Thursday, September 06, 2007 — Time: 3:30:09 PM EST New home permits figure may not tell market’s whole tale; Industry expert: Buyers gobbling up lots at 2001-2002 prices, eating up inventory By MATT BLUMENFELD, firstname.lastname@example.org While permitting and construction figures remain poor in Southwest Florida and across the country, Cape Coral Association of Realtors President Jeff Miloff believes that the real estate market is starting to get back on track. “We‟re getting back to a normal marketplace, to what is typical,” he said in a phone interview Tuesday. Miloff said there are plenty of bargain hunters looking for properties in Cape Coral these days, snatching up lots at 2001-2002 prices and chewing up the vacant home inventory. “Existing homes is what you‟re seeing people look at,” he said. “Right now we have more vacant homes than we‟ve ever had before because of all of the speculative buyers. But there are a lot of goo d buys out there with people that need to sell.” But while homes that were built during the speculative boom of 2005 and 2006 are selling, new houses are slow to be constructed. Just 47 single-family home permits were pulled in August, according to a city report released Tuesday. It was an improvement of only two permits from July, which was one of the slowest permitting months in the last decade and a half in the Cape. Those numbers are exponentially lower than what was seen in August 2005, when 742 permits for new single- family homes were issued in the city. But while things look bad for the building market in the Cape, the rest of the county appears to have it even worse. According to a Lee County Community Development report, just 63 permits were pulled in August across all of unincorporated Lee County, Bonita Springs and Fort Myers Beach combined. It was the worst month for single-family homes since November 1981 when 45 permits were handed out. The rest of the country is feeling the pinch along with Southwest Florida, Miloff said. Figures from the U.S. Commerce Department confirm that as a report released Tuesday shows a 1.4 percent drop in private residential construction in July, the 17th straight month of decline. But steady job growth and the continued influx of residents to the Cape will help pull the city out of its current predicament, Miloff said. According to him, the continued marketing of Cape Coral as a growth community has attracted speculators, along with those who want to move to the area, and the result is the current depression. “(Cape Coral) is still a destination, it‟s still a great place to live. If we didn‟t have the speculators, we‟d be the first one to come out of this little market challenge,” he said. Another major reason for the vast amount of foreclosures and vacant properties — bad credit lending policies — has also slammed the stock market, according to Miloff. The massive credit crunch facing the country led the Federal Reserve to lower the discount rate and create liquidity in the market. But it all began in the real estate market. “Banks were lending money and they were lending to people who couldn‟t afford to own a second home,” he said. “Locally people saw their property values almost double in some areas and they believed that was their equity. Looking back on it, the market wasn‟t real.” But Miloff and other real estate insiders seem to believe that the market is beginning its turnaround. While builder confidence continued to drop in August, according to the National Association of Home Builders, the organization‟s chief economist said that next year could bring better fortunes. “We now expect to see home sales return to an upward path by early next year and begin a gradual recovery process by mid-2008,” Chief Economist David Seiders said about three weeks ago. Miloff said the numbers he is seeing are easing some fears. “Home sales are gaining momentum,” he said. “We‟re starting to see broader activity.” But he could not predict if the market had hit its bottom yet or exactly when property owners could expect better conditions. “Nobody has the crystal ball to say, „This is the bottom.‟ By the time we figure out that this is the bottom, it will have already passed,” he said.
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