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Inventory Heating Up is Good News for Summer Buyers
May had the highest number of new listings than any May in the last three years. This trend will lead to more options for summer buyers. New listings during May pushed the inventory of homes for sale up 58.6 percent to 2,046 properties compared to 1,290 properties in May 2021.
Each month we have seen an increase in inventory since December of 2021. When equates to the inventory levels for the month of May doubling since the same time period a year ago. Plus this past month we have seen price decreases (or corrections as I call them) of almost 900 homes. This provides buyers with so many options.
As such, brokers prefer to compare this year’s activity to activity in 2019 as it was a balanced year with 7.3 months supply of inventory. A healthy market for the Naples are is six to 12 months of inventory.
Looking at closed sales, there was a 24.5 percent decrease in May to 1,249 closed sales from 1,654 closed sales in May 2021. However, using 2019’s balanced market activity as a comparison, closed sales increased 7 percent month/month and 18 percent year to date/year to date.
Demand remains strong despite having three times fewer options in inventory compared to 2019 levels. Today, we have 1.9 months supply of inventory. Not surprisingly, low supply and high demand are driving price increases in Naples and across the nation.
And while new construction is adding to the inventory, it’s not at a rate that will triple the inventory anytime soon. The overall median closed price increased 40.3 percent in May to $608,000 from $433,500 in May 2021.
Median closed price increases today are somewhat misleading. If we look at closed sales by price range, the $300,000 and below market is down 56 percent. That’s because we have few homes in inventory within this price category anymore. Therefore, a huge drop in the number of sales in the lower price categories means the calculation used to determine today’s median closed price reflects sales in those price categories where there is more inventory.
Since January, we’ve seen a 21.9 percent increase in the number of homes sold in the $500,000 to $1 million price category. The NABOR® May 2022 Market Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary.
NABOR® sales statistics are presented in chart format, including these overall (single-family and condominium) findings for 2022:
Many first-time homebuyers may be hesitant to jump into the market today due to rising interest rates. But it’s important to point out that rates are expected to go up again before the end of the year. Locking in today at six percent on a 30-year fixed mortgage should not be seen as a 30-year commitment as refinancing is always an option if or when rates decrease in the future.
But historically, rates have rarely gone below six percent. Aside from locking in at a rate before it increases, another advantage of buying a home today is that these buyers will be able to take advantage of the mortgage interest deduction on their income taxes. Take a look at the Freddie Mac Data for 30 & 15 year Historical Mortgage Rates from 1971 to present.
Closed sales were down slightly in the high end of the market in May, but this might be due to buyer reluctance to move cash out of the stock market right now. Notwithstanding, cash sales commanded 63.3 percent of closed sales in May, though brokers reviewing the report contend they are seeing more opportunities for buyers choosing to finance their purchase.
If you are looking to buy a home, income producing property or sell a house in Naples, contact me. My abilities stretch way beyond just listing the house. I provide a concierge approach to selling your house starting with an accurate market comparison, creating your listing with exceptional marketing tools, managing all showings, negotiate offers, contingencies plus so much more!
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Your Friend & Realtor,
Felicia
