For Better or Worse, seems like we hear that everyday.  Latest numbers pulled from the MLS shows our market is no better, nor any worse than back in January 2007.  There have been some changes though, and we’ll discuss them here.

The Ellis Team at RE/MAX Realty Group in Fort Myers Florida long ago developed a system that accurately gauges market activity relative to Supply levels, and we deemd this index the Current Market Index.  We developed this index because it helps tell the story of where we are today, not just where we’ve been with closed sales reports.  The higher the CMI Index, the more supply we have relative to demand.

Since January 2007 we also changed the MLS reporting system, as the MLS of Greater Fort Myers and the Beach became part of a larger system called MLS Alliance.  Local Boards no longer data share with each other, but rather this new entity.  We’ve tried to align the fields up accuratley to reflect the same data, even though each Board reports slightly differently.  We have no less than 6 Boards that post Lee County properties into this database, so it is broad based and very useful.

A Miami couple is alleging they were turned down by three lenders, then miraculously approved for three loans to purchase homes from Builder First Home using a mortgage company First Home’s parent company has a 49% ownership interst in. 

The couple alleges that the loan officer for Builders Mortgage, LLC falsified documents and changed numbers without their knowledge to get them the loan.  Of course, K. Hovnanian Enterprises, the parent company of First Home, takes issue with that fact.  K. Hovanian alleges the buyer is simply trying to get out of a contract they signed.

What is true is that the SW Florida real estate market has taken a tumble, and many buyers are looking for ways to get out of closing on properties they’re under contract for.  What is also true is mortgage fraud has been rampant accross the United States, particularly among investors.  What is unclear is which set of facts, or both, are at play in this case involving First Home and this Miami couple.

We recently came across an article recomending the Top 500 Real Estate Blogs nationwide and were suprised to see our Blog here in SW Florida mentioned, expecially coming from Pittsburgh, PA.

We are pleased and honored that our Blog made the SW Florida real estate list and we’ll continue to do our best to bring you the latest news, statistics, and analysis to the SW Florida real estate market via this Blog.

We also just made their updated 750 Blogs to watch article released yesterday from the Pittsburgh Homes Daily.

First Home, now a division of Hovanian Enterprises, claimed it’s first lending victim.  Investors from the credit union bought several homes with construction loans, which means the buyer financed the construction of the homes.  The problem is between the time the investor went to contract and the time it took to close-out the construction-perm loan, the market fell significantly to the point there wasn’t enough value in the home to justify the loan to value ratio.  Lenders no longer wanted to issue permanent financing, and the loan failed.

The investor can’t close-out the loan, and can’t sell the property for what they paid for it, so the buyer can’t ultimately close.

Not only will this have far reacing impacts on lenders, it may affect the builder as well when they don’t receive final draws on the construction loans and have oodles of properties tied up in court or foreclosure.

In fact, already many investors are suing alleging fraud by First Home, Construction Loan and D’Alessandro & Woodyard, a real estate brokerage that sold some houses for First Home.

More lawsuits are expected as investors from all over invested in these deals.  First Home primarily builds homes in Fort Myers, Cape Coral, and Lehigh Acres Florida.  Many investors had decent credit scores, but lacked the assets to carry the properties if everything didn’t work out the way they planned.  Obviously, things didn’t work out the way they planned as the market took a serious turn and didn’t pass Go.

The SW Florida real estate market has been hot and cold, up and down.  The first few weeks of March were hot, the second half was not.  Recent trends show the Lee County housing market is gaining strength, but don’t look for prices to pick-up anytime soon as we still have high inventory levels.

We expect 2007 to be a gradual strengthening market, and by strength we mean inventory leveling off and home sales picking up from 1st quarter 2007 levels.