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Cape Coral FL, The Sound of the Bubble Bursting /NY TIMES

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George Hatch

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We're going to have to get a ruling on this. We're not supposed to use the "bursting bubble" term or any variants thereof here lest we raised the ire of Mike Simpson's Creative Investors Club members. But I'm not sure that applies to quoting a headline from the NYT.

Everybody should line up their definitions sources, 'cause I'm pretty sure the definition of what is a "bubble" is going to come up here.
 

Michael Tipton

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Florida
• "When will real estate values finally level off?"

On Nov. 20, The Greater Fort Myers and the Beach MLS showed 18,596 single-family homes and condos available for purchase and 444 sold in October 2007. At this rate it will take just under 42 months for the present supply to reach zero.

Six months of inventory is considered a perfect balance between supply and demand, so the simple answer to this question is: "less than 36 months." But that answer treats all of Lee County as one market, which it's not.

South Fort Myers is doing better than the rest of Lee County. Cape Coral Gulf access lots are in limited supply and should see a more rapid turn-around. Demand for Lehigh lots will slowly return, but appreciation will be modest. Downtown Fort Myers? Wrong product in the wrong place at the wrong time.
So the answer to this question is that prices will stop falling when supply and demand are more in balance in the specific area a property is located.

http://www.news-press.com/apps/pbcs.dll/article?AID=/20071202/RE/712220308/1014/BUSINESS
 

c w d

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When Andrea Drewyor, 24, moved to Cape Coral from Ohio this year to take a teaching job, she found a brand-new two-bedroom waterfront duplex in a gated community with a fitness center, a swimming pool and a Jacuzzi — all for $875 a month in rent.

At night, most of the units around her are dark. The developer can moan.

Not Ms. Drewyor.

“I like not having a lot of people living here,” she said. “This place is awesome.”

Oh yes, that place is awesome until your landlord can no longer afford to own the home, defaults on its payments and you get a certfied letter stating that you have just a few days to vacate the property from the bank left holding the note. Yes, real awesome.
 

Michael Tipton

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Certified Residential Appraiser
State
Florida
Oh yes, that place is awesome until your landlord can no longer afford to own the home, defaults on its payments and you get a certfied letter stating that you have just a few days to vacate the property from the bank left holding the note. Yes, real awesome.

That has already happened to at least one of my friends. So much for their "security" deposit.
 

ketchumid

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Oct 5, 2007
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Idaho
Tough read on Christmas eve- sounds like at least one RE agent will tone it down on the next boom

Mr. Jarrett acquired a taste for $100 dinners. He bought a powerboat and a yellow Corvette convertible. (In a photograph on his business card, Mr. Jarrett sits behind the wheel, the top down, offering a friendly wave.) Last summer, he paid $730,000 for a 2,500-square-foot home in Cape Coral with a pool and picture windows looking out on a canal.
But Mr. Jarrett hasn’t closed a deal in three months. He is on track to earn about $50,000 for the year, he said. Yet he needs $17,000 a month just to pay the mortgages, insurance, taxes and utility bills on his four properties — all worth less than half what he owes. Rental income brings in only about $3,500 a month.
Mr. Jarrett has not paid the mortgage on two of his properties in six months and is behind on the others as well, he says. His goal is to sell everything, move into a rental and start over.
He is supplementing his income by selling MonaVie, a nutritional juice that retails for $45 a bottle. He recently dropped health insurance for his family, saving about $680 a month. He is applying for a state-subsidized health plan that would cover his 9-year-old daughter. “I’m in survival mode,” he says.
 

redfalcon

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Appraiser Trainee
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Florida
I have been living in southwest Florida since 1969, when Lee County only had about 100,000 people living in the whole county, that number has grown to over a half million now. The last statistics I have seen said that approximately 30,000 people move to southwest Florida every year, and with the bulk of the baby-boomers retiring a large number of the homes we have in inventory will be sold. This is Florida, people will continue to move here for that million dollar glow that we carry year round and the warm gulf water that rejuvenates the elderly. The bubble may have burst, but the future is still bright and sunny.:)
 

Couch Potato

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North Carolina
I have been living in southwest Florida since 1969, when Lee County only had about 100,000 people living in the whole county, that number has grown to over a half million now. The last statistics I have seen said that approximately 30,000 people move to southwest Florida every year, and with the bulk of the baby-boomers retiring a large number of the homes we have in inventory will be sold. This is Florida, people will continue to move here for that million dollar glow that we carry year round and the warm gulf water that rejuvenates the elderly. The bubble may have burst, but the future is still bright and sunny.:)
Keep telling yourself that, but when I moved out of Florida earlier this year, the truck rental companies where having far more leaving than coming back. The driving force pulling people to Florida was not the weather, but the low cost of housing and the low taxes. Those advantages are gone (although they may come back.)
 

Rrebera

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Jan 21, 2002
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Certified Residential Appraiser
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Ohio
Pine Brook Woods

I have been living in southwest Florida since 1969, when Lee County only had about 100,000 people living in the whole county, that number has grown to over a half million now. The last statistics I have seen said that approximately 30,000 people move to southwest Florida every year, and with the bulk of the baby-boomers retiring a large number of the homes we have in inventory will be sold. This is Florida, people will continue to move here for that million dollar glow that we carry year round and the warm gulf water that rejuvenates the elderly. The bubble may have burst, but the future is still bright and sunny.:)

What are the values in Pine Brook Woods?
 

Terry Caldwell

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Nov 30, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Beware the statistics. Far fewer people are moving to SW Florida now that the boom is over, and historically, an influx of 30,000 people would mean 10,000 or more leaving the state. Retirees and second home owners will likely return to the area, but future growth may be limited for a while as some markets lanquish.
Overall a good article that doesn't try to whitewash the problems here. And Mr Tipton is right on the money about some areas recovering more rapidly than others. A recent sale on Captiva set a record high price for Lee County, and the areas that initially brought people here, like waterfront property, will recover first.
 
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