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SPECIAL REPORT: Market turning around for $300,000 and under homes
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Rick DeMinico figured he had nothing to lose.
A few months ago, the young, single salesman for the food service company Sysco in Naples made an offer on a house that he describes as “a little absurd.”
“It was $40,000 less than they were asking for it,” he recalls. “We battled it out and they came down.”
The asking price for his two-story, three-bedroom townhome at Bristol Pines off Collier Boulevard was $249,000. He paid a little more than $200,000 for it _ all he could afford.
The tables have turned in the local real estate market.
A few years ago, it was tough to find a home under $300,000, let alone under $250,000, especially in the Naples area. Now, they’re in the hundreds.
In 2004 and 2005, a frenzy of investors snapped up homes, pushing prices sky high in Southwest Florida.
Community leaders scrambled to try to deal with what became known as an “affordable housing crisis.” The median price for a single-family home in Collier County peaked at $592,500 in February 2007. Now, it’s down closer to $400,000, as sales have slowed and housing inventories have grown.
“The market is feeling like it’s near the bottom,” said Stuart Kaye, owner of Kaye Homes, a Naples homebuilder since 1985.
Doors open
The American dream of home ownership is still out of reach for many low- and moderate-income earners in the region because of shrinking budgets, a tougher economy and tighter lending restrictions.
But falling prices are opening up doors to some who never thought they could afford to buy.
With the more affordable prices and lower interest rates, showings and sales for homes priced at $300,000 or less have picked up over the past four or five months, Realtors say.
“Certainly you can help a lot of people right now,” said Michael Sopka, a broker-associate for Amerivest Realty in North Naples, who found a home for DeMinico.
At 31, DeMinico longed to buy his first home and decided the time was right after watching prices fall. Though he’s only lived in the area a few years, he knew about the ups and downs of the market because his parents bought a home in Naples in 1989.
His home, which cost him about $207,000, is new and in a gated community with basketball and tennis courts, and a fitness center.
No one else has lived in the home. Like so many others investors, the original buyers purchased it in hopes of turning it around for a quick profit and then got caught with a home they didn’t want when the market soured. The home sat on the market for more than a year, DeMinico said.
“I got lucky,” he said. “They just wanted to unload it because they wanted to sell it. They couldn’t really rent it.”
His Realtor also worked with TIB bank to get him a loan that only required a $600 downpayment.
Not alone
Second-home buyers and retirees also are taking advantage of the lower prices.
Gary Gilchrist, a retired school superintendent from New York, recently purchased a condo in the Park Shore neighborhood in Naples for less than $300,000.
The asking price was $319,000.
Gilchrist, 61, looked all over town at dozens of other listings in his price range. He chose his home mostly based on its location.
He can walk almost anywhere he wants to go: to his computer classes, to the gym, to the grocery store, to the beach.
“Some days I don’t even drive my car. I don’t have to,” he said.
His condo is one of only 12 units in a development called Pasada. A few years ago, it probably would have cost him $400,000, more than he could comfortably pay.
Lots of choices
A search of the Multiple Listing Service on Friday showed 899 single-family homes for sale at $250,000 and under in the Naples area.
In Bonita Springs there were 159 and in Fort Myers there were 1,406.
On top of that, there are now hundreds of condos for sale in that range.
That’s good news for Dean Mann, a broker-associate for ERA Faust Realty Group in North Naples, whose company targets the working people.
“Business is basically pretty good. It’s not as good as it was years ago,’’ he said. “But it is coming back. People are starting to realize the homes are affordable.”
He doesn’t expect the really good deals to last long. By next year, he thinks prices in this range will be back on the rise.
Joe Ballarino, president and founder of Amerivest Realty, searched his Web site for homes the other day priced at $150,000 or less and found 579 results for Naples, which he said seemed almost unbelievable.
“The chart for pending sales under $250,000 is off the charts,” he said.
Though the Naples Area Board of Realtors (NABOR) has yet to finalize its March numbers, sales in that price range for the month are likely to to be more than double what they were a year ago, Ballarino said.
For several months, NABOR’s reports have shown most of the activity happening in the lowest price range. Single-family home sales below $300,000 increased to 45 in February from 27 last year, while condo sales in that range rose to 83 from 61 last year. Meanwhile, median prices in this bracket have continued to fall.
Doing the math
After crunching some numbers, homebuilder Kaye found that in the first quarter of this year there were 192 homes sold through the Naples Sunshine MLS for $300,000 or less, compared to 119 a year ago, a more than 60 percent increase.
