Beyond the sunshine and warm weather, the tax benefits of a Florida residency can be substantial. Everyone probably knows that Florida does not have state income taxes, but it is generaly less known that Florida estate taxes are more favorable than many other states.
One of the questions that many snowbirds ponder is whether or not to establish residency in Florida. Boca Raton Attorney Allan Lipman offers a free online audio domicile guide that covers the benefits of establishing residency in Florida. Lipman is licensed in both Florida and New York and his 10 part free audio guide provides numerous comparisons of the tax handling for both states. A good listen for anyone pondering an investment in Florida real estate.
My inbox today contained an e-mail that really troubled me, here it is (including typos) with the senders name redacted:
Subject
I BUY AND SELL SHORT SALES…
Comments
Hello Mr Mark, I’m an investor and I’m looking for a couple of self motivated and out- going agent(s) that wants increase their commissions by helping us find and buy high end properties in short sale. I have aligned myself with group of short sale negotiators in Fort Myers with years of experience in the short sale field, that will do the negotiation(s) with the lien holder(s) on your client/seller behalf at no cost to you or the seller(s). Once I acquire the property we will put property back on market (with you) giving you the chance to earn a double commission and becoming your seller(s) hero and by that the chances of more referrals and more daels. Please contact me ASAP to set up a meeting and discuss our working along side strategy on helping your clients as soon as possible. Sincerely:(redacted)
It is troubling to me that others have crafted business strategies to profit by taking advantage of others misfortune. I bet they never mention to the troubled homeowner that a deficiency judgment may very well be hanging over their head for the next 20 years.
ABC-7 reports that a German shepherd named Snoop is being trained to identify Chinese drywall. This innovative approach to identifying toxic drywall is great news for Southwest Florida. Snoop should be able to find the drywall even if it is just a sheet or two and not prevelant throughout the entire house.
I have another use for Snoop and that is to have him spend some 1 on 1 time with Realtors that are knowingly listing homes with Chinese drywall and not disclosing its presence. The Greater Fort Myers and the Beach Board of Realtors needs to step up and create and enforce specific rules about listings containing or suspected of containing Chinese drywall.
Casa Del Rio, the home of former WCI Chairman and former Ambassador to Portugal Al Hoffman, is on the auction block. Hoffman was also Chairman of the Republican Nation Committee and his Gulf Harbour riverfront home has hosted fundraisers and been visited by presidential candidates including George W. Bush and John McCain.
Many consider Casa Del Rio to be the finest home in Fort Myers, but is it just too much house for this town? Casa Del Rio has been on the market since November 2005 when it was originally listed for $17M. The price was been reduced twice to $14.9M but no takers over a four plus years it was on the market.
The auction is scheduled for March 13, 2010 and will be conducted by Daniel DeCaro Real Estate Auctions. It is an absolute auction, so the house will be sold. If you are interested, the 2009 property tax bill on this home was $56,085.73 and HOA fees totaled $2,668/month.
No speculation on a buyer, but my money is on Tom Werner, the Chairman of the Boston Red Sox. If this does come to fruition, I called it in 2006!
Business Week reports that lenders are stepping up their efforts to collect on deficiency judgments of mortgage defaulters. The article reports that banks are seeking deficiency judgments in both short sale and foreclosure scenarios. This stepped up approach by lenders has come as a major surprise to many who have completed a recent short sale transaction.
In the state of Florida, banks have five years to file the deficiency judgment and then 20 years to collect it. To get paid, banks can seize wages and bank accounts and also put liens on other assets.
The latest report on the Lee County rental market released by RealFacts of Novato, CA detailed some significant shifts in our rental market for 4Q09.
Lee County apartment occupancy rates in 4Q09 climbed 7.2% to 91.1%, the highest gain in the State of Florida. Lee County rents for the same period dropped 12.2% to an average of $776/month. This decline in rental rates was second in the State of Florida, trailing only the Ocala market.
It would appear that many of our residents who have lost their homes to foreclosure are now renting. With severely damaged credit associated with a foreclosure, many of these residents will be renting for quite some time. As these leases start to expire, I expect that we will see a significant uptick in demand for lease-to-own arrangements. These types of arrangements may prove very attractive for investors with skinny or negative cash flow assets.
