Real Estate Views from St Pete

CyberProfessionals Conference
Pittsburgh, Pennsylvania
April 28, 2008

Some 30 CyberProfessional Realtors are gathered in Pittsburgh, spread out along tables set in a large U-shape with lots of cords as well as wifi connections. Each of us have 15 minutes to speak to the group on what's new, what's working, what's not working. Most of us are eager for new ideas to supercharge out businesses.

Most of us, also, multitask. Next to me, Bob Carney is using his photo to take a picture. Kristal Kraft, also taking pictures, is more obvious, as she's using a digital SLR with long lenses. Some of us are double teaming, taking pictures of people taking pictures. Many of us are blogging.

Brainpower is draining, so we've been eating a lot as well, from breakfast and lunch that are part of the conference, to voluntary dinners together afterwards. Never tired of talking about real estate and technology, after dinner groups gather in the lounge - some drinking, some not, but all talking and listening.

Some of the veteran CyberProfessionals have attended two meetings a year since 1995! Some are here for their first meeting. We've really become a family.

So often we only have time to see an airport, taxi and hotel in different cities, so Tami and I took an extra day and came to Pittsburgh yesterday.

Meetings will be held at the Sheraton Station Square, just across the river from downtown. This was the view from our window this morning.

The day was sunny and mild, perfect for our leisure day here.

This morning the free hotel shuttle took us over to  Carnegie Science Center where we saw the exhibit BODIES. It was a great exhibit and we spent a couple of hours there, learning a lot.

Back to Station Square for lunch at Bar Louie, where we ate outside overlooking the Mon.

After that we joined some of the other CyberProfessionals on the Duck Tour - great way to see both the city, from land and from sea. Our guide is just graduating as a theater major, and he and the driver/captain kept us educated and entertained all the way.

We really enjoy the spring CyberProfessionals meetings as we get to see smaller cities that can't host the big conventions. We've been to Providence, Albuqerque and Annapolis, for example.

The next two days should be filled with lots of ideas. 

Property flyers - in my opinion - should be primarily for property information. Naturally they should have the agent's name, company and contact information, but isn't it going too far when there is more information about the agent/company than about the property? When pages talk about how wonderful the agent is?

If you want to have all of this information, then please have two sets of flyers/brochures - one for you to hand out to your own clients and at Open Houses, and one that's less advertising for those of us who are bringing out clients.

It's so nice to travel and not be gouged. Tampa International Airport has consistently been awarded one of the top US airports. We enjoy traveling in and out of Tampa.

Wifi access is free. Yes, free. Whether you use it for a few minutes to check e-mail, a few hours while waiting for a flight, or if you're here all day, it's free.

The first hour of parking is free, too, so if you're picking someone up, you can park, ride the elevator down to baggage claim, and reverse the process once you've connected with them.

Here - but not free - is a Marriott Hotel, connected to the main terminal by an air-conditioned corridor with shops. There's a revolving restaurant at the top where you can watch the flights come and go.

The airport is a hub system, with monorails connecting the central terminal to the "Airsides".

Art, restaurants, shops, comfortable seats.

Welcome to Tampa Bay!

The Signature Place sales office was our destination this morning as a client and I walked there from my office.

It was a beautiful Florida day, pleasantly warm, and sunny.

Our first stop was Starbucks - and there was a long line. Most of those in line were participants in the St. Anthony's Triathlon who were getting coffee here and breakfast next door at Atlanta Bread.

Then on the next corner we passed the wonderful sights and smells on the Saturday Morning Market, with sounds of music pleasantly in the background. 

Just across the street is the sales office for Signature Place. We looked at city scenes, the scale model, floor plans, and checked out the view from various units on various floors, all on the flat screen tv - the shots were taken by a photographer in a bucket, with a GPS to determine the height.

The 36 story building, now topped out, will have 246 condo units, and occupancy is estimated to be the Spring of 2009.

Despite the proliferation of luxury condos along  Beach Drive in downtown St. Petersburg, only 25% of the downtown condos for sale are over $1,000,000 - the majority are actually under $500,000. There are currently 185 on the market, ranging from $95,000 to $5,500,000.

In downtown St Pete, 

$95,000 would get you  a 1 bedroom 1 bath condo of approximately 700 sq ft in  co-op building from the 1920s, which is restricted to owners at least 55 years old.

$5,500,000 would get you a 4 bedroom 5 bath condo with ten times that space, 7,000 sq ft, in the newly completed 400 Beach. No age restrictions here.

Click here for the rest of the report ... 

Since I can't be Tomato -

should I be Orange, because I'm in Florida (and should I be whole or sliced?)

or should I be a Carambola, better known as a StarFruit, which grows in our yards here in Florida (and again - should I be whole or sliced?)

or should I stick with my sunset?

There are the cold calls we get at home from sellers of cemetery plots, travel deals, vitamins, etc and then there are the cold calls we get at work from sellers of ads, leads, and multi-level marketing plans.

Scenario 1:  Several times a day we get, "We have buyers for (insert city)".

Do you want money upfront for these or are you asking for a referral fee?

You mean you have more buyers and sellers than you can handle?

