Bank sales help set record in Lee County

Lee County is facing a looming shortage of a precious financial resource these days: houses taken in foreclosure and dumped back on the market by lenders.
Houses sold by banks and other "distress sales" accounted for 74 percent of the record 1,468 Realtor-assisted sales made in April in the county, according to statistics released Wednesday by the Florida Association of Realtors.
But the rich vein of foreclosures caused by the crash of home values and the recession is about to run out, said Brett Ellis of Re/Max Realty Group in Fort Myers. Fewer than 1,000 foreclosure houses remain among the 12,500 homes listed for sale.
"I can't see us continuing to reach these records unless we get a steady diet of foreclosures hitting the market," he said. "Sales will start slowing if only because we won't have the inventory."
Most of the bank-owned houses hitting the market are inexpensive homes built at the height of the housing frenzy that ended in late 2005, said Jeff Tumbarello, director of the Southwest Florida Real Estate Investors Association. Speculators abandoned thousands of those houses as bad investments, and now about 24,000 foreclosures are working their way through the county court system.
But a steady drop in prices during the past three years has spurred a frenzy of interest in those houses as they come back onto the market. The median price was $322,300 at its peak in December 2005 but in April was only $85,500, according to the association's statistics.
Will the boom in sales that rejuvenated the real estate industry this year continue?
Steve Koffman, a real estate broker with Century 21 Sunbelt in Cape Coral, said he thinks the foreclosures will keep on coming, providing a steady supply of houses for the second-home buyers and investors who make up the majority of today's market.
"I think it's a temporary bottleneck" that caused the relatively low number of foreclosure homes now for sale, Koffman said, noting that a few months ago giant lenders "Freddie Mac and Fannie Mae had a self-imposed moratorium that caused there to be a gap in the pipeline."
But, Koffman said, foreclosures from now on are likely to be more from the "second wave" of more expensive houses whose owners lost their jobs and couldn't pay their mortgage or, in some cases, simply walked away because home values had fallen.
Nationally, the spike in homebuying was more modest as sales of distressed low-end properties have even sparked bidding wars in places such as Lee County as well as Las Vegas, Phoenix and Miami.
But the market for high-end properties is at a virtual standstill, mainly because it remains difficult to get a mortgage for expensive homes.
"We're looking at a dual market right now," said Sherry Chris, chief executive of Better Homes and Gardens Real Estate.
The National Association of Realtors said Wednesday that home sales rose 2.9 percent to an annual rate of 4.68 million in April from a downwardly revised pace of 4.55 million in March. Sales were 4.6 percent below April last year, without adjusting for seasonal factors.
Compared with January - the lowest point in the housing recession - April sales were up nearly 4 percent. But compared with the peak in September 2005, sales are still down 35 percent.
And they have not kept pace with foreclosures, which continue to pile up at an alarming pace. Those properties helped drag down the median sales price to $170,200.
- The Associated Press contributed to this report.
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