The long-predicted wave of buyers back into the marketplace has finally begun in Southwest Florida, but not because home prices have magically rebounded. The reason for the excitement and flurry of activity is that banks have finally capitulated. In their haste to unload their ever-increasing inventory of foreclosure properties, large lenders have put hundreds of new or nearly-new houses on the local market at as little as 30-40% of the price they commanded when first built only a few years ago. Just this Friday a customer of mine closed on an 1800-square-foot 3/2/2 in a great neighborhood for the contract price of $95,500. The next day I was tagging along with a Realtor who was showing a two-year-old, 1400-square-foot 3/2/2 home in excellent condition with a list price of $89,600. In 2005, that same model sold for $250,000. At today’s prices, my clients are securing complete monthly housing payments (including taxes, insurance, and everything) of as little as $750 - $850, and with out-of-pocket costs of no more than a small earnest money deposit (refundable at closing), and the cost of a home inspection.
There is a link on my web site (www.hometeammtg.com) to a detailed list of 30 homes in Lehigh Acres which are listed for less than $125,000. There are additional filters in place as well: all of the homes shown were built after 2000 and all are move-in ready. I compile the list weekly, and lately it has been more like 40 or 50 homes long. By the time I update it every week, there are usually 10 or more homes on the list under contract (showing as “Pending” status).
In conclusion, this is a wake-up call to all of you teachers, single mothers, and professionals making $30,000 to $40,000 a year who have been waiting for houses to become affordable. If you are renting a house (or apartment!) now for $800 a month, it is very possible you could be using that same money to pay a mortgage. The tax benefits alone make this worth considering. However, the window of opportunity is not guaranteed to stay open forever; interest rates remain low, but lending guidelines tighten by the week. 100% financing is still available today, but it may not be for long. Do your due diligence, but don’t put it off another year.
Just as the best moment to sell at the top of the bubble was, in hindsight, probably August 2005, we may look back in a few years and declare that the ideal buying time was March 2008.
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