Naples Market Comes Out on Top

Excellent natural amenities, a top-rated quality of life, zero income tax, and relaxed COVID policies all help Naples stack up favorably against housing markets nationwide

BY ARTIS HENDERSON

It’s been no secret that the Naples real estate market is on fire. Collier County has witnessed an incredible boom in the last 12 months compared to other markets across the country. How hot is it? According to data from the National Association of REALTORS® (NAR), the Q1 2022 median home price for the Naples-Immokalee-Marco Island metropolitan statistical area (MSA) was $745,000, more than double the median home price—$365,767—in the United States.

Other indicators that this MSA is on top in terms of property transactions: • Property appreciated 24.2 percent over the last four quarters—compared to a 15.2 percent appreciation nationwide. • The three-year appreciation for houses in this MSA is at 73.7 percent. It’s 44.5 percent across the U.S.

• Locally, the three-year housing equity gain is $316,000 compared to $112,700 nationwide.

Nadia Evangelou, NAR’s senior economist and director of forecasting, expects this trend to continue. “The Florida job market has already recovered from the jobs lost at the beginning of the pandemic and there’s good employment growth, which is positive for the housing market,” she says. She also points to the demographics of the greater Naples area, where older, affluent adults make up most of the housing market. “This will keep demand strong in the area,” Evangelou predicts.

Population growth is key. Florida has experienced increased rates of incoming residents over the last year. Florida’s population increased by 211,000 between July 2020 and July 2021, according to the U.S. Census Bureau. It ranks second in the nation for population growth behind Texas.

As corporate culture has shifted away from centralized offices toward work-fromhome options, greater numbers of people are seeking the Southwest Florida lifestyle. “We expect teleworking to remain in place and for housing demand in the Naples area to remain strong,” Evangelou says.

LIFESTYLE AMENITIES

You don’t have to look far to understand why Naples is a sought-after market. “We’ve got everything,” says Greater Naples Chamber President/CEO Michael Dalby. “We’ve got great weather practically 365 days a year. We’ve got beaches. We’ve got three performing arts centers thriving in our community. We’ve got museums. We’ve got beautiful outdoor spaces. There’s always something to do here.”

One of the best parts of Collier County is the speed of life it offers. “Southwest Florida tends to be slower-paced than the East Coast of Florida,” Dalby says. “This is a great place to just breathe. I think that’s what draws a lot of people here—an ability to reconnect with life.”

One reason people can relax and recharge in Naples is the proximity to nature. Collier County has world-class beaches, parks, and nature preserves. “Within a 30-minute drive, you can be in the Audubon Corkscrew Swamp Sanctuary and feel like you’re smack in the middle of the Everglades,” Dalby says. “That ecosystem with its plants and wildlife that are unique to South Florida makes for a great outdoor experience.”

And for those who like to be active outdoors, Naples has no shortage of sporting activities: pickleball, tennis, golf, kayaking, and paddleboarding. Unlike in northern locales, Naples residents get to enjoy outdoor sports year-round.

Added together, these lifestyle amenities create a picture of a very desirable location unique to Southwest Florida. As buyers look to shift away from other states, the Naples market has a strong appeal.

QUALITY OF LIFE

The beaches, art and culture, natural amenities, and outdoor recreational opportunities create an alluring picture of the

Deb Logan

Michael Dalby

Nadia Evangelou

Shelton Weeks

Naples market. And there’s more: Naples is an active participant in the Blue Zones Project. Funded by the Naples Healthcare System, Blue Zones Project Southwest Florida brings together local stakeholders to make healthy choices easier within the community. e project, which appears in communitiesacross the nation, was developed in the wake of research by Dan Buettner and a team from National Geographic. e team identi ed ve locations around the world where people live measurably longer than anywhere else on earth: Ikaria, Greece; Okinawa, Japan; Sardinia, Italy; Loma Linda, California; and Nicoya, Costa Rica. Researchers set out to identify the factors that enable people in these places reach the age 100 at a rate 10 times higher than in the United States with lower rates of chronic disease. eir results? ough these communities were in di erent parts of the world, their residents shared key lifestyle characteristics that increased longevity: moving naturally, having purpose, taking time to relax, eating wisely, and creating meaningful connections and a sense of belonging.

“ e secret sauce is that everyone is coming together under one umbrella,” says Deb Logan, executive director of Blue Zones Project Southwest Florida. “We have over 800 organizations that have embraced the Blue Zones Project, making healthy choices easier at country clubs, homeowners associations, in schools, and at the workplace. With all these organizations joining forces, there’s been a synergistic impact on the community.” e local Blue Zones Project was a natural t for the area, and it ampli es the message that residents practice healthful lifestyles, Logan says. “We have beautiful weather that encourages people to be outside, whether that’s walking a dog or meeting neighbors or swimming in the Gulf of Mexico,” she says. “ is helps people move naturally and create social connections.”

With this emphasis on health, plus the other lifestyle amenities Naples o ers, it’s no surprise that Naples ranked No. 1 in a Gallup wellbeing index four consecutive years.

LOWER TAXES AND THE GREAT WEALTH MIGRATION

e Naples market also o ers something many other markets across the nation can’t compete with: zero state income tax. “ at’s huge,” says Shelton Weeks, Ph.D., Florida Gulf Coast University (FGCU) Lucas Professor of Real Estate and director of the Lucas Institute for Real Estate Development and Finance. “We have a very strong positive trend of migration from other states with one of the main factors being the di erential tax treatment.” is trend continued throughout the pandemic at an accelerated rate. e Internal Revenue Service publishes data each year on the migration patterns of American taxpayers. For 2020, the most recently available data, the IRS reported a shift of $23.7 billion in aggregate adjusted gross income into the state of Florida. Florida far surpassed other states, with the next closest states being Texas at $6.3 billion. New York and California experienced net losses of aggregate adjusted gross income—$19.5 billion in New York and $17.8 billion in California. e Wall Street Journal calls it “ e Great Pandemic Wealth Migration.” An editorial published in June blamed high taxes as one of the factors contributing to the wealth shift, noting that four of the 10 states that received the biggest income shifts in 2020 don’t have state income taxes. ough this factor a ects all income levels, the movement to Florida speci cally for zero income tax skews in the direction of those with a higher net worth. “As a rule, higher-net-worth individuals are likely better informed and are more likely to be working with nancial planning professionals,” Weeks says. “ ey often have greater degrees of freedom than working-class individuals, who are busy dealing with the brush res of the day and don’t have time to look around for opportunities.”

RELAXED COVID POLICIES

In addition to its income tax policies, the state of Florida has implemented other measures that have made it a more attractive market for homebuyers. While some states remained in lockdown for months, Florida Gov. Ron DeSantis permitted greatly reduced COVID measures. Weeks points out that this has been a big draw for those looking to relocate, especially businessowners. “ e thing businessowners want most is an opportunity to succeed,” he says. “In places where lockdowns were hard and fast, it’s di cult to imagine that businessowners felt they still had the same opportunities.”

Southwest Florida was highly attractive for those seeking to escape stringent lockdown measures, especially in places like New York and California. Combine relaxed pandemic restrictions with bene cial tax policies and incredible natural and lifestyle amenities, and it’s no wonder that the Naples real estate market consistently outpaces other markets across the nation.