In Recovery? Local, national experts say Collier real estate market on the rebound

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— New normal. Reset button. Return of common sense.

Talk to real estate insiders and experts about the market in Southwest Florida and these terms are bound to come up.

"The downturn we saw ... it was unprecedented," said Bill Poteet, president of the Naples Area Board of Realtors. "Up until then, Naples had been pretty much bulletproof through most recessions."

Everyone knows what happened instead. The rapid descent of Southwest Florida's housing industry into chaos has been well-documented, as has the flood of short sales and distressed properties that defined the market in 2009 and 2010.

After a promising 2011-12 tourist season turned out even better than expected, local market-watchers are saying the real estate market in Collier County is officially back on the mend — save a couple of caveats. With a presidential election approaching, and uncertainty in gas prices and income tax rates — particularly among upper-income brackets — there remain factors that could slow the recovery of the real estate market.

"It's a mini-recovery," John Tucillo, chief economist for Florida Realtors, said during an April 13 economic summit at NABOR. "And we have a long way to go."

On a whole, however, Realtors in Southwest Florida sound decidedly more upbeat — and less reserved in their enthusiasm — this spring than in recent memory.

"Yes, we feel very optimistic," said Phil Wood, president and CEO of John R. Wood Realtors. "The fact that unemployment is improving gradually all over the country, the fact that Naples and Southwest Florida usually lead the country out of the recession because it is such a desirable area — that all gives us reason for optimism."

Michael Timmerman, a senior associate at the Naples arm of market research firm Fishkind & Associates, said median home prices are gradually ticking upward in Naples, after a seemingly endless couple of years scraping the bottom. Meanwhile, the volume of home sales is increasing, and, though standards are stricter now than five or six years ago, lenders are becoming more willing to grant loans.

Data released by NABOR in mid-April showed that median closing prices for single-family homes increased 17 percent from the first quarter of 2011 to the first quarter of 2012. Meanwhile, inventory was down 13 percent.

It all seems to point to this: the local market is on the upswing.

"I think 2011 is best described as a strong year of recovery in the Naples real estate market," said Cindy Carroll, a principal at Carroll & Carroll, a Naples real estate appraisal and consulting firm. "It's the first year that we've seen stabilizing trends continuing through the whole year. When we got to the end of the year, we finally felt like we had a strong, improving trend under way."

However, increased sales numbers have been somewhat uneven in some segments of the market, particularly among lower-end and distressed properties, and homes in the $500,000-and-up range.

In the first quarter, home sales in the Naples market increased 29 percent, according to the Naples Area Board of Realtors. The median home price in the quarter increased by more than 14 percent to $190,000. The median is the price at which half the homes sell for more and half for less.

The first-quarter 2012 numbers released by NABOR indicate this trend may be evening out.

Sales of homes in the $500,000 to $1 million range increased 55 percent from February 2011 to February 2012. Overall, from the first quarter of 2011 to the same period in 2012, the increase was a more modest 29 percent.

Tucillo said the upper end of the market has been more active than normal, but, he added, normal is pretty slow.

"We're looking at a snail that had a five-hour energy drink," he said. "We've got a lot of way to go to get back to normal. It's going to be a slog."

Sales of homes in the $300,000 to $500,000 price range increased 14 percent from the first quarter of 2011 to the first quarter of 2012. Sales of homes in the $1 million to $2 million range also increased by 14 percent during that time period, according to NABOR.

In Lee County, pending sales – or new contracts written – for single-family homes increased 24.5 percent in the first quarter, compared to a year ago, according to a report by Florida Realtors. In the quarter, new listings dropped by 4.5 percent and the median sales price grew 8 percent to $135,000.

Meanwhile, speculators and flippers no longer seem to dominate the marketplace. That's a near-reversal from 2009 and 2010, said Brenda Fioretti, managing broker of Prudential Florida Realty in Naples and a NABOR director.

