Mortgages making comeback in Naples real estate.
Cash has been king in Naples for a long time, but mortgages are making a comeback.
“The August report showed conventional sales amounted to 44% of all sales; whereas in August of 2013, conventional sales amounted to only 34% of all sales in that month,” said Steve Barker, a Naples broker. “I believe we are starting to see a real trend back to home financing as many of the homeowners who lost homes in 2006, 2007 and 2008 are now able to qualify for new mortgages.”
According to Pat Pitocchi, Naples Area Board of Realtors (NABOR®) Media Relations Committee chairperson, “One factor contributing to the impressive activity in August may be that buyers are concerned an impending rate increase will occur this fall.”
Phil Wood, President & CEO of John R. Wood Properties agreed and added that this concern may not be on just the buyers’ minds as he’s heard “several large banks are encouraging high-end buyers who have always favored purchasing homes with cash to consider applying for a mortgage to take advantage of the low rates.”
Aside from a steady shift of cash sales to more sales with conventional financing, Barker pointed out that there were 284 non-traditional sales (short sale and foreclosed sales) in August 2009 compared to only 49 non-traditional sales in August 2015. “There simply isn’t a huge presence of cash investors consuming the market anymore.”
Activity in the upper end of the market was impressive in August too, as evidenced in the report. Overall pending sales for homes in the $2 million and above price category increased 58% from 19 pending sales in August 2014 to 30 pending sales in August 2015. This $2 million and above price bracket’s overall median closed price also increased 14% from $2,850,000 in the 12 months ending August 2014 to $3,250,000 in the 12 months ending August 2015.
Highlights from the Naples August 2015 market report:
• Overall pending sales increased 2% from 795 in August 2014 to 811 in August 2015.
• Overall closed sales increased 2% from 9,695 in the 12 months ending August 2014 to 9,870 in the 12 months ending August 2015.
• Overall median closed price increased 14% from $260,000 in the 12 months ending August 2014 to $297,000 in the 12 months ending August 2015.
• Overall median closed price for homes $300,000 and under increased 10% from $175,000 in the 12 months ending August 2014 to $192,000 in the 12 months ending August 2015.
• Overall inventory decreased 2% from 3,579 in August 2014 to 3,525 in August 2015.
• Overall inventory for homes $300,000 and under decreased 26% from 1,279 in August 2014 to 946 in August 2015.
• There is a 4.27 months supply of inventory.
• Average days on market decreased 4% from 81 days to 78 days.