THE NEW PRICE OF PARADISE

When New York Times reporters put Cape Coral Realtor Marc Joseph in the international spotlight recently, quoting him at length about his weekly rides with prospective buyers in a green bus known as ForeclosuresRUs, they pointed to a devastated housing market and a kingdom of good deals.

That’s not new news. While Mr. Joseph makes his way slowly from one foreclosed property to another, nobody else is shaking in surprise.

Like big speed bumps in the road, conditions for a classic buyer’s market have been evident for some time. After all, median home prices in Lee County fell from $278,000 in 2005 to $215,000 in 2007, to a low of about $80,000 nine months ago, before inching back up to roughly $90,000 in November, according to statistics provided by real estate professionals in the region.

What many might not know, however, is where the good deals are, or why better deals might exist at some price ranges than at others — with “good deal” being defined this way: real estate listings cut by the greatest percentage from their previously listed prices or sales prices.

More than $ 1 million >> ADDRESS AND LOCATION: 10064 Magnolia Bend, Shadow Wood, in Bonita Springs >> BASICS: Two stories, five bedrooms, five bathrooms, one half-bath, den, lanai, family room, three attached garage spaces, two carports, pool, spa, 4,550 square feet, built 2002. >> LIST PRICE: $1,495,000. Home was listed for $2.3 million in 2003, sold for $1.8 million in 2005, listed for $1.595 million in 2008, reduced to $1.395 million and listed until September 2009, then re-listed in November at the current price. >> PROPERTY INFORMATION: Marble on the diagonal covering all the living areas, an impressive marble staircase with wrought iron railing. The comfortable living room has a fireplace, coffered ceiling and overlooks the golf course. The family room is perfectly situated between the kitchen and lanai, great for entertaining. The gourmet kitchen has it all, granite counters, gas cooktop, double oven, center island and much more. This home offers a summer kitchen, Vantage Lighting System, security system and many more features. The lanai is huge. It offers ample covered space and deck space. The private spa area off the master bedroom is brilliant. Here, Florida Weekly plugs that information hole, exploring some of the best deals in Lee County listed from roughly $100,000 to more than $1 million. Coincidentally, we pick the brains of some of the most experienced veterans in the industry about the market and its opportunities as the New Year unfolds.

$100,000 to $250,000: >> ADDRESS AND LOCATION: 10488 Carolina Willow Drive, Botanica Lakes, Lot A233. >> BASICS: New home, built 2009. Three bedrooms, two baths, 1,695 square feet. >> LIST PRICE: $220,900 (Realtor says house value is $402,000) >> PROPERTY INFORMATION: Covered patio screened, granite countertops in kitchen and master bath, raised panel wood kitchen cabinets, custom interior paint, upgraded tile through main living areas. Consistent improvement

$500,000 to $1 million: >> ADDRESS AND LOCATION: The Palermo, 19th floor, 4875 Pelican Colony, unit 1904. >> BASICS: Three bedrooms, three baths, one half-bath, with 3,295 square feet of living space on the 19th floor. Family room, screened lanai, balcony, etc. >> LIST PRICE: Previously listed for $1.3 million, now listed at $899,000. >> PROPERTY INFORMATION: Spectacular 19th floor spacious residence with expansive windows and sliding glass entries throughout, leading to the exquisite tiled terrace with panoramic views of Estero Bay and Gulf of Mexico. Designer decorated, 10-foot ceilings, crown molding, plantation shutters, window treatments, accented tile inlays, tray ceilings, faux paint, custom closet cabinets. Fabulous private elevator vestibule with stunning custom artist hand painted mural. Gourmet kitchen with built in paneled appliances, granite countertops, 42-inch custom cabinets, pull-out shelves and backsplash tile opens to the morning room with great views, all the way to Sanibel on a clear day. Master suite bath with luxurious marble vanity tops, shower and tub deck. Amenities include: guest suites, theater, fitness center, Bay Club, waterfront dining, beach park with private shuttle. “Even a hardened cynic like me sees optimism in the numbers,” says Jim Green, owner of Jim Green Realty.

$250,000 to $500,00: >> ADDRESS AND LOCATION: Alva, 17770 Rancho 78 Drive >> BASICS: Three bedrooms, three bathrooms, built 1996, 2,523 square feet. >> LIST PRICE: $395,000, previously listed for $725,000 >> PROPERTY INFORMATION: Custom-built modern log home in a secluded Alva setting on 2.5 acres. The exterior walls are made of cedar logs imported from the Pacific Northwest. Interior finish and floors are white pine. The home is constructed with old-world quality carpentry and craftsmanship. High cathedral ceilings and stone-faced fireplace. Quality construction throughout. Large kitchen and bedrooms, delightful wrap-around porch. Prefer to not run the air conditioners? Use the 18 ceiling fans to gently move the air in the house and on the porch. Five-bay pole barn with loft storage or workspace, two barns with four and five stalls, fenced and cross-fenced. Walking distance to Alva Park and schools. “The volume of sales was at a record high for the 2009 year (15,336 homes sold in Lee as of November, compared to 13,479 sold in 2007 and 2008 combined), and the median price of homes sold is starting to move up from its lowest point in April, 2009.

