FOUR CORNERS – Pete Howlett has watched the Four Corners real estate market soar to amazing heights during the building boom of the last decade, to the painful correction when the market went bust in 2008.
Howlett, a Realtor who operates Orlando Vacation Realty at Polo Park in Davenport, said what he hadn’t expected was for the downturn to last this long, as the local housing market remains mired in short sales, foreclosures and declining prices three years after the bubble burst. Howlett said it’s particularly frustrating that the federal government seems unable to recognize that the housing market may be the key to turning around a sluggish economic recovery.
“Real estate is such an economic driver,” Howlett said. “It’s construction jobs and retail jobs. People need to buy things for their home. If you fix real estate, that solves so much of the economy’s problems.”
Howlett is the chairman of the Four Corners Business Council, a group of small business owners in Four Corners and Northeast Polk County who meet once a month at Howlett’s office to network and look for ways to boost business. The council, which had its most recent meeting on Aug. 3, is made up of business owners who work in fields related to real estate – an industry that, as Howlett noted, continues to struggle for relief.
He said the chief problem isn’t interested buyers, prices, or inventory. The biggest headache in the market today, Howlett said, is credit – not enough buyers can get it.
“The mortgage situation is a big part of the real estate problem,” Howlett said. “You can’t obtain financing today. The banks used to give it to anybody who could fog a mirror. But now they won’t give it to anybody. It’s tough to make real estate work when financing is so difficult to obtain.”
Four Corners and Northeast Polk County experienced building booms between 2000 and 2007, as developers rushed to meet the public’s virtually insatiable appetite for new homes in this area close to Disney and the theme parks and just a half hour from Orlando.
But soaring prices left too many people priced out of the market, and then the credit crunch had a devastating impact on the market. It left the region with a fast-rising number of newly built, unsold homes, and a painfully high home foreclosure rate.
According to RealtyTrak, a real estate foreclosure web site, one in every 372 housing units in Florida received a foreclosure filing in June 2011,and the average foreclosure sales price here is $119,105.
Locally, it’s not much better, Howlett said.
“Short sales are still probably 60 percent of the market,” he said. That’s when a seller can’t afford to meet their monthly mortgage payments, and offers to sell a home for less than what is owed on the mortgage in the hopes that the lender will accept a lower price, and write off the remainder of the debt, rather than let the home fall into foreclosure.
But short sales are becoming less attractive to buyers, Howlett said, because banks are known to be very slow about making a decision on whether to move forward with one.
“Dealing with the banks is an exercise in frustration,” he said. “I’ve been dealing with one bank for nine months. In my opinion, this is just crazy to me. Just the other day, the borrower called me up and said, ‘I called Bank of America and the home I want to buy is being turned over to foreclosure.’ I said, ‘Didn’t they know we’re doing a short sale?’ Apparently they didn’t. It’s amazing. The mortgage department doesn’t talk to the second mortgage department, which doesn’t talk to the short sales department.”
Like many other Realtors, the frustration of the housing market has sent Howlett and his company into the field of property management. As more and more people struggle to sell their homes, they often decide to rent it until the market improves.
“I’m doing property management now, so that’s my bread and butter,” Howlett said.
But even that market is undergoing strains because of the sluggish economy. Howlett said he’s run into several problems – from owners and tenants alike.
“The owner is going into foreclosure and not telling you, and the tenants are losing their job and not paying the rent,” he said. “I had one tenant call me to say he just moved out. They said, ‘We cleaned the place and left.’ There’s not much you can do. You can go through the hassle of putting it on their credit report, but you’ll never get paid.”
Brooke Thompson, a Realtor who runs Premiere Realty in Orlando, said the rental market has actually gotten worse in recent months, as tenants struggle with the challenge of having lost so much of their credit history throughout the recession.
“Everyone has such bad credit now,” Thompson said.
In many instances, she said, they’re no longer even looking for homes or apartments to rent.
“Now they’re just looking for a room to rent,” she said.
Howlett said he expects to stay with property management, noting that “It’s better than sales.”
But he hopes both the housing market and the banking industry start to show signs of improvement in a field that may not have hit bottom yet.
“Hopefully it turns around,” Howlett said. “I guess the bright spot is having a positive attitude – and knowing this, too, will pass.”
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