Homes in Lee County Sell Cheap, but Fast

Existing homes sales in Lee County in April rose sharply from a year earlier as prices plunged and builders offered deep discounts.


Meanwhile, sales and prices dropped nationally as the backlog of unsold single-family home was at a 23-year high, according to statistics released Friday.

In Lee County, 809 single-family homes were sold with the assistance of a Realtor compared to 573 in April 2007, an increase of 41 percent, according to the Florida Association of Realtors.

Meanwhile, the median price fell 29 percent from $283,200 to $200,300 in the same period.

Charlotte County sales showed a similar trend: The price was down 27 percent from $197,100 to $143,400 while the number of sales rose 6 percent from 254 to 268.

Collier County statistics weren't available.

Southwest Florida bucked a statewide trend of falling sales: Florida had 11,200 sales, down 9 percent from 12,358 a year earlier. The statewide median price fell 17 percent from $239,000 to $198,900.

One recent buyer said he's glad to be buying after a long decline in the market. The median price of a single-family home is now 37 percent off the all-time high of $322,300 reached in December 2005.

"We found it cheaper to buy than rent," said Bernie Connor, 71, a retiree from Maine who's under contract to buy a four-bedroom, two-bath house in northwest Cape Coral for about $110,000.

"I found it more reasonable to buy, naturally, because of the equity," he said. "The low home market's probably going to last for another year or so but then it's going back up - there's no question about that."

His real estate agent, Brett Ellis of Remax Realty Group in Fort Myers, said the market is continuing to absorb the foreclosed houses being taken back by banks - Connor's new house, built in 2006, is one of those homes.

"Prices are attractive and buyers are off the fence," Ellis said. "There are definitely enough end users."

Fifty-seven of the houses sold in April were in one community - Coral Lakes in Cape Coral, where Fort Myers-based businessman O.J. Buigas in March purchased 116 completed but never-lived-in houses and townhouses for $13.5 million from Engle Homes. Engle's parent company, Tousa Inc., is seeking to reorganize under federal bankruptcy protection.

Buigas immediately reduced the prices at Coral Lakes by about 40 percent and they've all been sold, said Denny Grimes of Denny Grimes & Co., who marketed the homes for Buigas.

"You will see the numbers go up" for sales, he said. "I think the worst is over," although prices may continue to fall for a while.

In a similar move, businessmen Greg Jarrett and Larry Smith are buying 72 houses from financially strapped Comfort Home Builders in Cape Coral. The plan is to offer them for half the original price, or less, and sell them in a month.

Two weeks after the homes went on the market, about half are under contract, said Steve Koffman of Century 21 Sunbelt Realty. He's selling 62 of the houses and Kim Hardin, also of Century 21 Sunbelt, is selling 10.

Buyers include people intending to live in the houses and investors, Koffman said. "The shrewd investors are buying when other people are selling."

Nationally, the housing market was still in the doldrums.

Figures released by the National Association of Realtors showed sales of existing homes fell for the eighth time in the past nine months, with the backlog of unsold single-family homes rising to the highest level in more than two decades.

Sales dropped by 1 percent to 4.89 million units, matching the all-time low set in January. These records go back to 1999.

The median price for an existing home dropped 8 percent, compared with a year ago, to $202,300. Analysts predicted further price declines given the huge backlog of unsold single-family homes, which rose in April to 10.7 months supply at the current sales pace, the highest inventory level since June 1985.

- The Associated Press also contributed to this report

Lee County's subprime holes may deepen

For every 1,000 homes in Lee County, 62 are financed with the shakiest of loans.


Those loans are headed for trouble fast. Thousands are in foreclosure or behind on their mortgages and thousands more will see their interest rates skyrocket.

They are subprime loans, arranged with people with weak credit in exchange for higher interest rates or a low rate that adjusts after a set time, often two years.

Subprime loans are being blamed for the downward spiral of the nation's residential housing market.

In Lee County, 17,300 of 245,405 homes are financed by subprime loans.

