Tuscany Reserve is a little less exclusive.

Built for affluent second home buyers, the luxury golf course community off Livingston Road in North Naples has been repositioned to offer more homes at a lower price, reflecting a tougher housing market in Southwest Florida.

When the developer, Bonita Springs-based WCI Communities Inc., conceived the project, it expected to sell homes for $2 million to $5 million, with golf memberships in the range of $200,000. However, as the Florida real estate market slowed across the region and state, the community, designed to look like the Tuscany area of Italy, never really took off.

In a recent conference call, WCI’s CEO Jerry Starkey revealed just how much the project has affected the company’s bottom line. In the fourth quarter, WCI reported a rare quarterly loss and $118.3 million in impairment charges. The charges included an $84.9 million write down for Tuscany Reserve, reflecting a market loss in value in the community.

“The community never really gained traction,” Starkey said.

Under a new plan, the community could have about 570 homes, instead of 310. No change in zoning is required.

Recently, lower-priced single-family houses and multifamily homes have been introduced to the market.

“This has been in the works for a number of months, in that we have been working on a repositioning plan for the community,” said David Fry, chief operating officer for WCI’s traditional homebuilding division.

“Basically it’s a result of the market. The [Florida mortgage] market was telling us that this community needed to be more reasonably priced.”

The average home price in the community was more than $2.5 million, he said. Now, it’s $1.5 million, reflecting the new housing options WCI is offering.

“People can get into the community for less than $1 million,” Fry said. “With the infrastructure, it turns out to be a very good value.”

Four units are offered per building, and 15 buildings are planned. Homes on the upper floors are 2,400 square feet, and first floor units are 1,800 square feet. They offer views of the golf course.

Smaller single-family homes are now available, with prices ranging from $740,000 to just over $1 million, he said. Homes have courtyards, porches and fireplaces and will offer 2,260 to 2,900 square feet under air.

At the higher end, WCI has an inventory of about 20 homes in the community, which Fry describes as a “moderate” inventory. Since the release of the new housing options, WCI has written 25 contracts and it’s working on another eight to 10, he added.

In the first seven weeks of marketing the new products, Tuscany Reserve saw 25 percent of the traffic that it had all of last year.

“I think at the end of the day, it’s the perceived value,” Fry said. “When you drive in the community you will see that.”

SOURCE: Naples News

The U.S. housing slump has cast a shadow over the Naples housing market, once one of the hottest real estate markets in the country - but there is little sign the boom has turned to all-out bust.

Billed as a subtropical paradise, it has seemed almost immune to recent concerns about a slowing U.S. economy and fallout from a gathering wave of foreclosures on properties bought with subprime loans - Florida mortgages for those with poor credit histories.

Naples real estate prices saw a wild run-up earlier this decade, with some studies showing an increase in home prices of as much as 140 percent between 2001 and last summer.

Now, though home prices are still stubbornly high. Even as demand has slowed.

Visitors to the art galleries, restaurants, top-notch hotels and palm-fringed boutiques of downtown Naples can’t help coming away with the impression that it remains among the most attractive locations anywhere in the United States for wealthy retirees and second-home buyers with cash to burn.

Britons and Canadians have become a growing part of the mix here, say long-term residents, citing the lure of a warm climate and weakening U.S. dollar. That has helped support the market.

And while there is a whole catalog of ready-and-willing home sellers in Naples, according to Florida real estate agents, few seem poised to cut prices dramatically and make a run for less impressive digs elsewhere anytime soon.

“A lot of the people that have their property up for sale right now may not even have to sell it,” said one realtor.

The allure of Naples includes its white, sandy beaches, superb fishing on the azure waters of the Gulf of Mexico, and the fact that it touts more golf links per capita than anywhere else in the country.

“MOST OVERVALUED”

Naples has been the “most overvalued” housing market in the country since June 2005, according to economists at National City Corp. and economic consulting firm Global Insight Inc.

But when the market started to slow the impact was immediate - the number of houses and condominiums sold dropped about 47 percent from the second quarter of 2005 to the same quarter a year ago.

Prices also fell, with the median price dropping to $365,000 in the fourth quarter of 2006 from a market peak of $437,500 in the first quarter. That still was a significant gain since the beginning of 2004, when it was $257,500.

