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.
At first glance, statistics for the entire single-family-home market in Park Shore, Moorings and Coquina Sands confirm this and suggest a fairly balanced market: in the past year, there have been 128 sales and there are currently 120 listings. However, when this data is given new parameters - teardowns, new construction and resale from 2000--2016 – new storylines and complexities are exposed. After several years of activity, a distinct pattern in the teardown/new construction sector has emerged: strong sales of teardowns were witnessed in 2015, followed by a large supply of new construction inventory in time for the 2017 season, peaking at 58 in March. 31 properties were sold, a significant amount, yet there is a clear lag in the replenishment of inventory which currently only stands at 36. Teardown sales had a bumper year in 2017, up to 75 from 48 in 2016, suggesting developers may have had to wait patiently for the injection of capital before moving on to the next project. This cycle looks likely to repeat and we expect a rise of new builds in the upcoming year; however, as teardown sales are comparatively less vigorous than the 97 and 90 transactions in 2014 and 2015 respectively, we expect this will be more moderate than the previous burst. It is undeniable that teardowns and new construction seem to be locked into an intricate inverse relationship, simultaneously pushing and pulling, slowing and accelerating this active market. This correlation polarizes the market, leaving a healthy supply of properties built from 2000-2016 that fall outside the parameters of ‘new’ and ‘old’. These homes continue to trade at a significant discount, selling at prices more reflective of the land value than the quality of the property. Even bayfront homes, which typically enjoy an 80%+ premium for a superior location, struggle to sell if out-of-fashion. This sector of resale is decidedly a buyer’s market, with almost double the amount of inventory to sales and looks likely to remain this way unless Tuscan homes enjoy a renaissance.
The performance of these three disparate submarkets is not the only driver; subtle nuances in location affect prices in a surprisingly profound way. As much of the quality inventory has been absorbed in the heart of the Park Shore and the Moorings, developers have had to explore less tested areas such as the northeast corner of Park Shore, the ribbon of single-family homes that runs along Belair, Binnacle and Alamanda and the small pocket of duplexes on Fairway Terrace. The market has not responded favourably to these experiments in expansion and despite many numerous, steep price reductions, these homes have been slow to sell. In fact, the lowest sold price per square foot for new construction was on Alamanda at $355.33 – on par with that of a teardown. It is unclear whether developers are deterred, but such depressed sales in the $2m+ range suggest these locations are not synonymous with any sort of profit. Other builders have migrated southwards into Coquina Sands, which is characterized by significantly larger lots and consequently, a less suburban feel. The increase in land size makes it easier to build single-story homes, which appeal to many potential buyers, but also makes it impossible to resist the temptation to build sprawling properties that surpass 4,500 sqft, creating a new $4m+ price point. The next year will serve as an interesting case in price discovery in both the $2m and $4m range along the perimeters of these neighborhoods.