Report: Cape-Fort Myers foreclosure rate highest in nation

Cape Coral-Fort Myers posted the highest foreclosure rate of any metro area in the nation, with one of every 86 homes in some stage of foreclosure, said RealtyTrac Inc.The California-based company reported this morning that number of homes facing foreclosure jumped 57 percent in January compared to a year ago, with lenders increasingly forced to take possession of homes they couldn’t unload at auctions, a mortgage research firm said Monday.Nationwide, some 233,001 homes received at least one notice from lenders last month related to overdue payments, compared with 148,425 a year earlier, RealtyTrac reported. Almost half of the total involved first-time default notices.

“You have more people going into default and a higher percentage of the properties going back to the banks,” said Rick Sharga, RealtyTrac’s vice president of marketing.The U.S. foreclosure rate last month was one filing for every 534 homes.Stockton, Calif., was ranked second, with one of every 97 homes involved in a foreclosure filing, while the Riverside-San Bernardino metro area in Southern California had the third-highest foreclosure rate with filings for one of every 101 properties.January’s tally represented an 8 percent hike from December.RealtyTrac follows default notices, auction sale notices and bank repossessions.

Lenders typically consider borrowers delinquent after they fall three months behind on mortgage payments.Attempts to help struggling home owners have fallen short.“The loan workout modification programs aren’t having a significant material effect on keeping properties from going back to the banks,” Sharga said.Other cities to make the top 10 list of foreclosure hot spots were Las Vegas at No. 6 and Greeley, Colo., at No. 8.The news comes the heels of a reports that show a slight rise in existing home sale prices. Home prices rose but the number of sales fell in Lee County in January from the previous month, according to a report released Monday by the Florida Association of Realtors.

Meanwhile, in a separate report Monday by the National Association of Realtors, sales of existing homes fell to the lowest level in nine years while prices continued to decline for the fifth straight month.In Lee County, the median price for a single-family home sold with the help of a Realtor was $234,000, down 12 percent from $266,900 a year earlier but up 8.7 percent from $215,200 in December.Sales were down to 338 in January, 31 percent off 492 a year ago and down 21.8 percent from December’s 432.One south Fort Myers couple, Jim and Carol Osborn, is optimistic that the waterfront house in the Shell Point area in Iona where they’ve lived for 12 years will still fetch a good price in this market.“As far as what we have to offer, it features deep water access to the Gulf or Pine Island Sound — either way you’re out there in 15 minutes,” said Jim Osborn, 68, a retired engineering and computer science professor at Florida Gulf Coast University.The Osborns were avid sailboaters when they moved to Shell Point from Wilmington, Del., he said, but now are considering a move to a tennis community.Jim Osborn said he’s aware prices have fallen about 20 percent from their peak in December 2005, when the median price reached $322,300. “But I think the houses in this area, for different reasons, have stabilized,” he said.

The Osborns’ house is listed for $749,000, which their agent, Mark Hetrick of List in MLS Realty, said is priced to sell — less than the $800,000 to $850,000 being asked by the eight or 10 other houses for sale in that area. “To move it you’ve got to be the biggest deal around.”Real estate broker Steve Koffman of Century 21 Sunbelt Realty in Cape Coral agreed that waterfront prices are stabilizing. “You’ve had two years of declining prices that put waterfront back in the game for most people who couldn’t afford to pay for it two years ago.”Meanwhile, he said, there’s room for optimism in the market generally because of a surge in pending sales in January. “The impression I get is the investors are looking at our market again,” Koffman said.

Statistics weren’t available for Collier County because the Naples Area Board of Realtors does not provide its numbers for publication in the association’s report.In Charlotte County, the median price was $156,800, down 21 percent from $199,400 a year earlier and down 3.9 percent from December’s $163,200. The number of sales was 175, 13 percent more than 155 a year ago but down 13.4 percent from 202 in December.Nationally, The National Association of Realtors said Monday that sales of single-family homes and condominiums dropped by 0.4 percent last month to a seasonally adjusted annual rate of 4.89 million units, the slowest sales pace on record going back to 1999.The median price of a home sold in January slid to $201,100, a drop of 4.6 percent from a year ago.The drop in sales and prices underscored the continued pressure facing housing, which is struggling to emerge from its worst slump in a quarter-century.Sales were weak in all parts of the country except the Midwest, where sales posted an increase of 3.4 percent. Sales dropped by 3.6 percent in the Northeast, 2.1 percent in the West and 0.5 percent in the South.Sales of existing homes and new homes tumbled for a second straight year in 2007 as the housing industry was battered by a severe credit crunch that hit in August while major financial institutions began reporting multibillion-dollar losses on their investments in risky subprime mortgages, loans made to homeowners with weak credit.

