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Basic Supply & Demand with a Little Bit of Months Supply of Inventory Thrown In - Naples, Florida

By
Real Estate Agent with Florida Supreme Realty SL514814

Seeing the supply side being diminished like this is a long awaited event.  There's not even a concern how it's being accomplished either.  Terminated and withdrawn listings are factored in along with expired and sold too.  Weeding out over priced listings and homes in poor condition is a healthy thing for the market wherever you live.  Realistically this does not mean you are going to start flipping again as easily as it was but know that there are some bargains here.  I recommend a Buy & Hold strategy for the long haul of at least 5 years.    

Chart showing basic real estate supply and demand in Naples, Florida

Please don't fret about the slight downturn on the Demand side.  There's actually more strength than expected there due to our seasonality.  The Supply side is continually charging up our strengthening market.  The leaner we can make this the better, to a point.  The 3rd quarter is usually our slowest time of year however in recent times the ebb and flow has not been as great.  Our best asset has been long time visitors who have watched the market for years now seeing that the time has come to own property here.  What was unattainable to many for so long is now within reach and in some instances seeing '02 pricing.  

The past years data showing supply and demand of Naples, FL real estate activity by month

Months Supply of Inventory, sometimes referred to as MSI, compliments the Supply and Demand information well.  We're still not into a balanced market but are swinging to that direction.  Single digit MSI is good to see and I will predict that a near balance will happen this coming season by January or more likely February.

      Chart showing the estimated months supply of inventory for the real estate market in Nples, FL

Supporting data for previous chart of months supply of inventory of real estate in Naples, FL

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Elizabeth Birmingham
EB Realty - Grand Junction, CO

Good research. What is good for Naples is good for Key West.

Aug 20, 2011 08:00 AM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Kevin,

Well, I hope people are listening to the widom of Kevin J. May.  Buy now and hold for 5 years.  Have a great weekend. A

Aug 20, 2011 08:32 AM
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

Elizabeth, that makes sense within the similarities of our markets.  A trip is planned to see for ourselves.

Alexandra, isn't it funny how we never bothered to track MSI until recently.  Since 2007 it has made a huge difference when deciphering market direction although it's not to be relied upon solely by itself.

Aug 20, 2011 02:35 PM
EC, JF, Double R and Zoey the Cool Cat
Russel Ray Photos - San Diego, CA

Is the inventory down because properties have been sold or because they've been taken off the market? It seems a lot of properties here have been taken off the market because they couldn't sell because financing is so difficult, especially with the new law disallowing junior trustees to go after deficiencies after short sales.

Aug 20, 2011 02:56 PM
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

Eric, our year over year total sales show 2010 and 2011 as our highest since '04 and '05.  Relatively speaking we saw 16,308 sales during the past two years and 18,057 during 2004 and 2005 combined.  Expireds accounted for 7,202 fails in '04 and '05 combined, while there were 13,602 since August 21, 2010.  It's safe to say we're selling most of them and the majority of expireds are staying off the market instead of being added back into the inventory.  Our peak was 2005 with 9,242 sales from August '04 to August '05.  Our most recent weakest year was 4,088 sales year over year ending in August of 2007, almost exactly half of this past year's sales volume.  Both 2010 and 2011 are nearly identical in both regards with 8,157 vs. 8,151 in sales and 6,888 vs. 6,714 in expireds.  Getting better all the time!

Aug 20, 2011 04:24 PM
Yolanda Cordova-Gilbert
Richmond, TX

Kevin,

            It seems if people do want to move somewhere or own a second they do watch the market with the interest rates this low and prices down this is the time for action. Naples is a great area. Lots of beach action!

          

Aug 21, 2011 08:02 AM
Sandy Shores FL Realtor®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Kevin, We are seeing the same kind of trend here in Brevard.  Inventory is diminishing.  We are in multiple offer situations and it is taking us longer to find houses for our buyers, than before.  Great comprehensive post!  Hope you are well!

 

Aug 21, 2011 01:31 PM
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

Yolanda, throughout most of the State we have fared better than most and you're right there is something unique about our 2nd home market and it's not just the beach.

Sandy, I am so glad to hear that it's happening in Brevard also.  The girls are all smiles so it must be good times for all in Melbourne.  Yes, that means you too!

Aug 21, 2011 02:24 PM
Joshua Zargari
MJ Decorators Workshop LI staging and home decorating - Lynbrook, NY
MJ Decorators Workshop

Good morning Kevin.

Now is a great time to buy a home...

Prices are down and the interest rates is very low...

Aug 23, 2011 01:16 AM
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

I'm considering it Joshua!

Sep 02, 2011 12:53 AM