St Petersburg, Florida - Real Estate and Real Life

Amendment on Jan 29

2008-01-16T22:03:00.000-05:00

this came from a daily news 'blip'..

REAL TAX CUTS FOR REAL PEOPLE: VOTE ‘YES’ ON 1In this new video, you’ll meet the Bonilla family of Hollywood. They’re voting “Yes” on Amendment 1 on January 29 because it will save them more than $1,400 a year in taxes. Find out how the property tax break will help them and families like them across the state. Share this link with friends, clients and colleagues. Check out the “Yes on 1” video: http://yeson1florida.com/video_gallery.php

I have heard the feedback from folks on reducing our firemen, policemen and so forth, but I am skeptical. when I went through the CONA leadership course, I met with many of the city leaders and it sure seemed like we added a lot of chiefs instead of indians as the tax revenue base increased. I still see 4-5 guys changing light bulbs for the city.

Our schools are still terrible based on the tests, but yet the tax dollars aren't going to make parents get more involved with their kids lives and education. I am not one to throw money at a problem.

My only thing is that folks really look at the amendment details and make an educated decision, not an emotional.

www.realtorshane.com or email me at swhitlatch@eralambrecht.com

Some good news about housing?

2008-01-07T16:56:00.000-05:00

This article is courtesy of the Tampa Bay Business Journal, January 7, 2008.

"Although not ready to call it a trend just yet, preliminary home sales numbers for December show some of the best results in the past two years, despite December typically being the slowest month of the year for real estate sales.
Sales for Hillsborough, Pinellas and Pasco counties were up 14.5 percent while new listings dropped more than 21 percent from November, according to Multiple Listing Service numbers compiled by Tampa-based Home Encounter LLC.
There were 1,824 home sales in the three counties in December, up 14.5 percent from November's 1,559 sales. At the same time, the average price per square foot rose 4.2 percent to $145 despite actual sales prices below listing dropping another 16.4 percent to 6.1 percent from November.
"What we're seeing in December could indicate a slowing of the decline, but our analysis suggests that the bottom of the market is still a long way off," said Peter Murphy, chief executive officer of Home Encounter, in a release. "You can't correct the kind of problems we have overnight. Factors like 18 months over-supply will take their toll on the strength of the Bay area real estate marketplace for many months to come."
But the market seems to be picking up, according to the report. Hillsborough's projected rebound date has moved two months up to May 2010. Pinellas' projected rebound date improved four months to February 2009 while Pasco County could actually see a rebound beginning in November, an improvement by two months of the projected date determined in November.
New listings in the three counties fell 21 percent from 6,080 in November to 5,025 in December. At the same time, listing prices rose 11.1 percent to an average of $170 per square foot over November. Total listings declined 6.5 percent to 37,207 over November.
"The fact that these improvements occurred in December, that they were significant and that they were so widespread should give us cause for cautious optimism," Murphy said.
Existing home sales numbers for December is expected to be released by the Florida Association of Realtors later this month."

As I have reported to my clients in my bi-weekly marketing roundup, activity has definitely picked up. this doesn't mean it is time to raise prices and have a party for your Home Equity Line of Credit! Actually, I see it as a time when many sellers now have a realistic view of the market and have priced their homes accordingly. there are a lot of buyers who have been on the sidelines for some time and it has worked out for many of them. Unfortunately, just like with the stock market, by the time we all read about the market 'turning' it will be too late. I still think we have quite a long time for that 'turn' that everyone loves to predict. I hope we are settling into a period of time for reasonable pricing, reasonable activity, and reduced burden from taxes and insurance.

www.realtorshane.com or email me at swhitlatch@eralambrecht.com

Merry Christmas from St Petersburg Florida

2007-12-25T19:22:00.001-05:00

For those of you who know me you already know my bias towards St Petersburg. After travelling to all but 4 states in the United States, I still find it hard to top St Petersburg regardless of the yardstick you use in measurement. Sure, it doesn't snow on Christmas here but my kids went and played in the 'snow' last week in their shorts, and ate Beef Tenderloin by the pool Christmas eve, went to mass without a jacket, played soccer, rode bikes, and topped it off by jumping in the pool on Christmas. That, my friends, was our dose of cold weather for Christmas. Last year we had some rain, but this year the weather was normal and absolutely beautiful and another reminder that yes we do live in a wonderful place.

Merry Christmas from my family to yours.

A soldier buys his first home today and gives me a lesson in life and business.

2007-12-22T09:24:00.001-05:00

I had a closing on one of my listings yesterday that held a lot of meaning for the season, the current real estate market, and for my business model. It didn't really hit me until this morning, the day after the closing, when I sat down and was reading an article in the WSJ regarding the housing market.

This listing was one of the least expensive listings that I have had this year, but it probably holds the most meaning. Isn't that usually the case in everything. The 80/20 principle, I guess.

This listing was a nice 3/2 single family home in the low $200K's. The buyer is active military and is being shipped to Gitmo in a week or so, and has a fiancee and 2 small children and this is their first Home that they can call their own. So, from a real estate standpoint, this was the case where a buyer was thrilled with his purchase. He is buying a home at well-below the appraised value of the home, it is a lot of the home for the money and is in a nice neighborhood. At the closing table, he said something like "I just bought a 1/4 acre piece of American soil". How exciting! After a hurried weekend of moving in, he can enjoy a happy Christmas with his family in his own home. One of his goals was to find a home that he could be comfortable that his family would be safe and comfortable in while he was overseas. I was happy to be a small part of that.

