Fort Myers has home bargains as market recovers from bubble
Fort Myers had been one of the nation’s first areas hit by the bursting of the housing bubble, and the local real estate industry had hoped it would be among the first to recover. It seemed well on its way in June 2009 when home sales were 121% higher than in June 2008.
But in 2010, home sales have been dragged down by a number of factors, including the end of the home-buyer tax credit, the temporary lapse of the National Flood Insurance Program and fears that the BP Gulf oil spill would reach the beaches in the Fort Myers area.
“I think it is just a hiccup,” says Christie Knight, president of Realtor Association of Greater Fort Myers and the Beach.
After all, the National Flood Insurance Program was renewed, retroactive to June 1 through Sept. 30. And the oil has not washed up on its beaches.
Still, the oil spill has given tourists and home buyers something to worry about.
“Fort Myers was struggling to begin with, and now the timing of the oil spill is most unfortunate,” says Sean Snaith, economics professor at the University of Central Florida.
•Sales status. In June, the metro area’s home sales were 18% lower than in June 2009.
The local market has relied on international buyers and vacation home buyers, many of whom have been paying in cash. In the first quarter, 71% of home purchases were made with cash, Knight says. But in the second quarter that dropped to a little over 65%, perhaps because many second-home buyers held back to see what damage came from the oil spill.
•Price points. Prices have come way down since the peak in 2005. Then, a waterfront home might have cost $800,000 and now goes for $300,000 or $350,000, Knight says.
Five years ago, most families who lived and worked in the area couldn’t afford to buy a home. “The market was very influenced by speculators who artificially increased the prices,” Knight says. “Now they are very affordable.”
Prices are starting to climb back. In June, the median sales price — $93,000 — was 12% higher than a year earlier.
Cape Coral-Fort Myers still has one of the highest foreclosure rates among large metro areas, according to RealtyTrac. Many low-priced foreclosed homes are getting multiple bids, pushing prices up.
•Local economy. For many years, construction and tourism drove the Fort Myers economy.
“It was an example of an area that was being fueled in large part by the housing boom,” Snaith says. “It has felt significant pain when the boom went bust. And we haven’t seen any signs of job creation taking place.”
The Fort Myers metro area had an unemployment rate of 12.5% in May, higher than the state’s rate of 11.7%.
In the past, most foreclosures were properties purchased by speculators, but now unemployment is sending more owner-occupied homes into foreclosure.
•Hot ‘hoods. The McGregor Boulevard area of Fort Myers is eclectic and desirable. It may be pricier than other parts of town, but its prices are much more affordable than they were a few years ago, Knight says.
There are some old Spanish-style villas, Florida “Cracker” style homes and newer Mediterranean homes.
McGregor-Riverside, for example, is a historic neighborhood where prices range from $99,000 to several million dollars.
Most expensive home
Vision Construction Management is selling a home built in 2008 that’s situated on a deepwater canal that’s only minutes to the river and Gulf. (See photo above.)
•Price: $14.9 million.
•Bedrooms: 5.
•Bathrooms: 5 full, 3 half.
•Size: 8,808 square feet.
•Features: Family room, formal dining room, library, billiard room, state-of-the-art home theater, exercise room, wine cellar that holds 2,200 bottles of wine, wine-tasting room, patio, pool and spa, dock, garage for four or more cars.
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| This home, built in 1992, is on the market. | |
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Median price home
This home, built in 1992, is on the market.
•Price: $95,000.
•Bedrooms: 3.
•Bathrooms: 2 full.
•Size: 1,231 square feet.
•Features: Great room, cathedral ceilings, kitchen with breakfast bar and pantry, two-car garage, partially fenced backyard.
Ammunition for Condo Buyers…
South Lee home, condo sales drop
By MARK S. KRZOS • News Press • July 13, 2010
10:30 A.M. — Home and condo sales in south Lee County have slowed to a trickle after a busy spring.
The Bonita Springs-Estero market generally remained unchanged in all eight areas of monthly evaluation.
Experts believe the combination of no more government assistance combined with fewer residents in the summer have set the base line for the next several months.
Single family homes listed dropped from 191 in May to 152 in June. This represents a 20 percent drop and is part of an overall reduction in inventory. Single family home sales topped out at 90 units sold which were the second highest months of sales in 2010.
