Navigating the Naples, Florida, Real Estate Market: A Guide for Potential Homebuyers and Investors
Table of Contents:
- Overview of the Naples, Florida, Real Estate Market & Short-Term Rental Market
- Understanding the Market
- Neighborhoods in Naples
- Characteristics of Popular Naples, Florida, Neighborhoods
- Pros and Cons of Living in Each Neighborhood
- Considerations for Different Lifestyle Preferences
- Investing in Naples Real Estate Advice
- Factors to Consider Before Buying or Investing
Whether you’re a snowbird tired of the frigid Northeast or an investor looking for premiere property along the shores of the Gulf of Mexico, the Naples, Florida, real estate market has something for everyone.
The small city, located south of Bonita Springs in the southwest Florida region, is full of stunning mansions and condominium towers with expansive ocean views. Despite Naples’ small size, you’ll find many entertainment and dining options, including high-end shopping centers, top-rated golf courses, and a growing craft brewery scene.
We’ve created this handy guide for people considering whether to invest in real estate. Naples, Florida, has many property investment options to consider.
Aerial Shot of Naples Florida
Overview of the Naples, Florida, Real Estate Market & Short-Term Rental Market
Naples, Florida, is an affluent area. Some homes in well-heeled neighborhoods like Port Royal and Aqualane Shores can stretch into the millions of dollars.
Many people travel to Naples from the Northeast and lodge in short-term rentals during winter. They stay for several months, returning to their primary residences for the spring and summer.
Understanding the Market
Naples, Florida, is the principal city of the Naples-Marco Island area, part of Collier County, which boasts a population of over 375K.
Naples, Florida, Demographics
The city of Naples counts under 20K residents.
According to the most recent U.S. Census, nearly 53% of residents are 65 or older, making Naples a premier destination for retirees. Just 9.4% of residents are under the age of 18.
Nearly 90% of residents identify as white. Approximately 5% of the population is African-American, while 4.5% identify as Hispanic and 1% as Asian.
On average, each household contains 1.97 people.
Approximately 97% of residents are high school graduates, while 61.7% have advanced education. The median household income is $125,306.
Top Locations in Naples, Florida
The majority of the Naples population lives in Old Naples, which is the most coveted neighborhood in the city. Old Naples consists of stunning mansions and condominiums nestled in palm tree–lined streets.
Another popular neighborhood is Moorings-Coquina Sands, along the Gulf of Mexico coastline. Moorings-Coquina Sands contains a mixture of condominiums and houses and is generally more affordable than Old Naples, although some properties cross the million-dollar sales price.
Park Shore is another exclusive area in Naples. Set in the northern part of the city, Park Shore contains numerous condominium properties, some of which are new builds.
Moorings-Coquina Sands and Old Naples are top areas for short-term and long-term condominium rental properties. Port Royal attracts home buyers seeking a large house or mansion to live in year-round.
Recent trends for Naples homes indicate sales prices are up by 16.7% compared with February 2022. The median sales price for a home is $758,750. The market is not very competitive, with properties sitting for 51 days on average after listing. Just 226 homes sold in February 2023, compared with 304 during the same month last year.
The average monthly rent for a Naples, Florida, property is $5,000, down $500 since January 2023. Rental prices increase between November and March and drop sharply during the hot summer months. In the peak winter season, rentals average $6,000 monthly and fall to a low of $4.8K in June.
Home Prices and Affordability
Homes for sale in Naples, Florida, can reach millions of dollars. However, it’s possible to find bargain properties in neighborhoods like Moorings and Sun Terrace or closer to the Naples airport. Generally, prices drop significantly for inland properties not directly on the shoreline. Smaller one- or two-bedroom properties are typically less expensive than large condominiums and single-family homes.
What Is the Average Cost of a Home in Naples, Florida?
The average price for a home in Naples, Florida, is currently $758,750. However, prices vary extensively depending on the neighborhood, proximity to the oceanfront, size of the property, and features. Homebuyers and investors will find some properties under $500K, especially if they’re willing to venture a few blocks from the shoreline.
How Much Does a Square Foot in Naples, Florida, Cost?
The average price per square foot of property in Naples, Florida, is $430. The average is up 12.3% since February 2022. The price per sq. ft. drops for properties located away from the shoreline.
Inventory and Availability
The greater Naples area, which includes North Naples, Pelican Bay, Willoughby Bay, Vineyards, Orange Tree, Golden Gate, and Verona Walk, currently has nearly 3.7K homes for sale.
People seeking to purchase within the Naples city limits will find nearly 1K property listings. There are multiple listings scattered throughout every Naples neighborhood.
Beachfront Homes, Old Town Naples
Neighborhoods in Naples
The area where you should purchase or rent property in Naples depends on your objectives and finances. As Naples is a beach town, nearly all homes are within a few miles of the oceanfront. The northern area of Naples features numerous condominiums, while the southern part consists of mansions and single-family homes.
