Back to the Basics
With today's technology it is very easy to get too much information. When I was in grammar school (I am 52) one of my jobs was to chart the progress of certain stocks on graph paper. Every morning before going to school in Harrington Park, NJ, I would take my fathers list of stocks and go upstairs to his home office in the attic and post the previous days closing price from the Wall Street Journal on some large ledger sheets bound in a black leather book. My father had one page for each stock he either owned or wanted to own. It was a wonderful way to learn, and I remember the pleasure I had in looking back on a few months of work, done one check mark at a time. Once I connected the check marks I could see a trend. My father would mark in colored pens his purchases and his sales. He did this on Saturday mornings, when he worked at home.
Today, I can track a stock price minute by minute. In fact, I can make a trade in my Waterhouse account and actually see it register. I can also check last weeks housing starts and I can find out how many listings on the MLS lowered their price during the past hour.
We should, however, take some lessons from the guru of stock investing, Warren Buffet. Mr. Buffet doesn't check his stocks every day. In fact, Warren once asked a question something like this; " If you could check the price of your house every day and it did not go up every day for 25 days in a row, would you sell it?" Of course not.
I remember a column I wrote in October of 2004 "When Does the Paint Dry?" that talked about a similar topic. In it I said :
Right now in Florida we are in the middle of a real estate boom that when we look back on it, we will be able to more clearly see the steps that the boom is going through now. When we look back, we may see clearly the 17% or 20% (or what ever the number is) appreciation that happened. Right now, it is impossible to see that a home is going up 2% a month or 20% a year. No one, and certainly not me, can predict appreciation and just because a home appreciated 24% in one year DOES NOT MEAN that during that year it went up a certain percentage a day, a month, or a quarter.
Little did I know that we were having appreciation that was more than twice the 17% or 20% that I thought we were experiencing. Just as now there is no way we can know that our appreciation is still running along at 10 to 15% (which I will look at a year from now, by the way). I think we will find we are doing nicely, thank you, at the rather pleasing and calmer 10 to 15%. Let's not try to gauge a real estate market by the headlines and the daily news. Let’ s make that check mark annually on ledger paper. (Thanks Dad for that basic lesson)
Some of the basics lessons in life we never forget, even if we don’t always follow them. When ever I take a couple of aspirin, I remember my mother taught me; "Always drink I full glass of water" she would say, "The aspirin will work better". I have no idea if she was right, but in fact to this day I never take aspirin or a vitamin with out thinking of her and indeed most times I drink the whole glass.
In real estate, knowing the basics and following the basics are two different things. When everything you bought or possibly COULD buy went up in value at a rate that we could see almost on a monthly basis - the basic rules went out the window. But here, for your review, scrutiny, and pleasure are my basic rules that you might want to remember and use.
Location. Buy the best location you can afford. Buy by the water, the view, the good neighborhood. You can never change the location – make sure it's the best.
Alternatives. Once you make a decision to buy, examine all your alternatives, find out what else you can buy for the same amount of money or in the same location.
Examine the true cost. Not just the price, but the cost in maintenance, travel, taxes, utilities.
Know your Exit Strategy and be comfortable with it.
Those are the bare bone basics that I think apply to almost any real estate purchase.
Buying a Pre-construction Condo?
If you are thinking about a preconstruction condo here are some of my basic "tips" about what to look for (In addition to above).
1. Parking. Is there enough? Is it convenient?
2. Garbage. Where is the chute? How will the dumpster be emptied? Is it near your parking space?
3. Storage. Is there any?
4. Warranties. What are they?
5. Who is the management company?
6. What appliances are included? Washer and Dryer?
7. Is there a guest apartment available for you to use?
8. Who is the builder? Look at his other projects.
9. Read the condo docs.
10. Can you put shutters on?
11. What will traffic be like? Noise?
12. Where will the sun come in?
13. Where are the air conditioners? (noise)
14. Does your furniture fit?
15. When will construction start and what are your options with delays?
16. Is the price locked in?
17. Can the specifications change?
I appreciate you emails and comments and can always be contacted at Gregg@ma-realty.com. We have been very busy at Market America Realty and Investments and season is indeed back in full force. Please visit www.investinwaterfront.com for news about the communities we are marketing.
Key properties include:
The Citadel - condominiums 3.5 miles from the beach starting at $249,900.
Grand Isle - My personal pick for best buy right now in waterfront marina living. Virtual Tour Here
Villas at Venezia - A marvelous infill condo project off Metro.
Reflection Key - Preconstruction condos starting uner $300,000
I have updates for you on our other new projects:
Cyperlin is our Class A office building in which we are selling office condos. We have added an eighth floor of amenities which will include a work out center for the occupants, a board room and a break room. These will all be plush, luxury amenities with a gorgeous view.
Our Windsor Lake Estates project is closer to a development order. This is a 147 acre project of single family homes. We will start selecting our preferred builders next month and will announce availability in about two months. (No web site yet) This is a gated community of one half acre lots with lakes off of Burnt Store Road.
Also in our pipeline (coming soon): Office condos from 800 sf; a commercial office park with warehouses and flexspace, andour own waterfront marina project. Stay tuned!
I am looking to hire a part time (9 -1) receptionist/office manager - an ideal position for someone with children that wants to back into the work force. Emails only - send resume please to Holly@ma-realty.com
Saturday, January 28, 2006
Friday, January 20, 2006
Two Complexes on Summerlin Road
Two complexes due along Summerlin RoadOffice tower, boutique hotel to be built near intersection with Gladiolus RoadBy Don Manleydmanley@news-press.com Originally posted on December 19, 2005
Two major developments are coming to Summerlin Road, including a seven-story glass office tower and a boutique hotel.The office tower will bring a new bank into the area, while the hotel project will include residential and commercial development on property a few hundred yards from Gladiolus Drive.Along Summerlin's eastern side, between Gladiolus and Cypress Lake Drive, real estate agents' signs are now joined by construction workers and their equipment.
Work on the tower, named Cyperlin Center, is scheduled to begin in May and end in late 2007, said Gregg Fous, owner of Market America Realty and Investments of Fort Myers, the developer.He said the 7,000-square-foot building will become an office condominium and preliminary agreements have already been reached with two purchasers.
Slated to occupy the first floor is Iowa-based First American Bank, which specializes in commercial and small business lending.First American recently agreed to buy Pelican Bank and its six branches in Lee and Collier counties. The bank opened a local loan-production office in March and plans to expand its Southwest Florida operations, said Ken Aschom, president of First American Bank Florida.He said Cyperlin would be its Lee County headquarters and also contain a full-service branch, including a drive-through. The bank may also purchase the tower's naming rights, Aschom said.
Phoenix Law Partners PA will move its offices from University Park, at the corner of Summerlin and College Parkway, to half of a floor at Cyperlin, which it already has reserved, said the firm's president, Charles Phoenix."This will be the first reflective glass contemporary mid-rise office building in Southwest Florida," said the tower's designer, Michael Sheeley, owner Sheeley Architects in Fort Myers.
He said the interior of the concrete frame structure will have an upscale look, both inside and out, and a number of environmentally friendly and energy efficient features. The exterior design features a gently curved facade, front and rear, with an angled corner facing Summerlin and Cypress Lake Drive."We're very excited about it and think it's going be a landmark building in Lee County," Sheeley said.Phoenix said he began considering a move once he learned of Cyperlin.
"I was not actively looking, but the opportunity to own Class A space in the building was appealing to me and the other members of the firm," he said.Upscale office space that offers prime location and access is considered to be Class A.
Fous, Aschom and Phoenix all said Class A space is a scarce local commodity, because builders have focused on more profitable residential development in recent years.Fous said he's certain the tower will sell out long before construction is completed. He pointed not just to the accommodations, but also its location."It's a prestige location for a prestige building," he said. "You're in the heart of the south Fort Myers business district," he said. "I think that's the key. This is probably the best corner in Lee County. Very high visibility."
Phoenix agreed."It's in the center of the financial district of the Fort Myers area and that's where we want to be, and where our clientele is," he said "Additionally, it's a convenient location for all the employees of the firm."
About a mile south of Cyperlin sits a site of about 40 acres that will be home to Ardmore, a three-part project being built by Ardmore Development, of Fort Myers.It also will be home to Reflection Key, a mix of 180 three-story condominiums and patio homes, The Ardmore — A Boutique Condo Hotel, and a 60,000-square foot commercial building that will provide space for office, retail and restaurant uses.Work began about a month ago on Reflection Key and should end in 2007, said Vincent Wolanin, owner of Ardmore Development.
Wolanin said said construction should start on the commercial building in late 2006 and end in early 2007, while work is scheduled to begin on the hotel in early 2007. The hotel, which will have 280 condominium units, will probably take two years to complete, he said.The Ardmore will target the segment of the part-time resident market that wants to enjoy hotel-like conveniences in a place they call home.
