Real Estate Newsletter Jan 2024 I Matt Brown Real Estate

REAL ESTATE NEWSLETTER: JANUARY 2024

Hello Season 2024 and 2023 in Review

The Naples area real estate market has started out 2024 with a jump start and has been quite busy since Jan 2nd! As anticipated, seasonal visitors and buyers have showed up in force in January with showings and contracts up noticeably, a welcome change after a rather slow 2nd half of 2023. Read more about the current market and 2023 annual recap below.

The 24th Annual Naples Winter Wine Festival was this past weekend at The Ritz-Carlton Naples, Tiburón and “broke every single record that this auction has ever had” and raised more than $33 million for Florida children in need. Gulfshore Business did a great job summarizing the excitement for such a great cause, here is the article. Other sources: Haute Living and Robb Report.

Enjoy this month’s newsletter and please let me know your feedback… would be interesting to hear what you value the most: 1.) current events 2.) blog posts 3.) market commentary/graphs, or 4.) local real estate news/updates.

~Matt

Luxury Hotel & Resort Guide Blog Post

This month I have compiled a short list of the top Naples area luxury hotels and resorts for those visiting from out of town. This can be a helpful resource to consider the options when planning a visit, please bookmark the page and share with friends and family! View Luxury Hotels Blog Post

HYATT REGENCY COCONUT POINT RESORT AND SPA NEAR NAPLES

2023 Year-End Naples Real Estate Market Review

Increasing interest rates and economic headwinds challenged the real estate market nationwide in 2023 and although Naples is somewhat insulated, we certainly felt the impact with fewer showings and less sales. Plenty of buyers still sought to own a “piece of paradise” in SWFL, with 8,834 of them finding success and closing on real estate in Naples in 2023. That number was down 13.4% from 2022 sales but not all that bad considering existing home sales in the US hit a 30-year low in 2023. For Naples it was the lowest annual total since 2010 but in terms of dollar volume of property sold it was only a 3-year low, surpassing 2020 dollar volume by 6.4%. Even though sales were slower and there were more price reductions and negotiation happening, overall average sales prices and price per square foot statistics held relatively steady over the last year after roughly doubling since 2019.

At this time last year, our coastal enclaves were still reeling from the impact of Hurricane Ian that made landfall 9/28/2022. Tremendous progress has been made in the last year and July 2023 marked an important milestone for the community with the Ritz-Carlton Beach Resort reopened for business and came back better than ever with extensive upgrades and renovations. That resort and others such as LaPlaya are critical for our real estate market as they help introduce a significant new buyers to Naples and those intending to visit for house hunting trips need somewhere to stay.

Buyers have more properties to consider now that inventory is up considerably with 4,029 properties for sale in the overall Naples market. Even though inventory has increased, levels are still well below the 5,000 to 7,000 available listings we had on the market from 2016 to 2020. We haven’t had the current level of inventory on the market since SEPT of 2020 when we were halfway through the pandemic fueled buying frenzy that shrank our properties on the market from 6,068 in MAR 2020 down to 1,365 in MAY 2021.

Increasing interest rates slowed down the US real estate market in 2023 and constrained inventory as sellers didn’t want to let go of their low rate loans. The Naples market is more immune to fluctuations in mortgage interest rates than most markets because the majority of sales in Naples are cash transactions. This is one of the reasons our market fared better than most around the country in 2023. 30-year mortgage interest rates started 2023 at 6.19% and rose to a peak of 7.79% in OCT before falling down to the current level of 6.69%. Rates are widely expected to soften over 2024 which will help to encourage activity and loosen up the sales market.

Are people still moving to Florida? Yes! According to data from Florida Realtors®, from mid-2022 to mid-2023, Florida’s population increased by an estimated 365,205 residents which is second only to Texas’s increase of 473,453. That’s about 1,001 net new residents per day! Fantastic winter weather, a lower cost of living than many northern cities, less crime (Naples ranked #1 safest in the country by US News & World Report), a cleaner environment with beautiful natural surroundings, happy and friendly people and Southwest Florida is an area recognized where people live the longest in the US… all these factors add up to a superior quality of life and uniquely desirable place to own real estate.

I’m optimistic about the Naples real estate market in 2024 with the aftermath of Hurricane Ian behind us and interest rates softening, many that put off a purchase in 2023 will look to buy in 2024. We have quite a few exciting new developments to look forward to seeing evolve in SWFL over 2024; the Naples Beach Club and Four Seasons Resort, Rosewood Residences Naples, a new Naples Pier, the brand new Gulfshore Playhouse, major renovation of The Naples Players Theatre, Whole Foods/Restoration Hardware development on 5th Ave South, the Old Naples Hotel on Third Street South, the Great Wolf Lodge, Ritz-Carlton Residences Naples, Metropolitan and Aura Condominiums, a new Port Royal Club (wow the plans are spectacular), the 4th Kalea Bay Tower is almost complete and the final 5th tower is now for sale, Epique – the final high-rise to be constructed in Pelican Bay, a new golf course – The Kinsale Club, Saltleaf and the Ritz Carlton Estero Bay and many more!

