Posted on Saturday, January 21, 2012
We write about the principle of supply and demand in Naples real estate every week and recent findings prove interesting again. As inventories of available properties continue to decline we see more and more support for prices.
Take a look at properties over $300,000 for example. In the most recent NABOR (Naples Area Board of REALTORS) report yesterday we find “(the median) Price for homes greater than $300,000 increased slightly to $550,000 from $540,000.” Ok we will take that – up is better than down.
Why the price increase in the face of all the doom and gloom national news? Supply and Demand. Naples real estate supplies are much lower than in the past few years and this scarcity is driving prices. For example the NABOR report goes on to say “The available inventory declined 17 percent in 2011 with 7,581 available properties compared to 9,145 available properties in 2010. In the under $300,000 market category, the available inventory declined 21 percent to 3,771 properties in 2011 compared to 4,763 properties in 2010.”
This is the kind of inventory decrease the market is looking for. Our own analysis this week showed Naples real estate inventories at 9+ months – less than a year and just what we need for some price support.
Although the NABOR report is optimistic (and yes I will confess to being a natural optimist myself) we remain concerned about volume. Will volumes hold at these low inventory levels and sustain our market price growth or will see a volume slow down as we run low on supply? A tough question to call. Looking quarter to quarter we see a 7.5% decrease in volumes in the all Naples area Sunshine MLS. We note 1,597 closed transactions in the last three months (pretty good by the way given the low inventory) but we also see 1,725 closings in the prior three months. A decrease.
The next few months could see a battle of volume of inventory. If volumes hold or build watch those prices rise! We will see.
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No legal or investment advice or suggestions are being given in this Blog. Actual real estate price and sales results are subject to market forces and are not completely predictable. Please consult a lawyer or investment advisor for such legal and investment advice. 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
Mobile: 239.595.3921
Email: mark.c.goebel@gmail.com
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