WGCU hosted a panel of Southwest Florida real estate experts including Dick Hogan from the Fort Myer News-Press. The panel discussed the state of the market and expectations for 2010.
Distressed real estate and foreclosures dominated the discussion. The panel fielded calls from local homeowners facing foreclosure and having great difficulty trying to renegotiate with their lenders.
The panel discussion was recorded and is available for replay.
One of the buyer misconceptions about our current Fort Myers area real estate market is that banks will approve ultra-aggressive, low-ball offers on short sales and foreclosures. Approving low-ball offers in Lee County has absolutely not been the operating model for lending institutions during 2009. Particularly for foreclosures, much of the discount on these properties is reflected in the aggressive selling price.
The numbers speak for themselves regarding the ratio of selling price to listing price. In 2009, 20,480 residential properties were sold in Lee County for a total of $2.7B. The average listing price was $140,706 and the average selling price was $132,068. This represents an average selling price to listing price ratio of 94%. Anyone who tells you that banks are accepting offers at 50% of asking price is just not dealing with reality.
The Miami Press reports on new guidelines coming out from the U.S. Treasury that will place a 10 day limit on bank approval for a short sale. These guidelines cover mortgages for institutions participating in the Home Affordable Modification Program including JP Morgan Chase and Bank of America. Fannie Mae and Freddie Mac backed loans are not part of this program, but these two organizations are working on their own short sale standards.
If enforced, these guidelines should dramatically alter the dynamics of a short sale transaction. The current modus operandi on a short sale transaction involves bank approval delays that can stretch on for many, many months. Pending, but unapproved or denied short sale listings are clogging our MLS, and setting unrealistic pricing standards in some communities.
I applaud the Administration and Treasury Department efforts to introduce standards to the short sale process. Our extensive inventory of Cape Coral short sale listings and Fort Myers short sale listings could sure use some trimming through expediting the decision making process.
Time Magazine covers the re-emergence of flippers to the Florida real estate market. We have certainly seen this in the Fort Myers area, particularly in the entry-level single-family home foreclosure market. Cash paying investors have bought up significant quantities of the inventory below $100,000, making it challenging for regular homes buyers with a mortgage to compete.
The Time article suggest that today’s investors are “good” flippers, as they are helping to clean up foreclosure messes and also are holding longer than bubble era flippers. The article reports that during the bubble many “cocktail party” investors bought at any price irregardless of whether or not the deal made economic sense.
The Naples Daily News is running a series about Southwest Floridian news makers in 2009. One of the featured 2009 newsmakers is convicted real estate deal-maker Samir Cabrera.
If you are interested, Samir is now making his home in Pensacola at the Federal Prison Camp. Samir was convicted of fraud associated with a a vacant land flip in the Daniel’s Corridor of Fort Myers. His case was one of the most followed stories of the year and the entire region was relieved that justice was served.
The Daniels Corridor area has truly evolved into the “main street” of the Fort Myers region with the recent expansion of RSW and the upcoming development of the new Red Sox spring training facility.
Peter Goodman, the author of Past Due, which prominently featured the boom and subsequent bust of the Cape Coral real estate market weighs in with an update in today’s NY Times. This article is a must read for anyone with a vested interest in Cape Coral real estate.
Despite the echos of “we’re back” from many of my peers……which ring hollow up and down the banks of the Caloosahatchee, there is still much heavy lifting to be done in Cape Coral.
We sure are selling lots of properties right now, mostly foreclosures to bottom-fishing, cash-laden investors as well as pre-retirement boomers. This rush of recent investment is not going to solve the long-term problem here in Southwest Florida, that of economic diversity and the creation of quality new jobs. I would much rather see some of the stimulus money coming to areas like Cape Coral to stimulate the creation of new companies and industries. To me this would create sustainable recovery that cannot be realized with the highway projects that are being built all over the country.
If you have spent any time looking at Cape Coral foreclosures or Fort Myers foreclosures, chances are you have visited a home or condo that has been stripped of its appliances, cabinets, fixtures and sometimes even more. The NY Times reports on the damage and destruction that owners and others are causing to foreclosed homes.
