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It will be interesting to see if adjustable ARM resets put more island investors in a state of distress and force firesales. I suspect not, as most of these buyers have significantly more skin in the game than the typical Cape Coral/Lehigh no $ down investor.
Home values in sanibel cannot be isolated from what is happening in the rest of the country.
if you analyze the data and curves provided by trulia and at zillow and at aol real estate.
the following facts emerge:
1. Sales are declining : 7 single family homes sold in sanibel in april 09 ( aol)
2. Median estimayted value is declining trulia ( aprox 570) zillow 418 ( was 570's till 4/30 then changed0
3. avg listing price is going up. trulia
4. however the sanibel median value decline curves are phase shifted from say cape corals ie declines are occuring several months later
what logical interpretation can one make of these numbers
1. One or more of the realtors are right, as there is a greater number of cash properties than highly leveraged ones: the catastrophic declines that occured in cape coral havent quite come to pass here. owners have deper pockets.
2. deep pockets are not infinitluy deep. ergo a frame shift. same phenomena just occuring later as deeper pockets were able to withstand pressure to do a fire sale for longer.
3. more and higher priced properties are coming to market. many purchased in the boom. with ARM's that will start to track market conditions in mortgage rates very soon.
4. mortgage rates will be going up. the fed cannot indefinitely intervene. so the property some guy bought for 2 million that he is paying 2- 3 % on right now, that is already in negative amortization, that he is somehow struggling with payments on will become unaffordable when interst rates hit 6-7 % or even double digits.
5. sales are very low. this to me is a leading indicator of a crash. right now sellers are holding out for a higher price, so no sales. the dam is going to break very soon.
so hold tight
it is a buyers market.
I am an agent with Southeby's and an owner at South Seas. Your observation is correct. The Land's end prices have been pretty steady over the last few years. Below is the lowest price closing by year for a 2 bedroom/2 bath:
and the lowest price active is $1.130. In a nutshell if you are concerned about the market continuing to drop Land's End provide a stable price relative to Florida real estate. On the other hand, if you are looking for a deal I would focus on the Beach Villa units at South Seas. Beach Villa units have dropped 20-30% since their peak and they are direct beach front something that does not exist at Land's End.
If you are interested in the financials on owning a condo I would be more than happy to work with you on either Land's End, Beach Villas or other real estate. If you need a deep dive to compare the condo complexes on Sanibel and Captiva, see my rent by owner site, IslandRatings.com.
Southeby's Gulf to Bay
Because Sanibel and Captiva Islands are a second home market, they have not followed nationwide trends. Also many island property owners do not hold mortgages, which buffers the market further as these sellers are not motivated by changes in mortgage interest rates. The uniqueness of these sanctuary barrier islands will always be appealing to investors. As a full time Sanibel Island resident, I believe that this is the best place to vacation, retire, raise a family, work and play. It is a pleasure to help buyers and sellers achieve their real estate goals here in paradise.
Here is a link to the available property at South Seas including Lands End, which is my favorite spot behind the South Seas gate. if anything catches your eye, please drop us a line.
Captiva will always be a strong market; even with the damage of charley we did not see much movement in prices. Captiva and Sanibel are always a hot vacation spot world wide. I don't expect to see any drastic move in prices in that area. I would be happy to send you what is available, best of luck to you.
Have a great day,
Right Choice Realty LLC
home office: 239-463-5217