How COVID-19 is challenging the Naples Florida real estate market
Whether you are a real estate agent or a potential home seller / buyer, you need to keep an eye on the state of the market in the real estate industry.
This article will look at the main challenges COVID-19 has posed for the real estate business in Naples, Florida.
Impact of COVID-19 and the real estate sector in Naples, Florida
Covid-19 has brought the world to its knees in a way we’ve never seen before. Health problems and home support measures have forced many people to adjust their lifestyle. Many industries have suffered because of this, including the real estate markets.
Although real estate players in Naples, FL have since tried to get the region’s market back on its feet, some of the consequences of the pandemic persist.
Common challenges in the Naples, Florida real estate market
Increase in the number of days required to conclude real estate transactions
Today, health concerns have made house sellers reluctant to open their doors to strangers. Likewise, home support measures have also led to fewer home buyers looking for housing.
This has resulted in a delay in the average number of days it takes to close housing deals in Naples, Florida. As you can see in the figure below, in the years leading up to the pandemic – 2019 to be precise – it took around 50 days or less to close a property sale. Fast forwarding a year later, that number jumped to a median range of 109 days in March 2020 – around the time the pandemic was taking its course at full speed.
That’s an approximately 118% increase in the median number of days homes spend in the Naples, Florida market. Although the market recovered after the first wave of the virus by reverting to its average median rate of 57 days, the recent discovery of the omicron variant has started to hit the market again.
Recently reported in the news, COVID cases rose 948% in Florida as Omicron launched a huge wave across the country. With information like this over the radio waves, you can bet that more home sellers will be reluctant to open their doors to strangers for home inspections, let alone make deals.
A drop in the median selling price of homes
The joy of every real estate agent, realtor, or home seller is finding a buyer who is willing to pay exactly the asking (listing) price.
Unfortunately, in a world impacted by COVID-19, such desires are mere fantasies.
The COVID-19 crisis has had a huge impact on the economic situation of many people, creating unfavorable situations such as job losses and price uncertainty.
The impact of this is a fluctuation in the median prices for which homes are sold. Traditionally in Naples, FL, homes are sold for around the asking price.
In June 2020, as COVID was at its worst, the median selling price of a home in Naples, Florida fell to $ 337,950. When you consider that the listing price for a home for that time period was $ 425,000, you can understand the extent of the slippage. For sellers and real estate agents over this time period, this represents a median loss of about $ 87,050.
Difficulty obtaining mortgages
As with every state’s real estate market, the mortgage is at the heart of Naples, the Florida housing market.
And as you can imagine, COVID-19 has affected this aspect of the industry as well. Due to the pandemic, many aspiring homeowners could no longer pursue their mortgage applications, making it impossible to buy homes.
In most cases, economic instability, health issues, and unemployment situations meant that it was simply impossible to continue with the terms of mortgage applications.
Dramatic turnaround in the post-pandemic world
The beautiful ending to COVID’s story is the dramatic turnaround the Naples, Florida real estate market has experienced in the wake of the pandemic.
Safe because recently, when a new variant of the virus – Omicron – hit the scene, the Naples, Florida market was recovering so well.
For example, in the immediate period following the worst period of COVID, the median price of real estate listings soared to $ 675,000 in 2021. The median number of days on the market – how long it took to sell of houses – returned to 57 days or less. And then the sell-to-list ratio skyrocketed to an ATH (all-time high) of around 103.4% at a year-over-year (year-over-year) rate of + 8.2%.
Story by Uday Tank