Clearwater Mayor hits huge Payday!

A hot property. A proponent. A payday.
As mayor of Clearwater, Brian Aungst championed a condo development. Then he bought in and made $233,000 after owning it for two days. But did he get in too easily?By AARON SHAROCKMANPublished November 27, 2005
CLEARWATER - As Florida real estate values rocketed upward in late 2001, Clearwater Mayor Brian Aungst strenuously supported a controversial Clearwater Beach condominium proposal, withering its opposition.
Then, without making a public disclosure, he reserved a unit for himself.
As soon as his condo was built two years later, Aungst sold it in just two days. His profit: a staggering $233,000, a return of 67 percent on his investment.
Aungst's unit - a fourth-floor, 1,350-square-foot Bonaire model in the Mediterranean-styled project named Belle Harbor - proved a windfall for the two-term mayor, who never had dabbled in real estate and sold the condo three months before leaving office in January.
Both Aungst and Belle Harbor's developers, headed by St. Petersburg condo builder J. Michael Cheezem, say the transaction was an honest, arms-length deal.
Aungst paid the listed price for his unit - $347,000, Cheezem pointed out.
And Aungst sees no problems with what he did. He and his wife reserved the unit thinking they would move there, he said, and sold it later only because they realized it was too small.
But an investigation by the St. Petersburg Times reveals a coziness between Aungst, who as mayor strongly pushed redevelopment, and the Belle Harbor developers, who built the first new luxury condos at Clearwater Beach and then won city approval for hundreds more - a portfolio now totaling more than $450-million.
Public records, private sale documents and interviews with Belle Harbor buyers also raise questions as to whether Aungst was given an advantage not available to the other original investors who scored condos in the $130-million project.
Many investors stood in line for two weeks outside the sales center waiting for the frenzied day in June 2002, when units first hit the market. By that day's end, investors told the Times, all models in Aungst's Bonaire floor plan were gone.
But Aungst, who earlier had told one of the developers in a one-on-one conversation that he was interested in buying in, didn't wait in line. He was invited to come pick out a unit the following day. He did.
City laws in effect then prohibited elected officials from using their position to secure an advantage that could lead to financial gain. The laws also instructed officials not to solicit or accept anything of value from individuals or businesses dealing with the city.
Aungst also may have violated city disclosure laws, the city attorney now says. Aungst had a $34,700 deposit on his unit in August 2002, when he voted with other City Council members to approve the platting of Belle Harbor's 6 acres. But he did not inform his city colleagues of his financial interest in the project, as city laws require. In fact, many city officials say they did not know Aungst had bought and sold the condo until this past summer, when the Times began researching this story.
Tracing the three-year arc of Belle Harbor, from point of proposal to selling of units to eventual occupancy, Mayor Aungst goes from a leading advocate to an investor, who then made a big profit.
Cheezem says he cannot explain how or why Aungst got the opportunity to invest because memories now are three years old and paperwork is gone.
But he did acknowledge: "If we had to do it over again, we would have had him stand in line or not sold him one."
Aungst, a cable TV executive who left politics after losing last year's race for Pinellas County clerk of the circuit court, said he had as much right as anyone to buy into Belle Harbor while mayor.
"I had discussions with some of my political advisors, I talked to friends, and they all said, "You're going to move into a place, there's nothing wrong with it,"' said Aungst, 51. "I carried debt, I paid interest on that. It was a straightforward deal."
* * *
Belle Harbor was the second major condominium complex proposed for Clearwater Beach. Connecticut developer David Mack, who later brought Cheezem into the project, wanted to replace a cluster of barracks-type apartments on the island's bay side with two towers at least 130 feet tall and street-level townhomes.
Investors smelled opportunity.
Clearwater Beach's market potential was established the previous year when Cheezem's JMC Communities launched the $78-million, 156-unit Mandalay Beach Club, the beach's first high-rise residential redevelopment in 25 years.
Eager buyers gobbled up Cheezem's condos when they went on sale in Spring 2000.
As Mack hawked Belle Harbor in 2001, Cheezem's Mandalay Beach Club was rising 200 yards to the south. The two projects promised a new level of luxury.
But there was opposition.
At one public meeting, more than 100 protesters turned up, arguing Belle Harbor's towers would wall off views of the sunset. Plus, the site needed to be rezoned, and Clearwater's extensive beach planning document, just finalized after lengthy negotiations, capped building heights there at 75 feet.
Belle Harbor was far from certain.
The strong-willed Aungst emerged as its champion.
From the city's dais, Aungst not only voted for the project, he was its most forceful advocate among the council of five.
Prior to a critical vote in September 2001, Aungst delivered a 20-minute monologue in which he berated critics, read a supporting letter in a driving cadence and singled out city staffers to confirm his points by saying "You're right."
"Developers are running things at City Hall," said Aungst, reading a critic's letter mockingly. "Boy," he returned, "have we heard that before."
Later, Aungst said: "I think it's a great project. I commend Mr. Mack. It's a win-win for everyone."
Then he called on his colleagues to support the development.
"This is not a hard swallow for you?" asked council member Whitney Gray.
"This is not a hard swallow," answered Aungst.
Belle Harbor advanced on a 3-2 vote.
Three months later, when the City Council considered rezoning the Belle Harbor site and allowing taller buildings, Aungst admonished council members and the audience not to fret multistory towers.
Using as props a water bottle and the board he banged his gavel on, the mayor said the city had two options: allow low development all along the waterfront, blocking views, or a few tall buildings with required open space between them.
"This is not some haphazard thing we're throwing together," Aungst said. "The character of the beach, it needs help. This plan will help it."
Council members approved the needed changes, 4-1 this time. Belle Harbor was a go.
* * *
The morning Belle Harbor's sales center opened, June 10, 2002, the project was just a rendering on poster board, but JMC's sales agents had 11 stories of condos to sell in seven floorplans. More than 30 hopeful buyers waited in line.
Real estate agents, a textile executive from Georgia, even David Mack's Connecticut barber had camped out as much as two weeks. Some paid homeless people $100 a day to hold their spots.
Andy Botwick, a retired Dunkin Donuts executive, slept in his Pontiac Bonneville for four nights. He, like Aungst, eyed the smallest floorplan, the two-bedroom, two-bath Bonaire. Seventeen were available that Monday morning, according to JMC.
Developers also accepted phone reservations, and when the sales center opened at 9 a.m., overloaded phone lines immediately jammed.
Even those in line called on cell phones - hoping to score that way. In 10 minutes, developers said, they had as many names on the phone list as were standing in line.
Buyers then were processed in clusters of three - two from the line, one by phone.
Mary Farnham, a Clearwater Beach real estate agent, was one of the lucky few who reserved by phone.
"I just happened to call in and someone answered immediately," said Farnham, who later resold two days after she closed, like Aungst, for a $176,000 profit.
By 1:30 p.m., most of the Bonaire floor plans already were taken, buyers said. Aungst, meanwhile, was finishing lunch in Feather Sound with St. Petersburg Mayor Rick Baker, Pinellas County Administrator Steve Spratt and County Commissioner Karen Seel, according to his calendar.
"I didn't have time to sit in line," Aungst told the Times .
By 3:30 p.m., Botwick made it through the line. Two Bonaires were left, Botwick recalled. He picked one on the third floor.
Murray Saltzman, near the end of the line, reserved the last Bonaire at 5 p.m. that first day, he said. He paid $427,000 for Unit 1103. "I didn't have much to choose from," said Saltzman, who bought one for his daughter. "It was either that or nothing."
Aungst had seats at that night's Devils Rays game, a 10-5 loss to the Los Angeles Dodgers.