Spencer Haynes, head of the Naples Area Board of Realtors, acknowledged that unsold properties had “flooded the marketplace,” whereas agents once had to scramble after every new listing. But he said the high end was holding up nicely.

Pending sales of Naples homes priced at more than $1 million have totaled 243 so far this year, Haynes said, compared to 252 over the same two and a half months in 2006. Those seeking a Florida mortgage loan for expensive properties aren’t shying away.

The ripple effect from problems caused by subprime mortgages involving borrowers with poor or less-than-perfect credit may yet pose a threat to Naples, since lenders have been battered by a recent surge in delinquencies and defaults.

After California, Florida has the most subprime mortgages of any state, according to First American LoanPerformance, a data and analytics unit of First America Corp. Investors and speculators who helped spur the Naples housing boom are thought by realtors to hold a fair share of them.

While acknowledging a risk to the Naples market, Haynes said it “typically had an almost non-existent foreclosure situation.”

He ranked Florida’s skyrocketing insurance rates, driven by the threat of hurricanes, and hefty property taxes, as greater threats to the Naples market overall.

“The rich and famous come to play here,” said Haynes, citing one pundit as saying that Naples had become “one of the cheapest places for wealthy people to live.”

“Whether it’s slower than 2005 or not, this is probably a pretty healthy place to be,” said Haynes.

Here is a commentary from a Naples housing insider:

It was a headline that attempted to shut a residential real estate market down: Naples, Florida most over-valued housing market in U.S.

Talk about manipulating a Florida housing market coming out of one of its largest sales volume years in history, one based on home buyers’ perceptions of a fairly valued market. And, if readers didn’t look past the headline, it disabled them from making a housing decision in this Southwest Florida community.

The Naples housing market is known internationally for it’s seasonal residents wealth, miles of pristine beaches, and uninterrupted glorious weather.

Though I am based in Chicago, I have spent several weeks each January for the past five years in Naples. I saw Florida home prices increase methodically up the appreciation ladder until the headline imposed plateau. The price climb mirrored many other real markets around the country. Here’s an overview of what I heard from Naples real estate agents, concerning the post-headline year, 2006.

The common thread was fear among buyers, sellers, appraisers, and developers. One agent said that after the headline broke, real estate appraisers started to question their own opinion of value on recent sales they were currently appraising. In hindsight, many believed they learned the power of headline, and if media proclamations were made in the future, they would know how to assimilate them.

Charlie, Katrina and Wilma also coupled with the headline, placed pensive-prone buyers in neutral and seasonal owners in sell mode. Increased building improvement, insurance, repair and maintenance costs and expenses from hurricane damage, played havoc with fixed income household budgets, causing Florida mortgage activity to decrease.

The first round of transplanted retirees from the 1970’s and 80’s began in 2006 to liquidate second homes in Naples because of declining health and mobility. Many popular condominiums that had for years had long waiting lists for units, now had multiple ones available. Plus, developers had begun a large surge of new construction that ventured to the western edge of the Everglades. The timing of these two unrelated events converged to substantially increase inventory levels.

The average age for Collier County residents decreased to the mid-forties from the mid-sixities during the headline period. Thus beginning a huge shift in demographics, for a market historically seen as one devoted to seasonal or second home ownership.

The new younger resident’s are: full-time residents, a majority are graduate school educated, relocated retail or service managers, and have chosen Naples specifically as their destination. Baby Boomers not quite retired still contribute to a smaller sales segment in the market, and are actively pursuing second home or rental investments.

The upper-bracket segment of the market continues to be strong. Demand for multi-million dollar properties in the Port Royal area south of Old Naples is especially popular.

Florida home mortgage loan applicants are out in the market, drafting purchase contracts and not just “kicking curtains.” Low-ball offers are common, but sellers who have priced their home correctly are not entertaining them. Limited investors have returned to the Naples market. One agent told me that there were many deals to be had, but savvy investors haven’t seen firsthand the post-headline reality.

Motivated sellers comprise 80-85 percent of the current inventory, unlike the common notion that sellers are willing to sit on a property for several years.