The market for subprime mortgages has essentially dried up and other types of loans have become more difficult to obtain as lenders have tightened their standards.Analysts said the abundance of unsold homes would continue to depress sales and prices for some time to come.“Expect sales and prices to keep falling,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics. “There is no end in sight for the housing disaster.”The slump in housing that began in 2006 followed a boom period in which sales and prices had soared to record levels. Many economists believe that the sharp turnaround has severely depressed economic growth and boosted the odds that the country could fall into a full-blown recession.
Courtesy of Fort Myers News Press

Amendment 1 boosts housing market in Lee County

Gordon Redshaw is under contract to buy a retirement house in Fort Myers — and he said the new Amendment 1 protections for homeowners approved by Florida voters last month is welcome news. Redshaw, 59, a retired Eastman Kodak engineer living in Rochester, N.Y., said he probably would have made the decision even without Amendment 1. “My wife and I were pretty much predisposed to move to Fort Myers, and really barring anything catastrophic with regard to the homestead, we pretty much had our minds set to move.” But the amendment provided a comfort level for the purchase, and he believes it’s good public policy, Redshaw said. “I was confident the Legislature would come up with something sensible and fair to everybody.” Real estate agents say Amendment 1, along with prices at four-year lows, has helped create a new willingness by buyers to close the deal. The amendment’s passage doubles the homestead exemption for property taxes to $50,000 for full-time residents and lets homeowners move their Save Our Homes exemption from one Florida house to another. Under Save Our Homes, the assessed value of a home doesn’t go up more than 3 percent in any year. That’s helped allay buyers’ anxieties about volatile property assessments and being punished for moving, said agent Brett Ellis of RE/MAX Realty Group. He said statistics bear out his opinion: the number of Realtor-assisted sales pending for single-family homes in Lee County was 1,088 on Feb. 14, up 33 percent from 821 a month earlier. That’s a rare note of good cheer in a market that’s been dismal since sales and prices reached their zenith in late 2005. Since December 2005, the median price of a single-family home has fallen 33 percent from $322,300 to $215,200 in December 2007, the latest month available, according to the Florida Association of Realtors. In the same time period, the number of sales fell 60 percent from 1,084 to 432. But every cloud has a silver lining. The steep drop in price is finally paying off in less wary buyers, Ellis said. “For whatever reason, Florida appears to be on sale to many people. Prices are down, foreign investors are in, and first-time buyers are back in the market for the first time in a long while.” Also, he said, banks are putting houses on the market priced to sell, often after months of foreclosure proceedings during which it was impossible to buy. “You’re better off letting the banks take over,” he said. “Now you got a property you can sell.” Agent Matt Finn of The Finn Realty Team, which concentrates on homes in Lexington Country Club in south Fort Myers, said he’s also noticed an uptick even though many of his customers are buying second homes that don’t qualify for a homestead exemption. Last year, he said, buyers just weren’t there. “You could put any price on it. Didn’t matter.” Now, Finn said, “They want their properties.” Amendment 1’s benefits are probably just beginning, said Kevin Clark, Tampa division president for Beazer Homes. “I think we’ll see a lot more of that.” Not every prospective home buyer is a fan of Amendment 1, however. Fred Bonke of Chicago, for example, is thinking about building a retirement home on the lot he and his wife, Karen, bought in Cape Coral in 2004 — and Amendment 1 is a factor against coming to Florida. The measure only increases the unfairness of giving a better deal to full-time residents who have been in Florida awhile, said Bonke, 64, a homicide investigator for the state attorney’s office in Chicago. “The person who lives next to you may have a better house but pay less taxes,” he said. “It really is splitting up the community.” Amendment 1 boosts housing market in Lee County That point of view may yet prevail, said Mark Vitner, senior economist for Wachovia Bank, who spoke Thursday at an Urban Land Institute symposium in Naples. “My suspicion is there might be a successful court challenge, which would not be entirely bad because it would really level the playing field.” Meanwhile, however, the amendment’s passage is a source of optimism in the real estate industry. Lee County Property Appraiser Ken Wilkinson, who spearheaded the drive to get Save Our Homes on the ballot in 1992, said it’s his impression portability and the doubled exemption are juicing up the market. Real estate agents, he said, are busy again. “One hundred percent, they’re telling me the phones are ringing.” Whatever the reason, Finn said, it’s good to actually be selling houses after a long dry spell. “I feel like I’m a Realtor again.”

