Foreclosures in Naples Florida

Looking At The Market Shares

Foreclosures in Naples Florida dominate our market.  On June 29, 2011 over half of all homes under contract were designated either “potential short sales” or “foreclosed”.

Active MLS Listings

Lets look at the numbers.  Today, there are 6,252 active listings in the Naples MLS.  Of those, there are 736 that area designated as “potential short sales”.  Almost 12% of the homes for sale in Naples are short sales.  On foreclosures, there are 171; that’s 2.7% of the market offerings.  By these numbers, it doesn’t sound like foreclosures have that much share of the market.  Remember though, these are active listings, not listings under contract.

MLS Listings Under Contract

Now for that portion of the market that’s under contract.  There are a total of 2,048 listings either “pending” or “pending w/contingencies.  That’s 33% of the market that’s moving!  Out of that number, 1,082 are short sales, 184 foreclosures, and 782 traditional sales.  Respectively, that’s 52.8% short sales, 9% foreclosures, and 38.2% traditional sales.  Now we see that well over half the serious market is comprised of foreclosures and short sales.

Everyone would agree that foreclosures and short sales are probably priced better than the average traditional listing.  That’s because the bank is trying to move their property and stop their expenses, and the distressed homeowner is trying to get their home sold before the bank takes their home.

The homeowner is not holding out for an unrealistic price;  he wants to salvage his financial reputation as much as possible. Whether his home sells for 5% lower or 5% higher is not his main concern.  He is trying to beat the deadline.

Many of the “traditional listings” are those homeowners who want to “test the waters” to see if they can get a better than average price.  So some of the active listings you’ll see in our MLS are not serious sellers today.

Short Sales History

When  real estate prices their free fall back in 2007 short sales were yet common, nor streamlined.  You had to have nerves of steel to survive the ride.  Many buyers withdrew their offers after weeks or months of silence from the banks, and very few ever closed.

In 2007 there were only 10 short sale listings that closed in the Naples MLS.  2008 saw a  jump to 215 sales.  Then in 2009 it surged ahead to 1,490.  Finally in 2010 there were 2,192 short sale closings.  At the half way point this year we are at 1,030.   Short sales may have leveled off, but they are easier than ever to achieve with the help of  a good REALTOR®

As you can see from the chart below, short sales listings are on the market the longest.  Some of this is due to the way the agent has to market this property.  The investor is not going to agree to lose money unless he has proof that the agent set the price at comparable market levels and then systematically reduced the price until offers came in.  Compared to REO properties, this marketing approach will take longer.

And yes, a short sale offer does take longer to get a reply than an REO offer, but in our experience it isn’t that much longer.  The number of REO properties are way down, the demand is high, and short sales will be filling that demand.