Sales in this lowest range accounted for more than 30 percent of the total in the first three months of this year, compared to less than 20 percent a year ago, Kaye said.
In 2007, there were a total of 619 sales for the quarter, versus 573 this year, he said.
In February 2007, agents at Downing-Frye Realty Inc. in Naples wrote 25 contracts for homes below $250,000. In the same month this year they did 61.
In March, agents wrote another 88 contracts in the same price range, up from 26 a year ago, broker Mike Hughes said.
“That really helped our overall numbers,” he said. “Overall, our contracts were up 22 percent over the previous year. Sales volume was up slightly.”
The company had a total of 235 sales in March. Last year, there were 192.
It’s not just transactions that are up at Downing-Frye.
Sales volume picked up 19 percent in March, compared to a year ago, Hughes said.
“We are seeing a lot of sellers realize what the current market is, and if they really want to move their property then they get aggressive in their listing prices, and that certainly helps,” he said.
On some homes, asking prices have dropped by $100,000 or more in recent months.
Dragging down
In the past year, mounting foreclosures and short sales, where lenders allow homeowners who can no longer make their mortgage payments to sell their homes for less than they owe, have dragged prices down in Southwest Florida.
In January and February, the Cape Coral-Fort Myers area had the highest foreclosure rate in the country, according to California-based RealtyTrac Inc.
Lee County broke a foreclosure record in February with 2,461 filings, up from 2,297 in January.
These days, it’s much more common to see these phrases on a listing in the MLS: “Short sale, bring all offers” or “This property has just entered foreclosure.”
When he last did a count in February, Matt Steves, with Prudential Florida WCI Realty, found 628 short sales and 72 bank-owned properties in the Naples Sunshine MLS. He lists them all on his Web site, www.funinsunnaples.com.
Not in Port Royal
When it comes to finding the deals, there are many places to look, including East Naples, Golden Gate Estates and North Naples. In Lee County, many of the most affordable homes can be found in Cape Coral and Lehigh Acres.
“You know they are all over,” Ballarino said.
Well, almost all over.
“You won’t see them in Port Royal,” said Hughes, with Downing-Frye.
Or anywhere else along the Gulf of Mexico. Most of the affordable homes are found east of U.S. 41, away from the water.
In south Lee County, deals can be found at such upscale golf communities as Bonita Bay and Pelican Landing.
A few weeks ago, Mary Catherine White, a Realtor at Amerivest, had floor duty. She got a call from a couple from Chicago looking to buy a retirement home in the area where they could spend part of the year. She took them out the day they arrived in town, and by the next day they had made an offer after finding a great deal on a two-bedroom condo at the Brooks, a gated community in Estero.
They got more than they wanted and paid $180,000, a price that even seemed to surprise White.
“Nobody can believe that we got something for that price in the Brooks,” she said.
The home was once listed at $369,000.
Comments
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I wish the Naples Daily News would put these stories along with the annual hurricane forecast in the comic section of the paper. They certainly get more laughs!
#1 Posted by mattmaki on April 12, 2008 at 6:30 p.m. (Suggest removal)
Good story. It's the truth, for once.
#2 Posted by cornandbeans on April 12, 2008 at 7:18 p.m. (Suggest removal)
What is selling is the forclosed homes....there are deals out there for forclosures.
#3 Posted by Hendry on April 12, 2008 at 7:33 p.m. (Suggest removal)
Where can I get some of that Kool Aid?
And we will have 15 major hurricanes this season...........
#4 Posted by vashark1 on April 12, 2008 at 7:59 p.m. (Suggest removal)
“The market is feeling like it’s near the bottom,” said Stuart Kaye, owner of Kaye Homes, a Naples home builder since 1985."
I stopped reading right there. NDN, when you get quotes from real estate "professionals" or builders your article takes a credibility dive.
Guess I will continue to use your newspaper as a rag.
#5 Posted by Sanity on April 12, 2008 at 8:56 p.m. (Suggest removal)
I see our home grown Lil Bush is picking at it again. Yawn!!! Read the article boys before you so pompously gas bag it. it is NOT comparing to "peak of the real estate bubble" but rather 4 or 5 months ago. "sales for homes priced at $300,000 or less have picked up over the past four or five months, Realtors say." We report..you decide!!
#6 Posted by gna on April 12, 2008 at 9:51 p.m. (Suggest removal)
Interesting the way NDN yoked that last story on the girl to replace it with this one. Maybe they just do that naturally every day at this time?
