Category Archives: Southwest Florida Real Estate

Market updates and news and information about the SW Florida real estate market

Is Buying at Auction a Good Deal?

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Like anything else, buying at auction can be a good deal, or a rotten deal depending on what you buy and what the terms are.  While there can be upside at an auction sale, the downside is much more frightening and should never be attempted without proper advice and education.

Is Buying at Auction a Good Deal
Is Buying a Home at Auction Always a Good Deal?

Each month we see big auctions advertised on billboards, newspapers and such touting bargains.  I’ve attended several auctions and I’ve learned many things.  In this article I’ll attempt to educate you on some of the things to watch out for that you might not know about.

Is Buying at Auction a Good Deal?

At one auction I noticed a group of people in front and another group in back.  One group kept bidding up the property to prices higher than market value and I wondered why.  Later on I discovered that when they won the bid for some reason they didn’t finalize a contract and the property went back out for re-bid.  This happened as many as 2-3 times per property.  At the end of the night when the crowd had thinned the property was purchased for much less by an investor who really wanted the property.  Essentially it was off the market all night tied up in contract sessions.

Another thing to look out for is reserve versus absolute auction.  An absolute auction means the property will be sold to highest bidder no matter what.  If it’s reserve, you never really know what the reserve is and they try and negotiate with you after you’re awarded the winning bid, so be prepared.

If you’re buying a condominium, or even in a homeowners association for that matter, I would look not only at the property, but also the association.  You may purchase and be the only one paying condo or HOA dues.  This may also make it impossible to sell your property to anyone but a cash buyer as lenders will not lend if the association doesn’t meet certain requirements.

Many are surprised to learn that the title work isn’t sufficient to actually sell the property.  Some have learned they may need to file suit to Quiet Title after they receive what they thought was good title to property.  There is a difference between insurable title and marketable title, and title policies today can exempt many things leaving you the purchaser holding the bag.

The property may also have many defects that aren’t known or get lost in the shuffle, and the buyer inherits them.  At one particular auction I’ve attended, once you put down your non-refundable deposit, you lose it regardless of whether you cannot get the mortgage (even if they promised to give you one at the auction) or if the property has major defects.  You simply MUST inspect the property beforehand or you will most likely be surprised afterwards.  I saw one home when the back half of the home was missing, and the buyer lost their deposit of 10%.  Additionally, if the air conditioner gets stolen prior to closing or damage occurs to property between auction and closing, it’s the buyer’s responsibility, so you are taking All the risks.

You also want to research code enforcement liens, fines for improper permitting, etc.  I had a house listed in Cape Coral with about $70,000 in fines, and a lot in Cape Coral with over $90,000 in fines by code enforcement.  We recently sold a $20,000 lot in Ft Myers with over $200,000 in fines.  In each case we rectified the problems before closing or didn’t close at all in the latter case, but this would not be true at an auction as the buyer would be stuck assuming those fees.

I attended one auction whereby the winning bidder put down their 10% and agreed to finance the unit through the bank at the auction.  They were approved on the spot for financing.  The problem is the property did not qualify because too many people weren’t paying their dues, and the loan was denied on that basis.  The new lender was the same lender selling the property at this foreclosure auction.  The lender obviously knew the property did not meet FNMA guidelines but they sold it to a buyer obtaining financing anyway, and in fact approved their loan.  The buyer was astonished to learn that after being approved, they were later denied, and their escrow deposit was being retained by the seller (the bank) for non-performance of the contract.

Like we said in the first paragraph, sometimes a good deal isn’t a good deal when it’s rotten.  You must thoroughly investigate the property, the association, the contract, the market, the financing, and the title work before you bid or you run the risk of being let down later.

If everything checks out to your satisfaction upfront, we would also encourage you to set limits on what you’re willing to offer so you don’t get caught up in the moment and overpay, only to find out later it doesn’t appraise and your loan is denied and deposit forfeited, unless of course you’re a cash buyer and don’t mind paying too much.

