Orlando Real Estate Blog | David Welch

I started a short series on business planning using Stephen Covey’s Seven Habits as a guide. In my first post I talked about what Covey refers to as Private Victory and the first three habits: be proactive, begin with the end in mind, and put first things first. This post will focus on the Public Victory areas of: think win-win, seek first to understand then to be understood, and synergize.

You can apply these three habits in the implementation of your business plan as you are actually in field working with buyers, sellers, other agents, title companies, lenders and the other professionals we deal with on a regular basis.

Think win-win is an appropriate mindset when working with your customers. If you do your job well your customer has their home sold or their purchase closed and you get paid for your efforts. Your customer and you both have an incentive to work together and you both win at closing. This is also the best mindset to have when approaching the other agent, the title agent and the lender. By working together toward a successful closing every professional involved benefits.

Seek first to understand then to be understood is really the secret to success of any salesperson. Your customer is not looking to be sold, they are looking for your professional opinions and advice. You are their advocate in the transaction, and you need to understand their concerns. Ask your customer questions, then be quiet and listen. A little time listening to your customer can yield a much more productive relationship with them.

Finally, synergize goes hand in hand with thinking win-win with the other people involved in closing your transaction. I have had a business relationship with the same title agency and the same loan officer for about 13 years. I stongly encourage my customers to work with these people, because I have complete confidence their transaction will be handled professionally. I find that the transactions I close with these folks go so much more smoothly. You need to try to synergize with whoever may be providing your customer’s loan or closing their transaction, but whenever you can working with your partners takes the synergy to another level.

There is one habit left, and I’ll cover that in my next post.

December 2011 real estate search results are in and Orlando, FL was the #10 most searched market in the country in December 2011, based on data released today by Realtor.com, the #1 homes for sale real estate web site.

Median list prices for homes in Orlando, FL hit $155,000 in December 2011, a 0.71% increase from one year ago this month, and -2.52% decrease from November 2011. The national median list price in December 2011 was $188,000, a 5.03% increase compared to December 2010.

Active for sale inventory of homes in Orlando, FL in December 2011 leveled out at 11,159, a -43.26% decrease compared to December 2010. National inventory counts for December 2011 were 1,893,528, a -22.29% decrease as compared to a year ago.

The median age of inventory in Orlando, FL in December was 80 days, a 8.11% increase compared to November 2011. Nationally, the median age of inventory was 122 days, a 7.02% increase compared to November.

For details on all 146 MSAs monitored by Realtor.com in December 2011, click here:

http://www.realtor.com/data-portal/Real-Estate-Statistics.aspx

Contact us if you’re interested in a custom report detailing real estate trend data by county or zip code.

Each month, Realtor.com surveys up to 250 Metro Service Areas (MSA) throughout the nation and monitors real estate trends including consumer search behavior, median list prices on for sale homes, active inventory counts and median age of inventory. The information is released to local markets to help consumers and real estate professionals as they work together to successfully navigate their local market.

According to Realtor.com, the top 10 most searched real estate markets, identified as MSAs, in the United States in December 2011 include:

Chicago, IL 1^st
Detroit, MI 2^rd
Los Angeles-Long Beach, CA 3^rd
Phoenix-Mesa, AZ 4^th
Atlanta, GA 5^th
Tampa-St. Petersburg-Clearwater, FL 6^th
Philadelphia, PA 7^th
Dallas, TX 8^th
Las Vegas, NV 9^th
Orlando, FL 10^th

In addition, the top most searched real estate markets in Florida in December 2011, and the national searched rank included:

Tampa-St. Petersburg-Clearwater, FL #6
Orlando, FL #10
West Palm Beach-Boca Raton, FL #13
Fort Lauderdale, FL #16
Miami, FL #18
Fort Myers-Cape Coral, FL #31
Sarasota-Bradenton, FL #38
Jacksonville, FL #42
Melbourne-Titusville-Palm Bay, FL #46
Fort Pierce-Port St. Lucie, FL #52
Naples, FL #54
Daytona Beach, FL #56
Lakeland-Winter Haven, FL #62
Pensacola, FL #110
Tallahassee, FL #113
Ocala, FL #124
Punta Gorda, FL #129
Gainesville, FL #130

Realtor.com is the most searched real estate web site today, and displays more than four million for sale and for rent property listings fed directly to the site for free by more than 933 multiple listing services (MLS) across the nation. More than 75 percent of all listings on Realtor.com are updated every 15 minutes with important information including price changes, sold data and property status changes, with the remaining properties updated every one to 24 hours. All homes tracked in these monthly reports are single family homes, condominiums, co-ops and townhomes.

