Florida Home Loan Experts: Don’t Expect Housing Downturn to Last

Florida real estate broker Denny Grimes greeted the audience at The News-Press MarketWatch on Tuesday night with the following message:

Welcome to the morning after!

Speaking to homeowners and investors at the sold-out event, Grimes likened the recent decline in sales and prices to a hangover after a wild night on the town.

But like a real hangover, he said, the Florida housing market downturn won’t last forever.

Buyers haven’t give up on this area even though the big run-ups in price of the past two years are over, Grimes said. They are simply turned off by increasing home appreciation and scared by what he called the “irrational decline” of the past few months.

Here’s what Florida home loan experts are saying about real estate in some specific areas of the county:

CAPE CORAL
Cape Coral will have its own regional mall along Pine Island Road, between Chiquita Boulevard and Burnt Store Road, on 200 acres put together by Cape real estate broker Greg Eagle. The project, however, is five to seven years away because zoning and road widening have to be taken care of first.

There should strong growth in the part of downtown Cape Coral where the city is offering developers incentives to rejuvenate the area.

Michael Schneider-Christians, of Century 21 Sunbelt Realty in Cape Coral, noted that about 400 new listings appear every day for Cape properties, but only about 100 sales go pending. At the same time, there are about 600 price reductions per day.

Speculators drove residential prices in 2005 far beyond where they could be sustained, Schneider-Christians said. “My personal opinion is that the next two years will definitely be a correction.”

BONITA SPRINGS/ESTERO
There’s a concentration of retail development taking shape along Interstate 75 south of Alico Road: Gulf Coast Town Center mall at Alico and I-75; Miromar Outlets at I-75 and Corkscrew Road; Coconut Point Town Center on U.S. 41 south of Corkscrew; and International Design Center at Corkscrew and I-75.

The design center, especially, will attract high-end home buyers from other markets because it will cater to architects and interior designers of luxury homes, he said.

In the short run, though, Bonita, is exhibiting a surplus of office space - there’s an 18 percent vacancy rate there despite relatively low rates in the rest of the county.

LEHIGH ACRES
The price of lots in Lehigh Acres has fallen off sharply in the past few months after being driven sky-high by speculation, Grimes said.

But houses in Lehigh - up to about $250,000 - continue to sell because there’s no competition in other parts of the county for homes that inexpensive, he said. This area is not having the affordable housing dilemmas that have plagued other cities in the state.

COMMERCIAL
For commercial real estate, the picture was considerably brighter. Among other good news, this sector saw a huge increase in construction: 2,143 units permitted in 2005 for a 78 percent increase over 2004.

Forecasting the future for Florida commercial real estate is difficult because there are so many factors involved — such as escalating prices for materials such as concrete and steel.

Nevertheless, there likely will be a cooling-off period of 18 months to two years while the rest of the nation’s economy catches up with the recent boom in Southwest Florida.

For residential real estate - for those wondering about the state of Florida home loans - the downward trend was clearer, although not an all-out disaster.

“The buyers are sitting down and saying, ‘Am I really willing to [30 percent more] than last year considering the number of things I have to choose from?’ ” said Michael Timmerman, Naples-based managing director for Florida at Hanley Wood, a national company that collects and analyzes data for home builders.

“But is the sky falling?” he asked. “Absolutely not. The fundamentals are still there. It’s a healthy change.”

In other words, individuals and families are still seeking out a Florida home loan for their needs. There’s no reason to panic about the housing market.