Good luck ever getting an impartial jury if that goes before a civil court. Opinion seemed pretty much overwhelmingly in favor of the girl. This is why Mr. Hunter asks for so much in the budget every year for these lawsuits that materialize out of no where. And that costs most everyone.
So while everyone is talking about that last article about the girl, while everyone is interested, NDN swaps it out with this story designed to help the local economy. Noble perhaps, but, in a way, hurts your credibility to anyone paying attention.
#7 Posted by baseballlives on April 12, 2008 at 10:13 p.m. (Suggest removal)
Special Report: Homes for sale..Golden Gate Estates...never occupied...some small plant growing done in certain sections of house. $600 and TIB credit approval and its yours!
#8 Posted by avb123 on April 12, 2008 at 11:29 p.m. (Suggest removal)
Nice. A story to pimp for local realty professionals. I was reading these positive pieces all the way up until the national headlines started raving about the market crashing.
Should read "Help local realtors! Will broker for food."
#9 Posted by TruthHurtz on April 13, 2008 at 12:15 a.m. (Suggest removal)
(This comment was removed by the site staff.)
#10 Posted by Sunnidaze on April 13, 2008 at 2:36 a.m.
REALTORS + still starving = CELT happy. Never trust a REALTOR.
#11 Posted by CELTLUV on April 13, 2008 at 8:25 a.m. (Suggest removal)
It is reassuring that the once troubled mortgage industry has cleaned up it's act now requiring borrowers such as Rick Diminico to come up with a hefty $600 down on a $207,000 home. Wise lenders realize that by having this much equity at stake, he is sure not to walk away if the going gets tough.
#12 Posted by PuffyStormClouds on April 13, 2008 at 9:02 a.m. (Suggest removal)
And I am sure that the Collier County Tax Appraiser will AGAIN ignore what is and has happened to lot and home prices in Collier. They do not want to face realty! When the appraised values come out in August, they will tell us that they are doing us a favor by keeping the property values of 2006 in 2007. There was a lot of fraud and stupidity out there.
GET READY TO FILE YOUR PETITIONS IN SEPTEMBER 2008.
#13 Posted by lalaland on April 13, 2008 at 9:12 a.m. (Suggest removal)
Whiney babies posting here cause they can't afford anything.
#14 Posted by techie on April 13, 2008 at 10:31 a.m. (Suggest removal)
Some very bitter people on this forum. I still can not understand why people focus so much on the Realtors (I'm not one). Not saying that there is not some culpability there but not to the extent that some would have you believe.
Most of what has happened in the housing market can be directly attributed to Wall Street and government's inability to protect it from itself. In the absence of any sort of regulation, WS will continue to produce product meant to sell. Trading on margin, selling short, derivitives, tranching; it's all about making money. In my mind, it's legalized gambling and the world's biggest ponzi scheme.
When WS saw how much money that Subprime products were making in interest, they jumped on the bandwagon and stepped on the accelerator to produce more of these types of products for the conventional lending market including no doc loans. Coupled with Greenspan's outrageous reduction in the discount/prime rate, all of sudden, not only was money dirt cheap but it was easy to get also.
When Buyer's found this out, they ramped up demand. When Seller's felt this pressure, they ramped up prices. Everyone blames the Realtors but let me tell you, I know several reputable Realtors who would go on a Listing appointment in 04-05 armed with recent comps showing a listing that should go for $325K and be told by the Seller that they wanted $450K! They held their ground and refused the listing and another Realtor came in, agreed to list at $450K and the home sold, after a biddng war, for $475K. Realtors finally understood that using comps was out of vogue in this atmosphere and started pricing to what the market would bear so like I said, I really can't blame the Realtor.
I can't even blame the Seller for selling for outrageous amounts (although a lot of your neighbors sold us out and moved to NC). The Buyer's were naive and stupid for thinking that prices would go up forever irrespective of the area's average income. Their goal was to not be the last to leave the room and be told to turn out the light.
BTW, so many commentator's seem to think this is some sort of localized issue. Wake up people! It is NATIONAL!! Do you really think that all the Realtors got together nationwide and decided to sell the country out? You may not like that Realtors and mortgage brokers are the face on the problem, but it was Government (Fed, Congress, SEC, President, etc.) that were asleep at the wheel as WS plotted new zany ways to separate some from their money so they could give it to others while making outlandish commissions.
In my mind, the Sellers, Realtors and Mortgage people were the only rational ones here. They did what they are supposed to do given the circumstances presented. Granted, some of the realtors/mortgage guys went overboard but the majority played within the rules.
