Recently another well known builder closed up shop, leaving more than a dozen homeowners with tens of thousands of dollars in lost deposits and with an unfinished home. All the warning signs were there, and known by us and others in the industry. This was the 4th local builder to go under in about a year.
We have consistently suggested to clients to let us represent them so they don't find themselves in this heart wrenching situation. Not only does it cost no more to have us represent you, but depending on the cost of the home, we can usually get our clients $500 - $1,000 in free upgrades. Additionally, clients have appreciated Sue's decorating expertise and our advice on upgrades that have proven to be popular and cost effective. We have a handful of local builders that we can recommend with confidence.
Home inventory in Cape Coral currently stands at only 3 months, the lowest level in years. Pending sales figures indicate it could very well stay this low for at least the next few months. As mentioned in last month's report, it is mostly low to mid-priced homes that are selling in the summer months, but we are still fairly active with gulf-access home sales. Lower-priced homes are often sold within a few days of hitting the market, putting pressure on younger homeowners and driving up prices of lower and mid-range homes.
This low inventory requires that more new construction homes be built in order to keep up with demand and to keep prices from rising dramatically. Cape home prices rose 7% from June of last year, and sales prices continue to be very close to asking price. This same scenario is playing out in all SWFL cities, although the inventory level is not quite as low as in Cape Coral.
The above chart shows the number of sales each month for the past decade. A surprise to many will be that January and February are not the strong sales months that many expect. It is not until March that higher sales numbers begin to take place, with March, April and May being the busiest months. It is also somewhat unexpected that June through September are fairly strong sales months. Tom: these stats reinforce my feelings that SWFL basically now has a year round real estate season, even though tourist season is in the cooler months.
Naples can add another top ranking to its growing list.. WalletHub ranked 227 beach towns with populations between 10,000 and 150,000 people, and designated Naples as the "Most Livable Beachside Community". The ranking was based on 49 metrics, including affordability, weather, safety, economy, education & health, and quality of life.
A total of six Florida cities ranked in the top 100, with Marco Island ranked 7th, Ft Myers Beach 72nd and Bonita Beach coming in 98th.
Several major lenders are offering loans with just 1 percent down, with at least one lender (NASA Federal Credit Union) has zero-down mortgages. So far the delinquency rate on these low-to zero-down payment loans has been minimal, according to lenders.
During the housing crisis, zero-down loans were among the biggest losses for lenders, investors and borrowers. However. housing experts say the latest versions are different from years ago. Applicants must now demonstrate an ability to repay what's owed, and they must have stellar credit histories and scores. Lenders require a lot more documentation to prove borrowers are in good standing and worthy of such loans. Many of the programs are charging higher interest rates. Tom: this is a slippery slope which could lead to future foreclosures when the real estate market levels out, as it inevitably will at some point. It may not be a good thing for real estate to have a short term "boom" if borrowers can walk away from a loan with minimal financial consequences. To minimize foreclosures and short-sales it is always best for lenders to require homeowners to have "some skin in the game".
Under a new mortgage product by Third Federal, a homeowner can buy a home prior to their existing home selling. Under Third Federal's bridge loan program, a borrower's existing home payment is eliminated so they only have one payment while they sell their current home. By using the bridge loan borrowers who already own a home can eliminate a big barrier to buying their next home better compete in low inventory markets. Third Federal's bridge loan program is available in 13 states, including Florida.
Tom: some clients have also used a HELOC on their existing home to make a SWFL home purchase.
Major Renovations at Coral Oaks: $307,000 of renovations are taking place at Coral Oaks Golf Course. Every green on the Arthur Hills designed championship course has been enlarged and reshaped to its 1987 original size with new Bermuda grass. New grass was also sprigged on the chipping and putting practice greens plus a nursery green. There are other renovations taking place at the course, with expected completion by Oct 1, just in time for tourist season.
During renovations there are temporary greens and the driving range is still operating. The rates are reduced to $20 per round before 3 p.m. and just $15 after 3 p.m. during renovations. This rate includes cart and tax.