According to the Naples Daily News, last year wasn’t bad for Realtors such as Bruce Babcock and Merry Coolidge, who made the biggest sale through the Multiple Listing Service in 2006 - a waterfront estate in the exclusive neighborhood of Port Royal for $14.9 million.

It was far from the only multimillion-dollar sale made last year. Luxury homes continue to move fast, despite a cooling Southwest Florida housing market.

In 2006, 28 homes in the Naples area sold for $5 million or more, the same number as in 2005. In that same price range, 11 condos sold last year, down from 15 a year earlier, according to statistics generated by the Naples Area Board of Realtors.

The trend comes down to the buyers.

“They’ve got the money,” Lee County Property Appraiser Ken Wilkinson said.

Last year, Lee County saw some multimillion-dollar sales of its own. The biggest through the MLS last year in Lee was a home in Mediterra that carried a price tag of $5.786 million.

In Collier County, the highest-priced listing is $19.9 million for a gated estate on Marina Drive that fronts Naples Bay in Aqualane Shores.

“I think there is a big difference between Port Royal and anything else in Lee County,” said Brett Ellis, a partner with RE/MAX Realty Group in Fort Myers. “Nothing in Lee County has approached that $20-million mark, and I don’t expect that it probably will real soon.”

Still, more than 35 homes sold for $1 million or more last year in Lee County.

As Florida home mortgage loans remained out of reach for many, the median home price for single-family homes up for resale dropped by 13 percent to $415,200 in the Naples area, and by 12 percent to $258,600 in the Fort Myers-Cape Coral market.

If you isolate higher-end neighborhoods and look at a three-year trend, a different story comes into focus. Statistics generated by the Naples Area Board of Realtors show home prices in most of Naples’ coastal neighborhoods continued their upward swing last year.

• In the third quarter, the median price of sales grew to $1.6 million in the Park Shore, Coquina Sands and Moorings area. That was up from $645,000 at the end of 2003.
• In the Port Royal, Aqualane Shores and Olde Naples areas of the Naples housing market, the median price rose to $1.96 million in the third quarter, representing a 120 percent increase in the past three years.
• Meanwhile, home prices dipped slightly in Pelican Bay in the third quarter. But they’re still trending higher than they were in 2003, and they rose again in the fourth quarter.

“The fact of the matter is that during the past few years the rich are getting richer and those that aren’t are not. That’s all there is to it,” said John Karevoll, an analyst with DataQuick Information Systems Inc. in La Jolla, Calif., which tracks the housing industry.

“Whether it’s Naples, Manhattan, Beverly Hills, or San Francisco, the very expensive homes are selling relatively well. There is still a little bit of a decline, but nothing like the decline we’re seeing in the rest of the Florida real estate market.”

While there’s been a 25-28 percent decline in sales nationwide, the decline in the high-end market is closer to 10 percent.

That market always dances to its own tune, as the people don’t have to worry about qualifying for a Florida mortgage, and whether it’s going to be a 6 percent, 30-year fixed mortgage, or a 6.25, 30-year Florida mortgage. Those are the details the rest of us need to fine tune.

And wealthy sellers are able to wait to get the price they want, which helps keep prices strong in pricey neighborhoods, despite buyers’ attempts at negotiation.

As a home builder serving the Naples housing market for over 20 years, Stuart Kaye has a unique perspective on his industry and community.

As one-time President of the Collier Building Industry Association and the Florida Home Builders Association, and founder of Kaye Homes, he has an outlook that goes far beyond his own company.

With Florida mortgage costs still low, and market dynamics shifting in favor of buyers, here’s what he has to say about the turbulent real estate market in Naples and Collier County in 2007, as told to the Naples Sun-Times:

OVERVIEW

Five years before 2006, the average annual increase in Collier County home prices was over 30 percent, placing Collier among the top three highest-appreciating markets in the country. For many people, especially those who got off in time, this was a great ride.

But it was clearly an unsustainable rate of increase. The demand side of the equation slowed down once amazing short-term profits were no longer available. The natural demand that rests on long-term growth patterns had been inflated by the speculative demand of investors.

