle, President and Managing Broker at Kunkle International Realty. The mad rush to relocate to Southwest Florida during the pandemic set a wave in motion based on the temporary increase in demand. Naturally, in response, prices began to increase as inventory vanished; down to 1,042 homes in inventory in December 2021. But this rush was short lived, and many sellers have been slow to adapt to a new reality.
Overall inventory has been climbing for the last 28 months. For July, inventory increased 50.5 percent to 4,352 properties from 2,892 properties in July 2023. There are 6.2 months of inventory available, up 59 percent from 2.9 in July 2023. Conversely, overall closed sales have been declining since July 2021, or 36 months ago.
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.”
If you are considering buying or selling your home, look to a Naples REALTOR® who has the ability to provide an accurate market comparison and give you expert advice on how to capitalize on today’s market conditions. A REALTOR® can ensure your next purchase or sale in the Naples area is a success. Search for your dream home and find a Naples REALTOR® on Naplesarea.com.
The Naples Area Board of REALTORS® (NABOR®) is an established organization (Chartered in 1949) whose members have a positive and progressive impact on the Naples community. NABOR® is a local board of REALTORS® and real estate professionals with a legacy of over 60 years serving 8,500 plus members. NABOR® is a member of Florida Realtors® and the National Association of REALTORS®, which is the largest association in the United States with more than 1.4 million members and over 1,200 local boards of REALTORS® nationwide. NABOR® is structured to provide programs and services to its membership through various committees and the NABOR® Board of Directors, all of whose members are non-paid volunteers.
The term REALTOR® is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribe to its strict Code of Ethics.