Naples Coastal Neighborhoods Trend Line Continues Upward March in the Third Quarter of 2006

As Reported by the Naples Area Board Of Realtors:

Pelican Bay: This shows the 3-year quarterly trend for the Pelican Bay area. The Median Sold Price for 2003 4th quarter was $597,500; the Median Sold Price for 2006 3rd quarter was $1,185,000.

Park Shore, Coquina Sands & The Moorings: This shows the 3-year quarterly trend for the area encompassing Moorings, Coquina Sands, and Park Shore. The Median Sold Price for 2003 4th quarter was $645,000; the Median Sold Price for 2006 3rd quarter was $1,600,000.

Port Royal, Aqualane Shores & Old Naples:

This shows the 3-year quarterly trend for the area encompassing Olde Naples, Aqualane Shores, and Port Royal. The Median Sold Price for 2003 4th quarter was $892,500; the Median Sold Price for 2006 3rd quarter was $1,960,000.

NAPLES FLORIDA – Third quarter statistics generated by Naples area Realtors® show a mix in pricing in Naples’ coastal neighborhoods, which include residential properties west of U.S. 41. However, the median three-year trend line in all the coastal neighborhoods remains in a consistent upward direction and is not expected to deviate from that path.

While the median price of closed home sales dipped slightly in Pelican Bay, the median sold price spiked sharply upward in the neighborhoods that include Park Shore, Coquina Sands and Moorings. Meanwhile, the median price in the Port Royal, Aqualane and Olde Naples area held fairly steady.

The median refers to the middle value in a set of statistical values that are arranged in ascending or descending order, in this case prices at which homes were actually sold.

The median sold price in the Pelican Bay area was $1,185,000 for the third quarter of 2006. In the Park Shore, Coquina Sands, Moorings area, the median sold price was $1,600,000. In the Port Royal, Aqualane Shores, Olde Naples area, the median sold price for the third quarter was $1,960,000.

“In any quarter, or even in any month, the median can vary greatly if there is an anomaly, a single sale that is significantly higher or lower than other properties in the area,” said Jo Carter, president of the Naples Area Board of Realtors® (NABOR). “We look at the trend line over a longer period to determine market shifts.”

Looking at the fourth quarter of 2003, the earliest period that the statistical analysis was available, the median sold price in Pelican Bay was $597,500. In the fourth quarter of 2003, the median sold price in Park Shore, Coquina Sands and Moorings was $645,000; and in the Port Royal, Aqualane, Olde Naples area, the median price in the fourth quarter of 2003 was $892,500.

“Over the past three years, the trend is significantly upward,” Carter said. “If you do the math, you see an increase in the median price of homes in Pelican Bay was up about 98 percent. In Park Shore, Coquina Sands and Moorings, the median price rose an impressive 148 percent. In the Port Royal, Aqualane Shores, Olde Naples area, the increase in the median was almost 120 percent.”

According to Carter, the areas west of U.S. 41 in Naples have long been considered the “price setters” for Naples area real estate. As prices have risen in these neighborhoods along the coast, pricing of homes in the inland neighborhoods have followed suit, although sometimes more slowly.

Carter said that NABOR’s new capability to generate statistical data on various segments of the Naples market provides an opportunity for accurate and significant trend analysis.

“By utilizing all of the data available to us, we can avoid drawing conclusions about the market on incomplete or inaccurate data,” she said.

She also noted that the upward trend lines are normal for the Naples area. “If you look at any period in the last 40 years, the trend lines look fairly similar to the current trend lines,” she said. “Prices consistently move upwards, with very occasional plateaus or slight dips.”

Economic Update

U.S. Economy:
Unemployment claims drop to lowest level in 2 months
By Martin Crutsinger, Associated Press

WASHINGTON — The number of Americans filing applications for unemployment benefits dropped sharply for a second week, pushing claims down to the lowest level in two months.
The Labor Department said 304,000 newly laid off workers filed claims for unemployment benefits last week, a drop of 20,000 from the previous week, when claims had fallen by 34,000.
The two straight weeks of big declines pushed claims to the lowest level since they were at 300,000 the week of Oct. 14. The recent decreases bolstered the view that even though economic growth has slowed sharply this year, employers are holding on to their workers in anticipation of an economic rebound.
The government reported last week that employers added 132,000 jobs to payrolls in November after adding just 79,000 jobs in October. The gain occurred in spite of the fact that construction companies slashed 29,000 jobs last month, reflecting the big downturn in housing this year, while manufacturing lost jobs for a fifth consecutive month as the nation's automakers continued to struggle.
The overall economy, which started the year at a sizzling 5.6% growth rate, slowed to sluggish 2.2% rate in the summer.
While there had been concerns that the deepening troubles in housing might push the country into a recession, those fears have eased recently with the expectation that the retreat in gasoline prices from record highs above $3 a gallon will give consumers more money to spend on other items.
Source: USAToday.com