Lee has one of the highest concentrations of subprimes in the country, ranking 16th, according to data from the Federal Reserve Board of New York, which compiles the information for the nation. By comparison, San Bernardino County in California is No. 1 with 84 homes per 1,000. Other Florida hot spots include St. Lucie, third with 79 homes per 1,000 and Miami-Dade, 14th, with 63 homes per 1,000. New York City has only 1 subprime loan per 1,000 homes.

Lee numbers

• Some 15,200 subprimes are for owner-occupied homes.

• Some 7,800 of the subprimes will reset with higher interest rates this year and next.

• Some 3,500 loans are at least 30 days behind on their payments.

As many subprimes slip into foreclosure, they're causing problems for a county already rocked with unemployment at a 15-year high; median home prices for an existing home down 34 percent since December 2005, from $322,300 to $212,500 in March; and a home-building sector flat on its back with a mere 86 single-family-home building permits in April, less than a quarter of the 419 a year earlier.

The more subprimes that fail, the longer it could take for Lee's housing industry to recover, experts said.

Some will go into foreclosure although others will avoid it, said Michael Timmerman, a Naples-based senior associate with Fishkind & Associates, an Orlando-based economic consulting firm.

"People know these things are resetting and they're already talking to the lender," Timmerman said. "People know the value of the property has gone down."

The silver lining is that houses become more affordable.

"It makes more sense to buy than to rent," he added.

Carol and Robert Rommel know firsthand the hardships faced by holders of subprime mortgages.

The couple, in their early 60s, bought a condominium in Bell Tower Park in south Fort Myers in September 2005 for $390,000 with a subprime loan and moved from Dallas. As prices dropped, they decided they could afford a house in Reflection Lakes. But the condo didn't sell and now they're struggling to cover two mortgages. They can't even refinance the condo loan because they'd have to pay a $10,000 early-out penalty, common under subprime terms.

For many people with subprimes, there isn't a lot they can do to keep from losing their investment, said Vincent Patti, vice president of Fort Myers-based First Capital Lending.

"What we're getting is a lot of them come through the door that there's not enough equity and there's nothing we can do," he said.

Their best bet is to throw themselves on the mercy of the lender, Patti said.

"I have seen a lot of the lenders stretching the terms for the reset," he said. "If it looks like it can be done, they'll extend the two years or three years. I've seen it happen a number of times, and it's happened to me personally on an investment property."

Banks are still cautious about giving away too much, he said.

"They seem to be looking for enough income that you can make the payment (under more lenient terms) but not so much that they won't give the farm away," Patti said.

For many, going to the bank would be an exercise in futility, said Robbie Roepstorff, president of Edison National Bank in Fort Myers.

Edison and most other local banks didn't do subprime loans during the boom - it was the big banks like Countrywide and Bank of America - and the local banks aren't getting any demand to refinance them now, she said.

Even for those with enough equity in their homes to refinance, it can be a rocky path, said Charles Costello, a real estate and mortgage broker in Fort Myers.

"When banks impose conservative, reasonable underwriting standards on someone who got into a subprime mortgage when fog on a mirror qualified you, and so many were self-employed and now are unemployed, independent contractors, that's the kiss of death," he said.

One bank, he said, recently asked a prospective lender for three years of pay stubs to prove a steady income.

Getting the lender to give you a better deal can be problematic as well, Costello said, because most subprimes were bundled up into mortgage-backed securities by Wall Street and sold to investors.

"It's difficult to modify a loan because nobody has the authority to do that," he said. "Because of the securitization, they're sliced and diced, a piece owned all over the globe."

The Rommels haven't given up on selling their condo.

"We're willing to bring money to the table," Carol said. "We'll take it out of our savings." Courtesy Fort Myers News Press

About $150 million owed in property taxes

Property owners this year failed to pay taxes on time on a record 58,000 parcels in Lee County, totaling more than $150 million in unpaid taxes, an indication of Southwest Florida’s floundering economy.

That means taxes on almost 10 percent of all county parcels are delinquent. Included as delinquent are people going through foreclosure but not those who have filed for bankruptcy.

Collier County experienced a record year as well, with 13,309 parcels advertised totaling about $50 million.

"That is staggering," said Mike Hagen, a former Lee County appraiser turned owner of TaxCuts1 Inc., in Fort Myers. "What it tells me is real estate values have tanked; people are hurting."

