It was 94 today and my pool was 92. Hard to cool off even getting wet. The real estate market in Lee County is experiencing the same heat. Sales are registering a blistering pace with 1742 pending resale homes in Lee County.
Inventory fell to 10,300 single family resale homes. That's one percent less than last month. Pending sales were almost 2% meaning there is new inventory still out pacing sales.
Of the sales, over 61% were under $100,000. With out these, sales would be 1072 less. This is the market that is on fire and where buyers are seeing values they can't pass up. Homes above this price are still facing an uphill battle with some upper price ranges facing 100 months of inventory. Current available inventory is available in real time at HOMEY.com
Still seeing this level of demand speaks well for the interest of people to be near our waters and living in the hot sunshine of SW Florida. The heat that's here even when the artic wind blows in the north. Remember to put the sunscreen on when your on the beach New Year's eve.
Tomorrow President Obama will visit Fort Myers for a townhall meeting. Here he will discuss the economy and our economic outlook. Both President Obama and this area have a long road to recovery ahead.
He is scheduled to visit Lehigh Acres and look at the foreclosure problem faced in this area. The media will no doubt talk about how bleak things look and no doubt they appear that way. However there is another view point.
Many people in this country and others would love the opportunity that is presenting itself if they only knew about it. When in the last 30 years can you remember a time when you could buy a newer home, close to the beach, where the sun shines on average 340 days a year. Where the temperature averages in the 70s and 80s and boats are almost as common as cars.
I think the media will focus more on the negative rather than the positive. So if you or anyone you know has ever thought about walking in the sand on a warm winter evening or playing some of the top golf courses in the country then tell them now is the time.
Sheep, Comptrollers and Rum provide much needed relief to wallstreet.
My reasons why the new and improved bailout plan is our new hope. A chance for a new beginning and will save our homes and economy from impending doom.
1. Increase in limit on cover over of rum excise tax to Pureto Rico and the Virgin Islands
While not well written "cover over of" know that on our next cruise or visit to the southern carribean we'll all be in good spirits! I could probably not even go into point 2 and 3 of why this great plan will work! Directly from the bill I kidd you not.
2. Study and Report on Margin Authority
Directly from the bill "The Comptroller General shall under take a study to determine the extent to which leverage and sudden deleveraging of financial institutions was a factor behind the current financial crisis." It does not say what this will cost, I'm sure a fraction of the whatever billion. Doesn't it make sense to you that this would be something we would have already done to determine how to fix and prevent the current problems. Maybe before we put pen to a 451 page bill that contains more cr*p than a biomass refinery. Which by the way is also in the bill... that we would have already done as much analysis as possible before something of this magnitude.
3. Extension and modification of duty suspension on wool products; wool research fund; wool duty refunds.
Now, there you have it. No pulling the wool over the public's eyes. We will all be rich next year from our tax break for the suspension on wool products and the wool research fund. I can't make this up.
Does this sound like I made this up. When I tell people about these subtitles and sub-sections they do not believe me. My dog looks at me this way when I try to explain carbon dioxide sequestration. If you don't understand this either search for "carbon dioxide sequestration" in the bill. You'll find it.
The bill is here in pdf format for your reading pleasure.
Do I think something needs to be done. Yes, when I make a bad decision there are consequences. There are people who need to pay for allowing this breakdown in our lending and banking policies. They were elected or hired to protect us from bad lending rules and wallstreet greed. There are CEOs and others that have profitted from this. Yes, we need intervention but we need accountability first or it will happen again. There you have it. Housing and economic crisis has been averted. You can now go do your income averaging for amounts received in connection with the Exxon Valdez litigation. You guessed it, also in this bill.
Three big questions are on everyone's mind today regarding the governments bailout of our financial institutions. 1) After a weekend to crunch options is this the best one? 2) Is it necessary? 3) Will it ultimately work? No one seems to have these answers.