It seemed like one couldn’t go wrong. New home builders entered the local market because it seemed that they couldn’t go wrong, either. Finally, years of price inflation, coupled with economic uncertainties, led buyers to wake up and back off.

NOT A RUNAWAY

In spite of what people think, there had not been runaway increases in home building here. Rather, during the last 10 years, building permits ranged between 5,820 permits (2003) and 8,158 permits (2001), so there has been consistency in supply. Uncertainty has checked demand, but all the things that are attractive about Naples and Southwest Florida are still in place.

This is a great environment and people want to live here. Even in 2006, Collier County was still a top employment growth center on a percentage basis. Demand will pick up when people feel the Southwest Florida housing market has regained stability. The days of people lining up outside of builders’ or realtors’ offices are gone.

HOUSES VS. CONDOS

Some portions of the Naples housing market are doing better than others. Throughout the state, single-family housing is doing better than most of the Florida condo market because there was more overbuilding in the condo sector and because condo market demand rests, in large part, on people seeking second homes. Second homes are a luxury that people are less concerned about in times of uncertainty.

Also, in this decade of record low Florida home mortgage rates, the run-up in condo prices exceeded that of single family homes, so the correction will naturally take longer to work through. In the single-family home market, there are always people looking for entry level homes, and there are always people at the upper end of the spectrum who will be ready to buy because they are less affected by economic factors.

IMPACT FEES

It is no secret that land is expensive and comprises a higher percentage of the total home cost than in the past. Add a $13,000 impact fee increase this past year, and, at $30,000 (whether a starter home or a mansion), we now have the highest impact fees in the state.

Material and labor costs have risen as well. However, there is now some softening of land prices, suggesting better times for both builders and buyers. In spite of the many cost increases to builders, buyers can find new homes (compliant with the latest building codes and including energy saving features) for what a comparable new home would have cost 2-3 years ago.

Politically, it is easier to increase impact fees that indirectly affect people who are not yet living and voting here than it is to increase ad valorum property taxes for those already here. Collier County has been able to keep property tax rates comparatively low while raising impact fees.

Because the impact fee for a $100,000 home is approximately the same as for a $1,000,000 home, the fees hamper attempts to offer affordable housing. If we build 7,000 new homes in Collier County, the burden of financing local government is unfairly placed on new home owners (to whom impact fees are passed along) rather than distributed more equitably among 20-30 times as many residential property owners.

SUPPLY & DEMAND

Oversupply in Collier County will continue for a while, though it is not nearly as bad as in Lee County. The majority of sellers who have active listings on the multi-list service have not yet accepted the fact that they will not make a 20-30 percent annual profit. Once they do, they will either take these homes off the market or lower their prices.

Over time, perhaps by middle or late 2007, supply and demand will come into a healthier balance and the number of homes listed for sale will decrease. This process is likely to be longer in Collier County than elsewhere, for the simple fact that many sellers here do not have to sell - selling is a desire or a preference, but not a need.

DEAD DEALS

In the end, buyers absolutely have to do their homework very carefully. They need to perform due diligence with respect to the people with whom they do business. It’s their responsibility to ensure they can make the Florida mortgage payments on time, and that they’re getting the best deal from their home builder of choice. Proceed with cautious optimism as you begin your home buying quest this new year.

Ross McIntosh, a Florida mortgage broker, sold his house for $735,000 when there were several others in his neighborhood listed for $790,000.

Some lowered their prices to $760,000 and, after months on the market, one recently sold for $675,000.

The problem is people have unrealistic expectations, said McIntosh.

“There is a lot of speculation about how far (down) the market is going to go and how long the (downturn) is going to last. I have no idea. But it makes sense that [the Naples housing market] was first on the way up so we would be first on the way down,” McIntosh said.

The slowdown in the Southwest Florida housing market is already greater than anyone expected, and could get a lot worse before it gets better.

Prices in the Naples metro area could fall up to 14 percent before the market stabilizes. Fort Myers was recently given a grade of “F” and rated it last in a study of 34 major markets in the country.

The grade, according to a recent survey, indicates a market where there are declining home values, negative order trends, high cancellations, high resale inventories, poor buyer quality and a place where incentives are common.

