SW FL Real Estate

The national sales data for March is out and it isn't getting better.  If anything, it gets worse.  For example the USA Today reports the national  numbers for March were the worst in 18 years. 

1. It's the "buy now" syndrome.  What? 
2. Yeah, SW FL has the best buyers market in the last 15+ years.  That's why people say, "buy now". 
3. It's your call, Mr/Mrs. buyer. 
4. Are you going to buy at the bottom of the market?  Probably not.  You are never going to buy at the absolute bottom. 
5. But, buy now and no matter what happens in the next few months - you are going to be great 3-5 yrs. from now.
6. If you are a buyer in this market you hold the cards and the leverage.

There are great opportunities for 1st time buyers and limited resource buyers as well as for cash buyers and high equity buyers.  Why is that?  Because sellers must be creative if they want to sell their property.  That means?  With a true professional agent representing the buyer, there are many possible concessions from a seller (not just final sale price) that could be most beneficial to the buyer. 

I will keep posting current real estate sales transactions info for the month of April - that I have commented on in prior postings as the busiest month of the year in this SW FL market.... Then, in May, we will have a better feel for what the summer will bring to this market.

Let's talk about these things - post a comment - a question - a comment - email me with any of the above, etc.... what do you think?

What is your personal situation with property insurance in SW FL?

As a realtor, we are really struggling working with clients trying to obtain adequate coverage at a "close to livable" cost.  My personal home insurance has been terminated.  The "bad hands" people rec'd approval to terminate another 130,000 policies in FL.  That should be really helpful.  I am going to make my own personal dent in this problem.  I am talking to, what I believe are, the right people and we are going to provide outstanding insurance coverage at rates that will at least beat the current rates available from these current companies..... stay tuned...

The market is staying fairly active as we look into May.

I just read a good article on the conditions of this market. I won’t plagiarize it but I will hitch hike from it a bit.

As discussed many times on this spot, April is the busiest month of the year. We normally head into slower months from this point until the end of the year. The current over supply doesn’t speak well for seller pricing over this future time. The seller must know when to take the hit and when not to take the hit. Sellers must ask themselves: Is it mandatory to sell this year? If yes, you must get creative and be in the lower 20% of your comparable price range. That price range may change frequently. Sellers must stay up with comparable sale prices (through their listing agent).

IF the answer to that question was no or maybe – evaluate further and or take it off the market – now.

Here are some evaluation points/factors:

• Your annual cost of owning the property (payments + interest, property taxes, insurance, utilities, mandatory fees, maintenance).
• That is your total annual loss or cost of ownership because the property hasn’t appreciated in the past year.
• Estimate the net amount to you after selling the property – today.
• Take that number times about 4% for the simple interest – time value of the money.
• This process makes no calculation for tax consequences of any kind (positive or negative).
• This total is what it costs you to own this property and not sell it and or price it at a number where it will sell.
• IF the property appreciates at a rate of 5% per year over the next (?) years - what does it take to get you out of this hole?

The next step is to take that cost of ownership and reduce it by a realistic rental income number if you decide to rent it for the next year or longer. This rental number will put a band aid on the wound but won’t do much to heal anything. Don’t forget after you rent it for a year or two you will be forced to spend thousands of dollars renovating it to try to make it marketable again.

Now you must decide. Is it time to take the hit or do you wan to hold on for another year or two?

Here are the Bonita Springs - Estero real estate sales and pending sales numbers compared to prior years.

	4/1 Thru 4/20/07	03/07	04/06	04/05	04/04
Both Pending	131	169	141	346	289
Estero Only	36	46	39	77	45
Both Sold	63	134	149	315	282
Estero Only	17	29	32	79	49

What does this tell us?  A lot of things but maybe nothing we didn't know:

• We will likely pass March pending and sold but you always do...
• We will likely pass April '06.  That wasn't assured but that is positive
• '05 won't be seen again for many many years but it shows you where our market was at its' peak
• We won't even get close to the market activity for '04
• This market is therefore less active then it was 3 years ago.  You have to find records for 4-6 years ago to find comparable activity levels
• That does not indicate the prices being reduced to 4-6 years ago however, they appear to be reduced to 2 year ago levels
• Due to Feb. & Mar. being such slow months, we can't catch the sold #'s of prior years for the month of April

What's your take?

I do understand this business and the numbers and the "back room" of how this works.  The insurance industry's net income rose to $63.7 billion in 2006 from $44.2 billion in 2005, according to the ISO, an information service for the industry, and the Property Casualty Insurers Association of America, an industry trade group.