He neither went to the sales office on June 10, nor called, he said.
Months earlier, he told Belle Harbor principal David Mack during a social function that he was interested in buying one of the condos, both Aungst and Mack recall.
Mack said he remembers cautioning the then-mayor. "I told him he was going to have to go through the same process everybody else went through," said Mack, who was not involved in unit sales. "I had 20 friends interested in buying one. I told them all the same thing - I'm not underwriting this thing, if you're going to do it, you're going to have to get in line."
Aungst recalls it differently. "If we had the conversation, which we probably did, he said to call the sales center, get on the list and that was about it," Aungst said.
At some point June 10, a sales center employee called, Aungst said, and told him he could come out the next day to select his condominium.
Cheezem said he cannot confirm Aungst's account or provide his own.
"I have no idea how to go back and reconstruct exactly what happened with each individual," Cheezem said. "We try to be as fair as possible.
"He was not put in front of the line. I don't believe he received special treatment," Cheezem said. "I just can't say for sure if he was in the group that phoned up. I don't have a grasp of every detail, who said what to whom."
The developers did hold back at least some units for themselves and company executives. Cheezem got one unit, and Mack got two. JMC's president of design got a Bonaire model, the same floor plan as Aungst's.
"It's just like taking something off the market," said Steve McAuliffe, JMC vice president of sales and marketing. "Most builders won't release their whole buildings at one time, they hold stuff back"
* * *
Aungst was a political unknown when he won Clearwater's top job in 1999. A public relations director at Time Warner, now Bright House Networks, Aungst quickly styled a no-nonsense approach as mayor, ousting a controversial city manager and taking steps to restore confidence in City Hall. During his six years in office, Clearwater built two libraries, a rec center, a new $34-million baseball stadium for the Philadelphia Phillies spring training and minor-league affiliate - a slate of public projects unrivaled in recent history. No one ran against Aungst in 2002, the first time that had happened since 1956.
Aungst first eyed a Belle Harbor condo as the beach home his family had long wanted, he said. The Belle Harbor address also put him in a new political district that afforded opportunities for higher office.
"I supported beach redevelopment," said Aungst. "I thought it would be telling for me to put my money where my mouth was."
Developers supported Aungst at election time.
Aungst accepted at least $30,000 from the real estate industry in his countywide court clerk race. Belle Harbor LLC contributed the maximum $500, as did Mandalay Beach Club Ltd.
Two David Mack entities, Greenmack Clearwater and DAM Clearwater, also contributed $500 apiece.
Aungst said he did not actively solicit the contributions. Instead, political advisor Ed Armstrong, who also is Cheezem and Mack's land use attorney, "ran that fundraising," Aungst said.
The contributions were "not a personal thing," Cheezem said. "It's important we support the leaders we think will do the best job in our local governments. It certainly has not been just Brian. I have always appreciated the leadership that the city of Clearwater has demonstrated."
Aungst said he called Belle Harbor in April or May 2002 - about a month before units became available - to say he was interested. Then on June 10, agents contacted him, Aungst said.
"We had no idea we had a shot to purchase a unit until we got a phone call," he said.
JMC provided the Times with Aungst's private reservation contract, which confirms he got his unit the day after the first-day sales rush. He picked the third-cheapest unit in the project, unit No.404, and held it with a $10,000 deposit.
In July, Aungst took out a $100,000 mortgage on his Countryside home. He signed a contract that August to purchase the unit and immediately put down an additional $24,700. The following January, he deposited $34,700 more, the remainder of his 20 percent down payment.
Aungst listed "escrow-down payment-Belle Harbor, 501 Mandalay Ave., Clw, Fl, 33767" on his annual financial disclosure form, filed in June 2003 at City Hall and with the Pinellas County Supervisor of Elections office. He previously had not disclosed his financial interest in Belle Harbor in a public record or during a public meeting. Even though he reserved the unit in June 2002, his name did not show up in county property records until he closed on the condo in September 2004.
He said he was not compelled to be more public about his reserved condo because it was to be his new home, he said. He used his name to purchase the unit, not a blind trust or obtusely named Limited Liability Company.
"I bought a place I was intending to move into," Aungst said. "If I was worried about anything, I would have tried to hide it."
* * *
It was not until his condo was nearly built that Aungst and his wife donned hard hats to tour the two-bedroom unit. They realized then, they say, it was too small.
"I have an office alone filled with all the stuff from when I was mayor," said Aungst, whose four-bedroom home is appraised at $350,000, according to property records.
They ruled out keeping both homes and renting out the condo, he said, because mortgage payments would be too high.
They had no choice but to sell, he said.
Aungst contacted real estate agent Martin Donovan, who specializes in Clearwater Beach real estate and also was an Aungst campaign contributor. He told Donovan to find a buyer. Donovan set a sales price at $649,000. Aungst agreed.
A retired couple, Robert and Betty Pfaff, were eager to find a Clearwater Beach condo after selling their home in the Island Estates neighborhood, a nearby waterfront community between the beach and the mainland.
Donovan was the Pfaff's real estate agent, too. He helped them sell their Island Estates house and then, as is common for real estate agents, helped them search for their next home.
Robert Pfaff, a retired Department of Defense employee, told the Times he and his wife saw Aungst's unit advertised. They had considered other condominiums, but they liked the idea of moving into a new project.
They started negotiating.
Aungst and Pfaff said they went back and forth on price before settling at $580,000. Pfaff does not think he overpaid. Aungst agrees; the condo was appraised at $600,000, he notes.
Belle Harbor signed over the deed to Unit 404 to Aungst on Sept.29, 2004, a Wednesday. By that Friday, Aungst had sold to the Pfaffs.
"They didn't hide who the owner was," Robert Pfaff, 69, said. "It was a straight up sale."
Thirty-four of the first 111 units changed hands in the first year of occupancy, but only one buyer, Sarasota real estate agent Lawrence Bauman, sold his condo quicker than Aungst. Bauman resold his the same day he bought it for a $157,000 profit.
David Mack held onto his $810,000, 11th floor condo for six months before selling for a 48 percent return.
Aungst's did better in two days - 67 percent.
Aungst said he cleared less than $130,000, after paying capital gains taxes and $29,721 in closing costs and real estate commissions.
* * *
Like most elected city officials around Tampa Bay, Clearwater's mayor is paid for part-time work - about $19,000 a year.
But government officials are obliged to keep the public's business separate from their need to make a living, said Ben Wilcox, the Florida director of the political watchdog Common Cause.
"Just because someone becomes a public servant, that doesn't mean they cannot make money," Wilcox said. "But they have to be fully open about it, and you don't accept any favor or quid pro quo in return for your vote."
Aungst said he received no favors. And listing his investment on the financial disclosure form was all he needed to do, he said.
But city ethics laws appear to require more, City Attorney Pam Akin says. When Aungst voted with other council members in August 2002 to approve a platting of Belle Harbor's 6 acres, he already had a contract on Unit 404 and made a $34,700 down payment. His colleagues in City Hall didn't know that, though.
City laws require officials disclose such financial interests. The penalty is a fine of up to $5,000.
In his final days as mayor, Aungst and friend and former campaign treasurer Jim Appelt organized Clearwater Land LLC to buy and sell properties. As of now, Aungst has made a down payment in one project, he said, a development being planned for downtown Clearwater by a member of the Church of Scientology.
His wife, Karen, qualified for real estate license in May. She said sh e is looking for a firm to team with.

