August 20, 2007 Emailing - Naples Real Estate

Hello everyone. It's been 2 months since the last mailing. Have I been on vacation? I wish. Some time off? You must be kidding. Nope, Jan, Denise, and I have been a little busy with some Buyers both visiting from up North and also from the U.K. I know, you thought Florida had fallen off the map with insurance costs, taxes, hurricanes, a collapsing real estate market, etc. But things are slow and steady. Are you waiting for your local or national paper to tell you "You should buy in Florida now."? Think about it.

In a nutshell as of right now:

The current real estate slowdown started in June/July 2005.

Prices peaked in late 2005.

It was obvious that there was a concern in early 2006. (6 months after the insiders knew).

Prices dropped heavily from the summer of 2006 till the end of 2006.

Prices have dropped at a much slower pace since early 2007.

Overall prices have dropped 20% to 40% since the peak. We are now into late 2004 prices.

Inventory increases in our area, caused by investor pre-construction properties, have stopped. That inventory "wave" is over.

Naples inventory, at this time, peaked in late March 2007 and has been declining slowly every month since. It has basically remained unchanged since early August.

Price decreases are less now because the large amount of equity "fluff" is gone. Sellers could easily cut $20,000 or $30,000 off their asking price because the unit was up $100k or more. No big deal. But those days are pretty much gone. We see smaller decreases now as some asking prices approach purchase price or mortgage balance. The word "profit" is not in Sellers' vocabulary as much as it was a year ago. Offers of 10% to 20% off listing price, which were common 6 months ago, are occurring much less. People are looking for a deal. What is that? 35% off the high? More? An educated Buyer has a plan on when to make their move and what information or who will guide them in that decision. If you are getting your real estate information from your local/national paper or a TV news broadcast, well, have a good time.

The bottom will be in the numbers. Just as the top was in the numbers. Again I say..."Inventory is everything". Inventory levels have been slowly decreasing since the end of this past March. Inventory increases cause by pre-construction are over. Those properties have been built, delivered, and listed. This does not mean prices will definitely stop coming down. It just means that part of the inventory supply is done with. Selection is good, both for new and resale.

Many of you know I have not been someone who has been screaming "Now is a good time to buy" like many of my comrades. Actually, I have just about no respect for any Realtor that routinely uses that line. If now is a good time to buy, what was 6 months ago or what is 6 months from now? Here are a few of my past quotes:

October 23, 2006
Remember, most believe the real estate market in Southwest Florida is a January to April event. So they will wait till December or January to re-list their home. Along with other owners who had already planned on listing for the 2007 season in the first place. The result? An even greater swelling of inventory in early 2007. And more inventory equals price declines. Many, many sellers will want their unit sold by April because they believe the buyers will then disappear. And for you, the buyer, time to party! Is this the bottom? I'm not going there. Ask me in May 07. Should you wait till March? Maybe. But if you will be looking to buy in the next several months, you can bet on aggressive pricing offers for new construction or existing homes.

November 6, 2006
You can easily find a Realtor that will tell you "now is a good time to buy", "prices are at their best levels now", "you'll never get a better deal", "the market is just fabulous", "prices will go up soon", and on and on... But a little harder to find one that will tell you to be cautious, do the research, watch the inventory levels, offer 10%-20% less than asking price, and maybe wait a little bit.

January 16, 2007
We are currently running at all time highs on inventory level. Look for motivation in May after season for those that do not get a buyer in the next 4 months.

February 26, 2006
At some point, as the number of new homes purchased by investors in 2005 and 2006 to resell come to close, I would expect inventory to start to stabilize. However, even at that point, I believe prices will still be under pressure.

May 14, 2006
Inventory seems to have peaked around late March and has been decreasing since. The BIG question is - Is that it? Will late March 2007 be the highest point inventory-wise or will we be higher in March 2008? One thing that led to this was the additional inventory of new homes and condos purchased to be resold. But that large increase of inventory most likely won't happen again because the cycle is basically over. In other words, the large percentage of those particular properties are completed or listed. Though we may have peaked in that respect, prices should remain under pressure thru the summer.

Season 2008. Well, I think it's somewhat safe to say that there may be some pent up demand after more than 2 years. Many have been on the sidelines for quite a while. The lower priced condos are down 35% and more now. Price drops have slowed and we are into pre pre-construction craziness pricing. In other words - 2004. Back when EVERYBODY wanted a vacation condo for $200k. We are getting close again. BUT... Inventory seems to be on a slow descent. Pendings are low as they should be for July and August. The season '08 question is will there be a increase in inventory as there usually is in January/February that will once again put pressure on prices? If so....will I be saying the same thing I did in late 2006? And how much room is left to actually go lower?

There is some mindset of "digging in". Some Sellers have lowered that 30% plus and have decided to simply suffer rather than lower any more. This is obvious as we see less frequent and smaller price reductions. There is oversupply, but we are slowly returning, in price at least, to how things were before the speculative run-up.

I believe in Florida. And I believe in Naples. And I can't go boating 12 months out of the year in North Carolina. And, I'm sorry, but it's cold there in winter. As I write this, I can see nearly half-way across the state out my window to the east and I can see the Gulf of Mexico, McIlvane Bay, and Johnson Bay to my west. It is beautiful. And I will watch the sun disappear again in 2 hours.

But as I have said, the secret weapon is watching those statistics, those numbers, getting the best price you can when you do decide to buy, being sure the community you choose is solid, and using a real estate agent that is not telling you "now is the time to buy".

Ray

A Buyer's Agent, also known as a Buyer's Broker, owes the client specific responsibilities and fiduciary duties that are required by Florida law. These duties are above and beyond a "neutral" transaction real estate agent. Only a Buyer's Agent is bound by law to represent your best interests, provide you as much information as possible, and negotiate on your behalf. There is usually never a fee charged to the Buyer when being represented by a Buyer’s Agent. The Buyer Agent’s compensation is distributed from the Seller’s side of the transaction.

The materials and content contained within this mailing/webpage may not be reproduced without the express written consent of Raymond W. Snow, Jr. The information herein is believed to be accurate and timely, but no warranty as such is expressed or implied. The owners of this webpage will report any copyright infringement to the Internet Fraud Complaint Center and the Federal Bureau of Investigation. The owners are prepared to file a lawsuit to protect its rights and business. We will, in accordance with applicable law, have our attorney file legal action, if necessary, in United States District Court, 11th District, Middle District of Florida located in Fort Myers.