Thursday, July 18, 2013

Largest Home In Cape Coral Sells For $5.3M

Largest home in Cape Coral sells for $5.3M

Jul. 18, 2013 10:51 AM   |  
Originally available for $6.7 million, this 18,404-square-foot home at 5832 Armada Court in Cape Coral is now selling for $5 million.
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5832 Armada Court, Cape Coral / special to the news-press
The crown jewel of Cape Harbour, 5832 Armada Court, also known as Cape Coral’s largest home, just sold for $5.3 million. The property sold for $5.1 million and the furniture represented $200,000 in the sale, making it the second highest residential real estate transaction this year in Lee County according to the Multiple Listing Service (MLS).
Ted Stout, Realmark Realty Broker listed and sold the home, which is officially the most expensive home sold in Cape Coral. It’s only preceded by the original sale of the house in 2009 for $6 million.
The $5.3 million sale trumps the next in line in the MLS by a whopping $2.4 million, a sale of $2.9 million at 5649 Riverside Drive in 2011. Stout said, “You can count on one hand the number of homes that have sold for more than $5 million that don’t have beach access in Lee County.”
Armada Court is located in Cape Harbour one the few gated waterfront communities on the Southwest Florida coast. It is unlike any other home in Lee County topping out at 18,404 total square feet.
The estate is situated on four lots and features the main house, guesthouse, caretaker’s quarters, six bedrooms, six full baths, three half baths, and three fireplaces. The vanishing edge pool with beach entry seamlessly merges with the waterways to offer endless waterfront views.
The walls of glass, unique finishes, rare wood flooring complete the look and feel of a Tuscan manor mansion. It’s both a boater and car collector’s dream with a garage that can house up to seven cars and more than 560 feet of seawall with seven boat docks and two boat lifts to accommodate multiple yachts.
The buyer is, a retired entrepreneur from Naples who was represented by Jutta Lopez, Sales Associate with Premier Sotheby's International Realty. Stout added “They bought the property because of the incredible value Cape Coral offers compared to Naples.
This home would sell for $15 to $20 million in Naples, making it a steal when you shop the Southwest Florida coast.”

Tuesday, June 25, 2013

Real estate rebounding with the help of quick turnarounds

House Flipping
Real estate rebounding with the help of quick turnarounds
IT COMES DOWN TO THIS QUESTION: CAN real estate investors flip homes successfully through the second half of 2013 without flipping out of business, or are the evolving markets on both the southeast and southwest coasts increasingly perilous for quick-buck ambition?

The answers may be both yes and yes, according to Realtors and investors alike in the distinctive and sometimes dissimilar markets from Palm Beach Gardens on the east to Naples, Fort Myers and Punta Gorda on the west.

Here, through the eyes of the experts in several markets, Florida Weekly glances at both the opportunities and the complexities inherent in flipping — the investment art of buying property then reselling it in short order at a significant profit.

Although the process came to symbolize poor judgment and greedy excess during the recessionary years between 2006 and 2009, that’s changed significantly.

“First off,” says Rick Shaffner, a former Michigan bank president and now partner in a consortium of five investors who own about 300 rental properties on the southwest coast, “I wouldn’t call it ‘flipping’ — that’s a derogatory term going back to 2006-2007. Guys were going in and not even closing these deals, buying a property for a hundred grand when they already had it sold for $150,000, and taking $50,000 off the table and letting somebody else close it.”

For many banks and loan agencies, not to mention flippers, it was an anything-goes time.

“The flipping thing got a bad rep because there wasn’t any real value added,” says Tom Weekes, a Keller-Williams Realtor based in Charlotte County who teams with his wife, Gay Weekes, to do business from Cape Coral north to Sarasota.

“It was just a crazy market that allowed people to make a lot of money provided they flipped it over quickly and didn’t get caught without a chair when the music stopped, so to speak.”

Now, however, home-buying loans remain much more difficult to get from banks, and investors come to the game with money in hand.

Investors are also much more likely to restore the properties they buy nowadays — often they have to if they’re buying foreclosed homes that have sat vacant — adding value before they sell, or renting them out for the time being.

That way, they can capitalize on strong rental markets and bet with a bit more security on increasing home values as investment opportunities begin to shrink.

