Market Talk: Decoding the Downward Market Shift

Sales are down in Southwest Florida—but don't expect a crash.

BY December 29, 2016

With 2016 sales in Lee and Collier counties down by 13 and 14 percent, respectively, it’s easy to think the market will be headed for a downturn in 2017.

“To be clear, there is no crash coming,” says Denny Grimes, president of Denny Grimes & Co., a Keller Williams Realty team.

The market is just taking a bit of a breather, says Grimes, who has been tracking Southwest Florida real estate for 17 years. Figures may be shifting downward, but 2015 was exceptionally high, and closed sales are double what they were in 2010, according to Grimes.

“After 2010, things started picking up steadily every year, crescendoed in 2015 and now (sales are) leveling off a bit,” he adds.

The stabilizing market will force some things to change in 2017.

Sellers will need to be more realistic when it comes to their homes’ worth. “Sellers cannot wake up like Groundhog Day and expect their home to be worth more every day they get up,” Grimes says.

Season won’t change the value of an on-the-market home, either, because the internet lets people shop for real estate worldwide year-round. And there will continue to be a lot of eyes on Naples, specifically, Grimes says.

The market shift may pose an opportunity for buyers to negotiate better deals in 2017, particularly with builders. “[Last year and the year before] builders were ramped up and building. Now they’re finding themselves with a slowing absorption rate,” Grimes says. So if a buyer finds a home or condo that is standing inventory, “This is going to be a good period … to strike a deal.”

Super-luxury communities in Southwest Florida, such as Port Royal in Collier County and Captiva Island in Lee County, won’t see much of a change since buyers represent a thin sliver of the market and the areas are coveted year-round. But generally speaking, “Both markets are rational, and as cards are dealt in the next six to 12 months, the seller will not be holding as many aces as [he or she] had in the past,” Grimes says.


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