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."