Where do you get your news? Might I suggest one source should be from the front lines. We live in an age where we are bombarded with news from all directions and while I do not believe in accepting any one source at face value I do believe that it is imperative to heavily consider local issues especially when it comes to Real Estate.
We currently see much information indicating that real estate prices continue to fall and that new construction is all but non-existent. While these facts are true on a national basis, anyone considering Real Estate in Southwest Florida needs to be aware that this area is truly separated from those trends. It was quoted in the Fort Myers News Press that in Lee County the median price in April Was $118,900.00 more than 17% higher than just three months earlier. As for new construction, we now see builders aggressively moving to build not only contracted homes but inventory homes as well. A few communities stand out are Paseo, The Plantation, and Heritage Bay who are all reporting sales at their highest level since 2006.
No Current market report would be complete without some discussion about Short Sales and Foreclosures. One of the terms bantered about in Real Estate circles is “Shadow Inventory”. This refers to homes that are in some stage of foreclosure but have not been brought to the market. While there is no way to dispute that this condition exists there are many theories about why and how it will be resolved. Some of the backlog is due to legal concerns causing banks to back track and review their processing of the documents. I believe that a larger issue is that they have finally come to realize that dumping properties in large blocks was not only hurting their bottom lines but destroying the financial well-being of countless home owners and, in turn, causing many to give up in despair when the value of their homes fell some 60%. We now see a much more orderly release of foreclosure inventory and as a result a firming in values.
As for short sales, they remain – as always – very unpredictable. No two cases are exactly the same due to all of the variables present. We did however receive encouraging news just yesterday that Bank of America will now allow a back-up contract to be substituted in the event that a primary buyer backs out for any reason. In the past this meant that the process had to start over from scratch, adding many months to an already arduous process. This is very encouraging to all of us who work so hard for our clients and get to the finish line just in time to watch everything fall apart. Let’s hope this leads the way for other banks to adopt the same practice.
In conclusion, Southwest Florida has indeed rebounded. I would encourage anyone with aspirations of purchasing in the near term to consider taking action this summer during the off season. It is my belief that this next season will again lead the way to increased activity and to higher prices. Now is a good time to make Southwest Florida your place in the sun.
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