"It's for people who want live in a building that has services, and then rent it out when they're not there," he said.Wolanin said The Ardmore's amenities will include maid service, as well as a pool, fitness room, restaurant and more.He predicted a commercial growth is about to explode on Summerlin, south of Cypress Lake Drive.
"It's one of the best market locations," he said. "If you were to take a dart and throw it at the map and you said to yourself, I want this to land dead center in the active market place, it would land there. That's going to be the new corridor that takes the place of (U.S.) 41 because 41 is overbuilt."It's attractive because it goes between Sanibel and Fort Myers Beach, and Captiva," he said.
Gary Tasman of VIP Commercial Realty said Summerlin is a logical destination for office space development."There's no question that what we're observing is the expansion of the College office corridor," he said. "That corridor has the highest concentration of office space and the lowest vacancy rate. The reality is the College corridor is completely built out and the market can only go south on Summerlin toward Gladiolus. It's a reaction to the high occupancy rate and it's very much needed."
What are YOU Waiting for?
WHAT ARE YOU WAITING FOR?
This past week seven of us at Market America held an open house at The Citadel in Bonita Springs. After about a twenty minute period from when we tied the last balloon on the signs and we were all wondering if ANYONE was going to show up; we were slammed. And we were slammed right up until 5:30 that evening. There were even times when visitors had to wait for one of us to break free to give a tour. It was the kind of open houses we were having six months ago - full of excitement and crackling with electricity. Momentum is important in this or any business and I am here to tell you its back.
Also back, but only for a short visit, is my very good pal and former sales manager David Squires and his beautiful wife Isabel with kids Nate and Davey. David is now working for the Gartner Group in Austin Texas. Gail and I went to an intimate party given by Dave's folks Tim and Mary Squires. (Tim is a project manager with Kraft Construction.) While chatting with Tim about his Pink Shell project on the beach, I saw a very professional business woman deep in conversation with Gail. All of a sudden they both do that thing it seems all woman do at some time at a party, they squealed and hugged each other.
At this point I was beckoned over and told that they just met, and when Pamela asked Gail's full name Pamela said, "Oh, you just recently came back from Chicago! I feel like I know you from your husband's column!" (Pamela was not the first person we met because of this column and will not be the last) Pamela is with the Lee County Visitor and Convention Bureau. According to Pamela tourism is up over last year (no surprise).
Pamela is a very impressive young single lady and told me she has been reading my investment column for a year or so, and while she does not have enough money to invest now, when she does she will start doing some
serious work.
I then asked her a simple question, "What will you do first thing tomorrow morning if you had $20,000 in the bank tonight?" She said she was not sure. I then told her, "Pamela, if you really want to start buying property, tomorrow you should start your program of real estate investing. DO the research. DO the previewing. MAKE the plan. VISIT properties. TALK to the experts. When the money becomes available you need to be ready."
It has always been my assertion that if you find the right deal, the money will come. In fact, I told her to call me if she finds the right deal. I will help her find the money.
Let me give you another example. I ran into a young man recently that is waiting to take the test to become a licensed real estate sales person. He told me he is very frustrated and feels like he is just wasting his time during this wait.
I asked him, "If you had your license tonight, what would you differently tomorrow?" He told me he would start working on expired listing and FSBOS to get listings. I then asked him, "Are you an expert in the area you have decided to farm? Have you toured all the listings in the neighborhood? Have you talked to and met all the agents that have listings? Do you have a mailing list prepared?" He admitted sheepishly that he had not done these things. Florida is very strict about what you can and can't do with out a license; I suggested he do everything BUT those things the state will not allow him to do.
"Make your road map and prepare the information. This is the only way you can hit the ground running."
By the way, dear reader, is there something YOU are waiting for? It might be that you are not going to retire for three years; OR you need another $10,000 saved; or the kids are too young, or your mother is still living with you. What ever it is that is making you wait, ask yourself, what would I do differently if that thing I am waiting for happened - and can I do it now anyway? Can I better prepare
for it?
When it comes to buying a second home in Florida, there is NO TIME LIKE NOW. You should not wait. If you have some "triggers" that need to happen, ignore them and start the process of finding your home here in paradise. In the process, the absolute worst case is that you are a better educated consumer; the best case is that you will look back at your former reason for waiting and wonder why you ever waited. Prices are not going down, interested rates are not coming down and your options will diminish, not increase. Don't let inertia set in. Give us a call and let us help you get started.
Well, I'm pumped. (Have I said lately that I LOVE this county!) Yesterday Gail, Tom Leach, Kathy Brewer and I spent two hours at THE SHORES at Paramount in Gulf Harbour. Our good friends at BBL are just about ready to finish (in late March) this ultra luxury eleven story residence on the water and marina for The Ronto Group. Four condos to the floor, each with a private elevator, two covered parking spaces, high ceilings and views that will take your breath away. Yesterday the wind was whipping up white caps on the river the views were the best I have ever seen.
BBL has asked us to market their penthouse unit 3,790 square feet under air and a total of 4,570 square feet. (If you have ever bought a builder owner unit - you know this is an exceptional condominium) Gail will work with BBL's design team to finish the backgrounds and decorating on these units. One of my favorite features is the sheer size of the outdoor verandas in the residences and the views either across the river or to the city lights. (This residence has BOTH.) You can also see the two pools or the sandy beach below
Market America can offer you special opportunities on any of the ten remaining residences. No guesswork here on what you will get; Gulf Harbour has hit it's stride in Fort Myers and has it all, Golf, Club House, Restaurant, Beach, and a very strong sense of pride. Contact Kathy or Tom today. (By the way, I am going back this morning to show the BBL owned condo. After my visit there I made some calls to some discerning clients that keep their boats in the Gulf Harbour Yacht basin - this is a perfect place to sit in a luxury home, put your feet up and admire your boat below.
Speaking of condos that have it all, we still have three MODEL LEASEBACKS at Burnt Store Marina and Country Club. One furnished (GI II 602) and two unfurnished. For details on this email me.
A year ago I wrote a column that asked “What are your experts doing?” I suggested that it is important to ask your various advisors what THEY do. What clubs does your gold pro use, what stock does you broker own?, etc. It is important to know these things, not necessarily because you should do the same thing, but you get a frame of reference. In my office, for example, Tatiana, my invaluable right hand and our marketing manager now owns three properties, one single family home and one condo and one under contract. Maggie Morrisee, our Bonita Springs specialist just put a second investment condo under contract. Me, I am buying land to develop office condos, commercial properties, and more single family homes. Tom, he is looking to buy condos. Debbie has a single family home and a preconstruction condo under contract. Cliff Wiersma, our land and commercial specialist owns land and building lots. We are experts in what we do, use us. and we don't just preach, we practice.
Here is Who we Are:
Market America Realty and Investments, Inc. is a customer centered agency. Unlike the traditional real estate agency that has dozens of agents that compete with each other, Market America Realty and Investments, Inc. will have the entire company working in concert to serve our buyers or seller needs. We are a company of specialists, but with one goal in mind, to meet our clients' objectives, with professionalism and with care.
Market America Realty and Investments, Inc. was formed by Gregg Fous in 1998. Fous has been in Real Estate since 1976 when he was first licensed in Florida. Since then Fous has been investing in real estate and managing properties. In 1998 he started Market America Realty and Investments, Inc. as a webcentric marketer to second home buyers. The company specialized in preconstruction condominiums and investment properties. Through the company website www.investinwaterfront.com Fous writes a weekly column for investors and second home buyers here in Lee County, Florida. The column currently has over 6000 subscribers and Fous has developed a loyal following for buyers, investors and fellow agents.
The company grew with like minded experts in the field; agents that wanted to work in a cohesive environment not dissimilar from a large law firm. Each team member is an expert in their respective field and the needs of the client dictate who will best be suited to serve that particular client. You will not find Market America Realty and Investments, Inc. offices full of small cubby holes with agents "working the phones". Each team member of Market America Realty and Investments, Inc. is a long term relationship builder, client oriented, and an expert in his or her area.
Market America Realty and Investments, Inc. is headquartered in The Commonwealth Financial Center in South Fort Myers. We invite you to visit our state of the art facility. (And, by the way - if this sounds like the company you want to work with - call me!)
Hot Links
Canal Home on Gasparilla in Old Fort Myers
Citadel Condos under $300,000 near Bonita Beaches
Grande Isle Condos on the Water "Gregg's" BEST BUY
Archived Columns
Cyperlin Center
© Copyright 2006 Gregg A. Fous All Right Reserved
The website contains copyrighted information and graphics. No portion of this intellectual property may be duplicated, reproduced, or distributed without express written permission of Gregg A. Fous. Any unauthorized use, reproduction, or distribution is expressly forbidden and may result in civil liability.
This past week seven of us at Market America held an open house at The Citadel in Bonita Springs. After about a twenty minute period from when we tied the last balloon on the signs and we were all wondering if ANYONE was going to show up; we were slammed. And we were slammed right up until 5:30 that evening. There were even times when visitors had to wait for one of us to break free to give a tour. It was the kind of open houses we were having six months ago - full of excitement and crackling with electricity. Momentum is important in this or any business and I am here to tell you its back.