Air Coming out of Ballon in Florida.

An unprecedented five-year housing boom -- during which Palm Beach County home prices nearly tripled -- is coming to an end, a leading real estate economist said. Instead of a pop, though, listen for a whoosh. "Housing bubbles pop," said David Lereah, chief economist for the National Association of Realtors. "There's no risk of that happening here. It's more like a balloon, letting out some air." Lereah, in town for a Young Presidents' Organization luncheon at Morton's steakhouse later in the day, spoke at the Marriott West Palm Beach to about 100 Realtors from Palm Beach Gardens-based Illustrated Properties. The housing market nationwide has undergone what Lereah called an "expansion" since November 1991, when double-digit mortgage rates fell to single digits. "For the last five years, that expansion turned into a boom in some markets, and I'm certainly standing in one," he said. The median price of an existing home in Palm Beach County soared to $400,000 in September from $137,900 in September 2000, Florida Association of Realtors data show. The Treasure Coast saw an even more dramatic price explosion: to a median of $269,400 in September from $78,400 in September 2000. That's a whopping 244 percent price increase. Statewide, home prices doubled in the same period, association records show. A housing bubble refers to rapid home-price appreciation that isn't sustainable over a long period of time. The theory is that a bubble could pop, causing homeowners to lose equity in their houses. Throughout the real estate boom, some media -- Lereah cited The Wall Street Journal in particular -- repeatedly warned that a big pop was imminent. "If Main Street had listened to Wall Street, they'd be out $4 trillion in additional wealth built up in real estate, especially in Florida," Lereah said. Instead of heeding the bearish housing analysts, even inexperienced investors began a flurry of buying and selling real estate in Palm Beach County and the Treasure Coast. Sellers enjoyed multiple offers, bidding wars and full-price cash offers. Everyone from cab drivers to waiters to Realtors themselves became "flippers," buying and selling homes, and profiting from seemingly daily double-digit price hikes. Those heady double-digit profit days are numbered, Lereah said. The seller's market is giving way to a buyer's market once again. "You want single-digit appreciation," he said. "You need job creation. You can't have median prices going to California levels, where the median price of a 1,500-square-foot home is $721,000. Single-digit is good." As a result, local sellers will have to lower their price expectations, he said. "In every hot market, I'm getting calls that sellers are still trying to get 20 percent (appreciation)," Lereah said. "Don't get greedy. Five percent wealth gain is better than keeping your house on the market for another 180 days." Houses that once sold in five days will be on the market much longer, Lereah said. That's a sure sign that buyers are regaining control. "Instead of five days, it will take 60 days to sell a home," said Bradley Hunter of Metrostudy, a West Palm Beach housing consulting firm. "That's normal." Interest rates will continue to increase steadily, Lereah said, rising to 6.9 percent by the end of next year. He cautioned against "creative financing" such as interest-only loans and against adjustable-rate mortgages, or ARMs. "You still have historically low fixed-rate mortgages," he said. "It makes no economical sense to take out an ARM. It's a serious risk."
Although some real estate markets nationwide will suffer setbacks as the boom winds down, Palm Beach County and the Treasure Coast can thank Baby Boomers for a strong market for the next 30 years, Lereah said. Not even hurricanes will stop them. "A small percentage of households will never come to Florida again," Lereah said. "That won't materially affect values -- maybe a 1 percent drop at best -- because you have so many people coming."

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Commercial Property in Cape Coral Heating Up!

Last week, we had the first of a two-part overview of the commercial real estate market in Cape Coral. Today, I want to narrow our focus down to two hot spots: the Community Redevelopment Agency area and the Pine Island Road corridor.Currently, there is about $800 million worth of CRA development in the pipeline, and this should usher in a dramatic change to downtown Cape Coral.The CRA is cultivating the eastern segment along Cape Coral Parkway to offer more of an urban lifestyle. Some notable projects in the works include a 75-unit Hampton Inn and the Terraces at Rosa Vista, both located on Southeast 47th Terrace Street.
Rosa Vista will include up to five stories of about 23,000 square feet. Retail shops and restaurants will be on the ground level, with offices on the upper floors. The Villagio project near the Cape Coral Bridge on Southeast 47th Street will be comprised of two, 12-story towers with residential units, restaurants and other retail space. There will also be a 15-acre mixed-use development known as Cape Vincent. Piazza di Venezia is a 20-acre development two blocks from Coronado Boulevard and Cape Coral Parkway.Not to be overshadowed by the CRA, Pine Island Road is shaping up to become Cape Coral's future corridor of commerce. The corridor is one of the only areas in Cape Coral where large tracts of commercial land are available, and this has attracted national "big box" chains. Publix will locate a new center that is under construction at the intersection of Burnt Store Road to serve the growing neighborhoods in the west (another Publix is planned for Del Prado Boulevard and Kismet Parkway).
A Super Wal-Mart is planned to open on Pine Island Road across from the German American Social Club. Near this location is a 200-acre site being proposed for a regional mall. In order for a mall to be considered regional, it must have a minimum of at least 1 million square feet of retail space with a population of at least 250,000 within a 10-mile radius. Clearly there is enough land to build the retail space and it has adequate out parcels. The surrounding population of 168,000 is expected to exceed the 250,000 requirement by the time the mall is built.However, there are still significant barriers to overcome before the mall developer can begin construction. Pine Island Road must be widened to accommodate the increase in traffic, utilities must be available, zoning must be approved, and the mall's likely designation as a Development of Regional Impact requires even further government approval. All four barriers come down to time and money, so we may not see this project actually built for another five to seven years.Even with the large amount of planned new commercial construction, demand and rents in Cape Coral should remain strong. The current deficit of available commercial space and Cape Coral's swelling population growth are projected to attract enough tenants to meet supply as these new buildings are completed.

New Home sales dip!

The Commerce Department reported Thursday that construction of new homes and apartments fell by 5.6 percent last month, the biggest decline in seven months. Applications for new building permits, a good sign of future activity, fell by 6.7 percent, the biggest decline in six years.
Analysts said these weaker-than-expected figures, combined with evidence homes are staying on the market longer, indicate the hot real estate market is cooling off.
“We are likely to see a steady downward trend in housing activity over the next few months all tied to rising mortgage rates,” said Nariman Behravesh, chief economist at Global Insight, a Lexington, Mass., forecasting firm.
The fear is that home values have soared to such high levels that a slowing in demand could cause those prices to drop sharply, raising risks to recent purchasers who could end up with mortgage burdens that are higher than the falling values of their homes.
Behravesh doesn't see that happening, saying higher mortgage rates “should serve to cool the market down without precipitating any kind of nasty scenario.”
On Wall Street, stocks surged Thursday with investors cheered as oil prices fell to their lowest levels in five months. The Dow Jones industrial average rose 45.46 points to close at 10,720.22.
The National Association of Realtors reported Tuesday that 69 cities around the country saw double-digit price gains during the July-September quarter, compared with the same period a year ago, led by a 55.2 percent surge in the Phoenix area and a 44.8 percent jump in home prices in Fort Myers, Fla.
Nationally, median prices for existing homes were up 14.7 percent in the third quarter compared with a year ago.
Analysts said as sales slow, double-digit price increases are likely to be a thing of the past as the Federal Reserve keeps pushing interest rates higher to combat inflation pressures.
Freddie Mac reported Thursday that the 30-year mortgage rose to 6.37 percent this week, the highest level in more than two years and well above this year's low of 5.53 percent set in June.
In addition to the big drop in construction starts in October, the National Association of Home Builders said a new survey showed builder optimism fell in November by the largest amount since right after the Sept. 11, 2001 terrorist attacks.
David Seiders, chief economist for the home builders, said he believes sales of both new and existing homes, while still setting records for a fifth consecutive year in 2005, will be down by around 5 percent next year, representing “an orderly simmering down process.”
But he cautioned that there were risks that the drop-off in activity could be more severe. He said one of the biggest risks is if housing purchased by speculators starts being dumped on the market, causing a glut that will sharply depress prices.
The October decline in housing , which pushed the total to a seasonally adjusted annual rate of 2.01 million units, reflected a 3.7 percent drop in single-family building and an even bigger 11.7 percent decline in multifamily construction.
By region, construction starts were down 10.8 percent in the West, 10.5 percent in the Midwest, 7.5 percent in the Northeast and 0.5 percent in the South.

