01 Apr Bonita Bay Real Estate News | April 2022

Your Bonita Bay REALTOR®,

Ed Gongola

SUMMARY OF BONITA BAY HOME SALES

If you are considering selling your Bonita Bay home, here are some statistics that may help you decide to place your home on the market:

April 2022 Market Update

New-Home Market Was Broken Before Pandemic

Sellers are Taking Advantage of Home Values Hitting Record High

More sellers are motivated to enter the market as home values continue to rise as a result of limited inventory and high demand in the Naples area. According to the February 2022 Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island), the overall median closed price in February was $550,000, a 37.5 percent increase over the median closed price in February 2021. The high demand for homes is demonstrated by the number of showings in February, which was 43,032. When divided by the number of homes in inventory during February (1,176), this translates to 36 showings per home. For perspective, in 2019 there were 2.9 showings per home. The data also shows that homes sold fast in February, within 23 days on the market, and the percent of list price received was 100.6 percent, which pleased many sellers.

“Twenty-five percent of the homes that went under contract in February came back onto the market within 20 days on average during February,” said Jeff Jones, Broker at Keller Williams Naples.   To take advantage of this occurrence, Jones suggests buyers use a very important tool in real estate: the back-up offer contract. A back-up offer can be placed on any property when that property is already under contract with another buyer. But in today’s market, there is a higher likelihood that the first offer may not stick so a back-up offer is a smart tool for buyers right now.   Brenda Fioretti, Broker Associate at Berkshire Hathaway HomeServices Florida Realty, agreed with Jones and added, “Before the pandemic, we had a 3 to 5 percent back-on-market rate monthly. But things are different today. We are seeing some good success stories when back-up offers are used.”   Fioretti went on to explain that a back-up offer contract – if recommended by a REALTOR® and approved by the seller – may not require a deposit and the buyer can keep searching for a home to purchase until they either become the primary buyer on the first home or cancel the back-up offer. For the seller, back-up offer contracts can provide confidence. In such cases, if a buyer asks to renegotiate, the seller has leverage because they have a back-up offer. Additionally for sellers, back-up contracts allow them to avoid having to re-list the home and start showing it again.   While inventory during February decreased 47.1 percent to 1,176 homes from 2,224 homes in February 2021, brokers reviewing the report like Molly Lane, Senior Vice President at William Raveis Real Estate, say the real inventory number is actually higher because the report doesn’t capture the number of off-market listings. “Because new listings are a hot commodity these days, they often don’t make it to the MLS until after they are sold. Sales are happening so fast that transactions in the ‘shadow inventory’ (homes that are not yet for sale but will be coming to market in the future) are more common than ever before.”   The median closed price in February increased 37.5 percent to $550,000 from $400,000 in February 2021. But according to Dominic Pallini, Broker at Vanderbilt Realty, he believes that prices are beginning to stabilize. “The median closed price only increased .2 percent from January to February, and the report shows February had more price decreases [276] during the month than price increases [170].”   Closed sales in February during the years leading up to the pandemic (2017-2019) averaged in the low 600s, but demand for the Naples lifestyle and the amenities living in paradise offer have driven buyers to the paradise coast in record numbers in recent years. It is only due to a lack of inventory that home sales in Naples did not fare as well as last February. While overall closed sales decreased 39.5 percent to 804 in February from 1,330 in February 2021, Bill Coffey, Broker Manager of Amerivest Realty Naples, pointed out that the report showed “the only area where we are seeing a decrease in closed sales over the last year is in the $300,000 and below price category.”   Mike Hughes, Vice President and General Manager for Downing-Frye Realty, Inc., pointed out that it’s “slim pickins’” for first-time home buyers as the report showed “there were only 26 single family homes on the market during February that were in the $300,000 and below price category.”   The NABOR® February 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. NABOR® sales statistics are presented in chart format, including these overall (single-family and condominium) findings for 2022:

There are several other key performance areas within the February report, month/month, that are worthy of mention:   1,261 – The number of new listings added to the existing inventory 69.7% – The percentage increase in median closed price for properties located in 34113 $1,161,203 – The average closed price for single family homes (+5.3%) 5% – The percentage increase in overall closed sales in Central Naples (34104, 34105, 34116) 4 – The number of months in a row that condominiums have sold for over 100% of list price 46% – The percentage decrease in median closed price for single-family homes in the Naples Beach area (34102, 34103, 34108)   “The process and complexity of real estate has changed,” said Budge Huskey, CEO, Premier Sotheby’s International Realty. “Having a REALTOR® on your side is the best way to ensure your interests are met and that you understand what to expect when you buy or sell a home in Naples.”

