HOW LONG BEFORE A LACK OF INVENTORY AFFECTS PRICES?
Reads the headline from a just released Market Report from the Naples Area Board of Realtors. A very good question is posed. Everyone wants to know if the price of the same home sold last year versus this year is up or down. It's hard to track that data in a meaningful way - i.e. to get enough data to draw a conclusion. One can infer from assessed values. We'll have some data on that very soon. But more importantly, I think, is that buyers are paying more for homes. Just look at the last several months on this chart.
From the press release (emphasis added): 'Naples, FL (July 20, 2012) - The overall housing inventory levels are the lowest they have been in six years. Inventory declined at least 12 percent in each price category from the second quarter of 2011 which had 7,208 properties compared to the second quarter of 2012 with 6,310 available properties, according to a report released by the Naples Area Board of REALTORS® (NABOR), which tracks home listings and sales within Collier County (excluding Marco Island).'
If you presume that buyers continue to buy the property they desire so what they are buying is fairly constant it's easy to see that they are indeed having to pay more as a result of inventory depletion.
Cindy is a well respected and long time appraiser in Collier County. She has seen all the ups and downs.
More from the press release: "We are seeing the gap between the list price and sale price narrowing in most market sectors," said Cindy Carroll of Carroll & Carroll Real Estate Appraisers. "While a 10 to 12 percent discount off the list price was the norm 12 to 18 months ago, 5 percent to 7 percent (and less) is the current trend. This results from the continuing decrease in inventory and reflects sellers holding firm on their asking price. Buyers are realizing that the pool of available properties that meet their individual criteria is limited."
- Overall closed sales increased 4 percent from 2,700 sales in the second quarter 2011 to 2,817 sales in the second quarter 2012.
- The overall average DOM (Days on the Market) decreased 2 percent from 188 days in the second quarter 2011 to 185 days in the second quarter 2012.
- Overall pending sales remained relatively the same for the second quarter 2012 with 2,877 pending sales compared to 2,879 pending sales in the second quarter 2011.
- Naples Beach Area overall closed sales increased 15 percent from 568 closed sales in the second quarter 2011 to 654 closed sales in the second quarter 2012.
The writing is on the wall, er, in my Blogs! It just has to be true, right? Even the nationwide media is reporting it, finally.
If you are even remotely considering the Naples, Bonita Springs, and Estero area give me a call.