Why Naples Real Estate is Undervalued
On September 19, CNBC did a story on the “Finding Housing’s Market Basement” where Richard Dekaser, a senior vice president and chief economist at National City Corp., singled out Naples in talking about the “first rays of sunshine on a possible end to the housing crisis.”
“Three years ago, the poster child for excess valuation in America was Naples, Florida,” he said.
Not anymore. Through the second quarter of this year, prices have dropped 33 percent, he said, leading him to judge the market as “slightly undervalued.” That means home prices are actually lower than where they should be.
Although I have not agreed with Mr. Dekaser in the past regarding, due largely to the methodology used in evaluating Naples overvaluation, I do have to agree with him at this time - to a point. Where I differ with Mr. Dekaser is that the Naples real estate market has gone through significant valuation adjustments and just might be undervalued to such a point where prospective buyers might be missing some excellent purchase opportunities.
In order to better understand the Naples area real estate market it is best to break down the market into an overview of single family homes and Read more
Estero Condos for Sale Inventory
As a seller you want to know how many Estero condos are competing with you for the prospective buyers looking at Estero condos, as well as how aggressive you need to be with your list price. As a buyer you want to know how large a selection of condos are on the market and if you can great a great deal on a condo.
The actual number of Estero condos for sale increased from August to September, with condos for sale decreased by only 2 condos. The total available condos was 307 in August versus 305 at the end of September. However, due to the level of closed sales the months of inventory for Estero condos for sale has remained at a stable level at September’s 15 months from August’s 14 months. Since the beginning of February 2008 with 38 months of inventory, the months have dropped an outstanding 23 months to its present level. The reader should review the graph as not only does it measure the months of inventory (adsorption rate) based upon a 12 month moving average, but reflects the 3, 6, and 9 month moving average.
- Estero condos for sale months of inventory
Estero Homes for Sale Inventory
The actual number of Estero homes for sale increased from August to September, with homes for sale increasing by 19 homes. The total available homes was 456 in August versus 476 at the end of September. However, due to the level of closed sales the months of inventory for Estero homes for sale has remained level at September from August’s 20 months. Since the beginning of February 2008 with 32 months of inventory, the months have dropped 12 months to its present level. The reader should review the graph as not only does it measure the months of inventory (adsorption rate) based upon a 12 month moving average, but reflects the 3, 6, and 9 month moving average.
The real estate market for Estero single family homes still remains a strong buyers market. A neutral market is generally around 6 months of inventory.
Below the presentation is a discussion of the meaning for the various absorption rates and how they may influence your decision for selling or buying real estate in the Estero real estate market.
- Estero homes for sale months of inventory.
Bonita Springs Condos for Sale Inventory
Before making a decision to selling or buy a condo in Bonita Springs it is important to know and understand the months of inventory available for sale within Bonita Springs. As a seller you want to know how many condos are competing with you for the prospective buyers looking at condos, as well as how aggressive you need to be with your list price. As a buyer you want to know how large a selection of condos are on the market and if you can great a great deal on a condo. The months of inventory will assist you in determining if now is an appropriate time to list your condo or purchase a condo at a great price. The months of inventory represents how long it will take to sell the number of condos on the market at the rate of closed sales based upon the average over a period of 12, 9, 6, or 3 months.
- Bonita Springs Condos for Sale Months of Inventory
Bonita Springs Homes for Sale Inventory
Before making a decision to selling or buy a home in Bonita Springs it is important to know and understand the months of inventory available for sale within Bonita Springs. As a seller you want to know how many properties are competing with you for the prospective buyers looking at homes, as well as how aggressive you need to be with your list price. As a buyer you want to know how large a selection of homes are on the market and if you can great a great deal on a home. The months of inventory will assist you in determining if now is an appropriate time to list your home or purchase a home at a great price. The months of inventory represents how long it will take to sell the number of homes on the market at the rate of closed sales based upon the average over a period of 12, 9, 6, or 3 months.
- Bonita Springs months of inventory homes for sale.
Naples Condo Inventory
The number of Naples condominiums available for sale at the beginning of October was 4716. The absolute number of listings increased by 41 condos over the 4675 listings at the beginning of September. Therefore, the months of inventory remained stable at 29 months. Viewing the months of inventory for the 12 month moving average trend shows a downward trend from February. The months of inventory in February was 37 months, while at the beginning of October it was 29 months.
Graph for the number of months for Naples condos available for sale.
Naples Homes Inventory
The actual number of Naples homes for sale remained level from September to October, with fewer homes for sale by 3. The total available homes was 5247 in September versus 5244 in October. However, due to the level of closed sales the months of inventory for Naples homes for sale has decreased one month from the beginning of September (29 months) compared to October (28 months). Since the beginning of February 2008 with 38 months of inventory, the months have dropped 10 months to its present level. The reader should review the graph as not only does it measure the absorption rate based upon a 12 month moving average, but reflects the 3, 6, and 9 month moving average.
The real estate market for Naples single family homes still remains a strong buyers market. A neutral market is generally around 6 months of inventory.
Below the presentation is a discussion of the meaning for the various absorption rates and how they may influence your decision for selling or buying real estate.
- Graph for the months to absorb the current number
of Naples single family home listings.
Fed Rate Drops .5 Percent
In a surprise move, the Fed slashes rates by 50 basis points today.
How will this effect interest rates on mortgages?
Federal Reserve cuts in the federal funds rate have an unpredictable impact on long-term mortgage rates. So it’s impossible to know for sure when — or even if — rates will fall as a result of the Fed’s emergency rate cut.
Adjustable rate mortgages (ARM’s) may be more sensitive to Federal Reserve rate decisions, especially if the spread between the federal funds rate and the London Interbank Offered Rate — more commonly known as LIBOR — narrows. There could be an impact due to other countries also dropping their interest rates by their central banks.
Depending on the exact nature of their mortgage, some people with ARMs may see their rate adjust downward the next time the mortgage resets.
Bonita Springs Condo Market Update
August Activity:
Listings:
During the month of August 94 Bonita Springs condominiums were listed for sale. For the same month in 2007, 121 condominiums were listed for sale; this represents a decrease of 22.3 percent. The decrease from 2006 was 36.1 percent from the 147 new listings.
In July 2008 there were a total of 132 condominiums listed for sale and in June 124.
The available for sale Bonita Springs condominiums have dropped from 1354 in February 2008 to 1104 at the end of August. This represents a reduction of 250 Bonita Springs condos or 18.5 percent.
The number of months of inventory or the absorption rate is presently 28 months down from February’s 41 months.
Bonita Springs Market Update Homes
August Activity:
Listings:
During the month of August 117 Bonita Springs homes were listed for sale. For the same month in 2007, 149 homes were listed for sale; this represents a decrease of 21.5 percent. The increase from 2006 was 10.7 percent from the 131 new listings. In July 2008 there were a total of 110 homes listed for sale and in June 129 homes.
Potential short sale homes listed in August was 12 or 10.3 percent and 6 homes or 5.1 percent are listed as a foreclosure, REO or bank owned.
Village Walk of Bonita Springs had the largest number of potential short sales - 4 with a median list price of $227500. The remaining potential short sale homes were listed in numerous developments.
The Bonita Springs homes listed as foreclosures were spread through various developments.
The inventory of available Bonita Springs homes for sale in February was 1201 homes or about 33 months. At the start of August the inventory had dropped by 217 homes or 18.1 percent to 984 homes or about 26 months. Read more