Tuesday, December 28, 2010

Real Estate Success for 2011

Since the last Quarter of 2005, our US Economy has been in a wrestling match with itself.  The most effective hold has been the "Strangle Hold" being applied by the Real Estate Market.  I feel foolish and humbled when I go back and read some of my predictions from 2007-2009, where I figured we must be coming out of this thing... and that recovery surely must be around the next corner.  In retrospect, that was frustrated wishful thinking - not prudent, thoughtful analysis.  I mean, who knew that we'd be into this thing five full years... and still be unsure where the light is at the end of the proverbial tunnel?

Here are some insights that I believe, as a Real Estate Professional, I must be in tune with, in order to continue to be successful in this "new reality" - and eventually break through as recovery comes:
  1. Ordinary effort will not be rewarded.  In a hot market, most everyone can stumble into a few sales.  To be a great agent, "good" isn't good enough any longer.  We have to commit to an extraordinary selling and/or buying experience for our customers.  It's what gives birth to our lifeblood - Referrals from satisfied customers!
  2. It's got to be "Mission Focus," not money focus.  Some transactions in our "short sale" world might not ever close.  The banks are making decisions with a calculator, not their hearts.  We have to know what we can control and, more importantly, what we can't!  We have to focus on getting up early and immersing ourselves in the process of doing the right things daily for our customers.  We must maintain faith and confidence that this will work most of the time.  If we focus on the mission, the money will come.
  3. Effective Communication is critical.  The "sales process" has changed forever.  Twenty five years ago, my first office broker introduced me to real estate sales with this classic offering: "Here's your desk and here's your phone.  Good luck, Frank, you're on your own!"  Well, thank God for my twenty years of experience as a US Army Officer.  I knew there was more to it than that!  Today, I've got to be the master of information.  I've got to know my market - cold!  I've got to be able to provide a true learning experience for my customers and instill confidence, so that they can feel good when following my advice.  If I say, "You are $50,000 over-priced," I've got to be able to back that bold statement up, don't you think?  Web sites, blogs, email, texting, smart phone, facebook, twitter... are all just the tip of the iceberg to come.  Providing customers and future customers with daily talking points keeps us engaged, until the need for action arises.
  4. Re-read my post on this blog from 11/23/10, "Goal Setting for Realtors, Buyers and Sellers."  What it boils down to is that to be effective over the long haul, you've got to be a goal setter, trend setter, and pace setter.  Without goals and a plan and schedule to achieve them, we're all in a crowded shipping lane with no rudder.
(Inspiration for this post comes from a terrific trainer, Steve Harney, and his January 2011 Quick Tips)

Friday, December 17, 2010

Real Estate and the US Military


  Well, it's the end of 2010... a "real estate year" I'd like to forget (or at least replace) - You know, like how the professor would let you take a test and have it replace your lowest grade?  I feel like I've been in the ring for 5 rounds (2006, '07, '08, '09, '10) with Mike Tyson in his prime.  The good news is that I'm still standing... and he's getting tired from punching me:-)

We spent the day Wednesday on board the USS Gettysburg at Mayport Naval Station in Jacksonville.  She is a 9,500"+" ton, nearly 600 feet long, 55 foot beam, 33 foot draw Guided Missile Cruiser.  A real bruiser of a US warship, with a crew of over 30 officers and 330 sailors (men and women).  As a 20 year US Army Veteran, it was great to get a backstage look at the Navy.  Talking to the men and women on that ship reinforced the fact that we have good people protecting our interests.  The ship's Captain, in his opening remarks, said it well.  He referred to our military forces (as well as community law enforcement and fire/rescue personnel), as "those who run TO the emergencies of life, rather than AWAY from them."  I liked that and it sums up a boat load of emotion.

It really got me thinking about that part of my life, blended with my second career as a Real Estate Broker.  Here's the rub... Many civilians, over their careers, use the build up of home equity as a significant part of their retirement nest egg.  Perhaps they bought a starter home when newly married for $100,000 and over the span of 30-40 years "moved away and moved up" maybe 4 times.  Then, in their 60's, their current home is worth $600,000 - very plausible in many parts of the country.  As a sales agent and broker in Fairfax, Virginia for 15 years, I helped a lot of corporate types, as well as FBI, CIA, Secret Service, etc. and a lot of Government senior executives.  When they moved, as a necessity of their job, they got a "relocation benefit package."  If the market was in a down cycle, Big Brother picked up the difference!  They couldn't lose!

Not so for the military men and women at the Pentagon, Bolling Air Force Base, Fort Belvoir Army Base, Quantico Marine Base,  or Norfolk Naval Base.  Nope, if they took a chance and bought a home... and got transfer orders in a down market, they basically had two choices:  1.  Sell at a loss, or  2.  Turn it into a rental property and not be able to buy a home at the new duty station.  I know I had myopic vision on this, yet I always wondered why those in harm's way got a lesser deal than those in the less harsh realities?

Anyway, we won't solve that here.  And as we cut costs to reduce the national debt, I doubt we ever will.  It's Christmas now and our forces are deployed in many places, where hateful, radical elements wish them harm.  Thank God for their sacrifice and dedication.  I wish for peace like the next guy, but the reality of human nature says it will never happen.  It is their selfless duty which makes this a great place to live.  In most of the world, home ownership is not possible...

