Neil Blair-Bennett

The Cape Coral-Fort Myers area is the second most undervalued residential real estate market in the country, according to a new research report

That means this is a good time for investors looking to buy land, experts say.

"Is land undervalued?" asked Fort Myers-based real estate broker RandyThibaut of Land Solutions. "Yes and no. Land prices for residential development land has bottomed out, it can't get much lower. But not commercial property."

Douglas Hannah, a partner in Fort Myers-based Silverleaf Capital Group LLC, which puts together deals for investors, said a lack of demand has caused prices to fall sharply since the boom ended late in 2005.

"Because it was overvalued (in the boom), it's really swung back," Hannah said. "We just bought some freshwater lots for 10 grand apiece that would have been 150 grand four years ago. They're down more than 90 percent. Are they worth 10 grand today? Maybe they are, maybe they're not, but because there's an oversupply of homes, there's no market for them here.

There are a lot of local opportunities now, Hannah said. We're aggressively bullish on real estate in Southwest Florida right now," he said.

Lee County's homes, with a median price of $112,800, were selling for 40.5 percent under value in the fourth quarter of 2009, down from being overvalued by 31.5 percent at $236,200 four years earlier, the report by financial consulting company IHS Global Insight states. Las Vegas, Nev., was No. 1, undervalued by 45.3 percent at $123,000 compared to being overvalued by 35.3 percent at $287,000 four years earlier.

But Michael Timmerman, a Naples-based senior associate with Fishkind & Associates, an Orlando-based economic consulting firm, said he doesn't agree that Lee County's property values are that much out of whack. The Global Insight survey, released Friday, looks at too short a time frame to be accurate, he said. "From the point of view of overall fundamentals, if you look at 1980 to today, we're probably about where we should be, maybe a little below that," Timmerman said. "It's all in the eye of the beholder."

He was also skeptical about another, contradictory survey released this week by Money Magazine predicting that Cape Coral-Fort Myers home values will fall 5.6 percent in the coming year. The report predicts the Naples area will fall 10 percent. People generally are better off not making decisions based on how they think home values will change, Timmerman said.

"Real estate is for use, your home, your office," he said. "That's how real estate should be viewed."

Source:News-Press 3-25-2010

Whether you are buying your first home, or your fifth, the process of buying a home is a detailed, time-consuming venture. At the same time, it’s an emotional period laden with difficult choices. You want to ensure that the home you purchase meets your family’s needs now, and in the future.

Each of these decisions often involves money. When you consider all that money represents, you’ll want to ensure that you don’t pay too much. This article helps you become a savvy buyer, by pointing out some of the pitfalls inherent in the home-buying process. These include such things as knowing what you want before you begin shopping, taking your time to shop, choosing the right realtor, and remaining objective while viewing potential homes. With this information, you’ll be closer to finding your ideal home.

1. Before you shop, develop a needs vs. wants list
Everyone has a picture of an ideal home. This would include all the features you not only need, but have long desired. However, when it comes time to buying a home, the desires cost more. While it’s nice to think about having a beautifully landscaped backyard, or a solarium, perhaps even some built-in appliances, these are usually considered luxury items, which can add considerably to the price of your home.

That’s why it’s a good idea to develop a needs and wants lists. With this list, begin with items you really need like adequate space, garage and number of bedrooms. For most people, basic needs should be considered first. After that, you could consider additional desires, if you can manage these benefits financially.

With such a list in your hands, you’re less likely to be caught up in the excitement of the pursuit. You’ll have a good idea of what you want, within you price range, and if you can afford those additional items.

2. Get pre-approved prior to shopping
Visit your financial or lending institution prior to home buying. Quickly, you’ll know the amount of mortgage you’ll receive. Be sure to get a mortgage commitment in writing. Most importantly, you’ll tell sellers that you are a serious prospect. Depending upon market conditions, a seller may lean towards an unconditional offer. You’ll have less negotiating power if you have to wait for mortgage approval.

Banks and financial institutions have developed many programs especially for home buyers, be that first-time buyers or those with equity in their homes. When you review your needs and objectives with a lending officer, you’ll be one step closer to purchasing your home.

