February 2017 SW Florida RE Market Report

Times are changing in Southwest Florida. Unlike the rest of the USA, which has little inventory and most home buyers are facing bidding wars to purchase a home, SWFL is awash in inventory.

Between new builds, and resales, Buyers have choices galore!

There also are differences between Naples and the Bonita Springs/Estero markets. The latter has clearly entered a "buyer's market," while Naples is holding steady but the number of reductions in price is increasing as we enter Spring.


From the Naples Area Board of Realtors:

"Overall inventory rose yet prices remained stable in February, according to broker analysts who reviewed the February 2017 Market Report released by NABOR, which tracks home listings and sales within Collier County (excluding Marco Island). Overall pending sales (homes under contract) and overall closed sales also increased in February..."

"Compared to this time last year when we were challenged to find properties for customers, the February report showed inventory is up by nearly 1,000 new listings, giving us almost nine months of inventory to show eager buyers," says Dominic Pallini, NABOR president. "Buyers have more choices now. The trend is promising."

"Overall, inventory rose 16 percent to 6,466 homes in February 2017, from 5,577 homes in February 2016. The largest increase in inventory during February was in the condominium market, which saw a 23 percent increase to 3,207 condominiums in February 2017 from 2,599 condominiums in February 2016.

"The February report also showed overall pending sales increased 10 percent to 1,092 pending sales in February 2017 from 983 pending sales in February 2016, and overall closed sales increased 18 percent.

"Broker analysts Coco Amar, managing broker at John R. Woods Properties Olde Naples office, pointed out that economic factors may begin to delay baby boomers' decisions to sell their northern homes and buy in Florida.

"I'm finding buyers are taking their time making a purchase decision because its still unclear how some of the President's reform policies will play out over the next few years. And with the stock market performing as well as it is right now, it's hard for them to replant those funds into a second home should they need it liquid quickly."

Adds Jeff Jones, amanaging Broker at the Naples-Park Shore office of Coldwell Banker, "Many baby boomers are also facing very different life circumstances than retirees from previous generations. AS the number of adult children and aging parents living with baby boomers increases, permanent relocation for them is not yet an option. Also, the recession seems to have reduced impulsive buying behaviors. Consumers are more educated about home values today and they are taking more time to look for the right home."

An interesting note: Cash sales increased to 68 percent of the closed sales made in February. Likely because there were 400 price reductions in one week in the Southwest Florida MLS during February, which motivated buyers to make a decision to purchase.

In the Bonita Springs-Estero market, it is another story entirely.

Roger Brunswick, president of the Bonita Springs-Estero Association of Realtors, says there is no question the area has moved into a "buyer's market" economically. The days on market have increased considerably year-over-year as well, further solidifying that it is still a buyer’s market and directly attributes to the overall 9 percent decrease in closed sales.

"Chasing down the market with price decreases is not a good sales strategy," states 2017 BEAR President Roger Brunswick, John R. Wood Properties. "A six- to eight-week price reposition can burn up two months’ time during the critical winter selling season. Cash buyers want to spend late season in their new property, so pricing accurately now is critical to meeting this need." Based on the current numbers, it will take a seller 38 percent longer to sell a property that is currently overpriced. "Sellers can’t afford this much of a delay, even if they don’t want to close in the next 30 or 60 days," Brunswick added.

The competition between resale and new construction homes is also heating up with builders providing many incentives, inventory and future site plans for prospective buyers.

The number of overall closed sales, including single-family homes and condos, for 12-month ending December 2016 was 2,9041 units as compared to 3,132 units for 12-month ending December 2015, a 7 percent decrease. Pending sales for December 2016 were at a 9 percent decrease with 2,872 units versus 3,174 units compared to December 2015. The days-on-market was 105 days, which was an increase of 38 percent from 76 days in December 2015.  As of Jan. 1, 2017, there were 1,475 units of inventory for single-family homes and condominiums, and the current months of inventory stands at five months.

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So there you have it. Naples, Bonita Springs and Estero are all awash with properties for sale -- both new and resale. For sellers, my advice is that I can list it, but if you want it sold we have to price it competitively. For buyers, you are in a better position and have a little more leverage, especially the farther north you go in the SW Florida real estate marketplace.

More to come . . . .