Frequently Ask Questions
Q: Why does Naples have so many homes for sale?
There are 12,000 homes listed for sale in Naples, which is double
the amount expected in a balanced market. But, the majority of these
homes listed for sale are priced 25% or more above recently closed
comparables. In other word, 25% higher than market values.
Many homes are listed 50% above current market values. If high
priced sellers were removed from the listings, the number of homes
listed for sale would be more in balanced for a housing market the
size of Naples.
Q: What percentage can I get off list price?
The average discount is 10% off of list price. But this can range
from 0% to over 25%. You can expect to buy a home at market value or
under market if the seller is truly motivated. It is important to
get an understanding of true market values before you buy.
Q: What about making lowball offers?
A lowball offer is an offer substantially below market price. Making
an offer significantly less to a high priced seller is not a lowball
offer. But is probably a waste of time.
When Naples was at peak pricing, the “Irrational Exuberance” of most
sellers had them wanting another 10% to 20% above peak pricing. As
such those homes did not sell, and those sellers are no longer
exuberant.
Irrational exuberance of a buyer will likely result in missed
opportunities this season.
Q. Can I get a good deal on a foreclosed property?
Bring along your hammer, nails, paint brush and work crews.
Foreclosed properties are owned by the “bank.” Mr. “Bank” has never stepped in
the property or looked at it. In many cases the previous owner did not have the
money to make mortgage payments and did not have the money to make
repairs and maintenance on the home. Especially since they knew they
would not be in the home for the long run.
Foreclosed properties are not necessarily the better priced homes. A
buyer that is just focusing on foreclosed properties will most likely
have a long search, and will be bypassing better value comparables
in many cases.
Q: What impact is the US credit crunch having on Naples?
The Naples housing market and its economy is driven by second home
buyers. These buyers are either putting their leisure plans in
place, or will soon be reaching retirement. They are not selling a
home to buy a home. They are buying a second home.
Over 50% of second home buyers pay cash for their home purchase, and
others usually make a substantial down payment. In 2007 more than
60% of the homes sold over $1 million had cash buyers. Workforce
buyers tend to buy more affordable housing and rely on mortgages to
finance their purchase.
Q: If Naples workforce housing experiences credit problems, won’t
that pull all home prices down further?
While second home buyers are represented in every community and
neighborhood within Naples, they tend to concentrate in the
locations and communities that best suit their leisure desires.
These will be communities with greater amenities or more expensive
locations or higher fees or higher values.
Q: Where is the market headed?
Unlike most housing markets, Naples gets a fresh infusion of new
home buyers each year, regardless of what is happening with the
local economy. Over time this yearly infusion of new buyers is
expected to increase, as we are just at the beginning stages of
baby-boomers reaching retirement. Based on the overall economic
events of the country, the number of buyers purchasing a new second
home in any future year might be up or down, but the trend over time
will be up.