Despite the bad news for the domestic real estate market in general, there are some positive developments in the local greater Naples Real Estate Market. Sales have certainly picked despite being in the throws of the summertime lull, although mostly in the lower end. More homes are selling at generally lower prices.

We are seeing many first-time homebuyers entering the buying fray and that is good news. ‘Short Sales’ and Foreclosures are accounting for many sales along with bank-owned properties and are becoming far more common. This in itself creates a drag on the market prices. The good/bad news here is that some people are benefitting at other’s expense.

Interestingly, when you look at 30–year fixed-rate mortgages which are up nearly a full point in the last week, they are still cheaper than a year ago. (Today’s rates look awfully inexpensive to me having endured rates years ago in Boston of over 18%.)

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Hot on the heels of the Fed’s inter-session rate cut of 75 basis points last week, they cut the rates again today, as they perceive we are most likely on the brink of a recession as they look to stem the tide in the face of a weak economy.

The real beneficiaries from these cuts are mortgage holders whose loans are directly tied to the Prime Rate, as they will see a benefit immediately. HELOCs (Home Equity Lines of Credit), as well of variable rate charge cards will see an interest rate reduction with their next statements.

The interesting thing is that even though long-term rates are at the lowest point in years (2005), it is extremely possible that these rates could actually rise if you look at historical performance and recent trends. The key is that if you are waiting for rates to fall further don’t! Go get your application in now with your bank or mortgage broker to lock in the low rate available.  

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I’ve always considered myself a ‘networker’ probably even before the term became a term. In real estate, we all look toward our happy clients for referrals, and actually it doesn’t matter whether whether it is real estate or not, any business can benefit from the power of word-of–mouth marketing.

A referral generated from this source is a better prospect because they most likely trust the source and are probably less suspect than a prospect generated by other means. Multi-national companies have learned to value the referral derived from word-of-mouth marketing and so should you. Many times we realize the power, but fail to direct our activity in that direction.

In today’s real estate climate, I believe that to remain successful we should be thinking ‘outside the box’ when it comes to marketing and promotion. Certainly one of the ways is to identify your most loyal clients and direct a campaign specifically targeting them for referral production.

We refer people daily to various businesses because it has been ingrained in our brain through slogans and other forms of advertising, so much so that when we hear it we immediately identify with that particular business. And so it should be for we realtors, whether it is a slogan or something else that makes us stand out. Our clients need to be talking about us in order to generate those referrals, so we’d better give them something to talk about!

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The current inventory in Collier County of approximately 5,800 homes and 4,800 condominiums remains excessive and the potential buyers out there seem to be firmly on the sidelines, waiting for the prices to decline even further. There is also disagreement among the ‘experts’ as to how and when the market will truly stabilize, causing further consternation.

With the housing prices down some 20% + it would suggest that it is a perfect time to buy, but again the buyers seem to feel that the market will drift even lower. Until they perceive the market stabilizing, they will most likely remain on the fence.

I’m reminded of the old phrase, “Sellers miss peak…Buyers miss bottom” and have been telling potential buyers that they need to get off the fence. Despite the disagreement about when our local market will bottom out, lower home prices, as well as historically low mortgage rates, (for those moaning about the recent rate rise, I remember rates at 18% +,) and the credit crunch easing a bit, I believe, like most, this to be the strongest ‘buyer’s market’ that we have seen in a decade.

I for one have been pushing buyers to get back in the game and buy, because it’s just sitting there in the palm of their hands!

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Finally, after a great deal of debate between the Florida House and Senate, a much sought after tax reform bill was passed. Now it is up to the voters in January to approve or disapprove the measure.

The nuts and bolts of the proposal are basically that the Homestead Exemption has doubled from $25,000 to $50,000 and the Portability issue has finally been addressed by providing statewide portability of the wildly popular Save Our Homes, (3% cap,) differential. A homeowner can now “port” the full amount of the differential if they are upsizing, however, if they are downsizing, the pro-rata share based upon market value of the new home as a percentage of the market value of the old home. There is a $500,000 cap on the amount to be “ported” and it is applicable to school taxes.

Here’s how the portability would work:

If it sounds a bit confusing it is, but the good news is that the legislature addressed the issue and now we are relatively free to move about the State without suffering to many consequences, such as our taxes rising by three times our current amount.

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With the enormous amount of inventory in the real estate marketplace, (now well over 3 years,) it is truly a buyer’s market. The big question on everyone’s mind is when are they going to start releasing some of that pent up demand and start buying.

The traffic in the greater Naples area has certainly picked up, witnessed by the fact that the normal heavily-traveled routes have seen increased congestion. As we get on toward the month of November, we should see even more traffic indicating “they’re back”. Funny…they may indeed be back, with more on the way, but they aren’t really buying. Oh sure they’re are certain pockets of interest with contracts being written, but mostly it’s very spotty.

In checking with people holding open houses, they voice the same concerns…where are the people? They all seem to reiterate the same theme, the people may be here, but they are showing no signs of real interest in looking.

Hopefully, we won’t be looking at another “season” that wasn’t. The buyers are probably just hanging around, (like the rest of us,) with their feet up reading their ‘buyer’s guides’, like us trying to get a handle on exactly what the heck is going on with this market! 

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You know it’s funny, I’m a very computer literate person, which can be good and bad. In this increasingly mobile society, (and I refer to the technological aspect,) fast is just not fast enough!

Having had broadband for a number of years and a wireless network in my house and home office, I now use an ‘air card’ with my laptop when doing open houses. That air card costs me $60 per month through my local cellular phone service provider, and when you

Is it worth it? Well I guess that it is, because if no one is coming through the particular ‘open house’ that I’m doing, it gives me a chance to get some things done on the internet that I couldn’t normally do. I can also justify the cost by the mere fact that maybe someone who does show up will need immediate information from the MLS, although I really can’t recall that ever happening. 

(I think that is why I told my other half that I needed the card!)

But when you figure how much it is actually used, (maybe 16 hours a month at best,) it costs a pretty penny per hour. The one thing that really does bother me though isn’t the cost monthly, but rather the speed. After having true broadband for my wireless network, although they call it broadband, the air card is pretty damn slow. As a matter of fact, I find myself waiting an obnoxiously long time for sites to load more often than not.

After going to my local Sprint PCS store to complain and see whether they had a faster card, I was told that it all had to do with the configuration of the local towers. They said that if I lived in New York or Chicago, my speeds would be far different and much faster because of the towers there.

Great…just what I need to do is leave Naples and move to New York or Chicago just to increase my speed. Somehow…I don’t think so!!!

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With residential real estate in the greater Naples area taking a plunge during the past year and a half or so, so also has the rental market. Not only is there a glut of homes and condominiums for sale, there now is an enormous glut of rental as well.

Certainly it is a natural phenomenon due to the fact that the homes and condos that the investors and ‘flippers’ had intended to dispose of and did not, are now going at bargain prices on the rental market. These former high rollers, (at least in their own minds,) with the bargain rents have hopes of creating some sort of cash flow, in many cases, just to stay afloat.

Many of the developers who were converting rental unit to condominiums, have now reversed direction because of the lack of interest when the buyers dried up and have gone back to renting the former rentals. This now causes problems for the landlords who are faced with increasing property taxes, as well as the higher cost of maintenance of the properties. Because of this situation, formerly positive cash flow in many cases, has turned negative and now the owners are forced to sell in a down market.

Not quite what people envisioned when moving to paradise!

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