Real Estate Investing in Fort Myers
Let’s face it purchasing a second home is an investment whether it be for vacation, retirement, or true investment. Any seasoned investor has been baptized by fire at one time or another. Certainly, those who invested in real estate in 2005 and 2006 saw their investments crumble in what has been labeled the “Bursting of the Bubble”. Some choose to turn their back and never return while others carefully watch, learn, and wait for a chance to take advantage of a unique opportunity. For the past year I have been proclaiming that we are now in a unique period where purchasing real estate in Southwest Florida makes more sense than ever before in my lifetime. We consistently see quality homes in upscale gated communities selling for $60.00 to $80.00 per square foot. The industry accepted cost for new construction even in this depressed economy hovers around $150.00 per square foot. This has not gone unrecognized.
Recently released data shows that in April 1457 single family homes were sold in Greater Fort Myers. This continues what has been a year long run of record sales. What is different about the most recent numbers is that median prices are rising. April’s median price of $96,000.00 is up 20% from a year earlier. Another astonishing reality is that reports have indicated that 60% to 70% of those transactions have been cash. Another important fact is that Short Sales and Foreclosures are declining as a percentage of overall sales. They currently make up 58% which is still significant but much lower than the 65% posted just one year ago.
My point in all of this is that if you are a fence sitter and waiting for the bottom to make your move; this data would suggest that it is passing you by. From a less statistical and a more practical perspective I can tell you that it is more challenging to locate “bargain properties” and even more challenging to successfully land them. It is difficult for our clients who watch the headlines from other parts of the country and indeed the world hear us say that they will not successfully land a property unless they bid above asking price. This is a result of the strengthening in our market. Foreclosures are priced for liquidation using a process called BPO, or “Broker’s Price Opinion”. As in any appraisal it is a snapshot at one moment in time. Assuming accuracy, this says that the market has firmed up and the value is more than it was at the time of appraisal.
In conclusion, I summarize in saying that there are still opportunities to take advantage of these unique market conditions and further suggest that if you have considered purchasing, you solidify your thoughts. Of course there is uncertainty. If there was an investment that was 100% certain, what would the return be on that? I like an investment that pays an annual dividend of sunshine and warm temperatures every January. I think you might as well.
Call me with any questions you might have and let’s become neighbors. ~Dick Dohack