From a business standpoint, this was important for a couple of reasons. First of all, this listing was with a seller who originally listed with an agent in our office and was unhappy with his agent. This can happen to any of us for a variety of reasons, but is never the goal at the beginning of the listing, I can assure you. Our broker had agreed to end the agreement but asked that he speak to me about what my team may be able to offer. I met him, found him to be a pleasant and most importantly (to me, at least) a straight-shooter. Because of the price point of this home, I would use our team approach to give it a bit more local exposure and that is what we agreed to do. The previous agent has since quit real estate, by the way. Lots of that going on, thankfully. It took a lot of time, conversations, strategy, and trust in each other but the house is now sold and all parties are pleased with the outcome. Service always wins out regardless of the business.

The most important part of this transaction to me, however, was that this buyer was an active soldier who is part of the force defending our principles and freedom. Say what you want about the current administration or your party affiliations, but this young man is one of thousands who are defending our lifestyle with their lives. Imagine being so excited about buying your first home, but knowing that you are leaving in 7 days for an entire year. My wife and I have been watching the series "the war" that was on PBS a month or so ago and it was eye-opening. I studied history as a kid, of course, but watching this series showed how much we have to be thankful for and how much of a sacrifice our young men and woman offer for our freedoms. It angers me to see the way that many of the war protesters target the actual troops. Again, part of the greatness of this Country is being able to disagree with the administration (or anything really), but to target the soldiers who are doing what they are told to do bothers me. The series also makes me appreciate the lifestyle we have daily. If you watch that, you will see what everyday citizens lived through during that war. Almost every citizen was impacted by the war daily. We can't say that today. God bless our troops, each and every one of them.

Why we live in St Petersburg part 74

2007-12-16T10:08:00.001-05:00

This photo is of the 25th Annual boley center's Jingle Bell Run that took place on Wednesday in downtown St Petersburg. I took this photo from an online gallery by a user names "tampabay" on TBT.com. If you look really closely, you can see my wife and I and a few friends just getting started on the race. It was a beautiful night for the 5K that pits racers of all types - serious runners, skateboarders, walkers, runners with 4 legs, and strollers that run/walk/other along the beautiful downtown waterfront of what I think is the most beautiful liveable downtown in the US. The weather was perfect, probably mid-70's, and clear skies. along the course, supporters wave and sing Christmas carols. Just a wonderful event that makes St Petesburg great.

My only regret is that my friends started sprinting at the start so I had to chase after them the entire 5K, finished around 28 minutes or so including about 1/2 mile of lateral running to get ahead of the pack in the beginning. Rumor was that there were bands along the way, but my goal was to stay with my friends to avoid embarassment so staying vertical and breathing was my primary focus:)

It really was a beautiful evening and event.

Median or Average - which is a better gauge?

2007-12-16T09:53:00.000-05:00

There was an article in the paper this week about the drastic price drop in home prices in the Tampa Bay area. Big headline, prominent placement - imagine that. In any event, the numbers reflect the market accurately. Or so it would seem. I pore over market numbers every month when they come out and try to see what it will mean for my clients. I am a numbers guy, so I love this stuff. I have seen this same article appear every few months it seems and it is only when the headline can say something like "biggest drop since..." or similar catchy headline. If you read the entire article, which I think most do not, it does refer to the median price drop but it also referred to the average prices only dropping 5% or so since 2006 in that month. That doesn't garner the bold headline. The truth is evident - the averages are down from last year and I think that will continue for some time. This silver lining is that for certain homes, this is a pretty darn good time to sell a home. If you look at what the median represents and then look closer at the numbers the story that I can pull out is that the largest price block in terms of sales is in the $200K range. It is actually fairly healthy relative to other price points. Not robust, but healthier. If you apply some price reduction to the price segments across the board and couple that with a growth or strong segment of homes selling in the high $100's and low $200K's, the median must go lower. If you have a house to sell in that price range the numbers could actually be good news.

Now back to the reality. I have said this for over a year to my clients. The homes that are selling are those that are in the best condition that they can be in. They are clean, show well, in good condition, and most importantly priced as well as they can be. No secret, no crazy incentives. Just a good product at a good price.

Does that guarantee a sale? I wish it could, but it is a must if you want to sell your home in this challenging market.

List Price = Overprice ?

2007-12-12T14:16:00.000-05:00

Based on everything you read in the media today, if you are buying a property you should offer (put in your number here)% below list price because in this market, of course, everything is overpriced.

Well, I have a problem with that but it is one that is hard to pin down. The assumption that is made is that every property is overpriced by (cut a number from your favorite media outlet)%. That is true only when you look at averages, not absolutes. The problem is how to pinpoint just exactly what the selling price 'is'. well, that part is actually easy - it is what a buyer will pay and a seller will sell it to that buyer for. Simple. Getting to that agreement is not, however, simple.

What my partner and I have been saying all year to every client is to price it within range of our suggested 'sales range'. This range is a guess, perhaps an educated one but that isn't for this debate. If you overprice and miss that range, you might miss the real buyer and even worse, you will compete with homes that you shouldn't (and in the buyers' mind) don't compete with and will end up helping another one sell.