        Click!
 

or Scenario 2: "we can get you #1 positioning in google".

Oh? For how long? For what terms? Does someone have to go to "your site" to search?

Don't you know how much #1 position is worth?

We're already #1 in the terms we want to be. 

Oh, everyone says that.

Are you in front of a computer? Go to google and search ------.

Click. 

or Scenario 3:

Are you interested in more business?

        Where are you located?

Well, in Austin.

Oh, great! Do you know anyone in Austin who wants to buy or sell real estate?

Short sales are so prevalent that there are now not only courses on Short Sales, but a designation! Most of these deal with how to properly represent sellers - but what about properly representing buyers? I blogged about short sales in our area, and quoted a great piece from a Wall Street Journal article:

"Homeowners hoping  to do a short sale sometimes advertise very low asking prices to lure buyers even if there is little chance the lender would accept bids at that level, Mr. Odio says. The "fictional" asking price, in turn, misleads potential buyers about the value of nearby homes."

What's fair? 

and

What's misleading? 

Spring and fall are the perfect times to enjoy St. Petersburg - you can have your windows open and feel the breezes, you can enjoy walking through your neighborhood or along the waterfront.

Many people enjoy Florida in the winter - but when you live here, you start to feel a bit cold in the winter. Summers here are hot, though not as uncomfortable as humid New England when you're not on the water. Ah, spring and fall. Less visitors than either summer or winter - we love it. If you're renting our your second home here, not only is this avoiding the high income rental periods, it's really the best time to enjoy the area. 

This is Al Lang Field in downtown St Petersburg, which has been the site for Spring Training for decades. Now the Tampa Bay Rays want to build a new stadium there.

There's a lot of coffee shop conversation about the proposed Rays baseball stadium on the waterfront in downtown St Petersburg, as well as cocktail talk. This week a student reporter from the University of Florida wanted to interview me. To summarize what I told her: it's too soon to have a conclusion because there are too many unanswered questions: who will pay? how much? what guarantees will the city have that development will be done timely and according to plan at the old site? I want to see a scale model of the stadium and its "sail" roof along with the surrounding buildings to get the proportions right - or at least an interactive 3-D model of those on the web.

St Pete has a unique and wonderful waterfront downtown - I want to be sure that isn't harmed. The St Pete Sailing Center is a great institution - I don't want to see that diminished. Available parking for shopping, eating and strolling is part of the desirability of downtown St Petersburg. Even now for gatherings like the 4th of July people are parking on the residential streets of the Old Northeast, blocking driveway access, etc. So parking IS an issue, and I don't want a downtown with more parking garages, unless they're underground.

I like sports and I'm in favor of sports facilities, but prime waterfront isn't necessarily the right place for that. Many people don't realize that there's more economic benefit from art and culture than from sports - and downtown St Pete is already a hub for art, music, museums, galleries, theater and other culture.

Many visitors talk to me as if the new stadium is a done deal, and don't realize that using (whether selling or long term leasing) that waterfront land must come before all the voters of St Petersburg to determine if they want the land used that way. So far, over the last decades, the voters have been pretty smart in how they voted - which projects were approved, and which ones were disapproved. I have confidence the voters will do what's right for St Pete.

Yes, this post is filled with Is - but that's what the reporter asked for. 

For the last few years at the St Petersburg Grand Prix we've watched Danica Patrick compete. Despite many rooting for her, she never has. Not did she this year.

This weekend, in Japan, Danica Patrick took her first Indy win - beating Helio Castroneves by about 6 seconds. Congratulations, Danica.

The Grand Prix race through streets of downtown St Petersburg is an exciting event, and we do indeed develop "relationships" with various drivers, from our own Dan Wheldon, to Helio, and others.

Come join us next year.

p.s. - Bayfront Tower is the best viewing around, if you own a condo there, or if you have friends that do!

Alpha magazine recently reported on the annual earnings of the top hedge fund managers.

In 2007 John Paulson topped the list - by betting on the housing market collapse, he made $3.7 Billion.

Four other hedge fund managers earned over $1 Billion in 2007.

In the five years that Alpha has been reporting on hedge fund managers' incomes, the entry point for the top 25 has increased 1,200%, from $30 Million to $360 Million. Pity the poor managers who made only $200 Million last year - they didn't even make the top 50. 

Lore magazine, in their March/April issue, had a very interesting article on Dubai, where construction is setting all kinds of records. The median home price there is $800,000 to $1.5 Million, and a beachfront villa goes for $10+ million. Average time on market is 2-3 weeks for a villa; apartments take 4-6 weeks.

RE/MAX has an office in Dubai, where Ali Al-Taher is the broker/owner of RE/MAX Associates Dubai.

Many agents have reacted to a slow market by leaving the business or taking a job with a steady income. One of the young agents in our office saw an opportunity and responded to it - he moved to Dubai, without any promise of employment. Once there he was offered a sales position with a multi-national development company, happily accepted the great opportunity, and is moving to Kuwait, where he will be headquartered, a place he's never been. In every market there is an opportunity. We just have to find it.

Be passionate. Find opportunity and seize it.