Last week when the Federal Reserve and the US Treasury Department decided that we were in a mess and finally came to the realization of how dire a problem it is. This is my first problem. In a digital age where we wait for nothing, fast food, instant messaging and electronic everything, our economic system seems to still be using a quill pen. The definition of a recession to CNBC is 2 or more straight quarters of negative GDP. (Gross Domestic Product a measure of national income and output.)
To me that is like the TV weather reporter telling you it is clear out and it is pouring down the rain. STICK YOUR HEAD OUTSIDE AND LOOK BEFORE YOU SPEAK! Foreclosures, poor job outlooks, bad credit and failing banks have been here for months. Yet we have to wait until near collapse to be motivated enough to find try and fix it? We had to know in this age of instant everything, yet money puts blinders on many people. The plan does not seem to address people losing their homes. It does address saving big corporations who all have Wallstreet addresses.
Second problem I have with this type of intervention from our government. My father worked for 33 years for Bethlehem Steel from late 50s to the late 80s. He had a good job with a good US company. Foreign imports of steel and failure to be competitive caused the company to fail. My father lost his benefits and all that he had worked for. His retirement was worth zilch, zero, nada. No golden parachute for someone who dedicated his life to the company he worked for. In 33 years he had worked his way from shoveling coal to foreman of a mining operation when he retired. No government bailout either for this long time American steel company.
Last, lots of companies fail with good ideas and bad decisions. Some fail with bad ideas and good decisions. Yet they fail just the same. It is the price to be paid for mis-management. It is also the way our country was built. The strong survive, the weak, well they get bailed out in 2008...
I believe that Fed Chairman Bernanke and Treasury Secretary Paulson were on target to be afraid we were headed for a disasterous situation with our banks and money market funds. Maybe a year too late...
Wasilla's fame may indicate Sarah Palin's ultimate future
The Jeopardy category for $500 is Famous Hometowns. Alex Trebek reads the following answers: Indianapolis, Indiana; Carthage, Tennessee; and Casper, Wyoming. The contestants now have less than a split second to hit the button, signaling that they know the right answer (in the form of a question, of course).
I've discovered that you can't watch Jeopardy without playing along. My wife and I usually watch the show during dinner. Both of us are rather competitive, so we usually pay closer attention to the categories on the tube than the chicken on our plates. We try to be lightning-quick to be the first one with the correct answer. However, for the question posed above, both of us would sit in silence.
How about you? Would you know that the correct question is: "What are the hometowns of the last three vice presidents?"
What if the answer had been Plains, Georgia; Hope, Arkansas; or Crawford, Texas? Most of us would recognize these as hometowns of past or current presidents.
Don't you think it is strange that we know the hometowns of our presidents, but not the hometowns of our vice presidents? Sure, being the most powerful person in the world is a big deal, but the second most powerful person is still pretty high in the pecking order. Yet, less than half of Americans would be able to identify what side of the Mississippi River the vice president grew up on. That's sad, considering the odds of a correct guess are 50/50.
I wonder how many people know where Joe Biden grew up. Ask 20 people on the street, and 15 of them would probably ask who Joe Biden is. Even if they did recognize his name, few would be able to pick him out of a lineup, and an even smaller number would know where he is from. I don't recall seeing Greta Van Susteren or Geraldo Rivera running around Claymont, Delaware interviewing Biden's elementary school classmates. It wouldn't surprise me if Kristan Cole and Judy Patrick, both elementary school classmates of the Governor, have had more national air time than Mr. Biden.
Now, ask the same number of folks if they recognize the name Sarah Palin. Better yet, to make it fair, just show a picture of her. Unless someone just returned from four weeks in the bush, everyone would recognize the governor's picture or at least think it was Tina Fey portraying a vice presidential candidate on Saturday Night Live.
Face recognition is one thing, but it takes more than that to capture the interest of the nation. Jennifer Aniston may be one of the recognizable celebrities in the country, but most people's curiosity with her ends with wondering if she is still in love with Brad Pitt.
