We have all experienced it. You are at a gathering and an acquaintance approaches you. They give a friendly greeting and quickly pose a question about sports, the weather, or a local event to start the conversation. However, when you are a REALTOR®, people often instead ask, “What’s happening in the real estate market?” Many truly want to know where the market is headed so they can keep up with the value implications of their home.
Interestingly, there is no shortage of data readily available. Local real estate firms frequently cite market data and trends in their advertisements. Some provide information from national data sources and others from local MLS. However, the local market is highly varied, even within communities that border each other.
Let’s peel back the onion just a bit to reveal what we mean for both Western North Carolina and Southwest Florida.
Western North Carolina Mountains
In 2023, 635 single-family homes were sold in Highlands-Cashiers MLS at an average sales price of $1.29M. That compares with year 2022 data of 710 single-family home sales at an average sales price of $1.21M. That equates to a 6.2% increase in the average closed price for single-family homes in our local market. If a client asks me “Does that mean my home increased around 6% in 2023?”, my response is “To give you a good answer, I need to know a little more information about your home, such as location, view, and style.” Let me share why.
If we delve into comparing two local communities’ recent sales results, we quickly see remarkable differences.
In 2023, homes within The Cullasaja Club sold at an average sales price of $2.43M. That compares with year 2022 data of an average sales price of $2.21M. A 10.1% increase year-over-year slightly higher than the overall local market’s rise in value. However, if we look at nearby Highlands Falls Country Club, in 2023 homes sold at an average price of $1.55M. That compares with year 2022 average sales price of $1.19M. A whopping 23.2% increase!
Southwest Florida, The Gulf Coast
Let’s compare the markets of the neighboring cities Bonita Springs and Naples. In 2023, the Bonita Springs area market sold 3,085 homes at an average sales price of $791,746. That compares with year 2022 data of 3,336 home sales at an average sales price of $666,176. A 15.85% increase in the average closed price for homes in the Bonita Springs market.
In 2023, the Naples area sold 9,252 homes at an average price of $1,101,818. Compared to year 2022 data of 9,827 home sales at an average price of $1,039,006. A 5.63% increase for the average closed price in the Naples market.
That is quite a difference! Here are a few reasons why we see differences in the average year-to-year closed sale prices in neighboring communities.
The market values of two homes that are similar but located in different neighborhoods can vary due to several factors. These differences are often attributed to various elements that influence the overall desirability and perceived value of a particular location. Here are some key reasons for the varying market values:
Location and Neighborhood Amenities: Does the community have a golf course and are memberships available? The proximity of the community to the beach is important to Florida buyers while the availability of mountain views is a factor for North Carolina. Other locational factors, like shopping and restaurants, play into the market valuation of the homes.
Crime and Safety: Neighborhood safety is a crucial factor influencing home values. Are the homes in gated communities? If gated, are they staffed 24 hours and do they offer security patrols?
Future Development Plans: Knowledge of any upcoming infrastructure projects, commercial developments, or improvements in the neighborhood or adjacent to the community can impact property values.
Supply and Demand Dynamics: The basic economic principle of supply and demand also affects home values. If there is high demand for homes in a particular neighborhood and limited inventory, prices tend to rise. Similarly, if there are little or no vacant tracts of land for future development, the prices of existing homes tend to rise with the demand.
In summary, the market values of similar homes in different neighborhoods are shaped by a combination of location, amenities, safety, education, future development plans, local real estate trends, historical sales data, supply and demand, and specific property features. These factors collectively contribute to the perceived value of a home in the eyes of potential buyers.
So, the next time you ask a REALTOR® about the real estate market, consider asking more targeted questions about specific locations or value segments you’re interested in. It not only encourages the REALTOR® to share more accurate insights, but also unveils the depth of their knowledge. You may be pleasantly surprised at the valuable information you uncover!
If you have been thinking about selling or just want to know more about the real estate market in Southwest Florida or Western North Carolina give us a call!