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Naples News January 21 2019
Mother Nature hasn’t been easy on Southwest Florida, and the real estate market in Collier County has felt the impact.
In 2017 it was Hurricane Irma. In 2018 it was red tide and blue-green algae.
On Friday morning the Naples Area Board of Realtors hosted its Year End, 4th Quarter and December Market Conference in Naples and discussed the impact these natural disasters had on the real estate market in 2018.
“Obviously, we were impacted tremendously by the perfect storm of an extreme red tide outbreak plus discharges in green algae,” said Jeff Jones, president of NABOR’s board of directors. “There is a lot being done, but obviously there isn’t an easy button like Staples has to fix our water quality problems, which have been developing over a period of years.”
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Jones reassured that “millions and millions of dollars” have been allocated to reduce the water quality issues that have put a damper on the real estate market and that he is optimistic for 2019.
“As these things started to abate, we saw the rental market bounce back a little bit, and we saw some better optimism about our future for water quality,” he said.
Despite all the obstacles, home sales in Collier still increased by 11 percent over the year to 9,771, up from 8,815 a year earlier, according to the latest report by NABOR.
The report tracks resales, or existing home sales, made by the Realtor association's members in Collier County, excluding Marco Island.
Single-family home sales rose 10 percent year-over-year in 2018, increasing to 4,768. Condo sales were up 12 percent, growing to 5,003.
Over the last two years, single-family homes have made up 51 percent of all closings.
“We have a very balanced market in terms of the type of structure that people are buying,” said Jones.
But the high-end part of the market really drove sales in 2018 with single family homes in the $1 million to $2 million price range increasing 12 percent and condominiums in the same price range up 42 percent from last year.
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For homes $2 million and up, there was a 14 percent increase for single-family homes; 27 percent for condos.
“The high end is great, and we all like selling one of those Port Royal homes, but the low end can bear a lot of fruit too,” said Mike Hughes, vice president and general manager for Downing-Frye Realty Inc.
NABOR hosted its Year End, 4th Quarter and December Market Conference in Naples on Friday, Jan. 18, 2019.
NABOR hosted its Year End, 4th Quarter and December Market Conference in Naples on Friday, Jan. 18, 2019. (Photo: Jennifer Beeson)
Pending sales — or new contracts written — in the $300,000 and under price range were up 39 percent this year, with almost a third of those sales occurring in North Naples.
Overall pending sales in 2018 rose 3 percent over the year. There were 9,365 compared with 9,121 in 2017.
In the fourth quarter, sales dipped a little, which real estate experts attributed mainly to the stock market and the holiday season, during Friday's market presentation at NABOR's headquarters.
“Overall if you look at 2018, we came off a storm and we had a really solid year. And it wasn’t seasonal like it was 15 to 20 years ago," Hughes said. “We are pretty much a year-end business these days, and the summer season has actually emerged to be a very strong season.”
And there is plenty of inventory for buyers to choose from heading into 2019.
There was a 14 percent increase in total inventory compared with 2017, which is the highest on record in six years.
In December the inventory of single-family homes on the market rose 17 percent year-over-year — at 3,131 — while the condo inventory increased by 12 percent in December, to 3,130.
The median home price — the price at which half the homes sell for more and half for less — rose slightly, growing 3 percent over the year to $339,000.
“The overall median closed price is wonderfully stable,” said Coco Waldenmayer, a managing broker at John R. Wood Properties in Naples. “There hasn’t been great movement in pricing since 2015.”
The Naples beach area saw the highest increase, 14 percent, in median closed prices for homes above $1 million.
Naples Area Real Estate Activity 2018
Naples Area Real Estate Activity 2018 (Photo: NABOR)
In 2017 the average price for homes over $1 million was $1.12 million. That has increased to $1.27 million.
And while Collier home prices are stable, some worry about the impact new construction will have on surrounding home values.
“Everyone likes the shiny new penny, but we cannot build the houses for the same cost anymore,” said former NABOR president, Rick Fioretti. “Labor is up. ... And there is an increase in the cost of new construction that is going to have to be felt at the point of sale.”
Fioretti thinks remodeling is what will really give the market a boost when it comes to sales since Naples is running out of beachfront land to build on.
“New construction is a good thing for our market, but once people get here and live 15 miles inland away from the beach there will be a whole new wave of people. ... And we are going to have to make new shiny pennies on the beach.”
