A lot must have happened since Jan.
Ref: Naples is an area I know very well, it’s actually one of the hardest areas to be hit by the turn in the Market. Below is a report from a local Real Estate Agent so he has a vested interest of talking things up.
Having invested and lived in Florida (sold up July 2005) I can confirm the following situation regarding Naples. When the Florida market turned in autumn 2005 people said it won’t affect areas like Naples it’s too upmarket, desirable and demand will always be there. Naples having boomed and bubbled more than most sucked in a lot of ‘investor’ that were really speculators.
In a ‘normal’ Naples market only 5% of the units on any given sub-division/development are up for resale. Currently on many of the most sort after that’s up 400% to 20%. Many properties that would have sold in 2004/5 in a week, have now been on the market for 8 to 12 months, despite being reduced by the vendors, that’s a crash. The investor, speculators and all those that are stretched financially are all heading for the exit before things really get bad, that is set to continue.
You can buy property on every sub-division of Naples at 20% below the peak, again that’s a crash! I personally would not choose to pay that much as there are better deals to be done. The example I gave of a reduction of 44% was Naples.
The price rises (2002 to 2005) in Naples like a lot of other areas of Florida was nothing more than a speculative bubble.
For anyone considering investing in Florida it is important to realise that the costs of buying (not to be confused with the price of the property) is high, the running (maint, tax, management, hoa fees, insurances, utilities etc) are also high, as are the costs of selling. Conversely rental income is always lower than anticipated if you rent it out. In a normal Florida market where the long term average annual increase in property prices is circa 4%, you generally struggle to break even on real estate. It is very cyclical get your timing wrong as many have and it’s a very expensive lesson. I predict (JMO) that prices in Florida will not bottom until late 2008 at the earliest.