March Madness Emerges From Depths of Foreclosure Obscurity

Where did they come from, this high energy group of college athletes that is stealing the show in NCAA March Madness? This Cinderella team from a school most people will admit they’ve never heard of. And now, the Florida Gulf Coast University Eagles have made a name for themselves, beating Georgetown and San Diego State, making history in the process by becoming the first 15th ranked team to ever advance to the Sweet Sixteen in NCAA history.

A little history lesson from the local Chamber of Commerce website tells us that their home base is the same place where Thomas Edison built his home and laboratory (you remember him: the guy who invented the light bulb, the phonograph, the movie camera and projector, and had 1,100 patents in all). And it’s the same place where Edison’s good friend, Henry Ford, opened his first car dealership in 1914.

It’s Fort Myers, Florida. A place that’s very familiar to real estate investors, rising from obscurity not as a sports mecca or for its historical background, but for being one of the nation’s hotbeds of foreclosure activity since the U.S. economy meltdown of 2007 .

Located in a judicial foreclosure state, the Cape Coral-Fort Myers metro area has been having a difficult time shaking off its reputation for being foreclosure central, even though foreclosure activity actually peaked there in December 2008, according to data compiled by RealtyTrac. Since then, it has been a roller coaster ride as the activity level gradually works its way down to more normal levels.

Add to that the robo-signing debacle that all but shut down the foreclosure courts statewide, resulting in processing delays, and causing some state lawmakers to question whether the judicial foreclosure process is the right way to go for the state as a whole. A few lawmakers have already introduced legislation to fast track the foreclosure process.

In 2008, the Cape Coral-Fort Myer metro area ranked the highest foreclosure rate in the nation among RealtyTrac’s largest metros with populations exceeding 200,000 people. The metro foreclosure rate moved down one notch in the rankings, coming in second for both 2009 and 2010. That was followed in 2011 by a dramatic drop to ranking No. 15 in the country, followed in 2012 by another slight decrease to ranking 18th highest foreclosure rate.

But even with much less foreclosure inventory currently in the local marketplace, the Cape Coral-Fort Myers metroplex continues to be targeted, favored by large institutional buyers as part of the recent bulk buying craze. As local REO listing broker Marc Joseph recently told the Foreclosure News Report, “The little mom-and-pop investors are being squeezed out. They’re still buying, but they’re buying less and paying more. The big hedge funds are creating an artificial market.”

One hedge fund in particular — Sun Cny Properties LLC — has been very active in Lee County (which comprises the metro area). In 2012 bulk buyers accounted for more than 5 percent of all foreclosure purchases in Lee County, RealtyTrac reported.

All the craziness of the real estate market may still need to be sorted out over the next few years, but the craze in college basketball being created by the FGCU Eagles seems genuine and sincere, giving locals something to cheer about for a change.

It’s great to see a small, no-name team that has nothing to lose beat the odds and the bigger name schools (even if I was rooting for SDSU). Oh well. Good luck FGCU in your next contest against the University of Florida on Friday. Maybe lightning will strike three times in your favor.

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