Like anything, an auction is just another way to buy and sell, and no matter which vehicle you use, please be sure to work with professionals and do your homework upfront.  You’ll be glad you did later.  Happy house hunting!

Open Houses as a Marketing Tool

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Many Realtors have mixed feelings on the effectiveness of open houses, and you’ll hear varying answers as to whether they should be utilized in marketing a home.

Some Realtors have grown tired of sitting an open house only to waste the afternoon away with no lookers or interest from anyone.  Other open houses are filled with prospects and it indeed helps sell that home, and maybe a few more in the area.  So what factors influence whether an open house will be successful or not?

Open House Weekend

Advertising an open house definitely helps.  Several weekends we’ve found agents with competing homes in neighborhoods we market open up the paper to see where the open houses were, then abruptly put up signs pointing buyers to their open house hoping to pick off a stray buyer and sell their listing.

The problem with this strategy is indeed the competing home may be located in the same area, but may not be posses the features in the ad that drew them to the open house to begin with.  Some agents promise open houses every weekend because they’re on a shoe-string budget and they win by either attracting a nosy neighbor who may be interested in selling their home, or picking up buyers who may not be qualified for the open house, but qualify to buy something else.  Either way the agent drums up business for free by using the seller’s home as a store-front to attract buyers.

We believe an open house can be an effective tool, but shouldn’t be used as the primary tool.  It’s simply an additional tool, and it may not be right in all instances.  For instance, if the seller is located in a gated community and the HOA doesn’t provide easy access on the scheduled open house day, getting buyers to the home can be difficult.

Open houses are a time when you’re showing the home to absolutely anyone and you’re never sure how qualified the person walking through the door is, or what their intentions are.  If a home has a lot of valuables or small personal items, it may not be wise to hold that home open.

We find that buyers just want to see the homes and get a feel for the market.  Online buyers want access to the listings first.  Agents can provide open houses via online virtual tours, and this can be especially helpful for rural properties, gated communities, or homes with lots of knick knacks.

If you’re going to do an open house for your tiny house, buyers generally want it to be worth their time, so holding several at once can be a tool to get buyers off the couch and out looking.  The buyer never knows which open house will capture their interest, but if there are several to look at, perhaps one will and it becomes worth their time.  It’s the same concept as builders doing a Parade or Homes.

We have a tour of 6 homes scheduled for this weekend, and we find that when we do multiple homes traffic at each home increases significantly versus holding just one home open. A list of homes we have on tour this weekend can be found at Topagent.com

All buyers want to see the goods (Listings) but some want to meet the Realtor and just get a comfort feeling on which agent might be good to deal with.  Buyers sizing up agents at open houses make decisions not only on the particular home, but on a possible agent to work with in the home buying process.

You can choose to open your home up, and doing so may produce mixed results.  Advertising helps, and having an independent 3rd party there to show your home really pays off.  Buyers rarely tell the owner what’s really on their mind as they don’t wish to offend, but finding this information out is critical to a sale.  Buyers will tell an agent things they would never tell the owner.  Too many times we’ve seen owners hold out hope for a sale because the buyers said how much they loved the home, when in reality they bought another and had little to no interest.  Or worse, sellers have refused to work with an offer because they felt a better offer was coming because they met the buyers and heard nothing but wonderful things about their home at the open house.  Sellers feel strung along when that offer never comes when the buyer seemed to rave about the home.

Open houses are not the end all marketing strategy, but if used in conjunction with an overall pricing, marketing, and sales strategy can be an effective additional tool and should be weighed with benefits and risks to ascertain whether it should be utilized in the sale of the home.

Discuss with your listing agent the pros and cons of holding an open house and with some planning and a little luck, it just might help you sell your home or find your dream home.

View our latest video SW Florida Real Estate Market Update-Foreclosures-October 2010

Stop-Go-Yield!

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Last week we reported that distressed sales accounted for 63.27% of all single family home sales in August, and that a big shake-up was about to ensue as banks declared they were halting foreclosure sales at auction until they had time to investigate whether they’ve followed proper procedures.