Of the 201 condominiums that came on the market, 84 were sold. The condo inventory remains high with 117 more coming into the market than sales out, said Bill Barnes, chief executive officer of the Bonita Springs-Estero Association of Realtors.
This trend is accounted for as Americans continue to unload, “non essential” assets such as boats, planes, condo’s and extra cars, Barnes said.
In other areas:
• Condominiums less than $200,000 have sold at a rate of 84 per month for two consecutive months. These condo sales are, however, down from more than 100 unit sales per month during the season.
• Condominiums priced at more than $1 million are barely selling at all. For the first time in 2010 no condos sold.
• Single family homes priced at $1 million or more didn’t fare much better. In June, three homes in that price range sold — the lowest in a monthly period in 2010. But overall, 2010 has been a good year with $37 million dollars of homes sold in the Bonita-Estero market.
Mogul invests in Fort Myers projects
www.news-press.com
July 3, 2010
Mogul invests in Fort Myers projects
Colorado developer feels the time is right
By DICK HOGAN
dhogan@news-press.com
A bargain-hunting entrepreneur who thinks the local real estate market is close to a comeback has paid $21 million for a high-rise condominium project and the adjacent First Street Village.
The two downtown projects were launched by Cameratta in the two years before the real estate market in Lee County collapsed at the end of 2005. First Street Village is partially built and High Point Place along the Caloosahatchee River has 76 units remaining to be sold.
Marcel Arsenault, through his Louisville, Colo.-based company Real Capital Solutions, paid Cameratta Properties $13 million for the construction loan on the 76 units that remain to be sold at High Point.
Real Capital is under contract to buy the 8-acre First Street Village for $8 million from Cameratta, Arsenault said.
The time is right to move forward on the two projects, Arsenault said — today’s low prices and tight credit are signs that the market’s at or near its low ebb.
“I’m a great student of real estate cycles,” Arsenault said. “The availability of mortgage money drives assets way up and the reverse also is true.”
Real Capital also bought 511 acres of entitled land in Estero, known as The Preserve at Corkscrew, for $9 million from Cameratta.
Cameratta paid $28 million for it in 2007.
Joe Cameratta, chief executive officer of Chagrin Falls, Ohio-based Cameratta Properties, said Arsenault’s infusion of cash will make it easier to market and sell High Point.
“The prices are as low as they’re going,” he said. “It’s gotten the bank out of the deal. We can take our time.”
Cameratta said he’s also tweaking First Street Village to make it more attractive with “a little less density.” He hopes to have a proposal to city officials in six to eight weeks.
The Preserve at Corkscrew should be offering lots by January 2012, he said.
These are Arsenault’s first ventures into Lee County, but he’s already done six deals and invested “something on the order of $50 million in the Miami-Dade area,” he said — adding that he intends to put another $500 million in Florida real estate over the next several years.
“We’re doing what we believe to be right,” he said. “We’re making a huge investment. The money we’re talking about is frankly my money. I’m putting my money where my mouth is.”
House Price Crash Rate Finally Beginning To Ease
Good news! The rate of the price decline in the housing crash has finally begun to ease.
Bad news! Prices are still falling 18% year over year.
Specifically, in April, according to the Case Shiller index, the rate of decline in nationwide house prices eased slightly in April–to 18% from 19% in March. The rate of decline has hovered around 19%-20% for the last several months. And prices have now declined a staggering 33%-34% from the peak. Read on>>
Cash Buyers dominating the Lee County Home Sales Market
Like fighting a battle with mail order bullets; its tough to win the war. As a borrowing buyer there really isn’t much defense one has against the cash buyer on a short or foreclosure sale. It has happened to me with my buyers countless times. Just as ever, CASH IS KING! Tougher yet, cash buyers pay much less for the properties than borrowing buyers. To the Seller (a bank) its a clean easy transaction; as apposed to potentially lengthy approvals, appraisals and inspections. All I can tell you is that, you must be completely qualified and ready to close as quickly as your lender can get you closed (ie. use a qualified and proactive lending agent) To you cash buyers, Enjoy your cake and ice cream -and call me. Read the article >>
Lawsuit filed against Lee County property appraiser
Whether a Realtor or a resident in Lee county, I think we all knew it wouldn’t be too long before someone actually “really” stood up to the tax appraiser’s value judgements. After all, values have gone way up and now, have gone way down. Appraised values must accurately follow suit. They haven’t. read the article >>
Worse than subprime? Other mortgages imploding slowly
All stats are now telling of another level of homeowners are on the brink of foreclosure. I don’t expect that this will bring a new bottom to the lower tiers of our local market; though the upper tiers may feel some falling values from a burgeoning onset of yet more foreclosures. Whether great news or awful, I’m going to bring it to you. It’s not an article to enjoy, but if you’re an investor, word on the street is, ‘you’ll soon have more to choose from.’ Let me see the article >>
The FHA Has Made a Major Condo Approval Change!
