Naples, Florida
Summer 2009
Real Estate Today


Overview

            The real estate turnaround in Southwest Florida hinted in April 2008 was fully underway in the spring of 2009.

While the June down-turn in settled transactions (see above) looks normal and predictable; in a bull market, June tends to see more closings than May.  Whether fewer transactions in June is just a blip or indicates a true softening in the market is difficult to predict.  Pending transactions are 250% over June 2008 with just over 1000 units in various stages of closing.  That should lead to a strong July, depending on what share of the current Pending properties are Short Sales.  Short Sales tend to have a long pending period and well under 50% actually close.

One thing that is fairly certain is that we will see prices harden and push upward in the more affordable communities as we near the end of the year.  The well publicized $8,000 incentive for first time homebuyers expires at the end of November.  As sellers will begin to realize that these buyers are going to get an $8,000 gift from the Obama Administration they will surely demand their share of the gravy by wanting an extra thousand or two for their home, and when the deadline is near enough they will get it from buyers weary of looking and willing to offer a bit more for what they regard as a better product.

Whether that price movement will carry over into higher priced properties is quite doubtful.  However, if the economy does not get worse and there is any uplifting of confidence, the pent-up demand for sunny homes is likely to continue to eat into Southwest Florida’s already shrinking inventory.  Once that movement is obvious, lots of local homeowners who have either been sitting on the sidelines all along, or who taken their home off the market for lack of interested buyers, will add a For Sale sign to their front yard and the inventory may re-build.

A larger inventory will serve to keep prices low.  Then again interest rates are back near 5% for a thirty-year, fixed cost mortgage for a buyer with superb credit . . . and the good interest rates could be enough to spur shivering northerners southward.

Based on the large potential inventory of current homeowners who want to sell either to move up or move out, I do not expect selling prices to significantly increase in the next year.  On the other hand, I do not expect to see them soften either.

That could change overnight if enough buyers crash the market.

            Local News

            All in all, things are pretty summery here.  Restaurants are running lots of two-for-one specials and tee times are available all day long.  Traffic is reasonable.  Days are hot and not very rainy.  There have been no reports of ‘tropical disturbances’ to get everyone thinking about storm shutters and the softened economy has put privatizing I-75 on the back burner.

            County Manager, Jim Mudd is back at work trying to come up with a plan that the County Commissioners can accept that keeps the county operating on millions less income than previous years and no significant reduction in requests for services.

Troubles

The downturn in the general economy has smacked golf course communities hard.  Memberships are way down at equity clubs and bundled communities are missing a few checks at month’s end.  Bonita Bay’s courses are the latest to fall with the developer locking the gates much to the displeasure of the current paid members.  There will be a number of lawsuits as resident owners and developers fight over tees and greens.

In General

The Gulf is warm, the nights are balmy, and life is generally good.

Real Estate

There is nine months of residential home inventory in Collier County today.  A year ago there was two years of inventory.  Increased sales at the low end of the asking price list and the withdrawal from the market of lots of homes in the upper half price range have brought the inventory levels to a manageable level.  As an indication of what is expected, Realtors are again starting to actively seek listings in preparation for what is predicted to be a very busy winter selling season.

 Investor Alert

The first-time homebuyer tax credit expires November 30.  That means to qualify for the $8000 income tax rebate which may be taken as a cash ‘tax refund’, buyers must obtain possession of the home prior to December 1, 2009.  The home buying process generally takes about two months; four to five months when dealing with Short Sale property.  Back timing from mid-November (the last semi-safe time to schedule a closing) to the beginning of serious searching means buyers should be active in the market no later than September for convention purchases and now for Short Sale property. 

Short Sale means the property is still privately owned, not bank owned – although priced like a bank owned foreclosure – and requires bank participation in the title transfer process since the seller will not realize enough cash from the sale of the property to retire the note (the mortgage), does not have the assets to add cash to the transaction to satisfy the mortgage, and asks the bank to forgive a portion of the obligation.

Resale Properties
 
Land

Raw Land

            No one is buying land.  There have been one hundred sales of residential property since the beginning of the year.  That’s one sale every couple days among 2000 plots now on the market.   While this may be a great time to buy, buyers either need to plan to build themselves or be prepared to hang on to the land for at least five years and probably closer to seven before we see another big land rush.

            The inventory of vacant lots over the past year continues to disappear, but not due to sales.  Here is a chart of vacant lots on the market and another showing land sales over the past year.

Monthly Collier County Undeveloped Land Inventory

Monthly Collier County Undeveloped Land Sales

            Some samples:

            Lot in Golden Gate Estates - 209018574

            $8000 will buy a lot on 2nd Avenue off DeSoto Boulevard.  In today’s jargon this property is reasonably close-in, being just off the eastern end of Golden Gate Boulevard, but is not likely to be desirable until the current glut of already built homes diminishes or until homes in the surrounding area age sufficiently to make new styles and amenities desirable enough to overcome the price differential warranting buying new.

            Lot in Pelican Marsh - 208045660

One very desirable piece of property is a third of an acre in the middle of the upscale, gated, golf course community, Pelican Marsh.  Priced as high as $1,100,000 in the past, the current owner is asking $390,000 for the lot surrounded by homes valued in the million dollar range.

            Lot in Aqualane Shores - 209023992

            The top asking price for a bare lot in the Naples area is currently $18,000,000.  This premium property sits on the west shore of Naples Bay about half way between downtown and the Gordon River Pass to the Gulf of Mexico.  There are over two acres bordering the Bay on one side and Duck Canal on the south.  Along the canal side there is plenty of room for a 60 footer to lay along side, leaving unobstructed the view of the bay and the Everglade’s daily cloud show off to the east.

