Lee County existing-home sales, prices fall in July


Prices and the number of homes sold in Lee County fell sharply in July, according to statistics released Tuesday by the Florida Association of Realtors.
The number of existing single-family homes sold with the assistance of a Realtor dropped 24 percent from 1,501 in June to 1,139 in July and the median price fell 3 percent from $96,600 to $93,500 in the same period.
Meanwhile, sales of existing homes nationally plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas, the National Association of Realtors said in a separate report Tuesday.
Why the big drop in Lee County?
Partly, the slowdown is due to the normal seasonal variation in sales here, said Mario D'Artagnan, a broker associate with the Jim Fischer Team at Gulf Coast Realty Network in Cape Coral.
"Historically, July and August are a little bit slow anyway," he said. "I think with school starting, people taking last-minute vacations, that puts a little bit of sluggishness in the numbers."
John McWilliams, owner-broker for McWilliams, Buckley & Associates, with offices in Fort Myers and Lehigh Acres, said today's rock-bottom interest rates are so far failing to juice up the market.
"The problem is in previous cycles, interest rates at this level have stimulated not only buyer activity but frankly helped bump prices up a little bit. But in this environment, they're not responding to the interest rates. And you can borrow at 4.5 percent or even a little better for 30 years."
One troubling recent trend, McWilliams said, is that "The number of houses coming onto the market is still twice, on average, what's being sold.
"Today there were 216 houses listed and 83 sold. That does not bode well."
Nationally the statistics were even grimmer, according to the national association's release.
July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.
The associated press and fort myers news press contributed to this article
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Homes not a path to riches


Some leading national experts argue that gone are the halcyon days of wealth being created by the home you own.
"People shouldn't look at a home as a way to make money because it won't," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C.
Southwest Florida became the poster child for bloated home prices.
The median price of a single-family home sold in Lee County with the assistance of a Realtor reached an all-time high of $322,300 in December 2005 before declining steadily over the next four years and leveling off over the past year.
In June, the last month for which statistics are available from the Florida Association of Realtors, it was $96,600.
Homeowners, though, can't look at that roof over their heads as a personal ATM, like so many did during the go-go years, said Michael Reitmann, executive vice president of the Lee Building Industry Association in Fort Myers.
"Too many were using the values of their homes that had become so inflated in value to live the high lifestyle," Reitmann said. "They used equity in their home to purchase other things. They have spent that money, and now they are under water."
Baker said that because housing is such a highly leveraged investment the implications can be huge.
"For example, if someone puts $20k down on a $200,000 home and it loses 20 percent of its value, then they are $20,000 under water," he said. "The fact that home prices can fall makes homebuying a very risky investment."
Also falling into that camp is Stan Humphries, chief economist for the website Zillow.com.
"There is no iron law that real estate must appreciate," he said.
He said homeowners will likely keep up with inflation, but their home won't necessarily be a ticket to great riches and a carefree lifestyle.
Fort Myers Realtor Brett Ellis agrees on one hand, but not another.
"I don't care if we ever go back to five years ago," he said, referring to a time when people were flipping houses, making easy money, and values were sky-rocketing to unheard of highs. "That was an irrational market. It wasn't founded on anything that meant anything."
"Most experts would say that traditionally a home is a good long-term investment. Real estate has been one of biggest wealth builders. Too many people look at the short term."
Unlike a lot of commodities, a home you can live in," he said. "You can't get to do that with gold."
Growth in real estate value began in earnest after World War II, when returning GIs helped create a construction boom. In the 1970s, inflation exploded, driving up the value of hard assets, and then in the late 1980s interest rates declined, further escalating the value of dirt and the buildings sitting on it. Then came the go-go days of the early 21st century when things got all out of whack, the boom went bang and Southwest Florida became a symbol for housing foreclosures.
"No lot in Lehigh was worth $50 or $60,000," Reitmann said. "In some places, there was no infrastructure. They had been $1,500. It didn't make sense.
"Now with the adjustment, these homes and lots that were inflated are coming down to market value."
Ellis said that the real estate market here has improved, and he estimates only an 8.5-month supply of homes on the market.
Reitmann said there is far more than just the nest-egg mentality to owning a home.
"It adds a certain social stability to the community," he said. "There's the pride of home ownership . ... You take care of it, and it brings stability to family.
"And that's not just a theory. There have been major studies on the subject, including one Harvard did."
The allure of white-sand beaches, golf course communities and the sky's the limit demand for new homes, Zillow's Humphries said, could be over.
"All those theories advanced during the boom about why housing is special - that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land - didn't hold up."
Reitmann, though, said it's far too early to tell.
"Until the market stabilizes, I don't think you can predict anything," he said. "I don't think you are going to lose by going back to true investment qualities ... putting 20 percent down."
Reitmann said people will return to buying homes.
"You have to live somewhere," he said.
Courtesy of the Fort Myers News Press. Search Fort Myers Real Estate

