Lee County existing home prices drop 59 percent

The median price of an existing single-family home in Lee County fell to $94,900 in January — a 59 percent drop from a year ago and the lowest since it was $90,000 in February 1999 — according to statistics released Wednesday by the Florida Association of Realtors.In a separate report released Wednesday by the National Association of Realtors, fresh evidence emerged of a weakening housing market with U.S. sales of existing homes falling unexpectedly last month to the lowest level in nearly 12 years.
Lee County had 758 sales, an increase of 124 percent from the 338 recorded a year earlier, said the Florida release, which measures sales assisted by a Realtor.Driving both trends is a flood of homes that have been foreclosed on by lenders and put back on the market to be resold, said Brett Ellis, a real estate agent with RE/MAX Realty Group in Fort Myers.As banks sell for rock-bottom prices, buyers have stepped up, Ellis said.“I’m seeing Northern buyers buying second homes, first-home buyers coming off the fence, and long-term investors, not flippers.”The median price — half the prices lower and half higher — has fallen so sharply in part because lower-priced homes have been disproportionately foreclosed on, Ellis said. But he added don’t expect that to continue forever.“The next wave of foreclosures is the higher priced, waterfront homes,” Ellis said.Compared to December 2008, both sales and prices were down sharply in January.The number of sales was off 29 percent from December’s 1,064, and the median price was down 11 percent from December’s $106,900.But the numbers aren’t evenly distributed across the county.Cape Coral accounts for about half of the sales and Lehigh Acres another 17 percent, Ellis said.John McWilliams of John McWilliams and Tom Buckley & Associates, which has an office in Lehigh Acres, said about 85 percent of the sales there are from bank foreclosure properties.“A normal seller obviously cannot compete,” he said. “A builder can’t compete to build.”Among Lehigh residents trying to sell their house are Robert and Nancy Auer, who have had their two-bedroom, two-bath house for sale for two years. but with no success. They’re asking $234,900.“It’s one of those things we don’t have to sell,” Robert Auer said. “We’re waiting until things get better.”Until then, the Auers will keep the house up for sale, and they currently have it listed on forsalebyowner.com.The price won’t come down. “That’s what we owe on it,” Robert Auer said.Jeff Tumbarello, director of the Southwest Florida Real Estate Investment Association, which tracks local foreclosures, said that with foreclosures forcing prices ever lower, “We’re in a negative feedback loop — we’re at the point that foreclosures are now begetting foreclosures.”Thirty-seven percent of foreclosures in the county are owner-occupied, and with about 2,000 filed each month, there’s no sign yet that the pace is slowing down, he said.Even though the number of sales fell from December to January, Ellis said he’s optimistic that today’s low prices will spur more sales. “I’m seeing some big numbers coming for February and March.”Nationally, sales of existing homes fell 5.3 percent to an annual rate of 4.49 million last month, from 4.74 million units in December. It was the weakest showing since July 1997 and well below the slight rise in sales that economists expected.The median sales price nationally plunged to $170,300, from $199,800 a year earlier. That was the lowest price since March 2003 and the second-largest drop on record.And home prices are expected to keep falling this year. That has whittled away Americans’ single-biggest asset and figured prominently in consumers’ decisions to cut back spending, which has sorely hurt the economy.

Home Values set for big drop

Lee County property values appear headed for a record drop of 20 percent on average - including up to 40 percent in Cape Coral and Lehigh Acres - after falling 12 percent last year.
"We're still in the process of evaluating that, so I can't say exactly what's going to happen," Property Appraiser Ken Wilkinson said. "But I can tell you, I think values will be a minimum in the 20s down."
There are two main reasons: a record number of houses in foreclosure or headed to foreclosure being sold at discounted rates and the plummeting revenue of new construction.
There were 74 discount sales in 2007. In 2008, there were more than that a month. Wilkinson has yet to get a final number because his office is still counting them. There were none in 2006.
As for new construction, that generated $4.3 billion in 2007, he said. Then last year that dropped to $770 million.
Wilkinson's office is not required to release estimates on values until June 1, after studying market activity from the previous year, and then final values on July 1. But as the economy worsens the topic continues to come up.
Lee property values rose as recently as 2007, by 6 percent. And in 2006, values soared 40 percent - 88 percent in Lehigh Acres and 43.3 percent in Cape Coral, where investors were selling properties they had just purchased and inflating values.
But by 2007, values started dropping in Cape Coral and Lehigh Acres.
In the Cape, the drop was 3.1 percent, and last year the Cape had the biggest loss of value in the county, at 26 percent. Lehigh values dropped 8 percent in 2007 and 17 percent last year.
"It was outrageous a couple of years ago when the
values went so high," said Bonnie Timberlake, executive director of the non-profit Cape Coral Housing Development Corp.
Her agency has been so busy not only handling affordable housing planning, but tending to foreclosure prevention she had to change the greeting on the office voicemail, asking callers to be patient as she and staff try to respond.
They could be getting busier.
"It's still a little early to make a prognosis, but it wouldn't surprise me" if values dropped 40 percent in Cape Coral and Lehigh, Wilkinson said.
When properties drop in value like that, governments lose millions of dollars in tax revenue. Lee is facing a $160 million shortfall next year.
And the situation is really tough for people who bought homes at the peak of the boom, in 2005 and 2006, like Cape resident Jeff Ziomek, 45, a professor at Edison State College.
"It's disappointing. You put so much hard work and energy into purchasing a home, to have the American dream," said Ziomek, whose house is worth less than half what he bought it for in 2006. "But what can you do?
Michael Reitmann, executive vice president of the Lee Building Industry Association, said the huge price increases in the Cape and Lehigh, followed by the sudden decreases, are affecting the rest of the county.
"We've been actually anticipating the decrease in value," said Reitmann, who believes the drop countywide could average 25 percent. "It's the reality we're dealing with."
Last week, Lee laid off 19 people from its building department. They are employees who make their money off building permit fees. Only nine permits were pulled last month.
The only way to get through this housing slump is to get rid of the inventory - 24,000 active condo and home listings and another 20,000 to 30,000 in the foreclosure pipeline, according to Denny Grimes and Company.
Reitmann believes the county is moving in that direction.
"I can see it getting better already," he said. Courtesy Fort Myers News-Press
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