If you are looking to buy or sell a home in Naples, contact a Naples REALTOR® who has the experience and knowledge to provide an accurate market comparison or negotiate a sale. A REALTOR® can ensure your next purchase or sale in the Naples area is a success. Search for your dream home and find a Naples REALTOR® on Naplesarea.com.The Naples Area Board of REALTORS® (NABOR®) is an established organization (Chartered in 1949) whose members have a positive and progressive impact on the Naples Community. NABOR® is a local board of REALTORS® and real estate professionals with a legacy of nearly 60 years serving 6,000 plus members. NABOR® is a member of the Florida Realtors and the National Association of REALTORS®, which is the largest association in the United States with more than 1.3 million members and over 1,400 local board of REALTORS® nationwide. NABOR® is structured to provide programs and services to its membership through various committees and the NABOR® Board of Directors, all of whose members are non-paid volunteers.The term REALTOR® is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribe to its strict Code of Ethics.

 

 

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Will Ukraine War Impact Florida Real Estate?

By Derek Gilliam

On the one hand, Fla. is the No. 1 state for Russian RE investing – 29% of all U.S. purchases. On the other, Russian buyers make up only 0.8% of all foreign purchases.

 

 

NAPLES, Fla. – Over the past six years, Russian buyers of U.S. real estate have preferred the sunny coasts of Florida over property in any other state in the nation. Wealthy Russians have reportedly bought so many luxury condo properties in the north Miami city of Sunny Isles Beach that some have termed it “Little Moscow.”

 

“They love to be here, and they like to spend their money and enjoy their life,” Lana Bell, a South Florida real estate agent told NewsNation.com.

 

But it’s not just the wealthy Russian elites seeking Florida sunshine.

 

Across the state from Warm Mineral Springs in North Port all the way up to small town of Steinhatchee near the Panhandle, Russians and Eastern Europeans have established communities, according to population data from the U.S. Census Bureau’s American Community Survey.

 

Over the past six years, 29% of Russian real estate transactions in the United States occurred in Florida, the most in the nation, according to a report from the National Association of Realtors® (NAR).

 

But even as countries across the world impose sanctions on Russia for invading and waging a brutal war against its neighbor Ukraine, the impact to U.S. home or property prices is not expected to be meaningful, even without any Russian purchases of Florida real estate.

 

“Russia has little direct impact on the U.S. real estate market as it accounted for less than 1% (0.8%) of all foreign buyers who purchased U.S. residential property from April 2015 through March 2021, according to data from NAR’s survey of foreign buyer transactions of its members,” covering about 5,000 respondents, the report said. Any effect from the loss of Russian purchases would tend to be at the high end, as the NAR’s report notes that Russian buyers buy more luxury properties than the average Florida buyer.

 

Still, with the transition of the pandemic to a different phase, the loss of Russian buyers could be offset by the resumption of purchases by people from other countries, as well as within the U.S.

 

Craig Cerreta, the managing broker for Premier Sotheby’s International Realty’s Sarasota office, said the pandemic caused a near shutdown of foreign buyers, but that the segment has been bouncing back in recent months.

 

During the COVID pandemic, real estate prices have drastically increased in Florida as migration brought new residents to the state, with people retiring early or enjoying the ability to work remotely.

 

Tight supply

Historically, Cerreta said, Canadians, followed by residents of the United Kingdom, have accounted for the majority of international real estate transactions in the Sarasota market.

 

“There is no question that they (Russian purchasers) are small” locally, he said. “But they are typically high-end buyers.”

 

The NAR data says that the average Russian real estate transaction was about $650,000. The average for all international buyers was about $480,000.

 

But, with the demand seen for Florida properties, combined with historically low number of properties for sale, any loss of Russian purchases are being more than made up from demand from other buyers, Cerreta said.

 

Cerreta recently sold a home he owned in the Sarasota area. During the open house, more than 170 people viewed the residence and 21 people made an offer. Three of the offers came from people in California, something that surprised the longtime real estate agent, as Californians have historically not been a large market for the west coast of Florida.

 

Any loss of demand from Russian buyers for luxury properties or other property types won’t be felt in the Sarasota market, he said.