Thursday, December 2, 2010

"Flagler County, FL Waterfront Homes - 2010 Recap"

     I know it's only December, but here is a recap of waterfront home sales for the first 11 months and 2 days in Flagler County, FL for 2010 Areas include the Palm Coast, FL zip code 32137 and Flagler Beach, FL zip code 32136.  "Waterfront" is defined as "On a Saltwater Canal, the Intracoastal Waterway (ICW), or the Atlantic Ocean."  This does not include fresh water canals, golf course ponds, ocean views, marshes, etc.  These homes were "on the water."

For all of this year, there were only 109 such sales.  In the heyday of 2001-2005, it would not have been a stretch for this number to have sold in just one month!

                                                          Here is a statistical summary of these sales:

  • Sales Prices:   
            • High = $1,000,000 (on the ocean)
            • Low = $150,000 (on a canal)
            • Average = $320,000
            • Mean = $280,000
  • Average price/square foot = $148
  • Average Days on the Market = 198
  • Type of sale:
      •  Total sales = 109
      • "Normal" = 73 = 67%
      • Foreclosures = 11 = 10%
      • Short Sales = 25 = 23%
  • Number of sales, by month:
      • Jan = 3
      • Feb = 4
      • Mar = 5
      • Apr = 10
      • May = 10
      • Jun = 14
      • Jul = 13
      • Aug = 10
      • Sep = 13
      • Oct = 16
      • Nov = 10
      • Dec =  none yet... (Hey, it's only the 2nd!)
All I can say is "Holy Cow, Mama!"  A $280K Median... and $320K Average price for a Florida waterfront home?!?  If you were here in 2000-2005, you are scratching your head now.  At the 2005/early '06 peak, canal LOTs were in the $300Ks!  ICW LOTs were $495K-$750K!  And Oceanfront LOTs were over $1,000,000!  If you want waterfront... GET IT NOW... or be telling your grand kids about how you should have... back when it was cheap!

Monday, November 29, 2010

"Pent Up Housing Demand"

"Thou shalt not covet... Thou shalt not covet... Thou shalt not covet."  There, I feel a little bit better now... but not a lot.  "What's my problem," you ask?  Well, it seems that the real estate market is showing signs of recovery in the Northern Virginia - Metro Washington, DC area.  You know - the market I moved from - to come back to Florida in 2001.

All my buddies in my old Remax and Century 21 offices are struttin' a little bit recently.  "The market is brisk again," they say.  To be fair, it's not "1995-2005 brisk" to be sure, but brisk, nonetheless.  I'm pretty wired up... you know - Facebook, Twitter and an endless stream of websites and blogs, etc.  "Three closings this week!" they say.  "Thirty buyers through my open house!" they boast.  "Our office phones are ringing off the hook and we got two walk-in buyers yesterday!" etc., etc.  It's enough to make a grown man cry (especially if said grown man is a Real Estate Broker / Sales Agent... in Florida).  However (and it's a BIG however), our time is coming! 

Florida, you see, is a "destination State."  People really want to come here to Palm Coast and Flagler Beach.  We are surrounded by the Beaches of the Atlantic Ocean and the Gulf of Mexico, drenched in Sunshine, and blessed with year around Warmth.  You can ride your motorcycle or bike, go fishing, surfing, hiking, walking on the beach, or play golf - in February!  And the machine is oiled by the guy "up North" being able to sell his house first, so he can move here. 
Simple math: "No sales in NJ/PA/MI = No sales in FL"

Please don't interpret this as me saying, "The recession is over," because it's not.  We have a lot of messes to clean up first and we have to put a lot of people in Florida, California, Arizona, Nevada, and Michigan, etc. back to work.  Banks have huge "shadow inventories" of foreclosures and short sales to push through the system.  We've got to look in the mirror and promise ourselves that we won't be defeated any longer... and that's not "foo foo" talk.  Recovery really does start with attitude shifts!

And as the tide starts to turn, hang on to your hat, because we too will then get our share of "brisk" sales, in response to pent up demand. What Does "Pent Up Demand" Mean?

When the demand for a service or product is unusually strong. Pent up demand is used by economists to describe the general public's strong return to consumerism following a period of decreased spending.
Pent up demand is often seen immediately following a recession or depression, where consumers have built their savings or held off on purchases, due to the prevailing uncertain economic climate. Quite often, pent up demand accelerates the economic recovery period immediately following an economic downturn, thanks to a sudden increase in consumer confidence and spending.  If you live in Florida, especially Palm Coast or Flagler Beach, make sure you cover all the bases, by crossing your fingers and saying your prayers!

Tuesday, November 23, 2010

"Goal Setting for Realtors, Buyers, and Sellers"

My wife and step daughter and I went to a church service Wednesday night.  The pastor there is a gifted speaker and always brings biblical truth into modern day relevance.  But make no mistake about it - I'm no preacher.  So I'll skip the religious and spiritual lessons, epitomized by Paul's words in the gospel, whereby he states that he is "Pressing on toward the GOAL..." and "Forgetting those things which are behind and reaching forward to those things which are ahead!"

Now that was written over 2000 years ago... and it sounds like Paul of the gospels graduated from the Dale Carnegie course!  As a Real Estate professional, the past few years have been rough... really rough.  And yet the lessons learned from a thousand classes - both as a student and as an instructor - stay in front of my eyes.  It's stuff like this that keeps me going and "spitting in the eye of this recession."  Not just "surviving," but in the pursuit of "thriving!"