He said he has seen 20-year-old homes sell “lightning fast” because they were fully renovated.
“Remodeling should be off the chain for the next 20 years here in Naples,” he said.
Naples News October 13th 2018
When Maryland residents Roger and Shirl Lynn Butschky sold their home in East Naples more than a year ago, they didn't get their money after the closing.
Every dime — more than $450,000 — went to a fraudster who sent bogus new wiring instructions to the couple's title company at the last minute without their approval or knowledge, according to court documents and a report filed with the Naples Police Department.
The Butschkys sued Dunn Title in Naples and several of its employees for negligence and breach of fiduciary duty in 2017, seeking damages and a jury trial. The lawsuit is pending in Collier Circuit Court.
Real estate wire fraud, a form of cybercrime that intercepts money transfers in home sales, is nothing new, but it can take many forms.
Local experts say Southwest Florida is ripe for such scams because of its wealth and plentiful supply of high-end homes.
Title fraud is common
"It's common. It actually happens all over the country — this title fraud," said Amanda De Medeiros, fraud line coordinator for the Lee County Sheriff's Office.
Last year, the FBI's Internet Crime Complaint Center received more than 300,000 complaints, with reported losses of more than $1.4 billion. The real estate sector was heavily targeted, and 9,645 victims lost more than $56.2 million.
In 2016, the number of fraudulent wire transfer scams reported by title companies and closing agents to the Internet Crime Complaint Center increased by 480 percent. The crime has been reported across the country — in every state.
Many title companies, Realtors, real estate lawyers and banks have tightened their rules and procedures for closings to try to fend off fraudsters. Still, sellers and buyers should stay alert, especially as a sale draws closer.
"Just stop for a minute and think about things and double-check and triple-check. Pick up the phone and have a conversation with your title agent," said Bryan Oglesby, director of public relations and outreach for the Better Business Bureau serving western Florida.
In the Butschkys' case, the FBI got involved after the couple's money came up missing.
After investigating the fraud, the FBI recovered less than $30,000, so the couple still lost more than $421,000 on the sale of their home, according to court documents.
"It's very unfortunate. They lost a lot of money," said their attorney, Michael Petruccelli, who has offices in Naples and Fort Lauderdale.
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Wiring instructions changed
According to court documents, the scammer posed as a legal representative for the transaction in an email sent to the closing agent and asked for a change in the money transfer instructions, claiming the request came from the Butschkys' son.
No such directions came from the couple's son.
"That was from the fraudster," Petruccelli said.
In their lawsuit, the Butschkys accuse the title company and its employees of not having the proper policies and procedures in place to avoid such scams and failing to meet industry standards in their handling of the closing.
Additionally, the couple contends Dunn Title's employees should have spotted red flags that ought to have put them on high alert before following the new wiring instructions.
Court documents show there were three attempts at changing the instructions for the money transfer. After two other banks refused to clear the funds because the sellers' names didn't match up with the bank account numbers, Iberia Bank finally accepted the money anyway. The money then quickly disappeared.
In a report filed with the Naples Police Department, Michelle Roman, the closing agent for the transaction, said she didn't suspect anything until she learned the Butschkys hadn't received their money a few days after their home sold. She said that's when she contacted the IT department at Dunn Title, which looked over her computer and concluded her email had been hacked.
Roman reported Dunn Title was "a victim of a scheme to defraud" to the Naples police and she wished to prosecute on the title company's behalf.
In a court filing, Roman and the other defendants argue the lawsuit should be dismissed for several reasons. Their arguments include the suit wrongly lumps the defendants under a single count of negligence and assumes a fiduciary duty that doesn't exist between Dunn Title and the sellers.
Omega Title Naples LLC — doing business under the name Dunn Title — had a contract with the buyers, not the sellers.
Roman no longer works for Dunn Title. She chose to leave the company, but she's still in the title business in Naples. She declined to comment.
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Title company too busy
In sworn testimony, Roman said mistakes were made at Dunn Title because it didn't have enough employees to handle the workload. Management, she said, refused to hire more staff, claiming the office was "not making any money."
Dunn Title's chief executive and owner Scott Dascani disagrees.
"She did have enough staff in my opinion," he said in a phone interview. "She felt like she didn't. Everybody is entitled to their opinion."
Dascani, who is also a named defendant in the suit, blames the Butschkys' lawyers, Threlkeld & Cetrangelo in Naples, for the mistake, although the sellers aren't suing the firm. He said he's convinced the fraudster obtained detailed information about the closing by hacking into the law firm's email first.
