Naples, Florida Real Estate Market Update – July 2025

The real estate market in Naples and the surrounding Southwest Florida region has entered a new phase as of July 2025. After years of aggressive growth and pandemic-fueled demand, the market is cooling and shifting into more balanced—if not buyer-leaning—territory. Inventory is up, homes are sitting longer, and sellers are adjusting to changing expectations. For investors, homeowners, and real estate professionals, this evolving environment presents both new risks and opportunities.

Market Activity and Sales Trends

Home sales in Naples have dropped significantly year-over-year. In May and June 2025, closed sales were down between 16% and 22% compared to the same period last year. This slowdown is impacting nearly every price segment, although it is most pronounced in mid-tier homes priced between $500,000 and $1 million.

Median closed prices have also declined slightly, with recent figures ranging from $568,000 to just under $590,000. This represents a decrease of roughly 3% to 9% from 2024 highs. Meanwhile, the median listing price hovered around $720,000 in June, down about 4% year-over-year.

Homes are staying on the market far longer than during the red-hot post-pandemic market. The average time on market is now approaching 100 days. In fact, many properties are sitting for three months or more before receiving serious offers, especially those not priced competitively from day one.

Inventory Expansion and Supply Pressure

Inventory in the Naples area has surged, with active listings growing by roughly 30% compared to last year. Current estimates place the number of available homes between 4,700 and 7,300 across Naples, Bonita Springs, Estero, and surrounding coastal areas. This expansion is driving up the months of supply, which now ranges between 8 and 14 months depending on location and property type.

This increase in supply has put downward pressure on pricing, but also empowered buyers with more options and negotiating leverage. Nearly 9 out of 10 homes are now selling for under the asking price, a dramatic shift from the multiple-offer frenzy seen just 24 months ago. Sellers are achieving about 94% to 95% of list price on average, with thousands of price reductions occurring monthly across the market.

Segmentation and Micro-Market Performance

The market is not uniform across Naples. Areas such as South Naples and inland neighborhoods have seen sharper declines in home values—up to 23% in some cases. In contrast, the beachfront luxury sector has remained more resilient. High-end properties above $2 million have continued to attract affluent buyers, particularly those seeking vacation homes or tax-advantaged second residences. In some cases, ultra-luxury listings have seen price appreciation of 15% to 18% year-over-year.

However, even in the luxury segment, the pace has slowed. Supply has increased to over 14 months in some cases, meaning that properties in this category often require extensive marketing and longer timeframes to close.

Market Drivers: Insurance, Climate, and Rates

Rising insurance costs have become one of the biggest headwinds to the Southwest Florida housing market. Homeowners in Naples are now facing average premiums exceeding $12,000 per year. This is pricing some buyers out of the market entirely and adding significant pressure to those financing their purchases. Escrow accounts are swelling, and affordability is taking a hit—even for otherwise qualified borrowers.

Climate risks are also contributing to caution among both domestic and foreign buyers. Concerns about hurricanes, flood zones, and long-term sea level rise are driving more due diligence and fewer speculative purchases, especially in waterfront neighborhoods.

Meanwhile, interest rates remain elevated, with 30-year fixed mortgage rates staying above 7% in most cases. Each 1% rise in interest rates translates to roughly a 10% drop in purchasing power, forcing many buyers to shift their price brackets downward or delay their purchases altogether.

International demand, once a reliable force in the Naples market—especially from Canada and Europe—has also cooled. Currency fluctuations, geopolitical uncertainty, and tighter financing options are reducing cross-border real estate activity.

Forecast: What to Expect Heading into 2026

Looking forward, the Naples housing market is expected to stabilize but not surge. A gradual recovery in single-family home prices is projected, with annual appreciation between 4% and 5% possible for well-located properties. Condominiums may lag slightly due to stricter HOA regulations, rising assessments, and limited rental flexibility.

The luxury market will likely remain a safe harbor for long-term investors and lifestyle buyers, though patience will be key. Properties with modern hurricane-proofing, new roofs, and low insurance liabilities will stand out and command premium pricing. Value-conscious buyers will continue to dominate the mid-tier, while cash investors may return if prices soften further.

Implications for Buyers and Sellers

For buyers, now is a time to act deliberately but assertively. Inventory levels are high, sellers are open to negotiation, and days on market provide breathing room for inspections and due diligence. Buyers who understand total cost of ownership—including insurance and taxes—will be better positioned to make smart long-term decisions.

For sellers, pricing strategy is more critical than ever. Overpricing leads to extended listing times and multiple rounds of reductions, often resulting in lower final sale prices. Homes that are clean, updated, and competitively priced are still selling—just not at the premiums seen in recent years.

Sellers should also consider pre-inspections, flood certificates, and upfront insurance quotes to position their listings favorably. Marketing campaigns should focus not just on aesthetic appeal, but also on cost-efficiency, resilience, and long-term value.

Summary Snapshot – Naples Housing Market July 2025

MetricCurrent ValueYear-over-Year ChangeClosed Sales~780 per month↓ 16% to 22%Median Sold Price$568K–$590K↓ 3% to 9tive Listings4,700–7,300 homes↑ ~30ys on Market~99 days↑ ~30%Homes Selling Below Ask~87% to 89%IncreasedAvg % of List Received~94% to 95creased

Naples and Southwest Florida real estate market

The Naples and Southwest Florida real estate market is undergoing a healthy correction after years of unsustainable growth. It’s a transitional period that favors educated buyers and strategic sellers. Long-term fundamentals such as lifestyle appeal, tax advantages, and retirement demand remain strong, but the current climate demands realism, patience, and flexibility from all parties involved.

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