The Naples, Florida market remains firmly in the hands of the grasp of the ‘summer doldrums’, with sales taking place, but mostly in the upper end ($3,000,000 +) of single family homes and condos. Inventory levels remain extremely high, and that inventory needs to be re significantly reduced so that we can get toward a more balanced market.

One of the keys to reducing inventory is to get the massive amount of over-priced homes off the market. Unfortunately, there is an abundance of over-zealous realtors who have the sellers convinced that the market lives in 2004 – 2005. Coupled with that, there are also a myriad of home sellers who are also living in that bygone era. These two factors help to make up a lot of the inventory, and again, it needs to go away, and by go away, I mean that it needs to be taken off the market.

The good news is two fold. Number one and foremost, Naples is and will most likely always be a world-class destination. Despite the down market, it remains a place where people want to have a primary or secondary home. Secondly, with the strength of the Euro versus the US dollar, many people overseas see Naples as a bargain, where the American buyer might be a bit ambivalent about purchasing.

My forecast for the next year is a rather flat market, but despite that, I feel that we have hit bottom. Certainly once the general public realizes that, the market will again gain strength the increased sales. 

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We have become so jaded when we look at the real estate market, that we hardly believe what we are seeing, specifically with regard to home sales.

In 2006,there were 4,500 home resales, which historically, is very consistent with annual trends. The problem is that we all tend to look at 2004 and 2005, the so-called investor-driven years, as benchmarks. We forget that these years the real estate market was not normal in any way, with its nearly vertical climb upward.

With the investors gone, we now have over 12,000 properties for sale in Collier County, which translates into a solid three year supply. The only hope of a property selling is that it is priced in the lower quadrant of the curve. As a matter of fact, even having the lowest priced listing in a particular community still does not ensure that it will sell, because if there are people who are desperate to sell, they might just take over that lowest priced listing.

One of the worries is that builders who are getting properties back in inventory because potential owners have chosen to walk, leaving their initial deposit on the table rather then go to the closing table, will price their inventory well below the resale properties. Think that it doesn’t happen? Well it already has started.

The good news is that it is a fantastic time to buy! Those who have waited to pull the trigger are supreme winners by purchasing now. There are some great bargains out there across the board in every price range, and you don’t have to go far to find them. It is a good time to be working with buyers, in some cases, they just need some coaching and guidance.

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The state of the greater Naples Real Estate Market is certainly improving, although we would like to see that improvement across the board totally.

The high end properties, $2,000,000 and up, are doing extremely well. Port Royal Aqualane and Bay Colony are three areas where sales are strong. On the other end of the spectrum, sales in the lower end of the market are also very solid. It is the mid-priced properties that are lagging.

The good news is that there is a distinct increase in activity with showings up significantly, in almost all price ranges. There is a feeling that the buyers have finally decided to get off the fence and start looking in earnest, and that will be a good sign. The buyers who are buying now, know that they have far more leverage than this time last year.

The issue will again be pricing. In order for any property to sell in this ‘buyer’s market, property must be priced properly.

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It is very interesting to see that there are 10 single homes in Olde Naples under $1,000,000, something that we haven’t seen during the last 5 years. There are currently 102 single family homes actively on the market. The low is at $750,000, with a high at $11,960,000 and the average at $2,630,446. The price per square foot is $942, which has been above $1,000 for a while, with the average days on market is 207.

By contrast, if you look at the Crayton Road area, which would encompass Coquina Sands, the Moorings and Park Shore, there are 184 active single family home listings. In that area, the low is $650,000, the high is $8,900,000, with an average of $2,096,206. The average price per square foot is $668, while the days on market is 182.

And finally in Port Royal/Aqualane there are currently 84 single family homes listed. The low is $2,179,000, the high is $24,900,000, with an average of $6,426,678. The average price per square foot is $1,455, with the days on market is 189.

In all three areas, it’s amazing that the average home tops $2,000,000, certainly just part of the reason that Naples has become a world-class destination and such a very special place to live.

