As you can imagine it is nice to see a ray of sunshine in terms of the Naples area real estate market instead of just that elusive light at the end of the tunnel.
Last week I made two sales. One was a single family home on a canal (no bridges, two minutes if that from the bay) within easy walking distance to downtown for around $800,000. It had previously sold for over a million several years back, and even that person had made a nice buy because shortly thereafter it had probably gone up to a value of 1.4 million.
He did not sell it, however, because he was not an investor and was using it as a vacation home. But now that he WANTED to sell to use his money for something else, he was willing to take a loss rather than wait for prices to head back up. And so our new client made a nice deal.
The other deal is one we made with a developer on a coachhome to be constructed. We asked for a price reduction and some additional clubhouse incentives and are waiting for the answer still. If we get what we are hoping for, our client will close next year on a spacious coachhome with a two-car garage for a bit under $300,000. Previously even in resale, a unit of this quality and caliber would have been in the 500s.
By the way, just because our market is recovering, that does not mean that prices are skyrocketing. There seems to be some confusion on that. Recovering means that people are finally here buying up the bargains (in fact we're seeing multiple contracts on the most extreme bargains). As a result, prices have been going up a bit, but there is still time to get a great deal.
The only problem to that thesis, however, is the person who takes this opportunity to the extreme: has a chance on an "extreme deal", decides he/she is going to make it the "extreme, extreme" deal, loses the deal and then decides he will buy later when sellers come to their senses. Barring a new financial disaster or the "ice age" that will probably not happen since we didn't just hit a bottom here, we hit an extreme bottom. And if you know Naples, you know this is a town that is hard to duplicate anywhere in the nation in regard to beaches, codes, our historic downtown, our tidiness, our community pride, and the top-end price point. It's nice to spend $300,000 in a community where you know someone else is paying upward of 30 to 40 million sometimes, to enjoy the same community, the same amenities, and the same small town charm with big city amenities.
So back to that bitter buyer.
Just because you can't save five dollars on a shirt doesn't mean you shouldn't save four dollars. You don't want to get mad about what you missed and then pay full retail in the end. Around our office we refer to that phenomenon as losing a quarter trying to save a dime. Just be happy you have this rare opportunity and take advantage of it! Buy something before the cycle completely reverses itself. The pendulum does swing both ways.
I also have to laugh about human nature. When most of the true Realtors (those who treat it as a career, not just a way to make a quick buck in good times) realized we had, for the most part, hit the bottom four months or so ago, the Naples News was still reflecting the negative side of everything. And I completely understand that. I was a journalist for years and I still am, so I understand the journalistic tendencey to be cynical and the effort to avoid being a public relations arm. The paper would call me up for interviews and I'd be Polly Perky because as an investor myself and one who has been willing to take the risks associated with expanding my real estate business operation in a down market, my ear has most certainly been glued to the ground. I live this everyday. The journalists don't. And, as we all know, by the time statistics come out and are compiled, they are old.
But anyway, everytime I'd say something positive in any medium, the negative bloggers would come out just beating up all my comments and indicating that I was quite naive or just hopeful. No doubt it has been frustrating feeling like the lone voice in the wind, even among many other Realtors. And whenever the paper did come out with an article tinged in the positive, they understandably so, would qualify it with a negative.
Well now the paper is finally starting to write mostly positive articles because statistics have caught up to the market and the reporters clearly see that the market has turned the corner. And what happens? The bloggers are now beating up on the newspaper about being in bed with the Realtors, etc. Too funny. Not so long ago we were mad at the paper for being so negative and out of touch with what was really happening in the market.
But much of that has to do with the fact that people tend to write and talk when things are bad. That's when most songwriters come out with their tunes. When they are sad and introspective. And when things are better or good most people just run around with big grins on their faces and they don't feel like writing. : ) Can't blame then really. But what the negative people don't realize is by being all "gloom and doom" they only hurt themselves and their communities. And if they are doing that to drive prices down even further so they can finally buy, then they are waiting too long. The time is now to "shut up" and "put up." And I mean that is a nice way. Buy the deals now very quietly because soon everyone will know that what I am saying is valid.
In May, home sales rose again in the Naples area. There were 476 sales, compared to 451 last year, a 6 percent increase, according to a monthly report by the Naples Area Board of Realtors.
