The beautiful city of Naples for many years has attracted all types of people, from celebrities to millionaires to the average Joe. The area over the past few years has seen a tremendous increase in home prices. This has made it harder for people to buy property in Naples but many homeowners in Naples have seen their equity rise. This has motivated many homeowners to deal with the decreasing affordability of Naples.
Wages struggle to keep up with the rising costs of housing, taxes, and insurances. A low household income would be a problem if you decide to live in Naples, given the high costs of living. The reason why some have found out that it is easier to just move out. It is hard to keep up with the rising costs of living if you are not a millionaire. Although, lately the city of Naples has attracted many households that have surpassed the million-dollar mark.
The evolution of the real estate market in Naples, Florida
Over the past few years, there has been a major shift in the number of homes sold by price range. In 2006 home prices reached a peak and it was hard to find homes valued under $200,000. There were less than 5% of homes sold under the price point of $200,000. Because of the recession, home prices plummeted from 2009 until 2011, reaching a new bottom. There were more than 50% of homes in Naples sold under the $200,000 price point. A couple of years earlier homes in this price range would sell for double the amount.
From 2012 home prices started to recover, and the number of homes sold under $200,000 started to fall. Ever since the year 2010 the average home selling price has been on the rise. In 2015 the average home price in Naples was around $565,000 and during the past year, the prices increased by about 11%. Years 2016 to 2017 according to dataus.io, placed the median property value at about $850,000, which is almost 4 times higher than the national average.
According to the first-quarter report in 2018 from the DC-based trade group National Association of Realtors, the Naples metro area ranks as ninth in the country in terms of salary required for a comfortable living (the report breaks this down with an example: with a 20 percent down payment, an income of $80,483 would be needed by the buyer to qualify for a loan to buy a house at the median price of $439,900.)
With the increasing demand for housing, the home prices outpaced wage growth during the last couple of years. A striking reduction in the number of underwater homes is fueling the trend. Ten years ago, Naples was ranked by IHS Global Insight economists as one of the most overvalued housing markets in the country, after prices raised by about 100% from 2001. South Florida ranked the second-worst real estate market in the USA in terms of underwater properties. Currently, we can notice that the trend has changed, and the increasing number of homeowners have 20% or more equity in their homes.
Real estate market in Naples, Florida today
According to Zillow the home value currently stands at about $330,000. Over the year 2019 Zillow registered a decline in value for homes of about 1%, but the real estate forecast in Naples shows an increase in home values of about 3%. Also, the median list price per square foot is about $196 and the median rent price in Naples is around $4,000.
Naples is still far from the top cities in terms of prices and affordability problems; the most expensive market in the country is still San Jose, where it requires a median income of $179,505 to afford the median-priced single-family home at a cost of $970,000. Nonetheless, single-family existing home prices remain on the upswing in both Collier and Lee counties over the year:
- Collier County homes jumped 16%, to $465,000 from $400,000, with the biggest increases in North and East Naples, the latter being the only area with an increase in townhouse and condo prices in the county.
- Lee County has witnessed a 4.7% increase in home prices, from $224,512 to $235,000, and townhouse, as well as condo prices in Lee County, beat the statewide growth of 4.4%, from $153,245 to $160,000.
- All neighborhoods saw price increases except Sanibel, Captiva, and Fort Myers Beach (the latter also the only area not to see a distinct drop in closed sales of properties.)
It appears that much of the increase in median prices throughout Florida cities can be attributed solely to the rising prices of affordable distressed homes. Even Habitat for Humanity has been affected by the affordability issue in Naples; the non-profit groups have stopped trying to find distressed homes to rehab due to the high prices and is now seeking cheap land instead, planning to build 100 homes by the end of the year resulting in a projected 2,000 interviews with people eager to be home-owners.
Throughout Southwest Florida, inventory levels for all types of homes are growing dramatically. However, prices tend to remain high and it is also because of the good climate that is drawing people who want to escape the harsh winters. Naples real estate agents can point to high equity possibilities as a selling point for the pricey properties, with the market holding strong and no sign of devaluing in the near future. The tropical climate of Florida