Real estate brokers and analysts are calling 2017 the best year since the recession.
According to new data released by the Naples Area Board of Realtors, sales through June are up seven percent over the same period a year ago, and up nine percent in June alone. The median closed price also rose five percent.
“Back in ’07 or ’08 we’d be sitting up here sweating wondering what we were going to talk about,” said Mike Hughes, of Downing-Frye and a former NABOR president.
Many of the metrics the organization tracks, including pending and closed sales and median closed price, are nearing their pre-recession levels.
At their quarterly market conference, NABOR’s presenters all showed optimism about the state of the market, and gave their explanations for what has made 2017 just a strong year on the real estate front.
The lack of a presidential election’s long shadow over things hasn’t hurt, Hughes said, along with a strong and steady stock market. Stocks were unsteady for much of the early part of 2016.
“We have a lot of cash buyers, and a lot of our cash buyers get their cash from the stock market,” Hughes said. “So last year when we started 2016, many of these buyers were not willing to realize their losses that were basically paper losses, so they held out of the real estate market.”
Inventories also continue to rise, up four percent over last year. Oddly, the increased inventory, along with the increase in competition from new construction, estimated at about 25 to 30 percent of the market by NABOR’s Brenda Fioretti, is helping the market run stronger.
“Sellers are now adjusting their prices to be more competitive in the market,” Fioretti said. “Sellers are getting realistic with their pricing, and generating buyer activity, this is a good thing.”
Absorption, of the percentage of total inventory sold per month, is also up. BEAR, the Bonita-Estero Association of Realtors, which tracks both Lee and Collier Counties, show about 11 percent of total inventory in Collier sells monthly, and nearly 20 percent in Lee.
Even still, the prices keep inching upward, the median closed price in Collier now $340,000. It peaked at $370,000 before the recession. NABOR data showed that nearly all of that increase came from lower-end properties, take out properties under $300,000, and the closed price of those homes actually dropped over the year.
Lower prices homes are also mostly vanished from the market, and while some have turned to condominiums as an alternative, condo sales at similar price points have been more lukewarm.
One theory, is the additional requirements that condos have beyond their sticker price is limited their sales, including high association fees or mandatory golf memberships.
“I’m looking at investor pools and thinking that because our rental market is so depleted, these things should be flying off the shelves for rental purposes,” said Coco Aran, managing broker at John R. Wood Properties. “If you’re buying a $250,000 condo and you have to buy a $60,000 golf membership you’re just not going to sell it. We need action in that marketplace, I think, in some form.”
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