The Ellis Team at RE/MAX is holding a Short Sale Seminar in Fort Myers Monday November 12, 2007.  Call 239-489-4042 to signup as seating is limited.  In this seminar we will teach buyers what the banks are looking for in the short sale process, and how to close on these properties quickly and circumvent the long approval process.

Selecting the correct properties, and working with agents experienced in the short sale process is critical in having success buying short sales.  We’ll show you the inside secrets directly from the Top executives at many of the Loss Mitigation Departments.

Only the experience of RE/MAX and the Ellis Team can bring you these inside secrets as we have nationwide connections with Top industry professionals who share them with us so we can help them sell their properties.

Many investors erroneously believe they can get great deals by making offers designed to trigger a counter-offer from the lender.  We will teach you how to discern myth from fictions, and teach you the right way to obtain the home of your dreams at an affordable price in SW Florida, or buy that investment home at today’s lower prices.

We are offering this seminar to end user first or second home buyers, or small investors.  There are investment groups who offer tips and strategies to investors who wish to purchase homes in bulk,  We are not offering this seminar to bulk investors at this time.

We will be sharing tips and insight you won’t get anywhere else.  If you miss this seminar, please call our office to find out when the next when will occur and we’ll get you on the list.

This past week rates on 30 year mortgages dropped to their lowest levels in 5 months! This is a great time to get into the housing market with a fixed 30 year mortgage to give predicatable low payments. Right now more than ever buyers have choices to purchase exactly what they want and get financing at historically low interest rates. There are also several 100% financing programs available for the first time buyer.

Short sales are the new buzz words in real estate for the past year or two, and there are certain things you need to know to be able to accomplish this task.  Short sales are an excellent way to purchase a property at or below today’s fair market value, and you need to work with an agent that thoroughly understands this process.

On this past weeks radio show we invited two experts from Countrywide Home Loans to explain the Best way to purchase these properties.  Countrywide is the nation’s largest lender, and is being proactive so that they don’t have to foreclose on these properties.

Last year Countrywide foreclosed on 7,000 properties nationwide, and already this year 25,000 are in foreclosure.  They don’t want anymore.

If you wish to buy or sell using this process, there are some important things your agent needs to know, so make sure you’re working with an agent who knows the systems and the regulations, otherwise buyer will miss out on a good deal and seller could lose home to foreclosure.

Listen to this week’s show online to hear more about the process.  Click on November 3, 2007 Show.

For those interested in consistently buying real estate in SW Florida below market value, call our office to signup for our next short sale seminar next week.

It could just be the time of year as pending sales typically drop anyway, or it could be a sign that the market hasn’t bottomed out yet.  Either way we’re not happy that the CMI Index has risen once again, a telling sign about the upcoming months ahead for this market.

Active listings are holding relatively steady. however, they are still rising.  Pending sales are also holding relatively steady, however, they are still dropping.  Either one wouldn’t be so bad except for the fact that inventory levels are near their highest levels.  This isn’t the best time for either of these events to occur, let alone both simultaneously.

Many agents I talk to, however, are optimistic that this upcoming season will be much better than the past two seasons.  We also look forward to the results of proeprty tax reform in Florida, which could influence affordability for home buyers.

The higher the CMI Index, the more supply we have relative to demand.

October 16, 2007	Active	Pending	CMI
Single Family	15,438	783	19.72
Condo	8,212	354	23.20

September 15, 2007	Active	Pending	CMI
Single Family	15,215	809	18.81
Condo	8,141	369	22.06

August 15, 2007	Active	Pending	CMI
Single Family	14,919	955	15.62
Condo	8,190	417	19.64

July 12, 2007	Active	Pending	CMI
Single Family	15,095	975	15.48
Condo	8,380	443	18.91

June 14, 2007	Active	Pending	CMI
Single Family	15,164	1,014	14.95
Condo	8,761	485	18.06

May 17, 2007	Active	Pending	CMI
Single Family	15,607	1,107	14.10
Condo	9,205	560	16.44

April 15, 2007	Active	Pending	CMI
Single Family	15,896	1,152	13.80
Condo	9,660	569	16.98

January 23, 2007	Active	Pending	CMI
Single Family	13,769	1,016	13.55
Condo	9,002	529	17.02

November 27, 2006	Active	Pending	CMI
Single Family	13,186	1,031	12.79
Condo	8,344	535	15.60

Tenants are being evicted because their landlords are collecting rents but not paying the mortgage on the home.  Some sellers legitimately can’t afford the negative cash flow, however they are keeping and pocketing the rent and not paying the bank anything.  This practice may violate the terms of the mortgage, and forces the bank to foreclose on the home, leaving the tenant homeless.

