Tag Archives: Cape Coral foreclosures

Short Sale Tips Revisited

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It’s been 8 weeks since we last reported on short sales, and we’re happy to report short sale activity is up as we’d hoped it would be.  Short sales make much more sense to all involved over a foreclosure as it helps preserve the sellers credit better, minimizes losses to the lender, and keeps the neighborhood in better condition. 

I recently heard a funny quote “Why do they call it a short sale if it takes so long?”  While I can’t remember who said it, it’s funny because it’s so sad.  Hopefully with new initiatives in place we’ll see quicker turn-around times for short sales.  As a CDPE (Certified Distressed Property Expert) we thought we’d share a few tips to help agents navigate this short sale process and make your deals quicker and smoother. 

SW Florida Real Estate Foreclosures Vs. Short Sales Graph
Foreclosures Vs. Short Sales in SW Florida Real Estate

There is a clause in the Short Sale Addendum to Purchase and Sale Contract entitled #5; Multiple Offers which reads “Unless otherwise agreed by Buyer and Seller in writing, Seller may continue to market the Property for sale and accept other offers and submit those accepted offers to the lender.”  We are not attorneys and we are not giving legal advice.  This clause seems suspect though and we encourage listing and selling agents to amend or supersede this clause. 

A purchase and sale contract is between one buyer and one seller, and once accepted you can request the lender to take less than what is owed via a short sale.  In a normal transaction a seller wouldn’t enter into multiple contracts with multiple buyers, so why would you muddy the waters and try that on a short sale?  Selling the property to multiple people just seems unethical and one buyer may have legal remedies against a seller for employing such a tactic.  

Quite often we see sellers accepting any offer that comes down the road, but the lender certainly would not agree to the short sale because it is so far below market value. The lender wants to minimize their loss, and only agree to short sales if it makes sense.  Sellers would be far better off negotiating or waiting for a reasonable offer than to accept any old offer.  

When you submit multiple contracts to a lender they mistakenly think it must be a hot property and hold out for more, and many times each new offer starts the process all over again, further delaying approvals.  And keep in mind when you submit more than one contract, the seller may be legally liable to more than one buyer. 

You don’t submit offers to the lender, only accepted contracts.  A seller should really only enter into one accepted contract.  A lender cannot do anything without an accepted contract between buyer and seller as the lender is not a party to the transaction and can’t sell to anybody.  This could change if they foreclose, but until then they are just the lender. 

If you’re a buyer the last thing you want is the seller sending in other accepted contracts.  It would be far better to move on and go buy another home and not waste any time waiting or investing in inspections, etc.  As a seller, it should also be the last thing you want as well as it can hold-up or kill your sale.  From a practical standpoint we don’t even know why this clause is in the addendum, or why agents or sellers would employ this tactic. 

The other advice we would give is to have the sellers completely fill out a financial questionnaire upfront before taking the listing.  There is no sense wasting buyers and sellers time if the seller isn’t going to qualify for hardship with their lender.  You’ll need all this information with the accepted contract anyway, so it’s best to do it upfront and save everybody time.  Not only will this speed up your short sale, but it will also help you skip doing deals that should never be attempted in the first place.  Buyers are skittish enough on short sales anyway, so why attempt one if it has no shot at success?  We’ll bring you more tips on short sales in upcoming articles.  By educating the market on what works and what doesn’t, everybody wins.  Good luck buying and selling.  We’re all in this market together, for better or worse, and it pays to work together for success.

Distressed Market Update SW Florida

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This week we’ll focus on freshly updated numbers for the distressed segment of the Lee County real estate market.  It’s important to study this segment of the market as it has been responsible for a large chunk of sales, and has influenced pricing in the market. 

As you can see from the chart, distressed sales in Fort Myers have fallen precipitously in the last 3 months, down from almost 73% in July to 58% in September.  Short sales in Fort Myers have increased about 20% and foreclosures have dropped 35% while overall sales have remained relatively constant.  This tells us that banks are working to sell properties as short sales in Fort Myers as opposed to acquiring the property through foreclosure and selling later on at much lower prices. 

Distressed Proeprties in SW Florida July-Sep 2009
Distressed Proeprties in SW Florida July-Sep 2009

Cape Coral on the other hand has seen about a 15% drop in overall home sales since July.  Distressed sales have remained relatively even, hovering around 70% all 3 months.  Foreclosure sales have dipped almost 26% since July while short sales have increased 9%.  This tells us that the demand in Cape Coral is directly tied to the bargain, meaning as the distressed inventory has fallen in the Cape, so have overall home sales.  Statistically, buyers in the Cape are all about the bargain, and as home prices have increased in the Cape, home buyers have moved to Fort Myers and potentially Lehigh Acres for the bargains. 

Lehigh Acres has seen a slight fall in distressed sales, down from almost 87% in July to 82% in September.  Lehigh Acres is still far and away the distressed capital of Lee County.  Overall home sales in Lehigh Acres have fallen almost 13% from July to September.  Foreclosure sales in Lehigh Acres are down 18%, while short sales in Lehigh are down 17%.  This is why home sales are down overall about 13% as Lehigh Acres, along with Cape Coral are both proving to be price sensitive markets led by first time home buyers and investors. 

