We spend copious amounts of time studying and analyzing our real estate market, listening to experts and top economists and trying to help answer these questions for our buyers and sellers who rely on our experienced local knowledge to help them make educated real estate decisions. Of course no one has a crystal ball, but let's look at some basics. First, John Tucillo, one of the country's top economists for many years has told us this: "If you can only remember one thing about the values of real estate, remember population; if population is rising in a big way, real estate prices will appreciate and if population is falling in a big way, values will go down." Think about the Houston market 20 years ago when everyone was leaving town because they lost their jobs in the oil industry- prices fell dramatically. The Collier County Economic Development Council projects population growth of 35.6% from 2004-2010 in the Naples/Marco areas. They also note that the Naples metro area is ranked 2nd in job growth for small places in the entire US. Using these numbers with Mr. Tucillo's knowledge, it is easy to predict that our real estate market is not ready to "burst."

Then why do we have high inventories and why have the high asking prices of 18 months ago dropped? Again, the numbers tell the story. What happens when any market appreciates at a faster than normal rate- everyone wants in, right? The same thing happened here. Spin-off from the stock market highs of the late 90's to the sharp market drop in 2001 saw investors looking for alternatives. Interest rates were low and inventories were low driving appreciation. Our market was going up so fast in 2004 that some properties "flipped" several times. It may have worked for a few, but no market can sustain 20-30% appreciation for the long term. For some it was a panacea. But as buyers turned their properties, inventories rose creating more to sell than buyers to buy. Supply and demand theory 101.

So where are we now? My father always told me, "You can't go wrong investing in real estate." But he also said, "just remember it's not as easy to turn around and you should plan to hold for a few years." Many investors who were looking for short term gains have found we are back to a "normal growth" market and with greater inventories, properties are not "flipping." Let's look at some more local numbers right from the Marco Area MLS stats. In April 2004 there were 28% more pending sales then closed sales. In April 2005 that number had dropped to 22%. In April 2006, that number is back up to 27%. Pending sales are always a leading indicator of the coming market and could mean this summer we may see the inventories start to shrink as savvy buyers get into the market. Credible sources also share this view. This month's Money Magazine Real Estate Guide 2006 forecasts that the Naples-Marco Island market will rise 9.3% in the next year. This could be a Buyer's Window of Opportunity. For people who are thinking about a move to the sunshine, you may not have "missed the boat."