To make matters worse, we just have to wonder whether the landlord has followed the law and placed the last months rent and security deposit into a separate Florida bank account for safe keeping. 

Tenants have been calling our office looking for a place to rent or buy.  Some tenants in SW Florida are taking the opportunity to buy at better prices now that the real estate market has corrected.  Not all tenants are in a position to take advantage of the buying opportunities due to credit issues, so they are forced to move quickly to another rental home.  Moving can be costly, so it pays to make sure your future landlord is financially stable and will pay the mortgage.  Ironically, it has been landlords who have done credit checks on potential tenants before deciding to rent to them.  We may see a day when tenants also do a mortgage check to make sure the landlord is financially making the payments.  Talk about a turn of events.

For about two years we’ve been telling people that we can’t call a bottom to this market until we see median prices level off, combined with a pickup in transactions.  August home sales witnessed at 22% rise in transactions and a modest 1.91% rise in median sales price over the previous month.

One month doesn’t signal a bottom to the market; however it is a positive sign that we’re now seeing both indicators rising in one month.  Both occurred during a time when we traditionally don’t see a rise in transactions, so seasonality cannot be blamed for this rise. If we continue to see a trend over the next few months, it will indeed be encouraging news for a beleaguered real estate market.

The media will most likely focus on sales levels Vs. the previous year, although the sooner we recognize that this market isn’t at 2005 or 2006 levels and is more in line with 2001-2002 levels, the better off everyone will be.  Sales are up over the previous month and that’s a trend we’d like to see continue.

The reason transactions are up is twofold. Sellers have finally reacted and priced their homes where the buyers are actually buying, and buyers have recognized a buying opportunity and are getting back into the market now that they can afford to again. 

Affordability is back into the market, and it was needed because the average person was getting priced out of the market.  Sellers grudgingly responded, and sales are picking up.  Price, supply, and demand always have a way of dictating sales.

Are all sellers priced correctly?  That answer is no!  The sellers who are priced correctly have a good chance at selling, and many are selling.  Over pricing a property is nothing new, in fact even in the hot 2005 market not all properties sold as we did have some greedy sellers.  Our 20 years of selling experience tells us there will always be over priced sellers, regardless of whether it’s an up, down, or sideways market.  The key is determining where you need to be and then being there.

