December 2022 - Naples Market Update

The report showed only 105 homes for sale below $300,000 in December compared to 1,816 in December 2019. Reviewing the report, Mike Hughes, Vice President and General Manager for Downing-Frye Realty, Inc., remarked that “aside from the below $300,000 price category, inventory nearly doubled in every other price category by the end of 2022 compared to 2021.”

Demand for the Naples lifestyle remained constant in 2022, and low inventory pressed median closed prices upward. The overall median closed price in December 2022 increased 13.9 percent to $575,000 from $505,000 in December 2021. Looking back at December 2019, the median closed price was $344,255; and inventory was double what it is today.

“We can expect values to stabilize despite our tight market,” said Cindy Carroll, SRA, of Carroll & Carroll Appraisers & Consultants, LLC. Carroll believes the challenge moving forward will be convincing sellers and buyers that factors in place during the pandemic, when prices soared due to elevated demand, are completely different than they are today. “It’s going to take a while for us to readjust to our new market conditions.”

Economic factors affecting our market include a possible recession, and rising mortgage rates, which are still over six percent, on average. “Many people who bought a home in the past ten years enjoyed a very low fixed rate,” said Jillian Young, President, Premiere Plus Realty. Carroll added that, “when you factor in rising rates, insurance, assessments, and taxes, the cost of buying a home today in Naples is a lifestyle that many people can’t afford.”

These same factors are affecting new listing inventory as well. Demand for homes in 2022 kept REALTORS® busy looking for new listings, which dropped 8.4 percent to 13,577 compared to 14,819 in 2021. Many homeowners, especially those who purchased homes below $300,000 or at low interest rates, are now unable to afford a change in local address due to the increase in mortgage rates.

Then, in the wake of Hurricane Ian, the Naples real estate market pivoted again in the fourth quarter of 2022. Homes that suffered damage fell into two categories depending on their age and the Federal Emergency Management Agency (FEMA) 50 percent rule. (The FEMA 50 percent rule, as part of the National Flood Insurance Program, mandates that if a home incurs substantial damage — determined when repair costs total or exceed 50 percent of the property’s market value — it must be brought up to current building codes and floodplain regulations.) “Older homes in affected areas like the Moorings, Park Shore and Naples Park are facing this situation now, which might produce some new inventory, as the owners may not want to bear the cost of renovation,” said Adam Vellano, a Naples Sales Manager at Compass Florida.

The NABOR^® December 2022 Market Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. NABOR^® sales statistics are presented in chart format, including these overall (single-family and condominium) findings for 2022: