Although inventory in the Naples and Bonita Springs area is painfully low and the Law of Supply and Demand is the dominant force, remember two things as you read the article below with information from the National Association of Realtors and Lawrence Yun, chief economist.
Firstly, whenever you read things that address statistics or trends as a nation, Naples is a unique real estate market (and that’s why you are reading this blog to begin with). Some things are going to apply and others not so much. We copied/pasted the article below because, in this case, the headline is spot on for Naples. Nothing is going to alleviate the crush for second homes, part-time vacation properties or investment properties for short-term rentals.
We have buyers coming into our real estate market from all over the country and the globe for various reasons – people seeking the great weather, endless beaches in the area, employment opportunities, opening businesses, no state income tax, outdoor activities and sports, water activities and sports, the kids are in school, escaping certain mandates, many people able to work remotely, escaping high tax locations, lifestyle choices, longer life, freedom and more.
Secondly, the demand for certain neighborhoods in the Naples is off the charts for good reasons. As an example, two communities that are experiencing huge demand and a historically low inventory are Conners at Vanderbilt Beach (single family canal homes with quick boating access to the Gulf of Mexico) and Naples Park (affordable price range, walk to the beach, no HOA to restrict short-term vacation rentals). There are other communities in which the supply is greater and prices might actually have room for negotiation.
As a buyer, your needs may differ from an investor who wants to AirBnB or VRBO a property in a neighborhood that has no restrictions on rentals, no limits on pets and is located in a hot area. So, a buyer needs to give thought and consideration to many things to find the property that suits their needs and lifestyle as well as the budget. The same money that buys a renovation project within walking distance to the beach would buy a “palace” located east of I-75.
NAR: Vacation Homes Will Defy Any Market Slowdown
While overall home sales show signs of cooling as prices rise and buyers step back, NAR Economist Yun doesn’t see that reflected in sales of vacation homes.
CHICAGO – The vacation-home market has boomed over the past year and is not likely to slow any time soon, even as the rest of the housing market starts to cool, says Lawrence Yun, chief economist for the National Association of Realtors® (NAR), in an interview for The Escape Home, a newsletter for second-home owners.
Even as companies bring employees back to the office, vacation homes will remain in demand, Yun said, though part of vacation homes’ rise in popularity has been attributed to the growth in remote work.
Overall, home sales show some signs of cooling, with many first-time homebuyers getting priced out of the market, Yun says. The median existing-home price for all housing types was $359,900 in July, nearly an 18% increase from a year ago.
Mortgage rates are also likely to increase, which could make buying even more expensive. NAR predicts that mortgage rates will rise to 3.5% by mid-2022, as the Federal Reserve likely begins to reduce its bond purchases before the end of 2021.
But vacation homes will remain a hot commodity. Rental prices for vacation homes will likely continue to rise too, Yun says.
“One near-certain aspect of the post-pandemic economy, when it comes, is the flexible work schedule,” Yun told The Escape Home. “It is very hard to envision five days a week in the office. Therefore, vacation-home sales will continue to move higher this year, next year and for the foreseeable future.”
Source: “What’s Next for the Real Estate Market? We Asked the Chief Economist at the National Association of REALTORS®,” MarketWatch/The Escape Home (Sept. 18, 2021)
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