Home Prices versus Stock Market, How is Naples Being Affecting?
Home Prices Versus Stock Market, is the stock Market impacting Naples Real Estate?
The last few weeks, both buyers and sellers have been asking us the same question, is the stock market affecting housing prices here in Naples? If you have been watching the Naples real estate market you’ve noticed that price reductions are occurring in most neighborhoods and sales are down, which has many wondering if it’s due to the unpredictable stock market. Here is what we have found.
We know that Naples real estate depends largely on second home time buyers or investors, In the Naples-Marco Island area, 49% of all single-family homes and condos are vacation homes or investments properties. So when an investor see’s their portfolio plunge, it hurts their confidence and can make some people less likely to buy due to less money for purchases and down payments – particularly since real estate can’t be sold instantly, like stocks and bonds can, and also requires ongoing carrying costs, like insurance, taxes and maintenance.
While buyers may have the money, it’s more a question of them waiting to buy until they feel the market has stabilized. Unfortunately, many analysts expect the ups and downs of the stock market to continue because of global growth risks, particularly in China. Yet global turbulence may eventually encourage more foreign buyers to invest in Southwest Florida as well.
Each neighborhood in Naples is different, it’s not as cut and dry to discuss the housing market as one simple area. Naples has homes ranges from $68 million to $250k and not all communities are currently experiencing the same growth. In fact, even in the same neighborhood certain types of properties are up while others are lagging in the market. To see if your neighborhood is maintaining or growing in value, message me! We can give you information to consider specifically for your home or the home you are looking to buy.
As your real estate agent, we act as your their local economist of choice by presenting them with the most current market facts and analysis to help them make the most informed decision.
The Good News
On the flip side, Naples real estate may benefit from the fluctuation of the stock market, why is that? Mike Hughes, President of the Naples Area Board of Realtors, said volatility in the stock market might actually help the local housing market in the long run.“The potential is there for people to cut back on the stock market and buy real estate as a hedge against volatility. The perception is that real estate is improving,” he said. “A lot of people knew a correction was coming, so I’m not too concerned right now.”
While there were slightly less overall sales in January 2016, the average days-on-the-market fell 14% to only 75 days this January from 87 days one year ago.
Bottom line: It’s a great time to put your home on the market and see good returns, however, do not expect to ask a crazy number and overprice your home just because that’s the price you “want”. Talk to your real estate agent so they can help you understand comps and find the CORRECT value for your home. We are still seeing a high number of closed sales on properly priced homes!
Is it Still a Seller’s Market?
The simple answer. Yes! The last few years, Naples has had low housing inventory in most neighborhoods which created the perfect environment for sellers to make an extremely high profit. Buyers wanted to buy in Naples and the price didn’t matter, cash offers dominated the market place and sellers saw bidding wars over their home. Fast forward to January 2016, we are seeing buyers being more cautious, researching information for them to feel comfortable investing again in real estate.
As of February 2016, housing inventory is now up. Local experts have shared data suggesting that we are now in a balanced market. That means that the market doesn’t lean towards either a buyer or a sellers market but that there is enough inventory for 6 months. What does that mean for you? You can expect home prices to stabilize and be put on the market for the correct value of their home, not an over inflated price like you’ve been seeing when it was a “seller’s market”.
Additional Affects on Housing
Everyone’s aware of the impending Presidential election in November, but maybe what you are not aware it’s affecting real estate. There is a natural slow down in real estate before ANY Presidential election.
A poll by Harris Interactive on behalf of MortgageMarvel.com shows 25 percent of Americans surveyed would prefer to know who our next president is before putting a down payment on a house. Among the 2,570 U.S. adults surveyed, 13 percent said they would definitely delay a home purchase until after the election; another 12 percent said the uncertainty might cause them to delay their purchase.
Another recent study by the National Association of Realtors showed that 52% of new home buyers say the #1 reason for moving is to gain “warmer weather,” which increases Naples value and should create good insulation from a further drop in home buying. After all, you can’t put a price on the Naples lifestyle and tropical weather especially while the rest of the country is currently experiencing another snow storm!
As previously discussed, ALL CASES ARE DIFFERENT, each neighborhood in Naples has a different outlook whether you are a buyer or seller. Waiting to “feel out the market” may cost you tens of thousands of dollars. Please contact an agent who can help you sort through the information and assess your individual needs on the best time to sell or buy.
If you are a Seller
Thinking about putting your home on the market? Contact us first so we can give you insight on the best ways to currently capitalize on your home’s value, you can reach us at ann@myluxuryexpert.com or 239-580-7367.
If you are a Buyer