Florida was one of the last states to enter a phase of housing market recovery. This is not surprising, when you consider that Florida was also one of the states hit hardest by the housing crisis.
But at long last, we are seeing some positive numbers in the Sunshine State. The real estate market in Naples is one example. According to Zillow, a real estate information service, the median sale price for the Naples metro area rose 32.7% over the last year. So clearly, the housing recovery has reached this market.
According to Realtor.com, the median list price for this market rose by 6% from March to April of this year. This is the result of growing demand among home buyers, combined with shrinking inventory.
Like all metro areas in Florida, the real estate market in Naples experienced a swell of inventory in the years following the housing crash. Widespread foreclosures created a huge surplus of homes, at a time when people just weren’t buying. This pushed home prices off a cliff.
But the surplus situation is beginning to work itself out. Housing demand has risen among investors and ‘regular’ buyers alike, and this has increased the absorption rate for homes. Inventory in Naples has dropped sharply over the last year. According to Realtor.com, the total number of listings in this market dropped by more than 16%, from April 2012 to April of this year. This is partly what accounts for the rise in home prices.
The median age of inventory has also dropped significantly over the last year. This particular metric gives us some idea how quickly homes are selling, based on their listing duration. The median inventory age for the Naples real estate market has declined by nearly 23% over the last year or so. Not surprising when you consider the shift in supply and demand.
Home sales have increased across the pricing spectrum, but especially on the high end. Local real estate broker Tiffany McQuaid recently told Fox 4 News: “Where the million-dollar properties were not getting as much activity over the last few years, that has increased threefold in 2013.”
According to the Naples Area Board of Realtors (NABOR), the local real estate market is expected to be hot this summer. They point to a “trifecta” of factors, including inventory decline, a lower number of days on the market (DOM), and rising home prices. The average DOM decreased by 14% from April 2012 to April 2013.
“This is the first time in a long time that we have seen such a drastic decrease in the average days on the market,” said Brenda Fioretti, a broker with Prudential Florida Realty.
NABOR also reports a sharp rise in the median closed price over the last year. This median jumped by 18% during the 12-month period ending in April 2013.
Low mortgage rates are doing their part to fuel housing demand in Naples, and elsewhere across the country. Rates have been hovering near historic lows for months, largely due to the Federal Reserve’s bond-buying program and other stimulus measures. But over the last few weeks, mortgage rates have risen steadily. So the best deals may be behind us. This should create a sense of urgency among home buyers.