The Naples real estate market for the month of March is continuing to show strengthening. The buyer’s market continues, however, it weakening especially since last year.

HOMES:

Homes available for sale, as of March 31 – totaled 3784. Of this total 659 were potential short sales, and 136 were foreclosures. This translates to 10.8 months of inventory (normal market is between 5 and 7 months) versus last year 21.1 months. This statistic most clearer reflects the higher level of sales activity of homes in the Naples area.

A total of 366 homes closed in March. Last March a total of 318 homes were closed.

Pending sales for the month of March was 700 homes versus last March’s figure of 575 homes.

The median sold price for a single family home in the Naples in March was $244000 in a year over year comparison March 2009 saw the median sold price at $177200.

An indicator of future closed sales in addition to the current month’s pending sales, is the total number of pending sales. The total number of pending sales includes not only the current month (700), but also an cumulation of those homes which have not yet closed from previous months. The total pending sales as of the end of March was 1370 homes. Of the 1370 homes, 735 were potential short sales and 185 were foreclosed homes (bank/lender owned).

CONDOS:

Condos available for sale as of March 31 – totaled 4036. Of this total 426 are potential short sale condos and 83 foreclosures. This translates to 14.9 months of inventory versus last year’s 29.9 months.

A total of 377 condos closed in March versus last March where 263 condos were sold.

Pending sales for the month of March was 627 versus last March’s figure of 465.

The median sold price for a condo in the Naples area was $165000 compared to last year’s median of $164000.

The indicator of future closed sales in addition to the current month’s pending sales is the total pending sales. In March a total of 1141 condos were pending sale. Of this number, 529 were potential short sales and 81 foreclosures.

The statistics used for this post were taken from the Sunshine MLS on April 1st using data obtained for the month of March.  The March data is primarily at this time, the final statistics are generally available on the fifth business after the end of the previous month.

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

The month of February started with 3814 homes available for sale in the Naples area. In a year over year comparison it is a decline of 1538 from last February’s 5352. This represents a decline of about 29 percent.

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

Naples Homes for Sale at the start of February

The months of inventory, a measure of judging current demand for 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 11.1 months compared to start of last February where there were 23.7 months of inventory. The decline in the months of inventory represents another sign of the real estate market for homes in Naples is continuing to improve.

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

Months of Inventory - Naples Homes for Sale

The composition of the homes 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 Homes for Sale in Naples - February

Tivoli Model in Caldecott Under Construction at Lely Resort

The other day I toured the Caldecott neighborhood of Lely Resort and saw a Tivoli model home under construction. A home which has no specific buyer and being constructed by a builder is called a “spec” home.

It was quite interesting to see a home under construction, although most of the major work had already been completed, there was still finishing work to be done, as well as, finishing of the pool and spa and the addition of the screened dome or pool cage.

The home has about 2723 square feet of air conditioned space and has a wide lake view from the master bedroom, breakfast nook, lanai and pool area.

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 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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Naples Florida homes for sale at the beginning of October was 3698 last year. There were 5244 homes for sale in September. This represents a reduction in the total number of homes for sale by 1546 or about 30 percent,. During the month of August. There were a total of 3777 homes for sale. The 3698 available homes for sale represents a decrease of approximately 2%.

The graph below shows shows the active number of listings for the period January 2008 to September 2009.

Naples homes for sale showing 2008 and 2009

The composition by type of listing is shown below in the pie chart.

October composition of homes for sale in the Naples area

The breakdown by type for the above:
Traditional - 2814
Potential short sales - 760.
Foreclosed - 124.

The breakdown by type of potential real estate transaction for August is shown below in the pie chart.

September composition of homes for sale in the Naples area

The breakdown by type for the above:
Traditional 2867.
Potential short sales 773.
Foreclosed 137

A factor, which supports an improvement in the Naples real estate market for single-family homes is the months of inventory. The current months of inventory is slightly below 12 months whereas in August. The months of inventory was likely above 12 months last year the number of months was 27. This represents a reduction in excess of 50 percent.

