Posted on Monday, March 05, 2012
We like the significant improvement in inventory levels over prior years. At slightly more than nine months there may be nice price support for this Naples real estate market. Nine months inventory might be supportive of prices according to some real estate rules of thumb.
But there continues to be one catch to this picture – those underwater homeowners. If homeowners are underwater nationally and locally then the sellers of the underwater homes are going to be tougher negotiators. Why? Every dollar conceded by an underwater seller is another dollar to bring to closing.
We certainly see this in the Florida marketplace. Florida Realtor reported last week that CoreLogic released negative equity data or under water homeownership figures. Their report stated “11.1 million, or 22.8 percent, of all U.S. residential properties with a mortgage had negative equity at the end of the fourth quarter of 2011. In Florida, that bumps up to 44.2 percent, though two other states fared worse – Nevada had 61 percent in negative equity and Arizona had 48 percent.”
So what do you do if you are a seller or a buyer in this market? Sellers might be less likely to accept financing contingency offers and/or sale of existing home contingencies from buyers. Why? Why take your home off the market for an offer that might not pan out. What about the buyers? For buyers both cash and pre-approval letters are king. Buyers might think about stopping by their bank are obtaining a pre-approval letter before making that offer – or perhaps even before shopping so you have a sense of what you can afford. Sellers may be more likely to take a pre-approval letter than a financing contingency in this market.
Make no mistake, our heart goes out to all those with underwater positions in their home. A terrible result of the real estate downturn impacting many people who did nothing wrong – except get caught in the down cycle.
Know these markets locally, get with a good Realtor, and consider their advice when making buy/sell decisions.
Have a great week!
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No legal, investment, or tax advice is being given in this Blog. Consult with legal, financial and tax professionals before acting on any real estate transaction. Actual real estate price and sales results are subject to market forces and are not completely predictable. The writings of this Blog are intended for the sole use of our clients.
Mark Goebel, PA is a REALTOR with Coldwell Banker on 5th avenue in Naples, Florida with 35+ years of visiting and living in Naples. After 25 years at Accenture, Mark retired as a managing director and spends his time helping non profits and building a Naples real estate team with his wife Nan. Talk to Mark and Nan about life in Naples and why they chose this place to live full-time over all others and enjoy Naples real estate.
Mark Goebel, PA
REALTOR Coldwell Banker 5th Avenue South
Mobile: 239.595.3921
Email: mark.c.goebel@gmail.com
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