Thursday, August 21, 2014

Southwest Florida housing starts on upswing

Southwest Florida housing starts on upswing


Housing starts in Southwest Florida spiked sharply in the second quarter, according to a report issued Wednesday by housing data provider Metrostudy.
Overall, starts in Lee and Collier counties increased 11.4 percent from 778 single-family homes in the first quarter to 867 in the second, according to Metrostudy, which tracks new-home construction in subdivisions in the Fort Myers-Naples area and other markets around the country.
Also, Collier has almost caught up with its larger neighbor Lee, accounting for almost half of the starts so far this year, said David Cobb, Metrostudy's regional director in the Naples-Fort Myers area.
The strong showing in Southwest Florida was part of a pattern in which "some of the most 'beaten-down' markets are now doing better," Brad Hunter, chief economist and director of consulting for Palm Beach Gardens-based Metrostudy, said in a written release.
Tim Rose, president of Fort Myers-based Arthur Rutenberg Homes, said he thinks whether the good news continues depends to some extent on national factors.
"Stability is always something that makes my customers happy," he said. "We look for stability in the marketplace, the country, the world. That's what makes people comfortable."
He's hiring more staff to deal with the increased sales volume, Rose said, "and I think other people are looking at that too."
Land Solutions CEO Randy Thibaut, who specializes in brokering the large-scale land transactions necessary to create residential communities, said the second-quarter numbers are encouraging but that it's important to watch for possible obstacles to future increases.
"We do have some slowdowns in the sales centers," he said. "We do have some standing inventory that's building. My biggest concern is oversupply. Are we going to oversupply? It's something we should keep a very close eye on."
Thibaut also said it's important to remember that the current pace of new-home construction is still a shadow of what it was before the housing boom collapsed in late 2005.
"By year's end we're only going to get around 8,500 single-family permits for Lee, Charlotte and Collier counties," he said. "That's far from the 45,000 we had at the peak (2005); it's far from the 10,000 we had in the year 2000."
Cobb said that there's a possibility of an oversupply of inventory, but that it wouldn't last long.
"In the short term there might be a little too much home-building activity in the market," he said, but the supply of land is tight and increasingly expensive in Collier while in Lee, supply is tight in desirable areas.
"The biggest problem is where people want to build: Estero, Bonita and to a certain extent the Treeline area," Cobb said. "Most of what's left is either in Lehigh Acres or Fort Myers."

California property flipper moves into Southwest Florida

California property flipper moves into Southwest Florida

Published: Thursday, August 21, 2014 at 12:32 p.m.
Last Modified: Thursday, August 21, 2014 at 12:32 p.m.
MANATEE COUNTY - One of California's largest real estate flippers is expanding into Southwest Florida, a sign the region's housing market continues to be attractive to corporate investors hunting for bargains.
The move marks a vast shift from just two years ago, when institutional investors like Wall Street's Blackstone Group and Colony Capital acquired hundreds of properties at low prices and converted them into rentals.
By contrast, Blue Mountain Realty has acquired distressed properties at a discount, provided mainly cosmetic facelifts and then quickly resold the houses for big profits.
The firm, which also builds new custom homes, has flipped thousands of properties in California.
Its Southwest Florida push comes as local home prices have rebounded by more than one-third since the downturn, with supply at its thinnest point in nearly a decade.
But analysts say that the market frenzy has created dangerous conditions for flippers who are betting on making substantial profits with little investment and time.
“There are still opportunities in certain price ranges,” said Jack McCabe, a Florida real estate consultant. “The lower-priced homes have been dominated by institutional investors and hedge funds, but they haven't been too active in the upper ranges because prices have been pushed up pretty high.
“They must see something because they're making handsome profits.”
Blue Mountain officials declined to comment when reached late Wednesday.
A Blue Mountain subsidiary has purchased at least seven homes between Sarasota and Manatee counties, records show, spending more than $2 million.

The transactions ranged from a $15,200 Bank of America foreclosure to a $553,000 Bird Key estate, records show.
Since then, the company has sold three local houses, grossing $315,000. That profit figure includes a Siesta Key foreclosure it sold for $69,000 more than it paid just a month earlier.
Blue Mountain has tried to sell some of the properties through a public auction, which Realtors say is unusual for these types of sales. Area agents also say the company's offered commission structure is below market.
And the company isn't alone in its quest to make substantial profits from flipping properties in the area, of course.
This month, prolific real estate flipper Karl Helbig nearly doubled his money on a Holmes Beach condominium that he had owned for less than a week, records show.
A Helbig affiliate bought the 1,092-square-foot unit for $325,100, and then resold it for $650,000.
The former owner, who acquired the 5608 Gulf Drive condo in December 2004, paid $825,000.
But Blue Mountain's emergence here also comes as rising home prices has impacted potential profits for flippers.
“Flipping has quieted down a lot,” said Shannon Moore, broker and owner of Green Lion Realty, which works with flippers in North Port and Port Charlotte.
“Right now, the banks aren't giving them away. It's easy to find buyers, but finding properties to flip can be pretty hard, and when you're dealing with more expensive homes, you're taking a much bigger risk.”

