"thunder" wrote in message
news
On Sun, 11 Apr 2004 01:02:13 +0000, NOYB wrote:

As usual, your timing is impeccable. Just today, in the local paper:

Naples Daily News

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URL:

http://www.naplesnews.com/npdn/news/...796311,00.html

Naples is a very nice town, so don't get me wrong, but that building
report is quite scary. I have witnessed many overheated building booms.
Bust is invariably part of the cycle. 40-50% price increases are not
healthy and not of long duration.


Prices had gone up 26% per year from 1998-2001. They then leveled off for
two years...and just about kept pace with inflation. However, "bust" is
part of the cycle only in areas that are affected by layoffs, recession, and
attrition. Naples isn't one of those areas. In recession years, prices are
flat (but they don't decline), and inventory builds. As soon as the economy
starts an upturn, inventories decline and prices soar again.

The majority of the people in Naples are retirees who already earned their
money and are bringing it down here in their retirement. The retirees now
are the baby boomers...a huge population with enormous wealth and very
little debt. An entire service population has grown as a result, and the
service industry feeds on the retirees. As long as the population continues
to grow faster than attrition (ie--from people dying), the demand for
housing will grow. Over the past year, Collier County's population grew by
almost 15%. Consequently, the demand for housing (expensive housing) drove
the median price up more than 40%.

Is it sustainable? Probably not at the same rate of increase. However,
you'll never see a true "bust" where prices begin to fall. They'll just
level off until the next boom.