“I am seeing investors hold for rentals as rental prices are up,” says Kathryn Klar, a real estate agent for Lang Realty in Palm Beach Gardens. The comment might apply to many communities where investors appear to be profiting significantly, or waiting just a bit longer to profit significantly.
And now, nobody appears to be questioning flippers for lacking virtue or value.

“This is taking care of business,” says Jim Green, a Realtor based in Lee County. “Too often society ignores blight and proceeds to build anew in other places. Blight begets blight. These restorations cause values to go up, improving the tax base for the subject property and the surrounding community.”

As Naples-based, John R. Wood Realtors Karyn and Rowan Samuel see it, “every transaction generates cash; each sale affects the local economy,” says Mr. Samuel.

“Real estate has a tremendous trickle down effect on multiple industries — from the sellers cashing out, to the builders and contractors, the brokerages and Realtors, the closing agents, all the way down to retail — to furniture and car sales, to dining and entertainment.

“An improving real estate market (helped by flippers) is an economic powerhouse, and I think we are starting to see that, especially in areas like Naples and Miami that are in-demand real estate markets.”
Cause for excitement?

All that said, last month, Realtytrac Inc., a market analyst, published a survey that identified the 25 hottest markets for flipping homes in the United States, based on sales from the first quarter of 2012 through the first quarter of 2013.

The company defined a flip as the buying and reselling of a home within six months.
First, it picked 600 markets nationwide where flips occurred. From those, it picked metro areas where at least 500 homebuyers flipped their properties in 2012, winnowing that number down to metro markets with a 9 percent annual increase in home values over a year, or more.

From that grouping, finally, the surveyors listed the 25 top markets. They awarded list position based in part on gross profit defined as a percentage of the first selling price, explains company Vice President Daren Blomquist, in an online description of the process.

Thus, if a buyer picked up a home for $150,000 and sold it for $200,000 within six months, the gross profit of $50,000 would amount to 33 percent of the original price.

On the Realtytrac list, five of the first 10 markets appear in Florida, including Orlando (No. 1 in the nation), Tampa (No. 4), Miami (No. 6), Lakeland (No. 7) and Sarasota (No. 9).

Lee County’s Fort Myers/Cape Coral — the market once ranked first in the nation for foreclosures — came in at 20 on the list.

The results led Mr. Blomquist to offer a rosy prediction for those with the capital to flip homes in 2013.
“Flipping homes — buying, rehabbing and reselling for a profit usually within about 90 days — will likely become more favorable for investors in 2013 as home prices are expected to rise,” he writes.

“And while buying homes as rentals still offers a solid rate of return in many markets, many buy and sell investors typically flip properties periodically to fund their ongoing rental purchases.”
Optimism’s pitfalls

But experts on the ground may not be so quickly optimistic, or so blithe in analyzing the 2012 numbers, depending on the given market and on what some call the hidden costs.

“If it’s a foreclosure market, it’s all being purchased by investors now,” says Tara Bua-Bell, a Realtor and partner with her mother Emily Bua in Naples Estate Properties. “I’d say for those investors in the last six to nine months especially, it becomes a question of whether they’re going to make a profit.
“Collier County was not as affected as some outlying counties or communities like Lehigh Acres and Cape Coral by the recession.

In Lee County’s Cape Coral, together with nearby Lehigh Acres one of the markets hit hardest in the United States by foreclosures, that’s precisely what’s been happening, says Frank Ehrhardt, a Realtor with Cape Realty. Mr. Ehrhardt flipped houses in Los Angeles and Chicago before moving to Cape Coral three years ago to invest in an opportunity himself.

“It’s a perfect time to have gotten into this because we bought our home at close to the bottom,” he says.

“The low-range market is where it’s easiest to get in, and it’s where a lot of the flipping happens. Groups and companies buy in, and we’re seeing a lot of individuals, too.”

But sometimes, he says, those individuals regret their investments because they don’t see unanticipated costs before they invest.

Still, “flipping is becoming extremely competitive,” he notes.

In 25 purchase offers Mr. Ehrhardt has made for his clients so far this year, at least 20 have have faced competing bids on the same day, he says.

That experience is common.

“We recently listed a Cape Coral home that was attractive to investors and had five above-asking-price offers within 48 hours,” says Jim Green. “That has become the current norm.”