Fort Myers seems to be much more stable at this point in time.  We are seeing a trend towards more expensive properties coming to the market via foreclosure, so it will be interesting to see where these properties are located and how it affects demand and pricing in each of the three major markets in Lee County. 

Congress has extended the first-time home buyer tax credit to purchases made through April and closed by July, and added a provision for existing home owners who have owned their home for at least 5 years.  Unfortunately, in this sagging market it doesn’t give them much time to sell their home and close on a new one to take advantage of this provision, so only a select few may be able to purchase a new home before selling the older home. 

We think Congress could have done a much better job writing this bill.  They did add to income eligibility limits, but again the bill limits who can take advantage by July.  This may further fuel the bargain end of the market assuming the president signs this bill, which has not been done at the time this article was written.

We’re concerned that this bill won’t fuel a total real estate recovery and will continue to spur demand at the lower end of the market.  To pull this economy out of the doldrums, a broad based real estate recovery would have served a better purpose, but I guess we’ll take whatever help we can right now.

We’ll also monitor the trend of banks accepting more short sales.  To date banks have been ill equipped to deal with the magnitude of requests.  Recently Bank of America adopted a policy to use its online foreclosure system of working with approved real estate agents called Reotrans and opened it up to short sales.  This will allow approved agents to more efficiently move Bank of America short sales through the system. 

Sellers wishing to sell their home via a short sale should seek out experienced short sale agents who are also familiar with Reotrans.  Because they are adding more than just bank REO’s (Real Estate Owned) they are changing the name from Reotrans to Equator.  This may revolutionize the way banks handle the massive short sale process and speed up many of these sales.  It will also help that they are using agents familiar with the Distressed Sale process. 

If you’re a seller considering selling as a short sale, it’s almost impossible to go it alone.  We recommend hiring a seasoned professional familiar with the intricacies of a short sale.  You might seek out a CDPE (Certified Distressed Property Expert).  If you’re a current Bank of America customer, you might also seek out an agent who uses and is approved on Equator.  This could be a trend that other banks go to as it will ease the communication stream and handling of the data among various agents, negotiators, and investors.  This online system could do for short sales what it has done for bank foreclosures, which was to make an online system whereby many authorized people could all work on a file simultaneously and get things done instead of pushing paper from one desk to the next. 

Stay tuned, as the market is always in flux, and we’ll report interesting changes and how they may affect the market.

SW Florida Real Estate Sales Sets Record in March 2009

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Single family home sales in Fort Myers and Cape Coral MSA were up 192% in March 2009 over March 2008.  The Fort Myers and Cape Coral MSA encompasses Lee County Florida. Home sales totalled 1,464 this year as compared to 501 last year.  Statewide sales were up 30% and median prices were down 30% from last year.  Fort Myers and Cape Coral is definitley leading the state in transaction increases.  Miami was next in line with a 101% increase in sales transactions.  For a complete chart of transactions by city and median prices, check out Florida Sales Report March 2009 Existing Single Family Homes. We’ve included a chart that shows home sales from 2005-2009 in SW Florida.

As you can see from our SW Florida Real Estate Sale Prices 2005-2009, sales prices are nothing like what they were in years past.  Prices declined 9.23% last month alone largely due to increased numbers of foreclosures selling in the lower price ranges, as you can see from our Month Over Month Sales Prices Chart.

Condo prices in Fort Myers and Cape Coral were down 36% from last year to a median price of $126,200, down from $196,400 last year.  Sales were up 53% this year as buyers reacted to the tremendous bargains in the market.  Many buyers have sensed the market has or is close to bottom and they better act soon.  See Condo Florida Sales Report.

Buyers have also responded to the $8,000 tax credit that essentially gives first time home buyers, or anyone who has not owned a home that was their primary residence in the last 3 years, a tax credit of 10% of sale price up to a limit of $8,000  Essentially the government is making the down payment for buyers, and buyers who put less than 10% down pocket the difference.  There are some income requirements.  See First-Time Home Buyer Tax Credit-What You Need to Know or watch our video explaining the First Time Home Buyer Tax Credit.

NBC  Nightly News recently did a report “Is Now the Time To Buy a Home” which can be fouond directly on our webpage.  there are some particularly good deal deals in Fort Myers real estate right now as pointed out in the NBC Report.

December 2008 Ellis Team SW Florida Real Estate Current Market Index

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Fort Myers Cape Coral Real Estate Current Market Index
Fort Myers Cape Coral Real Estate Current Market Index

 

The December 2008 Ellis Team SW Florida Real Estate Current Market Index again showed improvement from last month’s index.  The Current Market Index now stands at 6.65, down from 6.89 in November.  The lower the number the better the market is for sellers.  Transactions in the Fort Myers and Cape Coral real estate markets were up again significantly over last year as our index predicted it would be.  Single family home sales in Fort Myers and Cape Coral were up 78% over last year’s numbers in October.