"Sixty-five to 67 percent of our transactions at one point were short sales or foreclosures – in 2009," Fioretti said. "Now, we're down to under 40 percent. The distressed transactions are going away quickly."

It means inventory has dropped to roughly the same levels seen in 2004, just prior to the rapid increases that preceded the burst of the real estate bubble in Southwest Florida. Figures released in mid-April by NABOR show there were 7,596 single-family homes on the market in the first quarter of this year, compared to 8,762 homes listed for sale at the same time last year. That's a 13 percent drop.

Carroll said entry-level markets – in which most people buy their first home – are tightening.

"Some of those areas have only a few months of supply," she said. "In our market, stability is classified as when you see one year of supply."

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While the falling inventory drives up prices, it could produce possible ill-effects.

"As demand keeps increasing and inventory keeps falling, my concern on some of those is the developers that are jumping back into the market now may build some products that capture the existing market," Wood said.

It's not necessarily bad on its face, Wood said, but "those other properties will be hard to sell."

At the other end of the spectrum is concern that if inventory falls faster than new construction can keep up, prices will increase too rapidly.

"If we have pricing increases of 1 (percent) to 2 percent a year, that's good," Timmerman said. "If we start increasing pricing at a rate of 10 percent a year, that's an indication that our market is imbalanced and we have less supply than we need to."

This is part of an 8-day Daily News series, "In Recovery?" about whether Southwest Florida's economy is rebounding. Tomorrow: Construction.

© 2012 Naples Daily News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Comments » 22

joeblow writes:

More "Kool Aid" by the so called "Real Estate Professionals".

LSPinNaples writes:

Sales up...prices down! Is that a recovery? Looks like bottom feeders taking advantage of the lower prices only.

newzhound (Inactive) writes:

Perhaps.
What we do know is that people value a state where there is no state income tax. They know what is coming as a result of the Obama burden the system approach. And don't forget, next year your real estate sale will be taxed 3.8% for Obamacare.

TheyPavedParadise2 writes:

Thats a joke. Month after month they print this and every time they finally see some progress.

Coastal writes:

So the NDN is running a furry of false propaganda stories aimed at making useful idiots believe that this country is in some kind of recovery, all while they overlook the facts.

I guess that means that we have to do their job once again.

Home ownership: Biggest drop since Great Depression.

NEW YORK (CNNMoney) -- The percentage of Americans who owned their homes has seen its biggest decline since the Great Depression, according to the U.S. Census Bureau.

Number of vacant homes grows by 44%

US new-home sales off 7 per cent in March, largest decline in a year.

Rising foreclosures are weighing on the U.S. housing market, reducing prices and keeping new-home sales weak.

The Standard & Poor's/Case-Shiller home-price index, released Tuesday, showed that prices dropped in February from January in 16 of the 20 cities it tracks. That's the sixth straight decline.

Democrat economics at work so the NDN won't report those stories.

marty99919 writes:

Yep, like the others said:

http://articles.chicagotribune.com/20...

CarpeVeritas writes:

in response to newzhound:

Perhaps.
What we do know is that people value a state where there is no state income tax. They know what is coming as a result of the Obama burden the system approach. And don't forget, next year your real estate sale will be taxed 3.8% for Obamacare.

My real estate sale will be taxed by 3.8%

ONLY IF:

1. My married-filing-jointly income is above $250,000 (which excludes 97% of wage earners)

AND

2. My gross profit on the sale of my principle residence is greater than $500,000.

THEN AND ONLY THEN

Will this tax affect me.

If I made a quarter million dollars a year and then made a half million and four dollar profit on selling my home, I won't howl too much at paying 3.8% of four dollars.

But this spoils a great horror story. Sorry.

nightranger writes:

in response to CarpeVeritas:

My real estate sale will be taxed by 3.8%

ONLY IF:

1. My married-filing-jointly income is above $250,000 (which excludes 97% of wage earners)

AND

2. My gross profit on the sale of my principle residence is greater than $500,000.

THEN AND ONLY THEN

Will this tax affect me.

