More evidence of market turnaround!

Here's a thought for you...
When you think of 2 consumer advocates who comes to mind? I think of Jim Cramer and Suze Orman. Both are rumored to be buying Florida real estate. Hmmm...

Statistics are getting better. Quite frankly, I have not told customers its getting better...until recently. We have a wonderful climate for a turnaround. There are 2000 less properties for sale than there were a year ago and much more is selling. Check out this graph...

May '08 vs May '07 we are up over 30%. Good news for me :). I told you this was happening. If you have been reading my posts I am telling people on the fence to jump off. This year is the year of opportunity and it is NOT too late. Here it is in a nutshell.

The market slowed a few years ago. The buyers went away. Sellers were only willing to lower so much before they gave up on paying their mortgage. So, the lender got stuck without a chair. As you know banks do not want to own property. They will never rent and the property sits on the liability side of their asset sheet. It minimizes their ability to do what banks do best...lend money.

Now the banks are forced to sell at extremely low prices. Remember, there is not an unlimited supply of these REO properties. I have a list of only about 300. The list really has not grown. Each day some sell and some new ones come on. So, do you plan to wait until the market has already started appreciating before buying? Do you plan to continue to listen to the media's love affair with the bad news? The media was still talking about the high cost of living in Naples 6 months after this headed south. They seem to be about 6 months behind every story. I am writing the story now.

Using an IRA to purchase Naples Real Estate!

I don't think people realize quite how inexpensive it has gotten here.

This is a point I am trying to stress. It will play itself out in the near future. There is a price level here where everyone is attracted. The same variables that drew people to buy here still exist. I don't want to get into that today. I want to cover the ability to purchase property and have it produce a yield better than a CD or money market. I believe the rate of return matched with tremendous appreciation potential make 2008 a great time to buy.

Naples has quite a few condo conversion communities. These were once owned by a company that leased them out. In the years when the market soared the owners sold them off (or converted them) as individual condominiums. They were heavily bought up by investors. As things tumbled the investors chose to stop paying their mortgage. This caused a snowball effect directly leading to the problem we have now...the unusual amount of bank owned properties. These are the most aggressive of sellers.

Here is an example. This home sold for $220,000 3 years ago, June 2005. It is now listed at $101,000.

Property Details - Click Here
This is not a bad area. In fact, I live about 2 miles away.

Okay, let's do some math.

A condo like this rents for about $850/mo. Let's say you purchase this for $90,000 cash. I want to calculate what yield the rental income will produce against the $90,000 I laid out. I need to subtract the additional expenses.

Taxes - ~$150/mo. This amount should come down when the county accounts for a lower assessment.

HOA Fees - $263/mo.

So, you are left with $437/mo or $5244/year. 5244/90000= .058 or a 5.8% yield for your $90,000 investment. Combine that with tax deductions and potential for appreciation! How does this measure up against your expectations for the DOW this year?

There is also a way to use your IRA money to purchase the property. To find out how to do this read the article I have attached. I can put you in touch with an attorney to handle this matter.

Real Estate IRA - Click Here

Statistics Do Not Lie

As I have been telling many of you, it has not been this busy in over 3 years! I have evidence to support this now.

Pending Sales
February ’06 - 544 March ’06 - 612 April ’06 - 525
February ’07 - 464 March ’07 - 578 April ’07 - 494
February ’08 - 488 March ’08 - 609 April ’08 - 609

To sum it up, there was a 23% increase in pending sales April ’08 vs April ’07!

What has fueled the increase in transactions? LOW PRICES. It’s that simple. People are getting on board again. The truth is that this will prove itself time and time again over the next 12 months.

Pay attention. This is the most important point you will read.

In the coming years people will look back at 2008 as having been an incredible opportunity to buy real estate in Naples.

I don’t think people up North realize how much values have dropped here. Let me give some examples;


This home is on a golf course. It is ‘bank owned’.

Home is over 4300 sq ft. 5BR/4BA 4 Car Gar
Just Listed - $353,900

This home is on 2 lots west of 41. It is ‘bank owned’.

