Naples’ luxury homes driving Collier real estate market
Even outside of its traditional winter peak season, Collier County’s luxury home market is humming.
The market sold 156 homes priced at more than $2 million from April to June, up 42 percent from the same time period last year, according to a recent report by the Naples Area Board of Realtors. Collier County single-family homes in the $2 million-and-above market also rose 44 percent from the same time period last year. The two developments have local real estate experts excited about the future.
“The fact that we have so many buyers interested in the $2 million-plus homes makes us feel really good about the market,” NABOR President Pat Pitocchi said. “We think there are many factors involved. One of them is the strong stock market. As those investors look in the future, they are pulling assets out and putting them into real estate to diversify their assets.
“And then there is the common wisdom about mid-year national election and how they bring a correction in the market. People might be looking ahead and saying let me diversify and go back to something I can touch and feel, and that’s real estate.”
Another key indicator of a stable housing market is that conventional financing is making a comeback. According to the NABOR report, about 37.5 percent of Collier homes sales were financed with conventional mortgages vs. cash in June 2014. That’s up 10 percent compared to January 2013 when conventional financing was 27 percent of the market.
“We appear to be in a more agreeable lending environment now,” said Mike Hughes, vice president and general manager of Downing-Frye Realty. “Boomerang buyers, or consumers that were hit by foreclosures and short sales, are now able to re-enter the market because they can qualify for financing again.
“And to an investor, their perception is that investing in real estate has a real steady upside versus increasing their investment in the stock market since analysts predict a major correction by the mid-term election. In all, people feel more confident investing in real estate and, with rates still low, reinvesting and keeping it longer.”
Analysts at NABOR say market stabilization is further evident in nontraditional (short sale and foreclosed) purchases. In the recent NABOR report, 9 percent of all closed sales were non-traditional. In July 2009 when NABOR began collecting this type of data, about 49 percent of sales were non-traditional.
“We have a positive outlook for the future,” Pitocchi said. “I don’t deal with predictions, but we believe that we will have strength going forward and it will hopefully be demonstrated in our next report.”
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