"My heart goes out to anybody that's gone through this. It's terrible," Dascani said.
He believes the Butschkys will get their money back, but there's a legal process they need to go through for the insurance companies that cover these types of losses to react, he said.
Schemes getting more sophisticated
Dunn Title has gotten more cautious with closings since falling victim to the scam, Dascani said.But he noted the title fraud schemes are getting more sophisticated, with the fraudsters now taking over the mobile-phone accounts of their victims by gaining access to their SIM cards.
"If I could take everybody back in time to receive the paper check at closing, we wouldn't have this situation," Dascani said. "Unfortunately, it's the times we're in."
Over the past year a few victims have reported title scams to authorities in Southwest Florida, while other cases of the fraud have flown under the radar.
In January, Domenic Costantini, a Naples Realtor and residential builder, filed a report with the Collier County Sheriff's Office, saying he and his client were targets of wire fraud.
According to the report, a scammer sent an email that looked like it came from Costantini to one of his buyers with instructions for a wire transfer needed for a closing. The buyer followed the instructions and sent the money, only to discover the email didn't come from Costantini and the money didn't go to the real title company.
The Sheriff's Office didn't disclose how much the buyer lost. The information was redacted from the incident report made available to the public.
Costantini couldn't be reached for comment about the outcome of the case.
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A lucky break
Naples real estate attorney Liz Hazelbaker almost fell victim to wire fraud in February after selling her house in North Naples, but she never reported it to authorities. She and her husband had provided instructions to the title company to pay off a $400,000 loan on the day of the closing, with money from the sale.
Two days before the closing, a scammer — posing as the couple's bank — sent an email to the title company with new wire instructions. As a result, the money went to the wrong bank on the day of the closing.
"The day after closing, I called our bank to make sure they had received the $400,000 and they said no. I called the title company and they sent me the wire confirmation. This is when I realized the money went to a Chase Bank account and not to our bank. We were able to get the money back from Chase — luckily," Hazelbaker said.
She was lucky to get the money back because she had friends working in the law department at Chase Bank, who got the account flagged and locked down to protect her money, she said.
"Normally the money gets yanked immediately into a foreign account and once it leaves the U.S. there is nothing that can be done," Hazelbaker said. "These scammers try to get it out as quick as possible."
A growing problem
She fears title schemes might be a growing problem in Southwest Florida.
"When I was talking to other legal people about this, they were like 'this happens all day, every day,'" Hazelbaker said. "It just made me want to throw up. It's like every day, people's money is getting stolen. It's the new bank robbery. You're not stealing from the bank, but the customers."
She's not eager to sell or buy another house anytime soon.
"I'm not going to do a real estate transaction for a while," she said. "I'm still really freaked out by the whole thing."
Since she was scammed she's heard more horror stories including one from a friend who owns a title company in Cape Coral who paid a client $200,000 because of wire fraud. That's the amount a fraudster stole by impersonating his client in an email and changing the wiring instructions on a sale, Hazelbaker said.
"I think it's getting worse, and I think people are hearing about it more. I had never heard of it and I'm actually an attorney," she said.
Another close call
James Schlimmer, a managing partner and vice president for real estate at Cottrell Law & Title Group in Naples, said he's all too familiar with these types of scams.
"We've never had a situation where the money has been lost. We've caught it many times at the finish line," he said.
One of those times — on Halloween of last year — buyers received an email from their real estate agent with new money transfer instructions for the purchase of a home in the Naples area and they followed the instructions, sending $400,000 to the specified bank. The same day the same buyers received a second set of wiring instructions, prompting them to call Schlimmer's office.
Schlimmer's office looked into it immediately, recognized it as a scam and alerted the buyers. The buyers called the bank, which refunded the money, he said.
"You need to catch it within hours," he said. "Time is the only thing that's on your side."
His office, he said, has made many modifications to its internal processes to try to avoid the scam including not allowing changes in money transfer instructions unless it's done in person by the seller.
"The closer is not in the hot seat," Schlimmer said. "The closer is not the person that is under the gun. We have a funding department that checks all the work and then verifies the wiring instructions, then everything has to be dual authenticated to make sure the money is going to the right spot."
His office now has a slogan, "Inquire Before You Wire," which it stresses to all of its customers and employees.
