From Super-Irrational To Irrational In Florida
The News Journal reports from Florida. “Several Volusia County beachside cities that saw their fortunes rise with the condominium construction boom are now finding themselves financially hamstrung by the same residential market because of crashing condo values. Condo values are more volatile than single-family homes because they are bought more often by investors, speculators and persons seeking vacation and second homes, said Jon Zolsky, a condo specialist with Fun Coast Realty in Daytona Beach.”
“‘When the market was crazy in 2005 and 2006, I would say 75 to 80 percent of the preconstruction buyers were investors,’ he said. ‘When we crossed that 50 percent mark we were in trouble because as soon as the market softened they walked away and left a lot of empty units and the market spiraled down as fast as it went up. We now have a glut with low prices.’”
“‘Too many people tried to capitalize on the boom times and prices went way up and way down,’ said Bill Roe, owner/broker of Ocean Properties in New Smyrna Beach. “We have steep discounts and as soon as the banks loosen lending again, sales will pick up. Any moment I expect to see the spiral start up with prices increasing as the demand from baby boomers and those retiring wanting a no-maintenance lifestyle and with no new condos being built to limit new supply.’”
From WINK News. “A new report from Florida Realtors shows hope on the horizon. Even though the number of sales dipped since last year, prices are on the rise for existing homes and condos in Lee County. ‘There are fewer toxic properties coming on the market, fewer foreclosures, and the ones that are coming on the market are typically higher-end,’ says Denny Grimes, with Royal Shell Real Estate in Fort Myers. ‘We’ve gone from a super-irrational market to, basically, an irrational market. Sellers aren’t necessarily clicking their heels when they’re walking out of closing, but they are being successful.’”
The News Press. “Fort Myers-Cape Coral is one of the most inexpensive places in the country to buy a house, but rents are far above average. Driving the high rents in Lee County is a continued influx of foreclosure refugees being kicked out of their homes, said Susan Lutter, broker for Fort Myers-based Gulf Waters Rentals and Management. ‘We still have renters saying, ‘Hey, I have to be out by Wednesday,’ she said.”
The Herald Tribune. “According to an analysis provided by Michael Saunders & Co. agent Robert S. Goldman, a 4.3-month supply of homes was for sale in North Port at the end of June — a ridiculously low number, considering that a six-month supply represents a healthy market and anything below that means sellers can begin pushing prices up. And there have been some early indicators that prices are rebounding.”
“But, in North Port, nothing is ever exactly what it seems. The drop in inventory had everything to do with the rob-signing crisis that broke out nearly a year ago. ‘The reality is that there is still a tremendous amount of inventory that is not yet for sale,’ said Dennis Black, a Port Charlotte real estate consultant. ‘You have people who are behind on their mortgages and the banks haven’t bothered to foreclose.’”
“Is it possible to steal a house? It’s a question residents in one Fort Myers neighborhood are asking after squatters moved into a foreclosed home on their street. After someone moved into a home that was vacant for two years, neighbors in one Fort Myers community took notice. ‘I was out of town and one of my neighbors told me someone moved in and sent me a picture with the power on,’ David McCarthy, a neighbor, told WINK.”
“Another neighbor said she went to welcome the new resident. ‘I said well we knew the previous owner and he said well they rented it to me. They saved it from foreclosure. They are renting it to me as long as I keep the house up,’ she recalled. But that was news to the previous owner, Daryl Moran. ‘One of my neighbors called me and said that someone had rented the old house and you had leased it to him. I said well I don’t even own it as far as I thought,’ Moran remembered.”
“He reluctantly left the home after declaring bankruptcy more than two years ago. ‘We should have stayed there but at the time I thought we were doing the right thing,’ he said.”
“Recent legal challenges caused many banks to halt their foreclosure processes leaving the houses in limbo. For instance, the bank has filed for foreclosure on Daryl’s home but it’s not finalized so it’s still in Daryl’s name. The owner on record has to file for eviction and the squatter is banking that the owner who walked away from the house won’t care enough to file. We tried to ask the people in Daryl’s former home if they were squatting. Even though there was a car in the driveway, no one would answer the door. As long as they’re still in this home, the neighbors say they’ll be on edge.”
The Philadelphia Inquirer. “John Aguiar is a veteran of the Gulf War. Aguiar and his wife, Syrena, built a house in Cape Coral, Fla., after relocating from Chicago to be nearer her parents. Using proceeds from the sale of their Chicago house, they bought a lot in a new subdivision in the Cape, a middle-class suburb across from Fort Myers in southwest Florida.”
“But the mortgage, like so many at the time, contained a ticking time bomb. Their bank had given them an adjustable-rate mortgage, and soon they were struggling when their monthly payments ballooned. Then Aguiar lost his job in a housing-materials firm when his division was shut down. He cashed out a pension plan from a former employer, drained his 401(k) account, and worked part time at a Home Depot. ‘We did everything we could to try to hold on to the house,’ he said.”
“You can hear their stories almost every day at the Veterans Foundation of Cape Coral. ‘We have guys coming in here as often as you can imagine who are losing their homes and not knowing what to do,’ said Ralph A. Santillo, president of the group, himself embroiled in a foreclosure case on his own house. ‘They’re living on a fixed income, usually just Social Security, sometimes a little pension. All their costs are going up - insurance, taxes. Most times when people refinanced, they used that money just to keep up with their bills and pay their mortgage. So there was no real benefit. It was not like people were going to get rich and live off the money.’”
“‘There was stuff out there like no-interest loans or loans where you paid 1 percent interest,’ he said. ‘Then all of a sudden you find out two years down the road you are paying $5,000 a month. Some of these were usurious. They would have put you in jail for that years ago.’”
“When their bank refused their appeal to adjust their mortgage payment, foreclosure began and the family soon lost the house. John, Syrena, and their two school-age children moved in with Syrena’s parents. When John still couldn’t find work in Florida, he took a job with a trucking company in Chicago and moved in with relatives, separated from his wife and children by 1,300 miles. ‘We had the American dream,’ said Syrena, ‘and it was taken from us.’”