Characteristics of Popular Naples, Florida, Neighborhoods
The most sought-after neighborhoods in Naples, Florida, include Old Naples, Aqualane Shores, Moorings-Coquina Sands, and Park Shore. All four communities sit on the shoreline.
Other neighborhoods include Port Royal and Sun Terrace.
Old Naples sits west of Highway 41 between the Coquina Sands and Aqualane Shores neighborhoods. It’s a mixture of large mansions that rival the size of some condominium buildings. The area consists of quiet streets with numerous palm and banyan trees. Locals often gather near the Naples Pier to watch the golden sunsets.
Old Naples has several small parks to enjoy. It’s also the main public access point to Naples Beach. There are a variety of restaurants lining 5th Ave South, including an Italian trattoria, French Brasserie, and several seafood dining establishments.
Aqualane Shores is the ideal location for luxury real estate. Naples, Florida, considers Aqualane Shores one of the more pricey neighborhoods in the area. It is in the southern part of Naples and contains numerous canals and inlets dotted with single-family homes and mansions.
Aqualane is the wealthiest area in Naples, and homes for sale regularly top the $10M threshold. Many homes are new constructions built in the past decade.
Moorings-Coquina Sands is located in the center of Naples, just north of the Old Naples neighborhood. Moorings-Coquina Sands has numerous high-rise condominiums and townhouses facing the Gulf of Mexico shoreline.
The neighborhood is easily accessible to downtown Naples, Florida, and is home to the Moorings Golf & Country Club. Moorings Harbor separates Moorings from Naples Beach.
Park Shore is in the northern area of Naples. It consists primarily of towering condominiums that line Naples Beach and Inner Doctor’s Bay. Condos vary in size from studio to five bedrooms.
Numerous restaurants are scattered throughout Park Shore, including seafood, southern fare, and European-style dining establishments. Park Shore is home to The Village Shops on Venetian Bay, a high-end waterfront shopping complex with numerous boutiques and restaurants.
Port Royal is one of the wealthiest areas in Naples. Located just south of Aqualane Shores, the neighborhood has numerous mansions along the canals and beach that line the area.
Port Royal is a very private area with few businesses or restaurants. Beach access is limited to homeowners and visitors in the area.
Sun Terrace is one of the more affordable areas of Naples, Florida. It consists primarily of single-family homes with nicely sized lots. Most of the homes in Sun Terrace were built between 1950 and 1970, giving the neighborhood a retro feel.
Sun Terrace is ideal for homeowners and investors seeking fairly priced realty within a short drive to the beach. Sun Terrace borders several popular golf courses, including the Wilderness Country Club and Hole-in-the-Wall Golf Club.
Pros and Cons of Living in Each Neighborhood
Each neighborhood in Naples has unique traits that separate it from the others. Here are a few advantages and drawbacks to consider as you narrow your options.
Old Naples offers several benefits, including:
- Access to the Naples Public Beach
- A wealth of dining options
- Several community parks
- Established and safe area
- Ideal for families
The main drawback for Old Naples is the high cost of real estate. Purchasing a home or condominium in Old Naples starts at $750K, with many properties over $2M.
Advantages of living in Aqualane Shores include:
- Premiere area of Naples
- Ideal for beach lovers and boating
- Numerous private inlets and canals
There are some drawbacks of Aqualane Shores:
- Very expensive; most homes have listing prices between $5M and $20M
- No condominiums
Aqualane Shores is suitable for wealthy families and retirees who want a large property on the water.
Moorings-Coquina Sands offers various advantages:
- Numerous condominiums, many on the water
- Close to downtown Naples
- Range of prices starting from $400K to $9M
The main disadvantage to the area is its lack of single-family homes. While a few detached houses are available, condominiums dominate the property market. A condominium might not be ideal for families with young children.
Living in Park Shore has its benefits, including:
- A mixture of condos and single-family homes
- Cheaper properties away from the shoreline
- Lots of amenities in condominiums
- High-end shopping area full of restaurants
The primary disadvantage of Park Shore is its distance from downtown Naples.
Port Royal is one of the newer neighborhoods in Naples. Pros of living in Port Royal include:
- Stunning mansions close to the water on very private lots
- Access to canals and waterways for boating
- Custom-built homes with many features
The disadvantages of Port Royal include its distance to downtown Naples, lack of restaurants, and high-entry price point.
Sun Terrace has a few benefits, including:
- One of the cheaper areas to buy in Naples
- Primarily single-family homes
- Within a five- to ten-minute drive of the beach
- Ideal for families and others who prefer single-family homes
The primary drawback of Sun Terrace is the low inventory of housing. It’s also an older area, so some homes may require renovation.
