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August 2015 Market Update

Cape Coral City Council Votes to Eliminate Chiquita Boat Lock
 

On Monday July 27th, the Cape Coral City Council voted

7 - 0 to initiate the process of eliminating the Chiquita Boat Lock. The aging boat lock has been a source of angst for years, as the population in the SW quadrant of the city has grown immensely. During weekends in high season it can take an hour to an hour and a half to get through the boat lock during the busiest hours. This detracts from an enjoyable boating/fishing day.

 

The lock’s primary purpose was to prevent contaminated or polluted water from making its way to the Caloosahatchee River. With water quality improving, studies will determine if the lock can be safely removed. If the request to eliminate the lock is not approved, the city plans to repair and enlarge it, at a much higher cost than removing it.

 
The next step is requesting approval from the Florida Department of Environmental Protection and the Army Corps of Engineers, and approval is highly expected by city officials. If approved, the lock would be dismantled sometime in 2016. Should the lock be removed it is widely anticipated that the already highly desired SW Cape will be in more demand, which of course means steeper SW Cape real estate prices. Prices will increase as the lock removal (or enlargement) nears completion. We'll keep you posted.
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U.S. Home Prices Hit Historic Highs

 

A limited supply of listings continues to push home prices higher across the nation - so much so that according to the National Association of Realtors, median prices of previously owned homes rose beyond record highs that were established in July 2006. The median price of a home was $236,400 last month, and the average days on the market has fallen to only 34 days, down from 52 days a year ago.

 

Florida, and especially SW Florida, is not close to its peak prices of 2006. Although Cape Coral/Ft Myers home prices have risen by more than $100,000 since the bottom of the market in Jan of 2011, home prices are still more than $100,000 lower than in Jan 2006. Tom: Clients often ask me when I think SWFL home prices will peak.  I tell them, "I can't predict when our next peak will occur, but it won't be until we pass the previous peak, as a new peak has always surpassed the previous peak". I'm confident that SWFL will not see it's price zenith for several more years.

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The High Cost Of Waiting To Buy

 

With mortgage rates and housing prices expected to increase, buyers who delay buying a home could end up spending considerably more, according to research by Realtor.com

 

Here's a breakdown for some of SW Florida's top markets showing the penalty for waiting one year and the penalty for waiting three years. These statistics include all types of homes, including off-water. The figures for waterfront homes would reflect even greater penalties, approximately double.

 

Naples Area $22,409     Fort Myers Area $21,055       Punta Gorda $17,916

                   $64,924                             $60,393                          $51,045

 

                                        US Average $18,672

                                                            $54,879

 

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Self-Directed IRA's Can be Used to Invest in Real Estate

 

Self-directed IRA's (SDIRA) are an excellent wealth building retirement strategy, and can be used to purchase real estate. Just like other retirement accounts, SDIRA can be in either a traditional or Roth account. Traditional accounts delay income taxes until the funds are withdrawn, while Roth accounts are taxed on the invested funds, but all future withdrawals and profits are totally tax-free and have additional benefits.

 

We can recommend SDIRA companies, one which we and several clients and family members utilize is located in Ft Myers. Sue and I have bought and sold numerous Cape Coral lots and homes over the past 15 years, and I'll be happy to share my experience about this outstanding investment tool. If you feel that real estate will outperform the stock market over the next several years this may be a savvy financial option for you.

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1031 Tax-Deferred Exchange - Another Great Tax-Saving Strategy
 
For the many of you who bought property in SW Florida in the last 4 years you have accumulated a substantial amount of appreciation. Should you wish to upgrade to a larger home, a 1031 Exchange is an excellent means to delay, or possibly eliminate your capital gains tax. This is another strategy that we have used for decades and can guide you on the general requirements as well as refer some 1031 facilitators.
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Be Cautious When Selecting a Local Builder

 

A newspaper recently reported that a major local builder is not finishing construction on numerous homes in Cape Coral. Buyers are not only left with an unfinished home, but are also losing substantial deposits. This scenario seems to occur when construction picks up, but usually not until after the market has peaked, which is certainly not the case right now.

 

Because we are actively involved with area builders and know their history and reliability, we suggest you contact us before building with any of the nearly 100 builders in the city. Not only will we guide you to the more reliable and honorable builders, but we can advise as to which builders we think offer the best value. Sue is also excellent in the decorating department, and has helped clients with selections such as paint, tile, granite, etc.

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Facts and Stats
 
Naples Home Prices Soar 23%: In the past year Naples average home price increased from $270,000 to $332,000. Naples Gulf-Access home prices average $1,944,000, a good deal higher than Cape Coral or Ft Myers gulf-access homes. When home prices in high-priced cities such as Naples and Bonita increase this tends to increase prices in the more reasonably priced surrounding towns.
 
Foreclosures Plunge Across U.S. Distressed sales have fallen significantly since peaking at 32.4% in January 2009. REO/short sale homes now comprise only 11% of the total market share. Michigan and Florida lead the nation in distressed home sales at 21.7%.

 

57 million in "Sandwich Generation". According to Pew Social Trends, 57 million Americans (13%) live in multigenerational households, twice the number from 1980. The number is continuing to rise, and some reasons are high college student loan debt, home forfeitures during the real estate bust, and shortage of high paying jobs. The U.S. Census Bureau regards a multigenerational household as three or more generations.

 

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Tom & Sue Demogenes

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