Naples Rises From Florida Housing Swamp as Wealthy Buyers Return

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March 25, 2011

Sales in the Naples area last year rose 10 percent, the first annual increase in at least five years, while the median price for homes listed at $300,000 or more gained 4 percent to $544,000, according to data compiled by the Naples Area Board of Realtors. About half of the properties in the market are second homes, and discounts from 2006 peak prices average about 25 percent, said Brenda Fioretti, president of the group.

“Wealth determines housing, and the good places pick up first,” Karl Case, 64, a professor emeritus in economics at Wellesley College in Massachusetts who has been visiting Naples since a family vacation took him there when he was 13, said in a telephone interview. “For people with deep pockets, it’s generally a flight to quality.”

Premier Sotheby’s International Realty sold 41 Naples residences priced at $2 million or more this year through March 17, a gain of 14 percent over the same period in 2010, according to Lutgert Cos., a Naples property developer that owns the brokerage. There were 55 sales of homes priced between $1 million and $2 million, an increase of 17 percent, President Howard Gutman said in an e-mail.

Land prices are rising too as the real estate recovery takes hold, according to Steve Hagenbuckle, managing principal of real estate investment firm TerraCap Management Corp. in Cape Coral, Florida. Undeveloped land with zoning approvals in Estero, north of Naples, sold to a public builder he declined to name for $40,000 per quarter-acre lot. Eight months ago, Toll Brothers Inc. bought similar land for $10,000, he said.

Case, co-creator of a widely watched home-price index with Yale University’s Robert Shiller, said a steady U.S. recovery bodes well for Naples and the national housing market. Private surveys they conduct every year show “consumer home sentiment is strengthening” after reaching a low in 2008. “We’re not roaring out of this — GDP is 3.5 percent to 4 percent and the stock market is around 12,000 — but I believe we’ve hit a bottom,” Case, whose banker father first brought the family from New York City to Naples in 1959. He remembers his initial impressions of “a sleepy town that just took off.” “If you look around the country at places that hold their value, there are not a lot of houses on Martha’s Vineyard or Aspen or Jackson Hole,” Case said. “Naples is one of those areas, kind of a special place.”