Also back, but only for a short visit, is my very good pal and former sales manager David Squires and his beautiful wife Isabel with kids Nate and Davey. David is now working for the Gartner Group in Austin Texas. Gail and I went to an intimate party given by Dave's folks Tim and Mary Squires. (Tim is a project manager with Kraft Construction.) While chatting with Tim about his Pink Shell project on the beach, I saw a very professional business woman deep in conversation with Gail. All of a sudden they both do that thing it seems all woman do at some time at a party, they squealed and hugged each other.
At this point I was beckoned over and told that they just met, and when Pamela asked Gail's full name Pamela said, "Oh, you just recently came back from Chicago! I feel like I know you from your husband's column!" (Pamela was not the first person we met because of this column and will not be the last) Pamela is with the Lee County Visitor and Convention Bureau. According to Pamela tourism is up over last year (no surprise).
Pamela is a very impressive young single lady and told me she has been reading my investment column for a year or so, and while she does not have enough money to invest now, when she does she will start doing some
serious work.
I then asked her a simple question, "What will you do first thing tomorrow morning if you had $20,000 in the bank tonight?" She said she was not sure. I then told her, "Pamela, if you really want to start buying property, tomorrow you should start your program of real estate investing. DO the research. DO the previewing. MAKE the plan. VISIT properties. TALK to the experts. When the money becomes available you need to be ready."
It has always been my assertion that if you find the right deal, the money will come. In fact, I told her to call me if she finds the right deal. I will help her find the money.
Let me give you another example. I ran into a young man recently that is waiting to take the test to become a licensed real estate sales person. He told me he is very frustrated and feels like he is just wasting his time during this wait.
I asked him, "If you had your license tonight, what would you differently tomorrow?" He told me he would start working on expired listing and FSBOS to get listings. I then asked him, "Are you an expert in the area you have decided to farm? Have you toured all the listings in the neighborhood? Have you talked to and met all the agents that have listings? Do you have a mailing list prepared?" He admitted sheepishly that he had not done these things. Florida is very strict about what you can and can't do with out a license; I suggested he do everything BUT those things the state will not allow him to do.
"Make your road map and prepare the information. This is the only way you can hit the ground running."
By the way, dear reader, is there something YOU are waiting for? It might be that you are not going to retire for three years; OR you need another $10,000 saved; or the kids are too young, or your mother is still living with you. What ever it is that is making you wait, ask yourself, what would I do differently if that thing I am waiting for happened - and can I do it now anyway? Can I better prepare
for it?
When it comes to buying a second home in Florida, there is NO TIME LIKE NOW. You should not wait. If you have some "triggers" that need to happen, ignore them and start the process of finding your home here in paradise. In the process, the absolute worst case is that you are a better educated consumer; the best case is that you will look back at your former reason for waiting and wonder why you ever waited. Prices are not going down, interested rates are not coming down and your options will diminish, not increase. Don't let inertia set in. Give us a call and let us help you get started.
Well, I'm pumped. (Have I said lately that I LOVE this county!) Yesterday Gail, Tom Leach, Kathy Brewer and I spent two hours at THE SHORES at Paramount in Gulf Harbour. Our good friends at BBL are just about ready to finish (in late March) this ultra luxury eleven story residence on the water and marina for The Ronto Group. Four condos to the floor, each with a private elevator, two covered parking spaces, high ceilings and views that will take your breath away. Yesterday the wind was whipping up white caps on the river the views were the best I have ever seen.
BBL has asked us to market their penthouse unit 3,790 square feet under air and a total of 4,570 square feet. (If you have ever bought a builder owner unit - you know this is an exceptional condominium) Gail will work with BBL's design team to finish the backgrounds and decorating on these units. One of my favorite features is the sheer size of the outdoor verandas in the residences and the views either across the river or to the city lights. (This residence has BOTH.) You can also see the two pools or the sandy beach below
Market America can offer you special opportunities on any of the ten remaining residences. No guesswork here on what you will get; Gulf Harbour has hit it's stride in Fort Myers and has it all, Golf, Club House, Restaurant, Beach, and a very strong sense of pride. Contact Kathy or Tom today. (By the way, I am going back this morning to show the BBL owned condo. After my visit there I made some calls to some discerning clients that keep their boats in the Gulf Harbour Yacht basin - this is a perfect place to sit in a luxury home, put your feet up and admire your boat below.
Speaking of condos that have it all, we still have three MODEL LEASEBACKS at Burnt Store Marina and Country Club. One furnished (GI II 602) and two unfurnished. For details on this email me.
A year ago I wrote a column that asked “What are your experts doing?” I suggested that it is important to ask your various advisors what THEY do. What clubs does your gold pro use, what stock does you broker own?, etc. It is important to know these things, not necessarily because you should do the same thing, but you get a frame of reference. In my office, for example, Tatiana, my invaluable right hand and our marketing manager now owns three properties, one single family home and one condo and one under contract. Maggie Morrisee, our Bonita Springs specialist just put a second investment condo under contract. Me, I am buying land to develop office condos, commercial properties, and more single family homes. Tom, he is looking to buy condos. Debbie has a single family home and a preconstruction condo under contract. Cliff Wiersma, our land and commercial specialist owns land and building lots. We are experts in what we do, use us. and we don't just preach, we practice.
Here is Who we Are:
Market America Realty and Investments, Inc. is a customer centered agency. Unlike the traditional real estate agency that has dozens of agents that compete with each other, Market America Realty and Investments, Inc. will have the entire company working in concert to serve our buyers or seller needs. We are a company of specialists, but with one goal in mind, to meet our clients' objectives, with professionalism and with care.
Market America Realty and Investments, Inc. was formed by Gregg Fous in 1998. Fous has been in Real Estate since 1976 when he was first licensed in Florida. Since then Fous has been investing in real estate and managing properties. In 1998 he started Market America Realty and Investments, Inc. as a webcentric marketer to second home buyers. The company specialized in preconstruction condominiums and investment properties. Through the company website www.investinwaterfront.com Fous writes a weekly column for investors and second home buyers here in Lee County, Florida. The column currently has over 6000 subscribers and Fous has developed a loyal following for buyers, investors and fellow agents.
The company grew with like minded experts in the field; agents that wanted to work in a cohesive environment not dissimilar from a large law firm. Each team member is an expert in their respective field and the needs of the client dictate who will best be suited to serve that particular client. You will not find Market America Realty and Investments, Inc. offices full of small cubby holes with agents "working the phones". Each team member of Market America Realty and Investments, Inc. is a long term relationship builder, client oriented, and an expert in his or her area.
Market America Realty and Investments, Inc. is headquartered in The Commonwealth Financial Center in South Fort Myers. We invite you to visit our state of the art facility. (And, by the way - if this sounds like the company you want to work with - call me!)
Hot Links
Canal Home on Gasparilla in Old Fort Myers
Citadel Condos under $300,000 near Bonita Beaches
Grande Isle Condos on the Water "Gregg's" BEST BUY
Archived Columns
Cyperlin Center
© Copyright 2006 Gregg A. Fous All Right Reserved
The website contains copyrighted information and graphics. No portion of this intellectual property may be duplicated, reproduced, or distributed without express written permission of Gregg A. Fous. Any unauthorized use, reproduction, or distribution is expressly forbidden and may result in civil liability.
Friday, January 06, 2006
Think outside the box
Think outside the box
I have heard the term for years. I am sure you have too. It’s one of those catch phrases that consultants use. To me the expression means to look at something from outside your current realm of influence. For the past hour, before I started writing this missive, I went Yahoo searching for articles on “Thinking outside the box” and I did not find any article that actually presented a view from outside the respective influence the article was written from. In order to think outside the box you must first recognize what your box is.
All of us live in various communities. Certainly Gail and I live in Florida. We also live in downtown Fort Myers, but we also live in “parent community”, the “real estate community”, the “grandparent community”, the “developer community” etc. We, like you, wear many hats, or live in many “boxes”. Most likely our perspective is confined and guided by these influences, by these boxes.
For many years I was in the plastics business. I sold plastic film to the diaper and sanitary napkin industry all over North, Central, and South America. I was immersed in that business. My “box”, if you can believe it, was diapers and sanitary napkins. For years business was wonderful because Latin America was my oyster and my pearl was that most Latin Americans 15 years ago were not using diapers or sanitary napkins. The business grew like crazy. We built capacity, but after a few years we needed more business. In order to find it, I needed to look outside the box. I went to trade shows for totally unrelated fields to “think outside the box”. I actually went to wood working shows, metal conferences, health conferences, rubber conferences. I went searching for new markets, new uses. Eventually I started supplying house wrap, roofing membranes, and protective films for packaging etc. In order to grow and succeed, I went looking for needs to fill in new communities. I thought outside my box.