Last year, Lee County advertised about 43,000 parcels totaling $101 million in delinquent taxes. In 2006, it was 31,000 parcels and $48 million.

That means delinquent tax dollars are up 211 percent in two years.

Many delinquent properties are vacant in areas such as Lehigh Acres, Cape Coral and Bokeelia.

Tax certificates are used when an owner doesn’t pay on time. A lien is placed on the property and the certificate is sold at auction. Someone buying those certificates pays the taxes, but property owners can buy back the certificates with fees and interest.
The public has a chance to purchase tax certificates at the 8 a.m. May 30 online auction. The News-Press will publish the delinquent tax advertising section Monday and again May 19 and 26.

Property owners redeemed about 14,000 certificates from the 2006 tax sale and 16,000 from last year’s.

Unpaid taxes combined with other telltale figures to reveal the economic slump in the area. The median price of an existing single-family home has fallen 34 percent since December 2005, from $322,300 to $212,500 in March, the last month available. More than 15,000 foreclosure actions are pending in Lee County circuit court.

Jean Belizaire, 53, said his home in Cape Coral is going through foreclosure. He moved from Miami in mid-2006 when his brother-in-law said it was a strong real estate market. Belizaire couldn’t pay this year’s $4,112 tax bill on the home he bought in mid-2006 for $60,000 more than the county’s most recent appraisal. The licensed Realtor who worked independently said he last sold a home in February 2007.

In July, his wife of 30 years had a stroke, he said. Her insurance expired after three months, and she continues to recover in Miami with their daughter. Belizaire said he plans to move in with his daughter this month, but not until his 13-year-old son who lives with him, finishes the school year.

Belizaire had no success finding another job.

"I have plenty of friends right here, they lost their job and can’t find another one, I have three that have lost their homes already," Belizaire said. "It’s tough. Real tough."

Foreclosures hit new high

Foreclosure actions filed in Lee County spiked up sharply to a record high of 2,160 in April - with almost a third for primary residences, according to statistics released Thursday by the Southwest Florida Real Estate Investors Association.
Investors and homeowners alike have been hit hard as the median price of a single-family home has fallen 34 percent from a peak of $322,300 in December 2005 to $212,500 in March.
Joanne Long is one of the homeowners who's facing foreclosure - she and her husband Matt McKibben expect to lose their southwest Cape Coral home because they can't pay off more than $236,000 they owe lender Franklin Credit Management Corp.
There's little chance of selling the house to pay off that debt because it's now worth only about $105,000, she said.
The straw that broke the camel's back was having to refinance with an adjustable rate mortgage to pay the water and sewer assessment to Cape Coral in 2006, said Long, who works at the Lee County clerk of court's office and also part time as a real estate agent. "We were paying about $1,000 a month but once that happened the payment jumped to $2,200."
The lender filed foreclosure proceedings against them last year and now they'll have to leave soon with their two children and rent a house, Long said.
Of April's foreclosures, 692 were homesteaded primary residences: 32 percent of the total and up from 554 in March. The percentage of primary residences has been holding steady at about that level for the past six months as the number of foreclosures has risen.
Mortgage broker and investor Jeff Tumbarello, who's also sales manager for real estate agency Engel & Völkers Fort Myers River District in Fort Myers, said foreclosed houses are coming back onto the markets as the banks take them back and then sell them.
"But they're losing, on average, 50 to 60 percent of what they lent," he said.
The bank sales have had the effect of finally boosting the number of houses being sold in the county because they're going so cheaply, he said. "The foreclosed homes are the pearl our market's got to offer."