But Mr. Green echoes the voices of several of his colleagues by questioning the easy optimism of the Realtytrac survey, and data like it.

“The gross profit numbers used by the media have been very misleading,” he says.

“They exclude disaster remediation, renovation and improvements — say $20,000 on the average home purchased at $138,000. Typical cost-ofsale in our market is about 9 percent. If that home is sold at $189,000, the math says the investor made 9 percent on a $158,000 high-risk investment, less purchase fees and carrying costs.”

Mr. Green was using some other figures from Realtytrac in his example of built-in but unseen costs, in which the company described the Palm Beach, Broward, Miami-Dade metropolis as the number one market in the U.S. for flipping (taken together, those communities ranked ahead of Orlando).

There, from the first quarter of 2012 through the first quarter of 2013, about 4,300 houses were flipped by investors who bought in at an average price of $138,000 or so, and sold at an average price of about $189,000, within six months.

And finally, investors worry about other unseen factors, too — shadow inventories, for example.
“We think now we have an 18 to 36-month period left (for these investments),” says Mr. Shaffner.
“It’s more difficult to find deals that make sense on a rental program now. And there’s a caveat: Is there a shadow inventory? Are there a lot of homes that haven’t been released by the banks or Freddie Mac yet? Are they holding on to them and releasing them slowly because they can’t afford the capital hit?”

Nevertheless, Mr. Shaffner and his team of investors who can use family members to contract and restore properties, are sticking to an original plan defined in dollars per square foot.

In 2009 they started out paying about $35 a square foot for homes in Lehigh Acres and Cape Coral. Now they’re paying about $55, and their bet — this is the gamble bas

And that’s when they might sell significant numbers of their 300-plus rental properties, he says.
All of which seems like an opportunity to live with a lot of stress.
But that’s the life of an entrepreneur — any entrepreneur, but especially real estate investors, he says.
“Anybody who’s an entrepreneur wakes up every morning unemployed,” he explains.

“I don’t have Ford Motor Co., or Chico’s, or somebody else giving me a paycheck. So I wake up every morning unemployed, and figure out a way to create income.

“Anybody who’s 100 percent commission, that’s who we are.” 

Friday, June 21, 2013

Builders say housing is back

Builders say housing is back

@CNNMoney June 17, 2013: 10:47 AM ET

home builder
More builders say sales conditions are good rather than poor, confirming earlier signs of a housing recovery.

Is the housing recovery for real? It looks that way, as a key measure of home builder confidence crossed a major threshold Monday.

The National Association of Home Builders' index hit 52 in June, marking the first time it has been above 50 in seven years. A reading above 50 indicates that more builders say sales conditions are good rather than poor. The index has been posting gains for the last year, but those moves only indicated that builders thought the market was less bad than it had been.
"It's further confirmation of what we've felt for six months at least -- that the housing market is back and will continue to improve," said David Crowe, chief economist for the trade group.
June is typically a month when builders report slower activity, after the spring buying season peaks. But this year they're reporting better traffic levels and better sales conditions than they did in May.
The NAHB survey found that 41% of builders said current conditions are positive, almost double the percentage who said they were poor. A year ago, only 15% said conditions are good, while three times as many said it was a poor environment.
There have been many recent signs of a housing recovery, including a drop in foreclosures, a steady rise in home prices and an increase in sales of both new and previously-owned homes. A rise in mortgage rates, up from recent record lows, has done little to slow the the housing market.
In Crowe's opinion, "it's not the level of rates that has held back the markets, it's the access to credit," he said, referencing the difficulties that buyers have had getting home loans in recent years.

Wednesday, June 19, 2013

Florida Home Sales Gaining Momentum, Says Mick Wiener

Florida Home Sales Gaining Momentum, Says Mick Wiener

Mick Wiener explains why the residential market of South Florida has experienced such a boost in the first quarter.

