Cover Story
Left: Greg Kahn/Genesis Photos; Right: Chitose Suzuki/AP

Fighting poverty and leveraging greed

In recession-smacked Florida, and other parts of the country, government and individuals (and baseball owners) have to face up to hard choices

Issue: "Clutching two, dropping four," April 23, 2011

BRADENTON, LAKELAND and FORT MYERS, Fla.-Late-March sights and sounds from two Florida fixations-spring training baseball and a popped housing bubble:

Boston Red Sox second baseman Dustin Pedroia to an autograph-seeking fan: "Just a minute, ma'am. We're working. Trying to become a better team."

Fort Myers columnist Sam Cook: "The stadium . . . is an exercise in excess for Boston officials who leveraged their greed."

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Pittsburgh Pirates fan in Bradenton: "Eighteen straight losing seasons, but we have some good young players this year."

Bradenton Herald reporter Duane Marsteller: "Rampant speculation by builders, developers and buyers . . . relaxed lending standards . . . a blind eye to fraud."

Song over public address system during batting practice: "I don't care too much for money. Money can't buy me love."

Red Sox outfielder J.D. Drew: "When fans scream at me, I play hymns in my head. You want an example? 'Jesus, Lover of My Soul.'"

U.S. Census Bureau announcement: 18 percent (1.6 million) of Florida's homes are sitting vacant.

Man on Lakeland road holding a sign: "If each driver donates $1, you can save my home."

Painting on Larry's Pawn Shop in Fort Myers: A person with a big smile, dancing for joy, clutching two dollars and dropping four.

Detroit Tigers coach in Lakeland telling his players: "If you've got an off-on switch, turn it on."

Fans are optimistic as a baseball season begins, but housing experts remain skeptical about the Obama administration's ability to flip a switch and reverse the national slide in home values. Florida, which was a sunshine U.S. real estate market five years ago, remains in the shade. Its 18 percent vacancy rate is the worst in the country, with Arizona running a close second at 16 percent, and Nevada at 14 percent.

High vacancy rates like those push down housing prices and often leave homeowners who purchased properties from 2002 to 2007 "underwater"-owing more on their mortgage than their houses are worth. According to the Florida Association of Realtors, the median price for homes sold in January was $122,000-a 7 percent drop from a year ago and less than half the price at the market's peak.

On April 2 RealtyTrac noted nationally the existence of 1.9 million foreclosed homes-all putting downward pressure on real estate values. The five states with the most foreclosures were California (348,652), Florida (265,088), Arizona (101,337), Michigan (94,705), and Georgia (83,569). The typical foreclosure was a three-bedroom home that had sold for almost $250,000; marketed after foreclosure, such homes are selling for an average of $166,000.

The number of foreclosures signaled declining home values for the middle class. According to realtor.org, the median price of existing home sales continued to decline from a high of about $230,000 in 2007 to about $160,000 in February 2011. But the price decline, averaging 5 percent from 12 months earlier, was not uniform across the board, and the value of low-end and high-end homes increased:

• Prices of homes selling for less than $100,000 rose by 8 percent.

• Prices of homes selling for over $1 million were up 4 percent.

• The selling price of homes in the $250,000-500,000 range was down 4 percent.

• The biggest price decline came among homes selling for $100,000-250,000: Down 8 percent.

The bad news for middle-class homeowners, though, is good news for home purchasers. In hard-hit Lee County (Fort Myers and vicinity) on the Gulf coast, a 30 percent vacancy rate means that first-time homebuyers can buy houses that a few years ago were only dreams for them.

Eddie Felton, executive director of the Home Ownership Resource Center of Lee County, says government officials should not give "underwater" owners whatever it takes so that they can stay in their homes. Instead, he "triages" homeowners and helps those in the bottom third to get out of their homes quickly so a family that's a better economic match can get in.

WORLD subscribers might remember Felton ("Ghost streets," Feb. 27, 2010), who described for me suburban ghost towns, blocks with abandoned homes purchased several years ago for $250,000-300,000-three times what they sell for now, if they sell at all.

Felton, a 26-year Navy veteran, frankly criticized the way President Obama "gets up on TV and says his program will help people stay in their homes. It won't. . . . He can't come through without wrecking the whole system. Seems to me, if you can't produce, don't give people false hopes."

After our article, the News-Press-Fort Myers' daily newspaper-named Felton one of its six "Heroes of 2010" for the way he has "helped more than 1,900 people work out a deal that will allow them to stay in their homes or leave their homes in a way that least harms their credit."

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