This week two sales people from a local newspaper called on me to sell me advertising space in their chain of newspapers. This was their “box”. In fact “advertising” was not even their box. Their box was newspaper print advertising. (A pretty small box). I asked about how they tied into the internet. (They didn’t) I asked about what they knew about how I advertised. (They didn’t know how I advertised). These guys were so stuck in their box all they could offer me was blank space for a fee and I was to fill it with copy.
In an earlier newsletter I talked about investment advisors that tell you that they will review your entire investment portfolio, but never even mention real estate. Stocks and bonds are their “box”. You need to learn what box people you deal with are in so you can adjust your thinking. Don’t let them trap you into their box.
Lately, with the pending release of Palm Point, the coming closings on Oasis, and the negotiation on new properties, my box has been closing in on me. One way I surely get out of that box is to spend time with my two grandsons, Adi and Jacob. Talk about not knowing your “box”; preschool children are so refreshing because their thinking is so open to outside influence. I love probing their minds and suggesting to them new ways to look at things. We could all learn by spending a few hours with a three year old. Yes, they have their “box” but it is a very open one. We need to learn to be more like a three year old.
I can learn from everyone and absolutely love to meet buyers of our condos. This week at dusk one evening I was touring my friends Frank and Ellen at Oasis. As we were driving out someone was driving into the parking lot. I rolled down my window and motioned for the driver to stop. The lovely woman was a bit startled that I would stop her. I asked her with a smile if I could sell her a condo or something. She replied that she already bought one and could not wait to move in. Since I had the key I asked her if she would like to go into her unit. She was thrilled. Frank and Ellen and I went with Barb to tour her soon to be new condo. Now you must understand that I have been looking at these condos almost every day for the past year. But I was anxious to see it though her eyes. I got to look at the condo from her “box”. Her perspective was different from mine. She saw her furniture. She saw security in the impact resistant hurricane windows. She saw the lighting. She saw how her clothes would fit in the closet. She saw her husband in his favorite chair. She saw her HOME. You see, I knew my “box” was as the builder and developer. I was eager to see the condo from her viewpoint. In order to build, design and sell better condos – nothing is more important.
Know your “box” and know how to get out of it. You will learn and grow. Know the “boxes” of your friends and the people you deal with. You will be better for it.
I have heard the term for years. I am sure you have too. It’s one of those catch phrases that consultants use. To me the expression means to look at something from outside your current realm of influence. For the past hour, before I started writing this missive, I went Yahoo searching for articles on “Thinking outside the box” and I did not find any article that actually presented a view from outside the respective influence the article was written from. In order to think outside the box you must first recognize what your box is.
All of us live in various communities. Certainly Gail and I live in Florida. We also live in downtown Fort Myers, but we also live in “parent community”, the “real estate community”, the “grandparent community”, the “developer community” etc. We, like you, wear many hats, or live in many “boxes”. Most likely our perspective is confined and guided by these influences, by these boxes.
For many years I was in the plastics business. I sold plastic film to the diaper and sanitary napkin industry all over North, Central, and South America. I was immersed in that business. My “box”, if you can believe it, was diapers and sanitary napkins. For years business was wonderful because Latin America was my oyster and my pearl was that most Latin Americans 15 years ago were not using diapers or sanitary napkins. The business grew like crazy. We built capacity, but after a few years we needed more business. In order to find it, I needed to look outside the box. I went to trade shows for totally unrelated fields to “think outside the box”. I actually went to wood working shows, metal conferences, health conferences, rubber conferences. I went searching for new markets, new uses. Eventually I started supplying house wrap, roofing membranes, and protective films for packaging etc. In order to grow and succeed, I went looking for needs to fill in new communities. I thought outside my box.
This week two sales people from a local newspaper called on me to sell me advertising space in their chain of newspapers. This was their “box”. In fact “advertising” was not even their box. Their box was newspaper print advertising. (A pretty small box). I asked about how they tied into the internet. (They didn’t) I asked about what they knew about how I advertised. (They didn’t know how I advertised). These guys were so stuck in their box all they could offer me was blank space for a fee and I was to fill it with copy.
In an earlier newsletter I talked about investment advisors that tell you that they will review your entire investment portfolio, but never even mention real estate. Stocks and bonds are their “box”. You need to learn what box people you deal with are in so you can adjust your thinking. Don’t let them trap you into their box.
Lately, with the pending release of Palm Point, the coming closings on Oasis, and the negotiation on new properties, my box has been closing in on me. One way I surely get out of that box is to spend time with my two grandsons, Adi and Jacob. Talk about not knowing your “box”; preschool children are so refreshing because their thinking is so open to outside influence. I love probing their minds and suggesting to them new ways to look at things. We could all learn by spending a few hours with a three year old. Yes, they have their “box” but it is a very open one. We need to learn to be more like a three year old.
I can learn from everyone and absolutely love to meet buyers of our condos. This week at dusk one evening I was touring my friends Frank and Ellen at Oasis. As we were driving out someone was driving into the parking lot. I rolled down my window and motioned for the driver to stop. The lovely woman was a bit startled that I would stop her. I asked her with a smile if I could sell her a condo or something. She replied that she already bought one and could not wait to move in. Since I had the key I asked her if she would like to go into her unit. She was thrilled. Frank and Ellen and I went with Barb to tour her soon to be new condo. Now you must understand that I have been looking at these condos almost every day for the past year. But I was anxious to see it though her eyes. I got to look at the condo from her “box”. Her perspective was different from mine. She saw her furniture. She saw security in the impact resistant hurricane windows. She saw the lighting. She saw how her clothes would fit in the closet. She saw her husband in his favorite chair. She saw her HOME. You see, I knew my “box” was as the builder and developer. I was eager to see the condo from her viewpoint. In order to build, design and sell better condos – nothing is more important.
Know your “box” and know how to get out of it. You will learn and grow. Know the “boxes” of your friends and the people you deal with. You will be better for it.
Nature Abhors a vacuum
NATURE ABHORS A VACUUM
I seem to remember being taught this simple concept in high school science class. The concept has been reverberating in my head now for the last few months. Nature Abhors a Vacuum. If there is a vacuum, nature will try to fill it. If there is an empty space, it will not be empty for long. If there is more of something on one side of a fence, the other side of the fence will be a more attractive place. Nature likes to see balance and fights imbalance.
This is the case with people. (You are thinking, all right, Gregg, where are you going with this and how does it relate to real estate investing? Stick with me here.) As many of you know, Gail and I have been on vacation for the past two and a half weeks and we spent the time in the Czech Republic, birthplace of my grandparents. We stayed in Prague and toured churches, castles, museums, outlying towns, apartment buildings, restaurants, old buildings and talked to many people. The Czech Republic has been way on the “other side of the fence” from the rest of the world since World War II. Only since 1989 has capitalism been permitted and communism defeated. In my opinion it still has a long way to go to recover. But it is recovering and it is recovering rapidly.
My real estate “take” on the principal of Nature Abhors a Vacuum is this: present information and transportation technology will increase cultural homogeneity, lower or remove fences or barriers and have a tendency to make all markets and people more similar to one another than more different from one another. This means to me that what I see as a general long term trend (in real estate, for example) in one area will tend to occur in other areas. What is happening in the US will happen in the Czech Republic. What happened in California will happen in Florida. What happened on the east coast of Florida, will happen in Fort Myers. All this will happen to varying degrees and in varying time frames, but the real estate world is moving to “fill the vacuum”, to sameness, to balance.
The key for us is to identify the trends that will stay and spread and to identify the markets that will be affected next. We can learn from the east coast of Florida. We can learn from California. The center of the State of Florida can learn from our own area here.
As you look for opportunities for real estate investing, look for the “vacuums” and for the trends that will eventually flow into those vacuums. This is where opportunity lies.
I seem to remember being taught this simple concept in high school science class. The concept has been reverberating in my head now for the last few months. Nature Abhors a Vacuum. If there is a vacuum, nature will try to fill it. If there is an empty space, it will not be empty for long. If there is more of something on one side of a fence, the other side of the fence will be a more attractive place. Nature likes to see balance and fights imbalance.
This is the case with people. (You are thinking, all right, Gregg, where are you going with this and how does it relate to real estate investing? Stick with me here.) As many of you know, Gail and I have been on vacation for the past two and a half weeks and we spent the time in the Czech Republic, birthplace of my grandparents. We stayed in Prague and toured churches, castles, museums, outlying towns, apartment buildings, restaurants, old buildings and talked to many people. The Czech Republic has been way on the “other side of the fence” from the rest of the world since World War II. Only since 1989 has capitalism been permitted and communism defeated. In my opinion it still has a long way to go to recover. But it is recovering and it is recovering rapidly.
My real estate “take” on the principal of Nature Abhors a Vacuum is this: present information and transportation technology will increase cultural homogeneity, lower or remove fences or barriers and have a tendency to make all markets and people more similar to one another than more different from one another. This means to me that what I see as a general long term trend (in real estate, for example) in one area will tend to occur in other areas. What is happening in the US will happen in the Czech Republic. What happened in California will happen in Florida. What happened on the east coast of Florida, will happen in Fort Myers. All this will happen to varying degrees and in varying time frames, but the real estate world is moving to “fill the vacuum”, to sameness, to balance.
