Paradise Still Has A Price In Florida
The Palm Beach Post reports from Florida. “The stock market’s harrowing free fall Thursday made stomachs lurch harder than the twists and turns of Walt Disney World’s Space Mountain. But it’s how the 513-point Dow Jones dive impacts visitors to the Magic Kingdom, as well as baby boomers’ retirement accounts, senior citizens’ investments and foreigners’ homebuying ability, that Florida should be watching. Mark Vitner, a senior economist at Wells Fargo noted that South Florida could be hit particularly hard by a plummeting market because of its many retirees and their investments.’
“‘Clearly, you’ve got some people feeling a little less wealthy than they did a few weeks ago,’ he said. ‘We’re not just talking about investment banks going belly up; we’re talking about countries going belly up.’”
“Economic turmoil in those countries could negatively affect Florida tourism, but also homebuying. About 22 percent of all foreign homebuyers nationally chose properties in Florida last year, according to a survey by the National Association of Realtors. ‘What will help us is we don’t have a big speculative bubble in housing,’ said William Stronge, a senior fellow at the Economic Development Research Institute in West Palm Beach. ‘We’ve already gone through all that and we’re not going to have that again.’”
The Associated Press. “As Americans worry about the economy and debt ceiling, international investors still perceive the U.S. as ‘the most reliable country in the world,’ said Andrew Hellinger, chief executive of Coral Gables-based Hellinger & Penabad. ‘We are a country where you can place your money for investment and know it’s safe.’”
“Stephan Gietl of Austria and his partner Fernando Levy-Hara, of Argentina, have purchased 307 South Florida condo units for $40 million, since 2009. The duo has sold most of the units, mainly to international investors. Levy-Hara says the units yield between 5 and 6 percent profit per year after maintenance fees and property taxes. ‘With the potential appreciation, if you’re buying at half the price of the bubble, you have the potential to go up 60 to 70 percent in the next five years,’ he said.”
From WINK News. “H.G.T.V.’s House Hunters is about to give the nation a real look at Southwest Florida’s housing market and Cape Coral RE/MAX realtor Victoria Yereance hopes it sets the record straight. ‘My decision to participate was not to get the message out about how unrealistic some of these buyers are but really to say, here’s what’s really going on that you aren’t seeing or reading elsewhere,’ Yereance said.”
“‘Don’t get me wrong, there are still really good deals to be had here,’ Yereance said. ‘Two years ago we were deeply discounted. This year? We’re just ‘discounted’ and the property values are going to go up.’”
“Experts say just remember: paradise still has a price.”
The Miami Herald. “Ex-teen heartthrob David Cassidy and the Miami Lakes bankers are entangled in a tug-of-war over a $1.35 million-condo that Cassidy bought in Fort Lauderdale in 2005. BankUnited drew first blood by filing a foreclosure action against Cassidy when he stopped making payment on its $900,000-exotic mortgage. ‘It’s a strategic default,’ says Cassidy’s lawyer, Jeff Harrington.”
“And Cassidy’s fighting back. He’s counter-suing for fraud. Bank officials declined comment. In their court action, they claim Cassidy now owes $916,488.62. Cassidy listed the 34th floor condo at the Las Olas River House for $1.1 million.”
The Orlando Sentinel. “Orlando continues to struggle with a bigger share of underwater homes than any other metro area in foreclosure-scarred Florida. Retiree Dorothy Nypiuk has not missed any of the $2,400 monthly payments on the $287,000 house she and her husband bought in theConway area more than a decade ago. They are struggling to pay the mortgage along with their medical bills, but at this point they aren’t ready to walk away from the house, even though it is now worth only about $200,000.”
“‘My husband doesn’t want to do that,’ she said earlier this week. ‘He has a hobby: He works in the garage on radio-controlled airplanes. If we let the house go, what would he do? Where would he go? It would be just like putting him in a coffin someplace.’”
“Maitland real-estate agent Dan Duff said Central Floridians’ attitudes about losing their homes have changed a lot since the market began its slide four years ago. ‘First there was the shame factor, and then came the mad factor, when they tried to destroy their houses to get back at the banks,’ Duff said. ‘In the last 18 months to 2.5 years, it’s been about strategic foreclosures. … Just about everybody knows the banks aren’t going to come after them. There’s too many people out there, and the banks haven’t come after them all yet.’”
The Sun Sentinel. “Board-certified real estate attorney Gary M. Singer answers housing questions. Q: I own an investment property that I have stopped paying on… Recently, the lender filed a lawsuit against me to collect on the note, but it is not trying to take the property back in foreclosure. I have money in the bank and other assets. I called the lender, and it doesn’t really want the property back. I am afraid that the bank will come after my other assets. Can it? – Anonymous.”
“A: Yes. This is getting to be a much more common trend. First mortgage lenders are starting to decide that they really do not want the responsibility of owning the property, especially if it has a low value or is in disrepair. Second mortgage lenders realize that even if they foreclose the property, the first mortgage lender is going to get all of the proceeds from the foreclosure sale, leaving the second mortgage holder with little more than a legal bill.”
