The Standard & Poor's 500 Index, a benchmark for U.S. equities, has risen 91% since reaching a 12-year low in March 2009.

International buyers seeking to protect their wealth with U.S. hard assets may also buoy South Florida, according to a June 2010 report by the Chicago-based Realtors association. Florida properties accounted for 22% of all purchases made by buyers from outside the U.S. in the 12 months ended in April, the most of any state, according to the report.

The surge in Naples luxury prices contrasts with much of Florida's housing market, where values are falling amid a glut of foreclosed properties. Loan servicers have been slow to resume home seizures as state attorneys general investigate mortgage-industry practices such as robo-signing, or using employees to sign affidavits and other documents, according to RealtyTrac Inc.

Foreclosure Ranking

Florida's ranking of foreclosure filings per household fell to eighth among states last month from second in September, before the robo-signing controversy broke, the Irvine, Calif.-based data seller said March 10. Florida ranked second in the number of filings sent to property owners with 18,760.

"The foreclosure market is completely dysfunctional," said Michael Olenick, founder of LegalPrise Inc., a data seller based in Palm Beach that focuses on distressed properties. "People have given up finding a really cheap foreclosure."

WCI Communities Inc., a Florida homebuilder that emerged from bankruptcy in September 2009, has "aggressively" reduced peak prices by as much as 40% at nine of its developments around the state, including three in Naples, Chief Executive Officer David Fry said in an interview.

The Bonita Springs-based builder, which cut its staff from 4,000 to 600, expects to sell 300 units this year and almost double that number in 2012, he said.

Confidence Returns

"The stock market has favorably affected confidence in recent months," Fry said as he sat on the back patio of the Ritz-Carlton Hotel and Golf Resort in Naples, which WCI developed in 2002 as part of its Tiburon community. The hotel hosts the Naples Winter Wine Festival, a charity auction and social event that raised $12 million in January, 48% more than last year.

U.S. new-home sales unexpectedly fell in February to slowest pace on record, and prices dropped to the lowest level since December 2003, Commerce Department data showed today in Washington. Sales declined 17% to a 250,000 annual pace and the median decreased 8.9% from a year earlier.