Traditionally, we Realtors could recommend a purchase appraisal be done on the home. in this market, ironically, I have had buyers say 'yes, but that is just an opinion.' Well, sure it is, but it is one that the bank is going to use to let you have some bucks to buy the home and you bet that they are on the conservative side.

The point is that in our market, there are homes that are overpriced, absolutely, but there are also many homes that are priced well and even some (fewer) that are priced below market price. At the end of the day it takes a buyer to pay for a "market price" to be attached, so let the rodeo begin.

Home Prices - what it means

2007-10-26T07:53:00.001-05:00

If you are under a rock, you probably missed the headlines this week about the median price dropping this month. For the rest of you, let's review this a bit and see what I think it means. (for what it is worth).

These numbers represent all of Tampa Bay so this includes Pasco and Hillsborough counties in addition to Pinellas county. I will post the Pinellas numbers a bit later, I hope. I don't like to include or really review Hillsborough and Pasco counties because those areas include new subdivisions where hundreds and hundreds of similar homes are slapped together side by side. In Pinellas county, we don't have the space for that and there is a bit more of a destination or resort market influence in Pinellas. Out of state or out of Country buyers don't seek out track homes in Meadowview Grove Pines that is surrounded by Target, Publix, and an interstate. Of course, someone can find an exception. South Tampa and the Pasco coastline may be the exception in those areas.

enough said. Looking at the numbers as a whole is still an indicator of the regional market and they aren't good for many home sellers who have the paper money thoughts like the dot.com option days (I have been there, my friends). Median home prices are going to fall below $200,000 for the first time in 2.5 years, based on the article. The median in September was $200,700 - a 10% decline from the previous MONTH, and a 9.6% decline from 2006. Sales of existing homes, a better indicator, is down 39.7% from September 2006. Remember, this was down significantly from 2005 as well.

So, what does that mean? Well, for sellers it means you better make sure that your home is in great condition, shows very well, and is priced spot on - and then you have a chance of selling. I have been telling my clients all year that this is still a good market (and I have over 20 happy clients who have sold their home this year who can tell you the particulars), if - and it is a huge IF - the property is in the best possible position in the marketplace.

what exactly does that mean I hear you asking. Well, in my humble opinion, it means that if it has any functional 'issues' - it may not sell. At any price. Wow, that sounds strong, but we are seeing it play out daily. if the house is in a poor location - major issue. If the house is dated - major. If the house was remodeled cheaply - major issue. I hear Sellers tell me every day that the Buyers can overlook all of that and see the potential. Well, with over 18000 properties on the market in Pinellas county alone, they don't need to have vision unfortunately. They need patience to see all of the appropriate homes and they will buy the best one and try to get it at the lowest possible price. Very simple economics, really.

I had a potential client tell me the other day that my price recommendation was low so that it would be easy for me to sell it quickly. That may be true for some agents out there, probably too many, but if you look at what I have sold this year and for what prices you will see them among the highest price per sq foot etc... I just closed one that was sold for $290/sq foot. it is literally a few houses down from one that is listed at $178/sq foot and isn't selling.

I had to calm myself down, count to ten, and then review the market and her competition and after thinking about it more, Lee Ann and I decided to withdraw our proposal and decline the business. Let someone else list it for too much, watch it sit there for months and months and months, and then it may (MAY) sell next year for less than our target price. I wish I could bet someone money on some of these. See, in this type of market and in our society, we need someone to blame.

when prices were soaring - it was the Realtors' fault. Greedy, commission, all the rest. Well, now the prices have tanked. guess whose fault it is? you bet, ours. those darn licensed agents who are working hard to promote the home inthe best way possible, suggest a strong sales price, and have the sellers say "but I won't make my magic number after it sells". If we took out our commission - well then we are talking. That is the secret, the Realtor commission is what is wrong with the market. If you would simply deduct the $15K from that $275,000 house it would sell!!!! Sure, for $195,000.

Title Insurance Review

2007-08-26T07:21:00.000-05:00

I read in the St Petersburg Times yesterday that the State is investigating Title insurance and at the same time I encountered a 'situation' that seems to coincide with some uncertainty regarding the industry.

The situation that I encountered was with a new client of mine who is relocating and sold his previous home with another agent in a different city. I was going through a net sheet (showing him all of the estimated costs relating to an offer I wrote for him) and the title insurance costs were reviewed. I mentioned that it is customary for the Seller to select title companies in Florida, we can always write it in and select it ourselves. I asked if he preferred a company since he just sold his condo, and he mentioned that his agent selected the company and didn't even talk to him about it. I don't want to say that is wrong, but it should have at least been discussed.

I have always had a policy of obtaining 3 quotes for title insurance for my clients or more if the client has a preference. Who they choose if their choice, but I will relay my experience with the various companies since it isn't always the same level of satisifaction. As it turns out, most of my closings are done with one company. They almost always are the least expensive, will always match or beat any other quote, and are always top notch in terms of service and performance. the only financial benefit I recieve is a cookie from their office from time to time. The most important benefit is that my clients receive great service and product, and associate that experience with my performance.