The line graph below reflects the months of inventory over the period of January 2008 two September 2009.

Months of inventory - homes for sale

During the one of October historically, there is a sick depth against increase in the number of new listings that come on the market. The question is will wield the number of active listings as well as the months of inventory available for sale. Continue to show declines.

Listings:

The new listings for the month of August 2009 were 468 condos in the Naples real estate market. The number of condos listed in August 2008 was 513. The decline of new condo listings coming on the market condos was 9 percent. In August 2007, the new listings were 564, representing a drop of 96 condos or decline of 17 percent.

In July 2009 the new listings were 557.

Of the 468 condos listed approximately 20 percent were potential short sales, 12 percent were foreclosed (bank owned), and the remaining 68 percent were traditional listings.

Median list price for potential short sales was $129000, foreclosed properties were $86200, and traditional listings were $239500.

Closed Sales:

In the month of August 2009 the number of condos sold was 204. In August 2008 a total of 171 condos were sold. The year over year was 19 percent increase. In August 2007 a total of 122 condos were sold. The increase over 2007 was 82 condos or about a 67 percent.

Of the 204 condos sold, approximately 11 percent were approved short sales, 21 percent were foreclosures, and the traditional sales were 68 percent.

A graphic presentation for the composition of the closed sales is shown below.

Composition of sold condos in Naples for August 2009

The breakdowns of the median sold prices are discussed in the median sold price section below.

Pending Sales:

During August 2009 a total of 341 condos had an offer accepted by the seller. In August 2008, 184 condos had offers accepted. The increase from August 2009 represents an increase of 157 condos or about 85 percent.

In August 2007 a total of 110 condos were pending sale. The increase between August 2009 and August 2007 was 231 condos or about 210 percent.

The total number of condos pending sale in the Naples area as of the end of August 2009 was 4095. The graph below reflects the composition of these pending sales.

Composition of Total Pending Sales for Naples

Median Sold Price:

During the month of August 2009, the median sold price of a condo in Naples was $163500. The median price is the sold price represents the middle value of the all sold prices within a stated range. The median sold price can vary from area to area within a local real estate market.

In August 2008, the median sold price was $216000. In the year over year comparison median sold price declined $52500 or roughly 24 percent.

In August 2007 the median sold price was $285000. In comparing August 2007 to August 2008 the price declined $121500 or about 43 percent.

Median sold price for approved short sales was $123900, foreclosed properties were $63600, and traditional listings were $218900.

The difference between the list price and sold price for approved sales was about 81 percent, foreclosed properties 95 percent, and traditional listings 90 percent.

Listings:

The new listings for the month of August 2009 were 608 homes in the Naples real estate market. The number of homes listed in August 2008 was 797. The decrease in the number of new listings of homes was 189 or about 24 percent. In August 2007, the new listings were 950, representing a reduction of 342 homes or a decline of 36 percent compared with August 2009.

In July 2009 the new listings were 728.

Of the 608 homes listed approximately 27 percent were potential short sales, 20 percent were foreclosed (bank owned), and the remaining 53 percent were traditional listings.

Median list price for potential short sales was $165000, foreclosed properties were $119800, and traditional listings were $399000.

Closed Sales:

In the month of August 2009 the total homes sold were 331. In August 2008 a total of 220 homes were sold. The year over year was 51 percent increase. In August 2007 a total of 164 homes were sold. The increase over 2007 was 167 homes sold or about a 102 percent.

In July 2009 the number of homes sold was 400.

Of the 331 homes sold, approximately 18 percent were approved short sales, 39 percent were foreclosures, and the traditional sales were 43 percent.

The pie chart below shows the composition of closed sales in graphical format.

Composition of homes sold in Naples for August 2009

The breakdowns of the median sold prices are discussed in the median sold price section below.

Pending Sales:

During August 2009 a total of 518 homes had an offer accepted by the seller. In August 2008, 274 homes were pended. The increase from August 2009 represents an increase of 244 homes or about 89 percent.

