The 2021 Naples Housing Market Quarterly Review (Part 1)
Real estate markets throughout the Sunshine state started the year in high gear. The Florida Realtors January report highlights closed sales, inflated median prices, more pending inventory, and inflamed new pending sales as the main reasons behind the growing momentum.
Besides this aggressive trend, other market factors such as record-low interest rates, the ever-rising buyer demand, and a general inventory shortage remained the same at the start of the new quarter.
A shortfall in-home stock usually exerts pressure on property prices, but despite the red hot home prices in Naples, new pending sales for the single-family market segment went up by 16.9% in the year-to-year turnover.
That for condos and townhouses also rose by 32% compared to January 2020.
Home sales performance
From the report, the property closed sales for all single-family quarters throughout Florida totaled 21,582, while that for condos and townhouses was 9,608. Considering that home closed sales ordinarily occur between 1 and 3 months right after signing sales contracts, the year-to-year closed sales rates climbed to 18% for single-family properties and 24.6% for the latter property segment.
Florida’s median home sales price for the single-family units averaged at $305,000 at the start of the first quarter, a 15.1% up from a year ago. The median sales price for both condo and townhouse markets throughout the state was $230,000, causing a positive yearly turnover of 15%.
Median home price in the housing market refers to the mid-price value where half of the properties sold beyond and the remaining half sold below it.
Mortgage rates and supplies overview
With more than 8% growth in single-family home sales and 25% in the condo-townhouse markets, Naples undoubtedly started the previous quarter by setting record-breaking averages. The Federal Reserve’s current priority is to get amonetary policy, meaning that mortgage rates might remain at the bottom for most of this year in favor of a better housing market.
Other forecasters insist that mortgage rate predictions aren’t usually 100% certain, implying that all market players should prepare for a gradual rise in interest rates later into the year.
According to Freddie Mac reports, mortgage rates for a 30-year fixed-rate property were 2.75% in January. That’s a nearly 1.13% drop from last year’s average.
On the supply side, inventory shortages recurred into the first quarter as active listings for single-family properties averaging at 1.6 months in January. Supply for condos and townhouses at this time was 3.6 months.
New listings for single-family homes at the start of the previous quarter were down by an annual drop of 10%. The condo-townhouse market also dipped by a yearly pace of 7%. Unlike all the other years, the last quarter started with a weaker stock for new listings, and realtors throughout Florida are keeping an eye on this trend to establish there will be a downshift for the rest of the year.
The steep increase in the number of both closed and pending home sales throughout South Florida are the main factors causing inventory shortages in local housing markets. To be considered balanced, property markets usually require to have more than six months of new listings.
What this means for you
New supplies are still coming in but not at the much-needed pace to offset demand, skewing the Naples residential market towards the seller’s side.
To secure your dream home in Naples, you’ll have to act fast once an opportunity pops up in the market. Keep in mind that all listings will continue getting multiple offers as demand increases and inventory shrinks.
For those who aren’t sure about listing their properties, it’s still a great time to put them on sale.
On the luxury front, this market segment got unusually busy in the previous quarter as home sales for properties priced above $1 million but below $2 million increased by nearly 40%.
Those priced beyond $2 million saw a closed sale increase of more than 65% in the yearly turnover.
According to the Knight Frank Wealth Report released early this year, the number of ultra-wealthy individuals in the world increased by 520,000 people over last year. That’s about a 2.4% increase for people with an overall net worth of more than $30 million, commonly known as ultra-high-net-worth individuals (UHNWI).
The report further highlights that approximately 26% of this affluent population are interested in buying a house this year relative to the mere 21% reported a year ago.
This additional demand for properties will potentially affect coastal and rural regions with luxury homes of at least 5,000 square feet. The year-to-year home sales turnover for similar dwellings increased by 17% last year, meaning that housing markets for areas such as Naples should prepare to see more activities in similar markets this year.
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