Monthly Archives: August 2008

Home Buying Frenzy – Official July SW Florida Real Estate Housing Sales Numbers Released Including Fort Myers and Cape Coral

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July 2008 SW Florida real estate sales numbers were released today by the Florida Association of Realtors which includes data for Fort Myers and Cape Coral real estate.  The latest data shows a home buying frenzy as single family home sales in Fort Myers and Cape Coral were up 80% over last year’s numbers.  From the SW Florida Real Estate Homes Closed 2005-2008 chart, you can see home sales surpassed both 2006 and 2007 levels for the month of July.  Last July there were 426 single family home sales and this July there 768 home sales.  Condo sales in SW Florida increased 35% from 129 last year to 174 this year.

Median single family home sale prices in Fort Myers and Cape Coral dropped 37% from $246,100 last year to $154,900 this year.  Median sale prices dropped 10% in July from June 2008 levels, and have dropped about 27% in the last two months alone.  See SW Florida Real Estate Month Over Month Prices chart.  Our SW Florida Real Estate Sale Prices 2005-2008 chart illustrates sales price trends for the last 4 years.

Be careful not to judge the overall market by the median price, as foreclosures are skewing the data downward in the lower price end of the market.  While it is possible that multiple market segments are dropping to some degree, we really don’t see all market segments dropping to the degree the median price is.  Home buyers are jumping in with both feet as they have found affordability back in the market.

We believe home sales, while at a frenzied pace right now, would actually be stronger if financing wasn’t such an issue for homebuyers.  Lenders have certainly tightened the screws, and to some extent have caused the market to decline due to tougher underwriting standards.  We are not arguing as to whether the banks are right or wrong, as each lender has their own specific situation to deal with and less money to lend, but it is a fact that sales are being curtailed due to tighter lending policies.

Nationally pending home sales numbers have been stronger, which hopefully will be a good sign for the future as well.  We’ll keep reporting what we’re seeing in the local SW Florida real estate market, so tay tuned.  Be sure to check our Fort Myers real estate website for updates on the market as well.  You might also like our Housing Statistics webpage.

Click here to Search the Entire SW Florida real estate MLS.  You can also view Ellis Team Virtual Tours of our listed properties.  Feel free to visit our Bank Owned Bargains webpage for SW Florida bank foreclosures, and don’t forget our weekly radio show entitled “The Future of Real Estate” which you can listen to online.

Brett was recently interviewed on TV regarding what caused the local SW Florida foreclosure crisis.  Click here to watch that interview.

 

Ellis Team SW Florida Real Estate Current Market Index August 2008

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The August SW Florida Real Estate Current Market Index is out for Fort Myers, Cape Coral and Lee County real estate, and as you can tell, it’s been fairly level but weakening slightly, which should lead to strong sales numbers going forward, but not quite as strong as we saw in the summer months.

Ellis Team SW Florida Real Estate Current Market Index August 2008 Fort Myers Cape Coral real estate

The official index climbs slighty to 7.88, up from 7.51 the month prior.  The Index consists of Fort Myers and Cape Coral combined.  The overall Lee County index stands at 10.04 for single family homes and 19.27 for condos this month.  Fort Myers single family homes index is 12.89 and Cape Coral is 6.62, so Cape Coral is definitely the hottest part of the county for sales compared to inventory levels.  Lehigh Acres numbers are reflected in the Lee County numbers.  The graph depicts Fort Myers and Cape Coral  real estate single family home sales index numbers.

We’re predicting sales to remain good, but cool off slightly.  Financing is having an impact on current pending sales, and new sales will be tougher after October 1 when down payment assitance goes away.

Fortunately we do have some homes listed that are foreclosures and the credit union is willing to finance with only 2% down, and will offer low rates to buyers with less than perfect credit, so this is a very good program for buyers who may get squeezed out of qualifying or who cannot come up with the minimum down payment due to the new financing rules.

Hurricane Humor

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To: ex-LEE Countians, present LEE Countians, and future LEE Countians or
those who know a LEE Countian:

We’re about to enter the peak of the hurricane season, which starts June 1
and ends November 30.  Any day now, you’re going to turn on the TV and see a
weather person pointing to some radar blob out in the Gulf of Mexico and
making two basic meteorological points:

(1) There is no need to panic.
(2) We could all be killed.

Yes, hurricane season is an exciting time to be in LEE County.  If you’re
new to the area, you’re probably wondering what you need to do to prepare
for
the possibility that we’ll get hit by ‘the big one.”

Based on our experiences, we recommend that you follow this simple
three-step hurricane preparedness plan:

STEP 1. Buy enough food and bottled water to last your family for at
least three days.
STEP 2. Put these supplies into your car.
STEP 3. Drive to Nebraska and remain there until Thanksgiving.

Unfortunately, statistics show that most people will not follow this
sensible plan.  Most people will foolishly stay here in LEE County.

We’ll start with one of the most important hurricane preparedness items:
HOMEOWNERS’ INSURANCE: If you own a home, you must have hurricane insurance.
Fortunately, this insurance is cheap and easy to get, as long as your home
meets two basic requirements:

(1) It is reasonably well-built, and (2) It is located in Nebraska.

Unfortunately, if your home is located in LEE County, or any other area that
might actually be hit by a hurricane, most insurance companies would prefer
not to sell you hurricane insurance, because then they might be required to
pay YOU money, and that is certainly not why they got into the insurance
business in the first place.  So you’ll have to scrounge around for an
insurance company, which will charge you an annual premium roughly equal to
the replacement value of your house.

