2008 Ends Up in Sales Volume
It's not too surprising that after two years of dismal sales volume in 2006 and 2007, compared to 2004 and 2005, we posted an increase in sales volume for 2008 - finally. Is it? All the reasoning and analysis that have been done and will go on for some time is reduced to, prices are down, inventory is up providing a great selection, and people are starting to buy.
Is this the bottom? This question usually refers to the bottoming of selling price which is directly related to amount of inventory. The answer, I believe, is yes and no. Not too long ago the inventory of homes at 2006 and 2007 selling rates indicates some 36 months worth of inventory on hand. Today, in both the Naples and Bonita-Estero market, there are 27 months and 26 months of inventory respectively. However, for the Naples market where there is sufficient volume to track, the inventory for homes below $300,000 represents 23 months while for homes above $300,000 there are 33 months supply. Therefore, in the below $300,000 market segment I believe prices have stabilized for the most part and in the segment above $300,000 we will still see price reductions in the future especially in the above $500,000 market segment.
All-in-all, I think this is very good news - sales are up, inventory is down. However, the economy is in turmoil and many are waiting on the sidelines still. Low interest rates are helping those with good credit scores and verifiable income. Cash buyers are in the best position. Given the performance of the stock market and retirement accounts I am now seeing people moving retirement investment money into self-directed accounts and purchasing property as a long-term investment now, but ultimately for their own use in retirement some tens years or so from now.
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