The real estate market in Naples for single family homes is not as strong a buyer’s market as last year both the number of homes listed for sale and months of inventory is lower than last year. Buyers and sellers need to monitor the months of inventory to determine how favorable or not favorable the market is for them.
As of the first of January there were a total of 3,630 homes for sale. At the start of January 2009 a total of 5,296 homes were listed for sale. This represents a reduction of 1,666 homes or roughly 32 percent.
Below is a graph depicting the change in the number of homes for sale at the end of the month for the immediate past 2 years.
Two year number of Naples homes for sale by month
Another measure of the changing market is the number of inventory available for sale. This year the months of inventory is 10.8 months. Last year the inventory was 24.3 months. This is a reduction of 13.5 months in a year over year analysis. Buyers and sellers should monitor this statistic – months of inventory less than 6 is a seller’s market (demand exceeds supply), while an inventory more than 6 is a buyer’s market (supply exceeds the demand). A neutral market is 6 months – is when the market is in balance – demand and supply are equal.
Below is a graph showing the months of inventory during the past two years.
Months of inventory by month over the past 2 years.
Another important aspect of Naples homes for sale is the composition of the various types of listings.
Traditional listings are homes for sale which is neither bank owned nor a seller attempting a short sale. This is what typical occurred prior to the real estate bubble bursting.
Foreclosures are homes listed for sale and are bank owned properties.
Short sales are listings where the seller a property owner (seller) is attempting to sell the property and the value of the property is such that when the property is sold, the seller does not have the funds or resources to cover the short fall (difference) between sales price and the amount of the mortgage owed to the lender(s) nor the closing costs associated with the sale. This type of sale requires the approval of all parties holding a lien against the property.
The composition of listings is only one part of the equation in looking at real estate market. The other stages – pending sales and closed – are important to consider in determining the strength or weakness of the local real estate market.
The graph below shows the composition of the percentage of listings according to the type of listing.
Composition of Naples homes for sale
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