Bargain Basement Real Estate Prices

Homebuyers find happiness in Lee County

(Buyers and Sellers of Real Estate)

Southwest Florida's bargain-basement home prices have enabled Luis and Natasha Almodovar to realize the dream of home ownership.
In March, the young couple purchased a 3-year-old house in Cape Coral, with 1,875 square feet "under air," for the asking price of $75,000.
"We saw it, we liked it and an hour later, we put in a bid so we could be first in line," Luis Almodovar said.
Their purchase contributed to what has become a trend over the past 19 months in Lee County: sales prices coming close to or matching list prices for single-family homes.
Since December 2007, the median monthly sales price has been within a minimum of 91 percent of the median monthly list price. In fact, that ratio has often been much higher, hitting 98.24 percent in March and 101.13 percent in April.
The trend is being driven by the explosion of "distressed properties" - foreclosures and short-sales - on the market and the fact more sellers are pricing their homes to market levels, according to Realtors. They said those homes and their bargain-basement pricing have attracted a bevy of buyers, including many investors who are able to pay in cash.
But those rock-bottom prices have also resulted in appraisers lowering home values in their reports to lenders who are considering loans for prospective buyers. The result is more difficulty in securing home loans at a time when credit standards have tightened.
Realtors said it's become common to have multiple bids - sometimes 20 or more - for homes, especially in the price range of $100,000 or less.
Almodovar, 30, said he and his wife had been outbid during their two-month search, so they acted as soon as they found the house in northeast Cape Coral. They submitted their bid on a Friday and it was accepted on Monday by the bank.
"These houses are flying off the shelves," he said. "They used to be ridiculously high and now they're ridiculously low. You can't go wrong now."
Distressed homes comprised about 75 percent of sales last year for the Re/Max Realty Team in Fort Myers, a ratio that's jumped to 95 percent in 2009, said Darius Cochran, an agent at the office.
Bidding wars have become common, said Suzanne Sherer, an agent for Re/Max Realty Team in Cape Coral and president of the Realtor Association of Greater Fort Myers and the Beach.
Bids have begun to exceed the asking price of late as the flood of bank-owned properties that hit the market in late 2008 has been absorbed, said Susan Collins, a broker-associate for Rossman Realty in Cape Coral. The result, she said, is a shortage of available properties, especially in the lower price ranges.
Mary Huber, a Realtor for Century 21 Sunbelt in Cape Coral, agreed. She said she's seeing 20 to 30 bids, in some cases, for foreclosed homes built in 2004 or later, that are in move-in condition and have list prices for between $50,000 and $70,000.
But for anyone trying to finance the purchase of such a home, it's vital that their agent "run the numbers" to see whether the appraised value matches the asking price, she added.
The widening gap between list prices and appraised values has been occurring for six to eight months said Marc Gizzi, of Anthony Gizzi Appraisers in Fort Myers.
One reason for this gap may be appraisers who aren't being thorough when investigating sales prices for comparable homes in the market.
"It's 'Find me three very recent sales' and the three recent sales might be three liquidation sales that hit the market, and they're right around the corner," he said. "Liquidation pricing might not be market value. Typically liquidation is priced under market value."
Courtesy Fort Myers News Press