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?
As a whole, the aggregate single-family market has risen steadily since a low point in 2009 to reach an average price per sqft 10% higher today than in 2007. The different rates of appreciation of resale and new construction properties within this conglomeration are even more revealing. Resale, stagnant in the first half of the decade, has ascended since 2012, whilst new construction has risen at a more rapid pace. The effects of this disparity are best illustrated by the trends in the sub-markets. Although growth of single-family homes in Moorings, Coquina Sands, Olde Naples, Aqualane, and Port Royal was in concordance with the upward trend of the aggregate market, Park Shore was surprisingly flat. The contrast between the robust performance of the Moorings and the sluggishness of its nearly identical neighbour is explained by the disparity in proportion of sales of new construction properties: over the past decade, 25% of homes sold in the Moorings were new construction, whereas this figure was only 12% in Park Shore. This suggests that the market appreciation witnessed in the Moorings was reflective not only of increasing land value, but also the improvement in the quality of the homes now inhabited. Thus, homeowners in these areas should be mindful that contemporary renovation is tantamount to enjoying the returns touched on by these figures.
Port Royal continues to stand apart, largely immune to the seduction of new construction which comprised only 11% of total transactions in the area in 2016. This relatively small proportion indicates its growth continues to be driven by the coveted land and increasing prestige surrounding the exclusive community.
Once again, these figures demonstrate the intricacies and complexities of this market. Please call Irby & Associates for further details and guidance.