Naples Housing Market Leveling Off

No one knows where the bottom of the Naples housing market might be, but for the first time in months, the number of homes and condos on the market is leveling off instead of growing, according to the Naples Daily News.

The slowdown in the Naples market wasn’t as steep as it was last month, but Naples still leads the state in terms of sluggish home sales compared with last year, the Florida Association of Realtors reported yesterday. Once again, the Southwest Florida city had the steepest year-over-year single-family home sales drop-off in Florida in May.

“While this may be deeper and longer than the other pullbacks we’ve seen, the runup was deeper and longer than we’ve seen, too,” said Dottie Babcock of John R. Wood Realtors.

Babcock said the 2006 sales volume is now closely tracking 2004 levels, signaling a return to a more normal market. The year-over-year numbers continue to show significant declines because 2005 was such an abnormal, red-hot year, say local Realtors.

• The number of single-family home sales in the Naples area dropped 40 percent in May compared with the same month last year. There were 313 single-family home sales in the Naples area in May, compared with 524 in May 2005. That’s not as steep, however, as April’s 45 percent year-over-year decline.
• Condominium sales by Realtors in the Naples area dropped 51 percent in May —- from 590 to 291 —- compared with May 2005.

Despite slow sales, the Naples market (well-documented as the nation’s most overvalued) saw median price appreciation gains of 1 percent in May over the same month last year, from $503,000 to $507,900. The median price for condos dropped 7 percent to $369,200 in May compared with last year.

The market with the second-steepest May slowdown was Tampa-St. Petersburg, with a 35 percent year-over-year drop in existing single-family home sales.

Meanwhile, the inventory of homes and condos for sale seems to be leveling off at an 18-month supply. As of June 13, there were approximately 9,700 homes and condos for sale in Naples, roughly the same number as were on the market in April. Agents say there’s still a large number of condos on the market right now, primarily because of investors seeking to sell.

With inventory gradually rising, sales of existing homes continued to slow in Lee County as well, with 993 single-family homes — 24 percent fewer than a year before — sold in the county last month. The median sales price was $286,500, up 5 percent from a year ago.

Condo sales in Lee also continued to drop, falling to 250, 60 percent below the 620 sales posted last year. Condo median prices were up to $320,800, from $285,800 last year. Lee condo prices showed a slight decrease from last month’s $322,500.

Statewide, the single-family median price was $256,400, up from $249,700 last month and $232,000 a year ago. Nationally, the median sales price for existing single-family homes was $222,700 in April, up 4.3 percent from a year earlier. Due in large part to rising Florida home loan rates, sales in the state continued to slow last month, down 24 percent from last year’s pace. But most experts aren’t worried.

“That’s where it should be for a normal housing market,” Flood said. “We want people to retire here. We want businesses to be able to relocate here.” said Tom Flood of HomeBanc Mortgage. “The market is still trying to find itself.”

Flood and others believe a cooling South Florida housing market can only be good for the state’s escalating affordable housing crisis. In fact, some industry insiders are letting buyers know they have a lot more opportunities now than even a year ago.

“This is an incredibly good time to buy,” Naples Area Board of Realtors President Jo Carter said.

SunshineMLS, which covers Naples, Bonita Springs and Estero, shows year-to-date sales through May. According to its data, 356 homes and condos have gone under contract in the $1 million to $2 million price range, far under the 744 that sold in that price range in 2005, and on par with 391 homes and condos that sold in 2004. MLS numbers showed the average price of all Naples-area homes and condos at $794,353 in April and declining to $682,443 in June.

Realtors are not encouraging current sellers to take their homes off the market if they didn’t sell during the traditional winter season because Naples sees many international buyers in the summer. Likewise, a slight pickup in single-family home sales has been reported recently. If you are considering a Florida home loan in Naples, now might be as good a time as any to see if you can make the perfect offer in a tepid market.