Mick Wiener, a real estate broker associate and expert in the residential market of South Florida, has noticed a strong upward trend in home sales throughout the region. A recent article published by the Bradenton Herald confirms that Florida's housing market has seen a surge in sales--leading to a profitable first quarter. Here, Wiener comments on this trend and shares the insight provided by the aforementioned article.
The article explains: "The state housing market gained strength in first quarter 2013 with increased closed sales, more pending sales, higher median prices and a tighter inventory of homes for sale compared with the same quarter in 2012, according to housing data released Thursday by Florida Realtors."
The reason behind this influx in home sales is, largely, the creation of jobs within the Florida market. A state that was hit relatively hard by the recession, Florida is still working to replace the jobs that were lost during the financial crisis. As new jobs are established, individuals are able to turn their attention toward homeownership. This, in turn, creates more jobs, as the construction and development companies that work to build new homes are able to hire more professionals to meet the increase in demand. As such, the health of the housing market is, in many ways, a great indicator of the overall health of Florida's economy.
But Wiener points out another reason why home sales are increasing: "Sales of residential units, including single family homes and condos, are taking place at a record pace," comments Mick Wiener, Florida real estate broker associate and expert in the residential market. "Many of these properties are purchased as second or even third homes by affluent buyers who are looking for a wonderful place to invest in a vacation property."
Because the costs associated with homeownership in Florida are still lower than those in the northeastern states, many individuals living in New York and the surrounding area are turning to Florida for affordable second and third homes. As such, these individuals are investing in the economic well being of the Sunshine State while driving job creation and a healthier local economy. Because they get a high quality vacation home out of the deal, Mick Wiener believes this is a win-win for all parties involved.

As such, these individuals are investing in the economic well being of the Sunshine State while driving job creation and a healthier local economy. Because they get a high quality vacation home out of the deal, Mick Wiener believes this is a win-win for all parties involved.

Sunday, June 9, 2013

Reaction mixed on law that hastens foreclosure process

Tribune staff

Published: June 8, 2013
TALLAHASSEE - In the week before Gov. Rick Scott's deadline to sign a bill that would speed up the state's residential mortgage foreclosure process, bank employees flooded his inbox with a form letter urging his approval.

The bill "will help Florida's real estate market, and ultimately the economy, by expediting the judicial foreclosure process which currently takes an average of 800 days to complete," the message reads in part.

The strategy may have helped; Scott quietly signed the bill Friday afternoon.

It "will put (foreclosed) homes back onto the housing market and allow Florida families who have experienced a foreclosure to begin working to repair their credit and finances," the governor said in a signing letter.

As of Friday afternoon, more than 300 messages had been emailed to Scott's public account at Return addresses include domains for banks across the state, including First Citrus Bank, Jefferson Bank and Nature Coast Bank in the Tampa Bay area.

Calls to those banks weren't immediately returned. Scott had until Wednesday to sign or veto the bill.

Anthony DiMarco, chief lobbyist for the Florida Bankers Association, said his group was behind the email blast.

Banks "don't want to foreclose; we want to work with a borrower," he explained. "But the sooner someone can buy the property and move in, they take care of the property, pay taxes and get the neighborhood's property values back up."

DiMarco was quick to note many of his members don't actually own the mortgages but service them for another entity, usually Fannie Mae or Freddie Mac, government-controlled companies that buy residential mortgages and re-sell them to investors.

Florida still leads the country with 102,000 foreclosures over the last year, according to an April report by real estate data tracking firm CoreLogic.

The state has the highest foreclosure inventory as a percentage of mortgaged homes, at 9.5 percent, though that inventory is down 2.6 percent from this point last year.

The CoreLogic report also places the Tampa-St. Petersburg-Clearwater metropolitan area as No. 1 in the state for foreclosures, with 15,130 in 2013-14.

The bill (HB 87) passed the House this legislative session by an 87-26 vote and was approved by the Senate 26-13. Now that Scott has signed it into law, it becomes effective immediately.

Homeowner-rights groups opposed the measure, which is backed by the business and real estate lobbies and by condominium associations. They take a financial hit when individual units go empty for long periods.

The new law allows anyone with a financial interest, such as a condominium association, to trigger the accelerated process. It reduces the number of hearings from two to one. If a judge approves the foreclosure complaint, the hearing date can be set for as early as 20 days later.

"The sections dealing with judicial expedited foreclosures will speed up judicial foreclosure hearings so that the property can be sold to a willing buyer quicker than is happening today," the form letter sent to Scott says.

