Real Estate Market Update March/06

This web site was established to assist Cedar Hammock, Forest Glen, Naples Heritage and Naples Lakes homeowners with information on the real estate market in these communities. With the changing market conditions we've seen these last several months it is very easy for folks to be misled with all the different news reports that sadly are not always current with the actual information. As many of you know we started to see the Naples real estate market change last July 2005. Over these last few months, we've gone from a strong sellers' market to a strong buyers' market with sales down in the Naples area these last few months. Resales were down 43.5% in October/05, 47.5% in November/05, 53% in December/05, 60.5% in January/06 and down 67.5% in February/06 for the same period a year ago. The figures used for these calculations were the leading indictors, the number of pending sales for the month reflecting the actual activity for that month. With activity slowing, the inventory of properties for sale increased and prices are moving lower on weak demand. At the present time, we have 260 properties for sale in the four communities with 66 in Cedar Hammock, 83 in Forest Glen, 38 in Naples Heritage and 73 in Naples Lakes. So far this month, March/06, we've had 117 price changes in the four communities, showing the continued downward trend in prices.

In a market that is correcting, it's difficult many times to fully understand that market values are changing. As we all know the price of property is established by a willing seller and a willing buyer. When a market is correcting it's generally telling us that prices have gone to high for any number of reasons and is correcting to a level that buyers are willing to pay for a property. In the last couple years some folks purchased property on speculation for they felt prices were going to continue higher. Most buyers in the market presently are looking at the cost of ownership to value. For the most part we have two types of buyers; those who are looking at larger properties like estate homes or detached villas having different reasons for their purchases; and those looking at smaller properties like condos, verandas and garden homes who are more seasonal users looking at the cost of ownership to value. Many buyers, with prices at the level they were and the amount of time they were using the property, simply could not justify the price. With the present market conditions we can expect the downward trend in prices to continue and once prices reach a level that we see buyer interest again, prices should flatten and could remain flat for some time with future price appreciation at a more normal rate, but likely from a lower level than the price level today. Also, we are seeing prices on the smaller properties moving lower, more than on larger properties causing the difference in prices between the smaller and larger properties to become wider.

We'll keep this site updated regularly with information available that may be helpful for homeowners looking at purchasing or selling. Should anyone have a specific question please feel free to contact me.