Riverfront Apts. Sold.

Riverfront apartments sold.
BRADENTON - Mainstreet at Bradenton has been sold for $38 million to a company known for converting apartments into condos throughout Florida.
The 252-unit riverfront apartment complex at 210 W. Third St. opened just two years ago. The rental community is on property known as the Sandpile.
The property's gates once bore signs proclaiming move-in specials but leasing has come to a halt at the complex, which has been renamed 210 Watermark.
Officials from the new owners, Tarragon Realty Investors, could not be reached for comment. It is unknown whether Tarragon plans to keep the complex a rental community or convert it to condominiums. Residents received a letter informing them of the ownership and name change but haven't been given any additional information.
Nearby, The Promenade at Riverwalk, a luxury condo development that will feature two 15-story buildings, is under construction. That, in combination with the river view, make the property ideal for condo conversion, said Gina Uliano of Wagner Realty.
"Condos, to be honest with you, are the one thing still moving strong in this market," Uliano said.
The Manatee County Property Appraiser's Office records back up Uliano's claim. While housing sales were down in September in comparison to September 2004, condo sales were up.
"The large increase in the number of condo sales comes from a new condo conversion project and the sale of these lower-priced units is likely the explanation for the lower percentage increases in median prices for condos the lasts two months," said Dale Friedley of the Property Appraisers Office.
Condo conversions are often more reasonably priced than single-family homes and are attracting young families, second homebuyers, empty nesters and investors.
Investors made up the majority of those who camped out at Lakewood Ranch's Colonial Village at Town Park when it was announced the 19-building complex was going condo in June.
Some arrived as many as three days before the complex started taking deposits to sleep in their cars and wait.
The purchase of 210 Watermark is Tarragon's second venture into Manatee County. At its first purchase, Tradition at Palm Aire, formerly known as Whispering Oaks, leasing was halted after the sale. An announcement scheduled for early December will let Tradition residents and employees know its fate.
"Tarragon Corp. hasn't made a decision on whether or not Traditions will remain a rental community," said Crystal Westly, a Traditions employee.
So far this year, the Manatee County Property Appraiser's Office has recorded two official conversions, eliminating 700 units from the county's already dwindling rental market.
Friedley believes more conversions will follow. "Unless the trend changes, within another year there's going to be six or seven more," Friedley said.
In an area with a lack of affordable housing, for many leasing is the only viable option.
Declining supply most likely will lead to rent increases in an area where the market is already tight and more people will get pushed out, Friedley said.
"Obviously, when you're taking that many units out of the rental inventory, there is going to be an effect," Friedley said.

Homebuilders revenue rises!

D.R. Horton Inc., one of the nation's biggest homebuilders, said Wednesday fiscal fourth-quarter earnings rose 61 percent on a 45 percent rise in revenue.
Net income for the quarter ended Sept. 30 rose to a company record $563.8 million, or $1.77 per share, from $349.6 million, or $1.11 per share, a year earlier.

Revenue increased to $5.02 billion from $3.46 billion, and homes closed increased 38 percent to 18,622 homes from 13,452 homes in the year-ago quarter.
Analysts surveyed by Thomson Financial forecast, on average, income of $1.63 a share on sales of $4.7 billion.
The company's sales order backlog of homes under contract at Sept. 30, was a fiscal year-end record $5.8 billion, or 19,244 homes, the company said, up 28 percent from $4.6 billion, or 17,184 homes, a year ago.
D.R. Horton, which builds homes in 25 states, raised its earnings-per-share target for fiscal 2006 to between $5.22 and $5.32. This assumes the company will close about 58,000 homes and generate more than $15.5 billion in revenue.
Previously, the company forecast fiscal 2006 earnings per share of $5 to $5.05 on about $15 billion in consolidated revenue.
For the quarter ending Dec. 31, the company continues to expect earnings of 90 cents to 95 cents per share.
According to Thomson Financial, the company is expected to earn $5.24 per share on sales of $16.06 billion for fiscal 2006. First-quarter earnings are expected to total 99 cents per share, according to estimates.
Its shares slipped 22 cents to $32.09 in morning trading on the New York Stock Exchange, and have traded in a 52-week range of $25.35 to $42.82.
Chairman Donald R. Horton said in a statement, "We ended the year on an extremely positive note with a 33 percent organic increase in our fourth-quarter sales and strong sales performances in all of our regions. Our double-digit sales increase and our record $5.8 billion backlog position us for a strong start to fiscal year 2006."

Bargain hunting Success requires patience, willingness to renovate .

