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The State Of The Greater Naples Market....
Posted by V.K. [Mel] Melhado P.A. on Sunday, April 29th, 2007 at 5:00pm.The general state of the greater Naples Real Estate Market remains segmented, with the very high end single family homes and up-scale condominiums doing quite well. The lower end of the market is stagnant, and has been for quite a while.
Most of the sales in the lower end of the spectrum have taken place because they have been perceived as outright bargains. There are a lot of bottom feeders currently in the marketplace, trying their level best to scope out the distressed sales, and with the increased amount of preliminary foreclosures in Collier County and more expected, the ones who stick it out will have a field day. It is now quite common to see offers in the lower quadrant, (less than $500,000,) made for $100,000 to $150,000 off the asking price. In some cases that I’ve recently heard about, they are actually contracting for that amount less than asking.
Several interesting factors come into play at this state. Investors and speculators who are saddled with property that they didn’t expect to be holding at this point, will do anything to get some sort of cash flow going, whether it’s selling short or renting for a lower than market rate.
The short sales are one thing, but deposits that have been left on the table, in the case of new construction, present another dynamic. Builders who now find themselves with unwanted inventory are drastically reducing prices, thereby in some cases, selling for a lot less than other people in the community paid for their homes and condos. In one such instance, there is talk of a Class Action Lawsuit, and who can really blame the homeowners!
As you look at the chart below several indicators stand out, namely days on market, which have increased dramatically in most GEO areas and the sales price to list price percentage, which has dropped substantially. With inventory levels in excess of 15,000 units and representing what amounts to over a three year inventory, we are in for a long haul to right the ship. Should we head into a recession, the time frame could be a lot longer!
V.K. [Mel] Melhado PA
Downing-Frye Realty, Inc.
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