Since that time Three major lenders (J.P. Morgan Chase, Allied Financial Inc. (GMAC,) have all stated they were halting foreclosures, but that doesn’t seem to be the case. Last week there were in fact several foreclosure sales to the astonishment of the banks who have instructed their local counsel to halt proceedings of final judgments until they study each case.

SW Florida Real Estate Foreclosure Market
Stop- Go- Caution

We at the Ellis Team handle foreclosure sales for one of the large banks and FNMA. FNMA says they have not been affected because they didn’t employ the robo signers the big banks did. The large bank we work with gave us orders on 10 new properties in the past 2 weeks, and we had a closing this past week.

To date title companies are still issuing policies and the banks are still closing sales, although we’ve heard reports of some cancelled sales by agents. Banks may be halting summary judgments, but in many cases they are moving forward with new foreclosures to get the process started, but holding off on the final judgment or auction sale until they know they are on solid legal ground with their paperwork. This is not necessarily stopping them from disposing and selling properties they previously foreclosed on.

So one has to wonder if the bank’s announcement was all a farce for publicity. The answer is probably not. These banks are large and decisions take awhile to matriculate down to all the branches. The implications are huge though.

What’s at stake is the bank’s legal authority to foreclose. Typically the bank makes a loan then services the loan after they sell the loan to an investor, often times as a group package in what is called a security. These loans are typically bundled together with many loans, and many investors may join together and invest in the security package. Other times an investor will buy individual packages of loans.

Because these original loans get bought and sold, there must be a paper trail as to who actually owns the security, and the right to foreclose against the borrower. Defense attorneys have long asked for the lender to produce the note, often called “Produce the note defense.”

Usually the lawyers would sign affidavits that they, or the bank does indeed have the note, and the judge would accept that. The reality is, the note and other paperwork may be missing and perhaps never found. Because of all this, some judges may no longer accept those affidavits, and many of these sales may be in question.
Some speculate this could happen in as many as 30-40% of the cases out there, and the answer is nobody really knows, not even the banks or attorneys right now. This is why banks and states have opened investigations. If this is wide-spread, it could have deep financial implications to the banks and investors, and we wouldn’t be surprised to see damage suits against the banks by those foreclosed upon where the paperwork was insufficient.

This very well could stall the process and tie up the courts for awhile, which could affect the real estate market. It would make sense for the banks to emphasize short-sales now that foreclosures could be delayed, but the banks don’t always make sense.

Inventory could dry up, and transaction volume could decline. Some speculate prices would be driven up fast and furious, but we’re not so sure. We’ve had high sales because prices have been at bargain prices. Unemployment is high, and the economy is hurting. Will prices rise just because supply goes down? In a balanced economy, we’d say yes. In this economy, we may just be prolonging the foreclosures further out and delaying our recovery. We hope this situation gets resolved quickly as nothing good results from a foreclosure moratorium. In the end, the property will still be foreclosed or sold, so no sense delaying it and letting neighborhoods decay and the market falter. Let’s hope this gets fixed and we all get back to business soon.

Watch SW Florida Real Estate Update-Foreclosures-October 2010 on video

Big Shakeup in SW Florida Real Estate Market?

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Last month distressed sales in Lee County accounted for 63.27% of all single family home sales.  This trend has been fairly constant for the past few years as Lee County has been hit hard by a sagging economy and a fallout from the real estate industry.

We have reported in past articles how the government’s loan modification plan was ill conceived and would not help struggling homeowners and in fact would prolong the housing crisis, and this has born out.  While there is plenty of blame to go around, there is a new threat on the horizon that may shake-up the SW Florida real estate market and change the landscape of transactions.

SW Florida Real Estate Distressed Sales Chart
Percent of Distressed Sales in Lee County Florida June-August 2010

Because of the volume of foreclosures nationwide, banks have hired outside firms sometimes regarded as foreclosure factories to handle and process the foreclosure.  The problem is that these firms must certify and investigate certain facts before presenting to the court a notarized package that the person investigating has read all the documents and certified the package is true and correct.

