Annual Market Review 2016

Bring Your Highest Expectationsâ„¢ ANNUAL MARKET REVIEW FOR 2016 Naples / Bonita Springs / Estero / Marco Island Market Area

Bring Your Highest Expectations™

NAPLES, BONITA SPRINGS AND ESTERO Closed Sales The number of closed sales in 2016 decreased 12% to 11,582 from prior year, making it the lowest yearend sales volume since 2011, the beginning of this expansion cycle. The number of closings above $1 million decreased 14.7% over 2015 with 1,069 sales at the end of 2016 vs 1,253 at the end of 2015.

The segment above $5 million decreased 30% year-over-year.

Inventory Levels and New Listings Inventory increased 34.6% in 2016, in the combined Naples, Bonita Springs, Estero market. This is the largest percentage increase in inventory since the depths of the recession in 2008. The supply of condominiums increased 35.8%, while single family homes increased at a rate of 33.6% over the same period last year. It should be noted that John R. Wood Properties does not include manufactured product or time share condominiums in our analysis.

Availability of single family homes and condominiums increased in all price segments, with the largest increase noted in the product segment under $350,000. Product priced between $350,000 and $850,000 had the largest supply of inventory, representing over 40% of the total current inventory and an increase of 22% over the prior year.

The largest increase in condominium supply was product priced under $350,000. The largest increase in single family supply was for product priced between $350,000 and $850,000 and between $2 million and $5 million.

The sum of new listings placed on the market during 2016 was 20,392, up 9% over 2015, and the highest since 2010.

Pended Sales The number of sales pended during the year was 13,578, down 24% from the prior year and the lowest annual total since 2012. All price categories reflected decreases, with properties priced at $350,000 or below showing the smallest decrease, and down only 10% from 2015. It is important to note that not all pended sales close. However, this benchmark along with current inventory has proven to be the best leading indicator of market direction.

Summary Year-end evidence indicates that market direction has shifted from one that was in balance at the end of 2015, to one that is trending to an oversupply at the end of 2016. Some segments are already well above a one year supply. This market dynamic favors buyers, who now have a greater supply of available options for purchase. This shift is a notice to sellers that pricing strategy must be adjusted to reflect current market conditions.

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”

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MARCO ISLAND Closed Sales The number of closed sales in 2016 decreased 14% to 843 from 982 at year end 2015. This sales volume is the lowest since 2011, the beginning of the current expansion cycle. Properties priced above $1 million decreased 12.8% over 2015, with 149 sales at the end of 2016 vs 171 at the end of 2015.

Inventory Levels and New Listings Inventory increased 22% in 2016 compared to last year, with the year-end inventory the highest since 2014. The supply of condominiums increased 20% over the same period last year with single family inventory increasing 23%.

Marco Island real estate is distinguished by its view and its open water access. The following summary provides insight into the availability and pricing of single family homes and condominiums based on their view. Inventory data by view has been calculated since September 2016.

Single family inventory with Direct Access has increased 17.5% and list prices have increased 5% since September. Indirect Access homes have increased 8.6% in inventory with a 5.2% reduction in average list price. Available homes with Inland and Golf Course views have increased 46% and 25% respectively with asking prices lower by 5%.

Condominium inventory with Direct Access has increased by 43% and list prices have dropped 2%.

Indirect Access condominiums posted a 26% increase in inventory and a 10% reduction in overall asking price. Beachfront high rise condominiums account for the largest product offering on Marco Island.

Current inventory is 6.8% higher than September 2016 with the current offering price relatively stable, down less than 2%.

Pended Sales The number of sales pended during 2016 was 879, down 27% from 2015 and the lowest annual total since 2008. The Marco Island real estate market is heavily influenced by second home buyers and the reduction in pended sales is a reflection of the overall market softening. It is important to note that not all pended sales close. However, this benchmark along with current inventory has proven to be the best leading indicator of market direction.

Summary The same market dynamics are evident on Marco Island that we see in Naples, Bonita Springs and Estero.

