NABOR: Naples area may shift to sellers' market with real estate recovery

NAPLES — For years, home buyers have been in the driver’s seat in the Naples market.

After the housing boom went bust in 2006, it became a buyers’ market, giving them the wheel in negotiating bargain prices.

But the pricing power might be shifting to sellers soon with a shrinking supply of homes and condominiums overall, especially in certain neighborhoods.

“You are starting to see the prices increase in certain markets. It’s not every single market,” said Wes Kunkle, president of the Naples Area Board of Realtors and a managing broker of Weichtert Realtors on the Gulf in Naples.

On Friday, NABOR released its monthly report, showing inventory falling more than 13 percent in February over the year, from 7,888 homes and condominiums to 6,843.

The overall median sales price in February was $220,000, up from $180,000 in the same month a year ago, according to the NABOR report. The median is the price at which half sell for more and half for less.

The report also showed resales in the Naples area dipped slightly in February — a trend that could continue because of a lack of choices for buyers.

There were a total of 687 sales made in the Naples area, down from 694 in the same month a year ago, according to the monthly report. The report tracks sales made by NABOR’s members in Collier County, excluding Marco Island.

Of the total, there were 304 single-family homes and 383 condominiums sold last month. The report reflects the sales of existing homes, not new home construction.

While condominium sales rose over the year, home sales declined from 347 in February of last year.

“The condo market is doing well. It has really come alive in the last year,” said Phil Wood, president and CEO of John R. Wood Realtors in Naples. “A growing number of the northern buyers coming down to get out of the cold are looking for condominiums.”

He described the overall housing market as “very healthy,” saying it has consistently improved since 2008. He said, however, he wouldn’t be surprised to see sales slow over the next six months.

“We could see a little decrease due to lack of inventory,” Wood said.

“Changes in inventory at some point may become an issue,” said Shelton Weeks, chairman of the economics and finance department at Florida Gulf Coast University in Estero, in a statement. “Continued declines in inventory will produce some upward pressure on prices. However, as prices rise we should expect builders to bring more new units to the market, which may slow the advance in prices.”

Some neighborhoods are doing better than others. Some of the more active ones are the Moorings and Park Shore, north of downtown Naples and west of U.S. 41 near the Gulf of Mexico, which have seen more interest from buyers during the past six months, Wood said.

“There have been a lot of sales in there and inventory has gone way down,” he said. “Once the demand is there, then gradually the prices start going up and we are seeing that now.”

With such high demand, some custom builders are putting up speculative, or spec, homes, which are homes without buyers, to try to keep up with the strong interest in some neighborhoods, including the Moorings, Park Shore, Port Royal, Old Naples and Coquina Sands.

Year-over-year, overall pending sales — or new contracts written — in the Naples coastal area rose 15 percent from 1,839 to 2,119 units, and closed sales increased 16 percent, from 1,650 to 1,906, in the 12 months ending in February 2013.

Meanwhile, overall pending sales increased 5 percent from 10,160 to 10,629 over the year.

The shortage of inventory and rising prices may prompt more owners to put up for-sale signs, but a big surge of listings isn’t expected. For those who want to sell, the busy winter season is usually the time they put their homes on the market, especially in January to March.

“I don’t know what we’ll see over the summer. It’s going to be interesting,” Kunkle said.

While new home communities are ramping up construction and sales, building won’t come fast enough to catch up with the rising demand that will push prices up, said Russ Weyer, an economist and senior associate with Hank Fishkind & Associates in Naples.

“They’re preparing themselves for next season already,” he said. “There’s not much left of the season.”

He expects to see a stable rise in home prices over the next six months.

“The prices aren’t back yet to where they were and they won’t be for quite a while,” Weyer said. “I don’t think they will ever get back to where they were in 2005.”