Moody’s Economy.com says there is a 46.1 percent chance that prices will decline in the next year, said Chris Lafakis, an associate in economics specalizing in the Naples market.

The recent study looked at various housing indicators, such as the level of affordable housing, supply, prices, valuation and employment.

“We found that Naples is one of the most overpriced markets in the nation,” said Chris Lafakis, a Florida real estate expert specializing in the Naples market. “The only other markets that rival the appreciation of Naples and are likely to have similar price declines are Stockton, Calif., and some markets in the Northeast.”

The market has positives aiding it and negatives working against it.

The positives are a construction employment — which at 12 percent of total employment is twice the national average — holding relatively steady. Job growth in the industry has barely declined, strong migration trends are fueling demand for housing, and Florida mortgage rates are low enough to generate refinancing activity.

One of the biggest negatives is staggering price appreciation. Read: People aren’t willing to pay the kind of prices sellers want. And Naples is one of the least affordable areas in the U.S., eliminating many, many buyers.

Lower Florida mortgage loan demand means inventories are building up, which makes the upcoming season a crucial time to determine the future direction of the housing market. Some people have a dimmer view of the market than others. McIntosh thinks that what most people consider the worst-case scenario isn’t really the worst-case scenario at all.

“There is plenty of room for the market to worsen and my real concern is that we are heading for a worst-case scenario that is worse than we think.”

“We have too darn many condos,” he said. “Southwest Florida appreciated at a rate equal to or greater than everyone else in the country so it is perfectly natural to assume that when it goes down, it will be the same. We have more to give back.”

In many areas of the Florida housing market, prices will get worse before they get better - according to an analysis by Moody’s Economy.com.

In the survey of 379 metro areas, the study’s authors project that nearly 20 areas eventually could experience a “crash,” or a decline of more than 10 percent from peak to trough. The most affected cities in the Sunshine State will be Cape Coral, Naples and Sarasota.

In those areas, therefore, the time to seek out a Florida mortgage is now because sellers will be anxious to sign off on a contract before things get worse. Nationwide, the study forecasts a 3.6 percent decline in the sales price of existing homes.

The table below shows only those markets among the 100 largest by population that are forecast to have declines. In an analysis that considered Florida home mortgage rates, the local job market and other factors, the study makes projections on when those markets would peak, when they would hit their worst point, and what the total decline would be.

Cape Coral FL -18.6 Q4 2005 (Peak) Q2 2007 (Bottom)

Sarasota FL -14.0 Q4 2005 Q3 2007 Naples FL -13.8 Q4 2005 Q3 2007

In other words: You may be best served to wait until the second quarter of next year to take out a Florida mortgage loan for a residence in Cape Coral. This is when prices will be at their most affordable.

A new survey reveals a major problem in the Florida housing market: Despite a cool off in home prices, more markets are overpriced than ever. Naples leads the way.

Higher interest rates - especially for adjustable-rate Florida home mortgages - helped push manu cities into the overpriced category last quarter, according to Jeannine Cataldi, an economist with Global Insight, which conducted the analysis with National City.

Inside the survey

Despite a decline in Florida home loan rates since the end of the second quarter, the 30-year fixed rate is still at 6.4 percent (versus 5.8 percent a year ago). The difference for ARMs is even bigger.

The survey also takes into account differences in population density, relative income levels and historical valuations. Markets with premiums above 34 percent of “fair value” were deemed at risk for price corrections.

“Price growth will have to be stagnant while income and employment rises for housing valuations to fall,” said Cataldi.

Despite a substantial cooling of real estate markets, home prices were still 10.6 percent higher nationwide than a year ago, according to the Office of Federal Housing Enterprise Oversight. This is why affordable housing initiatives are being taken around the state.

Seventy-nine of the 317 markets studied in the Global Insight/National City report were judged to be “extremely overvalued,” up from 68 during the first quarter.

“Significant slower appreciation, or outright declines, among overvalued markets are a signal that we are in the early stages of a correction,” said Richard DeKaser, National City’s chief economist.

The Naples housing market remains the most overvalued market in the nation, deemed 101.5 percent above what National City considers fair value. Bend, Oregon, was second to Naples, 89.3 percent overvalued.

