Naples homeowners can expect as much as a 10 percent increase in the value of their homes by the end of the year, a national economist told a packed house of Realtors at an economic summit held Friday in North Naples.
In fact, all the speakers at the 2012 Economic Summit were optimistic about the real estate market in Southwest Florida.
Real estate is in recovery, locally and nationally, buyers have stepped up and prices are firming up, said Lawrence Yun, a chief economist and senior vice president of research for the National Association of Realtors.
Some of the hardest hit markets, including Naples, have been leaders in the recovery, he said. That has a lot do with their location.
"As you all know all real estate is local," Yun said. "You can not pick it up and move it somewhere else."
He predicted as much as a 10 percent appreciation in home prices by December in the Naples market over last year.
"This is not some wishful thinking," Yun said, adding that he believed an over correction in the local market has pulled prices down too far.
While the markets in neighboring Lee County are recovering too, it's not happening as fast because they saw more overbuilding during the boom years, he said.
Nationally, Yun said he expects home prices to increase by 1 to 3 percent by December. He expects increasing sales nationally, which he said could be boosted by 15 to 20 percent if banks just went back to using "normal underwriting standards," instead of using such strict standards that are so limiting.
He talked about a shortage of new homes, locally and nationally.
"You build it, they will come," he said, adding that the buyers may not all come this year, but they'll come in the next year or two.
The key to more housing demand is more people with jobs and that's happening in Florida, he said.
Yun was just one of five speakers at the 2012 Economic Summit, a first-time event sponsored by the Naples Area Board of Realtors, or NABOR. The event, held at the Realtor association's conference center off Pine Ridge Road, attracted a sell-out crowd of 250."It sold out before we could even advertise it to our members," said Brenda Fioretti, a Naples broker and NABOR spokeswoman.
Next year, NABOR will move the event to a larger venue with seating for up to 500.
The other speakers were John Tucillo, a chief economist with Florida Realtors, a statewide trade group; Shelton Weeks, a real estate professor and director of the Lucas Institute for Real Estate Development & Finance at Florida Gulf Coast University; Doug Duncan, a vice president and chief economist for Fannie Mae, and Cindy Carroll, the vice president and manager of the residential division at Carroll & Carroll Real Estate Appraisers and Consultants in Naples. All of the speakers delivered a heavy dose of optimism about the real estate market in Southwest Florida, but it came with some caution.
What happens in real estate depends heavily on buyers' perceptions and expectations, Tucillo said.
"People outside the state still think we're in the dumper," he said.
But they're wrong, he said, pointing out that home sales have steadily increased virtually ever month since last year in Florida.
"I think Florida real estate is back in a mini-recovery," Tucillo said, but he added there's still a long way to go.
Uncertainty over how the 2010 Dodd-Frank Act will affect banks in the future is limiting their willingness to give out mortgage loans because they are worried about the "sword hanging over their head," he said.
Distressed homes that have yet to hit the market, known as shadow inventory, are still a concern, but on the bright side the inventory has been shrinking and foreclosures have slowed, Tucillo said.
The good news about the local real estate market came on the heels of a strong season.
On Friday, NABOR released its first-quarter report, which showed the overall housing inventory shrinking by 13 percent and pending sales – or new contracts written – up over the same quarter last year, which was a strong one.
Mike Hughes, vice president and general manager of Downing-Frye Realty Inc. in Naples, characterized the sales activity in the first quarter of this year as "one of the top five ever."
"It was phenomenal," he said. "Really, the amount of pending contracts that were written in the quarter were staggering."
Pending sales increased 14 percent in the $300,000 to $500,000 market. They were up 29 percent in the $500,000 to $1 million market and rose 14 percent in the $1 million to $2 million market.
The median home price in the quarter increased 14 percent. The median is the price at which half the homes sell for more and half for less.
NABOR's report tracks home and condo sales made by its members in Collier County, except in Marco Island.
"I think the mood among the Realtor community is optimism," Hughes said.
Connect with Laura Layden at www.naplesnews.com/staff/laura_layden