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Naples
Florida Real Estate Blog |
Naples ray of
sunshine in housing market, analyst says
By LAURA LAYDEN
Thursday, September
18, 2008
NAPLES —
In one economist’s eyes, the Naples real estate
market is now seen as “slightly undervalued.”
In an interview with
CNBC Wednesday night, Richard Dekaser, a senior vice
president and chief economist at National City
Corp., singled out Naples in talking about the
“first rays of sunshine on a possible end to the
housing crisis.”
“Three years ago, the
poster child for excess valuation in America was
Naples, Florida,” he said.
Not anymore. Through
the second quarter of this year, prices have dropped
33 percent, he said, leading him to judge the market
as “slightly undervalued.” That means home prices
are actually lower than where they should be.
“Now it could become
even more undervalued and I suspect it will,” he
said in the interview. “But I think we have to
appreciate the adjustment that has already
occurred.”
He said prices could
hit bottom within six months as foreclosure rates
begin to fall.
“I don’t want to
overstate the case,” he said. “The housing bust is
not over. But we are in a later stage of
stabilization,” he said.
Dekaser is the same
analyst who labeled Naples the most overpriced
market in the U.S. a few years ago.
At the end of the
first quarter of 2006, National City judged that
with a median home price of $383,000, prices were
more than double what they should be in Naples.
Prices continue to
fall.
In August, the median
home price — the price at which half of the homes
sell for more and half for less — dropped to
$238,000 in the Naples area. That was down from
$375,000 a year ago, according to a monthly report
by the Naples Area Board of Realtors.
For seven straight
months, sales have picked up.
It was nice to see
Naples shown in a positive light in the media,
especially with so much bad news going on in the
banking and financial markets, said Brett Brown,
president-elect for the Naples Area Board of
Realtors.
He said if you took
out the under-$300,000 market, where most of the
foreclosures and short sales are happening, the
median price would have been up 5 percent in August.
Short sales are sales made for less than the bank is
owed to avoid foreclosure.
Naples was the only
market mentioned in the interview with CNBC.
“It shows we haven’t
fallen off a cliff,” Brown said. “We are here.
Properties are selling.”
To see the interview,
go to www.cnbc.com/id/15840232?video=859022956
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Southwest Florida
still caught in the foreclosure grip
By LAURA LAYDEN Naples Daily
News
Thursday, July 10, 2008
The foreclosure frenzy is far
from over in Southwest Florida.
In Collier County,
foreclosure-related filings rose 542 percent in
June, from the same month a year ago. In Lee County,
they jumped 369 percent and in Charlotte County they
increased 237 percent.
GREG
KAHN / Staff
Michael Madden,
broker associate at Gulfside
Properties Group at Remax,
copies contracts information
that will be sent to bank to
justify a short-sale at his
office on Fifth Avenue South
on July 10, 2008. Madden is
dealing with 18 short-sale
homes, meaning the lender
will release the lien for
the property upon receipt of
less money than is actually
owed. Short-sales and
foreclosures are rising in
Florida as the state has
seen a dramatic increase in
foreclosures from one year
ago.
GREG
KAHN / Staff
A house that is on
Michael Madden's growing
list of short-sale homes
sits empty at 3594 Zanzibar
Way in the Island Walk
Community in North Naples.
The Fort Myers-Cape Coral area
ranked fourth in the nation for its foreclosure rate
in June. It ranked first in Florida.
“It seems to be sort of a
ground zero in the state,” said Rick Sharga, vice
president of marketing for RealtyTrac.
The Naples-Marco Island area
ranked 19th in the country for its foreclosure rate.
RealtyTrac bases its report on
default notices, auction sale notices and bank
repossessions.
In June, 1,008 homes — or one
in every 186 households — received at least one
foreclosure-related notice in Collier, up 13 percent
from last month, according to RealtyTrac.
In Lee County, there were
3,749 filings, or one for every 91 households, last
month, down 13 percent from May.
Charlotte County had 515
filings, or one for every 187 households, which was
down 4 percent from May.
Nationwide,
foreclosure-related filings reached 252,363 in June.
That was down 3 percent from May, but up 53 percent
from a year ago.
The decrease from last month
is seen as more of a “blip,” in part because the May
filings hit a record high, said Sharga, with
RealtyTrac.
“Florida is showing no signs
yet of coming out of this foreclosure cycle,” he
said.
“For whatever reasons, whether
it was overbuilding or a high incidence of
adjustable rate or subprime loans, your area seems
to be particularly hard-hit.”
Florida ranked second in the
nation for foreclosure filings in June with a total
of 40,351, up 92 percent from a year ago. It had the
fourth highest foreclosure rate for states in the
country.
Today, more people who receive
foreclosure filings are likely to lose their homes.
That’s bad news for the thousands of borrowers who
are trying to fight it in Southwest Florida.
In Collier, new foreclosure
filings jumped to an all-time high of 716 in June,
according to the Collier County Clerk’s Office. In
the first six months of this year, there were 3,827
filings. That’s more than the 3,266 for all of last
year.
If the pace doesn’t slow, new
filings in Collier could near 10,000 this year, said
Brett Brown, president-elect for the Naples Area
Board of Realtors and a broker for Miromar Realty of
Southwest Florida.
In Lee County, new filings
also reached a record in June at 2,518, according to
Lee County Clerk of Courts.
