The market conditions for Naples covers both the month of March 2008 and the first calendar quarter of 2008, ending March 31, 2008. A monthly analysis reflects activity during a month with comparative data for the previous years of 2007 and 2006. The quarterly analysis covers a longer period of time, therefore, giving a more comprehensive picture of the current market conditions and trends. Trends are important for both buyers and sellers in determining their actions in the Naples real estate market, as well as, cyclical variations.
MARCH ANALYSIS
NEW LISTINGS:
During the month of March a total of 698 homes were listed for sale. The 698 homes listed were lower than March 2007 and 2006, where the total homes listed were 959 and 1100 respectively. The number of home listed in March, other than December 2007 (670), is the lowest volume of new listings since October 2005. The effect of less listings coming on the market is starting to be reflected in the total number of homes available for sale as March is showing 6016 versus 6186 homes in February. Although a slight decline, it is a positive sign for market improvement.
PENDING SALES:
The number of homes where purchase contracts were negotiated was 308. During March 2007 a total of 274 homes were pending sale – March 2008 was an increase of 34 homes or a 12.4% increase. In March 2006 the pending sales totaled 347 homes. The 308 pending sales for March represent the highest number of pending sales since March 2006 where 347 were under contract. One has to go back to August 2005 (323) to find a higher volume of pending sales.
CLOSED SALES:
During the month of March 169 were sold versus 213 in 2007 and 302 in 2006. To the casual observer the number of closings during March may not appear optimistic, however, there are some factors which must be considered – lenders have much stricter underwriting guidelines, fewer liberal loan programs, and the length of time needed to obtain lender approval for possible short sales.
MEDIAN SOLD PRICE:
In the month of March the median price paid a Naples home was $365000. In 2007 the median price was $495000 and in 2006 $489101. The median has declined approximately 26.3% between 2008 and 2007, while from 2006 it is a decline of 25.4%.
INVENTORY:
As stated earlier, there are 6016 homes currently on market which represents about 37 months of inventory to be sold.
QUARTERLY ANALYSIS
NEW LISTINGS:
The number of homes listed during the first quarter of 2007 totaled 2834 while the first quarter of 2007 was 3369 and 2006 was 3576. If one were look at the trend for the previous 3 calendar quarters, it would show an increasing trend line, but it needs to be looked at more critical since the month of January is the highest month for listings.
CLOSED SALES:
In the first calendar quarter of 2008 a total of 437 homes were closed. The closed sales were lower than 2007 with 500 closed sales and 2006 with 688. The implications of lenders’ actions are reflected within the lower volume of closed sales. The closed sales for the first quarter of 2008 are the second lowest starting with the second quarter of 2005. The lowest volume of 406 was during the fourth quarter of 2007.
MEDIAN SOLD PRICE:
The median sold price for a home in Naples during the first quarter was $400000 versus the median prices of $499500 in 2007 and $499275 in 2006. The decline in the median price is about 20% from the previous two first quarters. The median price paid trend line over the immediate five calendar quarters shows a decline, however, the most recent three quarters shows only a 4.4% decline. This could a sign of the market approaching or at the bottom. One does not truly know the bottom of the market until after it passes.
In summary, the real estate market is showing some positive signs where the new listings are decreasing, pending sales are increasing, and median prices are relatively stable over the past three quarters. The negative signs are the lower volume of closed sales and the number of months of inventory for homes for sale.
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