Governor Crist Sets Panel to Find Fix for Troubled Mortgages

TALLAHASSEE — Gov. Charlie Crist created a special task force of financial
experts and consumer advocates Wednesday for a quick study of Florida’s mortgage
market.
Two legislators, meanwhile, announced the filing of bills to tighten state
restrictions on lending practices. Rep. Scott Randolph, D-Orlando, and Sen. Ted
Deutch, D-Boca Raton, said a big part of the mortgage mess is caused by poor
people getting lured into loans they can’t afford.
In Lee County, foreclosures soared to an all-time high of 1,833 in January, up
from 596 a year earlier.
Of last month’s foreclosures, 564 were primary residences.
Crist signed an executive order creating the task force dubbed HOPE, for Home
Ownership Promotes the Economy, which will be headed by Lt. Gov. Jeff Kottkamp.
Chief Financial Officer Alex Sink and state Sen. Bill Posey, R-Rockledge, joined
Crist to announce the project.
They said the task force of bankers, mortgage experts, consumer advocates and
state officials will hold four meetings, starting March 3, and make
recommendations by April 18 for easing the subprime mortgage problem in the
state.
Sink said one in 95 households in Florida faced foreclosure last year, an
increase of nearly threefold from a year earlier. She said ill-advised lending
and borrowing decisions are the most frequent culprit.
“In the past, home foreclosures were most often associated with significant
catastrophic events in a family, like death or divorce or a job loss, or a
health issue,” she said. “Today, we’re seeing foreclosures that are driven by
these mortgages that were made to consumers, where their debt is actually
increasing over time rather than decreasing.”
Posey, who chairs the Senate Banking and Insurance Committee, said home
foreclosures in Brevard County have exceeded home sales four months in a row. He
said the “dire consequences for the economy” affect even homeowners who are not
facing foreclosure, by lowering property values in a neighborhood. -Courtesy Fort Myers News-press.

Mortgagees rip 'Band-Aid'

WASHINGTON –– Homeowners threatened with foreclosure could get a 30-day reprieve under a Bush administration initiative announced Tuesday but the plan drew skepticism from Lee County experts and borrowers.
Under the new program, six of the nation's largest financial institutions said they will begin contacting homeowners who are 90 or more days overdue on their monthly mortgage payments. The homeowners will be given the opportunity to put the foreclosure process on pause for 30 days while the lenders look for a way to make the mortgage more affordable.
But people in Lee County - where the number of foreclosures jumped to a record 1,833 in January as prices have plunged over the past two years - had little good to say about the proposal.
"This new plan doesn't address people like me who can't or won't just walk away, people who feel a sense of responsibility but who are stuck in a bad loan due to unforeseen circumstances," said Kathy Reed, a musician and former real estate agent who plays the violin and sings at funerals, weddings and other events.
Now she finds herself paying two mortgages: one on her old house in Alva that she's unable to sell and another on a house she bought in November 2006 in the Cascades subdivision in east Lee County.
Reed is unable even to refinance the new house because banks tightened their credit standards and won't lend to a self-employed person.
The situation is aggravated by the bankruptcy reorganization filed Nov. 9 by the builder of Cascades, Levitt & Son, she said.
"I'm one of the lucky ones - they finished my house," Reed said.
The new program will be available to the holders of all types of mortgages from prime to subprime and represents a widening of an initiative announced by President Bush in December that offers a freeze on subprime mortgage rates that are scheduled to reset to sharply higher rates for borrowers who qualify for the assistance.
But Jeff Tumbarello, who's a mortgage broker and also sales manager for the Engel & Voelkers real estate agency in Fort Myers, said it's too little to help working families much.
"I'm excited they're trying but they need to do much more," he said. "I think we should go out of our way to help people and their children."
Ed Bonkowski, a Fort Myers-based real estate broker, said the initiative will have little effect and is targeted at helping the wrong people.
"It's not going to do one iota of good," he said. "What's 30 days? The people are in, they signed it and they should pay."
If anything, Bonkowski said, "It's just going to forestall what's going to happen in the marketplace."
Banks need to take back the houses and put them on the market at a deep discount, he said - as little as 10 percent of the loan value.
Then, he said, "The investors will absorb the inventory and the crisis will be over. The money's on the sidelines waiting for this to happen."
Prices have fallen steeply in Lee County since the market peaked in December 2005. Zillow.com, which tracks home prices, released a report Tuesday saying that the median price of all homes in Lee County was $201,723 in the fourth quarter of 2007: down 20.1 percent from a year earlier and down 7.1 percent from the third quarter.
Nationally, the current crisis reflects the steepest slump in housing in more than two decades, a severe downturn that followed a five-year boom that saw home sales and prices both hit record levels, only to come crashing down over the past two years.
Homeowners who had counted on being able to refinance their adjustable-rate mortgages before they reset to sharply higher rates have been caught in the sharp downturn as home sales and prices have plunged in many parts of the country.
While saying the 30-day pause in the foreclosure process was not a silver bullet, Treasury Secretary Henry Paulson said it could give borrowers valuable time to work out refinancing terms with their lenders. However, lenders would not be required to offer any more favorable financing terms than they are already offering to borrowers in trouble.
Critics said much more assistance will be needed to prevent what is expected to be a tidal wave of foreclosures in the coming two years.
"A month long moratorium on mortgage foreclosure is like a Band-Aid when the patient really needs surgery," said AFL-CIO President John Sweeney.
"Homeowners at risk of foreclosure are floating 50 feet from shore while Project Lifeline throws them a 30-foot rope," said Sen. Dick Durbin, D-Ill. Durbin is pushing legislation that would let homeowners facing foreclosure alter the terms of their mortgages in bankruptcy proceedings to make their payments more affordable, something current law does not allow. The Associated Press and Fort Myers News-Press contributed to this report.

