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Cape Coral-Fort Myers Second Most Under Valued Market

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Real Estate Agent with Coldwell Banker BK3024917

The Cape Coral-Fort Myers area is the second most undervalued residential real estate market in the country, according to a new research report

That means this is a good time for investors looking to buy land, experts say.

 "Is land undervalued?" asked Fort Myers-based real estate broker RandyThibaut of Land Solutions. "Yes and no. Land prices for residential development land has bottomed out, it can't get much lower. But not commercial property."

Douglas Hannah, a partner in Fort Myers-based Silverleaf Capital Group LLC, which puts together deals for investors, said a lack of demand has caused prices to fall sharply since the boom ended late in 2005.

"Because it was overvalued (in the boom), it's really swung back," Hannah said. "We just bought some freshwater lots for 10 grand apiece that would have been 150 grand four years ago. They're down more than 90 percent. Are they worth 10 grand today? Maybe they are, maybe they're not, but because there's an oversupply of homes, there's no market for them here.

There are a lot of local opportunities now, Hannah said. We're aggressively bullish on real estate in Southwest Florida right now," he said.

Lee County's homes, with a median price of $112,800, were selling for 40.5 percent under value in the fourth quarter of 2009, down from being overvalued by 31.5 percent at $236,200 four years earlier, the report by financial consulting company IHS Global Insight states. Las Vegas, Nev., was No. 1, undervalued by 45.3 percent at $123,000 compared to being overvalued by 35.3 percent at $287,000 four years earlier.

 But Michael Timmerman, a Naples-based senior associate with Fishkind & Associates, an Orlando-based economic consulting firm, said he doesn't agree that Lee County's property values are that much out of whack. The Global Insight survey, released Friday, looks at too short a time frame to be accurate, he said. "From the point of view of overall fundamentals, if you look at 1980 to today, we're probably about where we should be, maybe a little below that," Timmerman said. "It's all in the eye of the beholder."

He was also skeptical about another, contradictory survey released this week by Money Magazine predicting that Cape Coral-Fort Myers home values will fall 5.6 percent in the coming year. The report predicts the Naples area will fall 10 percent. People generally are better off not making decisions based on how they think home values will change, Timmerman said.

 "Real estate is for use, your home, your office," he said. "That's how real estate should be viewed."

Source:News-Press 3-25-2010