Bargain hunting Success requires patience, willingness to renovate .
By JOE CREWS Business Writer Last update: November 13, 2005 Despite skyrocketing real estate prices, it's still possible to find a home for less than $100,000 in the Volusia-Flagler market -- if you persevere and are patient, and are willing to repair and renovate it.
Just ask Carla Gamble. She and her 42-year-old husband, Roy, this month moved into a two-bedroom, two-bath home north of DeLand they bought for $87,500.
"It almost took three months" of looking for a suitable home in the couple's price range, Gamble, 45, said. "I found it on the Internet."
She said real estate agents were showing them flooded properties, mobile homes or "neighborhoods I didn't want to live in." That prompted her to search the Internet, where she found the 48-year-old fixer-upper on Mohawk Avenue for sale.
The Gambles, now first-time homeowners, had been renting in DeLeon Springs. Their landlord wanted to sell that house, so they first looked at renting elsewhere.
"What they wanted (in deposits and two months' rent) was a lot more than buying would be," Gamble said. "We jumped into (buying) and got a home at a really great price."
She knows their new home needs a lot of work, but they plan to live out their lives in it. As a bonus, the home also has a detached mother-in-law suite they're planning to rent out.
"I probably won't want to get rid of it after I put my heart and soul into (fixing) it," she said. "We love this place."
Real estate agents say there are a few houses on the market for less than $100,000, but most will be -- to put it generously -- humble abodes in need of some work.
Maggi Hall, broker/owner of West Volusia Properties Inc. (which helped the Gambles buy their home), said she is listing a couple of houses in the DeLand Garden District and some in the Spring Hill area. (Spring Hill is a predominantly black community on DeLand's southwest side and adjacent unincorporated Volusia County.)
"Of course, they need restoration. That's about it, unless you want a mobile home in Lake County," Hall said, only half-jokingly.
Mobile homes are considered single-family residences, Hall said, but are much harder to get insurance and financing for unless they're less than 20 years old. But single-family homes with five-figure price tags are scarce, unless potential buyers are handy with a hammer and paint brush.
Hall recently found about three dozen homes on the West Volusia Multiple Listing Service that were priced less than $100,000. Some were in more rural areas, such as Seville and Osteen, but others were in Lake Helen, DeBary and Deltona. Virtually all were "handyman specials."
Pickings also are slim in Flagler County, according to Realtor Matthew Wilson of Coquina Real Estate and Construction.
He found eight in the listings there for less than a hundred grand -- seven mobile homes in the far western portion of the county, and one in a rundown neighborhood in Bunnell.
"Most are listed in fair or 'handyman' condition," Wilson said. "If you find anything under $100,000, it's not going to be much."
Realtor Anne Wilson -- no relation to Matthew -- of RE/MAX Beach Realty in Palm Coast said for less than $70,000 "you have your choice of delightful two-bedroom, single-wide mobile homes manufactured prior to 1980."
"How you finance it is up to you, since most lenders won't touch it," she said.
Aside from one side of a duplex in Bunnell, she added, there aren't any fixer-uppers available in Flagler County. "None worth sinking much money into."
Southeast Volusia has even slimmer pickings. Realtor Donna Concannon-Kosmas of Prestige Properties in New Smyrna Beach said nothing on the beachside is selling for that little. On the mainland, "whatever's there, they're tear-downs."
"Anything under $100,000, you're really just buying a lot," she said. "The houses are not habitable."
Even mobile homes are probably out of the question in the New Smyrna Beach area, Concannon-Kosmas said. "The land is just so much more valuable for other things."
The median price of existing houses sold in the two-county area surpassed the $200,000 mark in June. The median means half sold for more and half for less.
A spot check of Volusia County sales in late August and early September turned up about two dozen houses scattered around the county selling for less than $100,000. Some were mobile homes or units in multifamily dwellings, but many were slab-built houses in or near Daytona Beach (6 of them), DeLand (5), Deltona (3), DeBary (1) and Ormond Beach (1).
Of the 16 single-family houses in the two-week sample, half were bought by investors. Buyers of the other eight were moving into their newly purchased homes.
Only one of the six houses sold in Daytona Beach was occupied by the new owner, according to records at the Property Appraiser's Web site. Five of the homes were within an area bounded by Nova Road, Mason Avenue, Beach Street and International Speedway Boulevard. One was south of Daytona Beach Police Department.
In DeLand, three sold properties were outside the city limits. Two of the existing-house sales were to owner-occupiers, as were all three in Deltona, one in DeBary and one near Ormond Beach.
Hall, the West Volusia Properties broker, said prospective buyers should get a "four-point" inspection before finalizing any contracts. That would include detailed examinations of the house's roof, plumbing, electrical system and heating-ventilation-and-air conditioning system.
Anyone buying a fixer-upper or handyman's special, should expect to spend thousands of dollars on repairs, Hall said.
"I have never seen anyone do a decent job for under $5,000 if they're doing more than cosmetic work," she said. "Many just need a thorough cleaning and a coat of paint . . . (but) restoring a home is big bucks."
Some jobs, such as re-roofing or electrical wiring, should be done only by certified contractors in order to meet building codes. But painting, re-carpeting and the like can be handled by do-it-yourselfers.
Hall, herself a contractor, said a new air conditioner can cost $3,500 to $4,500; a new roof about $4,500; rewiring the electrical system about $5,000; re-plumbing a kitchen and bathroom about $2,000 apiece; and new carpeting about $1,200.
"There's a difference between remodeling and restoring, and doing just cosmetic work," she said. "If the new owners can do a lot of the work themselves, they will save some money. Done right, the value of the home will appreciate."
That's what Roy and Carla Gamble are betting on. And while finding a home for under $100,000 is daunting, Carla Gamble insists "if you have the patience, it can be done."

Real estate market softens as flippers' tactics flop.

Real estate market softens as flippers' tactics flop.
Investors trying to shed properties offer incentives while builders competing with them slash prices.By JAMES THORNER, Times Staff WriterPublished November 13, 2005
LAND O'LAKES - In Ballantrae, Pasco County's bestselling neighborhood of new homes in the past year, signs of a real estate boom could be starting to sputter.
And that could be good news for house hunters put off by high prices and poor selection for the past couple of years.
Real estate speculators who grabbed lots last year are having trouble selling their marked-up houses for the prices they want.
An illustration of the investor home glut is Glenapp Drive in Ballantrae, a neighborhood under construction north of State Road 54 between U.S. 41 and the Suncoast Parkway.
On Glenapp, five new, nearly identical 2,657-square-foot houses are for sale. Their owners are asking for an average of $345,000 for houses they bought for between $230,300 and $240,199 in the summer.
No one's buying - not yet anyway. And why should they? KB Home, the model's builder, markets the same house a few miles up the road for less than $300,000.
"We're going into a buyer's market," said Pam Koenig, a Land O'Lakes real estate agent for one of the five Glenapp homes. "It has to be."
What we could be witnessing is the downside of the investor mania that has pumped up the housing market the past two years. In a search for gains unmatched on the sluggish stock market, speculators gobbled up lots across Pasco.
This fall, many of those investors are trying to discard the properties simultaneously.
"Investors are competition for us. They actually become hidden inventory," said Kevin Robles, president of the Pasco Building Association and an executive with McCar Homes.
The market dilution is apparent in another Land O'Lakes community, Lake Talia, west of U.S. 41.
One of its two builders, US Home, recently discounted its homes and undercut investors. A sign announcing a "builder's closeout" appeared on U.S. 41.
US Home reduced one model formerly listed for $440,000 to $420,000. A speculator was reselling the same model in Lake Talia for $439,000.
At least 20 Lake Talia homes fill the Multiple Listing Service, the detailed inventory of homes for sale that real estate agents consult.
One Talia investor resorted to a hard sales pitch to shed his property: "Reduced for quick sale!!" and "SELLER WILL PAY $4,000 TOWARDS BUYERS CLOSING COSTS."
In another sign of softening, two builders, Morrison Homes and KB Home, have peppered Pasco real estate offices with offers of $3,000 bonuses for agents who steer them customers.
"The market's slowed down a great deal," Koenig said. "There's so many real estate flippers, it's diluting the market."
Pasco builders reported that about 25 percent of their sales last year and earlier this year were to investors. For some builders, it may be an undercount.
Many investors hide their intentions. They will say they are buying for themselves and later claim to have changed their minds before moving day. A son will build a house for an "elderly parent," who never materializes after closing.
Many builders rewrote sale contracts to discourage speculators - for example, mandating that a person hold a house for a year - but builders may welcome them back as sales soften.
The Glenapp Drive phenomenon could herald further localized home gluts. Ballantrae is Pasco's housing leader, recording 584 starts the past year, according to the firm Metrostudy.
While the housing market shows no signs of tanking, analysts expect a leveling off of prices that climbed 30 percent the past year.
That means investors might have to make do with lower returns, said Koenig, whose clients are listing a 2,657-square-foot Glenapp house for $349,900, $108,000 more than they paid for it in July.
Another investor markets the same house on the same street for $319,900. The cheaper house has been listed for seven weeks.
"If you are one of those five people on Glenapp and you want to sell, you adjust your price accordingly," she said.

Fire department recruits find it hard to buy houses.