Now, the regulators. I can't say that I understand how the fees are set so I can't comment on a review of them. What I would like to see, however, is a review of the relationships between builders, real estate agents/brokers, and lenders and where any money exchanges hands. Our office used to have a relationship with a title company and could have some ownership, but all of us (agents) had to disclose this up front and have the client sign this disclosure. That title company was simply one of the quotes I would obtain and they would always try to match or beat other quotes, so again it came down to the client and service. Their service went from great to poor and the market has a way of sorting that out and they closed the office.

I would like to know who is obtaining any financial benefit from that title policy (on behalf of my client as well) being issued. Not that it really matters as long as they are among the best priced and offer the best service.

My real issue is the issue of title issuance itself. I very much understand the need for the insurance. I have come across challenges of title in my career. What I don't understand is how there can be so many policies written for one transaction. I understand that there are different risks for different parties, but isn't the search and assurance the same? I mean, there are lenders policies, sellers policies, and buyers policies? Aren't they all insuring clean title and claims against that title? The article mentions 14% of the closing costs are for title. I am assuming that means the sum of each of these policies. I just don't know if that number is the fair number. How open is this market? I understand that the rates are 'set', but by whom and does everyone have to honor them?

My rates are not determined by a governing body, by any stretch. Is this the same for title insurance? I don't know but I guess we will soon.

Why is it so high in Florida, as the article suggests? Maybe it is because our property taxes and insurance is so high? Kidding, of course, but it seems everything can be blamed on those!

Great Italian Cafe downtown

2007-06-26T10:30:00.001-05:00

Several of my clients have always asked me to give out my list of favorites - whether it be restaurants, handymen, beaches, whatever - assuming because I meet so many people and I am so involved in St Pete that I have this 'list' somewhere. Well, I have been keeping one and giving that out to new buyers who move into our wonderful city and am just getting myself in gear and putting this online. I will try to focus on getting the full list on here in the best manner possible, but please be patient.

My first one on the list is a relatively new Italian cafe on 4th St, just north of Central, called Primi. I have been there about 6 times and each visit was as good or better than the previous visit. My wife and I went to Tuscany for a week last year so we became Italian food 'snobs', or at least we think we are, so we became even more skeptical of Italian food joints. Well, Primi works for us! The owners are from South Africa and bring a unique perspective to Italian food and it is wonderful. I think the staff is mostly family, the owners are always there, and the place just works on all fronts. The prices are very reasonable, the wine list is effecient and pares well with the menu, and the experience that the food, family, and vibe delivers is spot on.

My only beef is that they don't have a full bar, but hey - I couldn't get a glass of Makers Mark to save my life in all of Italy either.

If I do this correctly, here is a review from the Times
http://www.sptimes.com/2007/03/15/Weekend/Shaking_up_the_standa.shtml

here is one from Creative Loafing:
http://tampa.creativeloafing.com/gyrobase/Content?oid=oid%3A70606
Enjoy!

Latest News on Property Taxes

2007-06-05T12:38:00.000-05:00

Well, it looks like the tax relief issue is going to be a 2-step dance.

Legislators are saying that they are looking at immediate relief in terms of reducing – Voters would get a chance to approve property tax relief and restructuring proposals during the Jan. 29 presidential primary election, legislative leaders agreed Monday.Rep. Dean Cannon, who chairs a joint select committee on property taxation, announced the agreement during the panel’s last scheduled meeting before a special legislative session set for June 12-22. Cannon, though, said another meeting may be held the day before the special session.The election date agreement between House Speaker Marco Rubio, R-West Miami, and Senate President Ken Pruitt, R-Port St. Lucie, follows their approval last week of a basic outline for the pending property tax reduction and overhaul.“There is already a statewide election on that date,” Cannon, R-Winter Park, said. “There will be no additional cost to the people of Florida to have the election.” The long-term constitutional approach to which Rubio and Pruitt have agreed would do away with the existing $25,000 homestead exemption for primary homes and, for most homeowners, the benefits they get from the Save Our Homes Amendment, which limits increases in homestead assessments to 3 percent annually. The proposed super-exemption basically institues a tiered approach or sliding scale that would apply tax rates to portions of the value of the home and that portion grows as the value of the home increases which appeals to those in more modest homes because more of their home is exempt than in a more expensive home.

So, that still leaves buyers (and sellers) in a position of not really knowing what their taxes will look like this year, next year, or whenever. it does, however, give some hope that at least the taxes will be less - but how much less is still up in the air.

NY Times Article Featuring Old NE St Pete

2007-05-11T20:53:00.000-05:00

Havens St. Petersburg Fla.
A Neighborhood of Colonials and Palm Trees
By JILL P. CAPUZZO
Published: May 11, 2007
The Historic Old Northeast neighborhood of St. Petersburg, Fla., offers residents a quiet, tight-knit community with easy access to the city’s booming downtown.

http://www.nytimes.com/2007/05/11/realestate/greathomes/11havens.html?ex=1336536000&en=9a45a9e15afedd8f&ei=5124&partner=permalink&exprod=permalink

I couldn't say it better myself. This article focuses on the relatively small neighborhood that is the Old NE. Take a look at the slideshow, there are some beautiful pictures in there.

Pricing in a flat or declining market

2007-05-08T15:45:00.000-05:00

Ah, the million dollar question. This is one of the hardest things to do right now for most sellers. Let's face it, even the best Realtors are providing a very educated best guess at what the home may sell for given the circumstances of condition, motivation, terms of sale, and so forth. One of the hardest things to convey to sellers in our market today is that there is a chance that the home may not sell - at a price that they are willing to sell it for.

