Cape Coral, Fl., a quintessential subprime-ravaged region of the country, saw its volume of home sales double in 2008. Of course, most of the sales were foreclosures, and there’s no indication (yet) that home prices are rebounding. But the region was one of the first to be devastated by the wave of foreclosures, and it would make sense that it would stabilise early.
The Fort Myers News Press: Home sales in 2008 almost doubled those of 2007, offering those in the home selling business a much-needed glimmer of hope. Short sales and foreclosed homes selling at a fraction of their construction costs boosted the number of sales, but real estate agents are also reporting a boost in high-end home sales.
“It’s basically been about three years since our market came to a screeching halt,” said Realtor Terry Mell. “Everybody’s been trying to time it (to buy when the market hits the bottom). The majority of these people feel like we’re there.” Mell said he is seeing people who had held off on a new home purchase over the past three years jumping into the market.
The articles reads like something of a puff piece for local real estate professionals, especially anecodtes about finally selling a few high-end condos and people ‘coming off the sidelines’.
However, it’s not all self-serving quotes from local brokers:
Tom Boyer, a Tampa area builder and developer, remembers a conversation with a colleague in August.
“They told me what was going on,” Boyers said. “You can get homes from 30 to 35 cents on a dollar. Common sense tells you, I buy it now and sell in two or three years, it’s going to come back. You know it will be at least the value of what it cost to build.”
Boyers has purchased dozens of Cape Coral homes since August with plans to rent them and hold them until the prices rebound.
Mell said he has been dealing with a Louisiana investment company looking to purchase $32 million worth of Cape Coral property early this year.
Hearing more stories like this would be good. Banks aren’t going to find many credit-worthy families to sell all these houses too. But selling them to cash-rich investors, in bulk, who can then rent them out to the same families is a possible end route to burning through the glut. There will still be more houses than needed, but then people have been moving to Florida during their golden years since time immemorium and eventually it’ll all get filled.
Sure, a growing market in foreclosed homes isn’t a sign of health, per se. But until we burn through this glut, there’ll be no way to resume normal, stabilised sales.
Finally, another thing to bear in mind here is that national home statistics, the type reported by various agencies each month, are likely to prove misleading. It’s easy to envision Florida stabilizing sometime this year (as it’s been in a depression for a few years already), while the New York housing market decline really begins to accelerate.