Due to the pissy economy there are cheap properties all over the country to be had by someone with a couple of bucks in cash. But what I’ve noticed in Lehigh Acres, FL has me perplexed.
*What industry(s) pulled out that left so many people unable to pay their mortgages? There are a lot of freaking properties in that one community up for short sale.
*What’s the deal with banks allowing sales of homes that were built for $280K being sold for 32K? What is the catch to the buyer? Are there huge liens on these properties the realators aren’t disclosing in the ads?
*I’m seeing entire neighborhoods where every home is up for short sale. If not sold are these houses going to end up uninhabited and boarded up? Is that community going to turn into a weird tropical ghost town?
*Are banks going to get into financial trouble for allowing so many short sales?
*Is someone going to buy up these properties on the short sale and sell them when (if) the economy recovers and make a fortune?
And what I’m thinking what one catch may be: Chinese drywall. Many of the listings for these properties say the house has evidence of Chinese drywall. How essential is it to remove this stuff from a home? How much does it cost to do so?
IIRC, the problem with the Chinese drywall is that not only is it a health problem, which means it absolutely has to all be ripped out before the house can be lived in, but it also corrodes copper, which means that all of the house’s wiring has to be ripped out and redone, air conditioning units have to be replaced, copper plumbing needs replaced, etc. The cost of doing all of that is rather high, probably more than the house is worth under the market conditions down there. I suspect that the drywall itself is treated as a hazardous material, making more expense since it would have to be disposed of properly.
The $32k is probably the value of the land, minus the costs of disposing of the problem drywall. The bank probably expects you to raze the house and start over.
Sort of reminds me of that planned area in FL that is a giant circle of roads with a few houses, and a golf course that you can see on google earth. It is very strange, this scattering of houses and then just empty land with roads and canals…
I always thought that this would be the perfect time for Detroit to do Old Man River City on the empty parts and just shift the population into the new city and raze the other half of the old city. Benefit would be a brand new concentrated infrastructure designed for the needs of today [issue with older houses is aging pipes, ageing electrical systems, insufficient electrical systems for todays electrical world] [and yes, I know this sounds odd coming from someone how loves older houses for their uniqueness. Maybe they could move the heritage houses to a small ‘living museum’ area?]
Lehigh Acres has always, it seems to me, been under a curse of some sort. In my mind, it is sort of the classic failed Florida real estate development, with miles and miles of streets that have largely been ignored so far as maintenance work. I remember an experimental hydroponics facility for growing tomatoes that went belly up but I don’t remember any industrial activities there at all. I think it was originally intended to be a retirement community but it is located several miles from anything at all. Most of the real estate there was sandy and covered with scrub pine and palmetto; it was a great place to raise rattlesnakes if that were to be your avocation. It now has a fairly decent hospital and a Walmart. It was once a fairly popular site for Jim Walter style houses. I would be very wary of any “deals” available there. In fact, I would go so far as to say I wouldn’t live there by choice. YMMV, of course.
Too late for edit. In the 1990s, Lehigh Acres was the scene for a lot of robberies, especially break in type things. Reason being that people bought land at very low prices and during the construction of their homes, building materials and/or equipment would simply vanish as soon as darkness fell. Also, many of the houses were very isolated and break ins during the day were very common. I don’t remember too much violent crime but the potential was there. Also, I expect that many of the building lots have changed hands with a lot of regularity; if I were determined to live there I would be very careful with a title search, particularly with regard to tax liens. I would also have any house that I might buy checked out very closely for shoddy materials and workmanship. I just don’t think Lehigh Acres is the place to be but you’d really need to look it over closely.
The main industry that pulled out was the building industry. Sounds like a joke but it isn’t. One of the reasons why this area went bust so bad was that all these houses were being built and yet the vast proportion of the population moving here was just the construction workers. These houses were being built in the expectation of new arrivals/investors who never materialized. When things went belly up even the home builders left.
One of the big catches to purchasers in Lehigh is that so many of the homes have been stripped of everything down to the copper wire. You go in to one of these and you find nothing but holes where the counters, sinks, toilets, light fixtures, etc… were located. Sometimes the owner vandalized the house as a Fuck You to the bank. What’s left over is exposed to high heat and humidity with no maintenance. Mold city. All this combined with the banks desire to get rid of the property really drives the price down. Especially if the same thing is happening to surrounding houses.
Yes, whole blocks are being/have been abandoned. It’s really goes down hill once gang graffitti starts to appear on abandoned houses. Lehigh was a sort of weird tropical ghost town before all this started, just without houses. Now, large sections of it will become discarded without ever having been lived in.
I’m not qualified to address the effect on the banks.
Home sales in many parts of Lee County are pretty high. People with enough money to sit patiently can make a good profit in the 10-15 years it may take for Lehigh to recover. I’m not kidding about 10-15 years. That’s the estimate from the State. However, Lehigh Acres recently adopted a new community plan and we’re in the process of implementing the measures it contains. This won’t help any individual home, but should help address the issues that affect Lehigh as a whole.
Here’s the wiki on Chinese drywall. I’ve never had any personal contact with it. I live in an old apartment in Ft Myers. But my friends’ parents have suffered breathing difficulties and burning eyes because of their new-ish unit out in Cape Coral.
Homes without drywall still suffer price issues just from being in a crappy area. If every house on the block is down around $50k, don’t expect the one you’re looking at to do much better, even if it’s free of the problems of the others.
My advice, if you’re looking for a cheap second home, would be to stay away from Lehigh Acres. You could probably find something more desirable for not much more in southeast Cape Coral, south Fort Myers, or maybe Charlotte County. But Lehigh is so far away from the coast and the main commercial centers in Lee County that it would make a really crappy vacation getaway, unless your idea of a vacation is sitting on your porch in a rocking chair, holding a shotgun.
Essential. The real question is whether it can even be done without stripping the house to the cinderblocks. I’m on the market right now in South Florida and I’ve seen several homes that were supposedly renovated with their Chinese drywall removed. Certified by the county as safe. All of them had the distinctive smell of the stuff. My broker wouldn’t even let me consider any of them and we left immediately.
Not sure but I’m only seeing the renovation process applied to quarter million dollar homes and upwards. Given that it’s been unsuccessful I’d say cost is irrelevant.