Real Estate

MARKET REALITY SINKS IN

Monday, August 9th, 2010

The real estate market in the first decade of the New Millenium has been well chronicled. It has been a wild and bumpy ride for homeowners, especially in places like Florida. Foreclosures and short sales have become “the norm” in the past few years, and they have taken a toll on home prices.

The Boeglin Team gets regular calls to meet with homeowners to discuss the current market value of their home. This is known in our business as a CMA—Comparative Market Analysis. During the 2004-2006 bubble market, it was fun to deliver the news. We left homeowners with visions of sugar plums dancing in their heads. That has changed!

The reality of the real estate market is that homes in Southwest Florida are back to price levels of a decade ago. A recent CMA meeting was a fairly typical scenario:

The home was purchased in 2003 for $400,000 with $100,000 down and a $300,000 mortgage;
The buyers spent an additional $100,000 to replace the roof, re-surface the pool, upgrade to granite countertops, install tile and hardwood floors, paint, etc.
In 2006, the owners had the home re-appraised for $700,000. They replaced the initial $300,000 mortgage with a new one for $500,000 and were still left with $200,000 equity;
In 2010, family circumstances require the sale of the home, and the Boeglin Team is called in to provide a new CMA. Current market conditions indicate that the best the owners can hope for is a sale price of about $425,000 which would net them less than $400,000;
But they still owe nearly $500,000 on the mortgage!!! Is it surprising that short sales and foreclosures have become the norm?

We will always give our honest opinion, no matter the situation. It’s all part of the job for us as active realtors in the Southwest Florida real estate market. It is why folks continue to rely on the Boeglin Team.

Tags: Boeglin Team Bonita Springs Florida Real Estate Source, homeowners in new millenium, honest opinion realtors, market value of home, Real Estate CMA, real estate market reality
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THREE ATTORNEYS MAKE A CROWD

Thursday, August 5th, 2010

Let me begin this message with several disclaimers:

Some of my best friends are attorneys;
I, myself, am a recovering attorney, having practiced law in Indiana for over 30 years; and
It is a rare real estate transaction that does not experience a few bumps in the road from contract to closing.

That said, we finally got a condo closed this week that had more than its share of “bumps”. In fact, it felt like foot deep potholes all along the way. Everything that could go wrong did go wrong. Some of the issues were unrelated to the fact that the one of the buyers practices law in the Midwest, sellers’ son is an attorney in Naples, and he selected one of his attorney friends to close the transaction. Things like:

The bank hired an appraiser who was unfamiliar with the community, and he proved it with a very weak appraisal. This necessitated a re-negotiation of the contract price;
The condo failed the radon test, and required remediation at sellers’ expense; and
Too many mold spores were floating around, requiring additional work and expense to the sellers.

The solving of these unexpected issues required extensions of time to complete the deal. We managed to negotiate these problems without too much difficulty. About this time, however, the heavy hand of the law cast its dark shadow on the process. It was as if someone proclaimed: “Let the games begin!”

As an observer, it reminded me of the old days in the practice. How I miss those tactics! Tactics like threats, intimidation, passive-aggressive techniques, padding fees and charges, and questioning the integrity and ethics of the “other side”.

The next time I have a real estate transaction with 3 or more attorneys involved, I will ask Jan to take over for me. I dislike crowds.

Tags: Boeglin Team Bonita Springs Florida Real Estate Source, closing real estate transaction bonita springs fl, contract to closing bonita springs, experienced realtor bonita springs
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WHAT IF A SHORT SALE IS A VIABLE OPTION?

Tuesday, July 27th, 2010

We talk regularly with homeowners who find themselves “upside down” on their mortgage, meaning that they owe more than the home is worth in this market. What are their options?

Many of these homeowners continue to make their monthly mortgage payments, and pray that the value of their home will rise before their nest egg runs out. This is an admirable approach, and one that we would never discourage.
Some homeowners accept a sale price that is less than the mortgage owed, and then bring a check to closing to cover the difference. Another admirable approach.

A more common option in the current market is to go through the short sale process, in which the bank approves a sale price that is short of the mortgage balance—and then writes off the difference. The homeowner receives none of the proceeds, but also walks away from the deficit and the burden of ongoing mortgage payments.