Here is a summary of the life lessons the pastor taught last week:
  1. Winners are Goal Setters!
  2. Without goals, our efforts lack a sense of purpose and urgency!
  3. Goals are the objects of our ambition!
  4. If we keep making progress and chipping away at our goals, we get to say, "I may not be where I ought to be, but I'm sure as heck not where I used to be!"
  5. If you can get the goal on your own, it's likely too easy!  Most big, bad, bodacious goals require teamwork and synergy!
  6. Goal setters study worthy role models and emulate them!
  7. Accomplishing a goal requires hard work and focus... if you try to focus on everything, you end up focusing on nothing!
  8. Look forward to the goal... Don't dwell on the past... Learn from it and move on!
  9. Goal accomplishment requires excitement!  And you can't be excited with slumped shoulders and pessimistic self talk!
  10. The prize tastes better, when there is pressure to be overcome!
  11. Goal accomplishment requires that we set priorities and schedule our time accordingly!
  12. It helps to write them down and review them often... to see what progress is being made!  As sometimes changes are needed.  Be flexible!
  13. Goals require a leap of faith.  Without this element of risk, it's not much of a goal!  (Now, to be fair to the source, the pastor would surely say that faith provides assurance - not risk)
  14. To be a worthy goal, it must be congruent with your moral and ethical standards!
  15. Winners are goal setters, trend setters, and pace setters 
  16. Winners create their future, before it creates them!
  • Fellow Realtors, this recession will be over when we decide it's over. We have to walk that line, where we understand the challenges of this market, yet we don't allow the negative aspects to dominate our actions!
  • Sellers, if you really want to sell, you absolutely must get your head out of the sand.  Today's market is a Price War and  Beauty Contest.  Spruce your place up before you list it with me... and let me help you price it to sell... not be in the overpriced 70% that never sell!  Get in front of the market, so you don't end up chasing the market down from behind!
  • Buyers, be specific with your price ceiling, wants, needs, location, etc.  If you tell me "Let's see 100 homes and we'll know it when we see it," I'm no good to you.  If you don't know the differences among short sales, foreclosures, REOs, etc., Ask!  It could take 6-8 months to close a short sale (or get a counter offer... or a flat out "no"), so if you don't have the stomach or patience for it, don't do it.  By the way, there are plenty of "normal" sales from motivated sellers, from which to choose!  Palm Coast, FL and Flagler Beach, FL are "For Sale" and it's a great time to buy!

Thursday, November 18, 2010

"Flagler Beach, FL - Clandestine Paradise!"

Flagler Beach, Florida, is a Clandestine Paradise!  Drive up and down the Atlantic Ocean Coastline and you will know what I mean.  St. Augustine is nice, but prices in the beach towns are "ouch!"  Go south to Daytona Beach and it's nice too... but mingled with the sights and sounds of wild and wooly biker events twice a year, various Spring Break themes, and Speedway events, etc., it can be a bit  "honky tonk" for some tastes.  Mind you, however, that some go there specifically for that buzz... For me, I like being near it, yet not in it... I'm just sayin.'

Go farther north and it starts to get "Georgia chilly" and farther south gets "tropical hot & humid," as well as very crowded.  Most of the US East Coast shoreline is "stupid developed" with monster condos and hotels blocking views and public access to the ocean.  Not so in Flagler Beach!  It's a throwback to Old Florida and it's a slower, more sane pace of life.  There's plenty to do, with clubs and activities galore... just not in your face.  Flagler Beach's proximity to the "city" of Palm Coast and the venues of Flagler County are a big plus, also.  Plenty of shopping nearby, yet when you cross over the Intracoastal Waterway bridge and see the little town of Flagler Beach and the sun glistening off the ocean water... you just know it's a special place!

The beaches are clean and not crowded.  Even on 4th of July weekend, you can find a spot to park along the beach road (A1A) and go plant your feet in the sand.  And talk about "Old Florida," people come to the beach from miles around on Friday and Saturday mornings for the bountiful Farmer's Market.  At the market, you have the opportunity to step back in time to simpler days when vendors come from farms and cottage kitchens to sell their wares. The Farmer's Market has become a Flagler Beach institution as folks shop for fresh locally grown produce and homemade delicacies, plus handmade goods such as pottery, baskets and jewelry.

And right now, in November of 2010, Flagler Beach is "FOR SALE."
Prices are crazy low and are down by AT LEAST 50% from what they were in 2005.  You can buy a HOUSE... ON or NEAR the OCEAN for what a LOT cost in 2005!  Here's a little breakdown: 
  • Detached Houses:  There are 113 for sale, between $72K and $998K.  6 sell a month (in an average of 192 days).  That's a 20 month supply!
  • Condos & Townhouses:  There are 63 for sale, between $67K and $495K.  2.5 sell per month (in an average time of 250 days).  That's a 26 month supply!
  • Building Lots:  There are 108 for sale, between $20K and $949K.  1 sells per month!  That's a 108 month supply!
Here's the rub... There are really two MLS's!!!  There is the part that is in fantasy land - deep in denial - priced way too high for the market.  And there is the part that knows what's going on and wants to sell!  Evidence is that 70% of listings never sell.  Hint:  Priced too high!
Soooo.... Call an experienced LOCAL Realtor (like me) and let me help you figure this out.  If you are a Seller, I can help you price it right (provided you are motivated).  If you are a Buyer, I can help you sort through the mess an find the motivated Sellers!

Wednesday, November 3, 2010

"David Letterman Likes Palm Coast, Florida!"

This is good stuff! 