Through recent testimony, it has been revealed that a few of the large banks have one person signing thousands of documents, making it unlikely this person has personally reviewed each case.  In another case the vice president of one bank is also the vice president of another large bank, and is the person notarizing the attorney-in-fact’s signature. This is suspect and unlikely true, which gives further credence that this person is rubber stamping notary signings for various banks, which could invalidate all those foreclosures.

Three major lenders (J.P. Morgan Chase, Allied Financial Inc. (GMAC,) and Bank of America have halted foreclosures in 23 states because of this. There is a potential to postpone many foreclosures both here and nationwide, which could stall a real estate recovery.  The talk of the industry is, would this make banks more likely to consider short sales?  The answer is that would make too much sense, but it would speed things up and limit bank’s liability in this foreclosure document crisis.

FNMA has not been affected, and this document crisis will not halt all foreclosures, but it will shake things up for awhile.  What’s going to be interesting is how the failure of the banks to properly certify their properties for foreclosure will affect title.  A few title companies have already suspended issuing title policies on foreclosures of certain banks until they can determine the foreclosure was in fact legal.  The interesting question would be what happens to previously sold properties that could come into question?

This all sounds like a legal mess, and it probably is.  It is uncertain what all this means, but we do know it could have a profound impact on available inventory, and possible further effects on past sold bank foreclosure properties.  The implications are far reaching and beyond the scope of anyone’s expertise I know of to accurately predict how this will play out.  Our guess is it will just delay foreclosures in our area, which will prolong the market recovery.  Sales transaction could decline further unless banks step up and approve more short sales.

This is one of those wild card events that can affect the market.  Past wild cards were terrorism, oil prices, and the previous financial liquidity crisis.  Stay tuned.

Watch October Bank foreclosure video update-SWFL

Sales Up and Prices Down

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Last week we wrote that pending sales were up which may be a sign that closed sales might increase in August over July, and in fact sales were up 4.74% over the previous month.  We also posted that pending sales were down 19% from last year, and official numbers just released show actual closed sales were down 4.71% from last year. These are not stellar numbers, but keep in mind July sales were down 27.45%

Fort Myers, Cape Coral Single Family Home Prices 2010
SW Florida Single Family Home Prices

Sales could be up because median prices fell again 5.45% from the previous month, and 1.01% from last year.  By the attached chart you can see that home prices peaked in April of 2010 as opposed to reaching the bottom last April.  Home sale prices have now crossed over and fallen behind last year’s numbers.  This is a telling sign, and one that is playing out all across America as the real estate market has stalled along with the economy.

Homes Closed in Fort Myers- Cape Coral
Single Family Home Sales 2006-2010 Fort Myers, Cape Coral Florida

Transactions pick up as prices go down, but we’d like to see more stability in the market.  The median home price factor is more of an indication of affordable priced inventory as 1st time home buyers and investors are snapping up entry level homes as fast as they come on the market, and less inventory means fewer sales.  We’d like to see more sales in the mid and upper price ranges before we can say we have a healthy market, but we don’t hear anybody calling this a healthy market just yet.  Even though 2010 shapes up to be the 2nd best year on record for closed home sales, there is not broad support across several submarkets to call it a healthy market.  If it was strong we’d see rising prices.

The good news is prices have held fairly stable except for a temporary run-up, and season is again right around the corner.  Oil did not make it to SWFL, and today’s prices could again lure many from up North to purchase this season.

We’d like to see our government get back on track and offer incentives to get our economy and real estate market back on track, but that may have to wait until after the November elections as the current administration just doesn’t get it.

Real estate is traditionally about 32% of GDP and Main Street and the economy are married for better or for worse.  It’s hard to cure one without the other, and yet we don’t seem to be doing anything to help either.

In the meantime, interest rates are at record lows, affordability is at record highs, and buying power has never been better, so anyone who is qualified to buy is in good shape.  If the banks were to release more inventory, look out as this market could take off again.  Failing that, we may be in for status quo numbers for a few months until some questions are answered in the elections and the job market turns around.