The key for us is to identify the trends that will stay and spread and to identify the markets that will be affected next. We can learn from the east coast of Florida. We can learn from California. The center of the State of Florida can learn from our own area here.
As you look for opportunities for real estate investing, look for the “vacuums” and for the trends that will eventually flow into those vacuums. This is where opportunity lies.
What are they waiting for?
WHAT ARE THEY WAITING FOR
Last Saturday night Gail and I went to a Christmas party given by Kevin Manning and his lovely wife Terri. The party could not have been better; beautiful home, lovely decorations, fantastic food and drinks, and a great bunch of people. I got the opportunity to talk building, real estate and development with some of the folks that I really admire in this industry. People like Jim Crumby of Gross Point Development, John Armenia of the Armenia Group (Riva De Lago), Mike Sheeley of Sheeley Architects and Shawn Anderson of TKW Consulting. This was a very good year for this industry. Spirits were high and we all enjoyed conversation about the local market.
I did have a few conversations about the perceived "slow down" in the market. Whatever slow down we are in will be short lived. One of us said that some real estate buyers, especially investors were taking a "Wait and see Attitude", they are "Sitting on the sidelines". It got me thinking; "What, exactly, are they waiting for? If they are on the side lines watching, what exactly are they watching? It gave me food for thought and I have been thinking about this since Saturday night. Surprise, surprise, now that it is 2:40 in the morning and my brain won't shut down and I am going to share my thoughts
with you.
First, let me tell you that personally I am not waiting nor am I sitting on the sidelines. Within the past two weeks I put six properties under contract or made offers - either on my own account or for clients. This is a great time to buy.
PRICES. I think the biggest reason most people are waiting is prices; they think prices will drop. I believe that they will not, at least not in general. The rate of increase is slowing, but prices are not going down. Yes; the MLS has a larger number of price reductions in the past month than the previous month. Yes, there are pockets of price reductions. There always will be, but if you are not actively in the market looking at properties, you will not see them. If you are actively in the market you will see, at least in SW Florida, some very good deals.
INTEREST RATES. Here is the kicker. Most buyers don't think interest rates are going to go down. They think they will go up. They reason that the interest rates will go up so prices will have to come down. The problem with this analogy is that prices go up in direct response to interest rates and the net cost to the buyer is usually higher. So you if you wait, you are penalized. Here is the link to the Mortgage Bankers Association interest rate forecast. 30 year residential mortgage rates are at 5.7%; the MBA forecasts this to go to 6.7% in one year. Waiting will not help. I will tell you this; if you buy preconstruction now, and your property will not be ready for two years, when you borrow money two years from now your payments will be much higher. You might be better off buying existing product and locking in today's rates. This advantage just may out weigh the advantage of the lower price and anticipated appreciation of preconstruction.
BUBBLE POPPING. If you are waiting for this - do not hold your breath waiting for that popping sound. Instead you should be hearing the air escaping from some over heated markets. Sellers are more anxious to sell. There are deals out there that will slip away to the more savvy buyers. Here is SW Florida our prices are still way below other markets like Florida's east coast. If however, interest rates continue to rise, preconstruction buying may not be as wise as getting a good deal on an existing property and construction costs and margins that are based on this years costs rather than next years price increase.
My conclusion is that waiting to buy will not reward you, but cost you more.
This weekend Tatiana and Holly called me three times to come see a new development here in Fort Myers but I could not break away. They each reserved one condominium for themselves and reserved two more for friends. I finally stopped by last night with Gail and we put reservations on four more. Tom Leach in our office reserved one yesterday as well. Prices started at $170,000. The product, designed by Mike Sheeley, is very similar to Oasis that we did at Brixton; about 1100 square feet for the two bedrooms. No covered parking, but a great location in town. They released only two buildings. They are gone now and they will not release any more until January. They did not know what the prices will be for the next release. Construction has already started and the first buildings will be ready in August. If you are a broker, PLEASE don't bother contacting us. If you are looking to buy and want a condo at under $200,000. Holly or Tatiana can help you. We MAY be able to get you a reservation. $5000 does it once they are released.
The Citadel (www.citadel-bonita.com) now has a furnished model. This is our project about three miles from Bonita Beach. Prices start at $265,000. They are ready to move into and some already have tenants. Tom Leach is living there and can answer your questions or show you around. Ask Tom about special incentives.
We released reservation agreements this week for CYPERLIN, our office tower. We also had a nice write up in the News Press. (Article Here). First American Bank, headed up by my good friend Ken Aschom has reserved the first floor. First American recently purchased Pelican National Bank and their six branches locally. Cyperlin web site is here.
We are in an acquisition mode and will announce more projects in the near future. I am negotiating more parcels as we speak. I like the single family home market and I like the office condo market and will continue to explore those opportunities. By the way, if you are a commercial investor, or have land or buildings that you want to sell, you could do no better than work with Cliff Wiersma. Cliff is a CCIM, and is now with Market America. He has more experience in the land and the investment market than almost any one in town, and you can not find a more honest or hardworking agent. He has the same philosophy as I do. We believe in long term relationships.
Market America continues to grow and we are looking to add both commercial and residential agents as well as support people. If you are interested in working with the a top tier team, please contact me.
Merry Christmas to you all.
Gregg
Last Saturday night Gail and I went to a Christmas party given by Kevin Manning and his lovely wife Terri. The party could not have been better; beautiful home, lovely decorations, fantastic food and drinks, and a great bunch of people. I got the opportunity to talk building, real estate and development with some of the folks that I really admire in this industry. People like Jim Crumby of Gross Point Development, John Armenia of the Armenia Group (Riva De Lago), Mike Sheeley of Sheeley Architects and Shawn Anderson of TKW Consulting. This was a very good year for this industry. Spirits were high and we all enjoyed conversation about the local market.
I did have a few conversations about the perceived "slow down" in the market. Whatever slow down we are in will be short lived. One of us said that some real estate buyers, especially investors were taking a "Wait and see Attitude", they are "Sitting on the sidelines". It got me thinking; "What, exactly, are they waiting for? If they are on the side lines watching, what exactly are they watching? It gave me food for thought and I have been thinking about this since Saturday night. Surprise, surprise, now that it is 2:40 in the morning and my brain won't shut down and I am going to share my thoughts
with you.
First, let me tell you that personally I am not waiting nor am I sitting on the sidelines. Within the past two weeks I put six properties under contract or made offers - either on my own account or for clients. This is a great time to buy.
PRICES. I think the biggest reason most people are waiting is prices; they think prices will drop. I believe that they will not, at least not in general. The rate of increase is slowing, but prices are not going down. Yes; the MLS has a larger number of price reductions in the past month than the previous month. Yes, there are pockets of price reductions. There always will be, but if you are not actively in the market looking at properties, you will not see them. If you are actively in the market you will see, at least in SW Florida, some very good deals.
INTEREST RATES. Here is the kicker. Most buyers don't think interest rates are going to go down. They think they will go up. They reason that the interest rates will go up so prices will have to come down. The problem with this analogy is that prices go up in direct response to interest rates and the net cost to the buyer is usually higher. So you if you wait, you are penalized. Here is the link to the Mortgage Bankers Association interest rate forecast. 30 year residential mortgage rates are at 5.7%; the MBA forecasts this to go to 6.7% in one year. Waiting will not help. I will tell you this; if you buy preconstruction now, and your property will not be ready for two years, when you borrow money two years from now your payments will be much higher. You might be better off buying existing product and locking in today's rates. This advantage just may out weigh the advantage of the lower price and anticipated appreciation of preconstruction.
BUBBLE POPPING. If you are waiting for this - do not hold your breath waiting for that popping sound. Instead you should be hearing the air escaping from some over heated markets. Sellers are more anxious to sell. There are deals out there that will slip away to the more savvy buyers. Here is SW Florida our prices are still way below other markets like Florida's east coast. If however, interest rates continue to rise, preconstruction buying may not be as wise as getting a good deal on an existing property and construction costs and margins that are based on this years costs rather than next years price increase.
My conclusion is that waiting to buy will not reward you, but cost you more.
This weekend Tatiana and Holly called me three times to come see a new development here in Fort Myers but I could not break away. They each reserved one condominium for themselves and reserved two more for friends. I finally stopped by last night with Gail and we put reservations on four more. Tom Leach in our office reserved one yesterday as well. Prices started at $170,000. The product, designed by Mike Sheeley, is very similar to Oasis that we did at Brixton; about 1100 square feet for the two bedrooms. No covered parking, but a great location in town. They released only two buildings. They are gone now and they will not release any more until January. They did not know what the prices will be for the next release. Construction has already started and the first buildings will be ready in August. If you are a broker, PLEASE don't bother contacting us. If you are looking to buy and want a condo at under $200,000. Holly or Tatiana can help you. We MAY be able to get you a reservation. $5000 does it once they are released.
