Hey guys, I am glad to be back in Gainesville. If you followed my inane rantings on Twitter, you would know that last week I was in Jacksonville working on the final leg of my CPM designation through IREM. Gainesville is great, but I'm off to San Diego tomorrow to work the National Association of Realtors Expo for the National Association of Residential Property Managers. I know what you're thinking: that's a lot of words to say nothing. Thanks to Lem Purcell for covering the blog last week and doing it better than myself.
While I'm out in San Diego, I am going to meet with a potential retail center client, and I might even reconnect with an old GHS alum for a Laker's game, so the trip is looking fairly sunny.
It looks like I leave Gainesville for a week and the market falls apart! Seriously, November was our worst month last year and things right now for November look better than last year, but not by much. If I didn't tell you, September was the first year over year monthly increase in sales volume that we have seen since 2006 (up 15 percent over Sep 2008). October, unfortunately, wasn't so good. The market was back to old tricks, and at this point, I would guesstimate that when all is said and done 2009 will be down 15 percent in the sheer number of transactions and down 20 percent in total volume of sales (dollar price of all sales combined).
On Monday, I was scrambling to catch up when one of my top producers came in and told me he immediately started receiving calls from "shadow sellers" once the tax credit was extended. It is his opinion that the unintended consequence of the rollover is a spike in supply as sellers move to get their homes sold prior to April 30, 2010. We also got the news on Monday that, on January 1, a client wants us to take over management of their 131 unit busted condo. Good thing I've been working on my CPM! More on those pesky condos later.
At our sales meeting on Tuesday we had Aaron Prida from Entrust Freedom present to us on the topic of owning real estate in your 401(K) and/or IRA. An interesting topic, especially considering the deals out there in real estate right now. I was extremely happy to find out that "technically" you must have a professional Property Manager manage the asset. My wife and I were pretty intrigued though. Let's say that buy an investment property for $100,000 cash. If you net $600 per month after taxes and insurance, you would be getting a 7.2 percent cash on cash return. If you were depositing those monthly payments into a mutual fund, the potential could be pretty fantastic.
Wednesday, we got some great news that FHA was gong to be relaxing condo guidelines on FHA mortgages. I've said it before and I'll say it again while condos are frowned upon right now, the groundwork is being laid for the condo comeback. I also don't believe the single-family home market can right itself until after a condo comeback. Just under the radar, a lot of little things have been happening to right the ship in the condo market. This new from FHA is certainly promising. Some highlights from FHA:
• Increase from 30 percent to 50 percent the number of units in a project that can be financed with FHA loans. FHA, however, will make exceptions, even allowing up to 100 percent, when buildings meet an additional set of more stringent criteria.
•Require at least 50 percent of units in a complex to be owner-occupied or sold to owners who plan to live in the units. Bank-owned units may be disqualified from the percentage calculation.
• Reduce a presale requirement in new construction to 30 percent, compared to 70 percent for loans from conventional lenders.
Tommy Williams hosted a dirt turning event at his new zero energy home in Belmont. It was a great event and Tommy is excited to see the end results. This will actually be his second zero energy home to be completed. It was nice to see Tommy thanking all of his past buyers who have helped him lay the groundwork. "You probably could have found a cheaper home; instead you choose a green home." It was a classy event and co-sponsored by Alarion Bank and Bosshardt Title.
Right before I headed out this morning, I got this Florida Asset review report through Q3 of 2009. It generally shows that charge-offs (loans written off) for banks are up fivefold, and non-performing assets (Loans that default) are continuing to accelerate in Florida. The good news for our area is for now we are outperforming the rest of the state. I'm not so sure that will continue in 2010. Nine Florida banks have closed their doors this year.
Have a great weekend and Go Gators!