Why aren't we hearing about rate reductions instead of increases.  Ok, less sarcasticly, why are we still hearing about rate increases and rampant cancelations from the big 3 insurers in FL.? I have said before - these rate increases in FL are like the gas lines in the Jimmy Carter Admin. - they are - because they can.....not necessarily because they are real. 

If you are a Floridian, aren't you sick and tired of being taken advantage of by these people?  Stayed tuned.......  I am serious about this.

The Florida House passed its version of property-tax reform on Wed., 4-19. The proposed state constitutional amendment, would go on the November 2008 ballot (if it gets Senate approval). It could make Florida the only state in the nation without a personal income tax or property tax.

Republicans called it the state's largest-ever tax cut — a net of $25 billion to $35 billion over the first five years. They said it's wrong to tax the "American Dream" and that the proposal would make housing more affordable for low-income residents.

The Senate is scheduled to pass smaller, across-the-board property-tax reduction that would include $50,000 exemptions for first time home buyers, Save Our Homes portability for homesteaders and would leave out sales taxes (working on a 10% add on per year until market valueation were reached). This virtually does nothing, changes nothing and improves nothing.  But, that's my opinion. An extensive article on this:

If anything passes, it won't look like either, I suppose.  At the end of the day, these folks become politicians and politicians don't like to ultimately pass legislation that might keep a voter in their district from wanting to elect them again.  It's like the Congressman told me once, "I want every check every constituant gets to say U.S. Treasury on it".  "I can take credit for that at election time".

My opinion:  This states property owners must have relief in two areas: 1) property tax and; 2) property insurance.  If the current status quo is held, by this legislature, for another year we will all see this state economy completely tank!  This state economy is fueled by two items: 1) Tourists 2) Real Estate related activity with #1 to a large extent driven by the success of #2! Anyone that thinks that is incorrect needs to look at the fact that FL's bank account will finish in the red for the 1st time since '92 (I believe).  Gosh, have we had a strong real estate market since '92?  Dah....

What do you think?  Thanks for your time - this time - til next time.....

"Season" winds down and our "seasonal" residents prepare for their migration to the north.  Traffic improves for those of us still here.  This is historically the busiest month of the real estate year.  Bonita - Estero has 132 pending in 1st 17 days of April.  That compares to 141 for all the entire month of April one year ago.  The Estero zip code has 34 of that number.

Is this going to fuel this market or are the buyers just getting ready to go home and decided to pull the trigger before leaving?  tell me your opinion..

Check out some of the info. on my site... like: communities  -  announcements - free mls search  - local real estate news

As part of a very long list of things realtors don't have the luxury of..... participating in GROUP HEALTH INSURANCE!!!

There are a lot of individual things that realtors do to try to combat these types of shortfalls but, bottom line is - like all self employed and or small small groups of Americans - we can't participate in the benefits of group health coverage.  This is "the major agenda item" of lobbying entities working on behalf of small business. Now small business is getting support from big business in the effort.   Of all things ---- the National Federation of Independent Business won't back this effort!!!!!   Good grief people....

IF you are a self employed - you need to contact your business entities and enlist their help on your behalf.  This one item is possibly the single most crippling threat to small - independent business (self employed).

With our critical situation on property insurance in this area.... tell me-

What are you doing about your homeowner insurance?  "Allsnake" ins. just got approval to cancel another 130,000 policies in FL...  "Not very wide" ins. got approval to cancel another 38,000 policies in FL....

Are there good agents - with good products at decent rates?  Or are you just getting "beat on" by agents and companies?

Tell me... what are you doing  I dont' think this whole thingn is working.... how fast would you go to a different agency or company? Are you finding one that is more reasonable?

Please post your thoughts and comments on this one.....

Just a bit of a distraction on this fabulous Friday morning - I happened to stumble into something I thought should be shared with all.....

Am I a great kayaker?  No.  If you are interested or curious.... there is a great web site to tell you all about it at: http://www.greatcalusablueway.com

This site deals with Lee County areas and primarily Ft. Myers - Sanibel.  It even gives you the best places to "put in" - "trails", etc...  Another couple of interesting links - if you are so inclined: the beaches of Ft. Myers and Sanibel 

Just thought it might be a pleasant change of pace or another morsel of information for you from this amazing paradise we call SW Florida....

I could have discussed the insurance crisis in FL or the obvious political b.s. of the property tax debate but..... there is always next time, right?

I DON'T OFTEN "TOOT MY OWN HORN".... BUT......