At any moment, this company can drop you like used dental floss.

Since Hurricane Frederick, I have had an estimated 27 different
home-insurance companies.  This week, I’m covered by the Bob and Big Stan
Insurance Company, under a policy which states that, in addition to my
premium, Bob and Big Stan are entitled, on demand, to my kidneys.

Plywood shutters: The advantage is that, because you make them yourself,
they’re cheap. The disadvantage is that, because you make them yourself,
they will fall off.
Sheet-metal shutters: The advantage is that these work well, once you get
them all up. The disadvantage is that once you get them all up, your hands
will be useless bleeding stumps, and it will be December.
Roll-down shutters: The advantages are that they’re very easy to use, and
will definitely protect your house. The disadvantage is that you will have
to sell your house to pay for them.
“Hurricane-proof” windows: These are the newest wrinkle in hurricane
protection: They look like ordinary windows, but they can withstand
hurricane winds!

You can be sure of this, because the salesman says so.  He lives in
Nebraska.

Hurricane Proofing Your Property: As the hurricane approaches, check your
yard for movable objects like barbecue grills, planters, patio furniture,
visiting relatives, etc. You should, as a precaution, throw these items into
your swimming pool (if you don’t have a swimming pool, you should have one
built immediately). Otherwise, the hurricane winds will turn these objects
into deadly missiles.

EVACUATION ROUTE: If you live in a low-lying area, you should have an
evacuation route planned out. (To determine whether you live in a low-lying
area, look at your driver’s license; if it says you live anywhere in LEE
County, you live in a low-lying area.)  The purpose of having an evacuation
route is to avoid being trapped in your home when a major storm hits.
Instead, you will be trapped in a gigantic traffic jam several miles from
your home, along with two hundred thousand other evacuees.  So, as a bonus,
you will not be lonely.

HURRICANE SUPPLIES: If you don’t evacuate, you will need a mess of supplies.
Do not buy them now! LEE County tradition requires that you wait until the
last possible minute, then go to the supermarket and get into vicious fights
with strangers over who gets the last can of SPAM.

In addition to food and water, you will need the following supplies:

23 flashlights. At least $167 worth of batteries that turn out, when the
power goes out, to be the wrong size for the flashlights.

Bleach. (No, I don’t know what the bleach is for. NOBODY knows what the
bleach is for. But it’s traditional, so GET some!)

A 55-gallon drum of underarm deodorant.

A big knife that you can strap to your leg. (This will be useless in a
hurricane, but it looks cool.)

A large quantity of raw chicken, to placate the alligators. (Ask anybody who
went through Fredrick; after the hurricane, there WILL be irate alligators.)

$35,000 in cash or diamonds so that, after the hurricane passes, you can buy
a generator from a man with no discernible teeth.

Of course these are just basic precautions.

As the hurricane draws near, it is vitally important that you keep abreast
of the situation by turning on your television and watching TV reporters in
rain slickers stand right next to the surf at the Gulf of Mexico warning
everybody to stay away from the ocean.

Good luck and remember: It’s great living in paradise! Those of you who
aren’t here yet, you should come. Really!

I

No Money Down Payment Assistance Programs Going Away Oct 1

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Buyers who wish to buy with no money down had better hurry, because the new Housing Bill signed recently essentially eliminates down payment assistance from the seller on all FHA loans, and Congress added in the bill a provision that the new minimum down payment  will now be 3.5%, up from the previous 3%.  Financing is getting increasingly harder to get, and underwriting guidelines are changing daily.

We’ve heard of several loans in the Fort Myers and Cape Coral area that were approved by a lender and then pulled a day or two before closing due to changing underwriting conditions.  The new changes is making it tougher on buyers and sellers, as well as anybody in the industry.  Brett Ellis recently did a news story on the changing financing conditions.

Buyers who buy now will also receive a $7,500 tax credit on their tax bill as long as they fall within income guidelines, which are $75,000 for an individual and $150,000 for a married couple.  Buyers will receive slightly less if they make more than these amounts up to $90,000 for a single person and $180,000 for a married couple.  This is an interest free loan and does not have be repaid unless the borrower sells the home within 15 years, in which case $500/yr comes off the tax bill for every year they owned the home.

So there is much incentive for buyers to purchase now, and even more if the buyer needs a zero down loan.  These buyers need to buy and close before October 1, 2008 or they will need a down payment.  There may be some specific bond programs available after October 1, but that money goes fast and eligibility requirements are more stringent.

We’ll report on more of the provisions of the latest housing bill in upcoming days, so stay tuned.

Official June SW Florida Real Estate Housing Sales Numbers Released Including Fort Myers and Cape Coral

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Official housing numbers for Fort Myers, Cape Coral, and all of SW Florida were released for June 2008.  Single family home sales prices fell 18.83% in one month from May 2008, and 32% from last year’s numbers.  See Florida Single Family Home Sales Report June 2008  The only good news in all of this is that single family home sales in Fort Myers and Cape Coral rose 29% over year ago levels as homes became more affordable.

Condo sales in Cape Coral and Ft Myers were down 18% while median prices were down 19% over year ago levels.  Many in the industry felt good about sales going forward due to affordablity being back in the SW Florida real estate market, but others aren’t so sure.

The new Housing Rescue Bill will help certain borrowers, but will harm others.  Down payment assistance is going away effective October 1 on FHA loans, so a large segment of first time borrowers could be affected.  We’ll have another post in the coming days on what effects the new Bill will have on real estate in SW Florida.