12 years ago, I'd never heard of Palm Coast, Florida, even though I'd lived in Tampa and visited family and friends all over the state for years.  Then I came to a wedding in Saint Augustine and stayed at The Topaz in this cool little beach town, called Flagler Beach!

Two years later, I moved to Palm Coast... and I'm still here!  Making my living as a Real Estate Broker was amazing, as we (Flagler County) became the "Fastetst Growing County in the US" for a couple of rocket ride years!  Things have certainly slowed down, yet it remains a cool place to live.

Click this link below and it will take you to the Palm Coast city website.  Under "Announcements," you'll see "David Letterman Likes Palm Coast."  Watch the short imbedded video all the way to the end.  If you are a Palm Coast, Florida fan - you will love this!

Monday, November 1, 2010

"Moving is Hard in Post-Retirement Years"

 If you are in your "post-retirement" years... or your parents are, please read and internalize this post.  Understanding this may save you untold discomfort in the years to come.

I am a real estate broker in America's primary retirement mecca - Florida!  And believe me, I get all the jokes about blue haired drivers, early bird specials, and viagra at the seniors center, etc.  Ha ha ha ha ha ha!  Those old people sure are funny!  And to be sure there is humor there.  In addition, however, there is also cultural confusion.  This is not an unusual or atypical scenario:
  • Mom and Pop work all their lives in New Jersey or Ohio or Michigan or some other place on the frozen tundra and dream of coming to Florida.  Ahhhhh, Florida... where the kids and the grand kids can come and visit all the time!  We'll swim and bike and hike and walk on the beach and life will be grand!
  • The first year or two the kids come and visit.  But then two or three years has gone by and no kids!  Where are they?  Don't they love us any more?  Well, they are busy living THEIR lives... in their peak earning years... kids in school and sports... wanting to take vacations to some place other than Disney World and Gramma and Grampa's house... again.
  • Then hips and knees get replaced and arthritis kicks in.  Triple by-passes and menopausal issues and prostate problems happen.  Taking care of the house is no longer easy.  The grass needs mowing and cleaning the pool is a chore no longer considered fun.
  •  Mom and Pop miss the kids more than ever and want to be nearer to them.  Physical abilities diminish and memory fails more often than it used to.  Mom and Pop are becoming less capable... and they are feeling more and more alone as the years drift by. 
  • Cell phones and computers and email and texting... Facebook and Skype, etc., should make it easier, but they become daunting tasks.
  • Then, God forbid, Pop passes away and Mom is left alone, 2,000 miles away from the family.
Having just been through the sale of a home, as the "listing agent." here in Palm Coast, FL, for an 85 year old couple, has really brought this into focus for me.  It caught up to them in spades.  Going back to Michigan to an assisted living facility was a massive undertaking.  At 85 and quite frail, they could do almost nothing for themselves.  Going through 20 years worth of "stuff" proved overwhelming.  Only with the help of an also aging brother, a kind and caring neighbor, the arrival of a son a day before closing - and the grace of God - did we make it... (They called me today to tell me they made it to Michigan... and to say "Thank you" for helping them get there!)

If these things resonate with you, address some issues - now, rather than later:
  • Talk about it.  Talk about the above scenario, as a family, and get people's input.
  • Make sure you have both living and familial wills.
  • Discuss health and death and burial issues.
  • Get properties in Trust.
    • Hire an attorney for this and get the best legal advice possible.
    • Florida living trusts are all about taking smart and legal planning steps to minimize complexity, cost and grief following death... and peace of mind in the present! Remarkably, thousands of people fail to prepare their estate for legal transfer. Age, ill health or an accident leaves them incapable, incompetent or worse! Result? Their entire estate, along with the unraveling of taxes, creditor obligations and more "defers" to the probate court.
    • Think of your living trust as a documentary form of "You" ... what you've worked for your entire life, the assets you've created, and your preferences for inheritance are entirely captured by your Florida living trust. You "fund" the trust with your financial and real property assets. You can amend it or determine the trust's day-to-day business ... it's revocable ... up until the time of your death. Thereafter, no change is permitted. Your Florida living trust reverts to an "irrevocable trust", managed by your successor trustee under strict rules until all assets have been legally transferred, taxes paid, and creditors paid.
    • If you're looking for privacy, and potentially significant cost and time savings to your heirs, without the imposition of court-ordered probate, then examine further the Florida living trust.
      • (from EZine article on this topic, by Robin J. Derry)
  • Categorize and organize all the insurance, financial, and other "important papers."
  • Make sure both spouses have access to and understand all bank accounts, IRA's, investments, property deeds, payment books, bill paying info, passwords, PIN numbers, etc.
  • Start methodically purging "stuff" from the attic, garage, closets, etc.  If it's not needed, sell it or give it it away.  Lighten the load!
  • Talk about retirement homes, assisted living, and "going with the kids" issues.
  • Establish a relationship with an experienced local real estate broker (Here's where I volunteer), so when the time comes, you're not scrambling to find a good one.  Talk to them about their experience and understanding of the nuances required to work with you or your parents.  Believe me when I say that we often become like members of the family during these times.
  • And finally, decide if Florida is your final place of residence.  (Like I've been told many times before, "This is where I'm staying until they plant me in the ground!")...
  • If it is not, then make arrangements for that final move, while you are still young enough to do it - and also to enjoy it!

Tuesday, October 26, 2010

"Upper End Real Estate in Palm Coast, Florida"

50-50 Chance... Right?

