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.
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