"A Tale of Five Cities"-Cape Coral, Florida
Friday, May 09, 2008PAUL KANGAS: All this week, we have been taking a close-up look at the nation's battered housing market in a series of stories we call "A Tale of Five Cities." Tonight, our tour around the nation wraps up in southern Florida. As Jeff Yastine reports, when it comes to looking for a recovery in that corner of the country, it's a case of east versus west.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: If the economic earthquake that's hit the U.S. residential real estate market has an epicenter, it's probably here -- Cape Coral, Florida, which lies on the state's west coast near Ft. Myers. In February, this city of 150,000 was tops in the nation for foreclosures after being one of the hottest areas for real estate speculators during the boom years. But sales of existing homes are beginning to rebound, up more than 30 percent from the lows seen in the middle of last year. Veteran realtor Jeff Miloff senses a bottom in the local market based on the number of showings his firm does for potential homebuyers.
JEFF MILOFF, PRINCIPAL, MILOFF AUBUCHON: We have a decent size real estate company and over the last couple of months, we noticed our showings went from where we were lucky to have maybe five or six showings a day to now we're hitting 30, 40 showings daily. So it just tells us that the people are realizing that the pricing is right and they're coming into the market.
YASTINE: Who's doing the buying? Speculators who survived the bust, out-of-state visitors and families beginning to take advantage of the sharply reduced home prices. The volume of builder liquidations, foreclosures and bank short sales in the Cape Coral area put heavy pressure on sellers to drop prices. As a result, median sale prices are off more than 25 percent in the past two years. Realtor and market analyst Annette Barbaccia says the discounts of many individual properties are even more extreme.
ANNETTE BARBACCIA, REALTOR & MKT. ANALYST, AMB PLANNING CONSULTANTS: We recently sold a house for $100,000 that is a year old. The owner paid $240,000 for it and the new owners got a great windfall. So the plus side is that there are some wonderful bargains out there and I think that most real estate agents since November have seen really a pickup in sales.
YASTINE: Optimism is harder to find in areas like Miami-Fort Lauderdale, where the beleaguered condo market remains on life support. Analysts say the main problem is the sheer volume of unsold units already on the market and the fact that more condo towers are still being built. Analyst Phil Biber of Watermark Valuation Services says that steady supply of new units continues to weigh on the market.
PHIL BIBER, ANALYST, WATERMARK VALUATION SERVICES: That inventory has got to be absorbed before the market can become back into equilibrium. I mean, typically, a pretty healthy market is a three to six-month supply of inventory, 90 to 180 days. And now we're looking at two to three years. And until that starts coming way down, I don't think we've hit the bottom, because you've got much more inventory than you have buyers.
YASTINE: Few analysts or realtors are willing to say there's a bottom in any of the state's regional housing markets, but there is a sense that the worst of the crisis is nearing an end. Buyers are becoming more interested now that prices have dropped sharply, but the huge supply of unsold homes and condos means that Florida will remain a buyers' market for some time to come. Jeff Yastine, NIGHTLY BUSINESS REPORT, Fort Lauderdale.
