Home Sellers Capitalized on Surging Buyer Demand in 2021
Demand for the Naples lifestyle eclipsed all expectations and helped to break several home-sales records in 2021. The year ended with a 25.8 percent increase in overall closed sales and a 20.3 percent increase in median closed price (year over year). Broker analysts reviewing the December and Year End 2021 Market Reports released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), agree that the Naples housing market is going through a transformation and the last 18 months of record sales activity will not be sustainable in 2022. They strongly urge that sellers and buyers work with a local REALTOR® to help them navigate transactions smoothly with the least obstacles.
Sellers of homes located in Naples capitalized on a long wave of pent-up buyer demand in 2021, a year that exceeded many NABOR® records, including over $17 billion in home sales, a 52 percent increase from 2020. The closed sales momentum reached its zenith just as summer arrived but began to dim when inventory could no longer meet the rapid pace of demand during the second half of 2021. As a result, there were 20 percent fewer closed sales (6,109) from July to December than January through June (9,414).
According to NABOR®’s Market Reports, 487,677 showings and 15,523 closed sales occurred in 2021. Strong buyer demand devoured the inventory, resulting in a 76.6 percent decrease in the number of homes for sale to a record low of 1,042 properties from 4,462 properties at the end of 2020. Strong buyer demand and a declining inventory influenced the median closed price (year over year) during 2021, which increased 20.3 percent to $445,000 from $370,000 in 2020.
“The number of units are declining because of the basic fundamentals of supply and demand,” said Budge Huskey, CEO, Premier Sotheby’s International Realty, who added, “most brokers are confident the values we gained in 2021 will hold and may increase, even if at a slightly slower pace.”
Rising home values in Naples inspired many sellers in 2021, as reflected in the 17.4 percent annual increase in average closed prices to $807,695 from $688,091 in 2020.
During 2021, pending sales listings increased 14.8 percent to 18,664 pending sales from 16,254 pending sales during 2020. However, like closed sales activity, much of the pending sale activity occurred during the first half of the year when inventory was more plentiful.
The NABOR® December and Year End 2021 Market Reports provide comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. NABOR® sales statistics are presented in chart format, including these overall (single-family and condominium) findings for 2021:
Now is a good time for homeowners to list their properties to maximize their profits and achieve their intended home goals. Homeowners who can benefit include:
- Owners of rental property who might have lost money during the pandemic or are tired of being a landlord and want to cash out
- Older homeowners whose future plans include living in an adult and/or assisted living community and want to sell, bank their profit and move to a retirement community
- Married couples who are no longer raising children that require a large single-family home and are ready to downsize with the profit from the sale of their large home
- Second-home or seasonal homeowners who would prefer a profit in the bank now and can purchase a Naples home closer to retirement
Broker analysts agree that pandemic-induced changes to housing needs and preferences that began in the fall of 2020 contributed greatly to heightened buyer demand during 2021. Only during July and August, when families with children tend to relocate, did closed sales of single-family homes outpace condominiums during the year. The data indicates that home-type preferences shifted in 2021 to condominiums, as shown by an increase in closed sales of 37.2 percent to 8,206 condominiums from 5,979 condominiums in 2020. Condominiums in the $500,000 to $1 million price range reported the highest increase (97.8 percent) in closed sales compared to all other home types and price ranges tracked by NABOR®. Furthermore, while the overall percent of current list price received rose to 98.6 percent in 2021, during November and December this figure was reported to be over 100 percent in the condominium market.