2023 Year End Key Statistics

2023 Average Sales Price: $1,023,107, up 1.4% from 2022
2023 Average Price Per Square Foot: $454, up 1.6% from 2022
Total Sales were down 13.4% with 8,834 properties sold vs 10,206 in 2022
Dollar Volume of Closed Sales for 2023 was $9.04B, down 12.2% from $10.29B in 2022
Homes for sale at 2023 year-end: 4,029 properties in 2023 vs 1227 properties in 2022
Month’s Supply at 2023 year-end was up 90.9% with 4.2 months vs 2.2 months in 2022
Average Negotiation from Last List Price in 2023 was 3.8%, vs only 1% in 2022
Average Days on the Market for Closed Sales in 2023 was 54 days vs 27 in 2022, up 100%
New Listings in 2023 were down 2.4% with 13,310 listings vs 13,641 in 2022
Properties sold over $2M were down 9.7% in 2023 with 903 properties vs 1,000 sold in 2022
Properties sold over $10M were down 42.4% in 2023 with 34 properties vs 59 sold in 2022

Naples Real Estate Market Trends – January 2018 through December 2023

In this month’s Naples real estate market trend review I have highlighted the entire Naples market above $1M over the last 6 years. The charts show all properties (single family homes and condominiums) combined.

AVERAGE SALES PRICE

The average sales price for a property in Naples over $1M was $2.59M in DEC 2023, down 16% from DEC 2022 and up considerably from an annual low of $2.08M in NOV 2023.

AVERAGE PRICE PER SQFT

The average sales price per square foot for a property in Naples over $1M in DEC 2023 was $828/SF, down 14.6% from DEC 2022. Over the last 12 months, the average was $832/SF, down 4.6% from an all-time high of $872/SF in MAR of 2023 which represents the 1 year period from APR 2021 to MAR 2023.

MONTHS SUPPLY

This is one of the most important statistics regarding the current state of the real estate market since it combines the pace of sales with the number of properties currently available. The months of supply indicator measures how long it would take for all the properties on the market to be absorbed/sold if sales continued at the current pace and no additional listings came on the market. Generally 6 months of supply is considered to be a balanced market but within Naples luxury market, many consider around 12 months of supply to be a balanced market, below 12 months is a seller’s market and above 12 months is a buyer’s market.

The supply of properties on the market in Naples over $1M was flat from NOV to DEC at 8.7 months. Supply has increased since bottoming out in 2021 but is still considerably lower than the pre-pandemic norm of 10 to 15 months.

HOMES FOR SALE

At the end of DEC 2023, there were 1,626 properties on the market in Naples over $1M, up 59.7% from DEC 2022 and above the 6-year peak levels of 1505 properties in 2019. This chart could be misleading, we expect the number of properties over $1M to increase because the prices have approximately doubled since 2020 so there are a lot more properties worth more than $1M. When taking into consideration the rate of property purchases over $1M, the supply is still lower than 2018-2020 levels (see Months Supply chart above).

NEW LISTINGS

There were 298 new listings introduced the Naples market over $1M in DEC 2023, 21.6% more than the same month a year earlier. New Listings typically peak in JAN so we can expect this to increase dramatically next month.

PENDING SALES

There were 136 pending sales over $1M in Naples in DEC 2023, down 8.7% from DEC 2022. We expect to see the pending sales increase considerably in JAN, the first month of our high season.

TOTAL SALES

Total sales over $1M ticked up in DEC to 162 from an annual low of 121 in NOV. DEC 2023 sales closings were 14.9% more than DEC 2022 when the area was still recovering from Hurricane Ian that made landfall 9-28-22.

DOLLAR VOLUME OF CLOSED SALES (12-month rolling average)

The total dollar volume of closed sales in Naples over $1M was $416M for DEC 2023, down 3.5% from DEC 2022 but significantly up from $252M in NOV 2022. The total value of property sales over $1M in 2023 was $5.55B, down 10.6% from the $6.21B in sales in 2022. For reference the highest 12 month volume of sales over $1M was $7.42B during the 1 year time period from August 2020 through July 2021.

AVERAGE DAYS ON MARKET

In DEC 2023, properties that sold over $1M spent an average of 62 days on the market, a statistic that has been gradually increasing since the low point in May 2022 of 20 days but is still significantly lower than the average of 110 to 165 days on the market that were the norm before the pandemic.

AVERAGE PERCENT OF LAST SALES PRICE

The average amount of negotiation for properties over $1M in Naples was 5.1% in DEC 2023. These indicators are getting back to the pre-pandemic “normal” range of negotiation in Naples which was typically 6-8% negotiation from the last asking price.

PENDING PERCENT OF LAST SALES PRICE CHART

Southwest Florida & Naples Real Estate Market Reports

Each month our real estate newsletter includes previous months published market reports for the Naples Florida area, which includes the William Raveis luxury real estate market report and the Naples Board of Realtors (NABOR) market report.