I have to wonder if many of our buyers are missing the best values by focusing on short sales and foreclosures. Everyone wants a deal and many want to offer .30 to .50 cents on the dollar based on the estimated appraisal. In our market this reflects somewhere between 15% to 40% of what the previous owner paid in 2004-2005. We have defined this period in our area as the "irrational period" when people bought anything they could get under contract. I have to ask myself if finding the best value may actually mean ignoring the foreclosures and searching for owners that have owned for a longer period of time(8-10 years) and just need to sell, based on the statistice below?
Our company President, Phil Wood did a radio interview on August 26th, 2008 and updated us on what the market stats show for year-to-date 2008 in regards to foreclosures since that is a hot topic in the media right now. Below is the summary in the Naples/Bonita/Estero area:
- Thru July of this year, there have been 3,754 closings in SunshineMLS, in the specified areas. (a few more than our previous stats since some closings have now been added to the system.
- Only 163 of these were foreclosures, which is a very small number as compared to what media reports would lead one to believe. (4.3%)
- 45% of the foreclosures were in Golden Gate City and Golden Gate Estates, so there are only 90 closed foreclosure sales in ALL other areas.
- 84% of the 163 foreclosures sold at $300,000 or less, so it is primarily confined to the lower price ranges.
Obviously, there are parts of Lee County where the problem is much more severe, specifically Lehigh Acres and Cape Coral. These two areas have thousands of lots and/or homes, have traditionally been very reasonably priced, and many owners have now lost their jobs. There were also many investors that bought in those neighborhoods during the irrational period of 2004-2005, and have now simply walked away from their investment.
So overall, it is not a big issue in the Naples, Bonita Springs & Estero area.
The areas in Golden Gate mentioned above are primarily single family homes and more year round, full time, working residents as opposed to the gorgeous beach and golf course properties that most envision when they think of Naples................................................................................. In addition, many of our young first-time home buyers want to be closer in than this, where their jobs are, they can socialize with friends and hopefully capitalize on the great values that they hope will appreciate because of their appeal to both full time and seasonal residents when they are ready to move up.
Great values previal but are the foreclosures really where they are?
**Note: There are a few additional foreclosures in the area that may not go thru MLS. Additionally, there are tons of potential shorts sales that may also be potential foreclosures, although many banks are now standing on their heads to try and avoid taking back properties.