A Very Unrealistic Market
The News Herald reports from Florida. “Bay County’s foreclosure rate is among the top third of 67 counties in Florida— a state that ranks No. 3 in the nation for foreclosures, according to the state Agency for Workforce Innovation. The county court system is flooded with foreclosures, deputy clerk Virginia Starling said. ‘We have them coming in box loads — that’s not including what comes in the mail,’ Starling said.”
“Lindsay Hall, 68, is among thousands of Bay County property owners stuck in homes worth less than they owe and facing foreclosure. Hall is about to lose her two-bedroom cottage to foreclosure. ‘At my age, I can’t be on the street,’ Hall said.”
The Press & Guide. “City officials say they’re ready to put Dearborn Towers on the market after receiving the last of three appraisals for the Florida property earlier this year. The most recent appraisal put the value at $2,8 million, with the current restriction-limiting residency to people from Dearborn. However, if that restriction was dropped by new owners and rents raised comparable to those of surrounding buildings, it would be valued at $5.8 million. The first appraisal, submitted in March 2008, estimated the then-current market value of the 78,560 square foot property at about $5.6 million.”
“That’s a far cry the property’s estimated value in 2007, which was between $8 million and $8.3 million according to an informal appraisal.”
“According to a 2010 appraisal performed by Integra Realty Resources of Tampa Bay, the populations of both Clearwater (Pinellas County) and the state of Florida were anticipated to increase by an average annual compound rate of 1.04 percent and 2.02 percent, respectively, for the period between 2009 and 2019. ‘That means people are still coming to Florida, they’re just renting more now,’ said Dearborn Mayor Jack O’Reilly.”
The Sunday Business Post. “Irish investors, including well-known names in the business world, could lose up to $90million they invested in the buyout of a hotel on the Sawgrass golf course in Florida. About 100 investors, mainly high-net worth individuals, were involved in the $220 million buyout of the Sawgrass Marriott Golf Resort & Spa at the height of the boom in July 2006.”
“The investors put up about $90 million in equity and the remainder was funded with debt from the commercial lending division of Goldman Sachs in the US. Following the buyout, they borrowed a further $30 million to invest in upgrading the 65-acre resort. At the time, investors were told they could expect to make a 2.5 times return on their investment by selling or refinancing the resort by 2009.”
“However, the resort was last week granted Chapter 11 protection by a bankruptcy court in Florida after Goldman Sachs moved to take control of the property. It had not received payments on the outstanding $193 million in debt since last August. One investor described its difficulties as ‘a balance sheet issue, and not an operating issue’ and said that there was long-term value in the resort, which has planning permission for 500 more housing units.”
“‘The best outcome is that a third-party investor comes in to work with Goldman and with us to make sure it comes out of Chapter 11 and keeps trading,’ said one investor. He acknowledged that the Irish investors could see much of their investment wiped out.”
The Orlando Sentinel. “Two years after swallowing the troubled mortgage giant Countrywide Financial, Bank of America trails other major U.S. lenders in resolving troubled home loans through short sales or modified loan terms. Clermont resident George Simmons said he is now totally frustrated, having tried for more than a year to get Bank of America to convert a series of trial modifications into something permanent.”
“‘Let’s see, the last correspondence I had from them said they didn’t have my income-tax return and my Social Security records,’ Simmons said. ‘I sent it to them so many times. I’ve got my fax receipts and my certified postal receipts. They just keep asking for the same paperwork over and over and over again.’”
The Tampa Tribune. “Pasco County’s taxable property value will continue to decline in 2010-11, by 11 percent, according to estimates released Friday by the property appraiser’s office. ‘We’ve seen the bottom just fall right out’ of the housing market, Property Appraiser Mike Wells said Friday. ‘People were buying houses that had no business buying a house. It’s not their fault. Everybody wants to own a home. It’s a mess, but it’s going to right itself.’”
“Just not in the next fiscal year, or the one after it, Wells predicted. ‘The Save Our Homes (property tax amendment) is practically nil now because we’re in a declining market,’ Wells said. ‘For 2011, residential (property values) will probably go down a point or two, but it’s about hit the bottom. I don’t think we’ll see a rise in value for some time. There are too many houses for sale.’”
The Sun Sentinel. “Coral Springs and Parkland have a significant number of homes in foreclosure, but Colleen Stobinsky, managing broker of the Coral Springs Prudential Florida Realty office, believes the future is not all gloomy. ‘The outlook is far more positive for the two cities compared to some of their neighbors who are experiencing much higher numbers and a slower rate of sales,’ Stobinsky said. ‘This is because of the greater demand for homes in Coral Springs and Parkland.’”