“We all feel that foreclosures
and short sales are going to be a part of this
market for a time to come,” Brown said.
A spike in foreclosures and
short sales — sales made for less than the bank is
owed — have driven prices down faster in this
market, which has helped to spur more activity.
“There is definitely a lot
more foreclosures out there,” said Dennis Brando,
managing director for VIP Realty Group of Naples. “I
think they are really, really spread out. I think
they are in every neighborhood.”
VIP Realty now offers bus
tours of foreclosed homes once a month. Its first
tour in North Naples a few weeks ago attracted 20
people, including first-time buyers, foreign
investors and an elderly couple looking for a home
for their children.
“There seems to be a lot of
interest in foreclosures. People seem to be wanting
to see them, and they are surprised to see how many
of them are in great condition and they are really
nice houses,” Brando said.
More local real estate agents
are becoming savvy about foreclosures and
short-sales, which is helping them move more
quickly, he said.
On Thursday, Michael Madden, a
broker-associate for Gulfside Properties Group at
ReMax in downtown Naples, was busy faxing offers for
short sales to banks. He had about 15. He expected
only about a third of them to be accepted by the
lenders, and the rest of the homes to end up in
foreclosure.
He’s seen some homeowners
handing over their deed to the bank to avoid
foreclosure, while others are filing for bankruptcy.
He said while the foreclosures
are spread out across many neighborhoods in Collier
County, Golden Gate Estates has been hit
particularly hard.
In Lee County, Cape Coral and
Lehigh Acres have had a lot of foreclosures.
Madden said he hasn’t seen any
signs of a slow down.
“I think there are still some
people trying to hang on,” he said.
In Lee County, court auctions
for foreclosures are now held every day of the week
to keep up with the increase in activity.
“We are up to 100 a day,” said
Wendy McCabe, a civil supervisor for the Lee County
Clerk’s Office.
In Collier County, it’s not
quite that busy. But it’s trending up.
“We are auctioning almost
every day. I’m not just talking about one or two
homes. It’s usually eight or 10 every day that we
are auctioning,” said Dwight Brock, Collier County’s
Clerk of Courts.
In the first six months of the
year, there were 1,033 homes sold through courthouse
auctions in Collier. In Lee County, there have been
more than 3,100 auctioned off since the beginning of
the year.
There are many more to come,
McCabe said.
“There is a lot pending that
have not been sold yet,” she said.
For more information about the
Irvine, Calif.-based RealtyTrac’s June report, visit
www.realtytrac.com.
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On the path to a housing
rebound
The pain that
homeowners and homebuilders are feeling now is a
sign that things are going to get better.
By
Shawn Tully,
editor at large
Last Updated: June 25,
2008: 9:08 AM EDT
NEW YORK (Fortune) --
The news that housing starts have fallen to
their lowest level in 17 years sounds like
one more reason to be depressed about the
shrinking value of
your home.
In fact, it's an almost certain sign that
the path to a housing recovery is finally in
sight.
If prices are going to
stabilize, let alone rebound, the United
States needs to produce far more first-time
home buyers than new houses. That's the only
way to tame the glut of "For Sale" signs
dotting front yards from the Inland Empire
of California to the Gold Coast of Florida.
Builders constructed
far more homes from 2002 until 2006 - the
peak bubble years - than could possibly be
absorbed by the normal growth in households.
As a result, the
market is now swamped with one million new
and existing homes for sale that aren't
occupied, and hence need to sell quickly.
That's a multiple of the figure in most
downturns, and it testifies to the duration
and girth of the bubble.
"For the recovery to
begin, builders need to eliminate the
standing inventory of finished, unoccupied
new homes," says Mike Castleman, founder of
Metrostudy, which assembles sales data on
four million subdivisions across the U.S.
The massive overhang
of unsold inventory has remained stubbornly
high. Sure, builders cut back, but sales
dropped just as quickly.
Now that excess supply
is finally beginning to shrink. In April,
the number of new homes for sale stood at
456,000 according to the U.S. Commerce
Department, still a big number, but 93,000
below the mountainous figure a year ago.
The return of the
first-time buyer
The key player in any
recovery scenario is the first time buyer.
The housing market operates with a
pronounced laddering or ripple effect. When
entry-level buyers flood the market, they
not only stimulate production of new homes,
they purchase existing homes. Those
purchases, in turn, allow the sellers to
move up to bigger houses.
But when the
first-timers are absent, the entire buying
chain gets frozen.
Today, newbies are
coming back. Why? For the first time in
years, entry-level homes are affordable.
Builders have slashed prices, and what
they're building tends to be far smaller
than the McMansions of the boom, selling for
far lower prices. KB Home's average selling
price dropped to $248,0000 in its February
quarter, versus $267,000 a year earlier. In
2006, KB's basic model in Victorville, Cal.,
a former boomtown east of Los Angeles, took
up as much as 3,800 square feet and sold for
$328,000. Today, its stripped down offering
goes for $220,000, at less than half the
size.
So the first time in a
decade renters can carry the mortgage
payments and taxes on a new house for what
they're paying a landlord. Call it the
New Affordability.
Here's how the numbers
play out: Single-family housing starts are
now running at fewer than 500,000 a year.
The normal demand for housing, based on
immigration and household formation, is
around one million units.
We won't get back to
that figure for a while because so many
people rushed to buy homes during the boom.
