Memorial Day weekend marks the beginning of the lazy days of summer with family gatherings and beach holidays high on the “to do” list. In Naples this is the time of year when things begin to slow down and we reflect on the results of our “season”. Costal Living recently named Naples as one of America’s happiest seaside towns and this latest accolade strengthens the perception that countless visitors and residents hold true; that Naples is a paradise! According to Collier County reports, the Naples area witnessed one of the best seasons (January- March) since the downturn in the market as visitor figures and tourism spending rose exponentially for the first quarter in 2012. Hotels and restaurants were at capacity and summer bookings are ahead of 2011 figures.
Visitor spending carried over into the local real estate market as the Naples Area Board of Realtors outline impressive results for first quarter 2012 as compared to first quarter 2011:
- Pending sales increased 14 percent ($ 300,000 to $ 500,000), 29 percent ($500,000 to $1 Million) and 14 percent ($1 Million to $2 Million).
- Median closed price increased 14 percent.
- Overall inventory decreased 13 percent.
- The Average Days on Market (all properties) decreased 3 percent.
For several months in 2011 Naples Meridian reported that the most active price range in Naples was the under $ 200,000 category. As activity levels continue to increase based on buyer demand and availability of funds, either by cash or financed options, inventory levels have decreased. The Naples beach area in 2011 experienced little activity yet saw an increase of 14 percent in closed sales by the end of March 2012. Sales of single family homes rose for the $ 1 million to $ 2 million category by 14 percent, an substantial increase given the slumber that this category experienced in much of 2011.
If real estate inventory is declining and visitors and consumer spending is rising, is that enough to signify a true economic recovery?
John Tucillo, chief economist for the Florida Realtors organization recently noted at an economic summit that Florida is in a “mini-recovery “ though “we have a long way to go to get back to normal”. For the Naples area various factors exist that signal the beginning of the long term economic recovery.
In the first quarter of 2012 Collier County government issued 297 permits for new home construction. Builders and developers have begun to lean on economic and financial consultants like Fishkind & Associates to create market studies within the Naples area. Developers such as Toll Bros, WCI and GL Homes have recently launched projects in Southwest Florida each seeking to capitalize on the pent up demand given the lack of new construction options over the past few years.
The commercial construction sector has been slower to recover. A local construction firm notes that there have been “mild improvements” in the way of new business. Vacancy rates for retail and office space remain high and financing options remain limited. Businesses in time will seek to expand and acquire new spaces yet the rate of expansion hinges on the availability of credit.
Companies relocating to Southwest Florida and business expansion within the area are crucial elements to the success of our local workforce. Collier County relies heavily on the tourism and construction sectors as sources of employment. While the jobless rate currently stands at 8 percent there are approximately 37,000 people without jobs within Collier and Lee County and economists predict it that could be years before unemployment figures drop to the 6 percent.
Factors such as the presidential election, uncertainty in foreign markets, gas prices and income tax rates contribute to public hesitation and skepticism. This period of uncertainty translates into a lack of action that by definition stalls progress that has developed over the past twelve months. Perception as to the future availability of disposable income is paramount for the local Naples economy that thrives in large part to tourism activity and second home purchasers.
Naples is fortunate to be continuously recognized among one of the best places to visit and live. While the economic downturn has affected our residents, businesses and the housing market, the momentum towards a full recovery is continuously building. Lawrence Yun, chief economist and senior vice president of research for the National Association of Realtors drew the spotlight on the Naples market predicting as much as a 10 percent appreciation in home prices by December 2012 given the over correction in prices witnessed over the past few years.
While we all recognize that a true and lasting recovery will take time the wheels of the economic machine have begun to budge. For individuals and investor groups who have the means to visit Naples and relax on the beautiful beaches, dine al fresco and purchase a slice of paradise we tip our hats to you! As your contribution to our local economy stretches further than personal gain. It strengthens the fabric of our community, its resources and ensures that Naples remains at the top of everyone’s list.