Rob Rose Interviewed by Wall Street Journal on S. Florida Real Estate

Brett Arends is in south Florida for a week writing a series of articles on the real estate market. Rob spent two days with Brett as he visited Miami, Fort Lauderdale, Delray and Palm Beach. Here is his first article on the market in SW Florida.

Florida for Sale!
May 22, 2008 7:18 p.m.

NAPLES, Fla.-- You can hardly escape the real estate crash down here. Even the young woman who checked me into my hotel just lost her home.

So if you are looking to buy a place, someone is going to make you a deal.

The surprising twist: It isn't just at the bottom end of the market. As my colleague June Fletcher noted in March¹, there have been huge price drops in areas where foreclosures are at record highs. But you also see deep discounting in the snazzier parts of town. For three years, Americans have been using Web sites like Zillow to rubberneck the biggest real estate crash since the Great Depression and, maybe, to scout for values. But there's only so much the Web, or the statistics, can tell you. So I decided to come down here to see it up close. I'll be writing a series of columns over the next few days to tell you what I've learned.

WSJ's Brett Arends shows some high-end homes in Florida that are selling at cut-rate prices.

And who knows? I'm not really in the market for a winter home here. But you never know...

What I'm finding so far?

The market's even worse than you hear. Which means, if you're a buyer, it's even better.

The biggest price drops haven't fully shown up in the official data because that stuff isn't selling at all.

Some condo developments out in alligator swampland -- excuse me, on 'pre development golf courses' -- have gone dark.

Meanwhile, hard though it is to believe, plenty of others in the market are still in denial.

Brokers will tell you about homes still being offered vainly at $899,000 long after identical units in the same building have sold for $500,000.

This extends to some brokers too. When I called around before flying down, a remarkable number told me, "Gosh, I'm just the busiest I've ever been! The market's really picking up."

I guess they were gambling I hadn't read a newspaper in, oh, about three years.

But the good news is that there are deals around in the kinds of places you might actually want to buy.

Realtor Craig Jones of John R. Wood in Naples showed me a two-bedroom, sixth-floor co-op near the beach that probably would fetched more than $600,000 at the peak. Today it's on the market for $498,000. And Ms Jones whispers you can probably get it for $425,000.

That' a big price cut. The apartment has spectacular Gulf views and is a five-minute walk to the beach.

According to official data, this unit sold for $480,000 back in July 2002. So in some cases we are back to those prices, maybe even earlier. That's pretty much pre-bubble.

Zillow, for its part, says this co-op was last worth about $425,000 in 2000 --2001.

Incidentally, Zillow now thinks this property is worth $740,000². And the Web site says the value has risen by $200,000 in the past year.

So much for relying on the Web. What's actually happening in these markets isn't always showing up right away.

Meanwhile, a one-bedroom condo near the beach just sold for $237,000. At the end of 2004 the owners bought it for $370,000.

It's the same elsewhere along the west coast. On Siesta Key, near Sarasota, a corner condo right on the water is on the market for $500,000, and you could probably get it for $450,000. Realtor Raul Elizalde, at Michael Saunders and Associates, says that at the peak it sold for more than $700,000.

There are other deals on the island. It looks more interesting than snooty neighbor Longboat Key, where the lawns have been trimmed with toenail scissors, and former Florida Congresswoman Katherine Harris has a home.

Along the coast there are gorgeous, brand new homes on the water down from $3.1 million to $2.1 million; and the broker whispers you can get them for $1.8 million.

Bill Earls in Naples is showing a waterfront mansion with a boat dock for $9.9 million that "would have sold for $12 million, maybe $ 14 million, a few years ago." Sure, he's a broker; he would say that. But it's not implausible.

I was tempted to buy it and put it on my expense account. But the place was a little ornate for my taste.

Mr Earls largely deals with the high end and the very high end of the market. But he says the rich are as reluctant to buy as anyone.

Write to Brett Arends at brett.arends@wsj.com³