But with first timers
returning, sales should rise to almost
700,000 units by the end of next year,
according to Bernard Markstein, senior
economist for the National Association of
Home Builders. That means sales will soon
exceed new production by as much as 250,000
units a year.
That margin forms the
foundation of the housing revival that comes
in four steps.
Step 1: First,
the return of first-time buyers will shrink
the overhang of new houses for sale.
Step 2: Second,
because so few new homes are being built,
first-timers will start buying existing
homes from owners who want to move up but
have been trapped by the dearth of buyers.
Their improved fortunes, though, come with a
big caveat: The prices of new homes are now
lower than comparably-sized existing homes.
It's as if used cars are selling for more
than new ones. That can't last. So move-up
buyers are going to have to accept less than
they had hoped to get for their current
homes.
They'll get a big
break as they trade up, however. Unless they
bought at the height of the boom, they'll
still sell at a profit. They can then use
that equity to buy bigger homes at bargain
prices. During the bubble, homebuilders
started pushing up home sizes to 3,500
square feet or more. It's those behemoths
that are selling for the steepest discounts
today.
Step 3: Next,
housing starts should start rising, probably
next year. The increase, however, will be
slow and gradual. For the next two years at
least, homebuilders will compete ferociously
with existing home sellers for customers.
Step 4:
Eventually, the glut of existing homes will
disappear as well. The excess of new-home
buyers over new homes being built makes that
inevitable. But the oversupply is so
enormous that the healing process could take
as much as three more years. Only then will
prices in former bubble markets start rising
again.
One event has the
potential to slow or even derail the
recovery: A sharp rise in interest rates.
Right now, the first-timers are gorging on
6% loans guaranteed by the FHA. But rates
may not stay there.
If they rise to 8% or
higher because inflation rebounds, it would
take a far bigger drop in prices to make new
and existing homes affordable.
The New Affordability
is now in place. But if rates rise, we'll
have to establish a New New Affordability -
at even lower prices. 
First Published:
June 24, 2008: 10:44 AM EDT
http://money.cnn.com/2008/06/24/news/economy/tully_housing.fortune
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New estimate slows Colliers growth rate to 64 percent
By LESLIE WILLIAMS
Saturday, June 14, 2008
Collier County is changing the way it plans for the future.
A new estimate for Collier’s population into the future
shows a slower growth rate than previously anticipated,
possibly reducing the need to expand certain types of
projects for roads and utilities.
Rather than the 77 percent growth anticipated by Collier
County government during the next 22 years, the county’s
new population model calls for 64 percent growth in the
county’s permanent population through 2030.
Based on a recent study, levels of service for everything
from transportation to utilities will be set based on
permanent population numbers, plus a 20 percent increase to
account for part-time residents and visitors.
Collier commissioners unanimously accepted the model at a
recent meeting with little discussion, other than to verify
that the Collier County Planning Commission would have a
chance to reconsider the study in June or July. That’s
when more specific information is expected on the actual
numbers for needed services, such as wastewater treatment
and community park use.
As the new model is put into practice, county staff will
determine whether to realign services or growth plans to
account for the new numbers.
The new population numbers are based on projections provided
by the University of Florida’s Bureau of Economic and
Business Research, which are used outside of census years.
According to Collier County records, the Florida Department
of Community Affairs informed county government that the
previous population methodology employed by county staff was
“not a professionally acceptable population methodology.”
According to numbers from the Bureau of Economic and
Business Research, the 2007 permanent population of Collier
County was 333,858, equating to a seasonal population of
406,882 with the 20 percent adjustment.
That permanent population figure is 1.5 percent lower than
reported by county staff in the 2007 Annual Update and
Inventory Report, when it was listed as 339,068.
The 20 percent figure for seasonal population was obtained
based on facts that the seasonal population rate for 2000
was 23.8 percent over the permanent population.
However, a memo from Planning Commission Director Randy
Cohen reasoned that seasonal homes are never 100 percent
occupied at a given time. Instead, the occupancy of those
seasonal units is assumed to be about 85 percent, bringing
the seasonal increase to a little more than 20 percent.
Other scenarios have the seasonal population adding anywhere
between 17 and 19 percent to the permanent population, but
as the memo states, “Staff was provided direction by
(commissioners) to provide for the worst case scenario with
regard to public utilities.”
The new estimates call for slightly more modest growth than
was predicted in the 2007 Annual Update and Inventory
Report, with permanent population in 2030 predicted at
548,900, an 8.3 percent reduction from the 598,500 residents
anticipated.
In the near-term, the 2010 permanent population is
anticipated at 353,900, 6.7 percent less residents than the
379,200 listed in the 2007 report.
**************
Collier County permanent population* growth predictions
2007 333,858
2010 353,900
2015 406,300
2020 455,300
2025 503,300
2030 548,900
2025 591,200
* To determine seasonal population, the county will add 20
percent to each year’s permanent population
Source: Collier County records, UF Bureau of Economic and
Business Research
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Foreclosure restricts future home financing
WASHINGTON – May 28, 2008 – Homeowners going through
foreclosure today may have to wait five years before they
are able to get financing for a home again.
That’s according to new federal guidelines from the Federal
National Mortgage Association and the Federal Home Mortgage
Corp., otherwise known as Fannie Mae and Freddie Mac.