After the craze: Fort Myers Condo conversions leave fractured communities


Michael Jacob was living at the Monterra apartments in Bonita Springs in 2006 when the wave of condo conversions came through.
Jacob, and everyone else in the 244-unit complex, was told by management to leave if they didn't want to pay the sky-high price to buy - it was the very top of the wave to turn rental apartments into more lucrative condo sales.
Luckily for Jacobs, he and his wife didn't buy their one-bedroom apartment for owner Tarragon Corp.'s asking price of about $200,000. Prices crashed almost immediately and Tarragon hastily canceled its plans even before the last tenants left.
"Poetic justice," said Jacobs, who works as an assistant Lee County attorney. "It was just such an outrageous price."
The original conversion craze got going in earnest in 2004 as developers, faced with a huge demand by speculators for property, got in early and made a lot of money but those who were still playing the game in 2006 found themselves unable to sell at a profit.
Monterra tops the list of wildly excessive pricing. Tarragon paid $54 million in October 2005 for the complex, an all-time county record of $222,090 per unit.
Now, four years later, it's a different landscape - many of the apartment buildings that were converted have reverted or, more commonly, exist as "fractured" communities with owners and renters living in uneasy proximity.
Prices have fallen sharply. The median price paid for an existing condo in 2009 was $125,400 - less than half the $298,800 prevailing in 2006. Investors have reacted by walking away from condos they bought hoping to flip for a quick profit, contributing to the huge rise in foreclosures over the past four years.
What now?

Not much in the short term, because investors and condo dwellers alike are typically underwater on their units and unable to sell, said Paul Kaplan, managing partner of Miami-based KW Property Management & Consulting, which provides services for condo and homeowner's associations.
Over time, he said, it's likely that a trend of "absorption" will take place: as prices eventually rise, the rental units in a split community will be sold and the conversion complete.
Courtesy Fort Myers News Press
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Prices, sales on upswing in downtown Fort Myers


In downtown Fort Myers, most residential real estate activity centers on modern high-rises and historic homes.
And while there are plenty of vacancies, brokers and agents dealing in both products say they've seen increased activity this year - though they have experienced the typical summer slowdown. Much of the movement in the past year stems from short sales and foreclosures.
The median sale price for all downtown condos - not just luxury high-rises - dipped to $80,110 in October 2009. On Sept. 30, 2009, for example, an 1,108-square-foot condo in Alta Mar on Palm Beach Boulevard sold for $84,000.
Since then, average condo sale prices have fluctuated between $114,900 in April and the high of $175,000 last month, according to the Realtor Association of Greater Fort Myers and the Beach Inc.
"We really kind of hit bottom in October of last year and have been eking back up to a good number," Deborah Murray, a broker at Exit Platinum Realty who spoke on behalf of the Realtor Association, said of downtown condo sale prices. "We're seeing a little bit more on the end user and a bit less on the investor."
Only 18 condos sold downtown between January 2009 and July 2009, while agents closed on 90 downtown condos during the same seven-month period this year.
High-rises, in particular, saw a median sale price of $148,000 between April 2009 and April 2010. The high sale occurred at High Point Place, a 272-condo development on West First Street, where a unit went for $399,900. The lowest sale was a $75,600 unit at Alta Mar on Palm Beach Boulevard.
"There were a lot of short sales and foreclosures and really, really great deals," Jean Sanders, a high-rise specialist for Sun Realty, said of the market.
High-rise market
Jackie Yundt, 58, a part-time nurse, and her husband Bill, who works part-time as a pharmacist, bought a four-bedroom, 1,900-square-foot unit at Beau Rivage on First Street in March. After renting there two consecutive years during the five months they spend in Fort Myers, the Canadian couple decided to take advantage of the low price points.
"If we had bought it pre-construction, we wouldn't have been able to afford it," Jackie Yundt said. The couple spent $185,000 for the condo.
The lowest priced unit available at Beau Rivage currently is approximately $140,000, said Rachel Kanel, who works as concierge for the high-rise.
"A lot of those who bought in the last year have bought foreclosures," Kanel said. "Most of the (buyers) are either investors or seasonal (residents)."
Several agents and brokers said High Point Place seems to be one of the most attractive high-rises at the moment due to its proximity to the downtown core as well as Publix and restaurants.
"It was a higher-end product to begin with so it didn't attract as many flippers out of the gate," said Mark Washburn, an agent with Island Coast Realty.
But now, some of those original High Point Place buyers are renting out their units, said Marilyn Covins of Storybook Realty.
"People who did buy early on, they can't afford to sell (units) so they've turned them into investment property," she said.
St. Tropez, part of a twin towers development with Riviera on First Street, offers attractive deals due to short sales and foreclosures, Washburn said.
"A lot of investors bought it pre-construction and a lot of that shake-out is still going on," he said.
Rental market