The Boeglin Team has helped quite a few homeowners in Spanish Wells and nearby areas to successfully negotiate the short sale process. Recently, Coldwell Banker established a separate department to assist its realtors in dealing with the unique issues of this process. New Federal regulations are now designed to make a short sale easier and quicker.

If you, or someone you know, is struggling with an upside down mortgage situation, the Boeglin Team is here to help. We can meet with you to explore your options, and to explain the short sale process as it applies to your circumstances. All information will remain completely confidential.

These are uncommon times, and uncommon times sometimes require uncommon approaches.

Tags: boeglin team bointa springs, coldwell banker, federal regulations short sales, short sale process, upside down mortgage
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WHAT IF 2010 IS THE OPPORTUNITY OF A LIFETIME?

Saturday, July 17th, 2010

I know of no one who is absolutely certain of the future direction of markets, whether it involves stocks, bonds, commodities, or real estate. There are always unknown variables which can push a market up, down, or sideways.

That said, we know some of the variables which currently affect the Southwest Florida real estate market. These “knowns” include:

Home prices are back to the “pre-boom” prices of 2001-2002, or roughly half of the inflated home prices of 5 years ago;
For the past 18 months, single family home prices have stabilized and condo prices are showing signs of flattening out;
Mortgage interest rates are under 5% and well below historical levels;
The number of homes listed for sale on MLS are at 67% of the level of a year ago;
Showings of listed homes remain strong, and sales are ahead of recent years.

Obviously, there are additional variables that will have an impact on the future direction of our housing market. Issues like the level of future foreclosures and short sales, the availability of mortgages, a nagging jobless rate, the attitude of appraisers, economic conditions in general, and even the BP oil spill in the Gulf. But hey, if it was all positive news, the future trends would be too easy to predict.

The Boeglin Team is currently working with some very smart buyers who have made the commitment to buy a Southwest Florida home this summer. We think they are making wise decisions. This could just be an opportunity of a lifetime!

Tags: 2010 OPPORTUNITY, boeglin team bonita springs, future direction of markets, home prices back to 2001-2002, level of future foreclosures and short sales, opportunity of a lifetime, single family home prices stabilize, southwest florida real estate market
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NORTHERN PERSPECTIVE OF FLORIDA REAL ESTATE MARKET

Monday, July 12th, 2010

Jan and I just returned from 2 weeks with family and friends in the Fort Wayne, Indiana area. The economic conditions and housing market in Indiana are clearly related to the Florida housing market, as many Florida homebuyers come to us from the North.

It appeared to me that much of the economic activity in the Midwest involves roads and bridges (federal stimulus money?), agriculture, and medical facilities. We saw some–but not a lot– of new home construction or expansion of manufacturing facilities. It seems that more schools are being shuttered than are being built. It is not the healthy economic growth that I remember when I practiced law in Fort Wayne during the ‘70s, ‘80s, and ‘90s, but the area is “hanging in there”.

The foreclosure and short sale activity in Indiana appears roughly comparable to these markets in Florida. Distress properties have had a depressing effect on home values in general—just as they have had in Florida. Overall, I sensed that home values in the Midwest have held up better than Florida home values, making our home prices relative bargains. Most of the business people we talked with are doing fine—and they love coming to Florida in the winters.

We heard a lot of interest and concern about the BP oil spill, and its impact on Florida in general. Barring some surprises, it appears that most of Florida—perhaps all of it except the Panhandle—will escape relatively unscathed by this ecological disaster.

Interestingly, temperatures were hotter in the Midwest during much of our visit than the temperatures in Southwest Florida. Heat advisories were the order of the day. On our return trip, from Louisville to Atlanta, the temperature ranged between 99 and 102. It was a breath of fresh air to get back to Bonita Springs, with its ocean breezes and low 90s high temperatures.

With home prices stabilized, and inventories of available homes at their lowest level in more than 5 years, I expect a healthy fall and winter housing market in Southwest Florida. It all comes down to supply and demand.

