Posted on Friday, December 09, 2011
After two and half years of economic challenges one starts to feel it might be time for a positive real estate turn – but although we too believe in cycles “feelings” do not make a market. Let’s take a look at some of the positive and negative factors facing the Naples market and try to understand what might be in store in 2012.
First some of the challenges.
Buyers just do not trust it yet. For many, a house was and is the biggest investment you make and if it is off 40% from where you bought it, or where you once had it down on a spreadsheet, you just do not feel that great. Buyers are going to need see more positives in the world, the national economy and in Naples, Florida real estate before we return to the glory days. Can we have an upturn anyway? Sure. But to really see it move buyer psychology needs to pick up.
Buyers may need to sell that “up north” property first. Although Naples markets are improving the “up north” market may need to improve to free up the buyer to buy. The “migration” south or south west from the northeast and midwest has clearly slowed due to the inability to move. We need to see better “up north” markets.
Financing – credit standards are back to where they once were (hoorah!) but this means fewer buyers are approved to buy, or are approved for less. Hard to argue with the need for better credit standards, and we are going to be among the last folks arguing for looser credit standards, we just need to grow with cash buyers and qualified buyers – the old fashioned way.
What about the positives? What forces are at work now in Naples, Florida real estate for this market to continue its come back?
Well for starters inventory is down. We need to see volume to go along with lower inventory but tightening supply is just what we need to support prices. As previously reported we now have inventories of less than one year in some Naples neighborhoods providing a real price foundation. And – there is nothing like a cautious buyer to lose a property or two to motivate them to buy.
Financing Again – a positive and a negative. Rates are low and if you are not a cash buyer these low rates may be tempting. Lower rates will bring some new buyers into the picture. Will rates rise next year? Who knows, but keep an eye on rates as another barometer – so far so good.
The employment picture – somewhat better but not by much. We need to get people back to work for many reasons – to gain our confidence back, to help out families in tough times and for real estate to make it back. Improving real estate creates even more jobs. Employment will help folks buy that Naples vacation home or provide a first time home buyer for an “up north” house and allow an “up north” seller to head south.
And how is all this working out in the last few months of 2011? Kerry Curry at Housing Wire reported “Gradual improvement in the housing market is expected next year, with existing-home sales edging up 4% to 5% and new home sales getting an even bigger boost off this year’s record lows, the chief economist of the nation’s largest real estate group … .“
We agree the potential for steady gains are certainly there – BUT be careful, and make sure the house is right for you and your finances.
What are your thoughts?
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
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