This is also where the Agent should really earn their compensation as well. My partner and I have had 4 of our listings go under contract at full price or at least within 98% in the first 3 months of this year, but at the same time we have a dozen others that are not selling - even at a reduced price.

Since this is what we get paid to do, I am not going to go into the full methodology that I do to try and narrow a price range down that I truly feel will meet the sellers' needs. I can, however, share one thing that I have been 'preaching' for about 6 months.

Even though each of us would like to increase the price of our home a little to try and make a few more dollars of profit, this can actually be the single most important reason that the home won't sell. Once you reduce a price in this market, you are almost guaranteeing that you are going to sell it for even less - if it will sell.

Secondly, if your home has a functional issue against it - location, lack of living space, functional obsolesence, overimprovement, etc - the market can be extremely brutal. There are simply too many homes for buyers to choose from around your home for them to purchase the home with 'issues'.

Why we live in Florida

2007-01-14T11:03:00.000-05:00

All it takes is a day or two of these views to help us take the hot and humid days of summer. This photo was taken from the porch of my in-laws place on Lake Wier (Sunset Harbor) just south of Ocala. Yes, it is January and my family will be in that water soon. This is sunrise over Sunset Harbor on the Eastern portion of Lake Weir.

A difficult day can be made easier with the sound of kids playing at the lake, boats zipping by, and a glass of wine later in the day during the sunset cruise.

As we complain about our taxes, hurricane season, snowbirds crowding the roads, and the sweltering heat in August let us rememeber these days. Actually, there are very few days where the water doesn't make the day more enjoyable.

On the tax and insurance front, it looks like the debates will be this week in Tallahassee so keep your eyes on the news coming from Governer Crist. Don't expect tremendous discounts in your insurance bills, but I do expect there to be at least some sense of order established where we can all know and budget for our insurance costs and expect them to be fair and consistent.

Yes it is getting more expensive to live here, but nobody said that paradise is cheap.

Mortgage Insurance Premiums and the new tax law

2007-01-11T14:29:00.000-05:00

Mortgage insurance will be tax-deductible in 2007 based on a new tax law signed during the final moments in Congress last year. Based on what I have read (and I am sure that everything on the internet is true) this is the first time these premiums have been tax deductible. I have never been one to suggest buying a home where you need to pay these premiums but I am sure there are scenarios where this may make a lot more sense now. With the cost of 'piggyback loans' or home equity lines and loans rising with interest rates in the last 12 months, looking at PMI is something that is worthwhile.

From what I have read, there are a few things to consider and as always please contact a tax advisor for the best advice on your situation.

Those considerations are as follows:

Applies on to mortgages that are closed in 2007. If you closed in 2006, look into a refinance in 2007 with PMI (if the numbers make sense)
There are income restrictions.
This is a 1-year deal. Congress will have to renew it to make it stick beyond 2007.
If you take the standard deduction instead of itemizing, this law won't impact you. Using simple math, you need to have a mortgage of approximately $130K to pay enough interest for the deduction to make sense.

I pulled some comments from various sources and according to an analysis by Bankrate, a homeowner with a $180K mortgage woudl save about $351 in taxes because of the new law if they had PMI. It assumes that the borrower has good credit and is the in 25% tax bracket.

Cheers.

NAR forecast for 2007 Market just released

2006-12-11T13:52:00.000-05:00

Existing-Home Sales to Trend Upward in 2007

Existing-home sales are expected to rise gradually in 2007 from current levels, with annual totals slightly lower than 2006, while new-home sales will continue to slide, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS®. David Lereah, NAR’s chief economist, says market conditions will vary around the country next year.“Roughly three-quarters of the country will experience a sluggish expansion in 2007, while other areas should continue to contract for at least part of the year,” he says. “Most of the correction in home prices is behind us, but general gains in value next year will be modest by historical standards.”

For Buyers, a Window of Opportunity “Buyers, especially first-time buyers, with the combined benefits of seller flexibility and an unexpected drop in mortgage interest rates, have a window of opportunity,” he adds. “These conditions will persist in many areas until early spring when inventory supplies are likely to become more balanced.” Existing-home sales for 2006, finishing the third-best year on record, are projected at 6.47 million, a decline of 8.6 percent from 2005. For 2007, sales expected to rise steadily to an annual total of 6.40 million, which would be 1 percent lower than this year’s total. “By the fourth quarter of 2007, existing-home sales will be 4.6 percent higher than the current quarter,” Lereah says.

Builders Slow New-Home ConstructionNew-home sales in 2006 are expected to fall 17.7 percent to 1.06 million, the fourth highest total on record, before sliding an additional 9.4 percent in 2007 to 957,000. Much of the contraction in the new housing market results from cuts in builder construction to support pricing for current inventories. In addition, high construction costs in many areas are taking a bite out of potential profits. Total housing starts for 2006 are likely to drop 12.3 percent to 1.82 million units, with another 15.1 percent decline in 2007 to 1.54 million.

