Florida: home price spike likely to continue

By DICK HOGAN • dhogan@news-press.com • October 26, 2010

September’s home sales dipped while prices spiked up in Lee County – but more recent chaos in the foreclosure process could make those patterns seem mild.

The median price of an existing home sold in Lee County in September was $94,400, compared to $88,400 in August; the number of sales fell from 1,193 to 1,102 for homes sold with the assistance of a Realtor, according to a report released Monday by Florida Realtors (formerly Florida Association of Realtors).

But in early October, some of the nation’s largest banks abruptly yanked some houses off the market that they’d taken back in foreclosure – citing potential irregularities in the way the paperwork had been handled.

In Lee County and around the country, the announcement by Bank of America, JPMorgan Chase and others caused fears that flawed foreclosure documents could keep buyers on the sidelines in the final months of the year.

A trend of fewer sales and higher prices likely will continue, although the extent on final sales won’t be known until next month, said Steve Koffman, a real estate broker with Century 21 Sunbelt in Cape Coral.

“It’s kind of a false sense of security when you see the median go up,” Koffman said.

The trend likely will mainly reflect that most of the houses pulled off the market were the most inexpensive ones for sale. With much of the bottom of the market gone, Koffman said, the median price will likely rise further by default.

A smaller inventory of houses for sale likely will mean fewer sales, he said, although that’s not certain – investors could simply switch to higher-end homes.

But it’s not clear how strong that effect will be, said Brett Ellis, head of The Ellis Team with Re/Max Realty Group in Fort Myers.

For one thing, he said, some banks continued filing foreclosures and getting judgments in existing cases, although there were some delays.

“I never saw a pause whatsoever,” Ellis said.

The Naples Area Board of Realtors does not make its sales and prices public.
Nationally, sales grew 10 percent in September to a seasonally adjusted annual rate of 4.53 million, the National Association of Realtors said Monday.

Still, sales could fall further if potential lawsuits from former homeowners claiming that banks made errors when seizing their homes make consumers fearful of buying foreclosed properties.
In a survey taken by the association this month, about 23 percent of the 2,000 agents surveyed said they have a client who is no longer interested in purchasing a foreclosed property due to the foreclosure-document mess.

“You’re going to see uncertainty on the part of homebuyers,” said Quinn Eddins, director of research at Radar Logic Inc., which tracks the housing market.

Mortgage applications to purchase homes last week were 29 percent below the same week a year ago, according to the Mortgage Bankers Association. At that time, buyers were rushing to purchase homes to qualify for federal tax credits.

Florida Property Bottoming out?

Distress sales boost existing-home prices.
By Mary Shanklin, Orlando Sentinel.

Orlando’s existing home prices climbed more than 5 percent in September, rising to $105,000 from $99,900 in August, according to a new report from the Orlando Regional Realtor Association.

The price increase, up from a 12-year low during August, was driven by a 10-percent price hike for short-sales prices and a 3-percent boost in prices of bank-owned houses. Those sales represented more than 70 percent of the market activity in September. Prices for “normal” sales – houses that aren’t sold in distress – were down 5 percent from August.

Members of the association completed sales on 2,226 homes in September, which is 13 percent decline from August and a 3 percent decrease from September 2009.

“What we are seeing is that a huge backlog of pending sales have finally worked through the system,” said Re/Max Town & Country agent Kathleen Gallagher McIver, chairman of the association. “Going forward, I now expect both the completed sales and pending sales columns to be lower compared to the previous year.”

The association noted that, to date, home sales are up 32 percent over this time in 2009.

There are currently 16,359 homes listed for sales on the area’s multiple-list service. The September inventory level is 2 percent higher than it was in September 2009, when 15,967 houses were listed for sale. The current pace of sales translates into 7.4 months of supply; September 2009 recorded 7-month supply.

Homes spent an average 88 days on the market before coming under contract in September 2010. In September 2009, houses were on the market an average of 96 days. The area’s average interest rate decreased in September to 4.46 percent.
Throughout the four-county metropolitan area, September sales volume exceeded the pace from a year earlier:

•Lake: 9.6 percent above 2009, with 3,224 homes selling to date this year

•Orange: 27.5 percent above 2009, with 14,629 homes selling to date this year.

•Osceola: 17.6 percent above 2009, with 4,813 homes selling to date this year.

•Seminole: 41 percent above 2009, with 4,396 selling to date this year.

Take a ride on High Flying Florida

Press Release (July 27, 2010)

Time To Take A Ride On High-Flying Florida

Figures released last month have indicated that the Sunshine State has become a prime holiday destination once more for both US, and overseas visitors. Visit Florida, the official tourism arm of the state, announced that in the first quarter of 2010 an estimated 22.7 million holidaymakers descended upon the golden coast – an increase of 2.7 percent on the same period last year.

The breakdown of the figures show that 19.7 million US residents enjoyed Florida’s beaches, and waters, while there was an 8.1 percent increase of overseas visitors arriving at Florida’s airports for their time in the sun.

Ed Fouche, chairman of Visit Florida, was quick to extol the figures as great news for the state, and for its own efforts in promoting vacations in Florida, as well as an upturn in trips across the border by Canadians, which was up by 5.3 percent of the total.

“This clearly demonstrates,” he said, “that well-executed tourism marketing is a smart investment.”

It is a mantra that Ollie Booth, CEO of USA Property Investor, is also keen to echo.
“Florida is hot, in more than ways than one at the moment”, says Ollie, “and we are forecasting a surge in property investment in the next few months. With prices too good to miss, there has never been a better time to invest in the Sunshine State.”

For instance, in West Palm Beach, Orlando, you can purchase a 2-bedroom, refurbished condo with fantastic onsite amenities at a jaw-dropping 80% reduction from the original sale price. A 10% net yield on this rakes in a profit of $295 a month.

Or take a brand new 3 bed, 3 bathroom Orlando town house currently tenanted at $1,000-$1,100 a month. These are selling at just $99,950. A third phase of new-build will be available later this year – but the prices then will be starting from $155,000 per property.

“These are just some of the amazing investment opportunities that are currently available to investors,” says Ollie, “but the key word here is currently because with the new interest in Florida as a holiday destination, prices won’t stay this competitive for long.”

On current trends, new high-flying Florida could well spawn a new breed of high-flying investor.