The Citadel (www.citadel-bonita.com) now has a furnished model. This is our project about three miles from Bonita Beach. Prices start at $265,000. They are ready to move into and some already have tenants. Tom Leach is living there and can answer your questions or show you around. Ask Tom about special incentives.
We released reservation agreements this week for CYPERLIN, our office tower. We also had a nice write up in the News Press. (Article Here). First American Bank, headed up by my good friend Ken Aschom has reserved the first floor. First American recently purchased Pelican National Bank and their six branches locally. Cyperlin web site is here.
We are in an acquisition mode and will announce more projects in the near future. I am negotiating more parcels as we speak. I like the single family home market and I like the office condo market and will continue to explore those opportunities. By the way, if you are a commercial investor, or have land or buildings that you want to sell, you could do no better than work with Cliff Wiersma. Cliff is a CCIM, and is now with Market America. He has more experience in the land and the investment market than almost any one in town, and you can not find a more honest or hardworking agent. He has the same philosophy as I do. We believe in long term relationships.
Market America continues to grow and we are looking to add both commercial and residential agents as well as support people. If you are interested in working with the a top tier team, please contact me.
Merry Christmas to you all.
Gregg
Look at the Big Picture Please
LOOK AT THE BIG PICTURE PLEASE
"The median home price stood at $216,200 as of October 2005, compared with $334,000 (in 2005 gold based dollars) in July, 1970. In other words, while there might be froth around the edges, median home prices have yet to fully catch up with the decline in the value of the dollar since the U.S. left the gold standard more than three decades ago." This according to Michael Darda, Chief Economist and Director of Research for MKM Partners in a Wall Street Journal article, December 1, 2005, Page A16.
His excellent article makes the point that the news about a flattening real estate market is overshadowing and even skewing the excellent news about a robust economy. Consider these points:
Data showS that existing home sale prices rose 16.6% in October from a year earlier.
Home prices have been rising faster than incomes, but the ratio between average home prices and incomes remains below historical averages.
"The ratio of total capitalization of household real estate relative to capitalized income (i.e. income adjusted for long term interest rates) also remains below historical averages."
"Business equipment production rode 6.5% in October."
"High tech production is 28.4% year over year."
Darda concludes his summary by stating that he believes we will look back at this period and agree that we underestimated how strong the economy was, I agree. The question is, "What do we do about it?"
Before I answer that question, let me voice my take on the local real estate market in SW Florida. There is no doubt that there is a cooling in the market and a decrease in the rate of increase in the prices. We are in a traditional slow season, it is true, but the slow down is evident in many sectors. The notable exceptions are single family homes in the upper range, commercial land and buildings, and land. We will see some selective price drops - but these drops will result in prices that are still substantially higher than even six months ago. We will not see a bubble "burst" and we will not see precipitous price decreases. PRICES WILL NOT BE GOING DOWN.
Buyers are taking a “wait and see” attitude and no longer feel the urgency to buy now. They are waiting to see if there will be a drop. Buyers were punished for waiting in the past. If they didn't buy in February, the price was higher in March or there was nothing left to buy. Now they think they can wait. Well, they better not snooze too long. (SW Florida prices, BTW, are still well below the East Coast of Florida.)
Now is the time for the savvy investor and home buyer to step up to the plate. There are some pockets of good deals, and it is my strong belief that we are still going to see price increases, albeit more slowly. But it is this slow creep that catches even the experienced buyer by surprise. Six months ago, we could see the price zooming by us, and it was clear that we had to act quickly. Now it is not so obvious.
We also have more product on the market because investors and homeowners alike feel that prices have flattened for a while and have decided to get out. This puts more competitive pressure on the market.
So if we know, and we agree, that the economy is strong, and prices are going to continue to increase, what do we do?
It is more important than ever to buy smart. Six months ago, no matter what you bought went up (Can you say, "tech stock comparison"?). Get a good Realtor that knows the sector you want to buy in, but YOU are the one making the buying decision. Make sure YOU understand the market and the various options. Be prepared to act quickly, because the smart money is still out there hunting.
For what they are worth, here are my suggestions:
Compare prices of similar projects. Some developers locked in costs early and have not adjusted prices upward as fast. (See our communities page).
Waterfront still rules, but watch out for oversupply concentrations. (Fort Myers Riverfront)
Look at existing properties and see how they compare to preconstruction opportunities. For example, if you can buy at Grande Isle at under $400 a square foot now, and be on the water, on a marina, and have limited competition, why would you pay $500 a square foot elsewhere? (Incidentally, I believe Grande Isle is grossly undervalued and Will Stout, President of Real Mark, just wrote a letter to all Burnt Store residents announcing his intention to buy all the assets of WCI at Burnt Store. Mr. Stout does nothing half way - his improvements and sharp marketing will further improve pricing at Burnt Store.) If you have not been up there lately, you need to go. The new grand entrance is completed and the Publix Mall down Burnt Store Road looks just about ready to open.
Look for sellers that are overextended and are ready to bail on the market. I have not seen many, but they don’t normally show their cards that easily.
The commercial sector is strong. Office condos and flex space are two areas I like. E-mail Cliff Wiersma, our land and investment specialist if you want to start looking in that arena.
I like single family homes in controlled predictable environments. (Read gated communities) I have been interviewing home builders for Windsor Lake Estates. These are high end home builders and all are seeing a strong fourth quarter. The pendulum is ready to swing toward more demand for single family homes from condos.
I like the rental market. There is a shortage of apartments to rent. Consider opportunities like The Citadel. Condos that come with tenants.
Thanks for your emails and phones calls. I have been busy lately with the planning for Windsor Lake Estates, The Cyperlin Tower, and growing Market America, and normal holiday festivities. Gail and I will return to Chicago next week with Christopher (my son) and Brandi to get cold, get Christmas Spirit and help boost the economy along Michigan Avenue. We may just look at some more real estate while we are there. We all wish you a safe season.
Gregg
"The median home price stood at $216,200 as of October 2005, compared with $334,000 (in 2005 gold based dollars) in July, 1970. In other words, while there might be froth around the edges, median home prices have yet to fully catch up with the decline in the value of the dollar since the U.S. left the gold standard more than three decades ago." This according to Michael Darda, Chief Economist and Director of Research for MKM Partners in a Wall Street Journal article, December 1, 2005, Page A16.
His excellent article makes the point that the news about a flattening real estate market is overshadowing and even skewing the excellent news about a robust economy. Consider these points:
Data showS that existing home sale prices rose 16.6% in October from a year earlier.
Home prices have been rising faster than incomes, but the ratio between average home prices and incomes remains below historical averages.
"The ratio of total capitalization of household real estate relative to capitalized income (i.e. income adjusted for long term interest rates) also remains below historical averages."
"Business equipment production rode 6.5% in October."
"High tech production is 28.4% year over year."
Darda concludes his summary by stating that he believes we will look back at this period and agree that we underestimated how strong the economy was, I agree. The question is, "What do we do about it?"
Before I answer that question, let me voice my take on the local real estate market in SW Florida. There is no doubt that there is a cooling in the market and a decrease in the rate of increase in the prices. We are in a traditional slow season, it is true, but the slow down is evident in many sectors. The notable exceptions are single family homes in the upper range, commercial land and buildings, and land. We will see some selective price drops - but these drops will result in prices that are still substantially higher than even six months ago. We will not see a bubble "burst" and we will not see precipitous price decreases. PRICES WILL NOT BE GOING DOWN.
Buyers are taking a “wait and see” attitude and no longer feel the urgency to buy now. They are waiting to see if there will be a drop. Buyers were punished for waiting in the past. If they didn't buy in February, the price was higher in March or there was nothing left to buy. Now they think they can wait. Well, they better not snooze too long. (SW Florida prices, BTW, are still well below the East Coast of Florida.)
Now is the time for the savvy investor and home buyer to step up to the plate. There are some pockets of good deals, and it is my strong belief that we are still going to see price increases, albeit more slowly. But it is this slow creep that catches even the experienced buyer by surprise. Six months ago, we could see the price zooming by us, and it was clear that we had to act quickly. Now it is not so obvious.
We also have more product on the market because investors and homeowners alike feel that prices have flattened for a while and have decided to get out. This puts more competitive pressure on the market.
So if we know, and we agree, that the economy is strong, and prices are going to continue to increase, what do we do?
It is more important than ever to buy smart. Six months ago, no matter what you bought went up (Can you say, "tech stock comparison"?). Get a good Realtor that knows the sector you want to buy in, but YOU are the one making the buying decision. Make sure YOU understand the market and the various options. Be prepared to act quickly, because the smart money is still out there hunting.
For what they are worth, here are my suggestions:
Compare prices of similar projects. Some developers locked in costs early and have not adjusted prices upward as fast. (See our communities page).
