No one Goes there anymore, It's too crowded

No one goes there anymore. It’s too crowded.

Welcome back Gregg. (Thank you to those that noticed I have been gone.) I actually have not been gone, but I did take a month off from writing to you. Since the Fourth of July weekend I have been struggling with TWO bad ankles and the pain has been wearing me thin.

One of the books I am reading now (Until I Find You; John Irving, Ballentine Books) has a wonderful passage about a young boy. The young man tells the reader that a one legged man gave a gift to his imagination by NOT telling him how he lost his leg. I happened to mention this passage to my good friend John Stamps yesterday. He got up this morning and suggested by a 5 AM email that I not feed my subscribers too many “Gifts to their imagination”. Thanks John. I’m back.

It was Yogi Berra that first said something along the lines of my subject line, “No one goes there any more. It’s too crowded”. This year Lee County population has topped 550,000 and will go to just under 1,000,000 by 2030 (Lee County). They are still coming – and to the tune of about 800 a week. But if you are not a long term investor – you may be in for some anxious times. We are in a slow down and it will take some time to bounce back.

When will the market recover? Yogi also once said, “I wish I had an answer to that because I'm tired of answering that question” But let’s talk about recovery. We now have an over inventory of new and resale homes. In other words we have more sellers than buyers. If the question is when will there be more of a balance in the market – my short answer is not until after next season – eighteen months or so.

A few months ago I predicted that financing was the main issue. Last weekend I saw a 1.25% rate offered by one of the major builders. If this does not bring more sales – what will this builder turn to next? I still say he will NOT lower prices. He may cancel his project, but lowering prices is just not an option that is very palatable for developers. Cost, while seeing some drop, will not drop enough to help in the short term.

Re-sales are a different story. If buyers of condos locked in their price early 2005, they still may be able to sell at a profit. But the high inventory of condos means even condos priced “right” may sit on the market for a long time. (I still have some VERY good deals in resale condos – after all this is a BUYERS market). If you want to get your foot on the escalator- email Debbie@ma-realy.com. Also check out www.citadel-bonita.com – my favorite entry level condos.

The single family home market will recover much sooner than condos. There were not as many investors and the smaller builders are quicker to respond to changing markets. Their inventory of lots was much lower than the big buys.

You will see some bold moves by the big developers like Endeavor. They will announce their Windsor Lake Estates project at a big bash in Cape Coral in September. Endeavor has surmised, correctly, in my opinion, that the one quarter acre lot typically available (and by the thousands) in Cape Coral is not a market they want to compete in. Windsor will be large lots of half acre in a low density gated community, not something you can easily get in Cape Coral.

The commercial market in Lee County is booming. I wish I already had a completed Cyperlin Center. I could fill it in a month. The pendulum has swung from residential to commercial as residential builders now look at the slow market for homes and condos as a time to rebuild the low inventory of office, industrial, and retail space. I do have a few opportunities for investors for Cyperlin. If you are interested in learning more, call me. 239-425-0771.

Most of my time now is spent looking for buy opportunities. We are also adding to our commercial staff. If you have experience in commercial real estate and want to operate with an experienced and trustworthy team, get in touch with me.

Gregg
www.investinwaterfront.com