Tags: Boeglin Team Bonita Springs Florida Real Estate Source, buying home bonita springs, Florida home prices stabilize, home values florida, housing bonita springs, southwest florida real estate market
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TRAVELING WITH TECHNOLOGY

Sunday, July 11th, 2010

When my son, Mike, and I ventured out on a 353 mile bike trip from Bonita Springs, Florida to the Gainesville, Florida area last month, we rode fairly old, low tech bikes. Mike travelled on a Trek 7600 that is vintage 1995; my bike is a Specialized Globe that we bought about 2003. These bikes are “mules” rather than “race horses”.

We did, however, enjoy the benefits of technology in our travels. Mike is a “techie” in his career in NYC, and we had with us: iPhone, Blackberry, notebook, iPad, Wi-Fi internet connection, Kindle, and digital cameras. As small as they are, they still added considerable weight to our bike loads.

Through Google Earth, we were able to plan our routes with confidence that the roads were adequate for biking, and that we didn’t miss out on a stretch of bike paths. We also identified hotels, restaurants, and bike shops along the way. The notebook and Wi-Fi enabled us (with Jan’s help) to blog at the end of each day. We received and sent phone calls and e-mails on the smart phone and blackberry. It was a comforting feeling to remain in touch even as we rode our bikes into unknown territory.

Now, Mike is back to work in NYC and I am back to real estate in Bonita Springs. We exchanged text messages on my Sunday morning ride to Venetian Village. We are both missing the challenge, adventure, and personal connections that we experienced on our 7-day jaunt. Who knows what adventures lay ahead?

On a personal note, I want to thank everyone who followed us along the way. Special thanks to the 40+ donors who have already sent checks to Spanish Wells Cares for the dental and medical care of underprivileged kids in Bonita Springs. Pledges continue to dribble in, and already total over $2,400. Thank you. … Jim Boeglin

Tags: bicycle travel, Bicycling in Bonita Springs Florida, Bicycling in Florida, Jim Boeglin, Traveling with technology
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BEING OF VALUE – Part Two

Tuesday, June 15th, 2010

“Strive not to be a success, but rather to be of value.” Albert Einstein. This is the second in a series of blogs on this important concept, specifically as it relates to people and situations we experience in the everyday business of real estate. My topic today might surprise some people, and it took me awhile to realize that the activity is actually a positive thing.

A recent business activity in our area involves homes that have gone through the foreclosure process, and are auctioned off to the highest bidder. Most of these foreclosed homes are unoccupied, in various states of disrepair, and not been paying condo or home owners association dues. They are often blight on the neighborhood that is driving down home prices all over the community.

We see investors purchase these homes at extremely low prices; re-sod or re-seed the lawns; bring in new landscaping; replace damaged flooring; repaint walls; purchase new appliances; and essentially bring a “dying” home back to life. They pay association dues and put the homes back on the market at levels that provide them with a nice profit, while still offering home buyers affordable, below market prices.

As long as the plague of foreclosed homes afflicts our area, I consider this business model to be “of value”. These investors are providing an important service in the home recycling business. New homeowners benefit by having a decent home at an affordable price; neighborhoods and communities benefit with the elimination of a blighted property; property taxes, utilities, and associations get paid; contractors have jobs to perform; appliance stores, paint stores, and flooring stores make sales; and the economic cycle points in a positive direction.

Of course, not all investors in foreclosures follow this business model. Some investors simply buy the homes to “flip” in whatever state of disrepair they were in when they bought them. I see very little “value” added by such investors. They are simply in it for the quick buck. Their days are probably numbered.

Tags: adding value to home bonita springs southwest florida, boeglin team bonita springs, foreclosures bonita springs, foreclosures driving home prices down, foreclosures southwest florida, investors adding value to homes bonita springs southwest florida
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IMPACT OF BP OIL SPILL IN SOUTHWEST FLORIDA

Thursday, June 10th, 2010

It has been nearly 8 weeks since the BP oil well explosion in the Gulf of Mexico, and thousands of barrels of oil have been spewing into the Gulf’s waters daily since the disaster began. There is no end in sight, and it appears that this may prove to be the largest man-made ecological disaster in the history of Planet Earth.

