The Ledger
By MICHAEL W. FREEMAN
THE REPORTER EDITOR
Published: Monday, May 17, 2010 at 1:15 p.m.
FOUR CORNERS — The story of Four Corners real estate market for 2009 could be summed up by the words “foreclosure” and “short sale.”
Just as the region boomed between 2004 and 2006 with scores of new subdivisions being built in an area that once had nothing but vacant citrus fields, the housing market’s slow collapse since 2007 has left a painfully high inventory of unsold homes. By 2009, short sales — where a home owner owes more on his mortgage than the house is worth and tries to sell it for less than what he owes, hoping the mortgage holder will write off the remaining debt — had become more than half of all local sales.
This year, though, local Realtors say there are signs that Four Corners’ residential and commercial markets are getting healthier. The three factors helping the most may be this area’s continued appeal to tourists, assistance from the federal government, and renewed interest from foreign buyers.
“This is becoming new territory,” said Jason Kaiser, vice president of the Orlando office of SRS Real Estate Partners. He said business owners are increasingly interested in the Four Corners area along U.S. 192 and U.S. 27, largely because they see a healthy number of full-time residents mixed with a steady stream of tourists and seasonal snowbirds.
It helped immensely when the Florida Turnpike Authority extended State Road 429 by adding an exit at U.S. 192, he said.
“We’re the new 429, coming right off the turnpike,” Kaiser said. “This is a new area.”
Commercial developers were reluctant to build during the recession last year, Kaiser said, or simply couldn’t get the credit to do so. But now, as the economy shows signs of improving, he said business owners are drawn to this region’s busy tourism corridor.
“Last year, it was more like, ‘Let’s wait and see what’s happening in the economy,’ ” he said. “Now, on the commercial side, when the tourists come here, we know they have to eat. We know they need someplace to sleep. With all the tourists here, it’s good for us. Being 1.5 miles from Disney, you’re at the epicenter of the tourism market.”
Mary Ellen Kerber manages the Formosa Gardens Village on U.S. 192 in Four Corners, and is the chairwoman of the Four Corners Area Council, a group of local business owners. She said Four Corners has another strength: an abundance of short term vacation homes. They’re particularly popular with British and other European tourists who come to this area for extended stays and prefer to rent a house with multiple bedrooms, a fully staffed kitchen and a private pool, rather than a hotel room. Short term vacation homes have been a booming business in Northeast Polk County in the past decade.
“A lot of the Brits are doing vacation homes now,” Kerber said.
Pete Howlett, a Four Corners Realtor who runs Orlando Vacation Realty in Davenport, said at the moment, there’s growing interest in buying vacation or second homes among Canadians and other Europeans.
“I’ve gotten quite a few calls lately from Canadians,” he said. “I’ve also gotten requests for information from buyers in Scandanavian counties. Most of our buyers are foreign nationals. I think this is a step in the right direction.”
The local real estate market is also being helped, he said, by the federal government’s new Home Affordable Foreclosure Alternatives Program, which the U.S. Treasury Department launched on April 5. It provides incentives in short sale or home foreclosure transactions to modify loans to avoid forecosure. It allows sellers to receive pre-approved short sales terms before listing the propety, and requires the borrower to be fully released from future liability for the first mortgage debt.
Howlett said in Four Corners and Northeast Polk County, the sky high number of new, unsold homes sent prices plummeting, hurting the entire market. Any federal aid here, he said, is a welcome attempt to strengthen the housing market.
“I think the government is helping,” Howlett said. “The main component of this foreclosure alternative program is the deficiency amount between what the borrower owes and what he can get for the home. Let’s say he owes $300,000 on the property, but can only sell it for $200,000. The bank can’t force the owner to pay the remaining $100,000.
“I think it’s in the bank’s best interest to write it off,” Howlett added. “I don’t think they’re ever going to collect it. They’ll be chasing it for so long otherwise. And they’re losing their equity anyway.”