And after those five years, a borrower would have to have a
Fair Isaac Corp. (FICO) credit score of 680 and put 10
percent down, said Leslie Swart, managing partner and senior
loan officer at Blue Skye Lending in Lakewood Ranch.
A FICO score ranges from 300 to 850 points and factors in
things like length of credit history, how timely a person is
in paying his or her bills and how much an individual has in
debt versus available credit, according to Bankrate.com.
About 27 percent of the nation falls into the 750-799
scoring range, according to FICO. The smallest category 2
percent – has scores of 499 or less.
“Fannie Mae and Freddie Mac, they’re actually tightening up
those restrictions that much more,” Swart said. “The
pendulum has swung to the other extreme.”
The move has come about as a result of soaring foreclosures
in the nation, mostly linked to subprime mortgages that have
left the financial sector in disarray.
Banks and lenders, many of which have written down billions
of dollars in bad loans, are less willing to take risk in
the subprime aftermath. Fannie Mae and Freddie Mac are the
largest purchases of loans sold by banks and lenders on the
secondary market.
Traditional mortgage companies also are looking at credit
qualifications with more scrutiny, Swart said.
“What’s interesting is, it used to be we could say anything
(credit score) over 700 or 720, you’re golden,” Swart said.
“But some lenders are pricing their (annual percentage)
rates differently at higher FICO levels. You can still get
financing in the high 600s, but your rates are better if
you’re 720 or plus.”
Bottom line: Homeowners should do everything they can to
avoid foreclosure, either through renegotiating the loan
with the bank or arranging a short sale of the property.
“Foreclosure and bankruptcy will affect your credit in a
real negative manner,” said Mike Rahn, production manager
with CNL Bank in Sarasota. “A short sale will affect it less
than that.”
A short sale involves the bank agreeing to let the borrower
sell the property for less than what he or she owes on the
mortgage. The bank ends up saddled with the loss on the
mortgage.
“A seller could negotiate a short sale with the bank and it
could have little or no impact on their credit,” Rahn said.
Most banks evaluate whether to allow a short sale on a
case-by-case basis, he adds.
Manatee County court records suggest banks may be more
willing to cooperate with borrowers as the foreclosure
fallout continues.
Out of 2,528 foreclosure suits filed in 2007, 328 – or
roughly 13 percent – were dismissed, suggesting borrowers
were able to make repayment or short sale arrangements with
lenders.
The worst thing you can do is merely walk away from a home
being foreclosed on, said Tracey Starrett, an attorney with
the Law Offices of Paul A. Blucher in Bradenton.
Doing so doesn’t necessarily let one off the hook for his or
her obligations to the lender, she said.
“A lot of times,” Starrett said, “if the bank decides that
they’re not going to be satisfied with just getting the
property back and they want to sue on the note as well
because there’s a deficiency, meaning you’re upside down,
they can file a summary judgment for a deficiency and come
after you for that. So a lot of times, a foreclosure may
lead to bankruptcy.
“Your credit score takes the biggest hit with bankruptcy.
Foreclosure is second. A short sale is a lesser hit.”
A bank’s decision to pursue a deficiency judgment is also
typically made case by case, said John Hanlon, assistant
vice president of commercial lending with Community Bank in
Bradenton.
“If a borrower has other potential assets or a way to repay
and the bank’s going to suffer a loss, we want to get back
as much as we can,” Hanlon said. “I think a lot of banks are
trying to work things out with the borrower. The bank
doesn’t want to take the property back, obviously.”
Copyright © 2008 The Bradenton Herald, Fla., Brian Neill and
Melissa Followell. Distributed by McClatchy-Tribune
Information Services. |
Is Housing Slump at a Bottom?
May 6, 2008 7:28 p.m.
Is it time, at long last, to head
down to Florida to start looking at homes?
Maybe.
And the nearby chart shows one
reason why.
![[Chart]](http://s.wsj.net/public/resources/images/OB-BK089_ROI_HO_20080506180141.jpg)
It comes from Wellesley College
Prof. Karl E. Case, one of the leading experts on the housing
market in the country. And it suggests we may be at, or near,
the bottom of the housing crash.
Of course, even if he's wrong we
won't know for sure for many months.
But new housing starts have at
last slumped below the seemingly magical one million mark. That
happened in March. Every time that has happened in the last 50
years, it proved to be the bottom of a recession.
"It is really remarkable how much
where we are today looks like the bottom we've had in the last
three cycles," Mr. Case says. "Every time we've gone below a
million starts, the market has cleared at that moment."
There is no guarantee this market
will be the same but the similarities with the past are
striking. Each boom peaked at around the same level of 2.5
million starts as well.
"It's bottom-fishing time, I
think," says Mr. Case. "There's got to be bargains in Florida,
Arizona and Nevada."
Mr. Case isn't alone in his
analysis. A hedge-fund manager made a similar case in Tuesday's
dead-tree edition of the Journal. Bill Wheaton, legendary real
estate professor at the Massachusetts Institute of Technology,
was quoted here nearly two months ago suggesting some fears
about the real estate crash were overdone.
And it was in January that I
cited my favorite market source, a private portfolio manager in
London, who said the homebuilding stocks on Wall Street were at
last a buy.
Those stocks have rallied more
than 50% on average from that month's lows. Share price
movements are often thought to anticipate events in the real
economy by around six to nine months: If that is the case here,
it would suggest actual real-estate prices will bottom sometime
over the coming months.
