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Sometimes you don’t want to come in first

January 17, 2009
Cape Coral Daily Breeze

Cape Coral set a dubious record in 2008: We were No. 1 in the nation for the rate of foreclosure filings.

One of every 12 homes in the Cape Coral-Fort Myers metro area is in some stage of foreclosure, according to RealtyTrac, a California-based firm that lists foreclosed properties nationwide.

This probably isn't news to anyone who picked up a paper in 2008. And it certainly isn't news to the 31,708 Lee County homeowners who got a notice of default from their lender last year.

These property owners have plenty of company. Foreclosure filings jumped 219 percent here in Lee County in 2008 and they increased 81 percent nationwide, according to RealtyTrac, which also pointed out the obvious: Foreclosure programs on the national and state level are not working.

Nor are loan modifications, at least not here in Lee County. With unemployment knocking at 10 percent, out-of-work property owners can't make the payments to bring their loans current even if the lender is willing to renegotiate terms.

Compounding the problem are the thousands of property owners who bought for investment or with little money down. They are simple walking away from their homes - and their mortgage notes - because the vast number of foreclosures have driven prices to, literally, less than half the price paid at the market peak.

Fact Box

Agree? Disagree? Comment on this editorial opinion below.

The median sale price of a home in the Cape dropped to $106,100 in November, down from October's median price of $139,500. In 2006, the median home price in Cape Coral-Fort Myers was around $268,000.

As prices continue to drop, as more people walk away or are forced out due to job loss, values continue to tick downward, prolonging the construction collapse.

These are not good times.

Nor are there any easy answers.

There is one small bit of good news, though, among the bad: Homes are selling.

Sales of existing homes in the Cape Coral-Fort Myers metro area were up 64 percent in November compared to November 2007, according to a report released last month by the Florida Association of Realtors.

Numbers were up again in December - 181.7 percent from December 2007 - and overall sale numbers for 2008 were much better than the previous year.

This means that lenders are taking into account current market conditions when setting price -and homebuyers are realizing that the bargain-basement prices aren't going to last forever.

It may also be a sign that the market is working to correct itself.

We certainly hope so, for RealtyTrac is correct in one regard: Moratoriums may provide short-term relief but they do not provide for long-term recovery.

Only a return to normalcy - transactions between a willing seller and a willing buyer - will accomplish that.

- Breeze editorial



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