That is not the case with Governor Palin. America is starving for every tidbit of information they can find about her, her family and the town she grew up in. We know she wears Kawasaki 704 eyeglasses, uses Max lipstick and likes to crack jokes about pit bulls and hockey moms. We can recite the names of her five children (no easy feat if you are not a Van Halen fan). Her husband, the "first dude" as we have come to know him, has had more media exposure than Barack Obama's second dude.
However, what's most unusual is not our interest in the Palins, but rather our interest in the town that raised her. I have heard that since Sarah, as you locals call her, made her big announcement, you have had more reporters in Wasilla than moose. Anchorage is sold out of rental cars and the Windbreak Café is cooking up a storm. In fact, the only satellite uplink truck within 200 miles has been operating nonstop. Maybe a TV affiliate in Claymont, Delaware would consider selling its satellite truck to KTUU-TV in Anchorage, because they're not using it.
Some contend the media's main purpose for infiltrating Wasilla was to uncover information that could be used against the Republican ticket. I'm sure that was the motivation of many, but little did they know that the more air time they gave Wasilla, the more they raised the curiosity of the rest of the country, or as you call us, the lower forty-eight.
Wasilla has become the most talked about town in the U.S., and its name recognition is as strong as some recent presidents' hometowns. Is this a coincidence or could it be prophetic? Regardless of the outcome in November, what I have come to realize is that your governor - and possibly our next vice president - is the product of hundreds of good people like you, who call Wasilla home. The hand of God may have raised Sarah Palin to where she is today, but there is not a part of her life that doesn't bare your fingerprints.
Wasilla couldn't be located much further west from the center of the U.S., but it represents the same values, hopes and dreams of middle America. Wasilla isn't even considered to be in the "heartland" of our great country, although we are learning that you have a heart as big as your state. Your small town of 9,000 people has the attention of the world, and I believe that one day we will have much to thank you for.
Geographically, I live about as far away from Wasilla as you can get, yet I am proud to consider you a close neighbor. In fact, after some deliberation, I've come to the conclusion that you call the rest of the country the lower 48 for the wrong reason. You probably use that term because we are south of you, but I think it fits because the entire nation is looking up to you.
Wasilla, Alaska ...hum, seems like all the other vice presidential hometowns are just "palin" in comparison.
Author: Denny Grimes, CRS, ABR, MBA. Denny is President of Denny Grimes & Company, which is located in Ft. Myers, Florida. He can be reached at denny@dennygrimes.com.
Tropical Storm Fay has come and gone, but the rain it dumped on Lee County lingers. The ground is saturated and some streets are flooded. As much as we needed the rain, we are anxious for the way things used to be, like being able to walk to our mailbox without wearing our slickers.
Likewise, we witnessed our real estate market raining inventory for the past couple of years. It rained so hard and long that you could forget about walking to the mailbox, because the only way to get to it required something with Evinrude on the back of it. Our inventory is still at record levels, but we may have reached the high-water mark. In fact, in some sub-markets, inventory is receding.
A few observations after looking over the resale home contracts for July:
The number of homes for sale in specific submarkets is starting to dry up. Buyers are recognizing the value being offered today. Our real estate market, like the recent rain, had a problem with "run off." Buyers would make an offer on a property and if the seller didn't accept the offer, the buyer would just "run off" and make an offer on a different home.
Single-family homes that went under contract in July sold within 2 percent of the original list price and were on the market less than 45 days.
In contrast, homes that sold for more than a 2 percent difference from where they were originally priced and where they were priced when sold, took 148 days to find a buyer on average. More importantly, they averaged only 80 percent of the original list price. What this tells me is that when the numbers are in line, so are the buyers. Being realistic up front can save sellers money and time.
Buyers are recognizing a value priced home. In July 40 percent of the homes that went under contract had been on the market less than 30 days and went pending within 98.8 percent of the original list price. There was no run off as the buyers absorbed the value-priced homes. Having young families and first-time home buyers own and live in these homes is a foundation our market needs to be strong.
