Naples Real Estate Market Update - Condos - 3rd Qtr 07
The Naples real estate market for condominiums remains lack luster but there are some bright spots appearing. The question remains will the bright spots continue to glow and thereby cause strengthening within the market. Below are graphical presentations with commentary on each of the graphs comparing the quarter ended September 30, 2007 to the quarter ended September 30, 2006 with quarterly data for the quarters between the two dates.
MEDIAN PRICE PAID:
The graph below shows the downward trend for the median price being paid for Naples condominiums. In the 3rd quarter of 2007 the median price paid was $275,000, which represents a 15% drop in price from the 3rd quarter in 2006, which was $325,000. Could the median price been better without the sub-prime mortgage market impact and credit crunch in the later part of the quarter?
CLOSED SALES:
The trend for closed sales for the period being analyzed reflects an upward trend largely due to the strong number of closings (930) which occurred during the 2nd quarter of 2007. The closed sales for the 3rd quarter of 2007 was 483 versus 532 for the 2006 3rd quarter. This results a dip of 9% in volume of closed sales. As questioned above - could the number of closed sales been higher without the sub-prime mortgage collapse and credit crunch?
PENDING SALES:
Condominium pending sales for the 3rd quarter of 2007 shows 321 units pending down from 362 units in the third quarter of 2006 or about 11%. The trend line reflects an upward trend for pending sales. When we see an upward trend in pending sales, it usually translates into an upward trend for closed sales in future periods.
NEW LISTINGS:
New listings - those condos that are placed on the market for sale or those that are relisted - is showing a positive trend for strengthening of the condo real estate market. A positive trend in this case is a downward trend - less condos coming on the market. In the 3rd quarter of 2006 a total of 1966 were listed. The number of new listings in 2007 was 1598 - down about 18%. Generally the 4th quarter of the current year and the first quarter of the new year has seasonal increases in the number of listings. If the number of listings in the 4th quarter of 2007 and the first quarter of 2008 are lower than the previous periods - it will be a positive sign for strengthening of the condo market in Naples.
SUMMARY:
By looking at the above graphs, one can see that the median price reduction in the Naples condo market is causing more condominiums to be sold or placed under contract, while the new listings is showing a downward trend. As of the writing of this post there is an inventory of about 2.5 years of condominiums to be sold, so buyers can find some excellent values. But buyers must be fully aware of the market in the neighborhood they are looking to make their purchase. In past posts one can see how bundled golf course communities vary greatly in the median price paid between the communities. For sellers, they need to be constantly aware of what the median price being paid for other condominiums is, as well as, the price of pending sales - pricing trigger. Later detail information about median price trends for various neighborhoods will be posted for informational purposes.
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