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Highlands Today

Another boom: Cheapest houses selling quickly

JASMINA MEYER/Highlands Today

There are several homes for sale on Lakeview Drive in Sebring.

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By GARY PINNELL

Highlands Today

Published: November 27, 2009

SEBRING - Four years ago - the height of the real estate boom - only a few homes were priced under $100,000.

"And they weren't something you'd want to live in," said Steve Fruit at RE/MAX Realty Plus II in Lake Placid.

The cheapest three-bedroom, two-bath house in, say, the middle-class Sebring Hills neighborhood behind Lakeshore Mall, was $150,000.

"Property values were pushed up unrealistically," Fruit said.

Times have changed. Today in Highlands County, 568 houses, condos, villas or mobile homes on owned land are priced under $100,000, said Fruit.

Almost 300 are single-family homes, said Dawn Dell, an agent with Country Club Realty of Sebring.

"There some are really decent houses out there," said Dell, who has closed $5.6 million worth of deals this year.

National trend

Fuelled by federal stimulus dollars and tax credits, stoked by cheap prices and low-interest loans, existing home sales in Florida warmed by 45 percent in October, compared with October 2008. That mirrors a national thaw in sales, which also was aided by a hefty inventory of available homes.

With median prices 17 percent below a year-ago level, 15,160 homes were sold statewide, compared to 10,444 homes sold in October 2008, according to monthly statistics compiled by Florida Realtors.

In Highlands County alone, 1,102 homes sold this year, Fruit said. Sixty percent of those went for under $100,000; the sale prices of another 411 houses were between $100,000 and $200,000. Another 101 homes - all priced $100,000-and-under - are under contract, said Fruit.

The median price of a Florida home sold in October was $140,300, down from $169,700 a year ago. However, Realtors told the News Service of Florida, the 9.1 percent decline indicates the market may be leveling off.

"Both the price gap and rate seem to be closing," said Florida Realtors spokesperson Marla Martin.

The National Association of Realtors said single-family home sales rose 21.4 percent above the 4.39 million-unit pace of October 2008.

Cheap interest

One reason why: cheap mortgage payments. Interest rates for a 30-year fixed-rate mortgage averaged 4.95 percent last month, compared to 6.20 percent in October 2008.

"I think interest rates are at historic lows," Fruit said. He closed a recent deal where the homebuyer was offered a 4.25 percent interest rate.

It's true. LendingTree.com and Wells Fargo are offering the same rate for a 15-year fixed loan.

"If you find a property you like, buy it now," he advised. "I'm not sure when prices will go up, but I don't think they're going to go much lower.

"And in the future, inventory will be lower. There is 8.4 months worth of inventory of homes under $100,000," Fruit said. Last year at this time, there was 15 months worth inventory in the same category.

"Anything under $100,000 is selling," he said.

As expected, the cheapest houses are selling the most quickly, Fruit said. Of the 127 Highlands County homes priced from $200,000 to $250,000, only 18 are under contract.

It's a buyer's market out there, Fruit and Dell said.

Caveat emptor

But it's always a buyers-beware market. Forty percent of the under $100,000 homes are distressed properties, Fruit said. Others are fixer-uppers.

But that means sellers are motivated, to use real estate parlance. Dell said 82 of under-$100,000 bargains are short sales - priced short of the mortgage balance - so the bank's consent is needed.

"We've been waiting three months on one deal," she said.

"If you want a short sale, there are some fabulous deals out there," Dell said.

Because the real estate market is bargain mode, bidding wars are starting again, she said.

Getting hotter

"Foreclosures are selling very quickly, and they're getting multiple offers," Dell said. This week, she had a Canadian buyer for a three-bedroom, two-bath foreclosed home in Sebring Country Estates - car-named streets like Corvette and Audi.

The bank advised buyers to step forward with their best offers, so sight unseen, the Canadian submitted $1,000 more than the $95,000 asking price for a 1,344 square-foot, concrete block house with high ceilings, tile floors, granite cabinet tops and a double-car garage. He had cash too, but was outbid.

"People up north are finally selling their homes," Dell said. Her theory for the heated-up market is that northerners have lowered their prices for their principal homes, they're ready to move south, and they think this is the bottom of the market.

"They're coming down here with cash, and they're buying," Dell said.

"The bargains are definitely out there," Fruit said.

Free federal cash for 1st-time and 2nd-home buyers

The Worker, Homeownership, and Business Assistance Act of 2009 has extended the $8,000 tax credit to first-time home buyers. Single taxpayers must have an income under $125,000 - $225,000 for married couples.

There is a $6,500 income tax credit for move-up and second-home buyers.

Both first-timers and existing home owners must sign a contract before April 30, 2010.

Highlands Today reporter Gary Pinnell can be reached at 863-386-5828 or gpinnell@highlandstoday.com

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