Lee County housing market clogged

Lee County's inventory of unsold homes has swollen to record levels, depressing prices and discouraging the construction of new homes - and the glut may be even worse than it appears.
As real estate sales in Lee County dwindled over the past two years, the inventory of unsold homes swelled to almost 16,000 _ seven times what it was in 2005 at the height of the market when buyers outnumbered sellers. Nearly 5 percent of the total housing units in the county are for sale.
Because of the glut, contractors find it impossible to compete in price against existing homes - and any dwelling in less than perfect condition has little chance of being sold.
The News-Press recently took a look at a one-day snapshot of the homes in Lee County for sale on the Multiple Listing Service, the system by which Realtors announce their listings to each other.
Some statistics:
• 5,189 single-family houses were listed for less than $200,000 countywide;
• 1,325 were going for $700,000 or more;
• Cape Coral had the most houses for sale: 5,011. That's followed by the Fort Myers/south Fort Myers area at 3,173 and Lehigh Acres at 2,547
Experts say the blame can be spread among the greedy seller and lagging economy. But high as they are, the MLS numbers may not tell the full story.
There's a "shadow market" of houses not officially for sale even though they're owned or soon will be owned by lenders who took them back in foreclosure, said Jack McCabe, a Deerfield Beach-based real estate consultant who tracks the area's home market.
"It'll probably take federal regulators to tell them to get this stuff off the books," he said. "The lenders are the most unrealistic of the bunch right now" - many banks still aren't putting their repossessed houses back on the market priced to sell.
As a result, said Michael Timmerman, a Naples-based senior associate with Fishkind & Associates, an Orlando-based economic consulting firm, it's hard to gauge the true number of houses on the market.
"The MLS doesn't really give us a full picture of the supply," he said. "It's very difficult because there's no one good source that allows us to get a handle on the total supply."
For example, Timmerman said, a builder generally doesn't put all the houses available in a new community on the MLS.
"But he may have three or four sales from a development on MLS just to entice people,' Timmerman said. "The MLS can be used as a system to generate leads for that particular builder."
But there's no way to know exactly how much of that is going on, or how many houses are being held by a lender who ultimately will have to put them back on the market.
When a homeowner does manage to sell, it's a happy event.
"That's the fun part," Esther Bird said as she closed on the sale of the Fort Myers house she and her husband sold in order to buy a bigger one for $370,000. "It's a good feeling."
It's also somewhat rare these days, said her real estate agent, Patti Pietroniro of Cypress Realty/GMAC in Fort Myers, even though Bird's house sold for $225,000 after only four days on the market.
The median MLS sales price has fallen 34 percent from its peak of $322,300 in December 2005 to $211,900 in February 2008, the last month for which statistics are available, according to the Florida Association of Realtors. Permits for new houses have slowed to a trickle: only 74 in March compared to 1,558 two years earlier.
The pace of sales is picking up, but it's short sales and foreclosure sales that make up the bulk of what's selling now because they're generally priced below other comparable listings, she said. "Buyers are making offers on short sales."
In a short sale, the lender agrees to reduce the mortgage so the seller can afford to make the deal.
Less desperate sellers often are not realistic about what a house will bring when they try to put it up for sale, Pietroniro said. "Unfortunately I have to tell people sometimes, 'I'm sorry I can't do anything for you'" at the price they want to ask.
Steve Koffman of Cape Coral-based Century 21 Sunbelt Realty, said about 40 percent of homes sold in the city are foreclosures or short sales.
The enormous inventory means that only the ones priced the lowest and in the best condition will sell, he said. Otherwise, an agent won't bother to show them to a client.
"There could be 500 like it on the market," Koffman said. "How do I pick the eight I'm going to show today? They have to stand out."
That's bad news for the houses that are half-finished or in bad shape, of which there are large numbers in areas where a lot of inexpensive homes were being built in Lehigh and the Cape during the boom, he said.
Many have been vandalized by thieves or even by subcontractors who weren't paid and illegally came back to take back items such as bathtubs, Koffman said.
He thinks the overall inventory of houses may start to fall now because sales are up. It's only in the under-$200,000 category that the number of houses for sale is likely to keep rising because so many are being taken back in foreclosure by lenders that will eventually put them back on the market.
With prices at rock bottom for existing homes, builders are offering great deals on the houses they've already finished - but don't expect it to last forever, said Kevin Clark, Southwest Florida division president of national developer Beazer Homes.
Builders are throwing in amenities such as granite counter tops and high-end flooring to lure buyers without cutting prices further, he said. That way they won't have to raise prices when demand picks up.
When the new construction that exists today is gone, he said, prices may not go up but "the next round of houses you get coming out from builders will be less amenitized - still a good price, but we can't afford to continue building $200,000-300,000 homes with that."
Fort Myers-based real estate broker Denny Grimes said builders are selling their completed houses successfully but that doesn't directly affect the MLS.
That will change when the builders' inventory is all gone, said Grimes, who also writes a column on real estate for The News-Press. "I think this year will mark the end of existing builder inventory."
At that point, Grimes said, there should be a surge in the number of MLS sales, he said, because "psychologically they (buyers) will realize you can't wait forever for everything." Article Courtesy Fort Myers News Press