Incidentally, contrarians will
also love Tuesday's gloomy first quarter news from leading
homebuilding
D.R. Horton
and from federally sponsored home loan giant
Fannie Mae.
Both announced massive losses following write-downs. Fannie is
holding a $4 billion cash call and both slashed their dividends.
You often see these kinds of capitulations at a market bottom,
though of course you can see them on the way down as well.
It's important to note that
real-estate prices in many areas are far from a historic
bargain. And where there is a glut, prices -- obviously -- are
likely to stay lower for longer. It is still a buyer's market.
If you are buying, drive a hard bargain.
Prices may still fall further.
Yet if you are tempted to keep waiting for homes to get a lot
cheaper, there are several reasons to think that might not
happen.
First, there are too many other
bargain hunters out there.
Second, the falling dollar has
made these homes even cheaper to foreign buyers. There are
plenty of people in Europe for whom Florida is now a bargain.
Third, interest rates are low
right now. I hesitate to give my fellow Americans any extra
incentive to borrow yet more money, but you can get a 30-year
fixed-rate mortgage under 6%. If the economy recovers that won't
last. If you are shopping for a home, it is probably worth
seeing if you can lock in one of these rates cheaply.
Finally, in an age of weak
currencies and rising inflation, "real" or "hard" assets are in
demand. That should include land, bricks and mortar. Sure, real
estate isn't as cheap as it has been at other times in the past.
But are Florida homes any more expensive these days than steel,
or copper, or gold? I'm not so sure.
Write to Brett
Arends at
brett.arends@wsj.com
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Home Buyers, Start
Your Engines
May 14, 2008
11:23 a.m.
If you
were thinking of buying a home, start looking.
The
latest data from the housing market shows that sellers,
after months and years in denial, are finally giving in
to reality and slashing prices.
There is
a distance still to go. There may even be a lot to go.
But the process, long delayed, is now well underway.
The
National Association of Realtors on Tuesday released its
long-awaited report on prices from the first quarter.
The price drops were startling.
In many
of the former hot spots, from Florida to Nevada to the
Californian "Inland Empire," single-family home prices
plunged by 20% to nearly 30% in a year.
Even
more remarkable was how far prices had fallen just from
the previous three months. In greater Las Vegas, for
example, single-family home prices are down about 20%
compared to the first quarter of 2007… and about 9%
compared to last fall. In certain parts of California,
the quarter-on-quarter declines are more than 10%. And
there are similar pictures from Boston, Mass., to
Tucson, Ariz., to, well, lots of places in Florida.
Nationwide, the decline from the previous quarter was
about 5%, says the NAR.
And
this, ultimately, is good news. We know prices have to
fall. The sooner it happens, the quicker the market can
clear.
We may
not be at that stage known on Wall Street as
"capitulation," but there is more than a whiff of it in
the air.
Far too
many people in the real estate market have spent far too
long insisting that denial is just a river in Egypt.
They refused to accept there was a bubble on the way up,
and refused to admit it even on the way back down.
(There's a few still out there: Last week I got an angry
email from a broker who blamed the whole slump on "the
media".)
It is
simply remarkable how slow this bubble has been to
deflate. That, bluntly, is part of the problem.
In the
Las Vegas area, for example, NAR data shows single home
prices peaked in early 2006. Yet by the middle of last
year, when everyone and their Aunt Sally already knew we
were deep into the biggest housing bust since the Great
Depression, prices had only been cut by around 4%.
No
wonder sales volumes collapsed and the number of unsold
homes skyrocketed.
You can
imagine what fantasies the sellers were clinging to.
"Well, two years ago this home was worth half a million
bucks."
The
problem: So what? It doesn't matter what prices were
three or two years ago. We were in a bubble. Market
psychologists call this "anchoring", because people
anchor their expectations to the past, and it's a
fallacy.
Just
five years ago, the same home sold for $270,000 and 10
years ago just $200,000. Are those relevant anchor
points too?
Fact:
Even though Las Vegas single family home prices are down
about a quarter from their peak, NAR data shows they are
still nearly 45% above their levels in early 2003.
The
picture is similar in other former hot spots.
It
remains to be seen how much further prices have to fall.
As
always, quality and scarcity command a premium. But
remember that a burst bubble is still a burst bubble and
everything is affected.
Cisco
Systems is a top quality technology company with real
profits, but its shares still fell about 80% in the
dotcom crash.
There is no desperate rush to buy real estate. (The best
way to play the real estate crash was to buy the
homebuilding stocks when they bottomed out in January,
as
written in this column at the time.)
But
sellers have at least returned to the bargaining table.
If you are in the market for a home, it is time,
cautiously, to take a look and, maybe, see if you can
play, "Let's Make A Deal." |
Housing market recovery on track
in Collier, slower in Lee
By LAURA LAYDEN
Thursday, April 24, 2008
Renowned Florida economist Hank
Fishkind spoke the words Naples Realtors and brokers
wanted to hear.
The housing markets hit bottom in
Collier County and home prices aren’t going to drop
anymore, he said Thursday in a talk organized by the
Naples Area Board of Realtors. “The markets are not
eroding further,” said Fishkind, principal of
Orlando-based Fishkind & Associates.
Prices have flattened out and if
they were going to fall any more that would have
happened in the last six months, he said.