80% Comes From Only 20%... Really?
When I was a kid, I had no concept of what "Upper End" might mean, other than we'd drive through the "rich people's neighborhoods" to be enthralled by their Christmas lights each year.  I mean I truly didn't understand that granite and marble and Italian tile and 30' ceilings and Viking stoves and Swedish dishwashers and walk-in refrigerators and temperature controlled wine rooms were required to get you there.  But 15 years of selling real estate in Great Falls and McLean, Virginia - home to Senators, Congressmen, Pro Sports Figures, and Corporate CEOs, opened my eyes. 

Then I came to Palm Coast, FL and Flagler County in 2000.  I brought the "Fastest Growing County in the USA" thing with me, as Fairfax and Loudon, Virginia had owned it for a while.  Prices started rising and places like Hammock Dunes, Ocean Hammock, and Hammock Beach soared into the $$Millions.  Palm Coast's salt water canals and gated communities like Grand Haven took off too.  A modest Maronda home for $70,000 in 2000, became $225,000 by the end of 2005.  It amazed me that there were no homes under $200,000 for sale in our MLS system!  Had our rate of appreciation continued through to the present time, our median price would have gone over $1,000,000.  I know it's bad right now, but thank God the inevitable happened when it did.  Had we gone even higher, the fall would have been even worse!

So what constitutes the "upper end?"  It's quite arbitrary, really.  When I bought my first home new from a builder in Tampa, FL for $25,000 in 1971, the upper end was rumored to be $100K.  When I left the Pentagon and my 20 year Army career for real estate in Virginia in 1986, the upper end was $300K.  by the time I left there in 2000, it was $1,000,000.  In Southern California and the Silicon Valley, $1,000,000 got you a quaint starter home!

For my purposes, I call upon the "80-20 Rule" (that's the Pareto Principle for you math junkies).  Loosely interpreted (from my MBA days at Georgia Tech) it implies that "80% of effects come from 20% of the causes."  This theory came from observations that 80% of the wealth was enjoyed by 20% of the people.  So I've always theorized that upper end property is the top 20% (loosely) in a given market.  Interestingly, this applies to an amazing array of circumstances.  For example, I've managed 5 different real estate offices in my career and, invariably, 80% of the sales are done by 20% of the agents.  On most sports teams, 80% of the "impact" or "points" or "tackles," comes from the top 20% on the team.

In Palm Coast and Flagler Beach, FL... and all of Flagler County, FL, we'll say the upper end in the 4th quarter of 2010, starts at $500,000.  Of the 1,340 detached homes (not condos or land) for sale today, 187 are priced at or above $500K. 

The numbers tell a real story about our market
  • Over the past six months, about 15% of the listings for sale are over $500K, but only 2% of the actual closed sales. 
  • In the "normal" range, 3% of homes listed for sale are bank foreclosures and 32% are attempted short sales.
  • In the "upper end," only 1% are bank listings and only 6% are short sale attempts.
  • Of the 699 homes sold in the past six months, only 14 are upper end (2% of the total market)... It's such a small %, that it's impossible to make inferences... except that it's not a great time to be for sale at the upper end!
  • Also, two startling facts, not tied to price:
    • Over 70% of homes listed never sell (because they are priced too high!)
    • Of those that do sell, nearly 60% are distressed sales.
What does this all mean? 
  • It's an amazing buyer's market. 
  • Homes are selling, but shoppers are seeking bargains.
  • The upper end is clogging the funnel, as sellers in this range are more reluctant to face the irrefutable reality of The Law of Supply and Demand... (even though better educated, on average, and probably sat through Economics classes in college)
  • Since 70% of listings don't sell... to be successful...
    • It's a Price War
    • and a Beauty Contest
  • When choosing a Real Estate Agent, do your homework.
    • a CLHMS is certified to help you in the upper brackets.
    • a CDPE is equipped to help you with foreclosures and short sales.
Call me with your questions.  My CLHMS and CDPE expertise, coupled with my Harvard certification as a Real Estate Negotiator... and my 25 years of Real Estate Sales experience... could be the formula to help you achieve success!
Frank Zedar
Parkside Realty Group, LLC

Tuesday, October 19, 2010

House Hunting - 2010 Style

 Saturday morning - Starbuck's Italian Roast - and the Daytona Beach News-Journal... My eyes catch "Shopping for homes when there's too much to buy!"  The author, Ilyce Glink, says there are "Eight things" you can do, as a buyer, to be successful in this market:
  1. Create a wish list.
  2. Create a reality check.
  3. Get pre-approved for your mortgage.
  4. Pick a neighborhood.
  5. Pick a Real Estate Agent (...Like Me!)
  6. Search the Internet to do elimination.
  7. Do "drive-bys" to eliminate more.
  8. Look only "at or below" your qualified price.

Now, I'll add a little to her take on things...  I'd combine #1 & #2.  Just make one list.  You'll know if your list is close to realistic or not.  If you can go to $200K here in Palm Coast, FL and you want a pool, we can make that happen.  And to think in 2005 there were NO HOUSES OF ANY KIND HERE UNDER $200,000!!!    But if you say you want "Direct Oceanfront, 5 bedrooms, pool, granite counters, etc." for under $200K, then you'd be joking, right?  Right?

On #3, I'd get more than "pre-approved."  I'd get "approved" for a mortgage.  Actually make your application and start the process.  Then, when I find you your new home, we just need an appraisal.