Waterfront still rules, but watch out for oversupply concentrations. (Fort Myers Riverfront)
Look at existing properties and see how they compare to preconstruction opportunities. For example, if you can buy at Grande Isle at under $400 a square foot now, and be on the water, on a marina, and have limited competition, why would you pay $500 a square foot elsewhere? (Incidentally, I believe Grande Isle is grossly undervalued and Will Stout, President of Real Mark, just wrote a letter to all Burnt Store residents announcing his intention to buy all the assets of WCI at Burnt Store. Mr. Stout does nothing half way - his improvements and sharp marketing will further improve pricing at Burnt Store.) If you have not been up there lately, you need to go. The new grand entrance is completed and the Publix Mall down Burnt Store Road looks just about ready to open.
Look for sellers that are overextended and are ready to bail on the market. I have not seen many, but they don’t normally show their cards that easily.
The commercial sector is strong. Office condos and flex space are two areas I like. E-mail Cliff Wiersma, our land and investment specialist if you want to start looking in that arena.
I like single family homes in controlled predictable environments. (Read gated communities) I have been interviewing home builders for Windsor Lake Estates. These are high end home builders and all are seeing a strong fourth quarter. The pendulum is ready to swing toward more demand for single family homes from condos.
I like the rental market. There is a shortage of apartments to rent. Consider opportunities like The Citadel. Condos that come with tenants.
Thanks for your emails and phones calls. I have been busy lately with the planning for Windsor Lake Estates, The Cyperlin Tower, and growing Market America, and normal holiday festivities. Gail and I will return to Chicago next week with Christopher (my son) and Brandi to get cold, get Christmas Spirit and help boost the economy along Michigan Avenue. We may just look at some more real estate while we are there. We all wish you a safe season.
Gregg
The Pipeline is Still Filling
THE PIPELINE IS STILL FILLING
As I write this from my hotel room in Chicago (no, no condo yet) the temperature outside is 18 degrees. The fluffy white flakes that drifted down on the four of us as we giggled and threw snowballs Thursday night have now congealed into what looks like licorice colored slurpies frozen on the sidewalk. When friendly store clerks ask us where we are from and we tell them Fort Myers, they kind of give us this "Whata you crazy?" look while smiling like they know something we don't.
We arrived Thursday afternoon in Chicago, about the same time the storm arrived that dumped six inches of snow and about three hours and before another Southwest plane skidded off the end of the runway at Midway. Fortunately we did not hear of this tragedy until the next day. We got all bundled up and played like kids on the side walks of Michigan Avenue. We came for some snow and Christmas spirit and Chicago did not disappoint. Gail saw her first real snow fall, by the way. (She has lived a sheltered life in paradise for 52 years!)
As Christopher and I were in line to board the plane in Fort Myers, we overheard a business man on his cell phone making last minute arrangements on property he had under contract off of Bayshore Road in North Fort Myers. Something about phase one environmentals. My ears perked up and when he got off the phone I offered him the name of the firm that does them for us. In the ensuing conversation (In which Christopher and I both offered our services - me for development management and marketing and Christopher for advertising) it became clear to me what this gentleman's view of the market was. He is a developer from Chicago (Condos and Commercial) and he "needed to get into Lee County while property was still available at a good price.” Yes, he is aware of a slight flattening of the growth curve, but he needs to fill his pipeline.
This is an expression I first used when I was in the plastic raw material business. In another life I sold plastic that was used to make, among other things, artificial Christmas trees. I had a very clear indicator of what the Christmas season would be by February of that year. This is because the Christmas decoration business is tied so tightly with the toy industry, and their big trade show was held every year in New York in February. It is in February that the large purchasers place their orders for the following Christmas for toys and trees and everything related to Christmas. The manufacturers would come back from this trade show and start to fill their pipeline. They ordered the tooling needed; they ordered the plastics, the packaging and the advertising. It is a fact that manufacturers must ship their Christmas goods to the distribution warehouses by August in order to be "on time" for Christmas. Any change in future demand had little effect on this pipeline.
Such is the case with the real estate development business. Developers need to secure the land, arrange their financing and plan their projects more than two years ahead of the demand curve. All indications are that they are still doing this. In other words the smart guys are still securing land so that they will have product to sell three, five and even ten years from now. They are filling their pipeline.
What this means to us as buyers is that there is a high level of confidence in the market. It means that there will be many more homes, condos and commercial properties planned and developed that we have not even heard of yet. It means that, while the number of new construction permits pulled may have slowed, (and in my opinion this has more to do with backlog than anything else) the quantity of "goods" in the pipeline will take a long time to change.
The smaller builder has the ability to respond nimbly to the market. He gets and order to build, he or his client buy the land, they order the raw materials, etc. and build. The smaller builder is also much more susceptible to price fluctuations. The larger builder evens out these short term changes by buying long in advance, often with contact pricing; by filling his pipeline with concrete and other materials he is not only assured of product, he is assured of price.
Now let's look at the demand side. Remember the licorice snow? Think scraping ice off your windshield; the bone chilling wind cutting though your outerwear. In truth, the weather is nasty up here in Chicago (or Cleveland, New York, etc… Can you say 62 degrees and wispy clouds in Fort Myers?).
The demand will continue for our weather, our beaches and our property. (By the way - Chicago didn't honor this latest snow storm with a name. I think we get too darn friendly with our hurricanes.)
At my last CCIM meeting, one of our members just returned from Germany where he attended a number of informative marketing sessions about South Florida. He reported there was not a single question about hurricanes.
Many savy northerners and Europeans are planning on their retirement place in the sun. In order to do this they need to plan now while prices are what they are. They cannot afford to wait for future increases and raw material, labor or land shortages.
In short, construction and buying will continue. Developers and buyers alike are "filling their pipelines".
If you are buying or selling real estate in Lee or Collier County, we would like to work with you. We are filling our pipeline too!
I am pleased to tell you that my column is now subscribed to by over 6000 people. When I started this column the market was just entering the double digit inflation cycle. I was making money buying preconstruction condos and reselling them prior to completion. My website was the only one of its kind; specializing in preconstruction condos and catering to preconstruction investors. There are many other sites now and indeed many other "experts". There is even someone coming to town teaching a seminar on preconstruction investing; but I would caution you to be very conservative in you investing. Do not count on the "flip".
Do, however, count on prices continuing to go up. Costs to fill the pipeline continue to increase, and while there may be some elasticity of demand, there will not be a lowering of the costs or the lowering of the margin expectations of either the developers or the investors.
Our website is now visited by retirees, investors and indeed many other Realtors. On our site you can get information about communities that you might otherwise not learn about. We have agents that specialize in each community and unfortunately my schedule does not allow me to handle all the sales and marketing efforts like I did three years ago. We are adding specialists now, and need to add more.
Look for more information on the Communities link on our website. Here you can often get pricing, floor plans and start dates. Remember, in most cases we act as brokers. We make our money by servicing our clients. We do this over the long term and from the clients perspective. We like to think of ourselves as real estate advisors, not just agents. We will sit "on your side of the desk" and evaluate your objectives and needs, and then honestly advise you on how to fulfill your objectives.
I encourage you to read my archived newsletters. You may pick up some helpful information you can use.
Gail and I wish you a safe remainder of 2005.
Gregg
As I write this from my hotel room in Chicago (no, no condo yet) the temperature outside is 18 degrees. The fluffy white flakes that drifted down on the four of us as we giggled and threw snowballs Thursday night have now congealed into what looks like licorice colored slurpies frozen on the sidewalk. When friendly store clerks ask us where we are from and we tell them Fort Myers, they kind of give us this "Whata you crazy?" look while smiling like they know something we don't.
We arrived Thursday afternoon in Chicago, about the same time the storm arrived that dumped six inches of snow and about three hours and before another Southwest plane skidded off the end of the runway at Midway. Fortunately we did not hear of this tragedy until the next day. We got all bundled up and played like kids on the side walks of Michigan Avenue. We came for some snow and Christmas spirit and Chicago did not disappoint. Gail saw her first real snow fall, by the way. (She has lived a sheltered life in paradise for 52 years!)
As Christopher and I were in line to board the plane in Fort Myers, we overheard a business man on his cell phone making last minute arrangements on property he had under contract off of Bayshore Road in North Fort Myers. Something about phase one environmentals. My ears perked up and when he got off the phone I offered him the name of the firm that does them for us. In the ensuing conversation (In which Christopher and I both offered our services - me for development management and marketing and Christopher for advertising) it became clear to me what this gentleman's view of the market was. He is a developer from Chicago (Condos and Commercial) and he "needed to get into Lee County while property was still available at a good price.” Yes, he is aware of a slight flattening of the growth curve, but he needs to fill his pipeline.
This is an expression I first used when I was in the plastic raw material business. In another life I sold plastic that was used to make, among other things, artificial Christmas trees. I had a very clear indicator of what the Christmas season would be by February of that year. This is because the Christmas decoration business is tied so tightly with the toy industry, and their big trade show was held every year in New York in February. It is in February that the large purchasers place their orders for the following Christmas for toys and trees and everything related to Christmas. The manufacturers would come back from this trade show and start to fill their pipeline. They ordered the tooling needed; they ordered the plastics, the packaging and the advertising. It is a fact that manufacturers must ship their Christmas goods to the distribution warehouses by August in order to be "on time" for Christmas. Any change in future demand had little effect on this pipeline.
