HOME SALES – Mirroring the national trend, turmoil in the mortgage market impacted Florida’s housing sector in September, despite continued low unemployment rates and other positive economic activity. Statewide sales of existing single-family homes totaled 8,688 last month, a decrease of 38 percent compared to September 2006 activity, according to Florida Association of REALTORS. The statewide median price for existing single-family homes last month was $221,200.

Read the analysis for the 3rd quarter for Naples homes sold in 2007 with a year over year comparative figures.

Also, read the analysis for Bonita Springs homes sold in the 3rd quarter of 2007 with comparative figures for 2006.

FLORIDA REAL ESTATE TAXES – The Florida House thinks it has a better plan for real estate tax reform, but time may be on the Senate’s side in a showdown over the issue. Lawmakers must settle their differences by next Monday, or it will be too late to put a proposed state constitutional amendment on the January 29, 2008 presidential primary ballot.

ECONOMY – Former Fed Chief Alan Greenspan said Tuesday that a bloated inventory of new homes, rather than existing homes, has unsettled the U.S. economy; but he expressed optimism that the nation will avoid a recession. “Where the problem lies is in home prices – new home prices, very specifically,” Greenspan said.

HOMEBUYERS PICKY – Homebuyers have many properties to choose from, but can nix one as a possibility quickly if it has a problem that traditionally spooks buyers – even if the problem would cost only pennies to repair.

Many homeowners are facing the potential of a foreclosure action for many different reasons.  A possible solution is the exploration of a "short sale" or pre-foreclosure sale.  A seller needs to research and gather information prior to embarking on this endeavor.  You might want to seek the advice of a well qualified real estate agent with the skill sets and experience in several disciplines beyond just real estate listing and sales.

If you are thinking about a pre-foreclosure sale (short sale), selling or buying in the Naples, Bonita Springs or Estero areas this article is a must read!

• Ascertain the status of all your payments on all mortgages and assessments, and whether there are any judgments or other liens on your property. What are the balances? What are the arrearages? What correspondence have you received from your lender(s) or their attorneys?
• Have you been in cooperative ongoing contact with the lender? With whom?
  Have you discussed forbearance or a short sale with the lender’s "loss mitigation" department?
• Have you explored other alternatives with the lender, such as mortgage modification or extended payment terms?
• What is the nature and cause of your financial hardship? In negotiating a short sale, you will need to show an unanticipated, significant hardship occurring after you originally qualified for the loan and be able to prove it to the lender(s).
• Ask a real estate attorney to check your title at the clerk of court’s office where public records are kept, to independently confirm the mortgages and liens shown on the property and whether the lender has yet filed a foreclosure suit.
• As a seller a real estate agent should advise you they can market the property and assist in establishing market value for any short sale contract – but you should retain a knowledgeable attorney to negotiate with lender(s) and consult a tax advisor on the adverse tax consequences of a short sale, as most real estate agents are not licensed to practice law or income tax preparation.
• If you decide to proceed, be aware you will not net a dime, the listing price must be "reverse engineered", i.e. start with totaling loan and lien balances, and then initially determining if the market will sustain pricing in a range as high as the total loan balances. Don’t forget: Since quick sale is necessary, the listing price should be set at the very bottom of the current market.
• As a seller the real estate agent should request you sign an authorization allowing the real estate agent and any attorney representing you to contact your lender(s), obtain further information and act for you.
• You should have ready the following documentation for lender’s review - your employment and income records, bank statements, last two year’s tax returns, and proof of assets and debts documentation to prove your lack of income to make loan payments and lack of assets to cover the shorted loan balances.
• But avoid committing to a real estate agent handling any short sale negotiations for you with lenders. This is going beyond the scope of the real estate sales license and risks great liability.
  At the same time, be warned against possible approaches from alleged "short sale experts", most of whom at best have taken a quick get-rich-quick seminar and at worst can be unethical equity skimmers.