For more information or commentary on local market trends, please contact:

Julie.Reynolds@move.com
Jennifer.DuBois@move.com
Jill.Kipnis@move.com
Candice.Cerro@move.com
Move@accesspr.com

I don’t read a lot of management books – at least not since I finished my MBA 22 years ago. One that I have read is Steven Covey’s “Seven Habits of Highly Successful People.” I was in a goal setting meeting at our office yesterday, and I started thinking about the seven habits and how well they correlate to our industry. Covey groups the habits into three different areas, so today I am going to focus on the grouping he titled ”Private Victory”. The three habits that fall into this category are “Be Proactive”, “Begin with the End in Mind”, and “Put First Things First.”

The typical agent in our market only sells three or four houses a year, and I think a lot of that is directly related to them not having any kind of plan. Sitting and waiting for the phone to ring is not a plan. You have to be proactive, and that can mean a lot of things. Some people read that and immediately think it means cold calling. That is not necessarily the case. It just means that you have to reach out to the market, and let people know that you are in the real estate business. When making plans, you need to begin with the end in mind. How many people do you want to help this year? Assuming you are in business to make a profit, how much money do you need to make and how much do you make on your average transaction? Divide the former by the latter, and you will have the number of people you need to help. It is not rocket science.

Finally, you have to implement your plan, and that means putting first things first. We are always juggling three aspects of our business. I call them the three C’s: contacts, contracts and closings. Before you can go to a closing, you have to have a contract. Before you can have a contract, you have to make contact with buyers and sellers. So, if you are really putting first things first, you are meeting potential customers. I have heard the average person knows about 300 people, and that sounds like a pretty good sized datebase of potential customers and referrals. Think of these three habits when you are working on your business plan, and read Covey’s book for a whole lot more detail than I have written about here.

This was definitely a December to remember when it comes to Orlando real estate. The number of homes available for sale continued to decline in the last month of 2011. There are 9,101 homes currently on the market with Orlando Realtors. Of that number 863 or 9.5% are foreclosures, 3,081 or 33.9% are short sales and 5,157 or 56.7% are equity sales. The total number active is down nearly 400 over the last month. Another number that has started to drop is the number of pending sales. While the pending sale index is up nationally, ours I believe has peaked and is settling back down. In our situation the decline in pending sales is not a bad thing, but an indication that short sales appear to be closing. Currently, there are 8,939 homes with contracts pending. Of those, 1,031 or 11.5% are foreclosures, 6,770 or 75.7% are short sales and 1,138 or 12.7% are equity sales. The biggest drop has been in short sales that stood at 7,088 a month ago.

Sales and prices did not disappoint with 2,287 closings posted for December with a median sales price of $115,000. The price remained steady from November, but is 15% higher than December 2010′s $100,000. December marked the fifth month in a row with year over year price increases. Looking more closely at the sales, there were 555 or 24.3% from foreclosures with a median sales price of $79,400. That is an increase in November’s median foreclosure price of $75,300. Short sale made up 836 or 36.6% of all sales with a median price of $105,000, slightly lower than November’s $106,000. The 836 closed short sales pushed the sold to pending ratio to 12.3% which is by far the highest I have seen since I started measuring three years ago. It could be the dwindling inventory has left buyers with little choice but to wait out the short sales, so more are getting to closing. Finally, the plurality of the sales 896 or 39.2% came from equity sales with a steady median price of $150,160. Cash sales remain strong with 1,167 or 51% of all sales closing without financing and 1,120 or 49% closing with some form of financing. Cash sales posted a median sales price of $75,000 while financed sales had a median price of $147,000.

