WHAT’S GOING ON IN THE CAPE CORAL MARKET?

To understand what is going on, you must understand what happened in the SW Florida market and the rest of the country over the last 3 years.

In 2002, new home prices began to escalate as demand for new homes outweighed supply and a large number of investors entered the market. Every builder and developer in the area saw demand caused by several factors. Some of these factors included the 15% capital gains tax, 1031 exchange tax benefit(allowing investors to postpone taxes indefinitely), self directed IRA’s(allowing investors to purchase property tax free), low interest rates, low down payments, and the collapse of the 2002 stock market. Investors were looking for a place to invest their money and real estate became that place.

SW Florida was one of the hottest real estate markets in the country as contractors and developers began buying land and prices began to move up quickly. In 2003, property was appreciating at 15% a year and by 2005 it topped 45% appreciation in one year. The feeling was that if you did not buy now, you would never be able to afford it. No one thought the price escalation would end. Everyone was buying.

Builders were backlogged with 2 years worth of orders. In July, 2005, the SW Florida market slowed for the first time in 3 years. Sales slowly dropped in late 2005-2006 as uninformed buyers continued to purchase properties in a declining market. The bottom fell out in 2007. The first half of 2008 was about foreclosures, short sales, and REO’s and they drove prices downward as new product came online and inventory grew. Houses that once were sold for $250,000 are now $85,000, well below replacement cost.

Foreclosures are presently happening at an unprecedented rate and will continue for 2+ years in some parts of Lee County such as Cape Coral and Lehigh Acres.

Most Investors think that the 2009 season will be the bottom in the Naples and Bonita Springs market. Sales have continued to increase through the summer months of 2008. Ft. Myers, Cape Coral, and Lehigh will rebound faster because the market over corrected.

Why Buy Foreclosures, Short Sales, and ROE?

Because, Foreclosures, Short Sates, and REO’s in SW Florida.

showing support from the bottom. Gulf Access homes that were once $600,000 can now be purchased for $200-250,000 if a buyer does his homework.

Investors and Europeans are buying because the numbers work. The window of opportunity for buying below replacement cost could last 6 months to a 2years. Take your time and learn what is going on in each area of SW Florida. Market knowledge, patience, and picking the right team to assist you is very important.

Figure out what you want and do your research online. The more you can zero in on one area, the better.

Contact us for a free consultation on how to get the best price and get what is best for you. We have had great success at purchasing property at the courthouse door. Let me explain this process to you so you can understand how it works. Cash is king right now.

I encourage you to start doing your research. We can send you weekly emails on properties that meet your criteria. These would include new listings, short sales, foreclosures, REO’s, sold listings, pending’s, and bank owned properties.

HOW DO YOU GET THE LOWEST PRICE?

Short sales can take months to find out that you did or did not get the property you bid on. It can take 30-90 days just to get an answer on your full price offer. Banks are not in a hurry to lose money. We used to feel these could be a waste of time. Now in recent weeks, that has changed. Banks are using and lowering prices in short sales so they can avoid costly foreclosure. Foreclosure can cost a bank up to $50,000.

Foreclosures & REO’s that are priced right can have up to 10 offers and sell for 10-15% more than asking price. This is how we know we have hit bottom and what the true market price is. With this knowledge of what is selling and at what price, you can then recognize a good deal when you see one.

Buying off the MLS? Unless the seller bought his property before 2003, then he cannot sell it for today’s market value. Yes, we are back to 2002 pricing.

How do you get the lowest possible price in this market? We feel you should search every avenue including short sales, MLS, REO’s, and buying at the courthouse door with the help of a professional. We work with someone who has been buying courthouse properties for 10 years and knows how the process works. Someone that is very selective and will help you find your diamond in the rough.

There are over 150+ properties for sale a week at the courthouse door but only 10% are priced well below market value. Our team looks at every property before it goes on sale. Every property comes with clear title, Warranty Deed, and title insurance.