If I made a quarter million dollars a year and then made a half million and four dollar profit on selling my home, I won't howl too much at paying 3.8% of four dollars.

But this spoils a great horror story. Sorry.

Why should real estate be taxed to pay for Obamacare. I never heard Pelosi talk about this. Democrats are a bunch of liars...

almasonlybar writes:

In your dreams. Wait 'til the latest round of foreclosures, which have been held in abeyance, hit the market.

ronl1212 writes:

in response to newzhound:

Perhaps.
What we do know is that people value a state where there is no state income tax. They know what is coming as a result of the Obama burden the system approach. And don't forget, next year your real estate sale will be taxed 3.8% for Obamacare.

Your comment is misleading. Most will NOT pay any tax on the sale of real estate. Tax applies for primary residences where profit... not sale price... exceeds $500K and your AGI exceeds $250K.
http://www.realtor.org/small_business...

Coastal writes:

If this is the only place you’ve lived in that requires you to be financially capable of paying back a loan, I suggest you go someplace else and buy, we have enough deadbeats walking out on their obligations.

napleschik writes:

It's still funny on a Monday I don't care who you are. Cindy Carroll should break out the skewed market and tell the truth.

dogtiredboss writes:

Take some basic economic courses boys and girls. While I completely agree the local boards and the NDNs have been pushing an improved market, the facts are that supply is down and demand is up. Still thousands of listings and (IMO) not near the bottom, but you can write all the negative NABOR bashing comments you want and it won't affect basic economics. The market will turn and stabilize and then rise. And someday fall again. Economics 101.

cozyboy writes:

this message brought to you by NABOR of SW Florida. We now return to your regularly scheduled grow house stories.

TheyPavedParadise2 writes:

in response to dogtiredboss:

Take some basic economic courses boys and girls. While I completely agree the local boards and the NDNs have been pushing an improved market, the facts are that supply is down and demand is up. Still thousands of listings and (IMO) not near the bottom, but you can write all the negative NABOR bashing comments you want and it won't affect basic economics. The market will turn and stabilize and then rise. And someday fall again. Economics 101.

Wrong, basic economics courses won't help you here. Not when there is real estate hidden from the MLS. You are living in a rational world. That isn't what we have here. There are 6000 homes empty for various reasons east of 951. Do those numbers fit into your supply/inventory?
Gonna be many years my friend, they choose to ignore the elephant in the room.

Therealist writes:

in response to TheyPavedParadise2:

Wrong, basic economics courses won't help you here. Not when there is real estate hidden from the MLS. You are living in a rational world. That isn't what we have here. There are 6000 homes empty for various reasons east of 951. Do those numbers fit into your supply/inventory?
Gonna be many years my friend, they choose to ignore the elephant in the room.

6000, huh?

upagain writes:

The real estate market will be a reflection on the overall economy. The problem is the economy has been propped up for the last 2 years, by the FED. The FED keeps waiting for the private sector to spur growth. That is not happening, so look for further damage to every sector, including housing. -10% decline.

Coastal writes:

in response to upagain:

The real estate market will be a reflection on the overall economy. The problem is the economy has been propped up for the last 2 years, by the FED. The FED keeps waiting for the private sector to spur growth. That is not happening, so look for further damage to every sector, including housing. -10% decline.

I agree growth is not happening and the real estate market is only one sign. Here is a key reason why we won't see the economy grow. Through June of 2011 private sector hiring was 10 times slower after the passage of ObamaCare than it was in the 16 months prior to ObamaCare.

The Democrat economy.

PeopleSpeak writes:

in response to TheyPavedParadise2:

Wrong, basic economics courses won't help you here. Not when there is real estate hidden from the MLS. You are living in a rational world. That isn't what we have here. There are 6000 homes empty for various reasons east of 951. Do those numbers fit into your supply/inventory?
Gonna be many years my friend, they choose to ignore the elephant in the room.

