When a storm like Hurricane Irma barrels through an area, the immediate thoughts and reactions are about helping people recover, rebuilding and repairing what’s been lost, and getting back to normal. Depending on how bad an area is impacted, it may take a while but eventually thoughts turn to the real estate market. Will people buy in Naples after a storm like Irma? Can anyone sell their home? Are there great deals just waiting for buyers to snatch them up? These are good questions, and I’m glad people asking them.
Understanding the Recent Past
Real estate operates in cycles, and the market is never equal or perfectly balanced. We have either a sellers or buyers market which is dictated by supply and demand. After the huge market disaster between 2008 and 2011, prices began to climb quite quickly. I would say maybe a little too quickly! But there was nothing really on the market once the foreclosed and short sale inventory was gone and before the builders returned.
Toward the end of 2015, the market shifted. Many sellers became optimistic and, in many cases, very aggressive with their asking prices for their properties they listed for sale. Buyers remembered 2005 and decided to purchase in a different location like Sarasota or Venice or did not buy at all and rented instead. They didn’t want to take the chance of paying too much and being underwater if the market crashed again.
As a result, Naples accumulated inventory throughout all of 2016. The commotion during election season didn’t help at all. Selling season last year began very slowly with really most of the buyers making their decisions around March and April. That, of course, was not by accident.
Some sellers realized that the market would not support the prices they wanted and after a few price reductions, their properties sold around March and April. In many cases, buyers told us they watched a particular condo or home for months. They liked it but refused to pay the inflated prices. Once the price came down, the offers came in.
The Current Naples Market
Welcome to the beginning of the 2017-2018 season. Not all sellers realize that the market has changed. We still have tons of overpriced properties on the market from last season that have spent 200, 300, and even 500 days on the market. The majority of them are in their original condition.
We already have early buyers in town ready to make offers on properties they would like to use this season. Unfortunately, there is very limited number of new and properly priced homes for them to view. As a result, many buyers have decided to sacrifice prime locations like Pelican Marsh or Pelican Bay for example and look for a new construction further inland.
What About Hurricane Irma?
Initially, we received several phone calls and e-mails from buyers asking “So are there any good deals in Naples now?” But in reality, Irma came and went leaving us with the vegetation and landscaping debris and with confirmation that our building codes are here for a reason. Thankfully, for the most part, properties suffered very minimal damage.
What buyers are going to be concerned about now will be impact glass windows, storm shutters and whether a listing suffered any damage from the storm. In some cases, questions will be asked about the possibility of special assessments for landscaping, damaged lobbies, and other common areas that needed repairs after Irma.
The other thing happening right now is an artificially busy beginning of the season. Many of the buyers that would normally have been here in September and October shopping for the properties were delayed. They’re here and looking now, as well as our normal influx of buyers that come during this time of year.
At the same time, we are also experiencing a lock on inventory. As of Monday, November 6 we had a total of 75 units on the market in Pelican Marsh. However, most of those have been sitting on the market for months. Out of those 75 units, only 22 came to the market within the last 30 days.
What’s really interesting is that out of the 22 newly listed properties, 10 of them were on the market last season or even a couple months ago and did not sell. In reality, they are not new at all. Buyers who monitor the market very closely are not being fooled by that trick - neither are their Realtors®.
We’ve noticed that many sellers are holding off listing their properties. If that’s you, please don’t. Right now is the best time to beat the crowd and offer your property for sale to our early seasonal buyers. They are in town either physically or watching the market online, ready to fly in and make an offer on the right place (at the right price).
Keep in mind that in addition to the properties I mentioned, there will be many more that didn’t sell last season returning to the market in the next few weeks. Of course, there will also be new inventory never listed before. Long overdue price adjustments of properties currently listed will take place. This means every listing will sooner or later have plenty of competition. Listing at the right price now means that you can bypass some of that extra competition.
Another interesting thing to watch for this season...the traffic. Bob and Betty Snowbird have a hard time driving as it is. And considering how many street name signs are still gone this is going to be...fun.
Are you ready to list your property and get it sold at the right price? Contact us today. Let’s talk!