Meanwhile, pending sales spiked 37 percent to 578, from 421 a year ago.
The report tracks home sales in Collier County, excluding Marco Island.
The single-family home market saw the most action. There was an 85 percent increase in pending sales and an 18 percent increase in sales last month, according to NABOR.
“Actually, June has been better. It is phenomenal. I cannot tell you how encouraged we are by the activity in June,” said Charlie Hummel, broker for Century 21 #1 Sunbelt Realty off Pine Ridge Road.
His office is seeing a lot of activity at the “very high end” and in eastern Collier County, particularly in Golden Gate Estates.
“A lot of activity is coming from Ave Maria, from people who work out there and they don’t want to live at Ave Maria,” Hummel said.
He said more programs and help are available now for first-time buyers.
“Evidently, FHA loans are more in vogue now,” he said of the low-interest loans that offer lower down payments.
Sue Myhelic, a Realtor and owner of Gulf Breeze Real Estate at Tin City in Naples, describes the buyers as a “mix of people,” including renters that now can afford to buy and foreign investors.
“It really has picked up on the foreign end. I’m working with some people from the UK and some people from Germany right now,” Myhelic said.
For foreigners, Naples has become an even better bargain because on top of the lower prices their money is worth more because of a weak dollar.
She said to see pending sales spike so high is “huge.”
“That is over 5 percent of the listings that we have. So that is fabulous,” she said.
The report shows there are 11,175 listings in the Naples area in the Sunshine MLS, or Multiple Listing Service. That’s down slightly from 11,980 a year ago.
Joe Ballarino, president of Amerivest Realty in Naples, found that pending sales for February, March, April and May were up more than 20 percent in the Naples and Bonita Springs markets over last year. There were 3,052, compared to 2,533 in that period in 2007.
May had the largest gain at 40 percent, with 749 sales, compared to 532 a year ago, according to his research.
More buyers are out in part because of a rising number of foreclosures, which has helped spur lower prices, area Realtors say.
In Collier County, there were 664 new foreclosure filings in May, up from 641 in April.
“It’s not slowing down,” Clerk of Courts Dwight Brock said.
Collier ranked 12th in the state for foreclosure-related filings in May. It had 893, up 413 percent from a year ago, but down 14 percent from April, according to Irvine, Calif.-based RealtyTrac.
Meanwhile, Lee County ranked first in the state for foreclosure filings with 4,311 in May, up 323 percent from a year ago and 26 percent from April. Those filings include notification of pending lawsuits, default notices, and bank repossessions.
“Everyone wants to feel they got a good deal. That is a normal reaction. So whether it be a foreclosure or whether it’s a seller giving on the price, those kinds of factors all make the buyers feel better about their purchase,” said Michael Hughes, a vice president for Downing-Frye Realty Inc. in Naples.
The median home price in the Naples area fell to $350,000 in May, from $389,000 a year ago, according to NABOR’s report.
Overall, home sales for less than $300,000 increased 39 percent with 231 in May, compared to 166 a year ago.
But it’s not just the lowest end of the market that is seeing activity.
Pending sales for homes priced between $300,000 and $500,000 increased 97 percent, and they were up 52 percent for homes priced at more than $2 million.
Overall, single-family home sales increased 18 percent, with 233 in May, compared to 197 a year ago. Single-family home sales in the less than $300,000 category saw a 110 percent increase — at 84.
Condo sales continue to lag behind. They decreased 4 percent, with 243 in May, compared to 254 a year ago. But pending sales increased slightly to 244.
North Naples saw the most sales at 148. That was followed by the Naples beach area with 118 and central Naples with 117.
Hughes called the May numbers both “staggering and encouraging.”
“The story to me is that this is the fourth month in a row that pending contracts have exceeded last year’s, month to month,” he said.
Orlando is seeing the same trend, which tells him that “certain pockets in Florida are showing some significant improvements,” he said.
So far this year, his agents have turned in 1,050 pending contracts to the accounting department.
“I’m pretty happy with that, considering the overall economy,” he said.
Last month, his company had just under 2,000 showings, Hughes said.
The phones keep on ringing.
To view NABOR’s full report, go to http://NaplesArea.com.
