Florida Real Estate Bargains Galore

News-press.com reports:

Foreclosures in Lee County surged in January to a record 1,833 - and some home buyers are reaping the benefits as banks increasingly put the foreclosed houses back on the market at fire sale prices.

"I'm smiling all over," said Diane Keene, a 55-year-old registered nurse who just bought a three-bedroom, two-bath foreclosed house with a pool in Cape Coral for $135,000.

But as lenders sell the houses they've taken back, experts say prices are likely to plunge even further after a long slide dating to January 2006.

The foreclosures in January eclipsed the previous record of 1,538 set in October.

Meanwhile, the number of permits to build new homes has fallen sharply. There were 54 permits pulled in January for unincorporated Lee County compared to 305 a year earlier, according to a report released Friday by the county Department of Community Development.

As prices have plummeted in the past year for residential real estate in the county, there's been a wave of foreclosures: 10,700 compared to 3,923 in 2006, according to records compiled by the Southwest Florida Real Estate Investors Association.

The median price of a single-family home sold in the county with the help of a Realtor has fallen 33 percent from the record of $322,300 in December 2005 to $215,200 in December 2007, the latest month available, according to the Florida Association of Realtors.

Realtors who have latched on to the new surge in foreclosure sales - up from two in January 2007 to 15 last month - are suddenly busy after two years of an increasingly soft market.

"I've had seven sales pending in the last week," said Linda Ellis of Sandals Realty, who works for several banks selling houses taken back in foreclosure. "It's so overwhelming I can't handle anything else. I work 15, 16 hours a day with two days off a month."

Keene's agent, Christine Million of Sellstate Priority Realty, said the bank sales are going fast because they're realistically priced - lenders want to dispose of the houses and are willing to take what the market will bear.

That's not always true of individual sellers who still hope for the lofty prices of two years ago.

"You've got 300 properties in a category and only the lowest three or five are getting any action," she said. What are the guys at the top of the market even doing there?"

John Moran, president of Riverside Bank of the Gulf Coast, said he's been disposing of foreclosed homes by a variety of methods.

"We've put some out for retail (through real estate agents) and we've sold some to our customers and employees," he said. "We've left no stone unturned."

Moran is especially glad that some of the houses have gone to teachers, firefighters and law enforcement officers - "heroes," he said -who had been driven out of the market by high prices until recently.

But mortgage broker Jeff Tumbarello, who's president of the Southwest Florida Real Estate Investors Association, said the housing market is still in trouble because tight credit by banks is preventing many sales even as foreclosures continue unabated.

"They're choking the real estate market," he said. "What's moving is $200,000 and below in our market, and the foreclosures are generally above that range. They're trying to fix a problem and they're creating a bigger problem."

The foreclosed home sales are just the beginning as more and more houses are taken back by lenders, said real estate broker Steve Koffman of Century 21 Sunbelt Realty in Cape Coral.

"The big stuff is still to come," he said.

Most of the interest in foreclosed houses is coming not from speculators but from people actually looking for a place to live, he said.

"A lot of people are saying, 'I can afford it,'" said Koffman, who also represents banks looking to dispose of houses they've taken back.

Brad Hunter, who directs housing statistics company Metrostudy's market research in Southwest Florida, said the increasing numbers of foreclosed homes coming on the market could push prices further down in 2008.

"Just this year we're seeing realistic prices return," Hunter said. "This year is going to be a year of healing and it's not going to be painless for everyone."

Keene is overjoyed to be buying a house for so little.

"I've been looking for two years now," she said, "watching and following, watching and following, as the prices came down."

She advises others thinking about buying to act quickly.

"If anyone's sitting on the fence," she said, "they need to jump off because prices are very good. I got a steal."

Who says prices can't go even lower?