Karen Myrick thought she found the ideal job. Myrick, 55, a financial clerk for the small Florida Panhandle town of Havana, was interested in the job of financial director for the Bonita Springs Fire Control and Rescue District. The pay range is $52,794 to $57,593, which is not bad considering Lee County's median family income is $54,100 a year.She said she wanted the job so she could be near her son and his family in Fort Myers.But she said she had to turn down the job because she couldn't afford a house.
Her case is indicative of problems local fire departments and other agencies are having in hiring qualified people such as Myrick because of the escalating cost of real estate in the high-growth areas of south Lee County and North Naples.Applicants are either rejecting the jobs outright, like she did, or taking innovative approaches to find homes.
Some firefighters chip in to buy houses together, or they rent space from more fortunate roommates who bought homes a few years ago before the housing market spiked.With the median price of an existing house in Lee County at $289,700 and in Collier County at $500,800, firefighters and other professionals making $40,000 to $60,000 are having a tough time finding homes."It's the key challenge we have right now in Southwest Florida," said Lee Building Industry Association executive Vice President Michael Reitmann.
Although the wages are competitive for this area, housing prices have outpaced pay scales."You just can't continue to raise salaries and
High real estate costs force many candidates to decline;others double up in homes so they can share the rent make it work," San Carlos Fire Chief Nat Ippolito said.
The problem has overwhelmed local government.Although affordable housing programs exist in Lee and Collier counties, there is a 30,000-unit deficit of such housing in each county.
Hit especially hard are young firefighters, especially those making in the $40,000 range."We really don't reach out to the moderate income households like we should," said Gloria Sagjo, a county planner.
So "if you were just moving here, what would you do? I don't know how you could afford it," said Roger Shelley, assistant fire chief with the Bonita Springs Fire Control and Rescue District.Consider Myrick. The median existing house price in Havana is about $100,000, she said.Myrick said she's a little better off than most.
"I could sell my 3,000-square foot house on 4 acres for $325,000 to $350,000, but what could I buy there, a small condo?" she said.By comparison, Shelley said he recently sold his older three-bedroom, two-bath wood-frame house with no garage on a standard lot in Bonita Springs for $315,000.
Entry-level Bonita firefighters who start at $44,600 annually will have an even tougher time finding housing, said department Chief Dan Gourley, who is faced with trying to hire a dozen more firefighters in February.In San Carlos Park, existing home prices have soared from $120,000 to $300,000 in less than two years, making it hard for his young firefighters to find places to live, Ippolito said.Firefighter Brad Altstatt, 24, a graduate of Estero High School, is in that housing predicament.
Earning $42,500 a year, he said he's renting space for $350 a month plus utilities from a friend who bought a house in San Carlos Park a few years ago.Ippolito said he may have a tough time hiring the six to nine more firefighters he needs during the next three months.
"All I can do is hope and try," he said.In North Naples in pricey Collier County, the problem is even worse.As a rule of thumb, a person can afford to buy a house that is three times his or her annual salary, said Cormac Giblin, county director of housing and grants. That means a starting firefighter earning upward of $40,000 annually to a fire department finance director earning $55,000 would be able to buy a house between $120,000 and $165,000.
Last month, there were no homes for sale in the county from under $100,000 to $199,000, Giblin said. He said there were only seven existing houses for sale between $200,000 and $250,000.North Naples Firefighter Eloy Ricardo said when he joined the department five years ago, he had to go in with another firefighter to rent an apartment in Golden Gate for $900 a month.
"We literally slept on the carpet because we couldn't afford furniture," Ricardo said. He said rent has since escalated to $1,300 a month.North Naples Firefighter Javier Spirgatis, who has been with the agency for 21Ú2 years, said he was fortunate, with his parents' help, to buy a condominium apartment in south Lee County for $113,500. And another firefighter, Adrian Martinez, rents from him to help make the mortgage payments. Spirgatis said the value of his condo is now $200,000.Local governments are planning new initiatives to help fill the work-force housing void.
In Bonita Springs, the city owns 16 acres where 65 homes priced at $180,000 to $200,000 could be built, Mayor Jay Arend said.The plan would be to sell the property to a developer who would build the houses and lease the lots to the home owners to keep unit prices down, the mayor said. He said construction could start in a year if everything falls into place.
City officials are also considering charging a fee on new homes of $500,000 or more to raise $4 million a year to Bonita's affordable housing trust fund.The city will have $1.14 million in the fund by the end of the year. Some of the money is being used to pay for streets and drainage in the 40-home Renaissance at the Rosemary community.The Bonita Springs Area Housing Development Corp. is building 20 three- and four-bedroom houses for $180,000 each, said Mary Sorge, executive director. Three other subdivisions, with 71 lots, are planned, she said.
Lee County has earmarked $1 million to create a community land trust program to help create more affordable housing.In Collier County, some developers are pledging to build a certain number of units in the work force housing price range of up to $210,000 or donating cash to the county's work force housing trust fund.
The county could used the money to build streets, water and sewer lines and other infrastructure to hold down housing costs, Giblin said.

Boards in SW Fla still don`t understand!

Listings in Southwest Florida still out of sync, irking agents
By RIDDHI TRIVEDI-ST. CLAIR, rtrivedi@bonitanews.comNovember 11, 2005

Four boards, thousands of agents and three listing systems — and no consensus on which system works best.
It was a similar lack of consensus that originally led to the split among the participating boards in Sunshine Multiple Listing Service. Now it is causing some Bonita Springs, Estero and Naples area real estate agents to join three boards or be left without access to a significant part of the home listings in one area or another.
"It's terrible. We get less listings down here and the agents up there can't read the ones on our MLS," said Jack Barra, a real estate agent with Prudential/WCI in Bonita Springs. "They were supposed to have data-sharing, but that was supposed to happen by the end of September, then it was Oct. 10, then Oct. 20 and now it is November whatever ..."
The problem, Barra said, is the Fort Myers board is playing games and there are a lot of agents on both sides who are upset with the split and the new system. Some real estate agents in Fort Myers and members of the board say the problem is with Sunshine MLS, not their end.
While each side says it is working on the data-sharing agreement, each one blames the other.
In the meantime, real estate agents and homeowners are paying the price, said Bill Barnes, managing broker for Coldwell Banker in Estero and Fort Myers.
For example, the Rapatoni system has technical problems that don't allow all the features to work properly, it doesn't interface with many of the existing features on Sunshine MLS and the split is forcing his agents to join three different boards if they want to have access to all the listings, Barnes said.
"For the homeowners, it means loss of data," Barnes said. "If different homes in a neighborhood are listed in different systems, they may not be able to get the transaction history for the neighborhood. The two systems are supposed to have data sharing but it hasn't turned into anything meaningful."
The split has left Lee and Collier counties with three listing systems, the one used by Naples and Bonita Springs, and two used by Fort Myers and Cape Coral, where most agents would prefer one combined listing for all the areas. While Barnes and other agents would prefer a unified system. Others, including George Sayers of Re/Max Realty, would like to see not just Lee and Collier counties, but also Charlotte County combine their data.
There are as many opinions as real estate agents over who is to blame for the systems splitting rather than combining.
Fort Myers board members blame an "outdated" Sunshine system. They chose the newer, more user-friendly Rapatoni system.
"Rapatoni has 95 (multiple listing services) nationwide. Sunshine is a homemade system put together by two part-time technicians," said Gary Atkinson, presi dent of the Realtor Association of Greater Fort Myers and the Beach. "We tried to get them to upgrade Sunshine and it didn't go anywhere."
That's why his board decided to go with its own system at the end of September.
Officials with Sunshine disagree with both claims — that Rapatoni is a better system and that Sunshine hasn't been upgraded.
"That's completely inaccurate.
I am sure (Rapatoni) has features they like better, but I have a feeling Sunshine has some feature they don't," said Joseph Ballarino, a Realtor with Ameriwest in Naples and immediate past-president of NABOR.
Real estate agent Dawna Krohe and Judy Fisch, a listing coordinator for Coldwell Banker, both said Rapatoni is more time consuming, harder to use and more complex.
"The new system is like a bureaucracy. It's not better and it isn't more user-friendly," Krohe said. "It's harder to put data in, harder to search and harder to find what you are looking for. It's frustrating."
Sayers of Re/Max, on the other hand, found 95 percent of his 171 agents in Lee County love the new system.
Brett Ellis a real estate agent with Re/Max Realty Group, The Ellis Team, has a more balanced view. The new system has its problems, Ellis said, and he spends a lot more time putting data into it than he would like. He considers those teething problems.
"We gave Sunshine two years. I am not willing to do that with Rapatoni," Ellis said. "But it has only been two months. I would give them a little more time."
That time is costing many agents money, say Barnes and others that do business in the Naples and South Lee area.
"Agents are having to refer business out to other people because they can't get all the listings they need," Barnes said.
Sayers said the move by Fort Myers to Rapatoni was the right thing to do.
"They took the right step to get us into 2006. We need to be able to service our buyers and sellers and this system does it," Sayers said. "We had too many complains about Sunshine. We can't send out agents out there with a pick and an ax."