Last month in Lee County, under $100,000 there were 138 homes sold that were less than 5 years old. At that pace there is 9 months of inventory, while for homes older than 5 years old there are 12 months of inventory. This is a sale and a beauty contest all at the same time. The prettiest house at the best price goes first. In this case the newer homes that are value priced are the first to go.
Looking at Cape Coral there is 12 months of inventory for homes under $100,000. However, there is only six months of inventory for homes built in 2003 or newer. This puddle is drying up.
The opportunity to own a home less than 5 years old under $100,000 is limited. Homes under $150,000 will be the next to dry up. Most of these homes are below reproduction costs. The rain has stopped falling as the number of building permits being pulled has averaged less than 50 per month. There is now less than 14 months of inventory and only 12 months of inventory of homes built in 2003 or newer. New construction starts at $100,000 or just under with most builders. This typically does not include the home site, sewer, and/or water expenses. Buyers, the time to take advantage of the value is now.
This is not just true for the lower-priced homes. Homes in certain areas and at different price ranges are being recognized for the value they represent.
If you are a seller, the critical time is during the first few weeks. Ask yourselves "How many showings have I had?" If the answer is zero or a low number you need to act quickly and get your property priced to get noticed by the buyers that are out there.
There are still foreclosures that are flowing into our area like tributaries feed rivers. Foreclosures look to continue to add to our inventory levels and slow the drying-out process. The quicker this storm passes the faster our market will recover.
The media may paint a gloomy picture but you can still get sunburned on a cloudy day. So buyers, listen up: If you ever wanted to own a newer home the time is now. You better get those Ray-Bans on and start looking because the ground is beginning to show in a few areas. Remember it is better to buy one day early than one day too late.
This past Wednesday, July 30, President Bush signed the recently-passed housing legislation (H.R. 3221) into law.
The new first-time homebuyer tax credit went into effect immediately upon the President's signature. What is all means to for everyone is still being questioned. Many hope the credit will convert "Just looking, thanks" home browsers into purchasers. This is remains to be seen. The downpayment assistance now offered as 3% of the purchase price by FHA is set to go away October 1st. This should give many who are thinking about taking advantage of today's once in a life time buyers market prices something to get them out writing offers on homes.
Here are some items we do know:
1) The legislation has two principal objectives: to offer affordable government-backed mortgages to homeowners at risk of foreclosure, and to bolster Fannie and Freddie with a temporary rescue plan and a new, more stringent regulator.
2) A permanent increase in "conforming loan" limits. The law will permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to a maximum of $625,500 from $417,000. (Except in Lee county, the formula is 115% of the median price.)
3) A new home-buyer credit. The new law includes a tax refund for first-time home buyers worth up to 10% of a home's purchase price but no more than $7,500.
4) The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments.
5) A ban on down-payment assistance from sellers. The new law eliminates a program that has allowed sellers to provide down payment assistance for FHA loans. This alone could reverse everything the bill was designed to do.
6) The law would also increase to 3.5% from 3% the down payment requirement for borrowers getting FHA loans. Again this only makes it tougher for some to find the money to buy a home.
7) Bolster Fannie and Freddie - A late and controversial addition to the new housing law provides temporary authority for the Treasury to lend a financial hand to Fannie Mae and Freddie Mac if the Treasury deems it necessary to help stabilize markets. Concerns over whether Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) will have enough money to weather future losses in the housing market has sent shares plummeting in recent weeks. Since the beginning of June, Fannie's stock price has dropped 55% and Freddie's plummeted 64%. For the past year, they're both down over 80%.
"Denny, you have had our home listed for two months and it's still not sold. Don't you think we need to come up with some creative marketing ideas?" These were the words from one of my sellers this week.
Being a curious cuss, I asked them what they meant by "creative." They quickly shot me a couple of ideas like providing owner financing or being willing to lease-purchase the home. They even offered to vacate themselves, their kids and pets from the home, leaving their furniture and accessories behind. My puzzled look quickly prompted the explanation that they would be willing to move to a furnished rental so they (she) could have their life back. Cleaning the grout with a toothbrush every morning before work was cutting into the joy of home ownership. These sellers are not having fun. They are not alone.
