Masterpiece Theatre - Port Royal's Dramatic Market 

John Glen Sample set the scene for his visionary residential enclave in 1938 when he purchased two square miles of savage, mosquito-menaced swampland just south of the cluster of cottages that comprised downtown Naples. He titled it Port Royal and deemed it to be a new haven for the elite - a place unencumbered by the past. Over the next twenty years, he personally directed much of the development of this project by proposing rigorous building codes, intelligent regulations and interviewing many of the potential residents. By 1959, Port Royal was fairly well-established and seemed to be following his carefully-crafted script. 

But this was only a dress rehearsal. Over the ensuing fifty years, Port Royal has burgeoned into one of the most elegant and sumptuous residential neighborhoods in America. The market has responded well to this expansion and Port Royal has consistently outperformed its other local, luxury-community competitors. For example, the average sales price for 2018 is up 17.38% thus far, in keeping with the 86.73% increase in average sales price since 2008. Furthermore, the number of transactions over the last 12 months was 25, compared to a current supply of 53, indicating 2.12 years of inventory. This figure is weighed down by the relative and typical illiquidity of properties over $20m, but as a whole, reflects a hardy ultra-luxury market. 

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By Land or By Sea – The Complexities of Aqualane Shores 

In 1949, just months before Naples officially became a city, development began on a waterfront residential neighbourhood in the stretch of land between what is now 14th Ave S and 21st Ave S. Out of mangrove-mired marshland, Forrest Walker & Co. sculpted several deep-water canals and carved approximately 350 home sites, creating a centrally located, nautical community. Today, very few of the original, modest ranch homes and quaint fishing boats remain; instead, the avenues are stately parades of august estates and a pageantry of yachts – a visual testament to Aqualane Shore’s metamorphosis into one of Naples’ most desirable locales. 

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Perimeters and Parameters: Developments in the Park Shore, Moorings and Coquina Sands Markets 

Confined geographically by Seagate Drive to the north and Naples Beach Club golf course to the south, the neighborhoods of Park Shore, Moorings and Coquina Sands are often classed as one real estate market. Crayton Road, the main artery connecting this stretch of covetable property, is a parade of realtor signs advertising sleepy ranch houses; dusty, buzzing construction sites; Mediterranean marvels and sparkling new spec homes. This four-mile drive suggests an unabashed confidence in the rich and unlimited rewards of redevelopment, both in the eyes of buyers who are willing to pay premiums for turnkey properties and sellers, who hope to cash in on their long-held homes – it appears to be an area of unbounded real estate activity. 

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Elements of Style: The Evolving Architecture of Olde Naples 

Olde Naples is an intriguing architectural and social paradox. It is, after all, the guardian of the city’s historical roots and cultural legacies, and yet, it is the site of some of the area’s most innovative and contemporary lifestyle trends. There is no other local community so diverse in architecture, varied in lifestyles and charming in its eclecticism. Hidden gravel alleyways branch off prestigious promenades such as Gulf Shore Blvd, beachfront bungalows perch on the water’s edge and sprawling estates wrap around duck-loving lakes. For residents, this heterogeneity ensures an aesthetically pleasing ménage of personalities, a link to the past and a hint at the future; for realtors, developers and investors, it opens up a world of possibilities. 

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A View of One’s Own: Activity in the Gulf Shore Blvd N Condominium market 

As 2017 draws to a close, the Gulf Shore Blvd N condo market is languorously rousing itself from the long off-season’s slumbers in preparation for another lively first quarter. The opening half of 2017 was fairly buoyant for the area: there were 164 sales as compared to 136 for the respective period of 2016, and until the unwelcome interruption of Hurricane Irma, this summer looked set to outpace 2016. Although the Gulf Shore Blvd N condos proved themselves to be impregnable bastions of permanence throughout the battering gales, the man-driven market was slower to recover from the chaos of Irma’s wind-whipping wrath. October inventory was down to 138 from 174 in 2016, while closed sales were down almost 50% both in September and October from their 2016 levels. We expect this to merely be a reflection of the delay in closings caused by Irma and to see a robust revival in the market through the injection of inventory and buyers during the winter months. In fact, the Gulf Shore Blvd N condo market has a palpable seasonal pulse, almost so consistent as to be called predictable: after a comparatively quiet summer, inventory and sales increase almost overnight and activity is brisk from the late fall to till the end of spring. Irma may have done her utmost to disturb daily rhythms, but the patterns and laws that govern the idyllic winter season are entrenched enough to trump Mother Nature’s whims. 