Realtors Jump Ship on Market

Cape Coral real estate agent John Valdespino saw the housing crash coming in 2006. He got out while the getting was good.

Valdespino, 44, went through a 10-week “boot camp” training program to become an Embarq telephone system installer. He now works for the company in Naples.

“People were buying $500,000 homes in middle-class neighborhoods, that doesn’t add up to me,” he said. “I said, ‘This isn’t going to keep going.’ I said, ‘You know, before all these other out-of-work Realtors jump, I’ll beat them to the punch.’”

He’s not alone.

The number of Realtors in Lee County dropped 16 percent in the last year, from 5,157 to 3,959 members of the Realtors Association of Greater Fort Myers and the Beach, Lee County’s largest association.

And it’s down 28 percent from the record 5,993 two years ago, when median price of a single-family home shot up 47 percent in a year’s time and real estate was a burgeoning profession.
Other Realtors’ groups also report falling membership. The Bonita Springs-Estero Association of Realtors has 758 members, down 25 percent from a year ago, association comptroller Lenore Bennett said.

If anything, the decrease in association membership may understate the decline of the profession.

Real estate agents are licensed by the state but most who are selling substantial numbers of homes belong to a Realtors’ association and subscribe to its Multiple Listing Service that shows what homes are available for sale. Many keep their licenses active but let their memberships expire, a telling sign real estate is not their full-time occupation.

“As things got better and housing boomed, people got their license. Business was good, housing was good, the economy was good, people got into the business,” said Peggy Hummel, president of the Realtor Association of Greater Fort Myers and the Beach.

The median price of a single-family home sold in December was $215,200, down 18 percent from $263,700 a year earlier. Prices had peaked at $322,300 in December 2005.

The number of sales in December also plummeted 28 percent from 604 to 432 a year ago.

Now, she said, after two years of falling prices and low numbers of sales, many finally made the decision to not stay members when the Jan. 4 deadline for dues arrived.

Valdespino, for example, said he paid to stay licensed this year even though he’s no longer in the business.

“I only renewed for the fact that maybe somebody from up north, I could possibly connect them,” he said. “It’s a $700 gamble.”

Others have given up altogether on this market.

Elizabeth Casella, 40, came here with her husband 16 months ago, after Hurricane Katrina clobbered her real estate brokerage in New Orleans.

“I moved my whole family here and began the process of transferring my broker’s license,” she said.

But Casella soon realized the market wasn’t the vibrant one that had existed even a few months earlier.

“I went for an interview with a real estate agency and I was there 40 minutes,” she said. “The phone didn’t ring. I asked them about it and they said, ‘It’s a slow day.’ I said ‘A slow day means it rings every four minutes.’”

As a result, Casella stopped the process of transferring her license and is now pondering her options.

“I figure if I have to start over, why not do something fun, start a little restaurant,” she said.

Casella may go back to school and wait for her two children to graduate from high school before she and her husband, who works for the Ritz Carlton in Bonita Springs, go somewhere else — they’re considering the U.S. Virgin Islands.

One enterprising Naples real estate broker is setting up a company to take advantage of the falling numbers.

Sheila Lewis, broker for Gulf Coast Investment Properties, recently launched Hangyourlicense.net, which for $250 a year will let agents stay active under her state license without belonging to a Realtors association.

Agents are required by the state to be affiliated with a broker but don’t have to be Realtors.

This way, said Lewis, who kicked off Hangyourlicense last week, they can give referrals to Realtors and be guaranteed their fair share of the commission.

Some Realtors are on the fence — moving toward a new occupation but unwilling to give up completely on real estate just yet.

Gordon Koschtial, an agent with Yacht Club Realty in North Fort Myers, came here from Detroit and got his license in ’05, just at the peak of the market.

He also started Odyssey Homes, which is finishing up some partly-built homes for financial institutions.

But after that, Koschtial said, there’s likely little work for him here. Home permits are at a crawl: Only 57 were issued countywide in December.

If nothing else comes along, he said, “I’m heading back to Michigan in five or six months to a job that’s waiting for me.”

There’s no sense in waiting for the market to come back.

“I’ll be dead and broke by the time that ever happens,” Koschtial said.
Courtesy Fort Myers News Press