“The lenders know that a promissory note case is much easier — and cheaper — to bring than a foreclosure action and can be finished much faster. After the lender wins the lawsuit on the promissory note, it will get a judgment that it can execute against your other property, your bank accounts and even your wages. Plus, it still has the mortgage lien against the original property, so it can go back and take that at a later date if it decides to. I have long advised my clients that this is one of the real dangers in ’strategic defaults’ and it looks like the lenders are starting to catch on, at least a little.”
“Further, it is too late to try to transfer the assets as most states have a two-year, look-back period for fraudulent transfers made for the purpose of hiding assets to creditors. The best thing that you can do now is to fight your lender in court and try to come to some sort of settlement.”
“A prime swath of vacant land in Jupiter was sold last month to homebuilder Otto “Buz” DiVosta. The parcel, which contains nearly 300 acres and is the last large piece of undeveloped land in the town, is known as Parcel 19 and was owned by WCI Communities Inc. Sources familiar with the deal say DiVosta paid a rock-bottom price of only $6 million for the land.”
“In 2005, WCI sold off about 500 acres on the south side of Indiantown Road to Toll Brothers for a different number: $100 million. Toll Brothers developed the Jupiter Country Club there.”
“Once a local powerhouse, Dan Catalfumo’s construction empire is fading rapidly. Banks are breathing down Catalfumo’s neck, a consequence of the real estate recession: His holdings have been slammed in the past two years by lender suits seeking $100 million-plus, several of them naming the highflying multimillionaire builder personally.”
“A come-from-behind deal is believed to have netted Catalfumo $25 million: last year’s bulk sale of unsold luxury condos in Riviera Beach, twin resort towers developed and built by Catalfumo. Given the upscale condos’ sluggish sales, that would seem to be a real estate coup. But he might have received much more early on. That’s because pre-construction, during the real estate boom, developers were interested in buying the property as soon as a resort condominium was permitted. By some estimates, that would have put $50 million or more into Catalfumo’s pocket.”
“Catalfumo went his own way, though, sources said, determined to develop the building himself and sell condos in what was a white-hot condo market. He poured tens of millions of his own money into the luxury development, the sources said. By 2007, when the market stalled, lawsuits to recoup deposits as prospective buyers tried to walk away from their purchases and new buyers failed to materialize. It was a $100 million blow.”
“‘The 160-plus buyers turned into over 100 defaulting buyer lawsuits instead of closings for in excess of $100 million,’ Catalfumo told The Post.”
“Few are counting Catalfumo out. ‘I don’t think anybody really cares ‘ about the cluster of lender lawsuits, said Neil Merin, chairman of the West Palm Beach commercial real estate investment firm Merin Hunter Codman Inc. ‘We just know this is how Dan does business. When times are good, he’s here ; when times are bad, he’s gone.’”
The News Press. “When Krista Davis drives around town, through road-widening projects and around new housing developments, she can almost imagine she is back in Southwest Florida in boom times. Then, the parched air blowing through the 40-story downtown skyline — and the mere fact she is driving to work — reminds her she is in Fort Worth, Texas. ‘There is just so much work going on here and so much happening all of the time, it almost reminds me of Southwest Florida a few years ago,’ said Davis.”
“Davis and her fiance, Cape Coral native Matt McFalls, moved to Texas last year after both lost their jobs here and lost their home to foreclosure. ‘We stuck around for about six months to try to find work, but there just wasn’t anything,’ Davis said. ‘We couldn’t wait any longer.’”
“‘Texas is creating a lot of jobs right now, no question,’ said Gary Jackson, director of the Regional Economic Research Institute at FGCU. ‘It is little concerning because a lot of those jobs are high-skill jobs. We would certainly like to keep those high-skilled people here. But, if we are not employing those people, can we really consider it a loss?’”
“Agents sold 107 homes on Sanibel from January to mid-June - including nine between $2 million and $5 million - compared to 88 homes sold during the first half of 2010. During the past four months, inventory was down on Sanibel by 17 percent. Agents say it’s a result of buyers adapting to new market values, and coming to terms with what their homes are worth.”
“After too many months on the market, some sellers are lowering their asking prices on Fort Myers Beach as well, said Isabelle Wells, of Coldwell Banker Residential Real Estate on Estero Boulevard. ‘People, after two or three years, are getting a little bit more realistic and they drop the price,’ she said.”
“People from out of state - who make up the bulk of island buyers - sometimes have perceptions that prices are still at unprecedented lows. ‘Even if you drop to a great price, they’re still going to argue with you that it’s too much,’ Wells said.”
“The average listing price on Fort Myers Beach was $480,154 as of the end of July, according to Trulia. Median sales price was $300,000.”
“Greg McBride is the senior financial analyst for Bankrate Inc., a financial-research firm in North Palm Beach. While some in the the housing industry complain that lenders have overcorrected for the financial wrongs of the housing bubble five and six years ago, McBride says the new sobriety in lending is just a return to pre-bubble normalcy.”
“Q: Higher down payments are not a new concept — they used to be routine, didn’t they?”
“A: Loan-approval standards are not appreciatively different than they were 15 or 20 years ago. And 15 or 20 years ago, you didn’t hear people screaming that nobody can get a loan. You didn’t hear anyone screaming, ‘Who are we going to sell all these houses to if nobody can get a loan?’”