At The Dean building on Dean Street, there are a handful of commercial office spaces available but residential is full. A few apartment rentals have recently opened up in the Bradford House on First Street, but Bill Weaver, vice president of the building's operator, Bill Smith Inc., said the 41 residential units are typically 100 percent occupied.
"We have a waiting list and as they come open, we usually rent them pretty quickly - within a couple of weeks," he said.
Rental prices in the 113-year-old Bradford House building, which also houses commercial space, range from $425 per month to $1,000 per month, Weaver said.
Renter Erin Cameron, 28, recently moved into a two-bedroom town house on West First Street. She said she chose the condo because it offers her the opportunity to purchase after a year and because the recent beautifications increased her interest in downtown living.
"Growing up in the area, downtown wasn't exactly the place you always wanted to go," said Cameron, who chose to live in downtown Fort Myers despite the fact that she has to commute to Naples for work. "There's definitely more people there now."
Dean Park, Oasis

When it comes to single-family homes, historic Dean Park offers deals on properties that investors bought and renovated, said Tara Molloy, broker at Riverside Realty Group. Molloy recently helped move a buyer into a Fannie Mae property situated on an acre in Dean Park for under $200,000.
Riverside Realty lists several 600-square-foot condo units near downtown on Providence Street for $38,000 and a 1,635-square-foot Dean Park home built in 1955 for $189,900. The agency has 14 pending properties in and near the downtown area and has sold 36 homes and condos in the vicinity since May.
Courtesy of the fortmyersnews-press
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Commercial connection: Businesses find great deals on spaces to rent


Many years from now our kids may read stories about the "Great Recession" of 2009 to 2010 (and counting).
With luck, they will only recall the ice cream being good and the beach being hot. But the rest of us here in Southwest Florida won't soon forget the things we see happening every day now - especially in the crazy commercial real estate market. It is an amazing time to witness history being written. Many of us wish it just wasn't so painful while others are happily securing their "Best Deals of a Lifetime."
For example, a local bank just foreclosed on its $6.2 million mortgage for a new, never occupied Class A industrial building (60,000 square feet) on Alico Road that cost $7 million to build just two years ago - and it is now being offered for sale at $2.7 million - and that is an asking price! I'm just getting started here.
On the street

An office building in World Plaza recently sold at $95 per square foot, where the norm was $150-plus per square foot a few years ago. An office lease was just signed in World Plaza at $7 per square foot gross, where $13-plus triple net used to be common. A 1.6-acre land site on Del Prado Boulevard just sold at $4 per square foot, as opposed to the double-digit price per square foot that was common in the past. Two land sales occurred on U.S. 41 between Colonial Boulevard and Corkscrew Road ranging from $2 per square foot to $5 per square foot. A lease on Colonial Boulevard was just signed at $11 per square foot gross, where $13 to $15 per square foot triple net used to be common. A Gladiolus Road retail lease was just signed at $10 per square foot net, where $15 per square foot triple net used to be common. A number of industrial leases at high-quality spaces are getting signed at $3.50 per square foot net, where $6 to $7 per square foot net was once the norm. A big medical group in Naples just renewed its lease on Goodlette Road for $20 per square foot net. This is still a top-of-the-market rent.
And some industrial owners are accepting deeply discounted rents for new tenants on month-to-month leases with the understanding that if they secure better deals from the market in the future, the month-to-month tenants will have to move out. Courtesy Fort Myers News Press.
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South Lee home sales slide


Email This BlogThis! Share to Twitter Share to Facebook Share to Google Buzz Posted by Dave Sorenson

The combination of the end of the government stimulus money, middle of the summer sales, the Gulf of Mexico oil leak and no improvement in the regional employment numbers hit the residential housing market hard, said Bill Barnes, the chief executive officer of the Bonita Springs-Estero Association of Realtors (BEAR).

Nationally the markets still have both very hot with a large number of closings yet other areas are overstocked with homes and condos with no buyers available.