Investors flipped 152 properties in the Sarasota-Bradenton-North Port market in the first three months of the year. That was down a modest 1.6 percent from the fourth quarter of 2013, but it was also nearly 9 percent above levels from one year ago, according to data provider RealtyTrac Inc. Most recently, Blue Mountain acquired a Panther Ridge property containing two homes out of foreclosure for $509,250, official property records show.
The homes, at 20109 74th Ave. East, were seized by U.S. Bank National Association in March after the previous owner defaulted on his mortgage.
Former owner John Suker bought the 4.9-acre property in September 2005 for $925,000, using a $675,000 loan from Bank of America. He took out a second $675,000 mortgage 11 months later. A foreclosure notice was filed in October 2011, records show.
Built in 1999, one 3,419-square-foot home has three bedrooms and four full bathrooms. A second residence contains one bedroom and one bathroom.
“What we're constantly on the hunt for is where are the opportunities?” Rick Revetria, Blue Mountain's vice president of operations, told the Press-Democrat in California.

Thursday, August 14, 2014

Cape Coral-Fort Myers second in nation for cash home sales

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Home buyers in Cape Coral-Fort Myers are second in the country in paying cash — stimulating the local real estate industry but creating potential dangers ahead.
The Cape Coral-Fort Myers metro area had 64 percent all-cash home purchases in May, according to a report released today by Irvine, Calif.-based financial data provider CoreLogic.
Florida was the No. 1 cash purchase state with 53.4 percent.
All that cash is flowing into the area because of the newly strict oversight by federal regulators of bank loans, plus low interest rates that make it unattractive to simply leave large amounts of money in a bond or a certificate of deposit, said Brett Ellis, head of The Ellis Team with Remax Realty Group in Fort Myers.
"It's easier to get a loan than it was two years ago," he said. "But there are additional restrictions they're putting on. A lot of buyers have the money, they think Florida's a good value but they don't want to jump through all those hoops."
Also, Ellis said, "A lot of people think there's going to be a stock market correction, so real estate seems to be the place to park your money."
One consequence of all this is that it's the more expensive homes that tend to be purchased with cash, he said — lower-end buyers have to take their chances with the bank loan process.
But interest rates likely will start rising in a year or two and that could be a game changer, said Bob Knight, co-owner of Cape-based Paul Homes.
The home-building industry in Southwest Florida has been trending stronger recently, but still isn't in shape to deal with a serious hit such as a sharp increase in interest rates, he said.
Higher interest rates, Knight said, could prevent some people from buying a house altogether while even those with the ready cash could decide to keep their money in the bank.
That could cause trouble for the slowly improving housing market here, he said.
"We're in recovery mode," Knight said. "We're not recovered yet. It's a fragile recovery headed in the right direction."

Tuesday, August 12, 2014

South Florida home prices rising more slowly

South Florida home prices rising more slowly

 
JUSTIN SULLIVAN / GETTY IMAGES

MBRANNIGAN@MIAMIHERALD.COM


South Florida’s red hot housing market continued to cool in the second quarter.
The median price of a single-family home in the metropolitan area comprising Miami, Miami Beach and Fort Lauderdale rose 7.6 percent in the second quarter to $270,000 from a year earlier, according to the National Association of Realtors.
Despite the slowdown from double-digit price spikes a year earlier, South Florida median home prices continued rising at a faster pace than national prices.
The national median existing single-family home price rose 4.4 percent in the second quarter to $212,400 from $203,400 a year earlier, NAR said. That was far slower than the 8.3 percent year-over-year increase in the median price in the first quarter.
“National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth,” NAR chief economist Lawrence Yun said in a statement. “At this slower but healthier rate, homeowners can continue steadily building equity. Meanwhile, for buyers, increased supply with moderate price gains is giving them better opportunities to choose.”

Read more here: http://www.miamiherald.com/2014/08/12/4285321/south-florida-home-prices-rising.html#storylink=cpy