I have been selected by Gulf Shore Life magazine as a recipient of their 5 Star Service Award for 2007.  Only 7% of all realtors in the entire SW Florida market become recipients of this award for outstanding client service.  The best part of this recognition is their determination method.  Gulf Shore Life sends questionnaires to home purchasers  regarding their experience with their realtor.  The responses are evaluated and determination of recipients are made from those responses from actual customers in actual transactions.  This is not a recognition that can be purchased.

I am most pleased to receive this verification of my work on behalf of my clients.

I look forward to serving all my clients real estate needs with this same commitment to excellence.

...... Contact me today......

Did you see the plans under consideration for E. Lee Co?  Wow....  And it will happen.  The "players" are at it....  We all know of the entire town Kitson & Co. will be building at Babcock Ranch. 

• Babcock will eventually be a city of 35,000 to 50,000 people. 
• Did we know... Benderson Development wants to build 210 homes and 49 equine lots located near Kitson? 
• Did we know.... Bonita Bay is planning North River Village just N. of the river, just E. of 31 and just S of CR 78?  This would be @ 3,000 homes on 1278 acres.
• Read all the article in a recent News-Press issue

This will make the existing community of Verandah become more valuable and create much needed commercial development along 80.  Don't forget, Bonita Bay bought the marina on the river at the intersection of highways 80 and 31.  They are in the process of renovating it with Verandah residents getting "1st shots" at boat slips.  I bet N. Village residents will have access too.....

What do you think? 

After all the legislative work and political wrangling the state legislature really "got a handle" on the insurance companies and insurance problems.  HA!

Good 'ol Allstate (lovingly referred to as allsnakes) just announced dropping another 108,000 policies in this state.  Nationwide just announced dropping another 38,000.  Yeah, we showed 'em!  We tricked those insurance companies......   These 146,000 home owners just got a 100% reduction in their premium!  This insurance situation is just like the gas lines in the Carter administration, they did because they could and could get away with it.

My own home owners insurance went to over $4,000 / yr. but it just went to zero last week.  They sent me my cancellation notice......   What a relief... or not....  Get all the news in this fast moving SW FL area right here

Any thoughts? 

A sold out crowd attended the "market watch" meeting sponsored by the Bonita - Estero Association of Realtors and the Bonita Springs Chamber of Commerce.

Not a very informative session really.  No revelations either.  As we know: in Lee county,

• home prices rose 124% or
• an avg. of 24% per year from 2002 thru 2006. 
• That is not sustainable. 
• One speaker believed the sales numbers would continue to be very slow throughout '07 with activity and price turnaround in late '08.
• Some opinions on condos is that over building will suppress that market longer than other markets.
• Some believe recent activity increases will continue thru this year rather than the usual diminishing thru the summer and fall 
• An interesting note on commercial property; in 2 years we have built more that 2.2Million sq.ft. of retail space and it is currently 98% leased or committed upon completion. 
• Upon completion there will be 8 banks located between Coconut Rd and Corkscrew Rd on 41 (1.5 miles).
• Some believed the more expensive home market will rebound more quickly than the other side of the market.

Here is my market summary:

1. First of all, be glad you didn't pay $50. to hear that.  I have been giving you better information than that for free and they made a lot of polyiana and unsubstantiated statements that I am not discussing here.
2. Prices will continue to decline thru the rest of this year to try to move some of the over supply inventory.
3. We have almost 3 yrs. supply on the market.  How many times do we say how simple this is: supply -v- demand.  3 yrs. supply = very little demand.
4. The property that sells will be the one that stands out - has unique qualities - is priced in the lower 20% of the market, etc.....
5. Developers/builders cut backs will eventually have positive impact on the market.
6. This market will continue to see "mixed use" developments flourish.  The concepts developing in Estero in Coconut Pt., Rapallo, Rapallo the Art District and the Estero on the river project recently rezoned and approved for construction to begin in '08.
7. The Lee county planning people revise their (by law) plan every 7 yrs..  the plan changes recently include much more emphasis on "mixed use" development.  You will see it in virtually all of Lee county in future projects.  This idea whose time has come primarily cuts to the traffic problems.  The goal is to provide the majority of individual needs right in the development area to eliminate the need for people to get out and create more traffic.
8. With a projected (planning commission again) 1.2 million residents in Lee county, creative mixed use is where we are headed.

 What do you think?  get all the real estate related news - easy read

in this time of suppressed pricing and over abundance of properties available?

