Luxury real estate can be a primary residence or a secondary one or even a vacation home. You cannot say that so and so number of bedrooms and bathrooms will cost so much money. Nor can you say that the heating arrangement, swimming pool, closet storage space or any such luxurious good will cost you so much more. It all depends on the urge and drive of the individuals truly wanting a luxury home rarely caring about the money as long as the homes are unique. But there must be a price and there is no doubt that the price must be appropriate to the worth of property. Right now, lower prices fueled by foreclosures and short sales, coupled with low interest rates and possible income tax credits make this an opportune time to shop real estate.

Individuals purchasing luxury real estate should choose signature homes that reflect values, needs and special features of the owners that stand out from the crowd. Special attention to architectural detail, rare locations, privacy and security all need to be weighted for a successful endeavor. Also important, are the individuals seeking a home away from home or a vacation atmosphere in the prospective property? Either way, the property must declare that it is yours and should be a signature of you. Local facilities should also cater to affluent homeowners in the area including caterers, upscale shopping, restaurants and the likes.

Marco Island continues to be one of the few safe havens in the property market offering rare and unique property and lifestyle options for these affluent buyers. In recent months we have seen a considerable upturn in the high end market and we can only think that eventually prices here will start climbing again and who doesn’t like to feel that they’ve gotten a true bargain, even when speaking of luxury? It should be noted that the middle market developer or homeowner is now more flexible and will entertain negotiation. Marco Island is truly a beachfront island paradise with some of the most unique and beautiful properties in the world. The market is currently strong, expanding and very exciting. Those who have successfully built wealth will tell you that real estate is not only one of the most important long-term investments you can make, it is also a sound and valuable asset in a financial portfolio.

Where Does The Real Estate Market Go From Here?

In 2003, buyers began to look at real estate as an investment property to replace their investments in a declining stock market. These buyers, for the more part, purchase property with credit, many with little or no money down. Since Marco is an island, with a limited amount of properties, it did not take long for real estate prices to spike up. Many properties were bought and sold several times per year. The ownership of a piece of real estate was treated much like an investor would treat a stock, buying and selling on margin for a profit. The easiest place to see this is to look at vacant land sales.
For example: From 2002 to 2005, inland vacant lot prices increased by 500%. Many of these properties were never built on, just bought, sold, and resold again.

So what happened to the real estate market in 2005?

This huge increase in prices made Marco Island unaffordable to may retirees and seasonal home buyers. Based on the vacant lot price, buyers need to build bigger and more expensive homes, to keep the ratio of land costs to dwelling costs in balance.
For Example: In 2002, the average inland vacant lot price was approx. $100,000. A typical home being built, on this property, was have ranged between $150,000 to $200,000 making the total cost between $250,000 and $300,000. In comparison, in 2005, the average inland vacant lot price was more than $500,000. To keep a proper ratio between land to dwelling cost, the buyer would have to build a larger and fancier home; thereby making the total cost over $1,000,000 for an inland home. This is the most extreme example because inland lots required the least amount of investment, minimal amount of carrying costs, and little personal attention to hold. On the other hand, condominiums, which require greater investment, higher carrying costs and more personal attention, only doubled in value during the same time period.

By the spring of 2005, the prices stopped increasing. It became more costly for an investor to buy and hold. The stock market was recovering from the 2002 crash and looked more attractive to the investor. However, at the same time many of the traditional buyers of Marco Island real estate had been priced out. Once the investors realized that there were no buyers at these price levels, they became aggressive sellers. By 2007, the average inland lot price declined by 60%.
Note: On the surface it appears the condominium priced continued to increase after 2005. What actually happened was that a larger percentage of sales where for bigger and more luxurious condominiums, thereby making the average price higher.

Some long term investors have returned to the market. This may be due to the recent decline of the stock market. Some traditional buyers are purchasing condominiums and houses at a more affordable price not seen since 2003. This return of buyers has increased unit sales and decreased inventory by as much as 25% since the peak. Most sales have been cash or else conventionally financed with at least 20% down. Prices have continued to decline from last year, but recently, prices have shown signs of stabilizing.
For Example: The average inland lot has fallen in price by an additional 20%. However, since mid-year, the average price has increased slightly.

The number of people reaching retirement age starting in 2009 will increase by 33% from 2007. This will increase the demand for property on Marco Island. Many of these buyers will need to sell a home up north, which may take a while until the credit market straightens out. However, the Marco Island real estate market should continue to firm up as unit sales increase and inventories decrease. In the meantime, potential buyers on average will have an opportunity to buy at prices not seen since 2003 and earlier. Occasionally there will be special circumstance sales, but generally these property are only on the market for a short period of time.

In Conclusion: If you are in the market for a certain type of property and are prepared to act, you need should request to be part of our email update report which will automatically send you new listings and price changes for your specific criteria.