Cape Royal Golf Club Set to Reopen: The Cape Royal Homeowners Association has purchased the golf course within their gated community and renamed it The Cape Royal Golf Club. Indianapolis-based Green Golf Partners, which operate several other courses in Tampa and the midwest, have been hired to manage the 27 hole golf course. There are 23 ponds on 225 acres. The "Caloosa Club" is a full service restaurant and bar. The course is scheduled to open on Labor Day, but the range is open now. Course rates will be available soon.
No Final Decision on Golf Club: The Cape's original golf course, last named The Golf Club, is still awaiting an official government decision as to whether it will remain green space or be approved for development by national builder D.R. Horton. We'll keep you posted when we know more.
Lee County Assessors Office Revises Property Values Upwards: In late June the Assessor's Office released an updated property evaluation from their May estimates. Cape Coral increased an additional 1.7% to 9.57%. Ft Myers Beach is up an additional 1.67% to 6.5%, and other Lee County cities saw higher assessed values from May. Tom: I expect that 2018 assessed values will rise by similar rates. If a buyer purchases a home before the end of the year versus the start of the following year, they avoid an additional year's increased valuation on their property taxes. To save 8 - 10% on property taxes every year is a significant consideration. If you are planning to purchase in the near future it behooves you to buy before the end of the calendar year - and lower property taxes is just one of the reasons why.
U.S. Housing Inventory at Lowest Rate in 30 Years: This is in large part to investors scooping up low-priced homes and stepping on the toes of first-time buyers. Homes under $200 K are not even lasting 30 days on the market. Investors also pay cash, making it even more difficult for first-time buyers to compete. ATTOM Data Solutions reports that 19 million homes are owned by investors, and 33% of home sales in 2016 were to investors. A similar scenario is taking place in the Cape.
SWFL International Airport Records Historic Best Month: Our international airport had 629,321 passengers in May, breaking the record for the 34 year old airport. In 2016, SWFL International Airport served 8.6 million passengers, and is one of the top 50 U.S. airports for passenger traffic.
In the past several months some of our wonderful clients have been thoughtful enough to refer us to their friends and family. It's the highest compliment we can receive and we can't thank you enough.
Home Sales Still Strong For Low & Mid-Priced Homes - Cape Coral Named One of the Best U.S. Cities for Boaters - Homeowners Sue Zillow Over Low Home Value Estimate
Cape New Construction Permits Spike - Rise In Cape Coral Million Dollar Home Sales - Increased Importance Of Third Car Garage
Cape Home Prices Rise by 18% / Inventory Drops Below 4 Months - Cape Coral Already Making Top U.S. Lists in 2017 - Rising Home Prices & Increase in Interest Rates Will Make Home Buying More Costly in a Year
Forbes Names Cape Coral #1 For Potential Growth . . . Again - Lee County Crime Rate Drops in 2016 - Royal Tee Golf Club to Re-Open
SW Florida Home Prices Keep Rising - But Inventory Finally Improves - Cape Royal Homeowners Buy Royal Tee Golf Course - Florida's Population Keeps Rising, But 8 States Lose Residents
Cape Coral Home Prices Increase 10% in 2016 - Cape Coral Home Prices Rise 72 Straight Months - New Home Permits Skyrocket
Seven Islands Project OKd by Cape Council - SW FL Now Has 12 Month Real Estate Season - U.S. Home Prices Pass Pre-Recession Peak
Inventory Shortage Eases Slightly But Not Prices - Upscale Duplexes Being Built on Cape Coral Lots - Homebuyers Losing Taste for McMansions
Cape Coral Again Leads Nation in Highest Rental Rate Increase - Environmental & Political Pressure to Clean Caloosahatchee River - Protect Your Florida Homestead
Fla Has 4 Top 10 Retirement Cities - Unique Condo Community Being Developed in Downtown Fort Myers - Update on Chiquita Boat Lock Removal
Atlanta Braves Eye Training Camp In Collier County - Frontier Airlines Will Service Punta Gorda Airport - Cape Coral Mid Year Stats
Assessed Property Values Released By Appraiser - Caloosahatchee Releases Update - National Builder Eyes Former Cape Golf Course