The law also requires lenders to show in detail that they actually own a mortgage or explain why they can't show ownership.

And it shortens the time for banks to go after foreclosed homeowners on deficiency judgments to one year from five years. Deficiencies are the difference between what the banks makes when it unloads a foreclosed home and what the previous homeowner still owes on it.

"Although I am not enthusiastic about (this) section of the bill . many consumers will benefit," the form message says. "Reducing the time for financial institutions to seek this judgment is, in practical terms, another way to help to move Florida through this difficult period."

Beginning in 2008, the real estate market collapsed, followed by millions of foreclosures nationwide. A flood of filings then crashed down on already overworked courts.

Many of those foreclosures were processed by "robo-signers," people who signed documents in assembly-line fashion, often without knowledge of what was in the paperwork. Those documents included affidavits saying a bank owned the mortgage on a foreclosed home when the original paperwork couldn't be found. The discovery of erroneous and fraudulent filings came soon after.

That's what initially motivated Eddie J. Walker, an Orlando minister, to get involved in the foreclosure crisis. He opposes the law.

"It's simple: This will make it easier for banks to take people's homes away from them," said Walker, pastor of In God's Time Tabernacle of Jesus church. "It doesn't take a rocket scientist to figure this out."

Even though Scott has approved it, "we'll keep standing up for what we believe," he added. "The fight doesn't end because you lose a round."

Wednesday, June 5, 2013

Impact fee cuts create uneven playing fields

Starter homes, commercial jobs affected most by fees.

Hector Ramos does some drywall work Friday on a house under construction on Surfside Boulevard in Cape Coral.
Hector Ramos does some drywall work Friday on a house under construction on Surfside Boulevard in Cape Coral. / Photos by Terry Allen Williams/ The News-Press
Ramos mixes drywall joint compound Friday while working on a house under construction in Cape Coral.
Southwest Florida’s topography is flat as a pool table but when it comes to impact fees there’s a noticeable tilt from jurisdiction to jurisdiction, builders say.
But it’s a complicated issue that weighs more heavily on some types of construction than others.
Most recently, on March 12 the Lee County commission voted for an 80 percent cut in impact fees, which are imposed to pay for municipal infrastructure made necessary by growth.
As a result, the price of building a typical single-family home dropped by $10,000 in the unincorporated county.
The city of Fort Myers followed suit with a similar reduction, but the Cape and Bonita Springs have not.
That put the Cape – just coming out of the home-building slump – at a disadvantage that’s hard to overcome, said Maureen Beneke, executive director of the Cape Coral Construction Industry Association.
“One the one hand, someone who’s got a lot here in Cape Coral, maybe they want to retire in a few years,” she said. If the Cape had cut its fees, “There’d be a new window of opportunity where they’d say, ‘My impact fees would be lower. I’ll do it now.’”
Also, she said, for those still shopping for a lot, “It pushes people who might have looked at Cape Coral out of the city.”
Bob Knight, vice president and co-owner of Cape-based Paul Homes, said the disparity in fees isn’t a good thing, but that there isn’t necessarily a direct effect on a home buyer’s decision to build.
“Cape Coral’s ability to generate this kind of construction is solely because of the canals and the waterways,” he said. “What separates Cape Coral from Lehigh? The waterways. And water can also attract a little higher-end home.”
But in commercial construction, with much more at stake in each project, impact fees are always a factor, said Mark Stevens of Mark Stevens Construction, a Fort Myers-based builder which specializes in office construction.
“The impact fee thing always sticks out like a sore thumb,” he said. “On every single project we do, it becomes an issue.”
For example, he said, an impact fee change by the county commission two years ago had a significant effect on the cost of plastic surgeon Dr. Ralph Garramone’s new location on U.S. 41 just north of Cypress Lake Drive, which opened last week.
The commission at that time eliminated the impact fees charged when general office space was converted to medical, as was the case with Garramone’s building (a former bank).
Like Cape Coral, Bonita Springs didn’t reduce fees like Lee and Fort Myers.
But Dennis Cantwell, president of Sand Springs Development in Estero, said that for the high-end homes he builds in Bonita and Estero, the $10,000 reduction per house isn’t important. “Some of the people I build for, their appliances are equal to that.”
Still, he said impact fees are a bad idea because the revenue they produce fluctuates wildly with the home-building industry’s strength.
Also, Cantwell said, impact fees tend to foster competition among municipalities. “Collier reduced its fees, so we (Lee County) reduced ours.”
He said impact fees are a disproportionately high percentage of a starter home’s cost, so imposing them can harm the construction of that sector.
He suggested a smaller transfer fee assessed every time a home is sold would be more affordable and a more stable way to fund infrastructure.
Lee Building Industry Association executive director Heather Mazurkiewicz said her group has talked to leaders in both the Cape and Bonita.
“We talk to them about the advantage of doing an impact fee reduction similar to Lee’s. We need to do whatever we can to stimulate job growth.”