• Because of an over abundance of properties, prices are dropping continuously.
• We are getting about 3 times the daily sales we had 2 months ago  But;
• There is such an over supply on the market that we can't make a dent in the recessive characteristics of this market.
• The real estate people must be very professional with the marketing program
• Sellers are dropping prices and making other creative concessions like the following to entice buyers:

1. Sellers are "buying down" the interest rate for the buyer during the 1st and sometimes the 2nd year of the buyers mortgage
2. Sellers are offering to pay portions of the related sellers closing costs
3. Sellers are offering to pay property tax for the buyers (in certain cases)
4. Sellers are offering to pay association fees for 1 year
5. Sellers are offering to pay for home warranties for 1 or 2 years

Wait a minute - if I tell you all this for free - you will have your bad realtor do it for you instead of me.......  gotta go for now......  call me or at least leave a comment on here.

Recent events in the SW FL market have prompted the question;

How did so many people get so upside down in their homes?

I think this question has three answers…

The declining market is out of the homeowner’s hands. To a large extent, we find ourselves relying on our state legislature to solve the property tax and insurance problems.  Placing our faith here is roulette at best, and certifiable at worst. At the end of the day - politicians only care about being reelected and the cost of that event isn't necessarily relevant to them either.

The homeowner problem always exists. Homeowners always believe their house is worth more than it is.  Homeowners have used all their equity to live beyond their means.

Unfortunately, a large number of the homeowners are in for; 

• certain failure
• filing bankruptcy or;
• losing their homes in foreclosure. 

Above normal numbers of homes are empty. And, the fantastic profits realized during the '02-'05 boom, have rapidly melted away. It  would appear we have relented to early '05 home prices.

why your realtor is depressed? ...

If you are like most of the public and consider your realtor to be the lowest form of human life - this is somewhat of an amusement.  And, if you think -they should have kept all that money they made in the last 5 yrs., you would be right.  However, if you were one of the "2 zillion" that moved into this market at the end....of this market... you are toast... and have been... and will be.....

If you think this market is "ok" and or "going to really recover now".  You need to stop lying to yourself.  And, the money being lost is not recoverable.  Give that some thought..... 

Here is a great value S.F. Home - as an example of the current market

It is always interesting to see some of the writings, thoughts and strategies of some of the "major players" in this Southwest Florida real estate market.  The following are those of one such company:

• 1st Qtr. '07 sales were equal" to 39% of 1st Qtr. '06 (which was totally dismal)"
• 2004 was just short of superstar 
• 2005 was a superstar 
• 2006 was a complete failure 
• 2007 will be a worse failure 
• 2008 will be almost back to average 
• 2009 will be better than average 

They summed it up pretty well!  Surely, this will get some comments!

I CAN'T IMAGINE IT....

You are not signed up for the monthly - free - email delivered (right to your computer - email - inbox - SW Florida real estate newsletter?  Why is that?

Get signed up today - just click here - I will even send you the 4-1-07 edition you just missed.... 

Did I mention - emailed - free?

My old joke: When in Hollywood, CA., know that your waiter is an actor and when in SW Florida, know your waiter is a realtor.

The mls numbers for March are shown below.  Let's remember a couple things: 1) these do not reflect properties sold by developers that were not listed on the mls and; 2) They do not reflect properties sold as "for sale by owner" - that were not listed on the mls. 

The # of closed real estate transactions for the month of March, in Estero, for the past 3 years: 22 ('07), 28 ('06), 37 ('05)

The same #'s for Bonita Springs: 78, ('07) 77 ('06), 183 ('05)

For the past 12 months, on average: 90% of all sold/closed properties are on the market for more than 130 days and almost as many close for cash as are financed (45%).  93% of all listing properties did eventually sell.

Sale pending #'s for the month of March for the past 3 years (looking at April potential closings):                                                                       Bonita Springs: 118 ('07), 115 ('06), 302 ('05)                                   Estero: 42 ('07), 42 ('06), 77 ('05)

We are back to 2004 levels

When you try to look at pricing - it is all over the board.  It is difficult to get an accurate measure of a particular group of properties.  For ex: the avg. sold price in Estero for the month of March for the past 3 years: $356k, $483k, $370k.  That doesn't necessarily equate to anything.  You must take a particular property and do comparables for the past 3 years to know much about pricing - averages and medians.  I never understood median.  The median is simple picking the 50th percentile sale which could be very much outside the norm of the sales transactions for the month.

Now, go look at yesterdays notes about developer/builder lay offs.

What do you think?