To me, what’s really fascinating is studying the different areas in Naples, the figures and graphing them on a monthly basis, which is what I do for my monthly real estate newsletter. It gives you a huge perspective of exactly what is going on, and the emerging trends. 

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The strong ‘buyer’s market’ continues here in the greater Naples area, with virtually no letup in sight. I keep reinterating that, in my opinion, it is a perfect time to jump into the game, buy and get off the fence. There are bargains in almost every segment of the marketplace, and yet I still hear from some buyers that their preference is to wait, because they feel that the market will trend even lower.
 
Just like the stock market, I’m not a fan of trying to time the real estate market, because the almost impossible to do. If you do happen to hit the very top or bottom of a market, you have to consider yourself extremely lucky.
 
I do believe that the state of the real estate market will remain fairly constant over the course of the next year and that prices will not begin increasing in earnest with any stability until the fourth quarter of 2007. Having said that, I do see sales, especially in the higher end single family homes that are properly-priced getting stronger during the short term. The key, as always, is pricing properly.

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One of the good things about the down market that we are experiencing is that it will flush out a lot of those ‘realtors’ who will not be able to sustain themselves, because they just don’t know how to work. These are the pretenders, the ones that came from other industries, grabbed a license thinking that they were going to latch on to a huge seller’s market and make a fortune. Now that the market has turned, they will be going back to hairdressing, used car sales or wherever they came from, and well they should.

While many bemoan the down market, I’m of the opinion that it’s a fabulous time to buy. There is plenty of money to be made, if you are targeting the right buyers. With prices off from their highs, there are values in almost every segment of the market. The European buyer is a perfect buyer to be marketing to, because the Euro and the Pound remain very strong against the US dollar. In many instances, the European buyer will find our current inventory a bargain, compared with what they are able to purchase at home, especially in regard to price per square foot.

There are many inexpensive ways to target the European buyer, with Craig’s List being one of the best. As a matter of fact, Craig’s List is actually a FREE service, allowing you to post real estate for sale virtually all over the world. The one thing that you cannot do is post multiple ads to multiple cities. They do monitor that extensively and will ban your e-mail address, if you abuse their policies. Having said that, it still is a great way for you to expose your inventory to potential buyers. Check them out at: http://craigslist.com. In today’s marketplace, in order to succeed, you need to be creative and imaginative!

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Leave it to the Naples Daily News to once again bash the real estate market with another front page article dated Sunday, the 19th that erred grossly. The piece mis-quoted a Moody’s Economy Study from 4 October of this year, which suggested for the downturn to bottom, we needed a 14% drop from our high (December 2005). The Naples Daily News incorrectly stated, among other things, that Moody suggested a 14% correction from today’s date.

Certainly the article does nothing to support the current resurgence in the marketplace, and could actually undermine it. For whatever reason, the paper continually tries to bite the hand that feeds them!

 To view the original article: _href=”http://www.whoismel.com/moodys.htm” mce_href=”http://www.whoismel.com/moodys.htm” >http://www.whoismel.com/moodys.htm

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Back in 1958, Glen Sample a developer/visionary selling lots in Port Royal that he was developing, advertised “There Will Never be Another Port Royal” and “Money Alone Won’t Buy a Lot in Port Royal”. Interestingly, he managed to sell only one lot in all of 1958, but didn’t get discouraged, explaining to a friend, “If we don’t sell this year, then we can ask more for them next year, and the next and the next. We’ve got something here that is different and can’t be duplicated.”

How right he was back then and the same can be said today about referencing the real estate market here in Naples. We live in a highly desired area and have become a world-class vacation and second home destination.

Sure we have experienced a slower market than last year, but there are many telltale signs that things are picking up. The housing market in our area will again see a boom in the coming years with, not only the completion of Ave Maria and its town, but also the Collier Companies‘ announcement of the six new towns that they intend to build in the area. As I’ve been saying for months, it is a perfect time to buy!

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