However, he said it will take
another six to 12 months for sales volumes to really
start improving in the Naples area.
In Lee and Charlotte counties, the
recovery is going to take longer because there are
higher inventories of unsold homes, Fishkind said. In
those counties, there was more overbuilding because land
prices were so much cheaper, he said.
While he described the condominium
market in Florida as a “disaster” generally because
there has been so much overbuilding, he said it’s not as
bad in the Naples area because the scarcity of land and
high land prices have limited new development.
He described the unsold inventory
of new homes in Collier County as “fairly small.”
In February, a little more than
200 existing single-family homes sold at an average
price of $540,000 in Collier County, according to deed
records, Fishkind said. There were more than 100 new
single-family homes that sold for an average price of
$375,000.
About 50 new condominiums sold for
an average price of $350,000, and about 175 existing
ones sold for an average price of $425,000 in February,
he said.
“Basically prices are the same as
in 2006,” Fishkind said.
He predicts that it will be
“years” before prices go up again.
Fishkind also touched on job
losses and foreclosures in Collier County.
As of March 8, the county had lost
about 7,400 jobs year-over-year. In Lee County, there
were 11,000 jobs lost in the same 12 months. Fishkind
called it “ugly,” but said he believes the worst is
over.
Statewide, more than 77,000 jobs
have been lost in the last year. Many were in
construction. Builders have been forced to make cutbacks
with the slowdown in residential and commercial
construction, and some have gone bankrupt.
Collier has been hard hit because
its economy isn’t diversified and its main drivers are
construction and tourism, Fishkind said.
“Employment growth is going to be
modest at best over the next few years,” he said. On the
foreclosure front, there have been 1,600 single-family
foreclosure filings in Collier since the beginning of
the year. In all of 2007, there were 1,500, Fishkind
said.
For condominiums, there have been
400 foreclosure filings so far this year, almost as many
as for last year.
“I think ultimately we will start
to see that peak and then level off. It’s a reflection
of all the adjustable rate mortgages coming due,” said
Russ Weyer, a senior associate with Fishkind &
Associates, in an interview after the talk.
Lee County filings have already
showed signs of stabilizing, he said.
The decline in housing starts will
bottom out in 2008, but don’t expect them to skyrocket
again like “Mount Everest,” Fishkind said.
The housing correction, high
energy prices and federal cuts in interest rates all
point to a national recession, he said.
He doesn’t expect a recovery in
Florida’s economy this year. He predicts that the
population won’t start growing again until next year.
When people start spending more that will make the
difference, he said. That could happen in a few months
when millions of taxpayers receive economic stimulus
checks from the federal government.
More than 200 people attended
Fishkind’s presentation, held at NABOR’s office off Pine
Ridge Road. It was a record showing for a NABOR
quarterly luncheon.
John Zagar, president for Stock
Realty in Naples, said Fishkind reaffirmed his own
thoughts about the turning market.
At Lely Resort, one of Stock
Construction’s communities off U.S. 41 East, there were
160 sales in the first three months of this year,
compared to about 100 for all of 2007, he said.
Arlene Carozza, NABOR’s president,
said after the board’s March report showed a sharp spike
in pending sales the members started feeling the worst
was behind them. Though the busy winter season
traditionally ends at Easter, local Realtors continue to
be busy with more open houses, showings and closings,
she said.
“Usually by this time Naples is
cleared out,” Carozza said. “People are staying — and
buying.”
To see Hank Fishkind’s full
report, visit www.fishkind.com.
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If a spike in January
sales at the Bonita Bay Group is a sign of
things to come, Southwest Florida’s real
estate market could be nearing bottom.
Last month, the Bonita
Springs-based developer had 28 sales in four
of its communities, more than double the
number it had in January 2007.
Gary Dumas, Bonita Bay
Group’s regional general manager, said a
combination of factors pushed up January
sales, including lower mortgage rates,
better prices and more buyer incentives,
such as discounts on golf memberships.
“I think there is more
value relative to prices and certainly that
is bringing some of the buyers in,” he said.
Prices have dropped
anywhere from 15 percent to 20 percent from
a year ago. But more than that, some buyers
are just tired of waiting for the market to
hit bottom, Dumas said.
“What people are
buying is not just homes, but buying this
lifestyle we offer. At a certain point of
time, people want to get on with their
lives,” he said.
The 28 sales were
valued at $13.7 million. They included
single-family homes and home sites, coach
homes and villas in Verandah in Fort Myers,
Mediterra in North Naples, Sandoval in Cape
Coral and TwinEagles in Naples.
Dumas said he’s heard
from other builders and developers that
traffic is up and that the “readiness of the
prospective buyers seems to be better” than
a year ago.
“Everything right now
compared to last year seems very, very
positive,” he said.
But one month doesn’t
make a trend, Dumas said.
The Naples Area Board
of Realtors reported that pending sales in
December were 275, down by two units from a
year ago, giving Realtors hope of a better
season this year.
Wes Brodersen, a
broker with EXIT Gulder Real Estate on
Bonita Beach Road, said he’s just finished
the “best week” he’s had in the past 2˝
years.
“My agents are a lot
busier. A couple of them are even smiling.
Things are improving,” Brodersen said.
He thinks the market
already has hit bottom, but others don’t
agree.