Selling isn't for sissies, especially in this market. On the fun scale, putting the home you live in on the market ranks somewhere between being forced to attend a wedding (even your own) on any weekend day that happens to be sunny and a root canal without Novocain. It would stand to reason that if something caused that much distress a person would want to be put out of their misery as fast as possible.
Too many sellers make the choice to prolong the pain caused by the inconvenience of selling in order to avoid the greater pain of accepting the fact that the market value of their home is less then what they want or need. That's what prompts them to look for any alternative, other than a price change, that will shorten the sales time. There is no miracle cure, although I have heard that the maker of Night Diet, the diet pill you take at night that causes you to wake up skinny, is coming out with Night Sale. If you're lucky, they will throw in a set of steak knives with your order.
During the first quarter of 2008, there were approximately 2,500 pending home sales and 40 percent of those sellers were able to sell their home without changing their initial listing price. That does not mean the home sold for the asking price, because it probably didn't. It does mean that the listing agent gave good advice, and the sellers listened.
There is no such thing as painless selling in this market. The goal for sellers should be to minimize the pain. The successful sellers mentioned above had to deal with pain too, but they bit the bitter pricing pill at the beginning of the listing period, instead of months later. Their pain was short-lived because 60 percent of these sellers' property sold in the first 30 days. That is a manageable length of time to keep your home looking like nobody lives there.
Statistics also show that the faster you sell, the closer to the asking price you will get. For example, homes that sold in less than 30 days sold for 98 percent of the original asking price. But that percentage dropped to 94 percent, 89 percent, 86 percent and 79 percent for homes that were on the market 30, 60, 90 and 120 days respectively.
Another interesting fact is that if the property is not sold during the first 30 days the probability that it will sell without lowering the asking price drops by 66 percent. Of the 16,000 homes for sale it is alarming to see how many have been on the market for months at the same asking price. The real estate definition of insanity is to keep your property listed at the same asking price and expect different results.
Another benefit of selling fast is that you are eliminating market risk. Prices are declining, therefore the sooner you sell, the higher your selling price is going to be. I know a lot of sellers who wished they were realistic with their asking price 12 or even six months ago. The irony is that some of these sellers are still price resistant. I guess one can get used to driving a car by looking in the rear view mirror.
Success in this market is a team effort. The agent is responsible for an accurate representation, an appealing photo presentation and dissemination of the information to agents and prospective buyers. The seller controls the asking price, therefore the seller is the only one who can control the speed of the sale.
If your home hasn't sold yet, then you are facing one of two pricing scenarios. The first is that you have very little showing activity. This means that your home is priced so far out of the market that it is not even coming up on the buyer's radar screen. Your only course of action is a significant price reduction. The second scenario is that you have regular showings, but haven't received an offer. The good news for you is that your asking price is closer to market value, but you will have to tweak it a little in order to motivate a buyer to act.
I wish there was a magic potion, but that's it; there are no other answers, no painless quick fixes. I can come up with some creative marketing ideas such as hiring the Blue Angels to do delta rolls over the seller's home, but that won't cause it to sell. It will just make the day-sleeping neighbor mad.
I head up our research department and let me tell you I was glad Denny wrote this article. It is hard explaining the differences buyers and sellers when they read so much different information. It is our job to try and keep our clients ahead of the market and the investment we make in our data research plays a big part in this.
First Quarter posts double-digit improvement over ‘07
My voice mail message light was blinking when I arrived at my office one Monday morning four weeks ago. Believing optimism trumps pessimism, I envisioned the message would lead to new business; it would be a great beginning to a new week.
I was right, sort of. I could tell by the tone of the man's voice in the message that he was actually giving me the business because he did not like what he read in my latest article. I've learned that any message that begins with the words "Mr. Grimes" wouldn't be one I'd want to build my week on.