SW Florida Home Prices

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It’s been over a month since we reported on single family home sale prices in Lee County, so we thought we’d provide an update.  Many people are questioning prices right now as tax notices went out recently, and many have been shocked at some of the new value assessments imposed by the Lee County property appraiser’s office.

Keep in mind that value assessments from the property appraiser’s office reflect values as of January 1, 2010 and not today’s values.  Its possible values have risen or fallen since January 1 depending on where you live.  Values do not move in tandem in perfect harmony.  Certain sectors of the market lead others, and when one moves another will follow to keep from having too much disparity.

SW Florida median Sale Prices
Home Sale Prices in SW Florida Fort Myers, Cape Coral

I could devote a whole article to this phenomenon we call “bunching” but we’ll save that for another day.  Since January, we’ve seen countywide price increases through April where median home sale prices peaked at $101,500.  Median sales price by definition means half the sales occur below that price and half occur over that price. Median sale prices have fallen since April to $93,500 which you can see by the chart.  New sales numbers are scheduled to be released September 24 which was after this article was written, so we’ll be keeping a close eye on sale prices and closed sales volume.

We did see an increase in pending sales last month which is a good sign going forward for closed sales, but pending sales were down about 19% from last August, and about the same for September, so official September sales would not surprise us if they came in down from last year.

Nationally unemployment is at 9.6% and the housing market is stalled, which does affect the SW Florida real estate market to some degree as northerners may be putting off selling in tougher times and moving to Florida.  Additionally, unemployment is a whopping 13.7% here in Lee County and rising, which does not help demand for housing, especially in the $150,000-$400,000 range.  The bottom of the market has indeed firmed up and homes listed below $100,000 are often scooped up quickly with multiple offers.  Homes priced much higher take longer as investors cannot flip them, the rents don’t always cash flow, and there aren’t enough 2nd home buyers to pick up that slack.

Season will be approaching again soon, and last year our northern friends did buy.  We’ll keep an eye out and see if that trend continues this year, and it very well could because the $150,000-$400,000 homes are still bargain buys, and everybody loves a bargain.

We’ll also report on pending sales in a few weeks.  Our guest on our Internet TV show will be Lee County property appraiser Ken Wilkinson.  We plan to ask him about housing values, and how to read the 3 columns in the trim notice to determine where your taxes will be for this year when tax bills are due in November.  The show is posted at Topagent.com

Interview wih Lee County Property Apprasier Ken Wilksinon

Segment 1

Segment 2

How to Buy a Bank Foreclosure in SW Florida

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One of the biggest frustrations buyers have is offering on a bank owned foreclosure and not getting it.  As a listing agent for many of the banks, sometimes buyers call me wondering why their offer wasn’t accepted, so I decided to write a 20 best tips on how to get your offer accepted.

The first thing buyers must understand is there is a lot of competition for these homes.  Typically bank foreclosures go fast, and for over asking price.  Everybody seems to want them.  So structuring your offer and submitting it correctly will increase your chances.

Keep in mind, listing agents must have all the required information, so if they ask for something upfront, they mean it.  Listing agents don’t have time to track your agent down for this info.  We attach a document to each MLS listing specifying what is required with the offer.

Tips on Buying a Bank Foreclosure Chart
How to Buy a Bank Foreclosure Chart

The reason is, the bank never sees your offer until one is accepted.  The listing agent must enter information into and online submission, and it must conform to what the bank asks for, and all fields must be filled out.  If a foreclosure has 20 offers, the listing agent doesn’t have time to call 15 agents and beg for information they required upfront.  Keep in mind, it takes awhile to upload 20 offers, and the listing agent may be dealing with 20 properties.

Listing bank foreclosures is very time intensive, and the listing agent coordinates everything from repairs to working out HOA fees, title issues, code violations, etc.  Providing the required information is the first step.

