Market Summary......................................................
Investments
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Naples Real Estate Market SummaryFor most of year 2004 and the spring of 2005, Naples was a very hot sellers market. High investor and second home buying demand shrank available supplies, causing prices to escalate 50% or more for most property types. While demand was weakening in 2005, sellers and listing brokers continued to push for higher prices, and listed properties above market values. As such, properties that would have sold if priced correctly, sat unsold. This caused a large increase in properties available for sale. Total availability at the end of 2005 was more than double that of 2004. Expect to see increasing levels of available properties in the upcoming months. Naples is currently a strong buyers market for most property types and price ranges. I can point to instances where sellers have dropped their asking price over 19% and where homes are being priced beneath previously sold comparables. Expect to see this as a more common occurrence in the coming months. Despite weak underlying fundamentals, the insanity buying craze for new construction by investors continues. Investor buying enthusiasm for new construction will grind to a halt in 2006. Property searches a year ago within many price ranges and property types would often return a handful of choices, now results will often yield dozens if not hundreds of choices. Last year if a seller was to price their homes to high, it would still sell, as escalating prices would eventually catch-up to their price. Now homes listed above market values will remain unsold, until the seller drops their price. Homes and condos with features that can truly differentiate them from the competition, along with the few areas showing strength, will fair better during the downturn. Homes and condos that represent just one out of many similar models, will have to differentiate themselves primarily by price. Meaning the lowest priced properties have a chance of selling. With few exceptions, buyers that bought in 2004, will still have great returns. Buyers that bought smartly in 2005 will also be okay. |