David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone

Actually, cash sales have dominated the Orlando real estate market for the last three years, and cash continued to be king in 2011. There were over 29,000 sales closed in Orlando in 2011 – Wow! Of those sales that closed last year 53.4% (over half, one in two, the majority) were cash deals. I ran the numbers and that means nearly $1.7 billion in transactions closed without financing. That is a lot of greenbacks flowing into the Orlando area.

I broke things down a little bit, because a lot of the cash transactions take place in the lower price ranges as investors continue to snag deals. Of all homes priced below $50,000, 5,212 or 94.4% were all cash deals. Many of these are condos, and there just is no financing available for the vast majority of condominiums here in the Sunshine State. The prevalence of cash sales drops off considerably above $50,000. Of the homes priced between $50,000 and $100,000 65% of the sales last year were still all cash. Homes priced from $100,000 to $200,000 drop off quite a bit more with only 35.8% being cash transactions. Even among homes priced above $200,000, 28.1% still closed without any financing.

With prices rising the last several months, and the lower inventory of properties for sale I am curious to see if cash continues to flow so swiftly into our market. With an affordability index around 200 and rents 30% higher than owning, Orlando continues to provide a good return on investment for real estate investors. Did somebody say show me the money?

So, you caved in to the persistent Florida sunshine a few years back and built an in-ground pool. You loved the days of fun in the sun, but now it’s time to move on, and there’s still that pool in your yard, a legacy of an investment of over $30,000 and months of construction. Hopefully you decided to build your pool for the right reasons: to make building a pool worthwhile, you must genuinely enjoy (and have time for) swimming, sunning, and all aspects of lazing around in the backyard. You heeded the advice to never buy a pool solely for the resale value. You also know that after you did build your own private paradise, you can’t expect to recoup all of the cost of building a pool in the resale of your home.

Like it or not, your pool can have a huge effect on how potential buyers view a home. Many will look at your pool and see clear water and attractive landscaping, but some will only see maintenance expenses, and still others just see a hazard for their young children. Obviously the proportion of each kind of buyer will vary with the local climate and relative number of home pools in your area— a pool in Florida will obviously gain more admirers than a pool in, say, Maine. In Florida, a pool usually adds value to a home, particularly a high-end home that already has a lot to offer. Typically these buyers are willing to pay more for the privilege of owning your former poolside retreat. The relative desirability of a pool is reflected in the monetary value of reselling a home with a pool.

What can you do to make your pool an asset? Research indicates that it’s the little things that make a big difference when reselling a home generally, and this advice applies to pools as well. The good news is that you can control what buyers see when they look at your pool. To that end, it’s time for a pool check-up. Does the stone or tile seem worn or eroded? Water not sparkling? Fountain running slowly? Fixing these issues will go a long way toward dressing for success for buyers. Remember that your home is competing with the best new homes in your area, and emphasize the advantages of inheriting a pool from previous owners. A beautiful, inviting pool will win over buyers and make them more willing to pay those few extra dollars.

Of course, sprucing up your pool is most helpful for persuading truly undecided buyers, the people who are flying in from Buffalo and have never even thought of owning a pool in their lives. These buyers may be put off at the thought of the pool initially, but once they see the raft floating near the spa or the towels out to dry in the sunshine, they may be seduced. However, those who are more familiar with what it takes to buy and maintain a pool, but haven’t decided if such an investment is right for them, can be the trickiest to persuade—yet another reason to be sure your pool looks its best when real estate agents come calling. When shown to its best advantage, your favorite weekend hangout can become a great reason for a buyer to choose your home.

reprinted by permission from Katherine McKenzie

One of the investors I work with asked me to double check the MLS, because she is not getting any new listings. She likes downtown and uptown Orlando condos, and has purchased several from me over the last few years. Three of the buildings where she has purchased are: Metropolitan at Lake Eola, Park North at Cheney Place and Uptown Place. All three of these complexes are in midrise buildings and offer similar amenities. The Metropolitan is right across the street from Lake Eola, so I think it has the best location hands down. The other thing all three share is a real turnaround.

There are 245 units in Uptown Place and 111 have turned over in the last three years. There are only eight foreclosure related filings open this year. Park North has 305 units and 124 have turned over wth only four filings this year. The Metropolitan has 129 units and 59 (almost half) have resold in the last three years with only four filings in 2011. For those of you who may not know this, any condo sales over the last few years would be cash deals. So, if you are thinking someone who bought in 2008 might still be upside down – it just is not likely. I wrote some time ago about another condo community in South Orlando with 360 units that was down to nine paying owners in 2008 that had 240 paying owners by 2010.