Secondly, consider that you’re probably competing against other buyers, and that many will be above asking price.  So how do you compete?  Consider a higher escrow money deposit, shorter closing time, and definitely a shorter inspection period.  Bank asset managers are also gauging the strength of each buyer, so you want to put your best foot forward in hopes of getting the property.

In many cases banks will counter multiple offers with highest and best.  Buyers are shocked when the bank doesn’t and just accepts one offer, so it always pays to pony up early on and go for it.  If you do get a highest and best form, assume the other buyer wants it as bad as you do, and act accordingly, because if you don’t, chances are you won’t end up with the home.

Be careful that your offer is written well and clearly states all fees and costs.  It is difficult to impossible to make changes later, and it could cost you the home.  Any change to contract later on opens up possibility home goes back out for rebid and you could lose it, so it pays to write offer correctly the first time.  Same applies with names; make sure everyone who wishes to take title is on contract from beginning. You may not be able to add names until after closing, which could require new title insurance and additional fees.

These are some very useful tips by an experienced foreclosure agent. Each bank has their own rules, so be sure to follow directions well.  Make sure you’re working with an agent who understands contract language. Many times we see financing contracts that don’t match up or specify some costs buyer is not allowed to pay under the buyer’s financing program, and the offer cannot be presented to bank until language is cleaned up which could cost the buyer the sale because of delays.  Be sure to work with an agent who has experience writing clear and concise contracts and understand financing in and out.

Bank foreclosures are prevalent in Fort Myers, Cape Coral, Bonita Springs, Estero, and Lehigh Acres, so following these tips will increase your chances, and ignoring them will most assuredly have you scratching your head wondering why the bank selected another offer.  Good luck and happy house hunting.

Search all Lee County Florida single family home foreclosures on MLS.

Search all Lee County Florida condominium foreclosures in MLS

Future of Real Estate Video Show SW Florida Goes High Defintion

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We recently experimented with shooting our TV show in High Def.  Previously we’ve used a mixing board much like a TV studio whereby we can mix camera shots, video graphics, etc, but it was standard definition TV.  Because we have a high definition TV we use anyway, and we shoot the show with High Def cameras, we though it would be nice to make everything more clear and understandable.

Future of Real Estate Video Show SW Florida Goes High Defintion
SW Florida Real Estate Market Update Video September 2010

Future of Real Estate Video Show SW Florida Goes High Defintion

Instead of having one track mixed in from a mixing board along with audio, we’ve gone to mixing each camera track and audio track and syncronizing them.  The reason I spell all this out is because agents all over the country have asked how we produce our show, and now that we’re making the change I thought I’d spell it out.  We then mix all the tracks together and produce one output and export.

Next week we’ll work on shooting the video so everything is in screen properly, or we’ll add another camera.  Let us know if you like the new changes.  View the latest show SW Florida Real Estate Market Update This week’s show covers pending home sales in Cape Coral Florida, Fort Myers, Bonita Springs, Estero, and Lehigh Acres.  We also cover inventory levels in Cape Coral, Fort Myers, and all of Lee County as we’ve seen varying reports of inventory levels reported lately.

Pending Sales Increase

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Pending sales lead to future closings, so studying pending sales over time offers a glimpse of what may occur in the 30-60 day future.  Obviously not every home closes, but it is a good barometer of what may close.

Nationally numbers were released this past week and pending sales increased 5%.  The SW Florida real estate market pending sales increased 4.11% over the previous month which is pretty much in line with national numbers.

Pending Home Sale Graph Fort Myers-Cape Coral
Pending Sales Fort Myers Cape Coral Florida Area

Pending sales are down 18.67% vs. pending sales last August, and this is in line with official sales numbers.  In July, sales were down 27% vs last year, so maybe when official numbers are released for August we won’t be down as bad as we were for July.

We’ve noticed a trend the last few election cycles whereby when people are uneasy about their jobs or the economy real estate sales tend to fall off just a bit in anticipation of the next election cycle.  Suffice it to say the November elections are on people’s minds, and how could they not be with all the ads on television during the primaries.  It is an encouraging sign that pending sales picked up in August over July.  Last year August sales were down slightly over July, so August isn’t always a month where we expect them to increase.