Mortgage Rates Seen Rising to 6.7%The 30-year fixed-rate mortgage is forecast to gradually increase to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate dropped to 6.11 percent.The national median existing-home price for all of 2006 is projected to rise 1.4 percent to $222,600, with another 1.0 percent gain next year to $224,700. The median new-home price should ease by 0.5 percent to $239,700 this year, and then rise by 0.8 percent in 2007 to $241,700.“Keep in mind that overall home prices were still appreciating at double digit rates in the first quarter of this year — prices in this buyer’s market are temporarily a little below a year ago when we were in a strong seller’s market,” Lereah says. “This correction is one of the factors drawing buyers into the current market, but most sellers are still seeing very healthy long-term gains.”Unemployment, Inflation ForecastsThe unemployment rate is expected to be 4.8 percent in 2007, after averaging an estimated 4.6 percent this year.

Inflation, as measured by the Consumer Price Index, is forecast to be 3.4 percent for 2006 and 2.3 percent in 2007, while growth in the U.S. gross domestic product is likely to be 3.3 percent for all of this year and 2.3 percent in 2007. Inflation-adjusted disposable personal income is projected to grow 2.6 percent for 2006 and 3.5 percent next year.— REALTOR® Magazine Online

Welcome to my world

2006-11-29T17:41:00.000-05:00

I am sure there is probably a rule against this but we all have to vent from time to time and since my blog isn't read by millions of people yet I figure this is safe.

I try to follow up regularly with agents who have shown my listings to see if their buyer is interested in the home, get feedback (both positive and negative), and to let them know of other homes I have listed that may be a fit for their buyers as well. Just good follow up - simple stuff.

Well, I called on 4 listings from the last 2 days (it sometimes takes a day or two to reach them live) and on 3 of them I received very encouraging feedback meaning that their buyers were interested in each of the homes and would be viewing them again. Well, that was all good until I reached the 4th.

This agent - who has the same license credentials as I do unfortunately - answered the phone politely enough. I thanked her again for showing my home at xxx address. this is a showing that I set up through 2 conversations with this agent to verify the time and the logistics of the showing. Thorough enough. Well, she couldn't remember the home. She informed me that if I had experience showing homes that I would know it is hard to remember which ones. Well, I disagree. As a professional real estate consultant it is my job to know the inventory. This means everything in the area. At the very least know the homes you are showing.

Well, after describing the home in more detail, 2x, she still couldn't recall the home. All I was doing was trying to see if her buyer was interested and secondly if they had any feedback. Well, we looked up her volume and she has done $400,000 total year-to-date. If you are doing $10M a year, I can understand the difficulty of keeping track of all of that inventory but $400K? Looking in more detail it was her listing and her sale so it was a $200k home that she represented both the buyer and the seller. I remember when I sold my first home - I remembered every home we walked into! I was looking for my second successful customer and remembered every one.

Enough of that - I just had to vent a bit. My customers want feedback, I want feedback and to give it to them, but sometimes you have to work with what you are given.

What a place to live - good and bad

2006-11-15T20:41:00.000-05:00

Wow. I am late in posting this but an event on the news today prompted me to act. first of all, I took my children to several neighborhoods this Halloween because I promised several customers that we would come by and I must say that the Old Northeast was off of the charts this year. As many of you know, the Old NE has always been one of the top destinations for Halloween revelry, but this year it seemed to be even better than before. it is always wonderful in the 17th Ave NE vicinity, but this year the cheer seemed to be on almost every block. I will post some pictures, I hope, in the coming weeks. My comment on this is that people always ask me why is the Old NE so attractive to people and my response always includes Halloween. This year, the weather was absolutely perfect - it was in the low 70's so you could wear the heavy duty costumes and not be uncomfortable. Maybe most importantly for us Floridians is that I could still wear my flip-flops and a short sleeve shirt to enjoy the fall weather! We saw several skits being put on in front of their homes, we enjoyed cotton candy being made in the yards, and most importantly we enjoyed the company of our neighbors and my kids had a great time - again - in a wonderful neighborhood in St Pete.

On the down side, I saw a video on the news today with 2 kids appearing to be fighting with their parents or guardians 'coaching' and pushing them to fight. I didn't get the full story, but I don't care. this is just great. Parents teaching their kids to fight. We wonder why some of the crimes are committed and why we have so many problems in our Country. Well, this has nothing to do with politics or socio-economic policies. Does anyone really wonder what will happen to these kids as they grow into adults? Do you think they are going to open a door for a date? Do you think they are going to congratulate an opponent in a true sport when they lose?

I know this has nothing to do with real estate, but evidently it happened in Pinellas county and it pains me to see this anywhere. Love your kids, teach them right from wrong, and teach them the value of working and competing hard and fairly. Simple stuff.

Halloween 2006 in Old NE

2006-11-08T00:02:00.000-05:00

I am having trouble getting my pictures loaded, but I am going to post without pics. I took my family to the Old NE this year for trick or treating mainly since I had several customers there that I promised that I would take my kids to see their festivities. In my 7 years here in this neighborhood, I have to say that this year was the best for Halloween by far. 17Th Avenue NE was of course the core, but the big difference is that I didn't see many blocks that weren't rocking! I have friends all over the country that talk about Halloween, but I can't see anyone beating the Old NE. the weather was perfect (73 degrees or so) and just packed.

What a phenomenal place to live.

If it smells like a rat, well.