This type of turnaround is happening all over Orlando which helps explain why November’s median sales price was up 9.5% over the same month a year ago. If you are thinking about getting back into the Orlando real estate market, don’t wait too long. Prices are still very low and interest rates are ridiculously low. This won’t last forever though.

David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone

If you are selling a home in Orlando valued greater than $300,000 make sure you are doing every thing right, if you want to get your home sold. Currently in Orange, Seminole and Osceola Counties there are 10,003 homes with contracts pending. While that is actually a staggering number, over half of these properties are listed under $100,000. There are 5,055, in fact, that are priced below $100k and another 3,503 priced below $200,000. That leaves fewer than 1,500 higher priced homes with contracts pending on them.

So far this year, and we have a few weeks left, there have been 5,698 homes priced under $100,000 that have had their listing either withdrawn or expire. That means even these most affordable properties are still about 12% more likely to be pulled off the market or see their listing expire than get a contract. There have been 4,736 homes priced between $100,000 and $200,000 that have fallen off the market. In that price range homes are 35% more likely to fail to sell than get a contract. To be fair, we don’t know why these properties came off the market. Many of them probably did not get a chance to sell for reasons that have nothing to do with the market per se. That said, the odds get longer as the price goes higher. There are 816 homes pending in the $200k-$300k range, but 1,854 failed to sell, so more than twice as many failed as succeeded. Homes priced $300k-$400k were three times more likely to fail to sell. $400k-$500k properties were 3.77 times more likely not to sell, and homes priced over $500,000 were more than 4 times more likely not to go to contract.

If you are the gambling type you might not like the odds of selling your higher priced home, but there ways to stack the deck in your favor. First, have a realistic expectation of the value of your home. I have observed that most sellers over value their home in many cases by 20% or more. Second, make your home available to be shown. While the over all market has a shortage of listings, there is a substantial oversupply when considering the number of higher priced homes compared with the number of buyers for those homes. You may only get one shot to show your house to the right buyer. Third, make sure when your house is shown, it is in show ready condition. Finally, find a Realtor® that has the tools and experience to market your home properly. Currently, there are 287 homes in the tri-county area priced over $500,000 that have contracts pending, so there is a market make sure you are prepared for it.

David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone

November sales ended up disappointing me just a little bit. The pace of sales early in the month lead me to think we were going to see more closed sales than October. I guess everyone was just trying to get closed before Thanksgiving, because things slowed down after turkey day. Let’s start with the inventory though. There are 9,489 homes listed for sale by Orlando Realtors, which is up slightly from October’s 9,420. Of those homes currently on the market, 854 or 9.0% are bank owned, 3,164 or 33.3% are short sales and 5,471 or 57.7% are equity sales. The number of distressed properties is up slightly compared to October while equity sale listings are down a bit. Pending sales remain strong, but continue to decline. There are 9,499 homes with contracts with 1,027 or 10.8% REOs, 7,088 or 74.6% short sales and 1,384 or 14.6% equity sales. The total number of pending contracts is down from 9,558 in the prior month although REO pendings are up slightly.

Now for the sales statistics. There were 2,048 closed sales in November which is down from 2,158 in October, and that is a little disappointing since the month started out very strong. The median price, definitely did not disappoint, coming in at $115,000. That is a big increase over October’s $108,000 and November of 2010′s $105,000. It think that is the third or fourth month in a row of year over year price improvement. Of those sales, 489 or 23.9% were REO with a median price of $75,300 and increase over October. There were also 762 short sales closed making up 37.2% with a median price of $106,000 also an increase over October. The biggest group was equity sales, accounting for 797 or 38.9% with a median sales price of $150,000, slightly lower than October. The ratio of short sales closed to pending once again exceeded 10%. Cash sales remained the strong with 1,037 or 50.6% of all sales closing without any financing at a median price of $75,003 up from October. The financed sales accounted for 1,011 or 49.4% of all sales with a median sales price of $145,000 which is a bit lower than October.

David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone