Quality of life and high demand are driving prices
Naples is one of the hottest housing markets in the United States, and it’s only getting hotter. According to a 2017 market report issued by the Naples Area Board of Realtors in January, the 2018 housing market is looking strong and only growing. It’s not hard to see why – who wouldn’t want to live in paradise?
Job growth and second homes
With the economy on the upswing, many Naples residents are set on buying their first home. Additionally, many people, including current residents and visitors from other parts of Florida and the U.S., are buying a second home or condo in the area as a vacation home and an investment.
A shortage of both new and resale units
Since condos and other homes are scarce in the highly-desired areas of Naples, it can be tough for potential buyers to lock down the unit they want before other bidders close in on the property. For this reason, many of the more affluent home buyers, especially those angling to buy a second home, are choosing to purchase their homes in cash. This makes their offer more attractive for both the seller of the home and the real estate agents involved, as it eliminates the need for buyers to get any type of bank confirmation or mortgage approval. In other words, all they need to say is “yes,” and the condo is sold.
The flip side of this demand is that the shortage has impacted affordability for lower-income residents in wider Collier County and Southwest Florida, and makes it a more competitive market for home buyers who are taking out a mortgage to purchase.
New communities are growing fast in South Naples
Traditionally, the most popular and expensive areas for real estate in Naples have been in the north and west part of the city, close to established, upscale areas like Fifth Avenue and Vanderbilt Beach. Beachfront condos, many valued in the millions, are some of the most highly-priced units in the city.
However, due to their high price and, more importantly, a lack of new beach land for development, beach homes and condos aren’t actually the fastest growing unit type for first and second home buyers. Instead, growth is fastest in the south and east parts of Naples, where large land tracts remain open for development and remain comparatively inexpensive. In fact, 12 new housing communities were under development in 2016 in southwest Naples.
While these new areas will certainly offer more (and more affordable) options to potential condo buyers, real estate in northwest Naples is likely to increase in price, albeit more slowly, as the new communities in the south and west finish the construction phase and increase the quantity of available units.
Distressed sales are shrinking
Distressed sales of condos and other homes, which began rising after the 2008 financial crisis and peaked in 2009, have mostly worked their way through the system. 2016 estimates show that distressed properties are less than 10% of all the available real estate in Naples.
This means that bargain hunters will have to look even harder if they want to purchase a foreclosed or distressed condo at well below market value. Plus, they’ll have to act fast, as more buyers in the area mean that any opportunities to purchase such condos will be quickly snatched up.
A condo in Naples remains a good investment
With Naples being rated the happiest and healthiest place in America, it looks like the area’s real estate has nowhere to go but up. Naples has so much to offer – from amazing shopping and art galleries on Fifth Avenue to the stately homes of Old Naples, to the white sands and warm gulf waters of Vanderbilt Beach.
Over the last few years, potential condo buyers have realized the many benefits of living in Naples, whether they want a solid investment to add to their retirement portfolio, a convenient place to live, or simply a seasonal getaway.
If you have any questions about the condo market in Southwest Florida, or you’re interested in buying a second (or first) home in the area, don’t hesitate to contact Dante Disabato at 239.537.5351 or through our online form.