The Naples Housing Market Forecast 2021
The approval of COVID-19 vaccines and the announcements of vaccination dates throughout Southwest Florida are signs that the local housing market will make a return this year. This recovery is expected to spark the local economy by deleting some of the pandemic’s effects.
Both home sales and prices escalated at a very torrid pace in the last quarter of 2020 throughout Southwest Florida. Demand here has been hot amid the pandemic with cash buyers looking to relocate to the land of surf, sand, and sun.
The December housing data for this region showed that home sales and prices increased despite the general lack of fresh supply. This trend will stabilize in the second half of 2021 and the stage is set to see some record-breaking home prices.
Factors such as the lingering strong demand coupled with the alarming lack of inventory will push home values to record-levels during this first quarter.
Zillow’s Home Value Index currently lists home values in Naples at $352,620, a 6.4% increase over the past year. It further predicts that this value will increase by 10.2% in the next 12 months. According to the Automated Valuation Model at home.com, the Naples home value is 58% higher than the national median home value of $231,000.
The continuing growth in home sales and a vanishing supply of new homes are projected to push home prices much higher this year. The current home price for a single-family property in Naples is $612,299 that for townhouses is $275,500, and condominiums are going for $356,483.
Current housing data show that there are only 7,268 properties left in the Naples housing market marking at least a 20% increase in house stock relative to the 5,761 houses in January 2020.
Key drivers for home sales in Naples
While property type directly dictates the kind of demand it receives, single-family properties have been the most preferred type among most buyers throughout Southwest Florida, especially the first-time buyers.
The National Association of Realtors (NAR) estimates the median age for first-time home buyers to be around 34 years. Out of the 7.4% of people turning 34 years in the next decade nationally, Naples is set to have slightly below 2%, meaning that the local housing market won’t have so much pressure on this aspect.
The current low mortgage interest rates of less than 3% are also set to give these millennials more buying power before they rise above 3% by June 2021.
The pandemic resulted in a shift of home preferences with people’s interest skewing toward living in places with a warmer climate and extra open space. This new trend explains why the Naples housing market has been experiencing a surge in demand since March 2020.
A resurgence of cases, especially in spring, will not only increase relocation and demand for housing in Naples but also boost Air bnb and condo rental prices through 2021. Breakthroughs with the COVID-19 vaccines are set to subdue previous housing market challenges. This will be fundamental in priming the return of the $40 billion tourist industry in Florida.
Willthe Naples housing market be a price bubble?
Factors such as the presidential election outcome, the upcoming stimulus funds, and the actual delivery of the COVID-19 vaccine are set to encourage home price inflations throughout Southwest Florida.
The resurgence of COVID-19 and fear of the new coronavirus variant are projected to motivate more people to relocate to Naples, setting the stage for unusual intense housing market activities for at least six months.
This growth spurt is predicted to make the market more competitive and force buyers to pay more and sellers to increase their list prices.
Dodge Data and Analytics claim that new construction throughout the Sunshine state is thriving but isn’t enough to quench the high demand. This trend is great for revving housing stock and increasing listings.
The firm lists Southwest Florida as one of the most active regions with more new constructions in America. Recent stats suggest that new construction in Naples has increased by nearly 10% and is expected to scale higher as the year pans out.
Naples’s lower-income and property taxes, warm climate, zero estate taxes, and beautiful beaches make it one of the most desirable destinations to live in Florida. Both active and initial listing prices are growing towards the 57% mark and are hurting home sales throughout the county. Local realtors are hopeful that the Naples real estate market will fully recover by summer this year. Contact our knowledgeable property managers today to get personalized help in navigating the changing housing atmosphere in Southwest Florida.
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