Straight from the FHA’s latest Mortgagee Letter 2009-19 that was issued on June 12th. In this latest Mortgagee Letter FHA is announcing MAJOR change to their Condo Approval Process.
“In accordance with the passage of the Housing and Economic Recovery Act (HERA) of 2008, the Federal Housing Administration (FHA) is implementing a new approval process for Condominium Projects to insure mortgages on individual units under Section 203(b) of the National Housing Act. FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations. HUD will continue to maintain a list of Approved Condominium Projects. The requirements of this Mortgagee Letter are effective for all case numbers assigned on or after October 1, 2009 except as noted.”
This is a MAJOR change to the present Condo Approval Procedure, and while it reduces the documentation and requirements for Full Condo Approval, it will place a lot more work and responsibility on Lenders. The new approval process states “The lender will have two condominium project approval processing options. The applicable documentation requirements will be the same for each option:
HUD Review and Approval Process (HRAP).
Direct Endorsement Lender Review and Approval Process (DELRAP), outlined in this Mortgagee Letter. This option is only available to lenders who have unconditional Direct Endorsement authority and staff with knowledge and expertise in reviewing and approving condominium projects”
Once an unconditional Direct Endorsement Lender approves a Condo Complex it will be added to the FHA Approved Condo List, and other Lenders will not have to repeat the process. The new approval process will do away with the need to do an Environmental Study in most cases, and the “Right of First Refusal” will no longer be a reason for declining approval of a Condo Complex.
The other MAJOR, MAJOR change, and this will present a huge problem in my opinion, is that this new approval process will do away with the present “Spot Approval”.
“The Spot Loan Approval process as defined in Mortgage Letter 1996-41 is eliminated with issuance of this guidance. The DELRAP and HRAP processes have been streamlined to allow for uncomplicated condominium project approvals eliminating the need to approve units on a “spot loan” basis”
So now it will become an all or nothing, and a simple two page questionnaire will be replaced by a stack of paper work that is over an inch thick (I saw one the the application packets today). This new approval process will also add significant time to the approving a Condo Complex, as oppose to the quick “Spot Approval” that is now available. Granted that the new approval process once done will not have to be done again, as oppose to the “Spot Approval” which had to be done ever time a loan was done on a Condo in a Condo Complex which was not on the FHA Approved Condo List, but the amount of time and work far out weighs the benefit in my opinion.
Hopefully FHA will re-consider the removal of the now “Spot Approval” option before October 1st and let it continue.
Southwest Florida sees light at end of housing tunnel
There is mounting evidence that, at long last, the worst is over for large segments of the Lee County housing market. Inventories are shrinking.
Multiple bidders — sometimes as many as 20 — are competing in short sales, when proceeds from the sale fall short of the balance owed on a loan secured by the property sold. Read on>>
Houses More Affordable Than Any Time Since The 1960s
A relevant national sign of the times article:
In another sign that house prices are finally slouching their way toward a bottom, another measure of housing “affordability” has now hit a level not seen since the 1960s. Too bad no one has any money to buy them with.
In this case, unfortunately, housing affordability is likely overrated as a price indicator, because so many would-be buyers are underwater on their own houses. (It doesn’t matter if you can buy your neighbor’s house for cheap if you would lose your shirt raising the money you need to buy it with.) But the increasing affordability is nonetheless a positive. Read on>>
robseibert