Correct. Homes east of 75 generally remain depressed compared to those west of Goodlette.

NABOR wants [sucker buyers from up North] to think that "Naples" is synonymous with Collier County (minus Marco Island) when in fact the City of Naples and coastal Collier are firming up while unincorporated Collier is dragging.

This trend will continue as retirees/people in general focus on location and the quality of life received from living near shopping, entertainment, and jobs. Granted, some move to SWFL for the serenity of a 2.5-5 acre wooded lot in the Estates, but most move for the beaches, shopping, dining, and what makes the area unique - eg what you get in Naples.

Our local economy will ONLY improve when the "powers that be" in the crony network not directly employed by Barron Collier Cos wake up to these facts and accept that constructing tract housing and strip malls on orange groves and tomato fields is over. I can't wait until we can stop pouring over these s----- canned NABOR "facts" and start worrying about real, sustainable businesses and being a real, grown-up economy.

TheyPavedParadise2 writes:

in response to PeopleSpeak:

Correct. Homes east of 75 generally remain depressed compared to those west of Goodlette.

NABOR wants [sucker buyers from up North] to think that "Naples" is synonymous with Collier County (minus Marco Island) when in fact the City of Naples and coastal Collier are firming up while unincorporated Collier is dragging.

This trend will continue as retirees/people in general focus on location and the quality of life received from living near shopping, entertainment, and jobs. Granted, some move to SWFL for the serenity of a 2.5-5 acre wooded lot in the Estates, but most move for the beaches, shopping, dining, and what makes the area unique - eg what you get in Naples.

Our local economy will ONLY improve when the "powers that be" in the crony network not directly employed by Barron Collier Cos wake up to these facts and accept that constructing tract housing and strip malls on orange groves and tomato fields is over. I can't wait until we can stop pouring over these s----- canned NABOR "facts" and start worrying about real, sustainable businesses and being a real, grown-up economy.

Very good post

JunkYardDog_1 (Inactive) writes:

in response to PeopleSpeak:

Correct. Homes east of 75 generally remain depressed compared to those west of Goodlette.

NABOR wants [sucker buyers from up North] to think that "Naples" is synonymous with Collier County (minus Marco Island) when in fact the City of Naples and coastal Collier are firming up while unincorporated Collier is dragging.

This trend will continue as retirees/people in general focus on location and the quality of life received from living near shopping, entertainment, and jobs. Granted, some move to SWFL for the serenity of a 2.5-5 acre wooded lot in the Estates, but most move for the beaches, shopping, dining, and what makes the area unique - eg what you get in Naples.

Our local economy will ONLY improve when the "powers that be" in the crony network not directly employed by Barron Collier Cos wake up to these facts and accept that constructing tract housing and strip malls on orange groves and tomato fields is over. I can't wait until we can stop pouring over these s----- canned NABOR "facts" and start worrying about real, sustainable businesses and being a real, grown-up economy.

I'll 2nd your comment.

dogtiredboss writes:

in response to TheyPavedParadise2:

Very good post

My supply/demand comment was not directed at a particular segment of the community, but was a result of the constant BLAH BLAH BLAH of how bad the market is. And no entity (NABOR, bloggers, NDNs) can move the economy. But as prices lower, the market responds and buyers buy. This is true for retail, food, commercial...anything. There are as many real estate transactions happening now as in 2005. Is that a canned fact? No. Why? Because buyers (not NABOR realtors) perceive value and opportunity and are acting on it. When supplies are low, buyers pay more. (Ever try to buy that special NEW Christmas toy that no store has and have to pay 3 times the price on eBay??) We ALL benefit from a better real estate economy. And the recovery will happen (maybe 1 year, maybe 5 years, maybe 10 years) in time in spite of all the crap we spew here on the blogs.

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