The supply of waterfront properties with boating access posted the greatest increase on Marco Island over the past year. Beachfront condominiums, which generally cater to the very seasonal market, have also increased, but not to the same level. Overall, the market favors the buyer and sellers should be aware of this price shift.

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”

Bring Your Highest Expectations™

ANNUAL CLOSED SALES UNIT HISTORY

Naples, Bonita Springs, Estero 15,000 13,271

12,000 9,967

9,000

10,494

11,275

13,093

12,017

11,582

8,859

6,000 3,000 0

2009

2010

2011

2013

2014

2015

1008

982

2016

Marco Island

1,200 1,000

915

956

843

780

800 600

2012

601

649

400 200 0

2009

2010

2011

2012

2013

2014

2015

2016

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”

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ANNUAL CLOSED SALES UNIT HISTORY OVER $1 MILLION

Naples, Bonita Springs, Estero 1500 1,186

1200

1,253

1,069 956

900 600

627

786

706

498

300 0

2009

2010

2011

2012

2013

2014

2015

2016

Marco Island 200 171

150

100

87

94

95

2011

2012

140

143

2013

2014

149

69

50

0

2009

2010

2015

2016

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”

Bring Your Highest Expectations™

ANNUAL INVENTORY LEVELS

Naples, Bonita Springs, Estero Condominiums

8,000 7,000 6495

Single Family Homes

6901

6,000

5406

5,000

5067 5305 4960 4264

3887

3632 3613

4,000

3109

3,000

2908

2799 2807 2796

3188

2276 2347

2,000 1,000 0

1/1/09 1/11/10 1/1/11

1/1/12

1/1/13

1/1/14

1/2/15

1/1/16

1/1/17

Marco Island 1,000

Condominiums

Single Family Homes

893 789

785

800

671 612

600

523

546

502

412 406

392

400

326 335

325

362 375 301 305

200 0

1/1/09 1/11/10 1/1/11

1/1/12

1/1/13

1/1/14

1/2/15

1/1/16

1/1/17

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”

Bring Your Highest Expectations™

ANNUAL NEW LISTING HISTORY

Naples, Bonita Springs, Estero 25,000 23,540

22,612 19,652

20,000

20,392 18,630

17,800

18,433

18,715

2013

2014

2015

2016

15,000 10,000 5,000 0

2009

2010

2011

2012

Marco Island 2,000 1,603

1,670

1,500

1,385

1,353

2011

2012

1,415

1,381

1,423

1,471

2013

2014

2015

2016

1,000

500

0

2009

2010

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”

Bring Your Highest Expectations™

ANNUAL PENDED SALES UNITS

Naples, Bonita Springs, Estero 20,000

18,433 16,604

15,000

14,867

15,148

14,718

17,801

15,041 13,578

10,000

5,000

0

2009

2010

2011

2012

2013

2014

2015

2016

Marco Island 2,000 1,682

1,500

1,318 1,143

1,059

1,428 1,212

1,182

1,000

879

500

0

2009

2010

2011

2012

2013

2014

2015

2016

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”

Bring Your Highest Expectations™

MONTHS OF SUPPLY

Naples, Bonita Springs, Estero 30

25

20

15

10

5

0 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017

30

Marco Island

25

20

15

10

5

0 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”

Bring Your Highest Expectations™

INVENTORY AND ABSORPTION LEVELS 2010-2016

Naples, Bonita Springs, Estero 16,000

Available Inventory

Closed Past 12 Months

14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017

Marco Island 1,600

Available Inventory

Closed Past 12 Months

1,400 1,200 1,000 800 600 400 200 0 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017

John R. Wood Properties, Bring Your Highest Expectations.

“The source of this real property information is the copyrighted and proprietary database compilation of Southwest Florida MLS, Marco Island MLS, Copyright 2016, and the proprietary compilation of that data by John R. Wood Properties, its employees, and professional statisticians hired by the Wood firm. Accuracy of the information is not guaranteed; it should be independently verified if any person intends to engage in a transaction, relying on such data.”