Jeff Dowler just posted about the decision in a California case of buyer vs agent. There's the issue of personal responsibility, but that's fodder for another blog.

More and more of us are representing international buyers. It's so important for us to understand the differences in real estate purchases in that country and in ours, so that you can properly advise them, and point out things they might  misconstrue. It would also be helpful to know the differences in legal systems and legal interpretations.

In Finland, for example, it is the INTENT of the parties that prevails over the written contract - just the opposite of the United States. Think how much better you will serve your Finnish clients if you can explain to them why the written contract is so important and why they should really concentrate on what it says.

As information becomes a commodity, proper advice is priceless. 

This afternoon about 1 pm an agent called wanting to show one of my listings, today between 3-4. I called the sellers and despite JUST returning from out of the country, they said ok, they'd rush around and get the house ready for showing, preferably at 4 so they'd have a few hours to accomplish that. Agent said 4 was ok, and that was done.

4:08 the agent called me - I'm sorry, but I have to cancel our showing appointment. We were running behind and my clients were too tired to see any more. I felt so bad for my clients who had worked so hard to get it ready (you know how your house looks when you've just come back from a trip), all for naught.

The agent sounded truly apologetic (she knew the situation from our earlier conversation). She said, I really couldn't force them to keep looking. No, you can't force them - but perhaps if you explained the situation they would have been more considerate...

When I reached the sellers - no, not sellers, still owners - they were gracious in accepting the situation, despite all their efforts. They did say, though, that in the future they wouldn't take a 3 hour appointment - needed to be the night before. They'll accommodate, they'll have everything ready, but they won't strain and push to meet a short request. Sad for the sellers - sad for the next prospective buyers.

I'm sorry. 

Remember that thick stack of paper that you received when you purchased a condo? Did you thoroughly read all those condo documents?

In the hot market, developers in Florida were converting apartment buildings to condominiums as fast as they could purchase them - these were "condo conversions". Apart from design considerations, you had to look out for sound conditioning, construction quality, when and how the upgrades would be done.

As the market slowed, some owners found themselves in two unexpected situations:

• one of only a few occupants - the rest of the units were vacant;

                                 or

• one of the few owners in a building with mostly tenants.

An "obscure" amendment to the Florida condominium statute, intended for rare cases of hurricane destruction, can be of far more significance. Some condominium declarations state that if a converted apartment project fails as a condominium, the developer (owning the majority of the condo units) can purchase the purchased units back from buyers at "fair market value", even if the condo owner does not want to sell.

So - you may be settled in to the condo you purchased a few years ago, and be forced to sell back to the developer at today's value, often well below your purchase price.

What about property rights? There could be prolonged litigation, but in the meantime - you can be forced to take a loss and sell, IF your condominium declaration has that provision. And if you have to sell at less than your mortgage amount? Not a nice situation. 

Scary thoughts for a Saturday night.

Read the entire article that appeared in this morning's Tampa Tribune. 

 Downtown condo rentals in St Petersburg, Florida have now reached a supply of 8 months, ranging from a 4 month supply of 1 bedroom units to an 8 month supply of 3 bedroom units. Rents (asking prices) range from $950/month for a 600 sq ft unit to $8,000/month for a 2,700 sq ft unit (yes, that's high - you can rent some that size for half the price). More owners are offering their condos for rent because they haven't sold. The downward pressure on home prices has spread into the rental market. Investors - if you're looking for positive cash flow, this isn't the time or place for it. Most downtown St Pete condos are offered for rent annually, and most are unfurnished.

Florida has a large inventory of condominiums - and that's an understatement.

We've been dealing with inventory, foreclosures, short sales,

       the minimum number of owner occupied units.

Now, according to an article in this morning's St Petersburg Times, the lender is also requiring information on the following:  

• Adequacy of condo association operating budget;
• Percentage of unit owners who are late on condo fees;
• Percentage of space allocated to commercial use.
• Reserves of 10% of current operating budget for capital expenditures and deferred maintenance.

and are often limiting their exposure to a particular building or development.

And who's to do the research and warrant the accuracy of their research?  (drum roll, please)

                .......     the lender.

What a demand on time, and what a burden - isn't that like rendering a legal opinion?

So, if you thought condo financing was interesting in the past ....just wait. 

What a surprise when Clayton Wilcox's photo and news of his resignation as Pinellas County Schools superintendent was on the front page of this morning's St Pete Times. I'm happy for him, but sad for Pinellas County. He had 3 more years to go in his contract - but was offered what he describes as the opportunity of a lifetime. He'd been forthright and to the point, and often controversial - he's blogged to the public and let them question and comment. It hasn't been easy for him, with the divisive school board and the board attorney, and the newspaper second guessing.

The school board says it will be easy to replace him. Not to diminish at all the administrators he's put in line under him (the signs of a good leader) but I wonder how many will have not just vision and dedication, but transparency and guts. A real leader needs guts, and the courage of his/her convictions. What Pinellas County does NOT need is a Yes man. I hope the replacement chosen is a true leader.

Bon Voyage, Clayton! Thank you for your years here and for your contributions. Best wishes in your new position, and may you truly influence literacy on a national scale.