Naples, Florida Condo Market Problems in 2025: Why Sales Lag Single-Family Homes
- Ed DiMarco
- May 21
- 5 min read
Naples, Florida, renowned for its upscale communities and breathtaking Gulf Coast views, is witnessing a growing divergence in performance between condominiums and single-family homes. While both property segments are navigating broader economic pressures, condos are notably lagging behind in terms of price growth, buyer demand, and overall market resilience. This article takes a deeper analytical look at the underlying factors causing condos to underperform relative to single-family homes.
Price Growth Disparity
Over the past year, single-family homes in Naples have seen a steady price rise, primarily fueled by limited inventory and robust demand from out-of-state buyers, particularly high-net-worth individuals. In contrast, condos have experienced either stagnant growth or a decline in value. From January to May 2025, the median condo price in Naples dropped by 2.7%, settling at $466,000. This is a noticeable fall from $479,000 in May 2024. Meanwhile, single-family homes appreciated by 6.7% during the same period, reaching a median price of $800,000, up from $749,800 a year earlier. This stark year-over-year contrast highlights the differing trajectories of these two property types.
Inventory and Absorption Rates
Inventory levels further underscore the market imbalance. As of May 2025, condo inventory sits at approximately 7.5 months, compared to just 4.3 months for single-family homes. This oversupply in the condo market exerts downward pressure on prices and elongates selling times. Contributing to this surplus is a wave of investors trying to offload units purchased during the 2021–2022 boom.
The broader Naples market listed 8,642 homes in March 2025—an 8.4% increase from the previous month. While condo sales increased slightly from 243 to 250 units (a 2.9% gain), prices remained on a declining trend. Year-over-year, condo listings have surged by 12%, while absorption rates have dipped by 9%, further indicating weakening demand.
Insurance and Maintenance Costs
Rising insurance premiums and escalating HOA fees have become a significant burden for condo owners. These increases are driven by heightened hurricane risk and legislative responses to structural safety following the Surfside collapse in 2021. As of early 2025, the average annual condo insurance premium in Naples climbed to about $1,675, representing a 19.6% increase from $1,400 in early 2024.
Additionally, new Florida legislation now mandates that condo associations maintain fully funded reserves for any repairs exceeding $10,000. This requirement has resulted in higher HOA fees, particularly in older buildings. Many condo owners are now paying upwards of $700 in quarterly HOA dues—an increase from $500 a year ago. In contrast, single-family homes, especially newer builds, tend to have more predictable and often lower maintenance and insurance costs.
Buyer Preference Shift
Changing lifestyle preferences post-pandemic have led many buyers to favor larger living spaces, private yards, and fewer restrictions—attributes commonly associated with single-family homes. Condos often involve shared amenities and stringent association rules, are falling out of favor.
In January 2025, approximately 85.1% of all home sales in Naples closed below the asking price, with condos particularly affected. The median listing price for all properties dropped to $761,300—a 6.6% decrease from the previous year. In May 2024, only 74% of homes were selling below list price, indicating growing buyer leverage and reduced seller confidence, especially in the condo segment.
Rental Market Saturation
Many condos were acquired during the market upswing for short-term rental investment. However, the current rental landscape is oversaturated, especially in the luxury segment. As of May 2025, the average monthly rent in Naples has dropped to $5,000 from $5,900 a year earlier—a $700 decrease. There are currently 4,355 rentals available, flooding the market and reducing profitability for condo investors.
High-end condos, particularly in prestigious neighborhoods like Port Royal, are facing steep competition. Monthly rents range from $12,500 to $35,000. Despite these high rates, the sheer volume of listings has diluted returns. In contrast, single-family homes maintain stronger rental appeal, offering better returns and more stability in occupancy rates.
Key Takeaways for Buyers, Sellers, and Investors
Staying informed is vital for those navigating this market. Buyers should scrutinize total ownership costs and evaluate long-term appreciation prospects. Sellers must be realistic with pricing and explore value-added incentives to attract buyers. Investors, meanwhile, should conduct detailed rental market analyses and consider diversifying into single-family homes for better returns.
Whether entering or exiting the Naples real estate scene, a deep understanding of these diverging trends between condos and single-family homes can significantly impact your financial outcome.
Final Thought: Navigating the Challenges in Naples' Condo Market
The Naples condo market is grappling with multiple challenges—from declining prices and inflated ownership costs to saturated rental conditions and shifting buyer behavior. While select high-end condos in prime locations may retain value, the broader outlook suggests a cautious approach. Year-over-year data from January to May 2025 highlights this trend, with condos experiencing a noticeable slump in price performance, market absorption, and rental viability. In contrast, single-family homes continue to display relative strength.
Frequently Asked Questions About Naples’ Underperforming Condo Market
Why are Naples condos underperforming compared to single-family homes?
Rising insurance and maintenance costs, oversupply, and shifting buyer preferences have collectively caused condos to lag behind in performance.
Is now a good time to invest in a Naples condo?
Caution is advised. Carefully consider long-term rental potential and all ownership obligations before making an investment.
How much have condo prices changed in Naples from 2024 to 2025?
Median condo prices dropped by about 2.7% from May 2024 to May 2025, settling at $466,000.
Are HOA fees and insurance higher for condos than single-family homes?
Yes, primarily due to new reserve funding laws and increased hurricane risks impacting condos more heavily.
How has the Naples rental market affected condo sales?
Market saturation has diminished rental yields for condos, prompting more owners to sell and contributing to oversupply.
What are the main risks of buying a condo in Naples in 2025?
Key risks include declining property values, rising fees, and increased competition in the rental market.
Are single-family homes a safer investment in Naples right now?
Current trends favor single-family homes due to better price appreciation, lower costs, and greater buyer demand.
Will the condo market in Naples recover?
Recovery is possible but hinges on broader economic improvements, policy changes, and a revival in buyer interest for low-maintenance living.
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Article By: Ed DiMarco, MS, MA
With years of hands-on experience in Florida’s luxury rental and investment property markets, Ed DiMarco brings a personal touch to real estate. Backed by Business Management and Communication degrees, Ed helps clients make confident decisions, whether renting a dream waterfront home or investing in Naples’ vibrant property market. His goal? To make every real estate journey smooth, informed, and successful.