According to Naples Area Board of Realtors (NABOR), housing supply is at its lowest since 2007 this May. The demand on the other hand, is relatively high with close sales and pending sales reaching over 1,000 in May. However, compared to the same month last year, the speed of sale is a bit slower. NABOR’s monthly report includes all of Collier County, except Marco Island.
Despite the discrepancies in demand and supply, real estate brokers do not perceive this as a sign of a real estate bubble building up. Real estate people do not want bubble happening since too much demand with little supply push prices to very high values causing home prices to be unsustainable for average buyers.
The bubble already occurred during the housing boom in mid-2000. Mike Hughes, President of NABOR also supported the brokers saying that the bubble theory is not happening. Hughes emphasized that the difference during the housing boom and bubble in mid-2000 and today is that lending standards today are more stringent. Inventory of new home developments is also easier.
Compared to last year’s home prices, the median home price in May has increased by 12%. Most of the price increase affected the $500,000 and down price range. Higher price ranges did not increase, which is a bit strange since most of the price increase affect the higher price ranges for the past years.
Median price for single-family homes increased by 19% while median price for condo residences increased by 10%. The inventory however declined by 8%, which mainly includes condominiums. According to NABOR, the decline in inventory particularly in the condo market is affected by the rising prices of single family homes pushing buyers to prefer condos. The decrease in new condo developments is another reason plus most international homebuyers nowadays, prefer condo residences because it is easy to maintain for them while they are overseas.