Single family inventory is down 12.42% from last year’s numbers.  In December 2007 we had over 16,000 single family homes for sale in Lee County and now that number is down to slightly over 14,000.  With sales up around 80% over last year’s numbers and inventory declining, many would say that 2008 has been a year of recovery for the SW Florida real estate market, but we cannot do so until prices stabilize.  Median prices have continued to head lower all year and this is why Fort Myers and Cape Coral has bucked the state and national trends, because value and affordability are back in the market.

In fact, prices are so far below replacement costs that first time home buyers and investors alike are scooping these properties up as fast as they come on the market.  While more foreclosures are scheduled to hit the market in 2009, many are condominiums and vacant land.  We are doing a study right now along with the SW Florida Real Estate Investment Association to determine how many Lis Pen dens filings are actual home foreclosures.  Keep in mind, a property may have multiple Lis Pen dens filings which may skew the numbers, so we may not see as many foreclosures in 2009 as some are quoting.

Local mortgage companies are reporting fixed rates in the 4.5% range today with 1 point.  Loan amounts are also on the rise, which could signal an up tick in future home buying in higher price ranges.  We don’t look for drastic upward changes to median home prices, however we do like to look at mortgage applications to get a reading on potential future purchasing activity.

We see regular negative articles and news stories about the real estate market, but the numbers tell another side of the story.  Sellers do not like today’s prices, and nobody knows where tomorrow’s prices will be for sure, however we can report there is a market at the right price and this market has been posting large gains all year.  We think many buyers and investors have figured out there are tremendous buying opportunities available now and they’re not listening to the Downers in the market.

If you really want to know how a market is doing, follow the money.  Buyers are back in this market because the prices are Right.  It’s a lot like the BCS polls.  Don’t follow what the polls say; follow the Vegas odds, because that’s where the money is.  It’s amazing how much better the money does in picking games than the experts do.  The numbers always tell a story.  The real wisdom is deciding not which expert to listen to, but which numbers you should follow.  In the SW Florida real estate market you can look at falling median prices, or increased sales.  Both tell a story, and we’ll leave it to the market to decide what the numbers mean.  We just thought we’d present another side you may not be seeing in the media or hearing from other experts and let you decide.

Florida Statewide Home Sales Numbers Released Including Cape Coral and Fort Myers Real Estate

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The Florida Association of Realtors released official home and condo sales numbers for the month of August.  Median sale prices were down 41% for single family homes in the Fort Myers Cape Coral area from last year.  See SW Florida Real Estate Sale Prices 2005-2008 and were down 5.16% from July’s numbers.  See Month Over Month % Price Change Chart Fort Myers Cape Coral Florida.

Median home sale prices in Cape Coral and Fort Myers have fallen 30.84% in three short months, from a median price of $212,400 in May to a median price of $146,900 in August.  Home sales were up 31% over last year with 684 sales this year Vs. 520 last year, but home sales were down 11% from July 2008 numbers.  Financing has become increasingly difficult for many homebuyers.  Even though affordability is back in the market, many good credit homebuyers cannot qualify due to changing underwriting standards and amidst a capital crunch on Wall Street.

It’s also important to note that foreclosures are driving the median home sales price down more so in areas with higher concentration of foreclosures, like Lehigh Acres and Cape Coral.  Fort Myers has not see the concentrated number of foreclosures like the previous two areas, and home prices have not suffered as much in many areas in Fort Myers because of that.

Anywhere we saw rampant speculation building; we saw rampant cases of investors/speculators walking away from their investment.  Most of these homes were built in 2005 and 2006 with no end user in mind.  The speculators were convinced they’d buy as many houses as the banks would lend money on and flip them to a buyer or another speculator for large profits.  This strategy worked until we ran out of bigger fools, and the whole strategy came crashing down, taking lenders with them, as well as legitimate end users who bought in that time frame.

Now banks and Wall Street are in trouble and asking the taxpayer for a bailout.  Most people are strongly against this idea, and yet the government is probably going to have to get involved in some capacity whether we like it or not to protect a domino effect of financial institutions from crumbling under their past poor decisions.

It’s not right, but it is where we’re at today, and unfortunately we may all have to pay for the sins of others.

 

Ellis Team to Appear on NBC Today Show

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NBC Today Show from Fort Myers Florida real estate market

NBC News called and asked if the Ellis Team could appear on the Today Show Tuesday September 23.  The show will feature Brett Ellis talking about the SW Florida real estate market.  NBC noted that Lee County Florida, particularly Cape Coral and Lehigh Acres has led the nation in foreclosures and is ground zero for the hosuing crisis.  Florida is a battleground state for this year’s presidential election.  The Today Show was in Pennsylvania on Monday and will be live from Tampa and Fort Myers  on Tuesday, specifically from Lehigh Acres.

Also scheduled to appear on the show is  one of the Presidential candidates, Florida Governor Charlie Crist, Tampa Bay Star Ronde Barber, and the show will unveil a new NBC News poll focusing on Florida issues.

The Florida segment from Fort Myers should occur in the 7:00-7:30 time slot ET. Brett Ellis is an agent with The Ellis Team at RE/MAX Realty Group in Fort Myers Florida.

 

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.