"This is one of the most serious problems facing our industry," Schlimmer said. "Buyers are losing their life's savings to these cybercrime acts."
How to avoid a title scam
Never accept a change to an agreed transaction based on an email.
If someone tells you there's a new plan, especially one that involves thousands of dollars, check it out before you send a dime. Call your agent or title company and make sure the new directions are legitimate.
Tips to spot a phishing scam:
Do not click on links or open files in unfamiliar emails.
If a company usually contacts you by phone, be suspicious if you suddenly start receiving emails or text messages.
Just because an email looks real, doesn't mean it is real.
If something seems suspicious, check the company's website or call them.
Email is not a secure way to send financial information.
Source: Better Business Bureau of West Florida
Naples News September 1, 2018
According to the National Association of REALTORS July market report, existing home sales in America decreased for the third straight month as a result of the severe housing shortage that is not releasing its grip on the nation's housing market.
Conversely, homes sales in the Naples area were up 8 percent in July according to the July 2018 Market Report released by the Naples Area Board of REALTORS (NABOR), which tracks home listings and sales within Collier County (excluding Marco Island). The nation has only a 4.3-month supply of home inventory, while Naples has a healthier 6.25-month supply of inventory.
"The Naples area overall median home price increase in July 2018 seems to be the only statistical category where we match national trends," said Kathy Zorn, broker/owner, Better Homes and Gardens Real Estate Pristine. "Naples saw an 8 percent increase in its overall median closed price in July 2018 compared to July 2017; whereas nationally, median closed prices went up just 4 percent. But median closed prices for properties over $300,000 in the Naples area decreased 2 percent in July 2018 compared to July 2017."
Interestingly, while July's overall inventory fell 1 percent to 4,871 properties from 4,928 properties in July 2017, inventory increased 5 percent in the $300,000 and below price category. In fact, inventory for single-family homes in this price category jumped 21 percent in July to 345 from 286 in July 2017.
"There are 1,154 single-family homes and 1,722 condos for sale under $500,000 currently," said Brenda Fioretti, managing broker at Berkshire Hathaway HomeServices Florida Realty. "Economists predict home sales in America during 2018 will not be as good as 2017. However, we're seeing the opposite in the Naples area. Granted our sales were hampered by a hurricane in 2017, but there are no signs that interest in buying a home in Naples this year might drop because of temporary climate or environmental phenomena. We have a healthy inventory, an increase in closed sales, price stability and a decrease in the days on the market compared to July 2017."
July also saw a huge 39 percent jump in condominium closings in the Naples Beach area. Closed sales for August look strong too in this segment as pending sales for condominiums in the Naples Beach area increased 55 percent in July 2018 over July 2017.
Overall pending sales in Naples were up 11 percent in July, with only one price segment ($500k-$1M) reporting a decrease compared to July 2017.
"Pending sales for luxury condominiums ($2 million and above) in July were up 150 percent," said Budge Huskey, president, Premier Sotheby's International Realty. "The strength of the luxury market segment for both single family and condos continued into the summer months, a reflection of sustained confidence among the affluent witnessing the longest economic expansion cycle in the nation's history and record corporate earnings."
How buyers are purchasing homes in Naples is very different than the national average home buyer, as well. Cash sales accounted for only 20 percent of home purchases in July nationally. But in Naples, cash sales accounted for 50 percent of all home sales in July.
The NABOR July 2018 Market Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR July 2018 sales statistics are presented in chart format, including these overall (single-family and condominium) findings and can be found at www.NaplesArea.com.
According to Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll & Carroll Inc., inventory in neighborhoods west of U.S. 41 are beginning to tighten. "I think we can expect some upward price pressure in areas where the inventory supply level is below 4 months, like Pelican Bay."
Carroll also noted that the number of affordable homes in areas such as Golden Gate City and South Naples is growing. "In April 2018, Golden Gate City had a 1.3-month supply of inventory; today it's at a 3.7-month supply. While a majority are priced on the high end of the $0-$300,000 price category, it might still provide some new opportunities for first-time homebuyers."
In response to the question of whether home sales will be affected by a longer-than-average red tide occurrence, Huskey responded, "Clearly it's a situation we are all watching closely, yet currently there's no reflection in the pace of home sales. While impossible to ignore if at the beach on a day in which it's more prominent, a block or two east you wouldn't be aware of any issue and inland sales represent the vast majority of all activity in the market."