The Cape Coral/Fort Myers area was recently recognized as being one of the top 10 most affordable housing markets in the world, according to an international survey.

The survey originated from Demographia Inc., which ranked Cape Coral/Fort Myers seventh in the world.

Lee County was behind some of the most economically depressed areas in the nation, including Detroit, Flint and Lansing, Mich.

According to Realtor statistics, the median home price in the greater Lee County area was between $89,000 – $90,000 in December 2009.

A total of 1,340 homes were sold in that month, an improvement of more than 300 homes from December 2008.

Realtors on both sides of the bridge are not surprised by where Cape Coral and Fort Myers ranked on that list.

They say now is the time to buy, especially if you’re someone who’s looking to stay in the new home for three to five years.

“It’s extremely affordable right now,” said Christie Knight, president of the Realtor Association of Greater Fort Myers. “We strongly believe our momentum will increase because of the extended tax credit for first-time home-buyers, and because interest rates are historically low. We feel very confident.”

The inventory of existing homes has decreased year over year, and Realtors are feeling optimistic about 2010.

Most feel the bottom has already been hit, and there isn’t anywhere to go but up, though a new round of foreclosures is expected to hit the market sometime soon.

Paula Hellenbrand of Encore Realty and a former president for the Cape Coral Association of Realtors said the number of foreclosures is deceiving, and that many of those properties are “evaporated” before they ever hit the market.

She added that now is the time for first-time home-buyers to seek out that dream home, as not only has the tax credit been extended, but companies like Fannie May are instituting 15-day waiting periods for owner occupied properties so home-buyers are in direct competition with investors looking to flip properties quickly.

“Our inventory is at a healthy level,” she said.

Source: Cape Coral Daily Breeze

Much of the recent increase in Florida home sales can be attributed to foreign buyers. These investors are cash buyers and can usually only purchase homes because of this; otherwise they are excluded from financing because of their nationality.

“Sixty percent of our buyers are foreign,” said Joe Milton, president and chief executive of J. Milton & Associates in Coral Gables. Milton wants to see more financing options for foreigners, as he predicts that real estate investment will increase even more if this happens.
“International buyers are activating this market and reactivating sales,” said Jenny Huertas, the international sales director for Condo Vultures, a Bal Harbour brokerage and consultancy company.

Buyers from all over the world are being lured to invest in the United States now that prices have reached a level that they can afford; an opportunity that perhaps hasn’t been available in previous years. Gabriela Guinmaraes, a partner with Integra Solutions, a Florida real estate consultancy that works with Brazilian nationals, says, “Investors are aware that assets have never before been so depreciated in a country like America.”

For the first time in 30 years, it is actually cheaper to purchase housing in Florida than it is in some Latin American cities says Walter Defortuna, chairman of Fortune International Realty.

As many areas in Central Florida worth only half of what they once were, property is being acquired rather quickly, with the weak dollar also helping to boost investment.
“The Swiss, Spanish, groups from Italy and England who already own some stuff down here are seeing it as a good time to buy, leveraging the economy and the currency effect,” said Mike Lapointe, vice president of Baybridge Capital Advisors in Miami.

Although the recession has been a global phenomenon, and foreign investors have been dwindling slightly, they are still more active in the sector than domestic buyers

Now with help from a $7.2 million federal grant, the city of Cape Coral plans to save 28 homes that would otherwise sit and rot away. The city has purchased about a third of the 28 houses with agreements on the others. City officials said they hope the plan will keep abandoned property from dragging down neighborhoods’ values and stave off blight before it is too late.

The city will rehabilitate and sell the houses to qualified homebuyers for zero profit. The city bought a property on Southwest 1st Street for $35,000, with plans to invest about $40,000 into its rehabilitation. It will sell for $75,000 or the assessed value – whichever is lower.

The money comes from the $4 billion 2008 Neighborhood Stabilization Program authorized by former President George W. Bush.

Part of the money will also go to down payment assistance for about 32 home buyers, who meet credit and income qualifications.

A prospective buyer will need a good credit score and a steady income, albeit a salary that puts them in the low- to moderate-level income bracket. They will also be required to stay in the home as their primary residence for at least five years, assuring the home’s owners will have the means and incentive to keep the property in good shape.