Inventory Hike Helps April Home Sales Swell

Naples, Fl. (May 31, 2024) – The payoff of months of rising inventory was finally realized in April as closed sales increased 3.8 percent to 999 closed sales from 962 closed sales in April 2023. This is the first month closed sales have exceeded past years’ monthly comparable sales since June 2021. According to the April 2024 Market Report by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), the 2,365 price reductions in April stimulated sales in the right direction. Growth in inventory does not appear to be slowing down either, as new listings in April increased 16.3 percent to 1,335 new listings from 1,148 new listings in April 2023.

“There are three things that could really help our market if they trended in the right direction: mother nature, insurance and interest rates,” said Mike Hughes. “But those are out of our control.”

Broker analysts including Dominic Pallini believe, “Interest rates are likely to stay above 5 percent for a long time.” But Jeff Jones, added that there is good news on the insurance front as “nine new companies have recently entered the Florida market, and 19 others have said they will lower rates or at least not increase them in 2025.”

The New Average

Demand for the Naples lifestyle increased during the pandemic, which depleted inventory for homes in the under $300,000 market – there were 315 homes for sale under $300,000 in April. Conversely, demand for luxury properties have soared, especially in the $500,000 to $1.5 million price category, which increased 68.1 percent compared to April 2023 and occupy the highest number of properties available (2,410) in the current inventory.

“The average closed price in Naples is over $1 million,” remarked Budge Huskey.

However, according to the report, closed sales influencing the overall average price growth was in the Naples Beach area. For April, the average closed price of single-family homes in communities located in the Naples Beach area (34102, 34103, 34108) increased 61.6 percent to $4,309,475 from $2,666,512 in April 2023. That said, this area was also where a large majority of properties sold for less than original list price as the percent of list price received decreased to 93.3 percent for single family homes and 94.8 percent for condominiums. This indicates sellers are reducing prices to meet the market.

Future Fit & Forward

According to the April report, the average monthly inventory in Naples is back to its familiar prepandemic level. April’s inventory increased 68.1 percent to 5,240 properties from 3,118 properties in April 2023. And the months supply of homes is up to 7.3 months. Huskey commented, “Typically, we begin to see prices slide once the months supply gets above 6 months, but we’re not seeing this in our market today. Inventory is growing, and prices remain stable.”

“Home values have doubled since 2019,” said Cindy Carroll. “And there’s no indication that homeowners are at risk of losing this growth in value.” Carroll went on to say that there will be spots in the county that will experience a slight loss in value, but nothing on a large scale or that would take us back to pre-pandemic prices. “I am unable to find anything in my research that is alarming. The thing we have to focus on now is re-educating our sellers on home prices today. Their home’s value has likely increased, but the number of price reductions each month tells me that prices are still starting out too high. If a home is not priced competitively when it’s listed, sellers will likely need to lower the price to meet the market.”

“It’s time to shake off the COVID years,” said Sherry Stein. “Compared to 2019, we are doing great today with higher inventory, low days on market, and remarkable increases in overall home values.”

As more high-end buyers discover the allure of Naples, broker analysts do not foresee the median closed price decreasing dramatically. For April, the overall median closed price increased 4 percent to $650,000 from $625,000 in April 2023. Though price adjustments are moving the needle in certain markets. April reported 2,365 price decreases, which decreased the median closed price 3.2 percent in the single-family home market to $793,750 from $820,000 in April 2023.

The NABOR® April 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:

Busting Assumptions

The cost to build is higher than before the pandemic too. According to Mike Bone, “The average new construction entry level price today is around $450,000 in Southwest Florida.”

The heightened cost to repair or rebuild is a primary factor in rising insurance rates. Yet, with more buyers in Naples paying cash – 65.4 percent of all transactions recorded in April – insurance and interest rates may not be as great an obstacle as some assume.

Growth in overall closed sales in April is a positive omen that the Naples real estate market is on track to outperform sales in 2023. “Historically, May has the highest number of closings,” said Huskey. Molly Lane, remarked, “If we can continue the growth we saw in April closed sales in May, this portends good things to come for our market.”

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.

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