Lee County housing market bottoms out, experts say

Article courtesy of the Fort Myers News Press
Foreclosures remained high and building permits remained low in March, but this is about as bad as it gets for Lee County's housing market, experts said Tuesday.
A recovery, however, may be months or even years away.
"We're starting to drag the bottom now and we'll drag for just a little bit longer," said Bob Knight of Paul Homes, the president of the Lee Building Industry Association.
Paul's company is based in Cape Coral, where only 12 single-family home permits were pulled by builders in March - half the 24 pulled in February and less than a tenth of the 122 in March 2007, according to a report released Tuesday by the city.
In unincorporated Lee County, 47 permits were pulled. That's down from 63 in February and only 15 percent of the 318 pulled in March 2007, according to a release Tuesday by the county Department of Community Development.
The county's numbers also include Fort Myers Beach and Bonita Springs, which contract with the county for permitting services.
Meanwhile, in a separate report Tuesday, 1,784 foreclosure actions were filed in Lee Circuit Court in March, according to statistics compiled by the Southwest Florida Real Estate Investors Association.
Knight said the flood of foreclosures has taken its toll on the home-building industry by forcing prices down to the point builders often can't compete.
"You just can't replicate the prices with new construction," he said.
People having a house built now, Knight said, typically "already own their lot and they've owned it for years. They have no interest in buying something existing."
But Knight warned that at some point, that will change and builders won't be able to offer the deep discounts a buyer can get now.
Jamie Pirrello, president of Vision Homes USA in Fort Myers, said it may be a while before large numbers of people start wanting to build homes here again.
"I don't see any hope in the near future" because of the huge numbers of foreclosures, he said. "If it were a short-term deal where there were a few foreclosures, that's one thing, but I think it's a long-term problem in Southwest Florida. A lot of these banks haven't even started to put the homes on the market yet - the numbers are so overwhelming, they don't have the people and systems to do it."
Charles McKinney, 74, recently completed a house in Pine Shadows Air Park in North Fort Myers and is living there while he tries to sell it.
He's not worried about getting a good price even though he know it won't go for the $800,000 he could have made two years ago at the height of the market.
"I think there are people out there" who will be interested because Pine Shadows has a rare amenity: a 3,200-square-foot, blacktop air strip. McKinney's house has a hangar that could accommodate most private planes.
"I'm not a professional builder," said McKinney, who was in the farming, real estate and movie theater business in Ohio before moving here 14 years ago.
Still, McKinney said, the higher end of construction in Lee County isn't dead yet.
"I've noticed there's still a lot of nice homes being built in the higher scale," he said.
Pirrello said that's true - wealthy buyers aren't feeling the same financial pinch as most people.
Charlie Green, clerk of courts in Lee County, said he doesn't think foreclosures will go much higher than the current rate.
He recently hired five people to do nothing but work on foreclosures but is already thinking about what to do when that work slows down and the number of sales starts picking up.
"I think we've hit bottom," Green said. "I think we've turned the corner."
There's no backlog of foreclosures waiting to be filed because the law firms handling them have geared up for the work, Green said.
"These mortgage mills are set up and they can crank them out," Green said.
Jeff Tumbarello, sales manager of real estate agency Engel & Völkers Fort Myers River District in Fort Myers, said he's not so sure the numbers have reached a plateau. The pace of about 80 foreclosures per working day may be as much as the attorneys, process servers and other people in the system can handle, he said.
Still, Tumbarello said, it's likely that in about two years, retiring Baby Boomers born in the late 1940s will rejuvenate the housing market here.
Permit figures for Fort Myers were not available Tuesday.
In the unincorporated county, single-family permits pulled last month were for a total value of $19.5 million. There were also six duplex permits for a total of $1.9 million and two apartment buildings for $2.3 million.
Commercial permits totaled $6.5 million for 18 buildings.
There were 1,556 permits of all types in the county - including additions and work such as swimming pools, fire alarms and fences - totaling $61.8 million.

