Collier home sales up in 2018 despite curve balls from Mother Nature

Mother Nature hasn’t been easy on Southwest Florida, and the real estate market in Collier County has felt the impact.

In 2017 it was Hurricane Irma. In 2018 it was red tide and blue-green algae.

On Friday morning the Naples Area Board of Realtors hosted its Year End, 4th Quarter and December Market Conference in Naples and discussed the impact these natural disasters had on the real estate market in 2018.

“Obviously, we were impacted tremendously by the perfect storm of an extreme red tide outbreak plus discharges in green algae,” said Jeff Jones, president of NABOR’s board of directors. “There is a lot being done, but obviously there isn’t an easy button like Staples has to fix our water quality problems, which have been developing over a period of years.”

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Jones reassured that “millions and millions of dollars” have been allocated to reduce the water quality issues that have put a damper on the real estate market and that he is optimistic for 2019.

“As these things started to abate, we saw the rental market bounce back a little bit, and we saw some better optimism about our future for water quality,” he said.

Despite all the obstacles, home sales in Collier still increased by 11 percent over the year to 9,771, up from 8,815 a year earlier, according to the latest report by NABOR.  

The report tracks resales, or existing home sales, made by the Realtor association's members in Collier County, excluding Marco Island.

Single-family home sales rose 10 percent year-over-year in 2018, increasing to 4,768. Condo sales were up 12 percent, growing to 5,003.

Over the last two years, single-family homes have made up 51 percent of all closings.

“We have a very balanced market in terms of the type of structure that people are buying,” said Jones.

But the high-end part of the market really drove sales in 2018 with single family homes in the $1 million to $2 million price range increasing 12 percent and condominiums in the same price range up 42 percent from last year.

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For homes $2 million and up, there was a 14 percent increase for single-family homes; 27 percent for condos.

“The high end is great, and we all like selling one of those Port Royal homes, but the low end can bear a lot of fruit too,” said Mike Hughes, vice president and general manager for Downing-Frye Realty Inc.

Pending sales — or new contracts written — in the $300,000 and under price range were up 39 percent this year, with almost a third of those sales occurring in North Naples.

Overall pending sales in 2018 rose 3 percent over the year. There were 9,365 compared with 9,121 in 2017.

In the fourth quarter, sales dipped a little, which real estate experts attributed mainly to the stock market and the holiday season, during Friday's market presentation at NABOR's headquarters.

“Overall if you look at 2018, we came off a storm and we had a really solid year. And it wasn’t seasonal like it was 15 to 20 years ago," Hughes said. “We are pretty much a year-end business these days, and the summer season has actually emerged to be a very strong season.”

And there is plenty of inventory for buyers to choose from heading into 2019.

There was a 14 percent increase in total inventory compared with 2017, which is the highest on record in six years.

In December the inventory of single-family homes on the market rose 17 percent year-over-year — at 3,131 — while the condo inventory increased by 12 percent in December, to 3,130.

The median home price — the price at which half the homes sell for more and half for less — rose slightly, growing 3 percent over the year to $339,000.

“The overall median closed price is wonderfully stable,” said Coco Waldenmayer, a managing broker at John R. Wood Properties in Naples. “There hasn’t been great movement in pricing since 2015.”

The Naples beach area saw the highest increase, 14 percent, in median closed prices for homes above $1 million.

And while Collier home prices are stable, some worry about the impact new construction will have on surrounding home values.

“Everyone likes the shiny new penny, but we cannot build the houses for the same cost anymore,” said former NABOR president, Rick Fioretti. “Labor is up. ... And there is an increase in the cost of new construction that is going to have to be felt at the point of sale.”

Fioretti thinks remodeling is what will really give the market a boost when it comes to sales since Naples is running out of beachfront land to build on.

“New construction is a good thing for our market, but once people get here and live 15 miles inland away from the beach there will be a whole new wave of people. ... And we are going to have to make new shiny pennies on the beach.”

He said he has seen 20-year-old homes sell “lightning fast” because they were fully renovated.

“Remodeling should be off the chain for the next 20 years here in Naples,” he said.