Prediction: Continued Price Increases, Overpriced

Naples area price increases predicted, overpriced may be in the future.

Naples home prices to increase. Bonita Springs, Estero, and Fort Myers too…

According to Local Market Monitor (LMM), a Cary, NC based company, in the LMM 2016 first-quarter forecast and reported in the Naples Daily News this date, prices in the Naples-Marco Island market will rise 7% per year for the next three years and prices in the Cape Coral-Fort Myers market will rise faster than that at more than 9% per year for the next three years more than LMM’s previous prediction of 7% per year growth.

Overpriced is based on the average home price being above or below equilibrium. Equilibrium is defined as the home being neither overvalued or undervalued and it is computed by LMM to be $376,722 for Naples-Marco and $261,000 for Cape Coral-Fort Myers. The current home prices collected from mortgage data are $363,800 and $244,861 respectively. Equilibrium is just around the corner.

LMM tracks 315 metropolitan areas nationwide including 20 in Florida. The Naples-Marco growth ranks 10 out of the 20 in the state for projected price growth and Cape Coral-Fort Myers ranks fifth.

Projections and predictions: LMM’s first-quarter forecast in 2015 missed the mark by 50%. It projected Naples-Marco three year price growth to be 41%, now the 2016 first-quarter report is tempered to a smaller but still very large 21%. For Cape Coral-Fort Myers the 2015 first-quarter report predicted 21% cumulative three-year price growth of 21%, now looking at a stronger 28% cumulative price growth.

Stronger job growth and lower unemployment rates in Lee County are cited as reasons for higher price growth than in the Naples-Marco area.