In August 2007 a total of 160 homes were pending sale. The increase between August 2009 and August 2007 was 358 homes or about 224 percent.

The composition of  the August 2009 homes pending for sale in the Naples area is shown below.

Composition for the month of August pending sales

The total number of homes pending sale in the Naples real estate market is 1133. The pie chart below shows the percentage break down.

Composition of Total Pending Sales for Naples

Median Sold Price:

During the month of August 2009, the median sold price of a home in Naples was $185000. The median price is the sold price represents the middle value of the all sold prices within a stated range. The median sold price can vary from area to area within the local Naples real estate market.

In August 2008, the median sold price was $257750. In the year over year comparison the median sold price declined $72750 or roughly 28 percent.

In August 2007 the median sold price was $404000. In comparing March 2007 to March 2008 the price declined $219000 or about 54 percent.

Median sold price for approved short sales was $190000, foreclosed properties were $118000, and traditional listings were $304500.

The difference between the list price and sold price for approved short sales was about 93 percent, foreclosed properties 99 percent, and traditional listings 88 percent.

The Naples real estate market for condos is starting to show signs of strengthening in many aspects and prospective buyers should be aware of the positive changes. The statistics presented and discussed below are global in nature for the Naples area and do not represent the more important micro-market views which can vary greatly from the global view.

Listings:

During the month of May a total of 536 condos were listed for sale. In May 2008, the number of condos listed for sale in the Naples area was 599. In addition the 536 condos listed for sale was less than the 757 condos in May 2007. The downward trend of new listings is continuing. The volume of listings in January were 990, February with 745, March with 771, and April with 657. Other than October 2008, the listings for May was the lowest number over the past 4 years.

The listed condos in May 2009 was the lowest number of homes listed since October 2005. The noteworthy item about this fact, is that in October 2005, was the start of the real estate erosion even though the median sold price of homes peaked in January 2007 with January 2006 as the next highest median sold price month.

Pending Sales:

During the month of May 2009, a total of 375 condos had offers accepted by sellers (pending). The figure for pending condo sales in May represents a substantial increase over both May 2008 and May 2007 were the pending sales were 217 and 207, respectively. The increase represents 73 percentage upwards change over May 2008 and a 81 percentage increase. The increase in pending sales for May can largely be attributable to the lower median sold prices of condos.

Over the past 9 months the number of pending sales in the Naples area have showing an upward trend from 118 condos pended in September 2008. In addition, the past 3 months have had the highest volume of pended condominiums over the past four years.

Closed Sales:

There were a total of 287 closed (sold) in May 2009. In a year over year analysis, the 287 sales is higher than May 2008 and May 2007, where 223 and 218 sales respectively took place. The sales in May represents a 22 percent increase and 32 percent over May 2007 and May 2008, respectively.

The closed sales in May, represents the highest number of homes sold since September 2005.

Since January 2009, the number of condos sold has been on a strong upward trend. This is the continuous of an upward trend starting in January 2009. The immediate past three months of closed sales is highest since September 2005.

The increase is largely due to the lower median sold price of condos in the Naples area.

Median Sold Price:

The median sold price (the sold price at which half the condos sold and half below) for May 2009 was $167000. This figure may not be good news for existing homeowners or sellers, but it is good news for prospective buyers. However, prospective buyers need to be aware that since January 2009, the median sold price for a condo in Naples has been ranging from $178000 to $167000. Over the past 2 months the median sold price has been showing a slight upward trend.

The median sold price in May represents a 36 percent decline from May 2008 when the median sold price was $262500 and a 45 percent decline from May 2007 when the sold price was $301500.

The lower median sold price has a direct affect on the increased volumes for pending sales and sold condos. The lower volume of new listings could have an eventual impact on the median sold prices, as the volume of new listings coming on the market for condos declines. Can the current statistics represent a stabilization of the Naples condo real estate market or has the bottom of the real estate been realized? Only the national economy and time will tell.

