Naples Home Market Update
Prior to presenting the analysis for August we need to reflect on the events which took place last August 15 - the sub-prime and liberal loan programs came to a screaming halt along with liquidity issues for lenders lasting for a couple of months. The result was a further weakening of already weak real estate market. Sub-prime and liberal loan programs accounted for about 16 percent of the purchases which had taken place previous to August 2007.
Going forward the monthly statistics will bear monitoring to assess the strengthening or weakening of the of the Naples home market.
Strengthening does not necessarily mean price appreciation, but takes into effect a lower volume of new listings (even though it is anticipated more listings will come on the market due to seasonal fluctuations), pending sales increasing, and closed sales over the previous year.
Weakening of the market will reflect just the opposite.
Another consideration to be explored is how developments or subdivisions where subprime borrowing took place may affect the overall performance statistics for the overall Naples home market, and leaving both sellers and buyers with what could be incorrect perceptions. An example of this is being seen in the drastic decline of the median price paid for homes during the month August in the year over year analysis; however, after excluding some developments or subdivisions the median price decline is not quite so drastic. Proving once again that real estate is so local that it has to be looked very closely.
August Activity:
Listings:
During the month of August 711 Naples homes were listed for sale. For the same month in 2007, 838 homes were listed for sale; this represents a decrease of 15.2 percent. The decrease from 2006 was 17.4 percent from the 833 new listings.
In July 2008 there were a total of 837 homes listed for sale.
The available for sale Naples homes have dropped from 6386 in February 2008 to 5247 at the end of August. This represents a reduction of 1139 or 17.8 percent.
The number of months of inventory or the absorption rate is presently 29 months down from February’s 38 months.
Additional detailed information will be posted to explain where the listings and identification of where distressed properties and non-distressed properties are located for a better understanding of the Naples real estate market for both buyers and sellers.
Closed Sales:
A total of 201 homes were sold during August 2008. Comparing the same month in 2007 there were a total of 164 homes sold, the higher volume of 37 homes represents an increase of 22.6 percent. In August 2006 a total of 195 homes were sold or an increase of 3.1 percent (or 6 more homes).
In July 2008 a total of 205 homes closed or 4 fewer homes.
Homes with a sales price of less than $200000 represented about 33.8 percent of the total 201 homes closed.
Homes with a sales price between $200000 and $300000 represented another 20.6 percent.
Four areas within the Naples area accounted for 37.7 percent of the August closings - Golden Gate Estates (20.6 percent), Golden Gate City (9.8 percent), Naples Park (3.9 percent), and Verona Walk (3.4 percent).
Pending Sales:
In August 2008 329 homes were placed under contract or pending for closing (pending sales are where a buyer and seller have agreed on the price and terms of a purchase and the condominium is no longer available for sale). The 329 homes is an increase over the 160 homes (106 percent) in 2007 and 202 homes (62.9 percent) in 2006.
August 2008 was higher than the 293 homes in July 2008 and lower than the 313 homes in June 2008.
Median Price Paid:
During the month of August the median price paid for a home was $265,000. In the previous year, 2007, the median price paid was $404000 or a reduction of 34.4 percent. In 2006 the median price was $434000 or reduction of 38.9 percent compared to August 2008.
In July 2008 the median price paid was $300,000 down 11.7 percent on a month to month basis.
Referring back to closed sales the areas comprising the largest percentage of closings in August shows the following:
- Golden Gate Estates - $164000 a reduction in value of 54.4 percent from the 2007 median price of $359900.
- Golden Gate City - $150900 a reduction in value of 38.4 percent from the 2007 median price of $245000.
- Naples Park - $247000 a reduction in value of 36.7 percent from the 2007 median price of $390000.
By excluding the above areas, the median price paid for a home in the Naples area was $369000 in August 2008 compared to $421950 or a reduction of 12.6 percent.
The analysis of the median price paid shows sellers and buyers should not only be aware of national, state, or area (city or town), but also by development or neighborhood to make an informed decisions in the real estate market.
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