In the Know: Collier homes most expensive in East U.S., but is crazy COVID-era pricing ending?
Phil FernandezCollier County has held onto its crown of the most expensive market east of Colorado, according to the National Association of Realtors' newly released first quarter report.
That's making it increasingly difficult for workers wanting to buy a house.
"Declining affordability is always the most problematic to first-time buyers, who have no home to leverage," NAR Chief Economist Lawrence Yun said. "It remains challenging for moderate-income potential buyers, as well."
The typical down payment for a first-time buyer has been about 6.5% since 2018, according to NAR, which recommends keeping monthly principal and interest payments to 25% of income.
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That would mean needing a qualifying income of close to $160,000 to purchase a median single-family house in Collier, based on NAR's statistics. A year ago, that number was under $115,000. Lee County has gone from about $64,000 to nearly $90,000.
But the dramatic rise in home costs for Southwest Florida seems ready to subside. At least a little bit, according to the latest local housing data.
“There were 51% more price decreases in March than February,” said Ryan Bleggi, president of the Naples Area Board of Realtors and managing broker for John R. Wood Properties. “That means a good number of homes were not priced properly when they were originally listed.”
About a third of the homes for sale decreased in price in March, according to NABOR.
More price drops on homes, rentals
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Traditionally this time of year, a few sellers will have reductions to catch a buyer before the usual Easter end of snowbird season. But there's something else going on.
“The trend to list a home at $25,000 to $75,000 over comps is beginning to fade," said Adam Vellano, a Naples sales manager at Compass Florida. "Pricing should reflect, among other things, the location of the property and volume of homes for sale nearby.”
NAR has found some of this is happening across the country.
"Appreciation should slow in the coming months," Yun said. "I expect more pullback in housing demand as mortgage rates take a heavier toll."
Based on a check of MLS listings, the overpricing is also showing up in the Southwest Florida rental market, notably on places annually renting for more than $2,500 a month. Not drawing tenant interest, overzealous landlords have had to reduce what they were asking on their original listings for many in that higher bracket range.
On the May 3 MLS, more than 15 places had dropped the amount, and that's just a small sampling of many rentals that aren't ever placed on the service. Lately, more spots in the higher price ranges are leasing at about what they went for a year ago.
Volume and its effect on price that Vellano had referred to may be playing a role in the overall market.
“New listings are almost where they were a year ago” for sale in March, said Mike Hughes, vice president and general manager for Downing-Frye Realty Inc. “Overall, the report showed new listings have risen since the end of last year, over a three-month period.”
Those listings decreased only 4.3% in March to 1,637 new listings from 1,711 in March 2021. If this wave of new listings remains steady during the coming months, it could mean more options for frustrated buyers navigating the area’s limited inventory.
“As winter visitors go back up north, it’s likely we’ll start to see more new properties come onto the market as homeowners and landlords will want to cash out and take advantage of their ability to make a profit," said Molly Lane, senior vice president at William Raveis Real Estate.
'Baby steps back to normality'
Marco Island saw a 10% rise in inventory from February to March while NABOR, which doesn't include that community in its info, had a 20% bump.
"It is becoming more and more clear that our market is going to start taking baby steps back to 'normality'," the Bonita Springs-Estero Realtors group said in its newly completed first quarter report. "Slowly but surely we are seeing inventory return."
There's still a ways to go. Lee County, for example, had 442 condos and townhomes on the March market, up from February's 380, according to the Royal Palm Coast Realtor Association. A year ago at this time: 1,770. But all this is opening the door to perhaps more listings, said Mike Dodge, market research director for John R. Wood Properties.
“This could be good timing for potential sellers who have been reluctant to list due to concern about finding a replacement property," Dodge said. "Listing now could reap the benefits of selling in an up market, but also the benefit of a market where recent increases in listing inventory should lessen the stress of finding a property to purchase.”
In the past, it would be unusual to compare housing stats from a month-to-month basis in Southwest Florida. But with dramatic swings in multiple categories, these haven't been normal times in the pandemic age.