This home sold for $715,000 in Dec ’05.

Just Listed - $199,000

2BR/2BA condo with great lake view!

Sold for $310,000 January '06.

Just Listed $131,000

The bottom line is that people that have been on the fence about buying...GET OFF THE FENCE. If you are still on the dock in 2009 your ship will haveleft the port.

I have directed my focus on helping buyers get great deals. My clients and I will focus on buying property owned by corporations. These include:

Foreclosures, Bank Owned Property, REO's (real estate owned)

I am dedicating a site this month soley to these listings. I will let you know when it is launched.

BankOwnedNaples.com

It is my goal to make buyers informed. If you have any specific questions please email me at Tim@eNaplesRealEstate.com

Pending Sales are on the Rise!

Great News! Real estate activity has finally made a turn North. I guess if prices drop far enough buyers start paying attention:) This is especially encouraging for those of us in this business that have decided to make this our career. I know for myself the wait has been long but the payoff will come starting this year. Here are the statistics.





February '08 pendings (Listings that went to contract) were 514 up from 464 the previous year. That is an increase of over 10% year over year. It is clear we are not yet back at the wild days of 2005. However, it is a turn for the better.

I would say that a fair assessment of prices is that we are in 2004 prices. In some cases, I am seeing properties sell for less than they had sold for in 2003! This is a time of opportunity. We all have an interest in this area for similar reasons; sun, lifestyle, beach, beauty, shopping, schools, etc. However, as real estate slowed much of the local economy has slowed as well. Some have left. We know this is a transient area to begin with. However, let me put this question in front of you...Anyone think that this area will have the same population 5 years from now? How about 10 years from now? 25? The same factors that drew our attention to this area will convince the millions of baby boomers to seek out homes in Florida. I have heard people say that the retiring generation will not give up their homes up north. I think they will. No state income tax and lower property taxes are 2 wonderful reasons.


So what has been selling in this market? If your neighbor has had their home for sale for the past 2 years and cannot figure out why it has not sold, I can tell you. It is priced too high. Most likely it is way too high! I would say that probably less than 10% of homes are priced right at this moment. If you would like to see a list of 'Sold Homes' in a specific community just email me with a request tryan@amerivestrealty.com

What are some of the best deals right now? The market leader for the next 24 months will be Bank Owned Properties. People that understand value will be buying these REO (real estate owned) properties. Banks and lenders have been inundated with so many homes. They have to sell them! Remember, a bank is not in the business of owning property. It is what is referred to as a non-performing asset. In fact, the bank, by law, has to sell the property within 24 months or risk losing their FDIC status. The bank has no intention of renting. Each month has an associated cost of carry. They must sell aggressively and they are...

There are about 200 Bank Owned Properties currently. For a list email me at tryan@amerivestrealty.com or call me 239-293-3336.

The Times...They are a Changing!

Welcome to my Blog. This is my first posting. Here I will keep you updated with regards to the mood of the local real estate market. Please feel free to ask questions and post comments. The Blog will be updated weekly and will include insightful news that readers will find helpful.

I guess if things get inexpensive enough they will start to draw attention. I am a Realtor in Naples and I have not been this busy in 3 years! Sure, we still have our tire kickers but people are definitely putting pen to paper. The truth is the people I am meeting are sharp and savvy. They are not just buying things they like. They are buying things they like and getting great deals.

It's funny...everyone agrees that in 10 years this market will thrive. They all want to buy the bottom. This is what I try to convey. Pay attention this is very important;

Real Estate ( especially the market we are in) does not trade like a stock. You do not negotiate with the trend of the market. You negotiate with owners and lenders. There are many short sales and bank owned properties. Additionally, there is a point where owners just throw their hands in the air. They don't want to see another mortgage, tax, HOA, utility, or any other bill. They want out. These are the sellers I am dealing with. This is not all sellers. In fact, it is very few. However, they are out there. I find them. Visit my Top Picks Page.

Call or email me. Let's start a dialogue and a relationship. I am your Naples Real Estate Advocate.