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 available homes for sale in the Naples area saw a drop in the number of homes for sale as of the end of April or start of May. The current number of homes for sale is 4756. This represents a drop in the inventory of 441 homes. The decline represents of about 8 percent. In the year over year analysis the current inventory represents a decline of 1037 homes or about 18 percent. In addition, the number of home available for sale is at the lowest level since January 2008. in January 2008 there was a total of 6270. Therefore, the decline is 1514 or about 24 percent. Below is a graphical presentation of the historical data for active listings by month from January 2008 to April 30, 2009.

Naples homes for sale

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 3624 for traditional listings, 951 potential short sales and 181 foreclosures.

Classification of Listings for Homes in Naples

Your thoughts and comments are always welcomed.

Home Valuation Code of Conduct Changes Effective May 1, 2009

The Federal Housing Financing Agency’s Home Valuation Code of Conduct (Code, or HVCC) will be effective on May 1, 2009, and will require that the lender order the appraisal. The intent of the Code is to help ensure that borrowers, homebuyers and secondary mortgage market investors receive fair and independent property valuations.

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.

Naples Homes For Sale - February 2008 to March 2009

As of the end of March 2009, there were a total of 5,197 homes for sale in the Naples area. Compared with March 2008 there was a reduction of 819 homes or about 14 percent. This also represents a reduction in available homes for sale from February of 100 homes.

The number of active listings is determined on April 1st based upon the close of business on March 31st.

After the 5th business day of April an analysis of the months of homes for sale inventory will be posted on this blog for prospective buyers and sellers.

A frequent question asked in today’s real estate market is “How much will a lender or bank discount the list price of a foreclosed single family home which they own in the Naples area?”

One individual stated that banks are selling these properties with a discount of 25% from the list price or 75% of the list price.

In today’s real estate and traditionally over the past decade, it has the practice of lenders, banks and REO (real estate owned) service companies to request either an appraisal of the home by an appraiser or a broker’s price opinion (BPO), perpared by a real estate broker or agent, for the subject home to determine the estimated market value. Periodically, during the time the home is for sale, the estimated market value is reassessed using a BPO.

A study of closed sales during the month of February 2009 for Naples single family homes did not support this statement. The actual difference in terms of percentage between sales price and list price was 10.16 percent or 89.16 percent from the current list price. When looking at the original list price the sales price to list price ration was 18.45 percent or 81.55 percent.

Prior to making a purchase a prospective buyer should have a comparative market analysis done rather than looking at the list price and have a pre-determined percentage of discount from the list price set in their minds. The above percentages between sales price and list price can be used only as a guide in opening the negotiation process.

During the month of February 2009 a total of 228 homes were sold with a median sold price of $211,300 for the Naples area.

The number of homes sold when compared with February 2008 shows an increase in sales volume of 85 homes or roughly 59.4 percent.

The February 2009 homes sold also represents an increase over February 2007 by 81 homes or roughly 55.1 percent.

In addition the 2009 homes sold figure is 25.3 percent higher than February 2006 by 46 homes.

The median price of a single family home sold in the Naples area does reflect a devaluation from the median sold price of $400,000 in February 2007 or $188,700, which translates to roughly 47.2 percent.

In February 2006 the median sold price was $445,000. The devaluation is $233,700 or roughly 52.5 percent.

The $211,300 median sold in February is higher than the median price paid in the months of November, December and January, where the median sold prices were $204,000, $204,500, and $188,200, respectively.

Noteworthy is that the areas of Golden Gate Estates ($102,500), Golden Gate City ($79,900), Naples Park ($184,000) and Naples Manor ($60,000), where there is a high volume of foreclosures and potential short sales when removed from the sold homes the median sold price was $395,000 in the Naples area or roughly 34.7 percent from the median sold price in February 2008, when deducting the above referenced areas. The median sold prices for the referenced areas are shown in parenthesis.

For buyers the above data is important to keep in mind when looking for homes in the Naples area.

Within the immediate 4 months of median sold prices relatively close, it could suggest that prices are bouncing at the bottom of the market. The bottom of the market can be impacted by the current economic conditions being experienced without the United States.

