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The reason the snowbirds flock to the Naples and Marco Island area is easy to see the beautiful beaches, warm winter climate, world class golfing, and active lifestyle. Many visitors enjoy their escape from the winter storms and cold weather. What transitions this buyer to move from the sidelines into a homeowner in our area? There are many factors changing the dynamics of our local marketplace.

A contributing factor bringing foreign buyers into our local market is the devaluation of the dollar.

David Ellis, CNNMoney.com stated that “the dollar hit successive all-time lows against the euro, breaking the key psychological barrier of $1.50 for the first time since the 15-nation currency was launched in 1999.”

Let’s translate why the devalued US Dollar and current pricing in our marketplace is making our local area a haven for foreign buyers.

-- A water indirect home sold for $389,500 US in July 2000. A buyer would need to convert 409,229 euros (EUR) for the purchase price of this home.

-- This home sold in February 2008 for $620,000 US. In February 2008, a foreign buyer would need to convert 412,325 euros (EUR) for the purchase of this home.

-- In US Dollars, there is a net appreciation of $230,500 (US).

-- For a buyer that utilizes a euro based currency, the net appreciation is only $3096 (US).

Another contributing factor for the transition in the local market is the stock market volatility. According the Wall Street Journal, weekend edition, March 1 and 2, 2008, “the Dow is down 7.5 percent this year and 13 percent below its record close in October (2007).”

In a hypothetical scenario, a retiring Baby Boomer with $1 million in the Dow in October 2007, could have lost over $130,000 in a little over 4 months. Some buyers with significant losses are considering the option to buy now and enjoy some of their retirement money in a warm winter retreat.

In a recent article in the Wall Street Journal, Jeff D. Opdyke, describes the “vulture culture” for real estate in Florida: “Home buyers from around the U.S. and abroad are descending on Florida to buy condominiums that have suffered sharp price drops amid the housing glut, subprime-mortgage crisis and credit crunch. Some are searching for investment properties, confident home prices will eventually rebound.”

He continues to say that other buyers are looking for their vacation or retirement homes. In Opdyke’s article, one banker that recently purchased condo and is currently shopping for a second property stated that he may miss the bottom but the banker believes that in the long term that percentage difference will be “irrelevant.” On Marco Island, selection continues to decline as the best value properties continue to come off the market at a faster pace. In February 2008 in comparison to February 2007, inventory levels dropped by 10.2 percent. Overall, for the first two months of 2008, pending (under contract) and closed sales statistics reported an increase of 10.3 percent in comparison the same time period in 2007. For January 2008, many areas of Southwest Florida were reporting increases in pending sales and buyer activity.

Today, buyers can enjoy the selection and negotiating power. As inventory levels diminish, so will your chance to “pick the cream of the crop” at their lowest price levels.

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Natalie Kirstein, MBA, Realtor, works for Premier Properties of Southwest Florida Inc at The Esplanade. She can be contacted at NatalieK@premiermail.net or 642-2222.