 

In February, 72% of all real estate sales in the Sarasota market closed at or above the list price compared to 43% at or above list price in February 2021, Cerreta said. “There’s not enough inventory to meet demand,” he said of the Sarasota market.

 

Sergei Sokolov, a Realtor with Sarasota’s Michael Saunders & Co., was born in Ukraine but moved to the United States when he was 5 years old. The now-47-year-old real estate professional, fluent in Russian and Ukrainian, said Russian speakers often want a Realtor who speaks their language.

 

The first house he sold in Sarasota in 2004 was to a Russian speaker, and he does about three or four transactions a year. Sokolov specializes in entry level homes typically in the $350,000 to $400,000 price range, with the majority of his Russian-speaking buyers already living in the U.S. or Canada and unlikely to be impacted by the Russian-Ukrainian war.

 

“I don’t expect there to be much of an impact on my business,” he said. “There’s just a lot more demand than there is supply.”

 

Varied buyers

The next closest U.S. state for Russian buyers was Georgia with 16% of all Russian purchases of U.S. real estate, roughly 13 percentage points behind Florida. New York (13%), California (8%) and Illinois (5%) rounded out the top five states for total transactions from Russian buyers.

 

The NAR report said that even in Florida, purchases of real estate made by Russians accounted for just 0.2% of the Sunshine State’s real estate transactions from July 2020 to June 2021. Those numbers may be skewed as the pandemic caused many governments to restrict travel to other countries.

 

A 2020 profile on international residential transactions in Florida conducted by the NAR with Florida Realtors, the largest trade organization in the state, concluded that foreign buyers accounted for $15.6 billion in real estate transactions from August 2019 to July 2020 – about 11% of the state’s sales. The total transaction volume for Florida real estate in that time period was $137 billion dollars.

 

However in that report that largely accounted for sales just prior to the pandemic, Russia did not rank among the top 15 counties for any Florida metro besides Miami. The Miami metro market, the largest in Florida, had just 2% of home sales go to Russian buyers.

 

The largest group of foreign buyers by transaction volume came from Latin America and the Caribbean with about 37% of the total value of homes purchased by international citizens.

 

Canadian buyers had the most transactions at 21% followed by Brazil (7%), Argentina (6%), Venezuela (5%), Columbia (5%) and the United Kingdom (5%).

 

The metro area of Miami-Fort Lauderdale-West Palm Beach had the lion’s share of foreign buyers with 47.3% of all purchases. The Tampa-St. Petersburg-Clearwater metro accounted for 11%; Orlando-Kissimmee-Sanford had 9.7%, North Port-Sarasota-Bradenton had 6.9% and Cape Coral-Fort Myers came in at 4.7%.

 

Larger economic issues

While Russians account for a tiny fraction of all real estate purchases in Florida, the real impact of the conflict may be felt at the gas pump as international buyers cut ties with Russian energy. President Joe Biden announced a ban on Russian oil earlier this week.

 

Chris Jones, president of Florida Economic Advisors and a University of South Florida faculty member at USF in the economics department, agreed with the real estate experts that the reduction in demand from Russian buyers for U.S. real estate won’t shift home prices in Florida.

 

However, the impact of rising gas prices could be dangerous for the U.S. economy, he said.

 

He anticipates that gas prices will increase at least another 50 cents before the end of May, with peak price per gallon of gasoline surpassing $5 per gallon this year. As people pay more at the pump, they have less money to spend on goods and services that drive the economy, which he believes will lead to a decrease in the nation’s economic output.

 

He said he fears that the American economy could be headed toward “stagflation” because of the rising gas prices. Stagflation happens when an economy has rising inflation at the same time as slowing economic output.

 

“We’re already halfway there,” he said, pointing to rising inflation.

 

Rising gas prices will also have an impact by raising prices on nearly all goods and services which could then cause fewer people to be able to afford to purchase residential property.

 

Less demand, caused largely by rising gas prices, would then impact Florida’s real estate market.

 

© 2022 Journal Media Group

Why Chose Me as Your REALTOR®? To learn more about me and my real estate business and Bonita Bay real estate specifically, I encourage you read the About Ed  section as well as the Testimonial section of the site. Over the years, my clients have expressed their satisfaction in my services and I’ve showcased their kind words so you can determine if I am the right REALTOR® to represent you.  If you are curious as to my sales success, visit my Sold Homes page. This gives a clear picture of exactly what I’ve accomplished and, more importantly, what I can accomplish for you.