$100,000 range: >> ADDRESS and LOCATION: Cape Coral, 2104 NW 22nd Ave. >> BASICS: Built 2006, 1,818 square feet. Three bedrooms, two bathrooms, formal living and dining rooms, family room, tiled living areas, carpet in bedrooms. >> LIST PRICE: $101,000 >> LIST COMMENTS: “Buyer will assume all future utility assessments, impact fees and the costs of septic abandonment and connection to city water, sewer and dual water as they are levied.” $250,000 to $500,000 >> ADDRESS AND LOCATION: 58 Timberland, in Carillon Woods. Near Bishop Verot High School. >> BASICS: Three bedrooms, three baths, 2,991 square feet, built 1990, on.32 acres. >> LIST PRICE: $399,000, down from the $620,000 the owners paid for the home two years ago, the Realtor says. >> PROPERTY INFORMATION: This is a short sale subject to third party approval, which could result in delays. This home in the highly desirable Carillon Woods. With three bedrooms and three baths, plus den/office. The home includes tile and hardwood floors throughout and the upgraded kitchen includes stainless appliances, custom cherry cabinets, granite counter tops and a skylight. The fireplace and surround sound system provide wonderful ambiance in the family room, with French doors leading to a beautiful lanai with a new summer kitchen and lovely heated pool. Recent upgrades include custom lighting and fixtures, new duct work for the air conditioning, new closets and new tile backsplash and contemporary fixtures in the kitchen. “While I would not anticipate a steep gradient to the price rise, I think it will remain consistent. Buyers were appropriately trepid in the past — they could see the falling prices. Many chose to abstain from purchasing a home that would be worth less the day after closing. With the median on the increase, one becomes more motivated to buy based on the future increase in value.”

Especially if one listens to Mr. Joseph. When he finished up with The

New York Times, he hustled over to a national FOX television broadcast, once again stepping out of his green bus for the cameras.

“I’ll tell you what you can get for $100,000 today,” he said to the world. “You can get almost a brand new home, four bedrooms, two bathrooms, about 1,900 square feet of living space that was (previously listed for) $280,000 to $290,000.

“And houses that were $600,000 to $800,000? Those houses are down to $200,000 or $225,000. And those are Gulf-access homes, straight out to the Gulf.”

But neither The New York Times

nor FOX-TV remembered to interview two other savvy commentators about this phenomenon, one of them still in business: Mark Twain and Southwest Florida Realtor Denny Grimes.

“No real estate is permanently valuable except the grave,” noted the late Mr. Twain, putting both boom and bust markets in perspective.

More to the point, Mr. Grimes, who owns Denny Grimes and Company, says, “The foreclosures are going so fast that Marc Joseph’s bus is too slow. You really need a NASCAR vehicle.”

Soon, perhaps, the interest in foreclosed and low-end homes will wane as the glut clears. And that interest should be replaced by more intense interest in homes of higher value.

Reducing the inventory

“We’re eating through that Lehigh- Cape cheap inventory stuff, the less expensive starter homes,” explains Toni Shoemaker, a Denny Grimes Realtor. “The investors are back, buying those as rental properties to hold on to themselves for some time (and not to flip).

“Those homes are a wonderful thing for young couples and first-time home buyers who can now afford a brand new home. People who are at lower income levels have to live somewhere, and it’s been wonderful for them.

“But we’re working through that inventory pretty quickly. We’ve just about eaten up the lower priced stuff. Next, we’ll see homes in the $150,000 to $250,000 range as sellers get more realistic about pricing them. Some people are still in denial. So I think the $180,000 to $300,000 range is where people will be looking next for the great deal.”

Before that could happen smoothly, however, the market here has to get past a potential land mine, Realtors say. That’s the glut of homes now owned by banks, and not even listed yet — the so-called ghost inventory.

“Now, about 85 percent of our business is under $500,000, and 63 percent is under $250,000,” says Michael Burke, a Luxury Home Expert with Keller Williams who sells homes in higher price ranges, but is forced to watch the rest of the market.

“We pay close attention to all the numbers because we have to know where the trigger points are,” he explains. “And those (lower) numbers might not accurately describe the markets in Bonita Springs, Estero and Naples. There are a lot of distressed properties in Lehigh Acres and Cape Coral, and they pull the numbers down. But most of the gated communities stand on their own.”

Although the housing market has stabilized, Mr. Burke adds, “We do see the condo market still adjusting. And we believe lenders are holding on to foreclosed properties (the ghost inventory). If that proves to be true, it’s going to knock us down a notch.”

In Mr. Burke’s estimation, banks do not have a strategy in holding on to those homes, so much as the inability to process them properly.

“I think that’s the problem,” he says. “With the banks, it’s just a manpower issue.”

And in the market as a whole, success is a matter of sober good judgment and a realistic attitude.

“Just because the median price of homes happens to have started up does not mean the market has corrected itself,” Mr. Grimes says. “That the median price of homes went up recently only means that at least one more home sold above the previous period at that price.

“If you’re a buyer, yes, you’d expect a Realtor to say, ‘It’s a good time to buy.’ There were a lot of people waiting for the ‘bottom of the market,’ and if you measure the market by the bottom of the median sales price, they’ve already missed that.

“But in this market, almost everything that sells is a good deal, or it wouldn’t sell. When you buy something below the cost of replacement, that beats wholesale, and it’s a good time to buy. Right now in most price ranges, you can buy something cheaper than you can build it.”

And when you do, when you get that good deal that will pay off in spades, someday, you can remember the words of that other great Realtor, Donald Trump: “It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my viewpoint. I just love real estate.” 