Thursday, November 29, 2012
Questions and Answers About the Luxury Market in Naples Florida
Luxury Magazine Interview
I was recently asked questions for an upcoming luxury magazine article and thought you might be interested in a sneak peak of my answers!
What has happened with sales in the upscale market in your area in 2012?
"Luxury buyers in Naples are taking advantage of the recessionary prices and making purchases. There was definitely a 'pent up demand'--people watched the market closely and waited for prices to level off before making buying decisions. Both investors and end users have been active in this luxury market segment."
What is happening with prices and with inventories?
"Sales in the $1 million plus category in Naples are up approximately 10% in Naples in the past 12 months compared to the prior 12 month period. Inventories are down considerably which is driving up prices. I've been calling it the 'trickle up effect' for over a year now; as we run out of inventory in the lower price points, the new listings are testing the market at higher prices and due to the diminished inventory many sellers are getting their prices!"
What types of properties and locations have been in particular demand?
"Waterfront is hot hot hot! There are few places on earth which affords the quality lifestyle offered in Naples Florida where you can actually buy a 'livable' home on the water with gulf access for under $1 million dollars. Naples most exclusive boating community, Port Royal, has an average sale price presently of just under $7 million, but residences in this neighborhood can be as high as $20 million or greater. We are also seeing a demand all along the coast, both in single family homes as well as the gulf front condominiums where beach access is a crucial buying feature. Additionally, the community downtown known as 'Olde Naples' is always popular with folks looking for a more urban lifestyle--walking distance to world class shopping & restaurants, bistros, sidewalk cafes, the live theater, beautiful parks and of course, the beach! Recently one of my colleagues here in the Naples Coldwell Banker Previews office sold a home in Olde Naples directly on the beach for $16 million! Several of the high end golf course communities, which up until recently had a huge over supply, have now seen a more balanced market and sales again are brisk."
Where your buyers are coming from?
"As always, our buyers mainly hail from the midwest, however here in Southwest Florida the New York metropolitan area recently surpassed other US feeder markets with the highest number of incoming flights. We are also seeing a lot of buyers heading over the Naples from the east coats of Florida--buyers looking for an easier pace. Interestingly enough, we have also seen some potential California buyers coming to Naples! Without question Naples is well represented by the international buyer as well. Canada tops the list, primarily the greater Toronto area, but my partners and i have sold homes this year to buyers from the U.K., Germany and Scotland. One interesting tidbit, I track our website traffic and in the past 90 days Russia has been in the top 10 countries by page views. I don't remember Russia ever being in the top 20 before this year. Also, we are seeing web traffic on our blog from both India and China!"
Any insights you might have gained about why they are buying and why they choose Naples vs. other locations?
"People buy in Naples because of the amenities: Nearly 100 private golf courses, 10 miles of pristine beaches, excellent fishing, boating and unbelievable natural resources. Naples was recently coined 'The Best Small Art Town in America'--we have a Philharmonic Orchestra, and amazing museums and galleries plus live theater and internationally acclaimed art shows and festivals. There's a gourmet restaurant if you want to go out every night of the year and you wouldn't eat at the same one twice, and our world class shopping rivals Rodeo Drive. We also have great healthcare and hospitals. Overall, an incomparable quality of life. Also, I might add that the weather in Naples, because of the gulf stream, is typically 5-10 degrees warmer in the winter than our competition---"
How does the upscale market in your area compare to other Florida markets?
"Most people look at Naples as a 'bargain'--just look at the prices in other cities and compare! Naples is a 'class act'...we cater mostly to CEOs, business owners, corporate executives and Fortune 500--There's not a lot of "celebrity" going on here. People are drawn to Naples because it's low profile. It's still a small town with big city amenities."
Regarding next year, what do you anticipate for sales and for prices? Can you comment on any underlying dynamics that will contribute to a strong market in 2013? Are there any potential wildcards that might change the direction of the market?
"There is always a chance that the fiscal uncertainty in Washington could put a wrench in our recovery. As we have seen in the past, wealthy people don't really need to buy....and they are usually very conservative, especially with second and third home purchases, which is our predominant market. On the flip side, they could take their money out of other investments and buy real estate instead. I prefer that scenario, as I have always been an optimist."
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Thank you, and make it a great day!
The Naples Real Estate Blogger