The Naples Housing Market Overview and 2022 Updates
As the second hottest housing market in 2021, the Naples housing market undoubtedly helped the Florida housing market flourish last year. This local real estate market reportedly grew by 32% and hit a record-high median sales price of $640,000 by the start of the fourth quarter in 2021.
With only a few months into 2022, will the Naples real estate still perform well as it did in 2021?
Before we get into that, here is a brief breakdown of key Naples housing market trends last year:
- The median listing home price increased by 31% YOY to $590,000
- The median listing home price per square foot was $319
- The median home sold price was $545,000
- The sale-to-list price ratio of 100, meaning that home selling prices nearly equaled asking prices
- The median days on the market was 57 days
Now, let’s dive in.
Key Real Estate Drivers in Naples Last Year
According to the U.S. News Best Places, Naples is the 7th most desirable place to live in the U.S. and the #1 best place in Florida. With favorable rankings in other categories like quality of life and safety, Naples stands out as one of the best destination areas for retirees and baby boomers. So what exactly makes Naples a top destination?
Flourishing Job Market
With a growing job market, Naples reduced unemployment to 2.9% in November 2021 from 3.7% in the previous year. Private sector employment increased by 7.6%, accounting for at least 10,400 new jobs. Similarly, the city’s labor force grew by 8.9%, translating to 15,716 workers.
Leisure and hospitality topped other sectors by registering the highest job growth at 4,000. Other notable industries with considerable gains included healthcare and business. Consequently, the growing job market boosted the city’s average household income to $217,838 and shot down poverty rates to 7.8%.
Relaxed Tax Regulations
Naples always appeals to many who want to increase their disposable income and transfer from states with high-income tax rates to those with zero state income tax status.
Opportunities for Education
Naples always strives to give premium to education and has an exceptional school system. At the core of the Collier County Public School System is a series of top-performing schools with an average rating of 8 out of 10, according to GreatSchools.
With an increased focus on education, many families with school-aged children often find Naples a viable option when moving. As for higher education, one can choose between Hodges University and the Ave Maria University of Law or find a befitting college in the neighboring cities.
Quality of Life
As part of the Sun Belt region, Naples allows people of all ages to nurture quality well-being.
Many often find Naples’s year-long warm sunny climate both appealing and relaxing. Apart from the beautiful beaches, Naples also offers several other amenities perfect for outdoor lovers. These include golf courses like Bonita Bay and the Naples Botanical Garden parks.
In addition, the local community often organizes numerous events like The Naples National Arts Festival, which offers varied opportunities for making new friends, relaxing, and learning about local cultures.
But how exactly did these drivers influence the local housing market?
Naples Real Estate Market Statistics and Trends in 2021
To honestly know what to expect in the Naples real estate this year, it would be best to consider how the market performed in the previous year. Historical trends often influence future forecasts and should not be ignored.
With that said, here is a wrap up of the 2021 analysis:
The median close price at the end of 2021 in Naples rose by a 20% YOY rate to $445,000. With 15,523 closed sales and 18,664 pending sales, the city registered a year-over-year increase of 26% and 15%, respectively.
On the downside, total inventories dropped 77% to 1042 units and the days on the market also suffered a 52% decrease to 44 days.
The demand for rentals also skyrocketed, but the crashing inventories generally pushed rental rates across Southwest Florida to new heights. Properties with a monthly rate of $1400 were rented out for $1700, while those for $1500 increased to $1900.
Experts now predict that this trend will continue for at least six months into 2022 and even caution that rent prices might further increase if inventory fails to meet demand within the year. Given that rentals account for about 22% of the real estate in Naples, this won’t be good for those whose investments are primarily tied up in rentals.
Naples Real Estate Market Forecast for 2022
According to the Washington Post, existing-home sales this year are projected to increase by 6.6%. In other words, the U.S. real estate market will remain a seller’s market in 2022, but homebuyers won’t have to scramble for buying options like in previous years.
Affordability might still be a challenge due to the escalating prices and interest rates, as prices for existing homes are projected to increase by 2.9%. However, inventories are expected to improve by 0.3%, with single-family units rising by 5%.
Yes, the 2022 real estate market seems promising. But will this also be true for the Naples real estate market?
Based on local housing trends and statistics, here are the main factors that stand to shape the real estate market in Naples:
As much as demand may remain high, it may taper off as the year progresses. The only things expected to fuel high demand into 2022 include the Great Resignation, increased migration, continued shift to remote work, zero state income tax policies, and a growing aging population
Many people relocated from the Midwest to Florida in 2021, with close to 1,000 people moving in per day. In 2022, experts predict that more people from New York, California, and New Jersey might join in the migration. Interestingly, the people moving to Naples are more interested in setting up permanent residences to enjoy the laidback environment, warm climate, proper work-life balance, and more educational opportunities.
According to the U.S. Census Bureau, the aging population is one of the fastest-growing demographics in America, with those aged 65 years and above nearly doubling in amount since 2010. With most of this population needing exceptional retirement homes, Naples stands out as one of the most desirable destinations to retire. It is expected that much of the influx this year will compose of retirees and veterans.
Although the demand for housing this year is considerably strong, the general lack of inventory is projected to continue. However, as home financing rates adjust to support a buyer’s market, inventories may scale up later on as the year progresses.
According to Zillow, it might take at least two more years for real estate markets to completely recover from the all-time low inventories. But this might happen sooner in Naples because of the numerous new constructions throughout Southwest Florida, with thousands of new housing permits approved for construction since September last year, providing buyers with more options in 2022.
This year, the last two quarters are a period to watch out for in this local housing market. While some expect home prices to rise around this period, some still believe that prices will decline. It is a crucial aspect of the Naples property market forecast 2022 that every buyer, investor, and realtor keenly follows while hoping to see home prices stabilize finally.
If you want to make a fast return on your investments and make quick cash in real estate, investing in the Naples housing market may not be suitable until June. Besides the rising prices, the market is still experiencing low inventories, which leaves you with fewer opportunities to work with.
This Naples housing market review widely suggests a positive outlook for 2022. It predicts a possible increase in new house constructions and supply as well as price stabilization into the year.
Building your rental portfolio is an excellent investment strategy in real estate, but only if you are keen to choose suitable properties in the right places. Intelligent investors often know when to ask for help, and you can choose to invest wisely with professional help from Woodruff Real Estate & Property Management.
Making the right real estate investment decisions isn’t as easy as taking a walk in the park. You will need to have knowledge of the local housing market and always ensure that you are up to date with any slight market shifts as they happen. Furthermore, you might need to have access to the right analytical software to succeed at it.
Well, Woodruff property management offers you locally-based, certified, and experienced teams equipped with cutting-edge property management tools ready to take on all of your real estate investment needs.
Call us at (239) 920 8799 or email email@example.com and get started with a free quote if you are a property owner.
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