For more information about these properties, visit:

http://www.sunshinemls.com:8081/search/lotlandboat_searchresults_report_columnreport.asp?eid=3886327

Residential

Residential Sales

Sales of homes continued to move northward in the second quarter of the year up almost 50% over the first three months.  Pending sales jumped 17% above the first quarter and inventory dipped downward by 20% in the same three month period. 

These changes definitely point to a more aggressive market place which seems to have a fairly balanced group of investor buyers and end-user buyers.  Ideally the market should have significantly more end-users than investors, but there is sufficient pressure and extreme bargain pricing that investors are finding ways to flip enough properties to make the purchase gamble worthwhile.

Based on pure gut feeling (and the stacks of phone messages from potential buyers) there is little doubt 2009 will end on a high note with buyers writing contracts and will likely carry over throughout the 2010 winter season.

Condominiums

In town, the best values continue to be among condominiums which do not seem to attract as many low end homesteaders as single family homes.  Here too, many owners are letting listings lapse, waiting for the market to recover.

Monthly Collier County Condominium Inventory

Monthly Collier County Condominium Sales

Treetops – 209019843

The lowest priced condominium for sale in Naples, at the time of this writing, is located in a lakefront community south of US41 about five miles east of downtown called Treetops which is not far from Edison College, Naples Regional Hospital and Marco Island.  The unit is a one bedroom, one bath first floor condo.  The community is a mix of rental units and homesteads with a good history for turnovers.  The asking price is $21,000 and while the unit is not pristine, it is in decent shape.

Positano – 208046636

Recently reduced to $69,900, this foreclosed, one bedroom – with a den for a bit of living separation – one bath, unit features nine foot ceilings, granite, and a super north Naples location on Livingston near Pine Ridge.  There are lots of amenities in the complex of 330 units with asking prices up to $375,000.  The unit can be set up for either annual or seasonal rentals which is good because rental agents particularly like Positano as a newer community with lots of the most requested amenities in a popsitive location.

Remington - 205011559

How about a private spa 21 floors high in the sky, overlooking the beach with the Ritz Beachfront Hotel next door, in one of the most prestigious settings in all of Naples, Bay Colony at Pelican Bay?  There are four bedrooms, an office, a library, 1700 square feet of deck space and panoramic views of the Gulf: north to Sanibel Island, south to Naples.  All that and they are only asking $7,750,000.   

Single Family

The inventory of stand-alone homes continues to drop with high demand for cheap housing eating the bottom out of the inventory.

Monthly Collier County Single Family Inventory

Monthly Collier County Single Family Sales

Here are some of the 225 foreclosed homes listed on the MLS ranging from $3,250,000 for 13,000 square feet of living area to $34,000 for a total re-do in southern Golden Gate Estates.

Golden Gate Estates - 209024634

The best value is probably this home in the north side of Naples.  Priced at $53,500 it definitely needs a bundle of work, but what a buy.  It has three bedrooms, two baths, a one car garage and needs only a reasonable amount of sweat and money to bring it up to resale quality.

Valencia – 209016626

Another foreclosure: Three bedrooms, two baths, two car garage, pool home in a family friendly area near schools with a community park and pool.  The asking price for this almost-livable home is $109,900 which seems most reasonable for a 1500 square foot home in a good area, even if it does need an appliance package.  There are some restrictions for any offer that is not cash, but when put together could make this an unbelievable home for a first time homebuyer.

Lely Resort – 209013965

For a buyer who wants lots of outdoor space, doesn’t care about a private swimming pool, but does care about living in an upscale community, this foreclosed courtyard home is right on target.  Just under 2000 square feet of air-conditioned space plus both covered and sun drenched, screened, outdoor living space set this home apart.  The bank is asking a bit over $400,000 for this golf course, gated community home which makes it an exceptional value.

Pine Ridge – 209024094

There are not many foreclosures in the upper price points, but this is one and it is spectacular.  Five bedrooms, a den, four full baths, two powder rooms, a bonus room, a five car garage, home theater, wine cellar, fireplace, vaulted ceilings, windows that reach to the tree tops, built to hurricane standards, and backed up by an automatic generator.  The kitchen features Sub Zero appliances.  The master bedroom is a masterful rendition of creative functional architecture.  Built in 2007 and priced at $3,250,000; for the discriminating buyer who wants privacy within easy reach of all that Naples offers, this is a home worthy of consideration.

            For more information about these properties, visit:
            http://www.sunshinemls.com:8081/search/residential_searchresults_report_columnreport.asp?eid=3886331

            New Construction 

            Dirt is moving on a steady basis in the limited number of communities still building.  Lely Resort, Verona Walk, Madison Park, Marbella Lakes, Heritage Bay, The Quarry, Valencia Lakes and Ave Maria are all pouring cement and laying carpet, but otherwise there is more road construction than home construction.  The builders who are building are offering some tremendous deals.  If you would like to know more about what is underway at the moment, contact me and I’ll get you updated.

Contact Information
 
            If you would like additional information about any of these opportunities or any other new or resale property in the Naples area or to change your subscription please contact:
 
            Ted DeGroot
            Prudential Florida Realty
            621 Fifth Avenue South
            Naples, FL 34102

            800-817-8499  x2496  Toll Free
            239-793-1969  Local
            239-248-8788  Cell
            ted@southnaplesrealestate.com