The Times reports that law enforcement authorities in Arizona are actively pursuing foreclosure strippers that are posting the goods for sale on Craig’s List. Stripping a home can be a difficult crime to prosecute as it is civil mater rather than criminal, and can often cost a bank more to pursue than the ultimate return they would realize in a civil proceeding.
Hopefully, authorities here locally will also pursue some of these foreclosure strippers to at least make others think twice before damaging the next home.
Throughout much of 2009, the News-Press has been chock full of local Realtors discussing how our Southwest Florida real estate market has reached the bottom……and is headed upward. While this would be great news and cause for celebration, I think it is truly difficult to really make a definitive bottom prediction until you have moved well past the bottom.
A Miami Herald article titled, Real-estate bottom is not when things appear to be better, rang true with me and all these bottom predictions. The article suggests that despite the uptick in sales and decreasing inventories that we have seen in 2009, we are truly not at the bottom. The article opines that government intervention is the cause for the apparent market improvement. Two examples cited include the first time buyers tax credits and court systems that are stalled due to being clogged with foreclosures.
While I don’t think I will truly know the bottom until it hits me over the head, we are continuing to see significant interest in well-priced Fort Myers foreclosures and Estero foreclosures from those looking for a pre-retirement second home. Tough to argue with a 70 degree day down here when the Northeast is getting slammed with a foot of snow!
NBC-2 reports on unrecorded liens, a surprise post-closing challenge many buyers of foreclosed properties have faced in Cape Coral.
The current policy in Cape Coral is to not file liens for things like overdue water bills if the amount is less than $500. In the scenario presented in the story, the buyer of a foreclosed building in Cape Coral received two water bills for over $800 that had not been recorded as a lien against the property. Cape Coral’s Mayor John Sullivan vows to fix this issue so that buyers of Cape Coral foreclosures will not be surprised after closing.
A good Realtor representing the buyer would know to call the City of Cape Coral to check on any unrecorded liens.
The St. Petersburg Times reports that the bottom feeding foreclosure workout firms will face significantly more scrutiny in Florida. These workout specialists promise miracles, typically charge a desperate homeowner a large upfront fee and then don’t do anything to help save the home from foreclosure.
Here locally, there are firms operating in under the guises of saving a homeowner from foreclosure. A common strategy of theses firms is to charge the homeowner a fee to list the home as a short sale. These firms also look for a payment from the buyer at closing. Typically language such as “A $2500 fee will be requested from buyer by third party at closing, so please adjust your offer accordingly” will be included in the MLS listing. This third party fee is going into the coffers of the workout firm, rather than the lender who is taking the hit on the short sale.
The bottom line is that a homeowner facing foreclosure should never have to pay an upfront fee to list their Fort Myers short sale home.
Remember the AC/DC song Big Balls………well I have to say that Roger Schutt, CEO of Premier Properties of Cape Coral may have the biggest of all!
Premier Properties has purchased the Cape Coral subdivsion formerly known as Pinewood Lakes from Reliance Bank, who took it back from the previous developer. The project has been re-branded as Celebration Cape and features 58 lots on a 20-acre parcel. At a purchase price of just under $1m, Premier is into this investment at under $18K per lot. Taking a long-term view, I really like the upside of this investment for Premier.
Celebration Cape has unique zoning which allows for over-sized backyard garages that can accommodate an RV or a boat. The project features a concrete wall around the perimiter and water and sewer utilities are already in place and paid for.
Celebration Cape is located off SE 8th Street, east of Santa Barbara Boulevard, between Nicholas Parkway and Hancock Bridge Parkway. New home prices including the lot start at $129,000.
The Realtor Association of Fort Myers and the Beach released November 2009 home sales numbers which highlight significantly increased levels of activity in our market. These figures reinforce the sentiment of our team which has been extremely busy with second home buyers looking to take advantage of our reduced home prices.
