Market Data

The Fallacy
Will Supply Exceed Demand?

“The months’ supply of homes is up 50 percent compared to last year,” said Broker Analysts. “This is good news for buyers looking to purchase a home before season starts as there are many more home choices available and interest rates may still creep downward.”

According to the National Association of REALTORS®, the “months’ supply” data refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Lower levels of months’ supply tend to push prices up, while higher months’ supply puts downward pressure on prices. For the Naples market, the months’ supply in September was 6.3 months. Nationally, a six months’ supply is associated with moderate price appreciation.

However, according to Cindy Carroll of Carroll & Carroll Appraisers & Consultants, LLC, “The Naples market is unique, and in my experience, a 12 months’ supply of homes has historically been where our market enjoys a balance.” A balanced housing market is when the supply of homes for sale is roughly equal to the demand from buyers. In a balanced market, neither buyers nor sellers command an advantage, and prices tend to remain stable.
While overall closed sales decreased 13.2 percent in September to 527 closed sales from 607 closed sales in September 2023, the rise in days on the market (from 59 in September 2023 to 83 in September 2024) means it is taking longer for homes to go from pending status to closed status. According to broker analysts, the monthly pending sales data is a significant contributing factor of the overall housing market health. They are currently optimistic that the recent increase in pending sales will continue to improve over the next six months, suggesting a positive outlook for the housing market.

Are Storms Chasing Buyers Away?

“Word on the street is that some job seekers are less eager to move to Florida because they fear being in the path of a future storm,” stated a local builder Sales Manager. Brokers reviewing the report are concerned that national news coverage makes it appear as if damage from the hurricanes was widespread, even though the most significant storm damage was concentrated in a relatively small area along the gulf coast. The Naples beachfront and inter-coastal areas experienced some storm surge and high winds, while inland regions saw much less to no damage. The misinformation being reported may contribute to slower market activity in the last quarter of 2024.
Brokers also responded by stating that the “vast majority of our market was unphased by the recent hurricanes.” It was added that storm fatigue and street flooding is convincing a few sellers to move off the water, but not necessarily out of the area. “What’s impressive is that our market did not falter in terms of performance due to the storms.” Additionally, “the insurance market in Florida is becoming healthier and reinsurance rates have been stable. Ten new insurance carriers have also entered the market and renewal rates have not increased significantly.”