Tuesday, June 4, 2013

Single-family home permits double in Lee compared with a year ago

 Shown is the resort-style pool at the village center in Paseo, the Lee Building Industry Association's Community of the Year.
Submitted Shown is the resort-style pool at the village center in Paseo, the Lee Building Industry Association's Community of the Year.
 — Builders pulled nearly twice the number of single-family permits in May than they did a year ago in unincorporated Lee County.
The county staff issued 80 permits, valued at about $16.3 million last month. That was up from 66 permits in April and 44 in May of last year, according to a monthly report by the county’s Department of Community Development.
“It’s all good news, but all news, good and bad, should be taken with a grain of salt,” said Denny Grimes, a real estate broker with Denny Grimes & Co. Inc., at Royal Shell Real Estate in Fort Myers.
He gave this example, to drive home his point:
“If you only have a quarter in your pocket, and you find another quarter on the sidewalk, you basically double your net worth. Permits doubling is good news, in that we have another quarter in our pocket, but we’re not ready to retire yet,” he said.
Last month, Lee also saw a jump in multifamily permits over the year. In May, there were 43, compared to 14 a year ago. In April, there were 65, county records show.
Building is still at a crawl and only beginning to pick up steam, Grimes said.
“This is good news, but then again the building industry isn’t running on all eight cylinders yet,” he said.
Most of the activity in housing is coming from national builders, who are looking to meet demand in the $200,000 to $400,000 price range, with the inventory so low in that market.
“The timing is right for them because there is very little resale inventory,” Grimes said. “Interest rates are still low and the consumer and the buyer sense that now is the time to buy.”
Last month, Lee County Community Development issued 3,502 permits of all kinds in the unincorporated area, which excludes cities and towns.
General commercial activity was valued at $687,525 for 115 permits, compared to nearly $1.2 million in April and $5.4 million in May of last year.
Commercial development traditionally follows residential development, so it’s still slow in general, Grimes said.
“Commercial has still not worked through their inventory,” he said. “That will take some time to do.”

Friday, May 31, 2013

Home prices rise the most in seven years

Home prices rise the most in seven years

May 28, 2013   |
WASHINGTON — Home prices rose in the 12 months through March by the most in seven years as the recovery in residential real estate gained momentum.
The S&P/Case-Shiller index of property values increased 10.9 percent from March 2012, the biggest 12-month gain since April 2006, after advancing 9.4 percent in February, a report showed Tuesday in New York. The median projection of 30 economists surveyed by Bloomberg called for a 10.2 percent advance.
Property values may keep climbing as cheaper borrowing costs and gains in confidence lure buyers while the number of houses on the market remains near the lowest level in a decade. Rising prices are shoring up household finances, which could give a lift to sales at retailers and help builders.
The median price of an existing single-family home in Lee County was $182,000 in April, up 29.8 percent from $140,199 a year earlier, according to the Realtors Association of Greater Fort Myers and the Beach.
Single-family sales in Lee were up 1.4 percent to 1,172 from 1,156 a year earlier during the same time period, the association’s monthly report states.
In Collier County, 1,126 single-family homes were sold in April, up 11 percent from 1,014 a year earlier, according to the Naples Area Board of Realtors.
The median price increased 9.4 percent from $223,000 to $244,000 a year earlier.
Numbers for both counties include only homes sold with the help of a Realtor.

Housing Market In South Florida Ripe For The Picking

  Housing market in South Florida ripe for the picking By Todd Wilson | September 16, 2020 at 12:05 AM EDT - Updated September 16 at 9:42 AM...