Highlights from the November 2009 figures released by the Realtor board include:
An increase in homes sales over November 2008 of 70.5%
2009 YTD single-family home sales of 15,336 – up from 8,768 for all of 2008
November sales included 47.4% bank owned, 18.9% short sales and 33.7% conventional
MLS inventory of 6,976 homes down from 12,106 in November 2008
It is a great time to be a buyer in Southwest Florida, there are interesting opportunities across all housing types and price ranges. Use our map tool to start your search of every active listing in the Greater Fort Myers area.
Wink News reports that the foreclosure auction held last night at the Harborside Event Center netted sales of 75 homes. Our market is still heavily weighted towards foreclosures with approximately two-thirds off all homes being sold falling into the distressed category.
We continue to see significant activity mostly from second-home buyers looking to take advantage of aggressively priced foreclosure listings. Here are free web resources that are updated daily with the latest foreclosure listings:
Here is a video of a Las Vegas homeowner calling into Your Money on Fox News. The caller poses the question of whether he should strategically default on his underwater home. The panelist present arguments for both sides of this debate:
The November 2009 Credit Suisse Monthly Survey of Realtors confirms what we are currently seeing in the Fort Myers market.
Pre-retirement baby-boomers are taking a serious look for a second home in Southwest Florida. Our highly discounted prices are very enticing and the continued strength of the stock market this year are two of the key drivers for this class of buyer. Most of the buyers in this category are paying cash. This opens the market up to deeply discounted condo projects that are currently not finance-able with conventional mortgages.
Here is an excerpt from the Credit Suisse report:
Here is a resource to view Fort Myers real estate including all the currently available active listings. There are interesting bargains to be had across all housing types and pricing levels.
The most expensive home to sell in Lee County Florida during November 2009 was a Captiva beachfront single-family home located at 11551 Wightman Lane, Captiva. The Captiva home is 2,200 SF and features 3BR and 3.5 BA. The home was re-built in 2003 and offers spectacular gulf-front views and beach access.
The selling price was $3.1775M / $1,444 SF. Congratulations to selling Realtor Rose Dakos of VIP Realty Group, Inc. for closing the most expensive residential property in November 2009.
Honorable mention for 2nd most expensive Lee County home sold in November was a single-family home located at 10411 Via Lombardia Court, at Miromar Lakes in Fort Myers. This waterfront home in the Castelli neighborhood of Miromar Lakes is 5,404 SF and features 4 BR and 6 BA.
The selling price was $3.1M / $573 SF. Congratulations to selling Realtor Jay Siegall of Sun Realty, LLC for closing this transaction.
On a most positive note, there were seven residential transaction in Lee County over $1m in November 2009. This is the highest number of $1M+ transactions since Gulf Returns started tracking Fort Myers area luxury closings.
The Sarasota Herald-Tribune has an interesting article about Norman Radow, who has been hired to liquidate the real estate portfolio of bankrupt Leman Brothers. West Bay Club in Estero is one of the assets that Radow is currently focused on. A big challenge at West Bay Club is that only 617 of the originally planned 1,054 properties have sold.
In the year that Radow has been overseeing the West Bay Club, his modifications have cut the annual operating deficit has been cut from $2.5M to $31,000. These changes have included the closing of unprofitable restaurants and opening the club to guests of the nearby Ritz-Carlton Hotel.
Currently, resale coach homes at West Bay Club are available starting in the mid $300s.
Estero Palms, a gated community of 32 single-family homes in Estero, has sold 22 of its 32 home sites. On a positive note, 14 of these sales have occurred since May 2009. Estero Palms features estate homes which start in the $220,000s. Estero Palms was developed by Taylor Morrison.
Estero Palms is located in Estero on Block Lane just west of River Ranch Road. This convenient location is adjacent to Estero High School and the Estero Recreation Center.
Tucked away in SW Cape Coral between Pine Island Road and the Cape Coral Sports Complex is the unique community of Saddlewood Farms with multi-acre lots that are perfect for equestrian families. What could be better than keeping your horses on your own property and also living close to everything in SW Cape Coral.
Saddlewood Farms parcels are as large as 5-acres and many are served by the Cape Coral central water utility, but to central sewers. Many of the homes in this community include stables and barns. The Saddlewood Horse Club offers stables, riding lessons and boarding.