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Great Expectations: Finding Equilibrium in New Construction 

New construction’s market performance serves as an instructive litmus test for luxury consumers’ demands and desires. Over the past few years developers and builders have introduced a variety of products, at numerous price points, in many different neighborhoods whilst tackling rising lot prices, construction costs and evolving stylistic trends. This rather rapid injection of inventory has become a fascinating experiment in identifying the target audience, the ideal home and the optimal price. Thus, throughout the year we have observed and asked: What is the demand for these brand new homes? What qualities are instrumental in determining a successful product? And how many of these spec homes can the market support? After analysing the last twelve months of data we are starting to receive answers that strengthen our initial hypothesis about the qualities that define the new construction market equilibrium – that optimal moment when those two fickle factors, supply and demand, find harmony. 

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Keep Calm and Carry On: Permanence in Paradise 

On September 10, 1960 Hurricane Donna brutally bombarded Naples, then a sleepy fishing community with less than 5,000 city residents, leaving utter devastation and heartbreak in her wake. But what could have been the town’s ultimate demise into the dark ages instead became a catalyst for a great renaissance. A surge of insurance money and influx of property developers led to a much-needed whirlwind of activity in a previously stagnant economy; in the ensuing decade Downtown Naples was reconfigured, Marco modernized, Park Shore plotted and Pelican Bay conceived. Thus, out of a swampy, inhospitable tree-strewn disaster-site, modern day Naples was borne. 

How cruel and uncanny that exactly fifty-seven years later, Hurricane Irma mercilessly assaulted the city with 142mph record-breaking winds and ominously threatened catastrophic storm surge. However, it soon became clear that large parts of Naples had withstood nature’s wrath and owners of properties in Park Shore, Moorings, Coquina Sands, Olde Naples, Aqualane Shores and Port Royal returned home to find the damage largely limited to landscaping. In the ten days that have followed, residents in these neighborhoods have witnessed the rapid clearing of Irma’s arboreal carnage, restoration of electricity and return to normalcy. By Season, much of the debris, drama and wind-whipped weathermen will be a distant memory for all those within our subject communities, but will there be any lasting damage to the real estate market, a lifeblood of the local economy and important source of investments? 

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Growth Spurts: Reflecting on a Decade of Market Movements 

Over the past year, sentiment towards Naples real estate has metamorphosed from premature pre-season uncertainty into whole-hearted enthusiasm and confidence for a market that has surpassed pre-recession heights. With markers in place for continued growth in 2018, now is an opportune time to reflect on the recent market activity of single-family homes in relation to broader historical trends over the past decade. Analysing data from 2007 onwards allows for a comprehensive picture of growth and provides a fitting context for today’s healthy velocity. To keep this study relevant, the parameters have been set to closed sales of $1m+ single-family homes in Park Shore, Moorings, Coquina Sands, Olde Naples, Aqualane and Port Royal and with a particular focus on the cumulative % change in price and price per sqft since 2007. This vantage makes it easier to separate out specific trends and unique characteristics that not only explain past behaviour but also help anticipate future performance. It also raises two important questions: Where has the market outperformed and why? 

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Supply and Demand: Identifying Optimal Opportunities in a Seasonal Market  

It is a long-running and continuing debate as when to buy and sell real estate in this complex market. Whilst numerous real estate reports are prone to generalizing about the region in its entirety, they tend to sweep over the fact that Naples is a compilation of many diverse and disparate communities. This newsletter, therefore, aims to provide a more in-depth analysis of seasonal fluctuations specific to Park Shore, Moorings, Coquina Sands, Olde Naples, Aqualane and Port Royal. 

The statistics focus on the pending activity of sales of $1m+ properties in the subject areas during the period from July 1, 2016 to June 30, 2017. The use of pending statistics identifies when the buyer made the decision to purchase a property, thereby removing the convoluted time-lag caused by the closing process. Over this 12-month period the number of pendings formed a sinusoidal pattern: from a low starting point in July, pendings grew steadily throughout the autumn and winter, peaked in February and March before beginning a predictable descent at the end of spring and into early summer. The ‘pending’ graph on the penultimate page demonstrates that this movement largely conformed to the traditional definition of season in general – the four months of January, February, March and April witnessed 50.6% of the entire year’s transactions. More insights can be revealed in comparing this data set of pendings to new inventory, which are proxies for demand and supply, respectively. The higher the pending/inventory ratio, the more buyers there are in relation to supply– thus ideal for sellers. Conversely, the months with lower ratios provide a supply/demand balance theoretically in favour of the buyer. The data suggests, if possible, it may be in the best interest of the seller in these areas to delay listing a property until the seasonal months of January, February and March to ensure maximum exposure and avoid cumulating days on market. For buyers, July and August present opportunities which perhaps, historically, have not been maximised to the fullest. The data also suggests there may be advantageous moments to act in the months of September, October and November. 

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