2006-10-27T10:49:00.000-05:00

The buzz in our office today is the continuing saga of the Charles Rutenberg agent from Tampa that has created a flurry of news and coverage in the recent weeks due to the manner in which her clients were buying homes. The reason our office is buzzing is because this group (agent, investors, and the mortgage broker) all tried to put a deal together with one of our agents here at ERA Lambrecht.

The deal went something like this - the group was interested in putting an offer together to buy one of this agents' listings (in our office), but they wanted to add thousands and thousands of dollars to the purchase price, but they wanted the seller to credit it back at closing.

To make a long story short, we talked about this in our office because nobody really understood how this was going to work and how in the world it could be legit. Well, the deal never got done at our office with this listing agent,but based on the news reports, dozens of deals did get done and all of them are now under suspicion.

It goes back to the things that our parents probably told each of us as we were growing up - if something sounds too good to be true - well, you know, it probably is. How does the saying go - if you smell a rat....

Yikes.

Elegant Downtown St Petersburg Living - at a discount!

2006-10-27T10:32:00.000-05:00

Can you imagine sitting on your balcony looking at this perfect view every day? We just reduced the price on this Ana Capri unit at the prestigous Parkshore Plaza in downtown St Petersburg. Elegant details and craftsmanship are evident everywhere in the home, building, and grounds.

As on any of my properties, you can view more details and tours through my website at www.realtorshane.com.

Future of Real Estate, Pt 1

2006-10-19T20:14:00.000-05:00

This topic is one that I plan on commenting on quite often as it is something that I think about almost every day. As most of you may know, I became a real estate professional to 'escape' the corporate vice president role that included way too much travel and kept me away from my family and my city. You can read all about that on my old web site and other bio 'spots' out there.

Ok, back to the future. All of my experience after graduate school was in technology, primarily software, so I am constantly looking at ways to utilize technology better in my business. I think I do a decent job, but I know that I am not maximizing technology. My web site needs to get a lot better, my tracking software and CRM software can be better, and my systems of providing information and feedback to customers can improve, just to name a few things.

What I really question is how will technology and the internet especially improve the process and costs of buying and selling real estate? Look, I am currently paid to do just that so I understand the position of the majority of real estate professionals against increasing effeciency and reducing costs because they see their income being pinched.

From my experience in technology you better be in the front of that curve and be a part of that change because technology will make virtually every process more effecient. Some just take more time and are more challenging. I have seen way too many very smart people figure out how technology can solve very challenging systems and create incredibly useful tools and efficent results in a short period of time.

Enough about the set up - what are the elements? You have a buyer, a seller, and a piece of property. those are the essential parties to the deal. Then you add 'others' to help make a certain part of the process easier, possible, or more efficient. For example, a mortgage broker is there to help bring money to the exchange. A real estate agent is there to help put the transaction together and currently handles much of the process (that can be made more efficient). They can help research properties, negotiate the terms, coordinate the closing process, and keep the parties at the table, among many other items. An attorney can be there to help with title (or a title agent), write and/or approve contracts, and other tasks. Of course, there are home inspectors, pest inspectors, surveyors, appraisers, and a myriad of other professionals that are also involved.

As I look at my job, my primary role is to provide professional advise and representation. For my sellers, I would also place marketing strategy up there with the advice and representation. There are about 62 (yes, we have written them down) other responsibilities that I do as a normal course of action for my customers. Perhaps at the top of the list is to provide all of this in person.

Since it is getting late, I want to wrap up this as the intro to this topic. What I have been trying to solve is how can I look at those items identified and numerated above and supplement and/or replace them with technology and subsequently reduce the cost to the consumer. I tried almost 1 year ago to create a fee-for-service model so I could match up a customers expectation with the services so that the process was more efficient for all and increased customer satisfaction. Well, I haven't found that perfect model yet. I tried to do this with some customers but in the end it came out more expensive. I will get there, and I welcome your input!

Yes, I have looked at the online companies. They each seem to offer pieces of the process, so that is a promising start. If I could minimize the process where my clients hired me to advise based on experience and continued education but left the leg work to automation - everyone would be happier. We just need to make sure it is better and less expensive.

When is the best time to buy? Pt 1 from my newsletter

2006-10-19T13:27:00.000-05:00

When is the best time to buy?
The answers really depend on why you are buying first. If you are investing it is fairly simple and we can address that later. One thing to remember is that most investors – stocks, real estate, etc – are always late to the party. The pros make their money on the herd coming in to a market.

If you are buying for the purpose of living in a new home, be it a relocation or upsize or downsize, it becomes more complicated. There are hundreds and thousands of studies out there that speak to the fallacy of ‘timing’ a market. There are a lot of people in the financial news for timing the stock market and it boils down to the best timing you can do is based on insider information. So, as a buyer, how do you get ‘insider information’ on the housing market? Research. If you look at historic trends and look at the last time the market ‘corrected’ you can then look for trends at that time and most importantly perhaps at the trends following that time. What type of data points do I look at? Mortgage rates and applications, rental vacancy rates, inflation and fed funds rate predictions, listing and sales trends to start with. Just like any statistical analysis you can go nuts but I just try and match these up with my situation or my buyers situation and act. We are in an unusual and desirable situation here in St Pete due to our location and climate in that we do have traits that attract buyers to the region. If you lived in Nebraska or Kansas, for example, I would pay very close attention to those statistics in a down market. (Please don’t take offense if you live in those states, but c’mon) One of my favorite golf courses is in Kansas, but I am not going there at least 6 months out of the year! I will try and expand on this topic on my blog if I can continue to make that a part of my daily and weekly routine, but I will tell you what I tell my clients that are currently looking to buy for residence purposes that if you look historically at the worst market corrections as being in the 19% range (and I think that was aggressively looking at the numbers), then look at what the home is priced at today, what it was priced at originally, and make an offer 20% less as the worst case scenario. In our market, you probably won’t get the home in most cases, but it can be a start. I am not crazy about making offers at 80% of list price, but I do use that as a worst case scenario for research purposes. You then have to ask yourself is this a worst case scenario? Are there less appealing places to live? You bet. So, if you can buy a home at 85-95% of the proper list price, you can look at it as a discounted price for paradise.