Yesterday someone asked a very good question about what I saw as to the direction of the value of Golden Gate Estates lots. They had heard that once Ave Maria University is built that lot values would increase and start selling faster.

Below is my response – it is rather lengthy:
For quite some time, people have said property values in Golden Gate Estates would go up because of both the Town of Ave Maria and Ave Maria University being built in the eastern part of Collier County.  It is one of the reasons that Golden Gate Estates lots shot up in value along with home prices.

The fact remains that Ave Maria is located about 5 miles further east of Golden Gate Estates and the starting prices for a residence in Ave Maria are now in the $200’s.  The town will have many amenities that Golden Gate Estates does not have – public water, sewer, parks, water theme park, tennis facilities, shopping, fitness center, etc. The town of Ave Maria will be a destination for people, not Golden Gate Estates.  Most likely the area of Golden Gate Estates to see some positive impact with be those areas that are close to Oil Well Road, which is the direct route to Ave Maria.  The further away a property is located from this corridor the less impact Ave Maria will have on a property’s value.

A good example is the impact that Orange Groves and Orange Blossom Ranch subdivision had on the Waterways and Orangetree subdivisions, where the home in Orange Groves and Orange Blossom were and are being built starting in the $300’s, where the existing homes in Waterways and Orangetree were selling for more and now, their prices have dropped substantially and barely selling.  The same impact was felt in the Golden Gate Estates areas surrounding Orange Groves and Orange Blossom Ranch.  People like new construction rather than an existing property.

Another factor that will be or is actually starting to be an impact on Golden Gate Estates – is the rate of foreclosures.  The number of foreclosures is rising, due to people not being able to afford the monthly payments.  Several reasons – increases in property taxes, increases in insurance, and the financing program they used to purchase the property.  Many people used either option adjustment rate mortgages (ARM’s) of some type.  Generally, the ARM’s are either 1/1, 3/1, 5/1, 7/1, or 10/1 – the first number represents how long the mortgage has a fixed rate and then the interest rate adjusts – unfortunately, the interest rates have risen since the purchase and the homeowner is faced with higher monthly payments.  All the increases combined – even though individually are small when combined are significant for the homeowner and thus payment problems start which end up in foreclosure situations.  Many of the homes were purchased by individuals that were classified as high-risk borrowers and various loan programs used where it truly did not meet the needs of the purchaser(s).  I was interviewed by both NBC Channel 2 and ABC Channel 7 here, regarding the foreclosure situation – it is my humble opinion that we are now seeing only the tip of the iceberg for foreclosures.

Another issue that will affect property values is the tightening of lender requirements – for example, last year someone with credit scores of 580 could obtain a loan, today the requirement is up to 600.  There is a greater scrutiny of loan applications and appraisals to ensure their accuracy.  As lending requirements tighten up the number of potential buyers dwindle.  This is occurring due to the amount of foreclosures taking place throughout the country.  Residential lots or vacant land is a higher risk than residential properties and these types of properties may see more stringent lending requirements.

One other factor that will affect property values is the rate of growth (population) that will be taking place in the future – one report I read stated that the state expected a school population growth this year of about 44,000 students state-wide – the actual number turned out to be less than 1,000!  If the population stabilizes, then the demand for housing decreases, when demand decreases so does home values, and it trickles down to the residential lots and vacant land.

Also, Hank Fishkind a noted Florida Economist (he is surveyed by the University of Florida’s School of Economics) has stated that residential improved (not vacant lots) properties may increase between 3% to 7% per year.  Vacant residential lots generally increase at a lower rate than improved residential properties.  It is important to note that the rate of increase is based upon the estimated market value at a given time and not the acquisition cost of the seller.

Lastly, the weather (hurricanes) will have an impact on the demand for real estate – a bad hurricane season will cause less demand and the prices will again decrease.

The issue of whether a property’s value will increase is rather a complex issue as you can see and not just narrowed down to one cause and effect, but it is a combination of events/actions and their effects that will determine future market values.