Gulfstream by Rove Travel, Naples Florida
Considerations for Different Lifestyle Preferences
Wealthy individuals who prefer private, large lots on the water should consider purchasing in Aqualane Shores or Port Royal. Old Naples is ideal for individuals and investors who appreciate the area's historical nature and prefer to be close to the public beach.
Moorings-Coquina Sands and Park Shores are ideal places for investors who plan to offer short-term or long-term condominium rentals. Many of the condominiums in Naples include features like pools, tennis courts, and gyms, which are attractive to visitors who prefer a small space with amenities. The area is also preferable for retirees or homebuyers seeking a smaller property on the shoreline.
Sun Terrace is further away from the waterfront but appeals to families who need a larger living space that is relatively affordable. Many homes in the area could use interior and exterior remodeling, which may appeal to investors who don’t mind paying a little extra to get a space in tip-top condition.
Investors who plan to use a property for short-term rentals should consider the needs of the typical Airbnb traveler, such as proximity to the beach and restaurants. Old Naples is likely the best neighborhood for Airbnb travelers since its walkable and located near the public beach.
Investing in Naples Real Estate Advice
If you’re planning to invest in real estate in Naples, Florida, we understand why! Naples tops the list of oceanfront communities in Florida, with its lovely white sand beaches and various entertainment options.
Investment Strategies for the Naples Market
You have a few options if you want to earn money from purchasing a property in Naples.
Buying and selling a home after a short period can provide you with some returns, especially if home prices continue to rise in Naples. Most properties are well-kept, so you’re unlikely to find foreclosures or significant rehabs in which home flippers often invest. However, you may find a few bargains in the Sun Terrace area that offers decent returns.
Another investment option is buying a property to rent in Naples, Florida. Real estate rentals do quite well. As a premier tourist destination, nearly 2M people visit Naples yearly. If you position the property well and provide amenities that visitors want, you’ll see a steady stream of passive income throughout the year. When it comes time to sell, you’ll also see long-term appreciation from the property.
Rental Market and Potential for Investment Returns
The rental market in Naples is most robust during the winter months when visitors from New York and other northeastern cities visit for the sunshine and warm weather. However, tourism never truly drops off. You’ll see visitors at all times of the year, including spring and summer.
Your investment returns depend highly on numerous factors, including the property’s location, rental rates, and monthly mortgage. You’ll also need to consider expenses for renovations and insurance.
Types of Properties to Consider for Investment in Short-Term Rentals
The average tourist in Naples is looking for a property close to the water and nearby amenities, like restaurants and grocery stores. They’ll appreciate a pool, hot tub, and on-site gym.
Condominiums are ideal for short-term rentals since they’re primarily on the water and have the amenities tourists appreciate.
You’ll also want to consider the property’s size. A studio may be enough for a couple on holiday, but a two- or three-bedroom is suitable for families and groups.
Working with a Real Estate Agent or Other Professionals
A Naples property will likely be a significant investment, as the city has high property values. However, the returns from your investment can be substantial if you find the right home that meets your objectives.
You can work with a Naples realtor or brokerage familiar with the community. Real estate agents in Naples, Florida, will point you toward new listings and open houses and recommend ideal areas for short-term rentals.
Also, consider looking for options through Rove’s marketplace. Rove’s marketplace caters to investors looking for prime investment opportunities for short-term rentals. We’ll partner with you to help you find your next investment property in Naples.
Factors to Consider Before Buying or Investing
Of course, you’ll want to consider a few factors before purchasing in Naples.
Unless you have the funds to purchase a property outright, you’ll probably need to take out a mortgage. Conventional mortgages are the most common, and you can extend your repayment period to 30 years or longer.
Government-backed loans, such as the FHA loan, are available for people with low credit scores. If you’re a veteran or current military service member, you can qualify for a VA loan, which won’t require a down payment.
Homeowner Association Fees and Restrictions
Many condominiums and gated communities in Naples require annual Homeowner Association fees. Fees vary depending on the location of the property. There are usually restrictions that will prevent you from making significant additions to the property.
The current property tax rate for Naples is a low 1.15% annually. Investors who hold the property for less than a year will incur federal short-term capital gains taxes. Long-term capital gains may apply to individuals holding the property for over a year.
Natural Disasters and Risk Management
Florida isn’t immune to hurricanes and thunderstorms, so property owners should budget for flood insurance in addition to homeowner’s insurance. Naples is part of the National Flood Insurance Program, so all homeowners can purchase consumer protection flood insurance directly through the program. Insurance costs will vary depending on your home’s value and coverage levels.
Invest in Real Estate in Naples, Florida
Naples has much to offer if you want to benefit from year-round passive income from a rental property. The city is chock full of activities and restaurants, and the beach is accessible year-round. Numerous investment opportunities exist throughout the dozens of Gulf shore condominium buildings.
You can start your investment adventure by checking out the Rove Marketplace. You might also consider our luxury properties in New York City.
Looking to own a short-term rental in Naples? Check out Rove Travel to get started today.