Please remember you are buying a home. This isn’t something you should buy expecting to sell it in 2 years and pocket a 40% gain even though you could have a year or two ago. Heck, my parents sold their home in WV that they lived in for over 20 years and sold it for something like 20-25% more than they paid for it. We are trained here in florida to now expect stock market type returns that are unrealistic, but I do feel like we have a great product that will appreciate more than other markets.

You know, I look at New Orleans as an example. I don’t have the statistics in front of me but I look at New Orleans as a worst case example for here. What if a major hurricane wipes out St Pete? By some accounts that I have read, the New Orleans residential market has improved in value since the storm. I don’t know enough about the market to comment on why, but it is definitely something to look into for perspective.

It is nice to be back in St Petersburg

2006-10-16T20:54:00.000-05:00

After spending the last 5 days driving to visit my 92 year old grandparents in West Virginia and back, I can really say it is nice to be home. My wife and I took this quick trip to take advantage of a couple of days off school for my daughter to allow both of my kids to see the changing leaves as well as spending some precious time with my aging grandparents and their great-grandparents. We made the trip up in 2 quick days, but spent 3 coming back to savor time in almost every state. From a real estate perspective, I tried to pick up home books in every state and we even took a side trip to Lake Overlee in South Carolina because we love lake property. From our quick view, it was picture perfect and it seemed you could get a lot with a small home or mobile for $200k on the lake. We will be researching that a bit more. It was not a bad drive from home and could be used in the summer or for a long weekend.

I was very interested in seeing how difficult it would be to find rental properties that could cash flow themselves and found some options. The problem that I ran into was that in the places that were most desirable to me in terms of price inflation over time were of course priced up thus making the cash flow goal more difficult to obtain. If you then add in the cost of property management it became more difficult. That is a short term view, however. Historically, properties don't descrease in value on the whole. So, if you can cash flow it it should pay for itself over time - thus the entire value regardless of gain - is a gain. Of course, there are operating costs, cost of capital, etc, to consider but the point is that if you take a long term view - which is a reasonable one there are opportunities out there.

I saw tons of potential in almost every state, especially as I headed north of Georgia. Virginia and especially West Virginia seemed to have the more reasonable rental price vs list price opportunities when I looked at long term leases. Short term rentals were more opportune in the southern resort states, but those prices were much higher.

So, in summary - because it is late and I did spend 5 driving days with 2 kids so I need my sleep - I learned that I am going to explore being a long distance property owner a bit more. The risks of being long distance are a big concern for me but I have some things to look into that I may talk about later.

The good news is that prices everywhere have come down which makes the options grow!

Now, for a bit of commentary. One of my pet peeves is that nobody seems to be bothered by the fact that we, as parents, cannot let our kids out of our sight and it wasn't that long ago that kids stayed out til the streetlights came on. I noticed that as I headed north I did see kids out and about a bit more than we see that in St Pete. Why is that? Our trip seemed to coincide with several national news stories about murders et al which pointed out that no state seems to be untouched by this crap, however.

What can be done about this? We went camping not that long ago with another family and our kids were able to walk around without us and when we asked them what was their favorite activity during this camping trip what do you think it was? those walks with their friends.

that should be normal activity for kids, but unfortunately in this day of age it is not. I hope I am not the only one mad as hell about it. I don't have a solution but do have some ideas that we will talk about at a later date.

How to settle on a price?

2006-10-04T21:37:00.000-05:00

This has become a challenge in the last month or so, both on the listing side as well as on the buy side of the transaction. Since this is such a heated topic today, I am going to focus first on the listing side and will comment on the sales side in future blogs.
On the listing side it involves the standard practices of evaluating the features and benefits of the home as well as it's shortcomings. The next step is to look at the comparables both in terms of square footage as well as bed/bath/features. By looking at each one of these homes, I normally can gauge where the subject home shapes up in terms of comparison.

The next step is to evaluate the goal of the seller - when do they want to sell? What type of contract do they want to offer on teh home? What are they going to offer with the home? What options are they going to select in terms of how we market the home? Staging? Warranty? Improvements?

In our market here in St Petersburg, we are definitely seeing a market that is not growing in terms of price as it was a year or two ago, but we still have a very limited amount of inventory and land options as well as having one of the most desirable locations anywhere in the US. What does this mean? It means that you can't be greedy and must be realistic in pricing your homes. What I am advising most of my clients now is to price is just below the comps if they want to sell it. Price it to sell at the asking price and don't count on reductions. reductions in this market are not the best option.

More later...