February 7, 2006

‘A Matter Of The Right Price’ In Naples, Florida

The Naples Insider has an update on that Florida market. “Real estate over time usually results in a very good investment. And this has been particularly true with Naples real estate. But real estate trends can run in cycles.”

“Overall the number of single family homes and condos available for sell in the Naples area is over doubled that of one year ago. Some communities, and property types have 3, 4 and 5 times more availability than a year ago. I hear a lot of comments from area brokers and sales associates saying such things as ‘The busiest buying time is from February to May, so once the buying season starts thing will pickup.’ Many sellers in the area have been counting on that advice in hopes of getting top dollar.”

“It’s true that historically Naples has higher number of buyers in February through April than other months. But a record number of buyers would be needed to make a marginal difference in the number available for sale.”

“For example, at the end of January 2006 there were more listed for sale over $300,000 then what sold during the 2005 season.”

“A comparison of actives (homes for sale) vs. pending (homes under contract and waiting to close) is a good measure of the health of the housing market. In a healthy real estate market, pendings will make up approximately 60% of of homes listed for sale in the mid price ranges, and 20 - 25% in the highest price ranges.”

“A year ago that ratio was near or over 100% for many area communities; an indication that the market was on fire. In January 2006, the actives vs. pendings ratio for the Naples area was under 20%. An indication of low buying activity.”

“Advice to Naples Sellers: You need to be competitively priced, not only based on trends within your community, but based on property type and leading indicators within the market as a whole. To sell in the short term, you need to be a value leader. Not just when compared to list prices, but when compared to what has actually sold over the previous months.”

“Advice to Naples Buyers” You are in the drivers seat. For most property categories and price ranges, there are many great choices now available for sale. It’s just a matter of paying the right price.”

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Comment by Ben Jones
2006-02-07 13:15:31

Thanks to the reader who sent this in. Be sure to note the link has a second page with lots of good data.

Comment by poguemahone
2006-02-07 13:17:45
Comment by lato1394
2006-02-07 13:38:28

I think Naples/Ft Myers was a hot spot for speculators from south and central america. Very wealthy people from Latin America were buying up homes by the dozen in South West Florida, in some casesthey were even using businesses to buy condos in South West and South East Florida.
Onces prices are started to “Plateau” in the Fall they are selling… Now that inventories are piling up looks like they are dumping them on a market with no end users.

Naples / Ft Myers is one of those areas geared towards the retired crowd on fixed incomes.

Comment by Glenn
2006-02-07 13:44:24

It’s been said that speculators account for 80% of condominium purchases in Miami. I’m sure it varies greatly from developer to developer.

I haven’t heard any figures for the SW coast of Florida.

Comment by flat
2006-02-07 14:06:14

crash = myth ?
not much movement after 19 months since peak

Comment by SB BubbleBeliever
2006-02-07 14:19:18

This time I think I want to borrow a Dana Carvey

Saturday Night Live “CHURCH LADY” quote:


If you open the link provided as”Naple Insider” you’ve got to admire one of the only honest realtor’s in the nation. I even like his graphics of MONKEY”S (See no Evil, Hear no Evil, Speak no Evil)… I can’t pick this guy apart, he’s just telling it like it is.

I’M ONLY WONDERING if this is a suicide note… one of his last reports before FLORIDA GOES BUST- and his business prospects dry up.

Comment by vainvestor
2006-02-07 14:23:15

I have been visiting Naples for 25yrs. The growth has been explosive, but it is still very beautiful. We first bought 12 years ago and now have three places, including our future retirement home. We plan to keep all our places for at least the next 15 years. If some bargains come up in the next few years I may buy some more.

I had noticed the appreciation over the past 4 or 5 years, but had not seen the speculation that I’ve seen in the condo market here in Northern Virinia. During the last cycle, Naples seemed to stay flat for years rather than drop. But, again, I wasn’t following too closely.

Comment by Anton
2006-02-07 14:31:55

Naples used to be incredibly elegant and beautiful, but today is just another trashed up Florida honky-tonk. The wealthy New Yorkers who’ve destroyed it live on the west side of the main drag, while poor locals, who “serve” them, live on the east. What was once a pristine beach is now a mass of ugly condos and outlandish houses designed to impress others with the owners’ wealth. This destruction is typical of what happens to lovely communities when people with too much money and absolutely no taste muscle in. I seriously doubt property values will drop much when the housing bubble bursts, because there are millions of more New Yorkers who think Florida-retirement is mandatory, and that nothing is more important that showing off ones money (to prove one has “arrived”).

Naples NEVER catered to the fixed income crowd, but the devastation of an entire eco-system to satisfy the pretentions of the vulgar was unthinkable to the wealthy who lived there in the past.

Comment by OCBear
2006-02-07 14:32:27

Interesting article posted by Flat.

Homebuilding Society(England) saying they are in for a soft landing.

Positively Wizard

Comment by circling_vulture
2006-02-07 14:54:43

Advice to Naples Sellers (i.e. Flippers) - brace yourself for the impact of reality hitting you like a ton of bricks.

Comment by Robert Coté
2006-02-07 15:00:39

“at the end of January 2006 there were more listed for sale over $300,000 then what sold during the 2005 season.”

That’s more than 12 months inventory!

As to Naples I have no idea how it can survive its’ present situation. 11 and 40 year hurricane cycles are sending insurance skyward and property taxes, already obscene, are going much much higher as the State attempts to indemnify itself against past and future storm damage. I just cannot see a price point that allows continued habitation at the current levels of population, density or economy.

Comment by bottomfisherman
2006-02-07 19:17:00

I had noticed the appreciation over the past 4 or 5 years, but had not seen the speculation that I’ve seen in the condo market here in Northern Virinia.

Hello?? Naples and S. Florida is regarded by many as the very epicenter of speculation and flipping. I wish you lots of luck with your obvious overexposure in that area.

Comment by vainvestor
2006-02-08 10:02:35

” I wish you lots of luck with your obvious overexposure…”

Thanks for your concern bottomfisher. I’ll take it under advisement. I trust, by your comments over time, that you are not a “real estate investor.” I also believe that you consider all such creatures to be stupid idiots.

Sadly, for you and the other crash-cheerleaders, the vast majority of investors have their sh*t together. I have over 2.5 million worth of real estate in Naples and owe about 100K. In other words, you won’t be sitting in my beach chair anytime soon.

I am in my mid-forties and have been an invester for almost 25 years. You may find it hard to believe, but some of us may be a little smarter than you. I don’t care about cycles- have no need to.

Your concern is better placed with renters who, in all likelihood, will not have adequate assets for retirement. I don’t advocate real estate as a sole means to financial soundness but owning your own home free and clear by retirement certainly is a key (IMO).

For me, I sleep well at night knowing that 15 properties will be paid in full by the time I am 55. Bubble shmubble.

Comment by ha ha
2009-08-14 13:51:55

“va investor”, February 2006:

“I have over 2.5 million worth of real estate in Naples and owe about 100K. In other words, you won’t be sitting in my beach chair anytime soon. I don’t care about cycles- have no need to.”

Now it’s 2009. Tell me, “va investor” — how’d that work out for you? When you were boasting on blogs perhaps you should have been selling instead.

Maybe you should start paying attention to cycles. Then again, for you it’s too late.

Comment by Tom
2010-07-09 20:46:09


It is 2010. How are things working out for you? Did you know that 1 in 7 mortgages over 1 million are now delinquent? That is a lot of RE in Naples that applies.

Good Luck with that “$2.5 million” you have. Probably worth $1 million today. How much did you pay for all that?

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