Investors warned of Real Estate Bubble.

Some Americans, including Federal Reserve Chairman Alan Greenspan, think the real estate market may be overheated. But a JPMorgan investment strategist speaking in Oklahoma City on Monday said investors should fear a potential stock market bubble. “There’s no real estate market in the nation that’s beat the stock market in the last three years,” said Jonathan Golub, New York-based managing director and U.S. equity strategist for JPMorgan Asset Management. Investors don’t recognize the nearly unprecedented three-year surge in stocks because most are “mentally anchored” to March 2000, the top of the tech-driven market, Golub said. Golub, considered the voice of JPMorgan mutual funds, spoke before a group of about 50 clients and business leaders at Nonna’s Euro American Ristorante. The accommodative monetary policy instituted by the Fed and Greenspan in the wake of the 2001 economic recession kept the nation “out of the abyss,” he said. But the historic low interest rates produced some unwanted consequences. Greenspan “kept the free money for too long,” Golub said. “The result is speculative behavior.” Consumers have borrowed heavily, refinanced their homes and have taken money out of the equity in their homes to spend, he said. That spending boosted the economy at the expense of savings. Americans, many of whom “feel wealthy” because of the growing value of their homes, are spending more than they make, Golub said. American’s free spending also helped create the soaring stock market. A closer look at the types of stocks that have experienced the highest price spikes over the past three years show just how risky consumers have become with their spending habits, Golub said. The Standard & Poor’s 500 index has grown 67 percent over the past three years. The most volatile stocks in that index have increased by 207 percent. The shares of index companies that have lost money have increased about 250 percent. Index companies that have had executives indicted have soared more than 300 percent. “The riskier the company, the junkier the company, the worse your management was, the better your return was,” Golub said. “Why? Because when you put free money in the system, junk rises to the top.” That, he said, should prompt prudent investors to seek quality companies with strong earnings, dividends, good business plans and solid management. More traditional investments should be in favor “not just for the next six months, but for the next two to three years.” Something must curb the level of consumer spending, and it likely will have to be something drastic, Golub said. “I don’t see something that’s going to quietly burst this bubble,” he said. “I frankly thought it was going to be (hurricane) Katrina. ... But Americans shrugged that off like it was a little storm. That was shocking.” Golub said the Fed probably will continue incremental hikes of the benchmark overnight interest rate until it reaches about 4.5 percent to 4.75 percent. The will increase the cost of borrowing and could have a chilling effect on consumers and the wider economy, he said.

Waterfront Property In Ft. Myers!

The thought of waterfront property in Southwest Florida usually brings to mind blocks of neatly platted rectangular lots backing up to seawalled, man-made canals. But there's a different kind of waterfront community tucked quietly away in south Lee County.Hendry Creek, just south of Gladiolus Drive and west of U.S. 41, is a little-known subdivision that's one of the best-kept secrets in Lee County. Though most residents would like to keep it that way, many were eager to talk about the virtues of their community and the positive aspects of the lifestyle they enjoy there.
Dr. Mark Streater, a resident since 1996, said he looked for property for a year before buying his waterfront lot in 1990 and chose Hendry Creek because of its natural waterfront and its convenient location to his four offices in Fort Myers and Collier County. "It's a good family neighborhood," Streater said. "There's pride of ownership, and everyone is friendly and knows everyone else."As a Minnesota Twins fan, he considers easy access to the nearby Lee County Sports Complex a plus.Situated at the end of Hendry Creek Drive, the Hendry Creek neighborhood has no other outlet and no through traffic. It's definitely a destination location.
This little gem of just 70 estate-size homesites is straddled by two navigable natural waterways, Hendry Creek and Phillips Creek, providing direct access to the Gulf of Mexico.The lots, both on and off water, were arranged to take advantage of the parcel's natural configuration. The result is a charming, old South ambience with meandering fingers of the two creeks creating picturesque bayous and backwaters. Private docks sit serenely in the shade of mature trees. One can imagine fireflies and banjo music.
According to homeowner Larry Rorrer, "It's like living on an island."In the common areas, benches surround the tranquil lakes — stocked for the residents' enjoyment — where shorebirds wade looking for a meal. A community boat launch — also for residents only — sits at the end of Thory Court, near where the two creeks intersect. There are even two tennis courts, although on a recent Sunday afternoon the only occupant was a mockingbird performing its repertoire.The lots begin at slightly more than a third of an acre, with the majority irregular in shape and over an acre in size.
Commercial real estate agent Jim McMenamy recalls launching his real estate career in the late 1970s and early 1980s selling lots in Hendry Creek from an on-site trailer office, when the half-dozen or so off-water lots went for $10,000 to $12,000, the non-navigable lakefront lots for $12,000 to $15,000, and the most desirable creek-front parcels from the mid-$50,000s up to $100,000."The development didn't immediately take off because we were in a recession then," he said. "It was pretty wild and woolly in that part of the county until 1982 or 1983."
In fact, McMenamy said, one day a bear — apparently displaced from the nearby Forest Country Club, which was under development at about the same time — came lumbering by the trailer."I went back inside in a hurry!" he said.McMenamy also recalls that when the lakes were dug for fill, the limestone rock shone a brilliant white in the sun's glare with no trees at the time to offer shade. However, by the middle 1980s, he said, Hendry Creek became "one of the nicest subdivisions around."
Developer Len Lucas of Tropical Hut Realty said he purchased the property from members of the Morroni family, who were once among the major flower growers in Lee County.He said he chose the parcel because it was "a spectacular property, with navigable access to the Gulf." After working out environmental issues with the Department of Environmental Regulation, Lucas and other principals platted and recorded the subdivision, but he agrees that in 1978 it was slightly ahead of its time.
"It was a slow mover in the early days," Lucas said, "but it matured nicely."Residents and former homeowners' association officers agree. The common thread running through residents' comments is that the navigable natural waterfront, an established sense of community, and a secluded but convenient location make Hendry Creek an attractive and enjoyable place to live.Residents also tend to stay in the community. According to the Lee County Property Appraiser's records, many who purchased their lots in the mid-1980s still reside there.
Kathleen Wells recalls building her first house there in 1984 when, "It was the boonies!"Wells is now in her third house in the subdivision. "We are 15 minutes from the bay," she said, "and it's a sociable community where you can walk in the evening, or enjoy jogging or rollerblading."
Sensible deed restrictions and a homeowners' association were included to ensure compatibility, although there was no designated builder and property owners were free to choose their own style of construction.With happy homeowners staying put in Hendry Creek, properties rarely come up for sale. According to the property appraiser, there have been only two recorded sales in 2005, a creek-front three-bedroom, two-bath home at $760,000 and a four-bedroom, two-bath on a 130-by-120 dry lot at $566,000.The only property on the market as of this writing was a four-bedroom, three-bath three-story home on Heaven Lane, listed at $779,000.