Deals spur home sales

Sales of single-family homes in Lee County soared in February as buyers were spurred into action by a sharp drop in prices.
The median price of a home sold with the assistance of a Realtor was $211,900, off 9 percent from January's $234,000. Sales were up 32 percent from 338 to 445, according to a report Monday by the Florida Association of Realtors.
Prices have been falling steadily for about two years in Lee County, although last month's sales were exactly the same as a year ago.
Lee sales of single-family homes in February held steady at 445 while the median price plunged 17 percent from $254,200 a year earlier.
Meanwhile, in a separate report Monday, the National Association of Realtors issued a report saying that after falling for six straight months, sales of existing homes posted an unexpected increase in February that may have reflected more aggressive price-cutting by sellers in Florida and California.
The most dramatic evidence of that locally was at the Coral Lakes subdivision in Cape Coral, where Fort Myers-based businessman O.J. Buigas last week purchased 116 completed but never-lived-in residences in the project for $13.5 million from Engle Homes.
Engle's parent company, Tousa Inc., is seeking to reorganize under federal bankruptcy protection.
Buigas immediately reduced the prices at Coral Lakes by about 40 percent.
"We're only at 29 homes available out of 116," said Fort Myers-based real estate broker Denny Grimes of Denny Grimes & Co., who's handling the sales. "There were some investors but I'd say it's at 75 percent end users or people who want to rent out for awhile before living there. People didn't come in and buy a baker's dozen."
The people buying are putting down non-refundable 5 percent deposits and often already have financing when they sign, he said.
One of the buyers was Mary Grace Munoz, 57, of Cape Coral, who with her husband Walter bought two single-family homes for $133,000 each.
"These were super, super values and possibly one day in the future I'll want to move to a smaller house, maybe downsizing when we're in our 70s," said Munoz, who said she was especially impressed with the community's amenities such as a clubhouse, pool, basketball courts and softball field.
Her son and daughter each bought a house, she added.
Real estate agent Brett Ellis of RE/MAX Realty Group in Fort Myers attributed the pickup in sales to the rising number of foreclosures. A total of 1,674 foreclosure actions were filed in circuit court in February, down from a record 1,833 in January but up sharply from 624 in February 2007.
"There are more foreclosures in the lower range because that's where foreclosures are concentrated, and that's what skews the price down," he said.
Buyers are snapping up the foreclosure sales, which generally are priced to move, he said.
The Coral Lakes sales show that lower prices stimulate purchases, Ellis said, but they'll also likely cause some who bought there for the old, higher prices to walk away from their mortgages and go into foreclosure.
One banker said, however, that the trend toward foreclosures may abate as lenders work with clients to keep them in their homes.
Richard Purdy, senior vice president of asset preservation at Coral Gables-based BankUnited Financial Corp., said, "Where there are more people working with banks on their current situations, if that puts fewer homes in foreclosure, that should be having a stabilizing impact on the market itself."
BankUnited is working with people to help them keep their houses, he said. "If it's someone who's lost his job and just needs a little breathing room, we can accept something other than the note payments for a fixed period of time."
Statistics aren't available for Collier County, but in Charlotte County the median price fell 25 percent from $201,100 in February 2007 to $151,300 while the number of sales fell 7 percent from 216 to 201.
Statewide, the median price fell 16 percent to $198,900 from $237,000 while the number of sales fell 25 percent from 11,132 to 8,310 from a year earlier.
The National Association of Realtors said that nationwide sales of existing homes rose by 2.9 percent in February to a seasonally adjusted annual rate of 5.03 million units. It was the biggest increase in a year and caught economists by surprise. They had been expecting a small decline.
The trade group reported that the median existing sales price in February fell to $195,900. That was the largest year-over-year drop in records that go back to 1999. Fort Myers News Press
- The Associated Press also contributed to this report.