“I don’t think we’ve
totally hit that bottom yet,” said Russ
Weyer, a senior associate with Orlando-based
economic and financial consulting firm
Fishkind & Associates.
He does believe that
certain parts of the market may have reached
bottom.
“Bonita Springs is
actually doing fairly good,” Weyer said.
“Cape Coral and Lehigh Acres are the two
weakest areas at the moment.”
Collier County hasn’t
been hit as hard as Lee County, where there
was a bigger frenzy of investment buyers in
2004 and 2005.
Lehigh Acres and Cape
Coral are among the top markets for
foreclosures in the country, Weyer said.
In a recent report,
Fishkind & Associates predicted that a
recovery in the new single-family home
market in Collier County wouldn’t be seen
until 2009 and that the average price was
expected to remain constant through 2010.
In Lee County, the new
single-family home market bottomed out with
around 1,400 new home closings in 2007, down
from 5,500 closings in 2005, according to
the report.
A slight rebound in
the existing single-family home market is
projected this year in Collier, but in Lee
that’s not expected to happen until the end
of 2010.
The condominium market
in both counties is expected to remain
sluggish, with so many units on the market,
according to the report.
“We will make the turn
again and Florida will be a popular place to
be,” Weyer said. “They don’t make the warmth
and sunshine like they do here in other
parts of the country.”
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NAR: Worst is over – existing-home
sales to trend up in 2008
WASHINGTON – Dec. 11, 2007 – Existing-home sales are
projected to trend up in 2008, with pending home sales
showing a slight near-term rise, according to the latest
forecast by the National Association of Realtors® (NAR).
However, a recovery for new-home sales is unlikely before
2009.
Lawrence Yun, NAR chief economist, says the worst part of
the credit crunch has already worked its way through the
data. “The unusual mortgage disruptions that peaked in
August were clearly seen in lower home sales that were
finalized in September and October, so the market was
underperforming,” he says. “Now that mortgage conditions
have improved, some postponed activity should turn up in
existing-home sales over the next couple of months, and I
expect sales at fairly stable to slightly higher levels.”
The Pending Home Sales Index (PHSI), a forward-looking
indicator based on contracts signed in October, increased
0.6 percent to an index of 87.2 from an upwardly revised
reading of 86.7 in September. It was the second consecutive
monthly gain, but still 18.4 percent below the October 2006
index of 106.8. “The broad trend over the coming year will
be a gradual rise in existing-home sales, but because sales
are exceptionally low in the final months of 2007, total
sales for 2008 will be only modestly higher than 2007,” Yun
says.
The PHSI in the Northeast jumped 16.0 percent in October to
80.6 but is 11.1 percent below a year ago. In the West, the
index rose 8.4 percent to 87.3 but is 16.9 percent lower
than October 2006. The index in the Midwest slipped 1.4
percent in October to 85.5 and is 11.7 percent below a year
ago. In the South, the index dropped 7.8 percent in October
to 91.6 and is 25.3 percent below October 2006.
“The improvement in the Northeast reaffirms a trend apparent
for some months now that shows signs of recovery, noteworthy
because that was the first region to slump, and the gain in
the West indicates some easing of interest rates for jumbo
loans,” Yun says. “Lawmakers need to understand that raising
the loan limits on FHA and GSE-backed conventional loans
will markedly improve mortgage availability.”
Existing-home sales are likely to total 5.67 million this
year, the fifth highest on record, rising to 5.70 million in
2008, in contrast with 6.48 million in 2006. Existing-home
prices should be down 1.9 percent to a median of $217,600
for all of 2007, and then rise 0.3 percent to $218,300 in
2008.
“Home price growth in the vast affordable midsection of
America will help raise the national median existing-home
price slightly in 2008. I then expect price appreciation to
return to more normal patterns in 2009, perhaps rising one
or two percentage points above the rate of inflation,” Yun
says.
“Even with a modest decline in the national aggregate price
this year, it’s important to keep in mind that nearly
two-thirds of the metro areas in the U.S. are showing price
increases,” he said. “The apparent disparity results from
fewer sales in high-cost markets, so a change in the mix of
sales is dragging down the national median home price.”
Areas showing healthy price gains include disparate markets
such as Gary-Hammond, Ind.; Binghamton, N.Y.; Corpus
Christi, Texas; and Spokane, Wash. “We can’t emphasis enough
how much local conditions vary, even within a given area, so
it’s important for consumers to make decisions based on
local market conditions.”
New-home sales are forecast at 788,000 this year and 693,000
in 2008, down from 1.05 million in 2006; no sustained
improvement is seen for new homes until 2009. Because
builders have correctly adjusted production, housing starts,
including multifamily units, will probably total 1.36
million this year and 1.16 million in 2008, down from 1.80
million last year. The median new-home price is projected to
drop 3.0 percent to $239,100 for 2007, and then decline
another 0.2 percent to $236,600 in 2008.
The 30-year fixed-rate mortgage is estimated to rise slowly
to the 6.4 percent range by the end of 2008, with additional
cuts in the Fed funds rate lowering short-term interest
rates.
Growth in the U.S. gross domestic product (GDP) should be
2.1 percent in 2007, down from a 2.9 percent growth rate
last year; GDP growth is forecast to improve to 2.4 percent
in 2008.
