As people grasp for signs of an economic recovery, a multi-million dollar beachfront property sale in Port Royal has people wondering if the local real estate market is regaining its heartbeat. The short answer: Yes.
“There is definitely a confidence in the air,” says Brenda Fioretti, president of the Naples Area Board of Realtors.
Fioretti says that the real estate market has improved over the past two years, but those improvements have been slow and difficult to quantify until now.
On the heels of last week’s sale of James Lennane’s beachfront home and property on Gordon Drive in Port Royal to a trust for $14.55 million, Fioretti says that home sales of over $10 million more than doubled in the past two years – going from three sales over $10 million in 2009 to 8 sales over $10 million in 2010.
“Investing in real estate is on its way back,” Fioretti says.
And as long as you’re realistic about the returns of those investments, Fioretti says you can be optimistic.
“We don’t expect the 20 percent appreciation any time soon,” Fioretti says. “But we do expect three percent in 2011.”
Jim Gorman, of Downing Frye Real Estate in Naples, handled the Port Royal property listing – 8,477 square foot, two-story, five-bedroom and six-bathroom home on a 1.29-acre lot, located at 4228 Gordon Drive in the Port Royal section of Naples.
Gorman says that while it’s not realistic to equate a beachfront, Port Royal property sale to countywide real estate trends, he does recognize that price-savvy buyers are out there and willing to invest.
“The beachfront property market is not, as a whole, indicative of the rest of the real estate market,” Gorman says. “But the buyers’ mentality and motivation is definitely indicative of buyers across the county.”
“Are people throwing money around? No,” he says. “People are out there looking for value. And they will buy, if they perceive it as a great value.”
Gorman says that he saw beachfront properties hit bottom last season, both in price and numbers. But he says this recent sale, along with the four other sales of beachfront properties in Naples in the last 12 months, shows that the beachfront market is coming up.
“Because of a lack of supply, is a great time to put beachfront properties on the market,” Gorman says. “I have at least there other buyers looking to buy on the beach in Naples, Florida.”
Phil McCabe, a Naples restaurateur and hotel owner who lives in Port Royal and owns several properties in Naples, says that just by looking around town, market improvement is obvious.
“My sense of the market is it’s very, very strong,” McCabe said.
“We had our best October ever,” McCabe said about room bookings at his hotel, The Inn on Fifth, in downtown Naples. “We had our second best November ever. These are good indicators for real estate.”
Fioretti points out that while homes priced over $1 million saw the largest improvement in sales in 2010, the overall real estate market also shows signs of a healthy rebound.
According to a study published by the Naples Area Board of Realtors, 7,863 homes were sold in Collier County, excluding Marco Island, during a 12-month period that ended in November this year, compared to 6,884 homes sold during the same time period in 2009.
The median home price in the category below $300,000 has risen from $179,000 through 2009 to $180,000 through 2010. But that statistic is tough to scrutinize, as many of those properties are distressed, or bank-owned and short sales, Fioretti says.
She points to homes in the $300,000 and over category, with median property sales rising from $525,000 in 2009 to $540,000 in 2010.
“Because the inventory keeps decreasing, because the prices have stabilized and because new transactions have increased - there’s optimism in the air,” Fioretti said.