Prices Drop, Foreclosures Rise

First off, let me wish everyone a Happy and most importantly Healthy and Prosperous 2009!!

I was going to write a recap of 2008 and gaze into my real estate crystal ball for 2009, but then I saw this article in the keynoter that pretty much summed it up:

"2008 REWIND: Prices drop, foreclosures rise
Home sales remain sluggish in 2008
By KAREN QUIST
kquist@keynoter.com

The average home price in the Keys continued to drop in 2008, as the twin pressures of high inventory and a growing number of short sales and foreclosures weighed down the market.
The average sales price Keyswide was $582,000, according to Coldwell Banker Schmitt Real Estate, which tracked sales through the first 11 months of the year. That's down 21 percent from the same period in 2007.Total sales were down 14 percent from 2007, as 1,065 homes sold through November.
At the end of November, there were 4,467 homes in the Multiple Listing Service, according to Coldwell Banker Schmitt. That's actually 2 percent fewer than the same time last year, but a sluggish sales pace throughout most of 2008 meant there was anywhere from two and a half to four years' worth of inventory on the market.
Things were looking up in the fall, as September and October sales followed mainland trends and soared 30 percent above sales from those months in 2007, but November and December didn't follow suit.
Inventory has been a consistent challenge in the Keys market since 2005.
"Wilma started it," said Brian Schmitt, president of Coldwell Banker Schmitt. "The flood of properties is directly related to the flood of Wilma."
Prior to that damaging October 2005 hurricane, there were about 2,500 homes on the market; in the months following, the number nearly doubled.
"We haven't recovered from that," Schmitt said. "It's been sustained by other things, but it started with that event."
Among those other things is the growing number of foreclosures, as well as sales made to avoid foreclosure.
RealtyTrac reports 1,280 foreclosure filings from January to November 2008 in Monroe County, a 146 percent increase over 2007. The online compiler of foreclosure data said that translates to one out of every 42 Keys households in some state of foreclosure in the first 11 months, compared to one of every 19 statewide and one of every 44 nationwide.
Of the 1,280 filings, RealtyTrac reports that 249 properties went to auction and 122 were in the hands of the lender (often referred to as an REO, or real estate-owned property).
Homeowners in danger of defaulting on their mortgages are more frequently turning to short sales as an option to avoid foreclosure. In a short sale, the owner works with a Realtor to sell the home, and the lender agrees to settle for less than what's owed on the property.
Sellers who aren't in distress are affected by the woes of their neighbors, Schmitt said, because "what they're able to get is more and more influenced by those" short sales and bank-owned properties.
Keyswide, there were 294 active and 54 pending listings identified as short sales in the MLS the week before last, according to Ed Anderson, general manager for Coldwell Banker Schmitt. Of those, 190 active and 31 pending listings were from Key West. Key West's average price through November was $602,000, 27 percent less than it was a year earlier. That's the largest drop of the four Keys areas that Schmitt tracks"

So, as you can see, although there are quite a few hardships going on, this has created an almost unprecedented opportunity for Buyers here in the Keys! Inventory is up, prices are down and the competition is fierce.

I would be delighted to help you make 2009 the year that you bought a slice of paradise!

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First State's Big Pine Branch to Open on Monday

Contrary to what the media may like to report , it is not ALL doom and gloom in the Financial Sector. First State is about to open a new branch on Big Pine Key this coming Monday. That being said, I am sure that they will be eager to make an abundance of Home loans for properties here in the Keys.

I came across this article in Keysnet.com this morning:

"First State's Big Pine branch to open on Monday

By Margaret Menge
mmenge@keynoter.com

It is a sign - a welcome one - that all in the banking world is not quite as universally dour as one would think after watching television news.
First State Bank has spent $2 million on a new branch on Big Pine Key, set to open Monday at the traffic light on U.S. 1.
"We were very, very happy to get that location," says First State spokesman Don Lanman. "It's prime location. It's so convenient and it's so efficient."
First State renovated the old Century 21 building, where Wilder Road and Key Deer Boulevard meet U.S. 1, adding two drive-through lanes that will allow customers to make deposits 24 hours a day.
And they've taken a "green" approach to the new branch.
"We could have razed the building and bought a new one," says Lanman. "But we chose to keep it."
Green features include a copper roof; copper having one of the highest recycling rates of any metal. There are also energy efficient light fixtures, landscaping that includes only native plants, and plants that don't require much watering and a sign made from recycled metal. The furniture from the old Century 21 office was given to the Habitat for Humanity ReStore in Big Pine Key. First State Bank will be celebrating the grand opening of the new branch all next week with free tours, coffee, holiday cookies and a drawing for a chance to win a gift card.
The new building will give the bank better visibility on this most populous island in the Lower Keys. But First State already has two other branches here: one inside the Winn Dixie grocery store, and another the bank calls the 'annex' - a very small space in the building across the parking lot, on the southwest corner of the Winn Dixie shopping plaza.
The bank planned to close the annex for good on Friday and move employees over to the new building to start work on Monday. The branch in the Winn Dixie will remain open for about another 90 days, says Lanman. Branch manager Shana Casey will oversee both locations, and employees will go back and forth between the two.
For customers of First State on Big Pine Key, the new branch means not having to park and get out to do your banking. And it also means having a place to meet with a loan officer in a private office. One loan officer will be moving to the new Big Pine branch from another location to accommodate potential lenders.
Key West architect and designer Michael Ingrahm, a principal in the firm MBI/K2M, did the redesign of the new First State branch, using millwork and other details that his firm designed for First State Bank when they were hired to do design work at the bank's main branch on Simonton Street.
Headquartered in Key West, First State Bank of the Florida Keys is a locally owned and operated community bank with 13 branches and 32 ATMs throughout the Keys. The bank was founded in 1955. "