WHAT CAN I DO TO HELP THE PROCESS?

You will need to know what you are looking for. Criteria such as area(this is the most important, must narrow your search), price, size, pool, waterfront, and age. Then we will send you weekly updates on the properties that meet your criteria and will be coming for sale in the following week.

Once you feel comfortable that you know value when you see it, then you will be ready to move forward. Cash is king at the courthouse door. There are some great prices right now so have fun. Some second home buyers that are not ready to retire can buy and hold and rent. For the first time this can be a positive cash flow investment for you. We can recommend a property management company to work with that will handle everything for you.

Research the area. Narrow your search to a couple of subdivisions and be patient. Keep watching the market. You will not be receiving unwanted phone calls from our team. All correspondence will be started by you. We want to make this as easy as we can to help you find the right house at the best possible price.

Call or email today if you would like more information. A 15 minute phone call can answer all questions and get you set up on automatic emails at no cost or obligation to you.

2009 will be a year of Repair and 2010 a year of Growth.

Below is an article from the National Association of Realtors chief economist. Listen to what he says about the market.

A Year of Repair, Then a Year of Growth

The worst appears to be over. Here are reasons for optimism

By Lawrence Yun j 2008

First, the good news: Home sales have stabilized over the last seven months and are expected to increase measurably in the rest of 2008. And the sub prime lending crisis is almost past; the balance of this year will be about cleaning up that mess. The bad news is that the current annualized sales pace of about 5 million existing homes is the lowest in 10 years. Luckily, the economy has over 10 million more jobs than 10 years ago, so sales should begin to grow later this year and continue into 2009, when sales should climb to 5.71 million units.

Prices also are expected to improve this year. Cities that performed evenly over the past few years like Cincinnati are likely to experience home price gains in the 20 percent to 30 percent range over the next five years, while formerly hot markets like Miami or SW Florida could see prices go up by as much as 50 percent during that period, after having adjusted downward this year.

These markets should get a boost from a more stable mortgage environment. FHA lending, which accounted for only 3 percent of loan originations in 2007, should grow to 10 percent in 2008 before reaching near-historic norms of 15 percent in 2009.

Higher conforming loan limits at Fannie Mae and Freddie Mac also are helping. With high-cost limits now at $729,750, interest rates on formerly jumbo-sized loans are easing.

Even borrowers with adjustable mortgages are in better shape, thanks to Fed rate cuts. Some adjustable loan borrowers might actually see their resets produce lower payments.

There are other reasons for optimism, including the home buyer tax credit that’s passed both the House and the Senate. It would give buyers an incentive to get off the fence.

So, even though we’re not out of the woods yet, by many signs we’ve put the worst behind us.

Lawrence Yun is chief economist of the NATIONAL ASSOCIATION OF REALTORS.

HAS THE SW FLORIDA MARKET BOTTOMED OUT?

Buyers have been sitting on the sidelines for 3 years and watched home prices fall and wonder when SW Florida would hit bottom. Now the beginning the 4th year, we are finally seeing sales volume increasing. The trouble with statistics is they are 3 months or 1 quarter behind. We will see that the third quarter, normally a slower time in our market, will increase substantially over last year. Prices have gotten so low that sales volume has increased.

Who’s Buying? Canadians and the Euro now see Florida on Sale with an extra 30% off compared to US citizens. Investors see opportunity with positive cash flow investments and coming appreciation even if it is 2-5 years from now. Second home buyers see this as a chance to retire in the sun. More importantly, full time residents are buying and seizing the opportunity as they know this is the chance of a life time with interest rates as low as they have ever been.

Are there more foreclosures coming? Absolutely

The news will be telling us how foreclosures are up for months to come and how many banks are going bankrupt. The big investors that over bought and overdeveloped such as WCI, AIG, Lehman Brothers, developers, builders, high equity investors, etc. are just now starting to foreclose. People who had the equity to hold on, thinking it would only drop 30%, are letting their properties go. No one expected it to drop 60-75%.