Interest rates are at record lows, and we’ve seen buying power in the $150-$300,000 price ranges increase substantially.  We believe sales could increase in this price range going forward into the next year as buyers realize they can buy much more home for far less money than they thought they could, even 1-2 years ago.

Inventory Levels in Fort Myers, Cape Coral, and Lee County Florida
Single Family Home Inventory Levels - pending Sales

As you can see from the attached chart, inventory levels in the Fort Myers and Cape Coral areas have been holding steady, and this is also true countywide as well, although the numbers are larger.  We’ve included a detailed pending chart as well showing pending sales from last year to present.  We’ll keep reporting what happens going forward on current real estate trends in SW Florida.

Be sure to check out our SW Florida Real Estate Market update for September directly from our Future of Real Estate Channel.

SW Florida Real Estate Market Update

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Official numbers were released last week, and as expected single family home sales dropped.  As you can see from the attached chart, there is some seasonality to this, but there are more reasons as well. 

Fort Myers Cape Coral Real Estate Closed Single Family Homes
SW Florida Real Estate Single Family Home Closed Sales

Sales are still well above 2006-2008 levels, but they are down against 2009 levels which was a record setting year.  Last year the market was filled with bank owned bargain inventory, and the trend this year has been less foreclosures coming to the market so we’ve been steadily selling off that bargain inventory. Actually the market never filled, but as foreclosure properties entered the market they were scooped up just as fast.  The pipeline has slowed this year. 

Combined with the expiration of homebuyer tax credits and high unemployment it’s quite predictable our market would slow.  Median home prices even began rising as less bargain sales were occurring.  In the last 3 months we’ve seen median prices decline from $101,500 in April down to $93,500 in July. 

So if less bargain homes are selling, it must be true that less regular sales are selling as well, or else the median wouldn’t drop.  This is also true, as distressed sales percentages in Lee County reached 64.18% in July vs. 54.66% in April.  Now that season is no longer here, it seems mainly the bargain homes are selling, and there are less bargains, so home sales are down, and non-distressed homes aren’t picking up the slack. 

Last year we predicted we’d see a No-Mans Land market when the foreclosure bargains dried up, and we’re seeing the beginning of this phenomenon now.  There is no major upward pricing pressure due to the economic times. 

Without rising prices, we won’t see increased builder activity, which means less tax dollars to the county government.  With fewer sales, we’ll see less doc stamps revenue to the state.  It’s a vicious cycle, so government better be prepared to make cuts because property tax values are also down which also cuts into county budgets. 

Real estate agents are out interviewing now because they’ve noticed their leads are down and they’re looking to go where there are some leads.  When the deals are gone, so is the investor interest, and we’re left with fewer residents looking to purchase.  We’re not seeing move-up buyers because people are uneasy about the economy and many can’t afford to sell because they owe more than their home is worth, so they can’t take advantage of moving up even if they do have solid employment.  The same goes with buyers looking to move-down.  You cannot move down to save money if you can’t afford to sell at today’s prices. 

This is Labor Day weekend and our market may be laboring, but it will be fine in the end. There are still good buys entering the market, and while we don’t see a lot of immediate upside pressure, we don’t see downward pressure either.  Even with slowing sales, we’re still the 2nd highest year on record.  Buyers looking to take advantage will have to be both quick and patient.  The early bird gets the worm when it comes to fewer foreclosure bargains, and the patient buyer gets the short sale, which can be a bargain if the buyer is prepared to wait.  And because 64.18% of current sales are distressed in some fashion, it pays to be both quick and patient.  The educated buyer with resolve is the real winner in this market.  The fearful buyer is missing opportunities and will kick themselves later.  

Perhaps when the government gets its act together and figures out which way is the road to recovery, we’ll see increased sales and prices.  Look for another homebuyer tax credit soon, or some other vehicle to spur the market, because real estate is traditionally 32% of GDP, and if we can kick start real estate, the economy may follow.

View our newly revamped website Topagent.com