Inventory Levels rose for the first time in 5 months, as did the Current Market Index.  The Current Market Index has proven to be a valuable indicator as to the future direction of prices in SW Florida real estate.  The Current Market Index for single family homes is at its all-time high at 18.81 while the condo index sits at 22.06 This would help explain why meidan prices have fallen over 13% in just three short months.  What is selling in Lee County is the lower end of the market, which is skewing the median price down.  However, we are seeing price corrections at virtually all ends of the market, so we won’t dispute it’s representation of the overall market. Mortgage disruptions have affected the mid and higher end of the market.  Going forward, the mortgage market is settling down and credit is slowly becoming available again to buyers who can legitimately qualify for a loan.  We still contend that the buyer is in the drivers seat, affordability is back in the market, and now is a great time to be a buyer.  It’s not a great time to be a seller.  Our advice is buy if you need a home, and sell only if you need to sell.  If you need to sell, you must price it aggressively to attract a buyer.  Homes are selling, but you must price your property where the buyers are. New home construction has fallen off significantly, which will help the resale market in the coming months.  Resales will not have to compete with builders new product at below cost prices.  Resales will compete with foreclosures from investors with new product who walk away from their mortgages.  It will be interesting to see how the banks market and price the foreclosures that are looming.  History tells us banks are usually slow to price correctly, and the properties typically fall apart due to lack of upkeep, vandalism, and theft.  We’ll report on the REO (Real Estate Owned by the Bank) as they influence the market and the effects they exhibit on the market. The higher the CMI Index, the more supply we have relative to demand. September 15, 2007 Active Pending CMI Single Family 15,215 809 18.81 Condo 8,141 369 22.06 August 15, 2007 Active Pending CMI Single Family 14,919 955 15.62 Condo 8,190 417 19.64 July 12, 2007 Active Pending CMI Single Family 15,095 975 15.48 Condo 8,380 443 18.91 June 14, 2007 Active Pending CMI Single Family 15,164 1,014 14.95 Condo 8,761 485 18.06 May 17, 2007 Active Pending CMI Single Family 15,607 1,107 14.10 Condo 9,205 560 16.44 April 15, 2007 Active Pending CMI Single Family 15,896 1,152 13.80 Condo 9,660 569 16.98 January 23, 2007 Active Pending CMI Single Family 13,769 1,016 13.55 Condo 9,002 529 17.02 November 27, 2006 Active Pending CMI Single Family 13,186 1,031 12.79 Condo 8,344 535 15.60

SW Florida homeowners wishing to sell often find out they don’t much like the number they can sell their property for.  Some sellers want more money, or simply owe more than the property is worth, so to protect their investment, cash flow, and good credit, they opt for renting instead of selling in a down market.

Renting sounds like the perfect solution, until they speak with a rental agent.  Thousands of other frustrated owners have also faced this decision, and have flooded the rental market.  Rents have gone down significantly in SW Florida, to the point where it barely covers just the property taxes and maintenance fees and leaving little to cover the actual mortgage.

I spoke with a seller today who just closed on a condo he owned and took a $60,000 loss.  He said rents in that community went down from $1200-$1300 to $800/month.

I know of some downtown river district condos that were purchased for $800,000 and are renting for $1,350/mo.  This does not cover the mortgage, and wouldn’t even cover the maintenance fees and property taxes either.  Some owners are glad to cover whatever expenses they can, while other investors cannot absorb a negative cash flow.

The other thing sellers may wish to consider is what are their expectations after they lose money for a year.  Even if the property is still in perfect condition, will prices be the same, more, or less than they are now.  Nobody knows this answer for sure, and it most likely depends on what typre of property you have and the price point.

Some investors have come to the sad conclusion that it’s best to bite the bullet today and sell now, if they’re financially able.  Whatever you decide, consider all the facts before making such a difficult decision.  If you decide to rent it, ask fair market value and get it rented to good credit worthy people.  If you’re going to sell it, ask fair market value and get it sold, leaving this decision to others.

The Florida Association of Realtors released real estate sales numbers for Florida today, and the Fort Myers – Cape Coral single family home sales slid 39% from 694 last year to 426 this year.  This was in line with what we expected based upon 2007 sales trends.  See SW Florida Real Estate Homes Closed 2005-2007 graph.

Median sale prices of single family homes were down 7% from $264,600 last year to $246,100 this year.  This was in line with what we were thinking based upon our SW Florida Real Estate Sale Prices 2005-2007 graph and closed sales data obtained through the MLS.  Median sale prices have been down 3 straight months, and has trended down 4 out of the 7 months so far in 2007.  See SW Florida Real Estate Month Over Month Prices graph.  Median sale prices are down 13.1% in three short months.

Prices are down significantly from the highs of the market in 2005, and coupled with recent market price adjustments and the volatile credit availability supply, we think now is the time for buyers to jump in and purchase.

The home buying climate is as favorable as it has been in a long while with excellent supply selelction, lower demand, and prices making affordability an option again for many first time home buyers.  What may hurt home buyers in the future is limited financing options.  We are seeing credit programs dry up by the day, which means many buyers who qualify to get financing today won’t in the future.  The sooner they get locked in the better.

View July statewide sales numbers for single family homes, and view statewide sales numbers for July condo sales.