As residents of Florida, we are anxiously monitoring the impact of this ecological and economic disaster on our little corner of the world. Our hearts go out to the fish, wildlife, people, beaches and estuaries in Texas, Louisiana, Alabama, and the Florida Panhandle. Meanwhile, we are watching the flow of oil as it inches it way in the direction of our home—Southwest Florida. Fortunately, we have yet to see signs of spilled oil in our area.

When I bike from Bonita Springs to the Naples Pier, I stop at Vanderbilt Beach (and at the Naples Pier) to check if there are traces of oil to be seen or smelled. Nothing so far, but my fear is that hurricane season could change that in a hurry.

We are blessed with many of the world’s great beaches, bays, and estuaries. Beaching, boating, and fishing are a way of life for many Southwest Floridians. We do not want these God-given resources to be damaged or destroyed by corporate negligence and greed.

So far, there has not been a noticeable impact on our real estate market. Buyers still consider our area to be one of the top destinations on the Planet. Let’s hope and pray that BP has not destroyed this Paradise along with their reputation.

It is difficult to assess the effort of BP to control the ecological and economic damages that have been, and continue to, accrue from their actions. The “spin” coming from their public relations department sounds great; the people directly affected by their actions appear to be less impressed.

From my perspective, saving Planet Earth has a much higher priority than the financial survival of BP. They should marshal their assets (i.e. not pay dividends to shareholders or bonuses to management until this emergency is completely resolved) in order to maximize their ability to handle the impact of criminal negligence on their victims. For BP, this is a test of character.

Tags: boeglin team bonita springs, BP oil spill bonita springs beaches, BP Oil Spill Florida, BP Oil Spill Southwest Florida, experienced realtor bonita springs, southwest florida real estate, southwest florida realtor
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BEING OF VALUE – Part One

Friday, June 4th, 2010

Albert Einstein once said: “Strive not to be a success, but rather to be of value.” For me, this is such an important personal message that I intend to return to it in some future blogs. Hence, this blog is designated as Part 1.

When I was about 12 years old—roughly 55 years ago—my 89 year old grandmother lived with us. I liked her a lot, partly because she did some of the chores that would otherwise have fallen on me.

I still remember the day she was drying the dishes I had washed, and dropped a plate to the floor. It was her second shattered plate in a week. A tear ran down her cheek as she put her towel down: “Now I’m of no value.” She walked into her bedroom and died several weeks later.

The experience affected me deeply, and I never forgot the lesson. I believe that being of value is an important personal need, and it comes into play in a variety of successful human ventures—businesses, family life, friendships, organizations, sports teams, etc.

We all know people who slide through life making little or no effort to add value to their world. Their goal is to “take” rather than to “give”, and they tend to live difficult, lonely, unhappy, unsuccessful lives. It is the “givers” who enjoy happy, successful lives.

Most successful businesses follow a business model that is designed to be of value to their customers and to their communities. In my experience, any other business model is simply not sustainable over a period of time.

In recent times, we have witnessed “flippers”, who were simply betting on a rising real estate market, come crashing down to financial ruin. Their business model did not include a way to be of value to anyone other than themselves, and they brought the residential real estate market down with them.

We have also witnessed Wall Street firms who were simply re-packaging investment risks such as mortgage-backed securities designed not to add value, but to leverage their profits. They almost succeeded in wrecking the U.S. and the Global economies.

The mission of the Boeglin Team is to strive to be of value. We attribute our success to these efforts. Some of our future blogs will share some of the ways that we observe people, companies, and organizations striving to be of value. We welcome feedback from all of you that share situations you observe in which value is added to our world.

Tags: being of value, boeglin team bonita springs, give rather than take, successful business models
Posted in Foreclosures, Real Estate | No Comments »

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MARKET REALITY SINKS IN

THREE ATTORNEYS MAKE A CROWD

WHAT IF A SHORT SALE IS A VIABLE OPTION?

WHAT IF 2010 IS THE OPPORTUNITY OF A LIFETIME?

NORTHERN PERSPECTIVE OF FLORIDA REAL ESTATE MARKET

TRAVELING WITH TECHNOLOGY

BEING OF VALUE – Part Two

IMPACT OF BP OIL SPILL IN SOUTHWEST FLORIDA

BEING OF VALUE – Part One

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