Until this problem is corrected, it will be difficult for lower-income buyers to find a Florida mortgage loan. We suggest completing the FREE form atop this page for more information from our panel of brokers.

Beth Ireland spent a year looking for a $300,000 house in Naples.

Then she quit her job as a nurse manager and moved to Pittsburgh.

“It’s nuts. When all is said and done, we can’t afford to live in Naples,” the 54-year-old said.

A paradise on the Gulf of Mexico in Southwest Florida, Naples boasts more than 130 art galleries, posh hotels and private jet service, according to its tourism website. Jobs are plentiful, but home prices around $500,000 on average leave something to be desired.

But locals call it the “bubble city,” as Naples real estate has surged a ridiculous 140 percent since 2001. It has long been one of the most desirable housing markets in the country, driven by an influx of retirees and second-home buyers, according to numerous sources.

But now, as a result of the overvalued home prices, area teachers, nurses, paralegals and other middle-income workers are pursuing housing (and jobs) elsewhere. That makes it tough for area employers, which are giving big raises and housing subsidies but still finding it difficult to hire or keep staff. Things have gotten to the point where even upper-middle class professionals such as university professors are finding it hard to make the payments.

“We have a workforce housing problem of acute proportions. It is a crisis that will only get worse,” said Edward Morton, chief executive of NCH Healthcare System, which operates hospitals employing more than 4,000 people.

The hospital system provides apartments for 250 employees at below-market rates, and will house 150 more in the next several years.

THE ESSENTIAL WORKFORCE

The Naples-based Collier County School District raised pay an average of 6 percent on July 1. Still, no fewer than 15 teachers who planned to move to Naples withdrew from contracts that were to begin this month because of the cost of the Southwest Florida housing market. The district has 65 unfilled jobs, three weeks before the start of the school year.

The Collier County Sheriff’s Office hasn’t been able to fill almost 100 positions, even after offering signing bonuses of as much as $3,000 since January 1.

Naples has a population of 300,000 had an unemployment rate of 2.3 percent in May, near a 10-year low and half the U.S. rate of 4.6 percent. The city per capita income was $42,846 in 2004, ranking ninth in America among metropolitan areas. That figure increased 2.9 percent annually from 1994-2004.

Yet soaring housing costs, coupled with a steady increase in Florida home loans over the past year, has made it difficult for many middle-class workers to afford anything. Throw in volatile (and necessary) insurance premiums and you have a recipe for an affordable housing crisis.

Randstad USA, a staffing company that specializes in providing clerical and factory workers, has recently been inundated with requests from employers for a wide range of jobs, including engineers. The number of inquiries about relocating to Naples, meanwhile, is at a 12-year low.

Hospice of Naples, where Ireland worked, has lost about 10 percent of its 200 employees in the past year because of housing costs.

Home price appreciation, and subsequent affordable housing issues, extend across Florida. Miami, West Palm Beach, Sarasota, Fort Pierce and Punta Gorda are also among the 20 most overvalued U.S. markets. This June, the Florida Legislature passed a law to encourage area home builders to construct cheaper housing in coastal markets. The law provides tax incentives and loan programs and authorizes school boards to provide housing.

SLOWER SALES

The situation may be easing, as rising Florida mortgage rates cool housing markets locally. In June, the average price for an existing home in Naples fell 8 percent to $451,500, the Florida Association of Realtors reports. In the three months prior to that, prices topped $500,000.

The city was still Florida’s most expensive market, and demand by second-home buyers and affluent retirees probably will keep prices high, said Jo Carter, President of the Naples Area Board of Realtors.

Homebuilders have long been targeting affluent buyers, as Naples has the most private golf courses per capita of any U.S. city, according to the National Golf Foundation. The size of homes has increased 10 percent in the past decade and more than a third of homes are bigger than 3,000 square feet, according to county appraisals.

Some middle-income workers who bought homes more than five years ago are selling and taking their profits. Simone Gartner, 42, a paralegal who has lived in Naples 36 years, sold her duplex residence, which had doubled in value to $310,000, in 2004. She rented a condo and moved in with friends before relocating to Kernersville, N.C.

“I’m tired of the expensiveness. I cashed out at the right time.” said Gartner.

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.