Southwest Florida Home Sales on The Rise

The numbers for the third quarter of 2009 are in, and we have never been more excited! The news is all good: The number of closed sales is growing by leaps and bounds, while decreasing numbers of new listings contribute to shrinking inventory. Prices also continue to be competitive, which I think helps to fuel sales.

Our point is, the Southwest Florida housing market is steadily improving, and these numbers prove it. With nearly a two-year trend of increasing closed sales, there is every reason to suspect this growth will continue. And as inventory decreases and there is less selection available, prices will naturally rise to meet the demand.

What gives us the right to be so optimistic? Well, for starters, the third quarter of 2009 saw 2,196 closed sales in Naples, Bonita, and Estero, whereas the same quarter last year only had 1,497 closed sales. That's an increase of 47 percent – definitely nothing to sneeze at. This makes it the seventh quarter in a row to increase over the previous year, which is almost two years of straight growth!

Also notable is the rate at which the inventory is dropping. There are substantially fewer homes on the market in this area now than there was a year ago. For example, the number of homes priced under $250,000 has dropped 16 percent from the same time last year – from 4,429 down to 3,720. The number of new listings on the market is also dropping: In the third quarter this year there were only 5,121 new homes listed, which is 6 percent fewer than last year's number of new listings.

We think it bears mentioning that one price category actually saw an increase in new listings: There were 21 percent new homes listed at less than $250,000 than the same quarter last year. This is significant because despite the increase in new listings in this category, the inventory actually went down by 16 percent, as we mentioned above. This fact should demonstrate exactly how well homes in this price range are selling right now.

Also important is the substantial improvement in the new listings to pended sales ratio. This statistic projects the future of the housing market's inventory: If homes are being listed faster than they are selling, inventory will grow. In the third quarter last year, there were nearly 3 new listings for every pended sale, and during the same time period in 2007 there were 4.7 new listings for every pended sale. Compare that to the third quarter of this year, with only 1.4 new listings for every pended sale.

Even with all this growth, competitive pricing is still the name of the game. In fact, we would venture to say that it's what is driving the growth! A whopping 63 percent of all closed sales in the third quarter were homes priced under $250,000. Remember, this is the category that also saw the only increase in new listings, yet the biggest decrease in inventory. In other words, homes priced at a quarter million or less are extremely appealing to buyers right now.

In all pricing categories, though, it is clear that price is king. The most competitively priced homes in each range are the ones selling the fastest. Even properties priced at over $1 million are showing signs of growth at last: The number of closed sales in this category increased 15 percent this quarter over last year. Since this is the first time the sales in this pricing category have increased, it is difficult to say whether it will become a trend, but I think the increase demonstrates that competitive pricing draws buyers in all price categories.

Looking at the numbers for 2009's third quarter, I don't think there is any room for debate: The real estate market in Southwest Florida is showing clear signs of steady growth. Especially considering how quickly the inventory in the $250,000-and-less category is dropping, I don't think such competitive prices will be around for much longer!