Saddlewood Farms is located off Pine Island Road (near the German-American Club) between Veterans Parkway and Chiquita Boulevard. Neighboring residential communities include Sandoval and the Royal Tee Country Club. Shopping and dining are just minutes away on Pine Island Road and at the Shops at Surfside.
The Bradenton Herald reports that Chinese drywall saga is entering a crucial phase:
Within the next few weeks, officials expect to determine how much of a fire hazard, if any, the contaminated product poses. They’ll also have a better idea of how much the drywall contaminates the air inside affected homes. A federal judge is expected to decide which of the several hundred lawsuits that have been filed over the product will be the first to go to trial.
And the White House will raise the issue for the first time when President Barack Obama visits China this week.
It will be interesting to see if President Obama puts the hammer down on the Chinese to cough up some funding to fix drywall problem.
The Sarasota Herald Tribune reports on short sale flipping fraud that is becoming more prevalent here in Southwest Florida.
In a nutshell, real estate professionals and investors are teaming up to by undervalued distressed properties from banks and then immediately flipping the property to a new buyer at a hefty increase. The short sale flippers often cross the legal line with bogus broker price opinions (BPOs) to misrepresent the properties market value to the lender.
It is great to see that the DOJ is going after two real estate agents in Connecticut that have been charged with engaging in short sale mortgage fraud schemes.
The real estate market in the greater Fort Myers area has been dominated by foreclosure and short sale activity. This REO activity has driven significant price declines in Southwest Florida real estate.
In the third quarter of 2009, home prices in the Fort Myers-Cape Coral area dropped on average 40%. This 40% decline led the nation for the 3rd quarter.
Source: The Wall Street Journal
We are seeing a major shift upmarket in foreclosure activity. At this time last year, the largest pocket of foreclosure activity was centered around single-family starter-type spec homes in Cape Coral neighborhoods like Gator Circle and in Lehigh Acres. Investor heavy condo developments like Bellasol, Cypress Landing and Sail Harbour were also heavily impacted with foreclosures. Many of these lower-priced homes and condos REOs were snapped up by a new set of investors with an eye towards generating a cash-flow positive rental income stream
Today, significantly more foreclosures are hitting the market in upscale communities like Miromar Lakes, Bella Terra and Gateway. With more amenities which drive higher condo and HOA fees, these properties are less attractive to investors to purchase as rental property. Second home buyers are definitely the target for this high-end class of foreclosures. Our team has been extremely busy this fall showing this class of property to out-of-town buyers. Several have liked what they have seen and are buying upscale foreclosed homes and condos.
Cape Coral has a beautiful new addition with the opening of Tarpon Point’s Resort at MarinaVillage. This new 19-story resort hotel offers comcierge and spa services along with shops, waterfront dining and a 175 slip marina. The spectacular views from the MarinaVillage property are include the Caloosahatchee River, San Carlos Bay and the Gulf of Mexico.
If you are considering a trip to Southwest Florida this winter to look at property, the Resort at MarinaVillage offers a luxury alternative to other Southwest Florida resort complexes including Sanibel Harbour Resort and South Seas Island Resort. Fractional ownership options are available at the MarinaVillage.
Congratulations to the Grosse Point Development Company for completing this beautiful project in our currently challenged market.
WGCU hosted a panel of Southwest Florida real estate experts including Dick Hogan from the Fort Myer News-Press. The panel discussed the state of the market and expectations for 2010.
One of the buyer misconceptions about our current Fort Myers area real estate market is that banks will approve ultra-aggressive, low-ball offers on short sales and foreclosures. Approving low-ball offers in Lee County has absolutely not been the operating model for lending institutions during 2009. Particularly for foreclosures, much of the discount on these properties is reflected in the aggressive selling price.
The Naples Daily News is running a 
Here is a resource to view 
Honorable mention for 2nd most expensive Lee County home sold in November was a single-family home located at 10411 Via Lombardia Court, at Miromar Lakes in Fort Myers. This waterfront home in the Castelli neighborhood of 
Tucked away in SW Cape Coral between Pine Island Road and the Cape Coral Sports Complex is the unique community of 