Such is the case with the real estate development business. Developers need to secure the land, arrange their financing and plan their projects more than two years ahead of the demand curve. All indications are that they are still doing this. In other words the smart guys are still securing land so that they will have product to sell three, five and even ten years from now. They are filling their pipeline.
What this means to us as buyers is that there is a high level of confidence in the market. It means that there will be many more homes, condos and commercial properties planned and developed that we have not even heard of yet. It means that, while the number of new construction permits pulled may have slowed, (and in my opinion this has more to do with backlog than anything else) the quantity of "goods" in the pipeline will take a long time to change.
The smaller builder has the ability to respond nimbly to the market. He gets and order to build, he or his client buy the land, they order the raw materials, etc. and build. The smaller builder is also much more susceptible to price fluctuations. The larger builder evens out these short term changes by buying long in advance, often with contact pricing; by filling his pipeline with concrete and other materials he is not only assured of product, he is assured of price.
Now let's look at the demand side. Remember the licorice snow? Think scraping ice off your windshield; the bone chilling wind cutting though your outerwear. In truth, the weather is nasty up here in Chicago (or Cleveland, New York, etc… Can you say 62 degrees and wispy clouds in Fort Myers?).
The demand will continue for our weather, our beaches and our property. (By the way - Chicago didn't honor this latest snow storm with a name. I think we get too darn friendly with our hurricanes.)
At my last CCIM meeting, one of our members just returned from Germany where he attended a number of informative marketing sessions about South Florida. He reported there was not a single question about hurricanes.
Many savy northerners and Europeans are planning on their retirement place in the sun. In order to do this they need to plan now while prices are what they are. They cannot afford to wait for future increases and raw material, labor or land shortages.
In short, construction and buying will continue. Developers and buyers alike are "filling their pipelines".
If you are buying or selling real estate in Lee or Collier County, we would like to work with you. We are filling our pipeline too!
I am pleased to tell you that my column is now subscribed to by over 6000 people. When I started this column the market was just entering the double digit inflation cycle. I was making money buying preconstruction condos and reselling them prior to completion. My website was the only one of its kind; specializing in preconstruction condos and catering to preconstruction investors. There are many other sites now and indeed many other "experts". There is even someone coming to town teaching a seminar on preconstruction investing; but I would caution you to be very conservative in you investing. Do not count on the "flip".
Do, however, count on prices continuing to go up. Costs to fill the pipeline continue to increase, and while there may be some elasticity of demand, there will not be a lowering of the costs or the lowering of the margin expectations of either the developers or the investors.
Our website is now visited by retirees, investors and indeed many other Realtors. On our site you can get information about communities that you might otherwise not learn about. We have agents that specialize in each community and unfortunately my schedule does not allow me to handle all the sales and marketing efforts like I did three years ago. We are adding specialists now, and need to add more.
Look for more information on the Communities link on our website. Here you can often get pricing, floor plans and start dates. Remember, in most cases we act as brokers. We make our money by servicing our clients. We do this over the long term and from the clients perspective. We like to think of ourselves as real estate advisors, not just agents. We will sit "on your side of the desk" and evaluate your objectives and needs, and then honestly advise you on how to fulfill your objectives.
I encourage you to read my archived newsletters. You may pick up some helpful information you can use.
Gail and I wish you a safe remainder of 2005.
Gregg
Running the Traps
Running the Traps
For most of this week I have been “running the traps”. “Running the Traps” is an expression I suppose came from the fur trappers, running their route to gather their trappings. Of course down here this is what all the crabbers and lobster trappers do. For me it just an expression I use when I have to get out in the marketplace and see what is really going on. I go see my friends in the industry, stop in at open houses, go to sales centers and generally get some “face time” . My assistant will ask me where I am going and when I will be back. I’ll shoot out, “I’m out running the traps. Forward my calls to my cell.”
I don’t care what business you are in, if you don’t go out and “run the traps” you will lose touch with your customer, your suppliers , and your business. I know a very smart gentleman in Caracas, German Toro, that runs a number of businesses in Venezuela. Mr.Toro was chairman of the board of a diaper producer and a good customer of mine. He told me the story of a board meeting he chaired. At this meeting he passed out a list of ten questions to his board members. They were very simple questions that any mother or house wife would know the answers to with out a moments thought. “What does a quart of milk cost?”, “How much do I have to pay a baby sitter?”, “How many times a day does a baby normally get changed?” Not a single member of the board could answer any of the questions. They had all lost touch with their customer. Most had never even set foot in a grocery store in the pat year. He sent them out with a scavenger hunt list of things to buy and answers to seek. Needless to say these board members were more in tune with their business with Toro at the helm.
In the real estate business, staying in touch with the market is critical; and as our market is very diverse and multi faceted, staying in touch is a challenge. We have to keep touch with so many factors such as interest rates, condo releases, the commercial market, home prices, resale rates, new developments, and emerging trends, technology and traffic. For this reason brokers and agents tend to specialize.
I learned this week “running the traps?”. That traffic is heavy and the snowbirds are back and they are here to buy. Every sales center I visited had people waiting to see agents. Most agents report lots of lookers. Lots of “ups” and many tours. Not many contracts though. I talked to one very organized agent that told me she recently reviewed her calendar for the past two years. She thinks that the last month has been an exact mirror of the two previous years. She told me that starting the second week in January she was booked with out of town buyers for every day for the balance of January. This year will be no exception for her. Traditionally buying starts again in earnest towards the end of January and peaks in May for second home buyers. In short, I was very encouraged by my field trips.
The economy is strong, interest rates are stable and still low, and there are some deals in the market place. This is a wonderful time to buy here. Sales have been slow and sellers are more willing to deal than ever before. Smart money is buying. The Fort Myers News Press has been running a series on the baby boomers and their effect on the market. Most of you know that this is not new news. But I cannot stress enough that we have only seen the tip of the ice berg when it comes to the baby boomer influx in South West Florida. If you do not have a second home in Florida, please buy it now. If you can afford another one…buy it now. Use some of the innovative mortgage options like option ARMs to help you with cash flow. These are the good old days for tomorrow. Get on the escalator.
For most of this week I have been “running the traps”. “Running the Traps” is an expression I suppose came from the fur trappers, running their route to gather their trappings. Of course down here this is what all the crabbers and lobster trappers do. For me it just an expression I use when I have to get out in the marketplace and see what is really going on. I go see my friends in the industry, stop in at open houses, go to sales centers and generally get some “face time” . My assistant will ask me where I am going and when I will be back. I’ll shoot out, “I’m out running the traps. Forward my calls to my cell.”
I don’t care what business you are in, if you don’t go out and “run the traps” you will lose touch with your customer, your suppliers , and your business. I know a very smart gentleman in Caracas, German Toro, that runs a number of businesses in Venezuela. Mr.Toro was chairman of the board of a diaper producer and a good customer of mine. He told me the story of a board meeting he chaired. At this meeting he passed out a list of ten questions to his board members. They were very simple questions that any mother or house wife would know the answers to with out a moments thought. “What does a quart of milk cost?”, “How much do I have to pay a baby sitter?”, “How many times a day does a baby normally get changed?” Not a single member of the board could answer any of the questions. They had all lost touch with their customer. Most had never even set foot in a grocery store in the pat year. He sent them out with a scavenger hunt list of things to buy and answers to seek. Needless to say these board members were more in tune with their business with Toro at the helm.
In the real estate business, staying in touch with the market is critical; and as our market is very diverse and multi faceted, staying in touch is a challenge. We have to keep touch with so many factors such as interest rates, condo releases, the commercial market, home prices, resale rates, new developments, and emerging trends, technology and traffic. For this reason brokers and agents tend to specialize.
I learned this week “running the traps?”. That traffic is heavy and the snowbirds are back and they are here to buy. Every sales center I visited had people waiting to see agents. Most agents report lots of lookers. Lots of “ups” and many tours. Not many contracts though. I talked to one very organized agent that told me she recently reviewed her calendar for the past two years. She thinks that the last month has been an exact mirror of the two previous years. She told me that starting the second week in January she was booked with out of town buyers for every day for the balance of January. This year will be no exception for her. Traditionally buying starts again in earnest towards the end of January and peaks in May for second home buyers. In short, I was very encouraged by my field trips.
The economy is strong, interest rates are stable and still low, and there are some deals in the market place. This is a wonderful time to buy here. Sales have been slow and sellers are more willing to deal than ever before. Smart money is buying. The Fort Myers News Press has been running a series on the baby boomers and their effect on the market. Most of you know that this is not new news. But I cannot stress enough that we have only seen the tip of the ice berg when it comes to the baby boomer influx in South West Florida. If you do not have a second home in Florida, please buy it now. If you can afford another one…buy it now. Use some of the innovative mortgage options like option ARMs to help you with cash flow. These are the good old days for tomorrow. Get on the escalator.
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