The following statistical reports are complied from the Bonita Springs-Estero MLS data.
Single family homes listed continued to drop to 139 homes coming on the market under the 152 which came on the market in June or the 191 which came on the market in May.
• Single family homes that sold in July plunged to 56 — 34 homes under the total of 90 which sold in May.
• Condominiums coming on the market in July also dropped with 181 units being offered for the first time. The 181 number was 30 less than in June and also 30 less than in May.
One reason for the slow condo sales are new laws being put on the books in Florida Condominium Law, regarding rental rights and the degree the associations can control the owners options.
In the four special price ranges BEAR tracks, the data for July for the single family homes under $200,000 that were sold and closed dropped to 32 which was a double digit decline since May and June. This is a clear indicator of the unemployment conditions in the affordable homes markets.
Condominiums’ in the under $200,000 were about double the home sales leveling out at 71 in the past month.
On the other end of the price range in the $1 million or more range no condos more than $1 million sold in the Bonita Springs-Estero Markets for the second month.
Single-family homes priced at $1 million or above fared better. In the Bonita Springs-Estero market, three single family homes sold.
For the year, 40 homes priced at $1 million or more have sold.
In July, a $4.1 million home on Hickory Boulevard on Bonita Beach lead the sales.
The next two were sales of $2 million in Bonita Bay and one for $1.3 million in Quail West.
Courtesy of the Fort Myers NewsPress.

Lee County foreclosures dip in July

The number of foreclosure lawsuits filed in Lee County declined slightly to 882 in July, according to statistics released today by the Southwest Florida Real Estate Investment Association.

That was essentially flat from 890 in June, but well less than half of the 1,877 filed in July 2009.

Foreclosures started to increase in the county in 2006 after the residential real estate boom started to collapse. The number reached an all-time record high of 2,665 in October 2008 and has generally been falling since then, according to the association's numbers.

There have been about 69,000 foreclosures filed in the county since January 2006, said Jeff Tumbarello, the association's director.

Homesteaded primary residences were 55 percent of July’s filings.

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Homeownership rate continues to slide

Millions of houses on the verge of foreclosure threaten to send homeownership to its lowest level in 50 years, according to new industry estimates.
Fresh projections say the rate could plummet to about 62% as early as 2012 and almost certainly by the end of the decade. Homeownership rates haven't been that low since they hit 61.9% in 1960.
The share of households that own their homes has been sliding since the housing bubble burst in 2006. The rate fell again in the second quarter of this year to 66.9% — the lowest since 1999 — from a peak of 69.4% in 2004, the Census Bureau says.
"Anybody who knows anything about housing thought it would be flat in the second quarter," says John Burns, CEO of John Burns Real Estate Consulting, a national housing market analyst based in Irvine, Calif. "Homeownership fell during the quarter when government was offering a tax credit (to first-time homebuyers). What do you think is going to happen now that there's no tax credit?"
The continued decline — 0.5 points lower than the same time a year ago — points to a fast plunge, he says.
Burns estimates that 6 million of the 8 million homeowners who are behind on their mortgages will lose their homes to lenders in the next two years. This "shadow inventory" could push ownership rates down to 61.7% within two years, he says.
Arthur C. Nelson, director of the University of Utah's Metropolitan Research Center, says the rate may not plunge that quickly because many foreclosed homes will be purchased by others.
Homeownership has been a cornerstone of the American dream because it has generally built personal assets and stable neighborhoods. Federal policy has long encouraged homeownership through the mortgage tax deduction and government-backed mortgages.
The push to own rather than rent now is being questioned. "A large percentage of households are not responsible enough to handle a mortgage payment," Burns says. "Growing homeownership is a great goal but you have to grow the percentage of households that are responsible."
More stringent financing requirements may prevent some from buying.
"We've seen low-income homeowner rates declining by twice as much as higher-income groups," says Daniel McCue, senior research analyst at Harvard University's Joint Center for Housing Studies. "Everyone is looking harder at the benefits and potential risks of homeownership. Is it the right option for you?"
Demographics also affect home buying. The children of Baby Boomers are coming of age but young adults typically rent and financial pressures are further delaying home buying decisions. More 20-somethings have returned home to live with their parents. The 2010 Fannie Mae National Housing Survey shows that two-thirds of Americans still prefer owning a home because it's a good investment in the long run.
The housing bust is providing bargains for home buyers willing to take the plunge.
"Affordability is very much in favor of homeownership right now," Burns says. "If the economy turns around quickly, you would hope that responsible renters would become homeowners." Courtesy of the Fort Myers NewsPress.