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Cape ranks high on foreclosure list

By Staff | May 13, 2009

Cape Coral continues to be plagued by one of the highest foreclosure rates in the nation, yet real estate agents and analysts agree that the market has hit bottom and now it is time to climb out of the gutter.
RealtyTrac, a national online marketplace for properties, released a report Tuesday on foreclosed properties for April. It found that filings only decreased by 1 percent from the previous month.
The report paints a grim picture for Florida, ranked second behind Nevada for the number of foreclosed homes. Like the state, Cape Coral is ranked second on the individual community foreclosure list.
According to RealtyTrac, foreclosure notices were filed for one out of every 374 homes in April. In Florida, foreclosures were filed for one out of every 135 homes — more than 2.7 times the national average.
Median home prices also continue to drop nationwide. The Fort Myers-Cape Coral metropolitan area experienced a 50 percent drop in home values, according to a report by the Associated Press.
Home sales have dropped in every state except Florida, Nevada, California, Arizona, Virginia and Minnesota. These trends may point to the proverbial bottom, but in states like Florida, the inventory of homes needs to be sold off before the economy can begin to mend itself.
The National Association of Realtors recently reported that young, first-time buyers accounted for more than half of all home sales in the first quarter of 2009. But that is not the case in the Cape.
According to Michele Schafer, president of the Cape Coral Chapter of the Women’s Council of Realtors, investors are the primary homebuyers in the city. Behind the large investors are second-time homebuyers, who are taking advantage of the lower prices.
“There are a huge amount of investors and people are buying second homes, but a lot of the blue-collar people can now afford to buy a home which is great,” she said.
Most investors who are buying homes in the Cape are choosing to rent to locals and reselling the properties in no less than three to five years, Schafer said.
Recent legislation has made it difficult for investors to flip homes swiftly, thereby falsely driving the prices.
Schafer said the city has already started to rebound from the bottom of the market.
“The bottom is over,” she said. “We are on our way back up.”
Over the last three weeks, homes under $100,000 have increased from $50 per square foot to $58, she said. Also, the city had two years’ worth of inventory eight months ago, but has approximately eight months’ worth today.
National surveys have property values in Fort Myers-Cape Coral dropping by 50 percent, but Schafer said certain homes for sale between 2004 and today have been selling at 30 cents on the dollar.
The Lee County Property Appraiser will release official property values July 1, but recent estimates put values down between 20 percent and 30 percent. It sends out a preliminary estimate on June 1.
“I wouldn’t be surprised if the overall decrease will be greater than 30 percent countywide,” said Lee County Property Appraiser Ken Wilkinson.
He said decreases in property values depend on individual homes and where they are located. Some may be lower than 30 percent, but in areas most affected by the boom — including north Cape Coral and Lehigh Acres — the decrease could be 40 percent or more.
“Our county holds the rush up and the rush down,” said Wilkinson. “We will see the largest decreases not only in history, but in the state.”