Southwest Florida Home Sales Show a Marked Increase

Bonita Springs – Estero – Naples Real Estate

By D. Michael Burke as printed in The News Press.com 12-March-2011

There is good news to share! We are seeing an increase in Southwest Florida home sales, especially in the Naples housing market. In January, pending sales – or the number of new contracts written – increased nearly 36 percent to 1,101. That compared to 810 contracts in the same month last year, according to a monthly report by the Naples Area Board of Realtors. The point is that we are seeing signs of an upward trend here in Southwest Florida. The weather up North combined with attractive home prices have produced higher pending home sales, as well as renewed confidence in our community.

Shelton Weeks, a real estate professor and director at Florida Gulf Coast University’s Lucas Institute for Real Estate Development & Finance, describes the renewed interest as the “wealth effect.” This means buyers are looking at their portfolios and feel wealthier than last year. They feel more confident, which increases the probability that they will buy a home right now.

However, make no mistake – it is not just the wealthy who are buying homes.

Based on NABORs report, here is the breakdown which compares this January to last:

· Pending sales for properties in the $1 million to $2 million price range increased 63 percent, with 52 contracts written.

· Pending single-family sales increased 40 percent, with 536 contracts written.

· Pending condo sales increased 32 percent, with 565 contracts written.

NABOR’s report tracks sales made through its multiple listing service in Collier County, excluding Marco Island.

With the rise in activity, it turned out to be the second busiest January for new contracts in the past 11 years in the Naples, Bonita and Estero markets. The highest January on record was in 2005, when 1,543 sales went pending in the three markets. For the first time in several years, we are seeing multiple offers on properties and while prices remain stable in general, some areas are already beginning to experience supplies of less than one year.

In January 2009, there was a more than three-year supply of non-waterfront, single-family homes on the market in the Park Shore, Moorings and Seagate neighborhoods. The supply is now down to about a year.

While pending sales rose in January in the Naples market, actual sales declined. There were 507 closed sales, down from 562 in January 2010, according to NABOR’s report.

This is due to the slow down during the last quarter of 2010. Everything after June was down. There were many reasons for the sales slowdown seen after June, including the after effects of the massive BP oil spill in the Gulf of Mexico, the instability of the stock market, the shaky economy and a lack of consumer confidence. These contributing factors caused many to back away from buying because of the oil. They were going to wait until it was settled.

The under $300,000 market continues to see the most activity in the Naples market. There were 377 closed sales in this price range in January, down from 392 in the same month a year ago.

In addition, the number of short sales in the Naples market is at its lowest point in over 19 months. This indicates a significant market change.

NABOR started tracking short sales – sales made for less than what’s owed on a mortgage – in July 2009. In January, 76 short sales closed in the Naples area market. That compared to a high of 142 in June 2010.

Many believe this will be an ongoing trend. There was a time when short sales could take 18 months or longer to close, but are now taking 60 to 90 days to close. More pending sales are traditional transactions, rather than the distressed transactions. About 47 percent of the closings in the Naples area market were foreclosures or short sales in January. In past months, it has been as high as 58 percent. The median price – the price at which half the homes sell for more and half for less – dropped to $156,000 in January, down from $180,000 a year ago, in the Naples area market. The average number of days a property was on the market declined 15 percent to 160 last month, down from 188 a year ago.

In Lee County, members of the Realtor Association of Greater Fort Myers and the Beach Inc. recorded 1,039 single-family home sales in January, up 2.16 percent from the same month a year ago. Month-over-month, closed sales dropped more than 20 percent. The association’s statistics reflect all sales made by its members, not just sales in Lee County.

Currently, there are 1,649 single-family homes under contract in the Fort Myers area market. Pending sales jumped more than 31 percent from December to January, with 393 new contracts written last month. Meanwhile, the median price declined to $81,000 in January, down from $85,000 a year ago and $88,000 in December.

Bank-owned homes accounted for the majority of the sales in Lee County last month. More than 45 percent of sales were foreclosures, 20.9 percent were short sales and conventional sales made up the remaining 33.5 percent of the market.

While these shifts in sales and median prices appear negative, the fact is that they represent the seasonal pattern that has been established in the prior three years. This year, as the cold weather hit early in the Northeast and mid-section of the country, many residents of these northern states are visiting our area to escape the winter cold. With attractive prices and stable inventories, this was when many visitors will decide that this is the time to buy.

In the Naples market, there are 9,388 homes and condos on the market. In the Fort Myers area, there are 6,784 single-family homes in the multiple listing service, or MLS.

Whether you’re visiting Southwest Florida and considering a home purchase here or if you’re a year-long resident looking to buy or sell, the time is clearly now to start planning and looking. Be sure to stay informed by learning as much as you can about the Southwest Florida real estate market. That’s where I come in! You need a knowledgeable agent who can look out for your interests and keep you informed about the market!