#15 Posted by naplesregular on April 13, 2008 at 10:44 a.m. (Suggest removal)
nplesreg, can you explain to me what is rational about Mortgage people lending $207k to someone who cannot make a down payment on a house that could easily be worth 10% less next year in a market that is still in decline? One would think by now the Mortgage people would have sobered up.
#16 Posted by PuffyStormClouds on April 13, 2008 at 11:45 a.m. (Suggest removal)
YeOldeNaples = whiney baby.
#17 Posted by techie on April 13, 2008 at 12:07 p.m. (Suggest removal)
Puffy - the mortgage people sell the product they are given. The risk people provide the product. It is up to the Buyer, given full disclosure of the product, to determine what is right for him. Do you want govt telling you what is right for you? Hopefully not. I personally just want to make sure that the risk is fully disclosed and there is a level playing field.
YeOlde - And who should they quote? If you want to know about mountain biking, you talk to tournament organizers and the racers. Doesn't mean that you don't understand that their information is formed with inheritant bias.
When I read what Realtors say, I understand that also. When I get numbers that I can get my mind around, I then form my own analysis. The numbers are what the numbers are and the MLS produces the numbers.
What so many don't understand about Naples is that we are much more dependent upon what is happening elsewhere in the US. When Subprime went away, there were less folks buying the starter homes. The people who own starter homes then had more difficulty selling and moving up into middle class homes and on and on until you reach the people who are buying 2nd homes in Naples.
Naples is primarily a 2nd home "destination" area with somehwere around 60% of home sales designated as such. People are much more inclined to come here than they are to Indianapolis. They move there because of jobs.
#18 Posted by naplesregular on April 13, 2008 at 12:16 p.m. (Suggest removal)
Now is a good time to buy, prices are so low,eventually prices will go up and faster than you think. Naples is a paradise and everyone wants a little piece of it, especially retirees.
#19 Posted by miamigal on April 13, 2008 at 12:53 p.m. (Suggest removal)
Everyone seems to think Realtors are evil. We simply bring together buyers and sellers. We don't dictate the prices, the market dictates the prices. Our job is to educate, and a good realtor will pull comparable sales, provide them to the buyer, and let the buyer decide what to offer. It is then up to the bank and the appraisor to determine if the home value works for the mortgage. Plain and simple. If the appraisal was not accurate, and the banks failed to ask for additional supporting comparable sales, or the appraisor went out of any paramaters set for them when doing an appraisal, then those would be the people to blame.
In the current market, with the short sales and foreclosures, the banks are actually dictating to the brokers what they are willing to pay as commission on such sales. Sometimes they pay nothing, but the good old realtor still does all the work and saves them from writing off the entire amount of loss, while still trying to make a decent living. Now, who really wins in this situation? Evidently the seller who was probably not financially strong enough to take on the property to begin with, but was convinced by the lender with the great sub-prime rates. So lets see, the bank wrote the initial loan, is taking a loss on that loan, and then forgives the debt to the person they should have thoroughly investigated from the beginning for financial stability, and they then take money out of the person's pocket who is trying to remedy the situation by a short sale versus a greater loss and that's the thanks they get? This makes me wonder how the Federal Government ever allowed this to happen. Oh, wait a minute, I forgot for a moment who is running the country. The politicians. There you have it.
Now is a good time to buy, especially if you want to get more for your dollar with lower interest rates. While we probably won't see the huge jump in pricing again, and a huge equity gain in a short period of time, I am confident that our market will rebound and we will eventually come out of this slump. Naples is a lifestyle combined with gorgeous beaches and many nice communites and people.
Just be sure to do your homework, budget accordingly, and don't be pressured by anyone. If its not the deal for you then walk away. There will be others.
Again, Realtors are not the enemy here.
#20 Posted by Kurtster on April 13, 2008 at 1:27 p.m. (Suggest removal)
techie,
Could you please contribute something productive to the discussion other than your one liners that only you think are clever.
#21 Posted by Sanity on April 13, 2008 at 1:35 p.m. (Suggest removal)
techie = starving REALTOR.
#22 Posted by CELTLUV on April 13, 2008 at 1:38 p.m. (Suggest removal)
We are by no means any where's near the bottom of this real estate crisis.
There is talk of prices dropping into 2010
let's all face reality here, they went up for years now it's time to come down, and heaven forbid if Florida gets hit with a Hurricane
prices will drop even lower and possibly stay there
forever !
