Hurricane Ian RE Update: Tragedy Created Opportunity

Home sales in Collier County did not drop dramatically after Hurricane Ian. “For each homeowner looking to move out west of U.S. 41, two buyers are looking to move in.”

NAPLES, Fla. – Speculation that home sales in October would drop dramatically in Collier County following Hurricane Ian was proven inaccurate as closed and pending sales for the month increased 23.7 and 8.7%, respectively, compared to closed and pending sales reported in September, according to the October 2022 Market Report by the Naples Area Board of Realtors (NABOR), which tracks home listings and sales within Collier County (excluding Marco Island).

And even though 525 listings were either terminated, expired or withdrawn from the Southwest Florida MLS during October, overall inventory for the month increased 72.7% to 2,325 properties from 1,346 properties in October 2021.

“Our current market has created many new opportunities for redevelopment that have caught the attention of a much broader spectrum of buyer,” said Spencer Haynes, vice president of business development and broker with John R. Wood Properties. “It is an environment created out of tragedy that will prove beneficial for the Naples area in the long run.”

Budge Huskey, CEO, Premier Sotheby’s International Realty, responding to Mr. Haynes said, “This is a statement about the confidence of our market in the future. Many older homes that experienced severe flood damage during Ian are in desirable locations. And this is going to start a new building boom with higher quality product.”

Admittedly, compared to 2021, which was a standout year for real estate in Collier County, closed sales in October decreased 24.5% to 662 closed sales from 877 closed sales in October 2021. Pending sales (homes under contract) also decreased 43.3% to 673 pending sales from 1,186 pending sales in October 2021.

According to NABOR’s statistics, October’s overall median closed price held fast at $555,000, the same as was reported in September. But compared to October 2021, the overall median closed price increased 23.3% from $450,000. Interestingly, the statistics showed a 1.6% decrease in median closed price for condominiums between September and October.

Mr. Haynes added that, “While we saw a slight increase in new listings by condominium owners who had damage and decided to sell instead of rebuild, the hurricane is not going to spark a ‘fire sale’ trend.”

There was a 26.1% increase in new listings in October compared to September, which broker analysts say is typical this time of year. Overall new listings in October decreased 13.9% to 908 from 1,054 in October 2021, but new listings for single family homes soared in October and were just 10 properties shy of the 548 new listings reported in October 2021. Preseason buyers will be pleased to find many more options than last year.

The NABOR October 2022 Market Report provides comparisons of single family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary.

“Even though interest rates are set to increase again, it’s a good time to be a homebuyer in Naples,” said Dominic Pallini, broker at Vanderbilt Realty. “The overall percent of current list price received is 96.4% and has been declining since April. This means buyers today have more room for negotiation.”

Mr. Haynes responded by explaining that “a successful negotiation could lower mortgage payments enough to offset the interest rate increase.”

According to Molly Lane, senior vice president at William Raveis Real Estate, “Whether a homeowner decides to rebuild or sell a property damaged by Ian has a lot to do with location and circumstance. Some retirees with an older damaged home west of 41 are choosing to sell as is and buy elsewhere in Naples, typically more inland and with a higher elevation, while newer homeowners in the affected areas are choosing to invest in a rebuild.”

Mr. Huskey responded that, “For every one homeowner that moves out of a neighborhood west of 41, there are two buyers looking to move in. We may see a short-lived variance occur within our market in the coming months as some discounting for homes with lower elevations may occur. But this also means there may be a premium set on those homes with a higher elevation.”

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