Neil & Cathryn Blair-Bennett

There is a heavy groundswell of support to make permanent the homebuyers $7,500 tax credit that was introduced as part of Stimulus Package 2008.

Support is also there to expand the credit to all homebuyers as long as it for a primary residence. Further impetus is for the tax credit to become a grant rather than the low interest forgiveable loan that it started out being.

If all home buyers become eligible for a tax credit without a repayment feature, it could result in an additional 555,000 home sales, enough to meaningfully draw down excess housing inventory, the NATIONAL ASSOCIATION OF REALTORS® says.

An evaluation of options for a home buyer tax credit by NAR shows wide ranging implications and benefits. A full credit to all buyers means an additional 2.22 million households would meet the income requirements for purchasing a home, but only one in four of those households would actually make a purchase.

Under the current $7,500 first-time home buyer tax credit, which must be repaid over 15 years, 264,000 households meet the purchase requirements. Using the same assumptions, with plans to hold their home for a median 10 years, it would mean only 66,000 additional sales.

Analysis of other options shows that if only first-time buyers are eligible and the repayment feature is dropped, it could mean an additional 202,000 home sales. If extended to all home buyers but the repayment feature is retained, the gain would be 181,000 home sales.

These projections could have a far reaching impact on many local markets. Lee County, Florida is one of those markets. Home prices have tumbled and affordable is now the name of the game. Single family homes are selling far below replacement cost and duplexes are one of the single best current investments.

Log on to Hope4HomeBuyers.org and see some of the best deals in the nation.

Take a look at this article from the Naples News. It appears that buyers are coming to the conclusion that the bottom of the market is very near. Existing single-family home sales in Florida were up for the third month in a row in November. If you are an investor or first time home buyer you better not wait much longer. Home prices appear that they may not fall much lower. For a full list of REOs in our area, please emal me at isemory@hotmail.com. There are still some great deals out there, but they are getting purchased very quickly.

Fort Myers-Cape Coral market sees major jump in Realtor-assisted home sales

www.naplesnews.com

By LAURA LAYDEN
2:37 p.m., Wednesday, December 24, 2008

The Fort Myers-Cape Coral market saw a 64 percent jump in Realtor assisted sales for single-family homes in November.

Last month, there were 600 existing home sales, up from 365 in the same month a year ago, according to the Florida Association of Realtors.

The median sales price for single-family homes declined 53 percent to $106,100 in November, down from $228,100 a year ago.

The median price is the price

at which half the homes sell for more and half for less.

While single-family homes sales were up in Lee County last month, condo sales were down. There were 85 existing condo sales, down 21 percent from 107 a year ago. The median price was $136,200, down 20 percent from $170,000 a year ago.

In Marco Island, there were 25 single-family home sales in November, up 79 percent from 14 a year ago. The median price dropped 48 percent to $262,500, down from $500,000 a year ago.

Last month, there were 13 condo sales in Marco, down 50 percent from 26 a year ago. The median price declined 26 percent to $295,000, down from $400,000 a year ago.

In Punta Gorda, single-family home sales were up 13 percent last month. There were 174, compared to 154 a year ago. The median price fell 45 percent to $97,700, down from $177,300 a year ago.

There were 17 condo sales in Punta Gorda, down 19 percent from 21 a year ago. The median price dropped 28 percent to $102,000, down from $142,500 a year ago.

Naples statistics are not broken out in the report, though they are included in the statewide numbers.

Statewide, existing single-family home sales were up for the third month in a row in November. Sales were up 4 percent. There were a total of 8,571 sales, up from 8,269 a year ago, according to the Florida Association of Realtors.

Nine of Florida's metro areas reported increases in existing single-family home sales in November. Some also showed gains in condo sales.

Florida's median sales price for existing homes last month was $158,300, down 27 percent from $217,000 a year ago.

For those of you who haven't been paying attention to the SW Florida real estate market, it has really taken a dive in the last 18 months. The reason is primarily an oversupply of homes due to investor speculation. There were a lot of investors who thought they saw an opportunity to get in and out of a few SPEC homes and make a lot of money quickly. Don't get me wrong, there were a lot of people who made a lot of money. But, there were a lot more people who got burned, because they weren't prepared financially to carry the properties if they couldn't sell them.

I was out with an investor on Sunday and we were looking at almost new duplexes in Lehigh Acres, FL. These duplexes which sold for $225,000-$300,000 in 2005 and 2006 can now be bought for as little as $54,000. I can remember when duplex lots were $60,000. There are a lot of investors who have never considered buying duplexes. There are several reasons why they haven't. Let's talk about why they should. The three main reasons that investors should consider buying duplexes are:

1. They cash flow much better than single family homes.

2. The replacement costs are much higher even in today's market.

3. Affordable rentals are always going to be needed (especially now that all families are pinching pennies).

Cash Flow

All investors would agree that cash flow is usually the most important aspect of investing in real estate. Why then would someone pay $45,000-$60,000 for a single family home when they can only get $700-$800 in rent? Duplexes are renting from $600-$700 per side. They cost the same as single family homes. Hello, it doesn't take a rocket scientist to figure out which is the better opportunity for an investor. Don't get me wrong, the resale on a duplex is going to be tougher than a single family home in the future. Why? Quiet simply your buyer base is smaller. You are only going to be able to sell to an investor, or maybe a first time homebuyer who will live in half and rent the other half. That being said, why would you sell a property that is paying for itself and cash flowing every month? You would be foolish to sell it. If you are looking for a cash flow investment, duplexes are the way to go. If you are looking at long term appreciation, single family or condos are the way to go.

Replacement Costs

Even in today's market where there are a lot of sub-contractors out of work because of a lack of new construction, building materials haven't really changed that much in price in the last 12 months. The cost to build a new duplex or single family home is $60-$70 per square foot plus land. That is without profit built in for the contractor. That being said, if you built a new 2200 square foot duplex for $60 per square foot, it would cost you $132,000 plus land. Land in Lehigh Acres is $7500-$9000 for a standard duplex lot. That being said, I think that the prices on duplexes can't get much lower. If they do, it doesn't really matter because rental rates are not coming down. An investor will still be cash flowing at the current rental rates.

Affordable Rentals

As we all know unemployment rates are the highest they have been in years. Credit scores are the lowest they have been in years. Available mortgages from banks are tougher than they have been in recent memory. Those three factors have led to a lot of people that have to rent. Renters in this area are comfortable paying $600-$850 per month. Anything higher than that and the rental pool gets smaller. With proper advertising and screening, it is possible to get good tenants in place very quickly. There is always going to be a need for affordable rentals.

Duplexes in my opinion are the safest real estate investment in our area. The cash flow potential is huge and the risks are minimal. I can't think of another area anywhere in Florida, or maybe the US, that has new duplexes so cheap. Please email me or call me if you are interested in more information about our area. I work with investors and end users alike. If you are looking for a new place to call home, a second home or vacation home, or an investment property please call or email me.

Israel Emory

isemory@hotmail.com

239-292-2499