Southwest Florida luxury real estate market heats up as temperatures cool down

Andrew Wigdor, Naples Daily NewsPublished 6:00 a.m. ET Dec. 16, 2019 | Updated 6:11 p.m. ET Dec. 16, 2019

As full-time residents brace for the visitor influx that comes with Southwest Florida's winter months, real estate agents are gearing up for an influx of luxury home shoppers and sales.

According to area experts, the luxury home market begins to heat up around January due to an increase in wealthy, seasonal visitors that arrive to enjoy the region's more temperate months.

According to Mike Dodge, the director of market research at John R. Wood Properties, the time period of March through June has been the peak of closed sales for properties at $1 million or more within the past five years in Southwest Florida.

He also stated that the peak listing month, no matter the price, is January every year.

Examples of luxury listings and sales in Southwest Florida have become more lavish, with over $40 million sales recently occurring in areas such as Naples' Port Royal. Last year, the priciest home ever to sell in Southwest Florida sold for $48.8 million in Port Royal. It was later torn down.

Billionaires from around the world visit the area during the winter months, and they often start house-hunting in their favorite vacation spots.

"If they're up in that range over $5 million, there's an excellent chance that this is not their only home and the time that they choose to come to Naples is in those (January through April) months," said Phil Wood, CEO of John R. Wood.

He said that notable listings often pop up as the region heads towards January, noting a $65 million home in Port Royal that hit the market in November. The home is the third highest priced listing in Southwest Florida history and would be the most expensive to ever sell if sold at the listing price.

Southwest Florida slowly becoming year-round marketplace?

Despite the seasonal factor still being important for home sales, some experts have said that the market is slowly becoming year-round.

According to Budge Huskey, president of Premier Sotheby's International Realty, one of the most notable differences in seasonal months is in luxury home owners listing their properties when more people are in the area.

"While Naples may still be viewed as a seasonal market, it has become less so with each year," Huskey said. "The greatest seasonality is in available inventory levels at the higher end as owners elect to place their properties on and off the market according to historical perceptions.

There are clearly months where contracts written are elevated following a November to March or April pattern, though it has become far less pronounced than in past years,'' he said. "From around April through June, closings spike based on pending sales written earlier."

Data collected by Premier Sotheby's shows increased sales activity in the winter and early summer months within the past two years, but late summer and early fall months still displayed dozens of $1 million or higher priced home sales each month in Collier County.

Craig Jones, a real estate professional with Premier Sotheby's who has been selling in the Naples market for years, agreed that the area is becoming more year-round in regards to the marketplace.

She said that the "old days" of the city becoming a ghost town in the summer are over, mentioning expanding food choices that are no longer closed in the warmer months.

"Naples is a place to come to in the summer," she said. "There is something going on here. That hasn't always been the case. It's a full-time town now."

Pete Reppucci, another agent with Premier Sotheby's who began selling homes in the Naples area in 1993, said he has also seen an increase in summer activity.

"I, for one, have noticed that my business has picked up more for the summer," he said.

Reppucci stated that some are now looking to prepare their home and get settled before the season begins, and they have more time to shop in the summer due to the decreased population.

According to Jeff Burns, a Premier Sotheby's agent who sells primarily in the luxury markets of Sanibel and Captiva, seasonality has also become much less of a factor in Lee County.

"I think technology changed all that," he said. "We're year round in Lee County."

This luxury home on Wulfert Road on Sanibel is on the market. Jeff Burns, a realty agent for Premier Sotheby's International Realty, is the listing agent. The season to sell luxury homes in Southwest Florida usually occurs January through April. It is also slowly becoming year round. (Photo: Andrew West/The USA Today Network, The News-Press)

Advances in technology have played a significant role in the way people buy in modern times, he said.

"January through April, it wasn't a myth," he said. "Years ago before the MLS, people really had no way to absorb what's on the market without putting feet on the ground down here."

He said he has sold three properties this year, "sight unseen," due to virtual tours.

