A struggling housing markets leaves Realtors looking for ways to diversify

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.

Realtor Pete Howlett operates Orlando Vacation Realty in Four Corners.

“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.
Mortgage lending.
Construction work.
Home building suppliers.
Home furnishings.
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.”

The real estate market in Northeast Polk County remains weak but shows signs of improving.

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.

Maintaining your property should be one less thing you need to worry about and with Orlando property management this can be possible! Orlando Property Management

British investors target foreclosed vacation and luxury homes in Four Corners.

DAVENPORT – A section of Central Florida that grew by leaps and bounds when the housing market was on fire, and has since suffered a high home foreclosure rate, could be in for some welcome financial relief, courtesy of foreign investors.
The British have long had a love affair with Northeast Polk County and the Four Corners area where U.S. 192 and U.S. 27 meet, since the area is close to Walt Disney World and the other theme parks, and has an ample supply of vacation homes.  In fact, the vacation home industry has been booming throughout Northeast Polk County for the past decade.
But the growth of residential subdivisions along U.S. 27 in the first half of the last decade, which wiped out so many vacant citrus groves to make way for new housing units, turned into a nightmare for local Realtors when the housing boom crashed in 2008.  It left the region with a high inventory of newly built, unsold homes, and a rising foreclosure rate.

U.S. 27 runs through Northeast Polk County, an area where the vacation home industry boomed during the past decade.

A lot of that inventory, which has been slow to clear the market, could soon get cleared off the books altogether, said L. Scott Brown, a partner and licensed title agent with Orlando Title Services in Orlando.  He said a group of British investors have contacted him about their interest in chartering a new company that would purchase a lot of unsold vacation home properties along U.S. 27, at a time when too much competition has brought the prices down from the historic highs in 2005-2006.
The new corporation, Brown said, would be set up on the islands of Guernsey, which lie in the bay of St. Malo in the English Channel, about 30 miles from the north coast of France and 70 miles from the south coast of England.  Guernsey is a tax free island, and offers British business owners the equivalent of setting up an American company in the Bahamas.
“All the guys are British,” Brown said.  “There’s an IPO (Initial Public Offering) that’s supposed to be released in the United Kingdom for the sale of hundreds of vacation homes in the (U.S.) 27 corridor. These will be homes that have been foreclosed on.”
The Four Corners area – where the counties of Lake, Orange, Osceola and Polk counties meet – already has a growing number of British pubs and restaurants, and a lot of the vacation homes there are run by property managers who relocated here from Britain to get in on this booming industry.  The short term rental home initially had its strongest market among the British and other Europeans, who came to the region for extended stays of a month or longer, and wanted to rent a fully furnished house for their families.  These home provide multiple bedrooms, a kitchen, game room and private pool — much more space than a hotel or motel room.  Even as the local housing market has floundered, there continues to be interest among foreign nationals in purchasing second homes here.

Sadly, far too many of the homes in Northeast Polk County and Four Corners have been short sales and bank foreclosures.

“There’s a lot of Canadians coming down and buying homes in the $100,000 range,” said Paul Dudley, who moved to Four Corners from England to run a local business, Florida Villa Services Inc., who sells game room equipment to residential and vacation home properties in the area.  “For that price, it’s all condos and townhouses.”
The second home and vacation home industries have dominated the Four Corners real estate market in the past decade, but it’s been a struggle in the past two years once the housing market collapsed.  Nevertheless, Brown said the British investors see an ideal opportunity to buy up new vacation homes at low prices, and then look for a healthy return on that investment as the market improves.
“They’re going to come in and buy up 6 percent of the vacation homes in Central Florida,” said Brown.  “They’ve contacted a couple of banks that have a huge portfolio of foreclosed homes. We’re going to know in the next two weeks if that will fly, but if it all flies, it will be great because it will remove a lot of dead inventory off the market.” 

L. Scott Brown, a partner in the mortgage firm Orlando Title Services, says British investors may buy up a bulk of foreclosed homes on U.S. 27.

Brown said the investors are looking at managing the properties for several years, then selling them.
“That can be a very exciting thing,” he said.
Pete Howlett, a Four Corners Realtor who runs Orlando Vacation Realty in Davenport, said clearing excess inventory off the list of unsold homes would help enormously in stabilizing the Four Corners real estate market.
“This market needs something like that to get rid of all the dead inventory,” Howlett said.  “Then we’ll see some return of prices when we get rid of all that dead wood.”
Brown said some local subdivisions are already seeing the inventory of homes for sale fall below 5 percent, which he said could soon put sellers in the driver’s seat once again.
“I’m seeing that in communities where the value has held up well,” he said.  “You’re seeing low inventories there, and with low inventory, it’s not long before it flips and becomes a seller’s market again.”

Contact us at FreelineOrlando@Gmail.com.

Maintaining your property should be one less thing you need to worry about and with Orlando property management this can be possible! Orlando Property Management

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