Building Permits drop in Lee County and Cape Coral.

The number of permits issued in October for single-family homes dropped sharply in both Cape Coral and Lee County.According to a report issued this morning, there were 861 permits issued by Lee County, which also includes permits in Fort Myers Beach and Bonita Springs — those two municipalities contract their permitting work to the county.That’s down from 1,181 in September but still more than the 641 issued in October 2004.Still, the county remains at a record pace for construction overall with $4 billion permitted in the first 10 months of this year. In all of 2004, only $3 billion worth of work was permitted.In Cape Coral, 464 permits were issued in October compared to the all-time high of 765 in September. There were 573 permits issued in the Cape in October 2004.October statistics were not yet available for the city of Fort Myers.

Home Sales slowing down!

Selling a house the past few years has been easy. Put up a "For Sale" sign. Host an open house. Sift through multiple offers. Pick a buyer willing to fork over more cash than you initially asked for. Then brag about how much you got.

That was then. And now? While there's still a plentiful pipeline of homebuyers looking to make a deal, finding one willing to make a split-second decision to buy and pay whatever it takes to get in the door is no longer a lock, real estate agents say.

In what could signal a mood shift in the feverish real estate market, tales of bidding wars and 30 percent annual price gains are quietly fading. Instead, there's nervous chatter about the recent increase in the number of homes for sale, sellers cutting their asking prices and builders wooing buyers with incentives.

The reason: There are signs that the overheated market might finally be cooling. The Commerce Department, for example, said sales of new homes in September fell shy of expectations, median prices declined 5.7 percent, and the number of new homes for sale shot up to a record 493,000. Freddie Mac also said October mortgage applications seem to be "tapering off."

It's not just the megahot markets such as New York City, San Diego and Phoenix showing stress. Softness is also being reported in condo-happy Las Vegas, the stalled auto capital of Detroit and Midwest college towns such as Madison, Wis.

Most real estate agents and economists are not forecasting a real estate collapse, although some doomsayers say the bursting of the "bubble" is inevitable. Instead, they say the temperature of the housing market is dropping from an unhealthy 104.3 to a reading closer to the norm of 98.6.

"The market is leveling off, but it's not like there's a huge crash going on," said Pam O'Connor, CEO of Chicago-based Leading Real Estate Companies of the World. Adds California-based agent Toni Martinez: "More buyers want to sleep on it before making an offer."

Richard DeKaser, chief economist at National City, said the five-year housing bull run peaked this summer.

"What we will see is a dramatic slowing in price appreciation," he said. Only a few high-risk markets will experience price declines, he predicts.

Once white-hot San Diego county is a test case. Home sales there fell 4.7 percent in September from year-earlier levels, and price appreciation slowed to 3.8 percent, said DataQuick Information Systems. Despite the pullback, DataQuick analyst John Karevoll describes the market as "stable" and "more normal."

Other signs of a slowdown:


Ricardo Cortazar, a Realtor in Tempe, Ariz., said it now takes 35 days, on average, to sell a home. Six months ago, it took a week. Inventory in Arizona has swelled to 15,000 homes, vs. 6,000 in May.


Vaughn Bryan, a real estate agent in San Bernardino County, has spotted another ominous trend: a rise in the number of 90-day listing contracts that expire without a sale.


Dan Elsea, a Detroit Realtor, said it's common for sellers in the job-starved Motor City to reduce their asking prices two, three or four times before signing a deal.

Agent angst

Signs of cooling have created angst among real estate agents.

"You now have agents in the office walking over to other agents asking, 'Why has this property not sold?' " said Martinez, an agent at Century 21 Lois Lauer Realty in Redlands, Calif.

Much of the perceived softness must be kept in perspective, argues J. Lennox Scott, a Seattle-based broker who said business remains robust, citing price gains of 16.3 percent in September, vs. a year ago. What looks ominous is less so considering fresh numbers are being compared with record highs. "Homes continue to sell briskly," he said.

An existing home that sits on the market for four months is not uncommon when compared with long-term housing data, said National Association of Realtors spokesman Walter Molony. A nationwide supply of homes that would take six months to sell is considered healthy. There is now a 4.7-month supply, up from 4.3 in May, the NAR said. In the 1990-'91 recession, supply hit nine months.

Business is slowing, but not enough to create a true buyer's market. High-end properties and the more speculative, investor-driven condominium market are under the most pressure. The Florida condo market, suffering from oversupply, overinflated prices and speculation, is prone to price declines of 20 percent to 30 percent, said Jack McCabe, a Deerfield Beach housing consultant. In Miami-Dade and Palm Beach counties, 11,465 units are under construction, permits for another 14,500 have been OK'd and plans for another 36,000 have been announced. Prices are "changing as we speak," he said.

The pricier end of the market suffers more from sticker shock.

"Homes in the $1 million to $2 million range in hot metro areas are more vulnerable," O'Connor said.

Buyers cautious

To sell, homes have to be priced right. Many potential buyers, their confidence shaken by high oil prices and hurricane fatigue, have turned cautious. They're leery of overpaying amid predictions of an impending downturn.

Interest rates also have been creeping up. Freddie Mac said the average 30-year fixed-rate mortgage is 6.15 percent, up from 5.64 percent a year ago, making monthly payments less affordable. The average monthly mortgage payment in Southern California in September was $2,034, $30 below the April 1989 peak but up 50 percent from 2000, Data-
Quick said.

In another subtle shift, many people looking to buy who might have rushed a few months ago to avoid paying even higher prices, are now waiting for prices to decline.

Take New Yorker Carl Haacke. He wants to move, but is in no hurry to make a bid on the elegant Brooklyn brownstone he covets. Instead, he's watched the asking price drop $200,000 from its initial $1.7 million. He figures if it drops once, it's likely to drop again.

"That's my incentive to wait," he said.

If that strategy becomes the norm, more sellers will lower their prices to lure buyers back into the market.

Bubble theory proponents say it will end badly, with sharp price declines and intense financial pain such as investors suffered after the tech stock bubble burst in 2000.

But for that to occur, it would take a dramatic rise in interest rates or a major shock to local economies resulting in steep job losses, argues Mark Milner, chief risk officer at PMI Mortgage Insurance, a Walnut Creek, Calif.-based provider of mortgage insurance.

Both bulls and bears have evidence to back up their predictions. Much -- but not all -- of current data show sales volume and price gains are still healthy, suggesting no danger of an imminent collapse.

September existing-home sales came in at their second-best level ever, although sales were boosted by heavy buying in the Gulf Coast region after Hurricane Katrina, the NAR said. In early October the NAR said its "pending home sales index" set a new record. The national median price of a home was $212,000 in September, up 13.4 percent from a year ago -- but down from $220,000 in August.