The Naples real estate market for homes is starting to show signs of strengthening in many aspects and prospective buyers should be aware of the positive changes. The statistics presented and discussed below are global in nature for the Naples area and do not represent the more important micro-market views which can vary greatly between the North Naples, Naples West, Naples Central, Naples South, Pelican Bay, Pelican Marsh, The Vineyards and Golden Gate Estates areas. [Read more...]
Naples Condo Market Update – March
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Listings:
The new listings for the month of March 2009 were 749 condos in the Naples area. The number of condos listed in March 2008 was 721. The increase of new listings of condos was 4 percent. In March 2007, the new listings were 861, representing a drop of 112 condos or decline of 13 percent.
In February 2009 the new listings were 710.
Of the 749 condos listed approximately 18 percent were potential short sales, 11 percent were foreclosed (bank owned), and the remaining 71 percent were traditional listings.
Median list price for potential short sales was $154900, foreclosed properties were $76000, and traditional listings were $275750.
Closed Sales:
In the month of March 2009 the sale of condos were 248. In March 2008 a total of 222 condos were sold. The year over year was 12 percent increase. In March 2007 a total of 217 condos were sold. The increase over 2007 was 31 condos or about a 14 percent.
Of the 248 condos sold, approximately 5 percent were approved short sales, 16 percent were foreclosures, and the traditional sales were 79 percent.
The breakdowns of the median sold prices are discussed in the median sold price section below.
Pending Sales:
During March 2009 a total of 413 condos had an offer accepted by the seller. In March 2008, 280 condos were pended. The increase from March 2009 represents an increase of 133 condos or about 48 percent.
In March 2007 a total of 207 condos were pending sale. The increase between March 2009 and March 2007 was 206 condos or about 100 percent.
Median Sold Price:
During the month of March 2009, the median sold price of a condo in Naples was $169000. The median price is the sold price represents the middle value of the all sold prices within a stated range. The median sold price can vary from area to area within a local real estate market.
In March 2008, the median sold price was $276250. In the year over year comparison median sold price declined $107250 or roughly 39 percent.
In March 2007 the median sold price was $310000. In comparing March 2007 to March 2008 the price declined $141000 or about 45 percent.
Median sold price for approved short sales was $130950, foreclosed properties were $80875, and traditional listings were $205000.
The difference between the list price and sold price for approved sales was about 93 percent, foreclosed properties 97 percent, and traditional listings 90 percent.
Foreclosures Sales Price to List Price in Naples
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A frequent question asked in today’s real estate market is “How much will a lender or bank discount the list price of a foreclosed single family home which they own in the Naples area?”
One individual stated that banks are selling these properties with a discount of 25% from the list price or 75% of the list price.
In today’s real estate and traditionally over the past decade, it has the practice of lenders, banks and REO (real estate owned) service companies to request either an appraisal of the home by an appraiser or a broker’s price opinion (BPO), perpared by a real estate broker or agent, for the subject home to determine the estimated market value. Periodically, during the time the home is for sale, the estimated market value is reassessed using a BPO.
A study of closed sales during the month of February 2009 for Naples single family homes did not support this statement. The actual difference in terms of percentage between sales price and list price was 10.16 percent or 89.16 percent from the current list price. When looking at the original list price the sales price to list price ration was 18.45 percent or 81.55 percent.
Prior to making a purchase a prospective buyer should have a comparative market analysis done rather than looking at the list price and have a pre-determined percentage of discount from the list price set in their minds. The above percentages between sales price and list price can be used only as a guide in opening the negotiation process.
Why Naples Real Estate is Undervalued
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On September 19, CNBC did a story on the “Finding Housing’s Market Basement” where Richard Dekaser, a senior vice president and chief economist at National City Corp., singled out Naples in talking about the “first rays of sunshine on a possible end to the housing crisis.”
“Three years ago, the poster child for excess valuation in America was Naples, Florida,” he said.
Not anymore. Through the second quarter of this year, prices have dropped 33 percent, he said, leading him to judge the market as “slightly undervalued.” That means home prices are actually lower than where they should be.
Although I have not agreed with Mr. Dekaser in the past regarding, due largely to the methodology used in evaluating Naples overvaluation, I do have to agree with him at this time – to a point. Where I differ with Mr. Dekaser is that the Naples real estate market has gone through significant valuation adjustments and just might be undervalued to such a point where prospective buyers might be missing some excellent purchase opportunities.
In order to better understand the Naples area real estate market it is best to break down the market into an overview of single family homes and [Read more...]