“Q: For someone looking to buy a home, is this a good time to buy? A: It is an excellent time to buy; home prices are now more affordable and interest rates are at all time lows. You also have the tax credit for first time buyers.”
“Q: Do you think house prices are ever going to appreciate the way it did from 2002 to 2007? A: I do not think we will see home prices increase like they did in 2002 to 2007; that was a very unrealistic market. But the real estate market will come back, it always does.”
The News Press. “To buy or rent? For many people, that is a question they consider when it comes to housing. But thanks to a tax credit for home buyers passed by Congress in 2008 that has been extended and amended twice, that decision has been a little easier for some.”
“Realtor Bob Oxnard said he expects people will be rushing to finalize deals by April 30. ‘I think April will be the biggest month of the year in terms of homes going under contract, or ‘pending sale,’ Oxnard said. ‘I am already hearing that some people are abandoning contracts on short sales since they are not sure they can be accepted by April 30.’”
“In Southwest Florida, Scott Gasparini and Kim LaMantia are among those who have taken advantage of the credit. ‘The tax credit is the No. 1 factor for why I bought a house,’ said Gasparini, 27, who moved to the area about a year ago from Connecticut and closed on a three-bedroom, two-bath single-family residence last month in the Cypress Pointe neighborhood.”
“Gasparini, who started exploring for homes last September, said he didn’t know the details about the tax credit at the time. But then his Realtor showed him how he could buy. ‘At first, I really didn’t know the details,’ he said. ‘But by December, I decided I wanted to buy and the tax credit, 8,000 free dollars, was the main reason.’”
“One concern about the tax credit is whether there will be a significant market slowdown once the program ends. Oxnard said he was doubtful about that.”
“‘I think all of us will be too busy in May to decide if the market is slowing dramatically, and we typically get an uptick in the real estate business in June since it is such a busy real estate month nationwide,’ he said. ‘I believe the whole real estate market is getting better because of fundamentals like reduced supply and lower prices. … I think people will realize the bottom is past and will lose the reluctance to commit.’”
The Marco News. “Several Marco Island City Council members proposed that the Code Enforcement Board have the power to reduce fines if a property is out of compliance, particularly when code fines on the foreclosure property are so expensive that no one will purchase the growing liability and fix the problems. Lowering fines before problems are fixed won’t work and time will be wasted negotiating with non-committal owners, some code board members have said.”
“Members of the code board declined the power that City Council Vice Chairman Frank Recker proposed they have on Monday. ‘I was baffled and shocked when he (Code Board Chairman Tarik Ayasun) said he didn’t want it,’ Recker said.”
“Proponents of the change in policy say it’s the only way to remove a stalemate in selling foreclosed homes. Marco resident Charlie Vollmer lives next door to a rat-infested abandoned property on a street peppered with homes worth nearly $1 million, according to Collier County Property Appraiser records. He thinks lowering the fines for the home at 266 Seminole Ct. may be the only way to protect the city and neighboring properties from a failing seawall.”
“‘My property is eroding into the canal… It’s falling into the drink,’ Vollmer said.”
“Most people won’t fix a property until they own it and the fines are too high to encourage a buyer, he added. The code fines on the home are about $270,000 and accruing at a rate of $500 per day, including a $250 per day fine for failure to connect to the sewer system and the $250 per day fine for the fallen seawall, reported Chief of Code Compliance Eric Wardle. Andrew Delgado of Premier Plus Realty listed the house for sale at $299,000.”
“Homeowner Lazaro Carret was first cited for the seawall failure in February 2007. Carret purchased the home in 2006 for $600,000 and couldn’t afford the repair, he reportedly told code officers. ‘He just threw away the keys,’ says Vollmer.”
“Carret owns another home on Bald Ealge Drive purchased for about $750,000 in 2007, according to the Collier County Property Appraiser. Ayasun said lack of owners’ responsibility was among the reasons he didn’t want to reduce fines in foreclosure cases. ‘It just continues to add time because the people who come before us aren’t taking ownership anyway,’ he said.”
“A cash buyer was willing to pay the city 10 percent of the code fine, fix the seawall at a cost of $18,000 and pay the sewer assessment of about $20,000, Delgado said. That buyer is going to move onto other opportunities now, he added. ‘We’re at a four-way stop and nobody wants to move. Beautification and economic stimulus are being stifled by a poorly written code. You can call the owner a crook, a bad guy… It doesn’t matter, we’re all getting hurt by this. They’re not punishing the original owners, the deadbeats.’”