Real Estate Watch:
Why Real Estate Markets Will Improve in 2007

There are reasons to be optimistic about real estate next year, a BusinessWeek Online analyst says. New and existing home sales might slide further in 2007, but there won’t be a sharp decline like there was in the early ‘80s and ‘90s. Why? Because the overall economy is in good shape.
Some markets will become much more affordable, making a home purchase possible for people who never could have afforded one previously.
Speculators who drove up housing prices will move on to speculate on something else.
Fewer new homes will be built, and surplus inventory will be absorbed, so prices will stabilize.
Mortgage rates will remain at relatively low prices and could go even lower if the Federal Funds Rate falls, which it might. - BusinessWeek Online, Maya Roney (12/12/2006)
Source: Realtor.org

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Economic Update

U.S. Economy: U.S. Homebuilders' Shares Gain on Rate Expectations
By Kathleen M. Howley and Brian Louis
Dec. 6 (Bloomberg) -- U.S. homebuilder shares rose, led by Standard Pacific Corp., D.R. Horton Inc. and Ryland Group Inc., the largest seller of new homes for first-time buyers, as a 10- month low in mortgage rates sparked hopes of a housing rebound.
Mortgage rates have tumbled unexpectedly to the lowest level since January, fueling demand for houses. Applications for loans to purchase homes last week rose to a seven-month high, Mortgage Bankers Association said today. Earlier this year, all the major housing forecasters, including MBA, had called for borrowing costs to increase through 2006 and 2007.
“The rally thus far has already occurred sooner than many expected, and we believe the group is about to accelerate its ascent,'' Stephen Kim, an analyst at Citigroup Inc., said today in a note to clients. Kim raised target prices for 13 homebuilders, including D.R. Horton Inc., Lennar Corp., and Toll Brothers Inc.
The Mortgage Bankers Association's index of applications rose 8.1 percent to 647.6, the highest since the week ended Jan. 20, from 599 the prior week. The group's index of refinancing rose 14 percent to 1989.7, while its gauge of home purchases gained 4.9 percent to 426.6, the highest since May.
Some housing experts are cautioning the housing market's bottom has not yet been reached.
“I see a trough coming in the first half of 2007,'' Frank Nothaft, chief economist at Freddie Mac, said in remarks at today's homebuilding conference. “We're about two-thirds through the correction in the housing sector.''
Source: Bloomberg.com

Real Estate Watch: Pending Home Sales Indicate Market Stabilization
WASHINGTON, December 04, 2006 - Pending home sales are hovering in a narrow range, another indication that stabilization is occurring in the housing sector, according to the National Association of Realtors®.
The Pending Home Sales Index, based on contracts signed in October, slipped 1.7 percent to a reading of 107.2 and is 13.2 percent lower than October 2005. The index had trended up from a cyclical low of 105.6 in July, and a decline from year-ago levels is narrowing. In September, the index was 13.6 percent below a year earlier, while in August the decline was 14.0 percent.
David Lereah, NAR’s chief economist, said a fairly steady pace of home sales can be expected for the next two months. “It’s important to focus on where the housing market is now – it appears to be stabilizing, and comparisons with an unsustainable boom mask the fact that home sales remain historically high – they’ll stay that way through 2007,” he said. “In addition, a temporary correction in prices distracts from the fact that it is primarily the number of home sales that affects the economy, and the number for this year will be the third highest on record.” The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.
Source: Realtor.org

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Economic Update

U.S. Economy: Bernanke Scrutinizes Labor Costs for Inflation Signs (Update1)
By Craig Torres and Carlos Torres

Nov. 29 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said a new source of inflation may be emerging in rising wages and salaries even as energy prices retreat.
He gave no indication in a speech yesterday that the central bank may reduce interest rates in response to slowing economic growth. Instead, Bernanke said policy makers are watching to see whether companies pass on pay increases to customers, which would raise the prospect of faster inflation.
Fed policy makers held their benchmark rate at 5.25 percent the past three meetings after raising the target rate for overnight loans between banks 17 times in two years.
“He is not signaling a near-term rate cut,'' said Paul Kasriel, director of economic research at Northern Trust Co. in Chicago and a former Fed economist.
Rising cost pressures from wages would be a problem for the Fed because inflation is already above the range identified as acceptable by officials including Bernanke.
Inflation, using the Fed's preferred index that subtracts food and energy from consumer expenditures, was 2.4 percent for the year ending September, higher than levels Bernanke has said he's comfortable with.
Source: Bloomberg.com

Real Estate Watch: Who’s Buying Houses Now?

Despite low mortgage interest rates, a smaller percentage of first-time homebuyers are entering the market, according to an annual profile of buyers and sellers just released by the National Association of Realtors.
During the year ending in June, 36% of all buyers who purchased a home were first-time buyers. That's down from 40% a year ago. Part of the reason for the declining share of first-time homeowners: Declining affordability for those entering the market after the housing boom of the past couple of years bumped up home prices, said David Lereah, the NAR's chief economist. A greater number of second-home sales also may have contributed to a lower percentage of first-time buyers overall.
The percentage of single female homebuyers, however, inched up in the survey to its highest level on record. Twenty-two percent of all homebuyers were female and on their own, up from 21% a year ago and up from 14% in 1995. In comparison, single males accounted for 9% of homebuyers, unchanged from last year.
Existing-home sales in the South slipped 1.2 percent to an annual sales rate of 2.49 million in October, down 8.8 percent from the same period a year ago. The median price in the South was $185,000, down 7 percent from a spike in October 2005.
Source: www.realtor.org


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