The condominiums for sale in Naples continue to show signs of improvement. While still a buyer’s market, the number of condos available for sale increased slightly while the months declined from the previous month.

The month of March started with 4155 condos available for sale in the Naples area. Last March 5207 condos were for sale in a year over year comparison it is a decline of 1052 condos available for sale. This represents a decline of about 20 percent. The month of February started with 4114 condos for sale 41 fewer condos than March.

The graph below shows the number of condos for sale in Naples between the years of 2008 thru 2010.

Number of Naples condos for sale at the start of March

The months of inventory, measures the current demand for condos, in addition, if it is a buyer’s or seller’s market. When the months of inventory ranges between 5 and 7 months, it is considered a neutral market – neither buyers nor sellers have control over pricing. When months of inventory are excess of 7 months the buyers control the market as far as pricing. The reverse is true for when the inventory is 5 or fewer months.

The months of inventory at the start of March was 15.8 months compared to start of last March where there were 30.3 months of inventory. The decline in the months of inventory is about 48 percent representing another sign of the real estate market for condos in Naples is continuing to improve. In addition, the March months of inventory slightly declined from February’s 16.0 months.

The graph below shows the movement in the months of inventory for 2008 thru 2010.

Months of inventory for Naples condos for sale at the start of March

The composition of the condos for sale in Naples (traditional, foreclosures, and potential short sales) is another aspect of evaluating the real estate market. The greater the percentage of traditional sales the more strength within the market place. The percentage of the various types of listings, as noted above, should be reflected throughout the real estate cycle. The real estate cycle is listing, pending sale, and closed sale. When the percentages are inconsistent during the real estate cycle signals issues within a particular type of listing group can be noted and effective decisions made.

Below is a graph reflecting the composition of condominium listings at the start of March.

Composition of Naples condos for sale at the start of March

The condos for sale in Naples continue to show signs of improvement. While still a buyer’s market, the condos available for sale are declining as well as the months of inventory declining.

The month of February started with 4114 condos available for sale in the Naples area. In a year over year comparison it is a decline of 1028 from last February’s 5142. This represents a decline of about 20 percent.

The graph below shows the comparison between the years of 2008 thru 2010.

Naples Condos for Sale - Comparison 2008 thru 2010

The months of inventory, a measure of judging current demand for condominium housing, in addition to if it is a buyer’s or seller’s market. When the months of inventory ranges between 5 and 7 months, it is considered a neutral market – neither buyers nor sellers have control over pricing. When months of inventory are excess of 7 months the buyers control the market as far as pricing. The reverse is true for when the inventory is 5 or fewer months.

The months of inventory at the start of February was 16.1 months compared to start of last February where there were 30.0 months of inventory. The decline in the months of inventory is about 46 percent representing another sign of the real estate market for condos in Naples is continuing to improve.

The graph below shows the movement in the months of inventory for 2008 thru 2010.

Naples Condos for Sale Months of Inventory 2008 to 2010

The composition of the condos for sale in Naples (traditional, foreclosures, and potential short sales) is another aspect of evaluating the real estate market. The greater the percentage of traditional sales the more strength within the market place. The percentage of the various types of listings, as noted above, should be reflected throughout the real estate cycle. The real estate cycle is listing, pending sale, and closed sale. When the percentages are inconsistent during the real estate cycle signals issues within a particular type of listing group can be noted and effective decisions made.

Below is a graph reflecting the composition of listings at the start of February.

Composition of Naples Condos for Sale at the Start of February 2010

The Naples condos market is not as strong a buyer’s market as last year both the number of condos listed for sale and months of inventory is lower than last year. With the reduction of condos for sale and the lower months of inventory, it still remains a strong buyers’ market.

As of the first of January there were a total of 3988 condos for sale. At the start of January 2009 a total of 4939 condos were listed for sale. This represents a reduction of 951 condos or roughly 19 percent.

Below is a graph depicting the change in the number of condos for sale at the end of the month for the immediate past 2 years.

Number of Naples condos for sale over 2 years

Another measure of the changing market is the months of inventory available for sale. This year the months of inventory is 16.5 months. Last year the inventory was 28.7 months. This is a reduction of 12.2 months in a year over year analysis. Buyers and sellers should monitor this statistic – months of inventory of 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.

Naples condo inventory for sale over 2 years

Another important aspect of Naples condos for sale is the composition of the various types of listings.

Traditional listings are condos 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 condos listed for sale and are bank owned properties.

Short sales are listings where the seller a property owner (seller) is attempting to sell the condominium and the value of the condominium is such that when the condo 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 a local 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 condos for sale

The condominium market for the Naples real estate area at the start of September 2009 declined down to 4095 units for sale. In the year over year comparison the number of unit declined 580 or about 12 percent from the 4675 condominiums on the market in September 2008.

The September 2009 was also a decline from the August 2009 4248 condominiums on the market. The decline represents a about 3.6 percent reduction.

The graph below shows the inventory of condominiums for sale since January 2008:

Naples condos for sale - September

The composition of various types of possible real estate transactions of the September condos for sale are broken down as follows:
Traditional condos for sale – 3482
Potential short sales – 533
Foreclosed condos – 80

The pie chart below shows the breakdown in a graphical format:

Composition of Naples Condos for Sale - September

In August the breakdown of condos for sale was as follows:
Traditional sales – 3629
Potential short sale – 542
Foreclosed condos – 77

Overall the number of Naples condos for sale declined from the previous month, the composition remained the same with the largest drop in the traditional condos for sale.

The available condos for sale in the Naples area saw a drop in the number of condos for sale as of the end of April or start of May. The current number of condos for sale is 4954. This represents a drop in the inventory of 274 condos from the end of March. The decline represents of about 5 percent. In the year over year analysis the current inventory represents a decline of 369 condos or about 7 percent. Below is a graphical presentation of the historical data for active listings by month from January 2008 to April 30, 2009.

Naples Condos For Sale - January 2008 to April 2009

The composition of the type of listings available for sale is rather interesting and could represent a major difference between prospective buyers’ perceptions, as well as, what is being reported by others as to how dire the Naples real estate market is. The vast majority of listings fall within the traditional listing category (traditional listings are listings being offered as a normal sale), followed by foreclosures, and potential short sales. The raw numbers for the various categories are 4289 for traditional listings, 595 potential short sales and 70 foreclosures.

Composition of Naples Condos for Sale

A question arises – do the closed sales for April reflect the classification of the listings? The answer to this question will appear on this blog sometime between May 8 and May 11.

Your thoughts and comments are always welcomed.

The graphical presentation of condos for sale in the Naples area shows; at the close of business on March 31st or the opening of business on April 1st, there were a total of 5228 condos for sale in the Naples area. In March 2008, there were a total of 5586. Between the years, there has been a reduction of approximately 358 condos for sale or about 6 percent.

The condos for sale at the end of February or the opening of business on March 1st was 5207. An increase from the end of February to the end of March was an increase of 21 condos.

During the month of April the end of “the season” occurs. As time moves forward the number of condominiums for sale may show a reduction in the number for sale as represented in the graph below, for the months of April to November in 2008.

Condos for Sale in Naples - February 2008 to March 2009

The number of available condos for sale, is one component for the calculation of months of condos available for sale. The other component is the average closed sales for the immediate past 12 months. It would appear at this time the months of inventory of condos for sale should be lower than it was in February.

Other factors influencing the condo market in addition to closed sales are pending sales. Pending sales reduce the number of available condos.