#4 - Agree.  Pick where you want to be.  If you want to be in Flagler Beach, then Palm Coast or Bunnell won't do.  If you want a salt water canal with Intracoastal access, then that's where we focus. 

Let's combine #5, #6, #7.  The right agent will make all the difference in the world.  Massive experience can really help if things get dicey.  Also, you won't get silly statements to try to "sell" you a particular house.  In 25 years of doing this, I know that you'll put it on your "no way, Jose" or your "possible" list within 2 minutes.  We won't waste time on houses you wouldn't buy.  The internet is not a threat to a good agent, it's an efficient tool.  And drive-bys are a great way to save boatloads of time.  A $99 GPS can save us three days of mind-numbing elimination.

I disagree with her on #8.  This quarter, 70% of our listings in Palm Coast, FL don't sell... because they are overpriced.  Maybe it's worth making an offer at the right price.  Plus, it's just a ridiculous buyer's market and there are bargains to be had.  If you qualify for $350,000, I'll ask you if you'd like to see up to $375K (maybe even $400K) if I can prove a price point of $350,000 or less.  But you are in charge of that decision.

Choices!  Choices!  Choices!
 Let's meet and talk about what you want!  I'll help you get it!

Wednesday, October 13, 2010

"Real Estate Update - Palm Coast, FL"

Every Class We Take... Now
Starts With "Short Sale."
  I do my best to update you on the main issues affecting real estate here in Flagler County, Florida.  This is a "snapshot" of the past 30 days in Palm Coast and Flagler Beach, Florida.  Included are zip codes 32164, 32137, and 32136.  The numbers this time are pretty much the same as they have been for the past few months.  We seem to be in a rut.  When we get to the end of 2010 - only 78 days from now - I'll do some trend analysis.  I'd like to be able to show how we're coming out of the woods, but know that is wishful thinking at this time.

So here we go:  (These numbers are for "Single Family Homes."  They do NOT include input for condos or land/lots or commercial transactions)
  • There are currently 1153 homes "For Sale" in Palm Coast.
  • They are priced between $45,000 and $2,600,000.
  • They have been on the market between 1 and an astonishing 1872 days!
  • 40% of the listed homes have been for sale for over 6 months... up to over 5 years!
  • Hint:  We have a serious mis-understanding of The Law of Supply & Demand.  My partner (in real estate and in life) Maritssa, ran some stats the other day and found that over 70% of homes listed... never sell!  The stark reality is that they are over-priced.  For every location and/or condition, there is a price, at which every property will sell.  In a market like ours, facing that price can often be a challenge.  To "Git er done" today, you need a Price Motivation Level of at least an "8" (on a scale of 1-10).
  • 34% of listings (391 homes) are short sales attempts.
  • Only 3.7% of our listings (43 homes) are bank owned foreclosures.
  • Hint:  We are caught up in the world of pre-foreclosures... or foreclosure avoidance.  But the foreclosures are coming, with over 300,000 notices issued per month for over 18 months in a row!
  • We have SOLD 111 homes, or 9.6% of available inventory.  9.6% is known as the absorption rate.  The implication is that if no new inventory came on the market, we could sell everything in about 10 months.  It's a fallacy, however, because 70% of our listings are over-priced and won't sell in the foreseeable future.
  • These homes sold between $55,000 and $840,000.
  • 67 of these sales were "distressed" sales - short sale or bank owned - almost all short sales.  That's an amazing 60% of all closings being distressed! 
  • Flagler Beach is more of the same.
    • 116 homes for sale at this time.
    • 5 sold in the past month.
    • With a lack of "comparables," appraisers at the beach have to get creative.

Five Year "Down Cycle?"
Come' on, Man!

These "Distressed Sales"
Are Now 60% of our Market!

Monday, October 11, 2010

Hey, Bank of America! Come'on, Man!

I know it's easy to blame the banks.  I mean they're big and rich and cocky and "above the law" and they foreclose on Grandma, etc.  But, COME ON, MAN!  Right when we might have been making some headway with clearing out the bottom!  For the past 60 days here in Palm Coast, Florida, our real estate closings comprised 58% "short sales" and foreclosures, while only 41% of our new inventory was distressed.

Nationally, banks have been issuing over 300,000 foreclosure notices per month for the past 18 months!  That's 5,400,000 Grandmas in the street!  As swiftly as the banks gave loans for $500,000 houses to families with household income of $35,000... Shhhhhh, you don't have to tell us what you really make... because this is a "No Doc" loan!...   They bang the gavel to take it back!  What a country!

Now we have a Bank of America (and others) moratorium on foreclosures!  They make it seem like an effort at compassion.  Hey, America, we CARE!  But what it really is... is a way to avoid law suits.  Why?  Because the bank's paperwork and admin is shoddy beyond shoddy.  It seems that some banks are taking houses... and they don't even hold the mortgage note - They can't find it!

A spin-off economic tragedy is that real banks can't make real loans on property, without said property for collateral.  Now we have a precedent that shows the system to be in jeopardy.  This could hurt commercial development and job creation - at a time when we need it most!  When banks don't lend $$, the fair market system grinds to a halt...

This is a story that is unfolding, as we speak.  The coming drama should be Bankalicious!

Friday, October 1, 2010

"Real Estate Investment in 2010"

You, too, can be just like
"The Donald!"

Are you a Real Estate Investor?
Would you like to be?

