This is a hectic time of year! The holiday season is here and a whirlwind year of domestic policy concerns and global banks drama is almost behind us, yet we must pause to reflect on the latest in the Florida and Naples real estate market as there is plenty of activity to report.
Florida.. The whole ball of Wax
As we close out the year reports from three leading US economists predict Florida to be experiencing an upward trend.
Mark Vitner, senior economist for Wells Fargo points to trade relationships with Latin American and the Caribbean have strengthened South Florida’s economy. Tampa and Southwest Florida have experienced solid job growth and international tourism has bolstered sales in the Miami and Orlando markets.
Chief Economist Dr. John Tuccillo for the Florida Realtors board noted that sales are trending upwards as the number of listings has decreased. The supply of bank owned properties has stabilized and multiple offer situations are occurring in local markets. Tuccillo agreed that foreclosed and distressed properties will remain a part of the Florida market in 2012 though predicts that lenders will begin to slowly add properties to the market instead of the chaotic dumping that occurred in 2009 and 2010.
Dr Lawrence Yun, Chief economist for the National Association of Realtors also pointed to sharp drops in inventory which implies an increase in demand which he believes will lead to price stabilization. He notes that this shift in inventory levels is a drastic change from a year ago as “buyers have stepped back into the Florida market.” The state’s popularity with international buyers underscores Yun’s comments for South Florida noting “don’t be surprised to see a gain in home prices in the Miami and Naples markets in the next 18 months” from there he predicts the recovery will carry on northward to the remainder of the state.
Naples FL – At the Forefront of the Trend
Dr Yun’s predictions are already taking shape as we dissect the pending sales reports and inventory levels in Naples, FL for 2011.
Signs that sales were picking up began in the early September which historically has been a slow month for the local market. Our brokerage firm, Downing-Frye Realty Inc reported an increase in sales of 11 percent in September 2011 compared to September 2010.
The following figures outline the conditions of the entire Naples area market:
(October 2011 versus October 2010)
- Available Inventory in Naples Beach area: – 16%
- Available inventory in North Naples area: – 24%
- Single family closed sales: + 12%
- Condominium pending sales: + 8%
- Overall Closed Sales: + 7 %
These figures are very encouraging given that the month of October is typically a time when full time residents are in town. The busy buying season kicks off in January when our northern friends choose to escape the winter blues and our international friends seek out the sunshine.
Our brokerage figures for November 2011 are in line with the Naples wide figures above. The busiest bracket for sales continues to be $150,000 – $250,000 (136 sales achieved in only November 2011) followed by $250,000 – $500,000 (65 sales in one month; up 17% from November 2010).
The increase in sales in the $250,000 – $500,000 range signals that financing funds are beginning to flow in our local market. Local mortgage brokers are actively advertising loan rates for FHA financing and conventional loans. Bankrate.com reported last week that the jumbo 30 year fixed mortgage rate fell to a new record low of 4.68 percent. The availability of funds is nothing new, yet the banks willingness to lend is the crucial element that has been missing.
The Naples real estate market is not going to boom overnight yet the cyclical nature of economics is at play. Inventory levels have decreased (18% since November 2010) and we at Naples Meridian have witnessed firsthand that buyers’ options have been reduced. Cash sales still trump financed offers at all price levels. Multiple offers are being administered by sellers who choose to price their home competitively while other sellers are still holding out for prices to increase. The result; fewer traditional re-sale homes are on the market. Banks have not released distressed properties for a while and the skepticism of “shadow inventory” is waning. A reduction in inventory is the first marker of price stabilization and with buyers monitoring the market from near and far we speculate that a fair bit of pent up demand exists. The busy season is only weeks away and we are bracing ourselves; Will sellers start listing their properties? Will their prices be realistic or remain inflated? Will buyers bite at the first sign or continue to wait?
Let’s decorate a tree, light some candles, open gifts and enjoy the holidays as 2012 is shaping up to be a year full of adventure.
At time of press our broker Downing-Frye Realty Inc announced that the company had achieved 3,000 closed transactions for the year (over $1 Billion in sales), a triumph in the local market as this is a barrier that had yet to be broken in Naples..until now!