DAVENPORT – Diversification is key for a lot of things, particularly investors, who view it as a means of reducing risk by investing in a variety of assets.
But diversification can also apply to the job skills that people have. If their talents in one field start to become obsolete, they can retrain and diversify, and offer more to employers.
It may not seem like the case, but this has become particularly true for Realtors.
Just ask Pete Howlett.
“We’re looking to have a strong year,” said Howlett, who operates a real estate company in Davenport, Orlando Vacation Realty.
“We’ve had some good activities recently as far as sales,” Howlett said. “I have more deals now than I’ve had in a while. I have eight deals going on now. I haven’t had eight deals at one time in a long time.”
Howlett markets properties in Four Corners, the area where the counties of Lake, Orange, Osceola and Polk meet at U.S. 27 and U.S. 192. This area has been a booming spot for newly built vacation and luxury homes, and when the real estate market was booming between 2004 and 2006, business was great. People moved to Four Corners just to open up real estate offices to take advantage of the heavy demand for properties there.
But when the housing boom turned bust by 2008, the crash was felt throughout a host on industries.
Home building suppliers.
The housing boom had fueled growth throughout a wide variety of fields, when suddenly the huge drop in home buying left behind a massive inventory of unsold, vacant homes, and a rising home foreclosure rate. Also gone was a long list of jobs related to the home building and growth industries.
The same was true for Realtors like Howlett, who struggled to stay afloat when the real estate market was tanking. What kept him in business, Howlett said, was that he diversified what he could offer his clients.
He did that be expanding into property management. For the past few years, Howlett’s company has managed homes that people want to sell, but simply couldn’t because the market was so weak and there were so few buyers. In some instances, these sellers decided to pull the house off the market and rent it instead. Managing other people’s homes, he said, helped pay the bills when there was a surplus of homes for sale but a big shortage of qualified buyers.
“I want to really push property management this year,” Howlett said. “We have about 70 properties that we manage. I want to get to 100. That’s our bread and butter right now.”
Howlett plans to continue expanding this year as well, by going into the field of Community Association Management – or consulting for home owners associations. This is a potentially strong field, since few builders during the residential construction boom built single family homes, and instead constructed subdivisions containing hundreds of new houses. These developments, often built in unincorporated areas, are run by home owners association that set the rules and regulations that all residents live by.
“Basically, you’re working for the homeowners association,” Howlett said. “There’s a lot of competition in that business, but it is a monthly paycheck. I think I can use some of my property management contacts to get into HMAs.”
Howlett said the local housing market has improved recently, as more buyers show interest in purchasing homes in Four Corners and Northeast Polk County. But he also knows that the market remains fragile, since inventory is so high, and since a lot of sellers have to compete with “short sales” transactions.
Short sales are when the seller owes more on their mortgage than a buyer is willing to pay for the home, so the property is sold at a reduce price. The hope is that the banks will agree to write off the seller’s remaining debt, rather than let the home fall into foreclosure.
Short sales may be good for a seller eager to unload a mortgage they can no longer afford to pay, and even better for buyers looking for good deals on the price. But for the overall housing market, these transactions painfully drag down home prices.
“Short sales are still going to be on the landscape for a long time,” Howlett said. “Prices have gone down and people are selling at a loss.”
Howlett said he’s stayed in business by diversifying what he offers clients, both in terms of property management and now home owners association management. He believes the local housing market, while certainly getting better compared to 2008 and 2009, nevertheless has a long way to go.
“I’m looking to do as much diversification of the real estate market as I can,” he said. “I want to work smart and open up other avenues.”
Realtor Brooke Thompson has gone through a similar experience. She became a real estate broker in 2005, and remembers how quickly sales went through back then.
“It was easy,” she said. “People would just put in an offer and get an answer right away.”
Times have changed since the housing market collapsed.
“Now you have to wait months for a deal to go through,” she said. “In one case, it was three months before we heard back on the offer.”
Thompson said she had to work harder to find qualified buyers, and she also put a focus on helping people who didn’t qualify for a mortgage and instead needed to find an apartment or home to rent.
“I did a lot of rentals,” she said.
Thompson, who runs Premiere Realty in East Orlando, said she also does a lot of short sales transactions. The good news, she added, is that “There are still qualified buyers out there,” including retirees and young couples looking to buy their first home at a time when prices keep falling.
To learn more about Orlando Vacation Realty, call Howlett at 863-424-3580.
To learn more about Premiere Realty, call Thompson at 407-716-7810.
Contact us at FreelineOrlando@gmail.com.
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