It used to be that anyone and everyone who bought property of any kind, fancied themselves as an "investor."  We were all so smart!  So you bought it from the builder for $180K and put it in the MLS for $240K as a "new build."  Simultaneous closings and pocket the difference!  Usually, "no effort in" is a "too good to be true" scenario.  It's just too risky!  And that's how that story ended in 2006, when the real estate bubble burst.  So many "investors" got caught with their hand in the cookie jar!

So here we are in the 4th Quarter of 2010... precisely 5 full years since we first noticed that "something was awry."  We've watched the market tumble here in Palm Coast and Flagler Beach, Florida to de-valuation of 50% or more.  Short sales and foreclosures comprise nearly 60% of our closings...  Inventory is large and prices are low...  Mortgage rates are extremely low.  An investor can find under 5% with 25% down.

In other words, It's a great time to invest.  If you have some cash and decent credit and are in it for a "hold," not a "flip," then your timing is good. 
Here are some of the issues to consider:

  • Use your head and a calculator, not your heart or your gut.  It's not like buying your personal home.  Heck, you don't even have to "like" it for it to be a good investment.  It's all about your ROI (return on investment) - Challenge your Realtor to demonstrate this to you. (Note: Land is a different beast.  Generally it generates no income, yet it does have associated costs of taxes, and maybe even upkeep and HOA fees, etc.  With land, it's "buying it cheap and estimating a hold period before a selloff.")
    • "Timing" the market can be elusive:-)
      Avoid overleveraging.    Debt can be a good thing, however you don't want to get caught making monthly payments "on your investment."  You want to "get payments from your investment!"  Accurate input into your Debt Service Coverage Ratio (DSCR) is important (garbage in=garbage out). 

      • In general, it is calculated by:

      • DSCR = (Annual Net Income + other miscellaneous expenses) / (Principal Repayment + Interest payments).

      • In a nutshell, DSCR helps to determine if an investment will cost you money or make you money!

  • Real estate investing is not a get rich quick concept (like the TV ads suggest).  We were smart from 1986-1989, but dumb from 1990-1993.  Smart from 2001-2005, now maybe dumb from 2005-2010.  That is yet TBD!  It's about your holding period and commitment.  Even factoring in the current mess, real estate has beaten the S&P 500 over the past 30 years.  It's a marathon, not a 100 meter dash.

  • Get good advice from professionals.  Not only your Realtor, but also an Attorney and a CPA would be great sources of legal and financial information.  Staying on the right side of the Law and the IRS are good things!

  • Have an investment goal.  Just buying a rental house because it was cheap is not a plan.  Market shifts, vacancies, tenant damages, chinch bugs/termites, hurricanes, etc., can have a huge impact, as well as expected cash flows and your desired benefit. Your Capitalization rate is calculated as: 

    • Capitalization Rate = Annual Net Operating Income/Cost or Current Value
   Calculating your Return on Investment will tell you if you are on track with your stated goal: 

  • ROI = (Gain from Investment - Cost of Investment) / Cost of Investment. 
(Note:  Residential investing is not in the same ballpark as commercial investing... different rules and risks, etc.  if you want consultation regarding commercial issues, Margaret Sheehan-Jones in our office is a CCIM candidate and head of our commercial department... I can put you together.)

Know your level of tolerance for risk!

Wednesday, September 29, 2010

"QR Codes - Smartphone Nirvana"

“QR Codes”

QR Code for www.PalmCoastUnplugged.com
 Have You Seen One of These?

This is a “Quick Response” (QR) code. You’re going to be seeing more of these on this Blog, our Facebook Fan Page (Parkside Realty Group, LLC, in Palm Coast and Flagler Beach, FL), Business cards, and our other printed and media marketing materials. You will find they are also now being used in magazines, newspapers and even billboards. In Japan (where they started), they appear on T-shirts and untold other applications… To the tune of over 50,000,000 hits/year - and growing!  Quickly!

So what does a “QR code” do?

It’s a cousin of the classic bar code you see on consumer goods when you shop. But this code contains a URL (website link). Basically, it’s a hyperlink on paper – one that your “smart phone” can read & launch. What this means to you is that our Blog and coming website MLS Home Listings will be easier than ever to access on your smart phone!  For example, if we run a print ad - say in Homes & Land - we can include our targeted QR Code so those with smart phones can do a quick scan and obtain detailed information on the home you have listed with us in Palm Coast or Flagler Beach, Florida!

How do I read a QR code?

You’ll need an “app” for your smart phone to read these little nuggets. Just do a search for “QR readers.” Many are free. Here are a few suggested searches to get you started:

• iPhone QR reader app search
• BlackBerry QR reader app search
• Droid QR reader app search
• iTunes
• BlackBerry App World
• Android Market

Once you install the app, launch it to take a picture of the QR code with your smart phone camera. The app goes to work and reads that image to translate it into a URL. Your smart phone’s browser launches, and the information you want is now on your screen!

3 Reasons You Will Fall in Love with QR Codes:

1. Easily get the information you want. QR codes are designed to take you instantly to the information you need. All it takes is a tap or two on your smart phone. No fumbling with a small keyboard typing in a web address.

2. Surf more... faster. QR codes simplify your smart phone browsing experience so you can instantly get the information you want, and get on with your day.

3. You’ll be one of the “cool” kids. Let’s face it – it’s fun to be on the cutting edge of technology. You’ve got a smart phone…why not use it to simplify your life and have some fun?  Who knows, you might even show your high school student something

Have a QR Code Question Not Answered Here?

