Dean Martin immortalized Naples, Italy as a city for lovers in “That’s Amore,” but Naples, Florida is more notable these days for broken-hearted homeowners whose properties are sitting idle or selling for less in a sluggish real estate market.
According to the Naples Area Board of Realtors, closed sales reported for the first quarter of 2007 dropped 25 percent to 939, compared with 1,250 during the first quarter of 2006.
New listings in the first quarter of 2007 dropped 14 percent, down to 5,885 compared to the record 6,851 reported in the first quarter of 2006, the board reported, and pending sales during the first quarter were down 4.5 percent to 1,491 from 1,558 a year ago.
The median sales price of homes sold during the first quarter also dropped significantly from $425,000 in the first quarter of 2006 to $399,512 during the past quarter, although the latter figure was up from $375,000 in the fourth quarter of 2006.*
“Median pricing is again showing a rise, with an overall upward trend line over the long term,” the board reported, while acknowledging that prices remain well below the level experienced during record sales periods in the first quarters of 2005 and 2006.
Nevertheless, “the value of the Naples location remains a strong draw for luxury second-home buyers and investors on the national and international level,” the board noted, adding that all figures cited above refer only to sales of homes within the Naples geographic area, excluding Marco Island and other outlying areas.
In a May 6, 2007 New York Times article, reporter Ernest Beck suggests that the Naples market “has developed a split personality.” Beck notes that for several years, the defining images of Florida’s frenzied real estate boom were crowded open houses and speculators flipping pre-construction condominiums.
“But since the market sputtered in mid-2005, as sales have fallen and inventories soared, property auctions and price cutting have become commonplace,” Beck writes. Today, as the gavel comes down on everything from vacant lots to multimillion-dollar estates, sales are still off, and foreclosure and mortgage delinquency rates are rising.
“Yet a closer look at different parts of the state, and at a wide range of properties, reveals a more complex picture of a market in flux,” he said. Naples prices are holding for “desirable properties on golf courses or with waterfront access costing $500,000 and more. But bargains are available for houses below $500,000 because of a bloated inventory of standard two-bedroom, two-bath condos.”
Most analysts agree that current housing prices will not affect the region’s rapid growth. Virtually no one expects southwest Florida’s population to stop increasing. That likelihood raises infrastructure issues, however, and not everyone is confident that state and local authorities are prepared to address them adequately.
Recent Census figures estimate the year-round population of Naples to be about 22,000, although that figure rises significantly during January, February, March and April as “snowbirds” spend their winters in vacation homes.
According to CensusScope, the population of Collier County, of which Naples is the county seat, soared above 300,000 in 2005, continuing the trend of the previous census decade (1990-2000) when Collier was the third fastest growing county in Florida, behind Flagler and Sumpter, with a growth rate of 65.27% compared to the national average for counties of 13 percent, CensusScope reports.
At the center of the infrastructure controversy are plans to expand I-75, the regions’s major thoroughfare, to six lanes and maybe as many as ten.
Naples Daily News columnist Mark Strain notes that for a long time, Collier County has been in violation of Florida statutes by allowing development to proceed with a failed primary hurricane evacuation route.
“The bureaucrats at all levels of government are aware of this and have quietly ignored the consequences,” Strain wrote in his May 10, 2007 column, “hoping that the base expansion of I-75 to six lanes would eventually come. I-75 as an evacuation route would then be secure and the past failures would be swept under the political carpet.”
Strain added that the expansion of I-75 to more than six lanes likely would trigger unwelcome kinds of growth for Collier County.
“Imagine the ends of two sections of I-75, each with 10 lanes (five each direction) terminating north-south (Tampa to here) and east-west (Miami to here) in Collier County. The impact of such a massive directional flow of traffic will force additional off-ramps, wider neighborhood streets, and provide a solid base of concrete from which to launch even more neighborhoods and shopping centers,” Strain wrote.
Another initiative, the proposed Heartland Expressway, would run through the middle of the state and connect to I-75 in Collier County, thereby requiring east-west arterial roadways which, Strain said, “could end up criss-crossing our neighborhoods.”
He acknowledged that while these scenarios will take decades to occur, we can be sure that the popularity of this beautiful area will end up being overwhelmed by exactly what most came here to avoid.
What is happening and being proposed in Southern Florida is identical to what occurred in the 1960s and 70s in Southern California. Los Angeles spread like a disease along the massive concrete corridors that linked the southern part of that state. What started as a southern link to San Diego, the 405 Freeway, ended up cross-connecting with a myriad of other freeways and the entire southern part of that state quickly became urbanized.
“We seem to be headed in the same direction. We can choose to plow ahead full speed or we can choose to move cautiously, step by step, hopefully learning from others who have made similar irreversible mistakes.”
The board qualifies median sales figures by noting they are derived from a set of statistical values, and that in any given period, the median can vary greatly if there is a single sale that is significantly higher or lower than other properties in the area.
– Robert McEwen