How Real Estate Market Trends Affect Home Values
The first step for quickly selling your home in Naples, Florida is understanding local real estate market trends and how those trends affect home values and pricing strategies.
If you are thinking about selling and wondering what your home might be worth in today’s Naples area real estate market, Call 239-307-8500 or use our Instant Home Value Estimator that will email you an automated valuation in 15 seconds. We will follow up with you once you receive your estimate.
Understanding Local Real Estate Market Trends
Before putting your home on the market, you need to know if you are in a sellers market or a buyers market because this will drive all aspects of your home sale process. The real estate market is all about supply and demand because that ratio directly affects the fair market value of homes. Simply stated, if you are in a sellers market there are few houses available for the number of buyers looking to purchase a home which typically drives price points higher. Conversely, if there are plenty of houses for sale and few buyers wanting to purchase them, it is a buyers market and price points are usually lower.
Sometimes there are several types of real estate markets happening at the same time in a specific area. For example, a locality might have a sellers market for homes under $500,000 because there are few homes available for the number of buyers wanting to purchase, but during the same time period that locality could also have a buyers market for homes that are $500,000 and higher because there are lots of homes on the market and few buyers looking to purchase in that price range.
It appears that currently, Naples is experiencing a buyers market with inventory outpacing sales consistently for the last 6 months as shown in the chart to the right. In fact, the January 2017 data shows that there were 7,870 active listings and 627 closed sales (these numbers are inclusive of all property types in Naples.)
Another aspect of the real estate market to consider is months of supply which is how many months it would take for all of the homes currently for sale to sell. An average supply is four to five months of inventory. If the number of months of supply is less than four, it means that it is a sellers market. If the number is greater than five, it means that it is a buyers market. In January 2017, Naples had nearly 11 months of supply which again points to us being in a buyers market.
Although this local data is helpful when selling your home, hyper-local data might suggest that a different scenario is taking place within a very specific community. For example, although the numbers for Naples show that we are experiencing a buyers market, it is very possible that a certain kind of home being sold in a defined community is in high demand; thereby creating a sellers market in that particular situation. Likewise, there could be a home in a locality where it is a strong sellers market, but there are so many homes for sale in one neighborhood that it creates a buyers that neighborhood.
In order to sell your house fast, your real estate agent needs to determine the fair market value at which your house will most likely sell and suggest an effective pricing strategy after analyzing all aspects of your local real estate market.