QR Code for:  Facebook Fan Page
for Parkside Realty Group, LLC
For a much more in-depth explanation of QR codes that will satisfy your inner-Geek, just go to:  http://www.en.wikipedia.org/wiki/QR_codes.  Or, you can ask me and we’ll be happy to answer them for you (or find the answer).  For your homework, download your new QR Code app to your smartphone and click this code. It should take you straight to our office Facebook Fan Page!  Stay tuned! Much more to come, as I’m just getting started! Take care! (Frank Zedar, Parkside Realty Group, LLC, Cell: 386-931-1987)
(Thanks in order to Michael Russer (aka: Mr. Freakin' Internet) and his Online Dominance webinar on this

Tuesday, September 28, 2010

"EXPIRED" Real Estate Listing?

Don't Be Sad - We Can Help!
 If your Real Estate Listing on the MLS has "EXPIRED" from the market, you are probably ready to pull your hair out!

 What the heck is going on?  Why would my house in a great town in Florida - near the beach - not sell after a full year on the market?

Most real estate agents are a bit wary of contacting recently EXPIRED homeowners. Why?  I mean you've done half of our work for us by standing out in a crowd and shouting:  
I think that most of us suffer a bit from remembering better markets - when houses sold quickly for the asking price (or more)... And no matter what you bought or sold - it was a "smart business decision."  We were drunk with success.  We here in Palm Coast and Flagler Beach, Florida were in "The Fastest Growing County in the USA" from 2003-2005!  Our values were skyrocketing and, if unchecked, our median price would have topped $1,000,000 by 2012!  And then the house of cards in the US housing market came crashing down.  We are working hard to correct things, but it was a huge bubble that burst!  We have some serious orienteering to do before we are out of these woods!
Down?  Yes!  Dead?  No!
... So most Realtors don't call you because they sense you are "angry with the real estate process" and probably not liking real estate agents very much right now!  It's a Mindset Thing...   If an agent - at their core - doesn't believe that you need them or want them, then you probably don't!

If you are now EXPIRED - and you'd rather be SOLD:
  • Interview and hire a highly motivated, well trained, experienced, aggressive real estate agent.
  • One who can take charge, who understands the business and who will tell you the truth about the market (not just what they think you want to hear)
  • Someone who knows how to take an ordinary thing and do it in an extraordinary way...
  • One who can deliver the "real estate holy grail," when you ask:

    • Can I trust you?  (with the keys to my house and input to critical financial decisions)
    • Do you actually care about my personal outcome?  Do you operate with empathy and compassion and Golden Rule behavior?
    • Are you competent... Can you get the job done?
Call me today... 30 minutes at your kitchen table could make all the difference!
Frank Zedar
Parkside Realty Group, LLC
Cell:  386-931-1987

There is Still Time...

Monday, September 27, 2010

"For Sale By Owner" Outreach...

Realtor Drive By Shooting!

Sounds Like a Country Song!
 If you are brave enough to be attempting to sell your home on your own...
in the roughest, toughest real estate market since the end of WWII...
you probably did it before and tasted success.

What I would give right now for a taste of the wild rides of 1985-1990... or 2000-2006!  Heck, I'd settle for the balanced and calm years of 1993-1999.  But this?  Who saw this coming?  (Oh, right - all the politicians with 20-20 hindsight).  I mean come on, man!  We here in Palm Coast and Flagler Beach enjoyed being "The Fastest Growing County in the USA" for most of 2003, 2004, and 2005!

Age Has Its Privileges!

FACT:  If we had continued that rate of escalation in value (about 25% per year), our median priced home would have jumped from about $230K to over $1,000,000 by 2012!  And that for a standard 2,000 sq.ft., 3/2/2 on a normal lot.  That great ocean front home in The Hammock or on Flagler Beach, which was $2,000,000 in 2005 would have teetered near a staggering $10,000,000.  We would have been a mirror image of Southern California, except with no jobs of that caliber.  Absolutely unsustainable!  It's almost good news that it happened when it did... because it could have become far worse.

Most real estate agents are a bit wary of "FSBO's."  You know why?  I'm guessing that you are seen as being "too savvy" or perhaps "too unmotivated."  Also probably "anti-real estate agent" and, of course, "anti-commission."  It's a mindset thing.  If an agent, at their core, doesn't believe you need them, then you probably don't!

If You Are In Trouble,
Don't Let Foreclosure Happen!
I Can Help.

My belief is this: 
  • Truly motivated sellers want a highly motivated, aggressive, experienced, well trained, real estate expert to help in these challenging times.  One who can take charge of the situation, who understands the business, and who will tell them the truth about the market... not just what you want to hear!
  • They want someone who can take an ordinary thing and do it in an extraordinary way.
  • They want the real estate holy grail:
    • Can my agent be trusted (with the keys to my house and input to my financial decisions)
    • Does my agent really care about my personal outcome?  Are they empathetic and compassionate and ethically centered?
    • And finally... Are they competent... Can they get the job done?

Don't Let This Happen To You.
The Market "is what it is."
Make the Most of It!

I believe that a "For Sale By Owner" sign is a call to action...  a request to "Apply Within!"

Why read "Palm Coast Unplugged?"

"Palm Coast Unplugged" gives a "backstage pass" to locally focused Palm Coast, Flagler Beach, and Ormond Beach, Florida... Real Estate and other useful information:
Please feel free to share your comments at the end of any blog post!