March 2016 Newsletter
As the “season” is rapidly drawing to a close, The Brown Realty Group has been very busy with the business of real estate. Although the year has started out a little soft in the Naples to Fort Myers corridor, we have had several closings and as we write this newsletter, we have 2 pending. Our new listings are at an all-time high. Let’s discuss the soft start to the year.
Single family home sales dropped by a larger percentage in the Naples Area in February than anywhere else in the state. Existing single family home closed sales were down 16.8% in February from the same month a year earlier. That was the largest drop out of the 22 metro areas that are tracked within the state of Florida. Fort Myers had the 4th largest percentage decrease in closed sales in the state for single family homes. Closed sales, in the Fort Myers market fell 12.5%. Some of the decrease in closed sales in Naples/Fort Myers is due in part to a lack of inventory in the “under $200,000” price range.
Interestingly, single family home prices in the Naples area were up 17.9%, to $460,000 from $390,000 a year earlier. In the Fort Myers area, prices rose 11.8%, to $216,000 from $194,000 for the prior year. Rick Brown of The Brown Realty Group said, “He doesn’t expect to see this sort of double-digit price growth that SW Floridians have become accustomed to beyond April or May. Rising inventory and slower sales will put downward pressure on prices.” Brown expects more traditional levels of price increases in the 5-8% range.
What has caused the significant decrease in closed sales over the last several months? Brenda Brown of The Brown Realty Group surmises that, “There are a number of contributing factors for this decrease – including lack of low-end inventory, the Canadian exchange rate, the ugly Presidential election, the volatile stock market and a decrease in tourism. Most of these factors, we have not seen in a number of years.”
BUT, Brenda Brown says it is not completely possible to understand the impact that new home construction is having on closed sales. Brown says, “All of our closed sales and pending sales statistics come from the Multiple Listing Service. Most of the new home sales are not report in the MLS.” SW Florida’s new home starts were up 42% in the 4th quarter of 2015, according to Brad Hunter, Chief Economist of Metro Study. The annual starts’ pace increased 18% in the 4th quarter compared with the prior year quarter, Metro Study said. Hunter said the rate of new home starts is “Extremely strong…among the strongest in the country.” New home construction has been heating up for some time. The regions’ annual starts rate has increased for 18 consecutive quarters. The pace of starts was up 22% over the year in Collier County and 10% in Lee County. The most active price ranges for new home starts were $300-399k, followed by $400k-500k.
The Brown Realty Group has taken some time to review our Downing-Frye office’s pending sales for the last 10 years to assist our readers in drawing their own conclusions about the current market. Pending sales are defined as homes/condos under contract, but not yet closed.
If we had not provided the history from previous years, you might say the market is way off. The reality is that we are having a more “normal” season for pending sales. If you’re a current seller, this is not great news, but this is very good news for a healthy, long-term real estate market.
Sellers are better positioned to have a successful sale of their home when they hire a strong listing team. The Brown Realty Group has a world-class marketing program for their customer’s homes. As the # 1 Team in the largest brokerage for 2015, our results speak for themselves.
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