He basically accused me of lying in my article that came out in Sunday's paper, just a day earlier. I reported that pending sales for the first two months of the year were up 16 percent over the previous year. He was then kind enough to read from The News-Press that was tossed on his driveway early that morning. He gleefully read that "existing home sales have fallen since the beginning of 2007." I couldn't help but wonder why he chose to believe the more pessimistic of the two stories. He must be a potential buyer.
I'm a glutton for punishment, because I stand by my comment. In fact, let me update my report by saying pending home sales for the first quarter of this year are up 29 percent from the same period last year. Don't worry; there is plenty of room in my voice mail box, so if you feel you need to call and ball me out, be my guest.
Before you do, let me explain the reason for the discrepancy in the sales numbers. Notice, I use the word "pending sales," which means contracts that have been written but have not closed. The News-Press receives their monthly sales reports from the Florida Association of Realtors, and those reports use closed sales, although the word "closed" is omitted. I am trying to encourage them to add the word "closed," so it will be less confusing for the public.
Solid arguments can be made for both methods of measurements. Those that use the closed sales approach rightly state that a sale shouldn't be counted until it closes. Therefore, they only count closed sales. The disadvantage of that method is that closed sales measure what happened 30 or 60 days ago, not what is happening now.
The closed sales for January and February were lackluster because they reflected the market's velocity from last November and December, which are typically slower months. You will soon hear that sales (closed) are showing improvement. Why, because pending sales have been increasing, therefore there will be an increase in closed sales. It's not rocket science.
Your reporting method of choice will depend on when you like to receive your information. If you would rather watch The Masters via your TiVo over the Labor Day weekend, then you will prefer the closed sales approach. My preference would be to watch it live. Therefore, I prefer tracking pending sales because they reflect more of a real-time picture of the market's temperature. Sure, some of the sales will fall out and not close, but that percentage is as predictable as expecting Tiger Woods to be in the hunt during the final round. The bottom line is that sales are increasing, so why not talk about it now instead of two months from now?
The news today that foreclosures may have peaked spawned the headlines "Lee's housing market bottoms out."
Working in the industry and studying the market intently I often sit back and wonder what this means. Correctly put I believe that it should say Lee's housing market may have hit the TOP of the foreclosures. (Maybe)
We are really looking for different signs that point to recovery. At the end of the article there is a mention that baby boomers may in a couple of years come back into our market and revitialize it. I would argue that they already are!
The reason they left or stopped buying in the first place was our market became overpriced and was seen as overvalued. Our cost of ownership put many out of the market with insurance and tax costs. Now as our market corrects we are seeing the buyers come out and buy. Many are baby boomers from all over the country. Evidence of this was seen in the recent liquidation sale at Coral Lakes.
We may be seeing the top of the foreclosure market only time will tell. We need to see the top of the inventory growth and we have not yet seen that as our inventory grew again in March to just over 16,150 for single family resale homes. Sales were good but no enough to create a drain on the inventory.
We are feeling and seeing the bottom of the builder market as they are building and selling as low as we will see. As fuel and transportation costs rise so will builders costs and so will the cost to the buyer. If there is a builder with inventory or putting footers in the ground today, it may be the bottom for this sub-market.
We still have to work through the bank sales and short sales and this process is like trying to suck peanut butter through a straw.
Sellers are still hurting adjusting to what the market will offer for their home. This is hard as these foreclosures are really putting pressure on prices.
These tops and bottoms are all good signs just like watching a wound heal. Our market is healing and buyers are starting to realize that the deals are here and now.
Michael Polly - Vice President Denny Grimes and Company
Lee County Florida's Real Estate Market
The ins and outs of sticking your toes in the sand when the sun is beating down in December. Finding just the right home or condo in Fort Myers or Cape Coral. Helping people understand to to buy and deal with foreclosures, bank owned REO properties and short sales. Opportunites exist and The Real Deal is my attempt to give you my perspective from the heart of our real estate world here in south west Florida.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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