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Judge Offers Foreclosure Help

Foreclosures... probably THE real estate story of 2008. It is truly a shame that the abundance of these Foreclosures even exists. That being said...these conditions have created unprecedented opportunities for buyers that are liquid and willing to look at the long term picture. I saw this article in the Keysnews.Com and thought it really spoke to the heart of the matter.

"Judge offers foreclosure help
By STEVE GIBBS
Free Press Staff
A circuit judge has appointed five mediators to help stem the rising tide of uncontested home foreclosures.
Monroe County judges have heard 1,612 foreclosure cases so far this year, according to 16th Judicial Circuit Judge Luis Garcia, which is almost double last year's 932 cases.
"The cases we heard in 2007 were way up from cases in 2006," Garcia said. "I just want to get the word out to homeowners facing foreclosure not to give up."
About 95 percent of the foreclosure cases are uncontested, Garcia said. So he has made a move to remedy what he sees as a premature surrender: If homeowners come to the hearing and show a willingness to work with their lender, he will appoint a mediator at no charge to the homeowner.
"I called the local [Florida] Bar association and within minutes I had five attorneys volunteer to serve as mediators," Garcia said. "People simply do not show up at the foreclosure hearings. For those who have tried everything but have not given up, come to the hearing. There may still be hope for you to keep your home."
Nick Mulick is one of the attorneys who has volunteered.
"We can facilitate the negotiation of a feasible workout by bringing the decision-makers to the table with the property owners," he said. "I will serve as a moderator to ensure that the parties don't get bogged down."
Mulick said lenders are willing to negotiate.
"Banks and other lenders don't want to get bogged down with nonperforming loans," he said. "They want to avoid that at all costs."
A mediator can help by persuading the mortgage-holder to reduce interest rates, defer payments for a year or change the terms of the loan, he said.
Dirk Smits, regional managing member of Vernis & Bowling, has volunteered to mediate foreclosure cases.
"People are terrified of court, but there is relief out there, especially if you have found a buyer," he said.
"If you have a $500,000 home and come with a buyer offering $300,000, chances are good the bank will take that offer. They will have to sell [your home] anyway. With a buyer they get a chunk of their money and are better off than trying to sell it on today's market."
Besides Smits and Mulick, Russ Cullen, Tim Thomes and Bill Crispin have volunteered their services.
"Hopefully we can save some homes and help keep the banks solvent," Mulick said.
sgibbs@keysnews.com"

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TIB (The Islamorada Bank) gets lending money

This article is From the Key West Citizen:

"TIB gets lending money
By Robert Silk Citizen Staff

TIB Financial Corp. will receive a $37 million capital infusion from the U.S. Treasury Department under a deal that closed last week.
The money will help TIB's nine Florida Keys branches continue lending to individual homeowners and small- and medium-sized businesses.
"It will allow us to continue without interrupting our mission," TIB Bank President/CEO Mike Carrigan said. "So far this year, we have never stopped lending."

The funds come as part of a program authorized by Congress' $700 billion economic rescue package, approved in early October. Carrigan stressed that this portion of the package, called the Capital Purchase Program, is available only to banks that federal regulators deem to be sufficiently healthy.

"This is an investment. It is not a gift. It is not a bailout," Carrigan said.
Under the deal, the Treasury Department will purchase $37 million worth of preferred TIB stock with an annual dividend of 5 percent for the first three years and 9 percent in the ensuing years.
In addition, the government is to receive warrants for $5.5 million in common TIB stock at $5.22 per share. The warrants can be turned in for actual stock shares at the government's discretion.

TIB was trading at $4.50 per share as of late Monday morning, down slightly more than half from its 12-month high of $9.47.
Carrigan said TIB has not been immune to the economic crunch that has afflicted financial institutions across the country, but it has doled out $150 million in residential mortgages for homeowners and $90 million in commercial loans to businesses this year, he said. About half of those business loans have been provided in the Keys, he said.
TIB reported losses of $2.2 million in the third quarter, compared with a profit of $494,000 during the same period last year.
The total value of its commercial loans increased by $20 million from the end of June to the end of September and its residential loans increased by $17 million.
The company holds $1.23 billion in total loans, of which $27 million are either in default or nearly there.
TIB Financial Corp. is the parent company of TIB Bank, The Bank of Venice and Naples Capital Advisors. It has 17 banks in the Keys, Homestead, Naples, Bonita Springs, Fort Myers, Venice and Sebring.
Founded in Islamorada, the bank now has its company headquarters in Naples, and two branches in Key West, one in Big Pine Key, two in Marathon, one in Islamorada, one in Tavernier and two in Key Largo.
As of Friday, only two other Florida banks were in the queue to receive a capital infusion under the Treasury's $250 billion Capital Purchase Program, according to The Wall Street Journal."

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