#23 Posted by Pomie on April 13, 2008 at 2:03 p.m. (Suggest removal)
mortgages were packaged so execs at mortgage banks and money center banks could get bonuses and exersize stock options for growth in revenues that were never going to be received and the rating agencies as they did with enron like the pros they are rated the trash as aaa- this is the result of the current anti-regulatory climate --- who did you vote for
why not laws to punish economic murder is this really different than embezzlement-where is the moral high ground
#24 Posted by welcome02 on April 13, 2008 at 2:13 p.m. (Suggest removal)
CELTLUV, maybe someday you can move out of your elderly parents garage apartment, and afford something of your own. Or not.
#25 Posted by 676 on April 13, 2008 at 2:22 p.m. (Suggest removal)
676 = techie's out of work REALTOR's assistant.
#26 Posted by CELTLUV on April 13, 2008 at 2:59 p.m. (Suggest removal)
Where's the love? How about Mortgage lenders not actually HOLDING the mortgage. They package it up into unrecognizable investment vehicles which the investment side of their companies then sell to Wall Street. In short is is UNSUPERVISED, UNREGULATED Voo Doo economics. You guys are a broken record about the realtors. Get real! (no pun intended!)
#27 Posted by gna on April 13, 2008 at 3:42 p.m. (Suggest removal)
Everyone is at fault here. Mortgage brokers, Wall Street, Realtors and finally, you, the homebuyer who didn't do the math before buying homes you couldn't afford.
Things will get better, but I don't think we are anywhere near the bottom yet. Give it another year or so to bottom out and 2-3 years to recover to 2007 levels (post bust, but not quite as bad as it is now or going to be).
#28 Posted by phlumox on April 13, 2008 at 6:11 p.m. (Suggest removal)
Wha Wha!!! I can't afford anything.
#29 Posted by techie on April 13, 2008 at 7:36 p.m. (Suggest removal)
The speculators are jumping in on the $300,000 and lower home prices. The Mafia type lenders are in second heaven with this situation and lay in wait like a pack of white sharks as they await the upcoming depression. The second round of speculators will then be finished off. Don't get sucked in to this feeding frenzy, hold on to every buck. This is the time for patience.
#30 Posted by rainbowchaser on April 13, 2008 at 7:53 p.m. (Suggest removal)
If you want to blow good money on depreciating assets, thats your problem. In the meantime, the real winners will be the patient ones with cash on hand and no debt. Good luck flippers!
#31 Posted by Sanity on April 13, 2008 at 9:04 p.m. (Suggest removal)
It's about time the real estate marked finally came down to the average wage for this area. No way someone such as a school teacher could move down here before and afford a 300k mortgage. It finally balanced out.
#32 Posted by visionphoto on April 13, 2008 at 11:10 p.m. (Suggest removal)
Sunday's paper had more than 40 pages of Real Estate advertising plus a 60 page real estate advertising insert.
I suspect that anything other than a positive front page headline on the real estate market would not have gone over too well in the advertising department.
The current economic crisis is in its early stages and it would not be unreasonable to expect housing prices to return to those levels that we saw in 2000.
Meanwhile in Washington the "Foreclosure Prevention Act" was passed in the Senate. If you take the time to read it you will discover it has more to do with handing billions of dollars of tax relief to corporate home builders than helping people stay in their homes.
http://banking.senate.gov/_files/0402...
#33 Posted by barron on April 14, 2008 at 2:58 p.m. (Suggest removal)
a $230,000 mortgage is about $1500 a month over 30yrs including PMI that's not much more than most rentals. No not a Realtor, this is personal experience.
what do you care about Realtors
i see a lot of angry people here every time an article like this is posted.
didn't you all want prices to come down...they are and people are starting to pick up on the deals.
you cannot compare the prices to anywhere else, especially up north because there is no comparison. i consider this place a paradise. It was when i moved here over 20yrs ago and still is
#34 Posted by NeezDutz on April 15, 2008 at 9:23 a.m. (Suggest removal)
i'm surprised that no one has mentioned the cost of homeowner's insurance. using Neez's example it would add about $250.00 a month. a surprise after closing. especially if an older (2000 or earlier) home, you may not find a policy. i bought a forclosure home in '98 and struggled to find an insurer. even after many code up-grades i am waiting to see if i get canceled again this year.
weird how they wait till june.
#35 Posted by mimibuck on April 15, 2008 at 9:51 p.m. (Suggest removal)
not true mimi, sorry my house built in '98 and my insurance was only $1500.00 this year with great coverage. i dont live on Naples Bay. i live off 951 and Pine ridge East side of 951
#36 Posted by NeezDutz on April 16, 2008 at 10:07 a.m. (Suggest removal)
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