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Mike Hughes doesn’t want to appear like he’s bragging about the sales frenzy going on within his office and the greater Southwest Florida residential real estate market. “It feels weird to talk about,” says Hughes, vice president and general manager of Downing-Frye Realty in Naples, “because so many industries are struggling right now.”
But not residential real estate. Closings at Downing-Frye, for example, rose 71% year-over-year in June and July over 2019, Hughes says, which mirrors the overall Naples market. Closed sales across Naples increased 35.4% in July over July 2019, and pending sales are up 57.3%, according to a report from the Naples Area Board Of Realtors. “In April, if you had asked me how the summer was going to be, I would’ve said very soft,” Hughes says. “And the exact opposite has happened.”
Within the sales surge, several trends standout. A big one? Buyers, some from Miami and South Florida and others from New York, New Jersey and other Northeast coronavirus hot spots, aren’t requiring to see the house first. With work from home capabilities booming and video technology for home-showings widely used, buyers are itching to flee their current home. To wit, there were 15,634 showings during July, less than half the number of showings in June, NABOR reports. “Yet pending sales increased,” the report states, “which indicates properties were purchased virtually, sight unseen.”
Although the overall median closed price for July increased 13.5% to $368,750 from $325,000 in July 2019, NABOR also says 829 properties reduced list prices during July — possibly to spur quicker deals. Hughes and some peers also note that the robust market is spread across most price points. The $500,000 to $1 million segment had the highest increase in closed sales, up 99% year-over-year in July, from 112 to 223. Closings among properties priced above $500,000 increased 50% year-over-year.
'It feels weird to talk about because so many industries are struggling right now.' Mike Hughes, Downing-Frye Realty
The challenge moving forward, several brokers say, is the byproduct of high demand: low supply. Overall inventory in Naples decreased 28.8% in July to 4,390 properties, from 6,168 properties in July 2019, the report shows. Even so, Hughes says his August numbers, when reported in September, will be as strong or not better than July. After that, the lack of inventory could slow down the market. At the same time, with the year being so thrown off — April, normally a stellar month, was awful, for one — Hughes says projecting the near future is near impossible.
“September typically is a soft month,” Hughes says. “If we have a strong September, that will tell me this thing really has some legs.”
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