Pending sale for the month of February 2008 was 484 homes. A pending sale is where a seller and buyer have agreed to both price and terms to sell the home and has been removed from the homes available for sale. The 484 pending home sales was the highest since May 2005. Over the past four months there has been a steady increase in the number of pending sales. Pending sales represent future sales of homes.

New listings coming on the market in February was 848 homes which is less than in previous February’s dating back to 2006. In February 2008 – 996; February 2007 – 1002; and February 2006 – 1,139.

In summary, the month of February the number of homes closed increased over the prior three years, median sold price has declined from previous years but the largest declines are in four neighborhoods, the volume of pending sales is the highest since May 2005, and fewer new listings came on the market than in the past three years.

The number of Naples condominiums available for sale at the beginning of October was 4716. The absolute number of listings increased by 41 condos over the 4675 listings at the beginning of September. Therefore, the months of inventory remained stable at 29 months. Viewing the months of inventory for the 12 month moving average trend shows a downward trend from February. The months of inventory in February was 37 months, while at the beginning of October it was 29 months.

Graph for the number of months for Naples condos available for sale.

The 3 month moving average is showing an upwards trend due the volume of closed sales declining while the number of available condos for sale have remained fairly stable around the 4700 level.

The 6 month moving average for the current period is showing an upward trend due to the closed sales declining.

The 9 month moving average trend is flat due to the declining closed sales.

The Naples condo market remains a strong buyers market. In the next couple of days more market condition reports will be posted here.

You may want to see a future graph depicting why purchasing a condominium residence should be a serious consideration at this time, if you are thinking about making a condo purchase.

The actual number of Naples homes for sale remained level from September to October, with fewer homes for sale by 3. The total available homes was 5247 in September versus 5244 in October. However, due to the level of closed sales the months of inventory for Naples homes for sale has decreased one month from the beginning of September (29 months) compared to October (28 months). Since the beginning of February 2008 with 38 months of inventory, the months have dropped 10 months to its present level. The reader should review the graph as not only does it measure the absorption rate based upon a 12 month moving average, but reflects the 3, 6, and 9 month moving average.

The real estate market for Naples single family homes still remains a strong buyers market. A neutral market is generally around 6 months of inventory.

Below the presentation is a discussion of the meaning for the various absorption rates and how they may influence your decision for selling or buying real estate.

The 3, 6, or 9 month moving average reflects the relationship of closed sales over the immediate past three, six or nine months and the number of homes on the market for sale.

When the trend line for these moving averages decline it is the result of an increase in closed sales with a constant level of homes available for sale or a constant number of closed sales with a declining number of homes for sale. A decreasing trend line represents movement towards a sellers market.

An increasing trend line reflects a lower volume in closed sales with a constant level of homes available for sale or a constant number of closed sales with an increasing number of homes for sale. An increasing trend line represents a movement toward a buyers market.

In the above graph the only trend line moving upwards is the 3 month moving average, due to closed sales over the immediate 3 months being lower than it is was in earlier months, while the number of homes for sale remained fairly constant or only slightly declining.

The remaining trend lines do reflect a downward trend due to the volume of closed sales in the months being higher than in the immediate 3 months.

Trends over a short period of time can be misleading due to seasonal fluctuations for new listings, which become available for sale, or closed sales.

The months of October and January generally are the highest months for new listings.

Shortly, the Naples real estate market update report for Naples homes covering both the month and quarter ended September 30, 2008 will be posted within this blog.

August Naples Condo Activity:

Listings:

During the month of August 458 Naples condominiums were listed for sale. For the same month in 2007, 560 condominiums were listed for sale; this represents a decrease of 18.2 percent. The decrease from 2006 was 32.7 percent from the 680 new listings.

In July 2008 there were a total of 499 condominiums listed for sale.

The available for sale Naples condominiums have dropped from 5582 in February 2008 to 4675 at the end of August. This represents a reduction of 907 or 16.3 percent.