With more abodes to choose from, sales are also climbing again.
NABOR closed sales in March rose 50% over February although still 37% less than a year ago. More than 62% of them were cash sales for the homes, which had a median of $575,000. The Lee median: $380,000.
March's most expensive house got picked up for $18.5 million at 980 Aqua Circle in the Aqualane Shores neighborhood of Naples. Selling for $4.5 million in 2007, the 8,693 square feet features five bedrooms and 7.5-baths.
Lee's No. 1 of $7.3 million wouldn't make Collier County's Top 10. Sitting on Captiva, the 4,122 square feet at 11548 Wightman Lane comes with four bedrooms and five baths and sold in 2016 for $3.5 million.
9th most expensive market is in SWFL
While California dominates the top of the cost rankings, Collier remained the 9th most expensive market in America, according to NAR's first quarter compilation. Here's where the eight pricier metros landed:
1. San Jose-Sunnyvale-Santa Clara, Calif.
2. San Francisco-Oakland-Hayward, Calif.
3. Anaheim-Santa Ana-Irvine, Calif.
4. Urban Honolulu, Hawaii
5. San Diego-Carlsbad, Calif.
6. Boulder, Colo.
7. Los Angeles-Long Beach-Glendale, Calif.
8. Seattle-Tacoma-Bellevue, Wash.
Gesundheit! A best place for allergies
You may not be able to afford a house. You may not like the annually increasing summer temperatures. And you may not want to live in a place that's referred to more these days as the Banana Republic.
However, you may have come to the right spot if you have grass allergies, according to a new study this past week.
Unlike our beloved beaches, it may not show up on any promotional materials to draw new residents and tourists. But Southwest Florida dominates the Lawn Love services company's list of the nation's best areas to live this year for those with grass allergies, with three of the four top locations.
After the company looked at average grass pollen forecasts, grass allergen intensity, lawn mowing frequency and medical care access, Southwest Florida had three of the top four metro areas: North Port-Sarasota, Lee and Collier. The Huntington, West Virginia area came in at No. 2. And Port St. Lucie and Tampa Bay rounded out the top six.
While the region is more allergy-friendly in 2022, don't ditch the antihistamines just yet. The Sunshine State does have the high-allergen, warm-season grass types like common bermudagrass and bahiagrass that cause those red eyes, the runny noses and that stuffed up feeling.
And where is it the most miserable? These five: Lancaster, Pennsylvania; Hartford, Connecticut; Albany, New York; Allentown, Pennsylvania; and Buffalo, New York.
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Mucho dinero
The High Net Worth Advisory Group, which at one time operated along Ridgewood Drive, has set up shop in a newly renovated 7,000-square-foot building at U.S. 41 and Vanderbilt Beach Road.
That's generally known as the former Fidelity Investments building at 8880 Tamiami Trail that you've more than likely seen since 1988 while waiting, sometimes too long, at the traffic light.
The milestone expansion is “increasing our Naples footprint at one of the most visible buildings in Naples," said Dave T. Morgan, the organization's managing partners. "Our clients live all over the country, yet when they visit Naples, we wanted them to have a place to meet that felt like home.”
My pals at Florida Gulf Coast University have been telling me that wealth management and related industries are booming. That's probably no surprise to many in certain brackets who have more money to play with these days after the federal tax cuts of last decade.
Another latest example is The Fischer Group, which had been focused primarily on Rochester and Albany, New York. Its top dog said this past week they're setting up a third outpost right here in Southwest Florida, and yes, away from those grass allergies up there.
“We are excited for this opportunity to further expand our over 30-year consulting practice (while) continuing to serve our clients throughout the Northeast,” said Marc Fischer, managing director of the organization that's part of Morgan Stanley's Graystone Consulting.
Its new berth: 8889 Pelican Bay Blvd., a traffic light away from the High Net Worth folks off Vanderbilt.
Based at the Naples Daily News, Columnist Phil Fernandez (pfernandez@gannett.com) writes In the Know as part of the USA TODAY NETWORK. Support Democracy and subscribe to a newspaper and our app.