The unemployment rate is likely to average 4.6 percent for
2007, unchanged from last year, but rise to 5.0 percent in
2008. Inflation, as measured by the Consumer Price Index,
will probably be 2.8 percent this year and 2.7 percent in
2008, down from 3.2 percent in 2006. Inflation-adjusted
disposable personal income is estimated to grow 3.1 percent
this year, the same as in 2006, and then grow 2.2 percent
next year.
© 2007 FLORIDA ASSOCIATION OF REALTORS®
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Home sales forecast brighter
in ‘07
WASHINGTON – March 12, 2007
– Anyone selling a home in
the past year has likely
suffered through some pretty
stormy markets, but
economists say a break in
the clouds may be on the
way.
That’s because since the
highly anticipated “real
estate bubble” began
deflating in mid-2005, has
been losing air for the past
year and a half and may
finally be out of air. And
while some markets suffered
through some deep slumps,
forecasters are now
predicting the worst may be
over.
“It appears we are getting
very close to bottom,” says
David Lereah, chief
economist for the National
Association of Realtors.
Lereah is one of several
economists who agree that
sales data show the national
existing home sales market
is on the verge of regaining
ground.
“Sales have hovered for the
last four months, scratching
bottom and then coming up,
scratching bottom and coming
up again. We are comfortable
this is now the bottom,” he
says.
But before you put away that
umbrella, it might be best
to check your local
forecast; scattered showers
may persist in certain
markets for at least another
year.
Over the past few months,
Lereah says 75 percent of
the nation’s housing markets
have expanded. Unfortunately
the ones that are still
falling are posting losses
large enough to bring the
national numbers down with
them.
“So, you can’t generalize.
You can’t say ‘We are in
this sharp recession,’ when
it is only 25 percent of the
markets that are losing
ground,” Lereah says.
What makes the current
housing slump so hard to
forecast is that the factors
driving the contraction are
different than those driving
past slowdowns, says Dave
Seiders, chief economist for
the National Association of
Home Builders.
“You have to put this in
context,” he says. “This is
not a downswing connected to
a recession. This one is
special because the drivers
are unusual.”
In previous contractions,
the entire economy hit a
bumpy patch, and mortgage
rates were in double digits,
Lereah says.
“This is not the case now,”
he says.
The primary problem now
plaguing the housing market
is one of oversupply, rather
than a general economic
malaise. In general, the
markets that are suffering
the most now are the ones
that benefited the most
during the run-up in prices.
“Markets that boomed in the
last five years boomed too
much, and now they are
coming down,” Lereah says.
Prices were high, and
builders responded by adding
a flood of new homes to the
market. When prices
continued to rise, investors
saw potential and bankrolled
even more homes. When buyers
stopped buying, the markets
that flew the highest had
the farthest to fall.
Molly R. Boesel, a Fannie
Mae economist, wrote in a
February commentary that
sales will likely post
another negative year in
2007, but that most of the
decline is expected from a
reduction in investor
demand. Consumers, on the
other hand, will likely jump
back into the market.
The Federal Open Market
Committee of the Federal
Reserve agreed when it
issued its Jan. 31
statement. In that
statement, governors said
they were encouraged by
“tentative signs of
stabilization” in the
housing market.
“These are the first stages
to getting the markets back
into balance,” Seiders says.
But even as consumers get
back in a buying mood,
housing markets won’t
necessarily spring back to
previous heights. Part of
the reason is because there
is still a large inventory
on the market, Lereah says.
One way economists rate
homes sales is by
calculating how many months
it would take to sell all
the homes listed for sale at
the current buying rate. At
last count, Lereah says it
looked like there were
between 6.8 months and 7
months worth of homes
sitting on the market right
now. He says that number
will likely fall to between
6.6 months and 6.5 months
worth by year end. But that
is still above the 5.5- to
6-month inventory that
signals a balanced market.
Looking foreword, Lereah
says 2007 will likely see an
additional 1 percent fall in
sales compared with 2006
numbers, meaning sales will
have hit bottom and begun to
rebound by year-end.
“We are not looking for a
big expansion, but it will
be an expansion – a
sluggish expansion,” he says
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Big Plans
- 22,000 Acre Big Cypress
Wednesday,
September 27, 2006
In the 1920s, New York
advertising magnate Barron Gift Collier began carving
civilization out of a wilderness that would become Collier
County. Some 80 years later, the company that traces its roots
to that pioneer is at it again, with plans to found a new town,
dubbed Big Cypress, east of Golden Gate Estates.
Collier Enterprises wants to
build some 25,000 homes in a new town and in a scattering of
smaller villages and hamlets on 8,000 acres of farmland
surrounded by 14,000 acres of preserve. The project would take
25 to 30 years to build. Work won’t get started until at least
2010, Collier Enterprises CEO Tom Flood said.
Big Cypress, along with its
neighbor, Ave Maria University and its companion town, are
products of a landmark 2002 growth plan that requires landowners
to preserve and restore land to earn credits for development.
The 22,000-acre Big Cypress
district is more than 34 square miles — about twice the size of
the city of Naples — and represents an unprecedented blank slate
to plan for growth in Collier County.
The company is planning public
workshops to get community input on the Big Cypress plans after
a kickoff event in late October. Details still are being
planned.
The workshops would focus on
land conservation, agriculture, parks, schools, economic
development, roads and housing, according to the company.
Flood said the goal of the
company’s planning is to make Big Cypress a self-sustaining town
that fits with the rural character of eastern Collier County.
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