The number of months of inventory or the absorption rate is presently 29 months down from February’s 37 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 condo real estate market for both buyers and sellers.

Closed Sales:

A total of 157 condominiums were sold during August 2008. Comparing the same month in 2007 there were a total of 122 condominiums sold, the higher volume of 35 condominiums represents an increase of 28.9 percent. In August 2006 a total of 121 condominiums were sold or an increase of 29.8 percent (or 36 more condominiums).

In July 2008 a total of 155 condominiums closed or 2 more condominiums.

Condominiums with a sales price of less than $100000 represented about 9.3 percent of the total 157 condominiums closed versus 1.6 percent in August 2007.

Condominiums with a sales price between $100000 and $200000 represented another 35.4 percent compared with 2007 where the percent was 16.4 percent.
Condos sold with sales price of between $200000 and $300000 represented 20.5 percent of the closings versus 34.4 percent in 2007.

Eight developments within the Naples area accounted for 31.7 percent of the August condo closings – Park Shore (11.8 percent), Pelican Bay (4.3 percent), Vanderbilt Beach (3.1 percent), Cypress Woods Golf and Country Club (2.5 percent), Falling Waters (2.5 percent), Fiddlers Creek (2.5 percent), Pelican Marsh (2.5 percent), and Stratford Place (2.5 percent).

Distressed properties (short sales, pre-foreclosure, and foreclosures) represented 17.9 percent with median price of $135000.

Pending Sales:

In August 2008 200 condominiums 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 200 condominiums is an increase over the 110 condominiums (81.8 percent) in 2007 and 131 condominiums (52.7 percent) in 2006.

August 2008 was higher than the 155 condominiums in July 2008 and greater than the 173 condominiums in June 2008.

Median Price Paid:

During the month of August the median price paid for a condo was $215000. In the previous year, 2007, the median price paid was $285000 or a reduction of 32.6 percent. In 2006 the median price was $319900 or reduction of 32.8 percent compared to August 2008.

Non-distressed condominium sold for median price of $231500, compared with a median sale price of $135000 for distressed (short sales, pre-foreclosure, and foreclosed) condos.

In July 2008 the median price paid was $250000 down 14.0 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:

• Park Shore – $1425000 an increase in value of 46.2 percent from the 2007 median price of $957500.

• Pelican Bay – $572500 a reduction in value of 40.2 percent from the 2007 median price of $957500.

• Vanderbilt Beach – $950000 an increase in value of 60.3 percent from the 2007 median price of $592500.

• Cypress Woods Golf and Country Club – $149500 a reduction in value of 19.2 percent from the 2007 median price of $185000.

• Falling Waters – $173,700 a reduction in value of 15.3 percent from the 2007 median price of $205000.

• Fiddlers Creek – $279999 a reduction in value of 41.7 percent from the 2007 median price of $480000.

• Pelican Marsh – $422500 an increase in value of 1.8 percent from the 2007 median price of $415000.

Short sale condos had a median price of $180000, while foreclosed condos sold for a median price of $133000.

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 condo real estate market.

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.

Hurricane Ike’s cone is still showing it is tracking to south and west. For the Naples, Bonita Springs and Estero areas of Florida it means the center of the storm may pass within about 200 miles of the coastline which disminishes the chances of the area feeling the full brunt of Ike.

The track towards the south does not help our friends in the Gulf Coast areas as the storm appears it will not pass over the mountainous areas of Cuba. It the storm passes over the mountainous areas of Cuba the storm will weaken. Currently the storm is a CAT-4 with winds of 145 mph.

The Florida Keys have started evacuations and hurricane preparations.

Hurricane Ike’s projected path as of this morning shows the cone just south the Naples area. This is better positioning than yesterday mornings projected path and cone. The Naples area may not be affected by Hurricane Ike. With this cone it does appear that Bonita Springs or Estero areas will have any affects from the hurricane. However it is advisable to prepare for the worst and hope for the best.

Updates will be posted throughout the day on this blog.