Burns also stated that 2019 has been a very "strange" sales year, with a variety of factors impacting business. His sales were off when it comes to average business in both January and February this year.

"But our summer was the busiest summer that our family had in 30 or so years," he said. "It bucked all the normal trends."

One of the larger factors at play in this change up was red tide, Burns said.

More: Tests show red tide concentrations dwindling as year comes to an end, FWC says

While he said that 2018's summer saw a "really bad" red tide bloom that caused people to cancel reservations on the islands, the recovery from red tide has caused summer 2019 sales to spike.

He said that the months of January through April in 2019 were down in sales compared to the year before due to the fact that those months shortly followed the devastating red tide that plagued the area in summer 2018.

However, he noted that this caused a sort of delay effect, with people buying later in the year.

"The recovery from red tide has really helped the market, and that's why I'm going to finish this (summer) season with the top sales we've had in 35 years."

The read on the season

With more and more people heading to Southwest Florida as January nears, some experts said they are expecting great things.

More: In the Know: Prominent Sanibel guest house to be auctioned; buyer will have to move it

Real estate professionals noted the strength of the economy, allowing more customers to feel secure in making substantial purchases.

"It's going to be a great season," Reppucci said. "Our market is like a lot of markets, economy driven and stock market driven. And everything we're hearing about the economy is good. The customers we deal with, they're all feeling good about the economy."

CONSIDER SUBSCRIBING TODAY: Help support our local journalism

However, Burns noted that election years are "always a little strange," and the impending 2020 decision could impact buyer activity in the coming months.

"Some people want to wait and see how the election turns out, no matter their political persuasion, before they make any big financial moves," he said.

Jones and Reppucci also said that there is an issue currently in Collier County with a lack of "really quality listings."

"When you talk about what people are really looking for (in the area), they are shopping new or newer homes," Reppucci said. "There's a lot of demand and not a lot of supply of quality listings."

He said that if one looks at Port Royal, for example, they'd find over 40 active listings but only about six of those that were built during 2015 or later.

"I have more buyers than I have something to show them," Jones said. "We find many of us are chasing that same listing."

She said that part of the issue could stem from certain owners being "frozen in time."

"Typically, election years are difficult for our market," she said. "People don't know what to do, so they do nothing."

For the luxury market on the islands in Lee County, however, inventory is less of an issue, Burns said.

"It is a very healthy level of inventory," he said.

The discrepancy, the agents said, could simply be due to the differences in the two markets in that more people come to the Naples area to live full time when compared to the more vacation-heavy feel of Captiva and Sanibel.

"People come here to live and they come here to live full time and they come here to work and have kids," Jones said. "We don't have as much as that resort, season appeal as Sanibel and Captiva."

What are buyers looking for this season?

Technology is a huge draw for buyers in the current market, experts said.

On the top of the list for important selling points are "smart home" functions and energy efficiency, Reppucci said.

Reppucci also said that having inventory ready to go as soon as possible is critical.

"I sell real estate, but more than that, I sell time," he said. "The buyers we see are concerned with time. 'I want it as soon as possible because tomorrow I'll be one day older.' There has been sales out there that we scratch our heads and say, 'Wow that was a huge number.'"

Photos: Here's what's left of a $22.5M Port Royal home after demolition

However, he said that some people are willing to overpay for new homes if they can have them immediately.

"New homes that can be gotten right now are high value," he said.

Jones stated that storm protection is also a must for the modern buyer in Southwest Florida.

"I saw change begin to happen after Charley and Wilma in the mid 2000s," she said. "This is when people took a look at structure in a different way and rebuilt in a different way."

She said that the first question 20 years ago was, "How far is it to the beach and how do I get there?"

The question now has become, "Where are the impact windows?"

Reach Andrew Wigdor at awigdor@gannett.com and on Twitter @andrew_wigdor

LANGUAGE

CURRENCY

MEASUREMENTS