The American Real Estate Market is Distressed and You Don’t Even Know it.

I know what you are thinking, just hear me out. It is true that foreclosures and short sales, also known as REOs (Real Estate Owned by banks), amount for a historically low percentage of our housing inventory as a whole (just 3% of our local inventory here in Pensacola). In the FHA guidelines, a 4-5% default rate is considered well within the normal range, and is a rate that is indicative of a normal housing market.

The housing market is definitely not “distressed” in the tall grass, trash out piles, white paperwork in the windows, squatter/foreclosure renter, short sale sense of the word. This is inarguable.

What is so striking is not only the historically low amount of inventory, but the mind boggling roster of active Realtors. While Pensacola has more than doubled the amount of active Realtors in our association from 2009-2016, the NAR (National Association of Realtors) has shown only a 7-8% increase in National membership, from 1.1 million active Realtors in 2009 to 1.2 million in 2016.

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Membership is at an all time high, while inventory is at all time lows. 

The median gross income of Realtors dropped from $45,800 in 2014 to $39,200 in 2015- a 15.4% decrease. The market is distressed because the ratio of listings available to agents active is almost 1:1 (2020 active realtors, 2,561 active properties). Compared to 2009, when there were 900 Realtors and almost 7,000 listings, the current ratio is daunting.

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There is just over 3 months of housing supply almost everywhere

While these charts are for the Pensacola market, the overall national inventory picture is not any better. Total housing inventory at the end of February increased 4.2 percent to 1.75 million existing homes available for sale, but is still 6.4 percent lower than a year ago (1.87 million) and has fallen year-over-year for 21 straight months. Unsold inventory is at a 3.8-month supply at the current sales pace (3.5 months in January).

Nice, fresh listings are being snapped up as fast as they can be listed, which is pressuring prices upward and creating multiple offer scenarios more common in REO sales than in traditional, non bank-owned listings. Prices are creeping upward, but running out of top.

In March of 2017, Pensacola reached an absorption rate (3.2 months) lower than the national average of 3.5 months. This is the first time in my history of tracking these numbers that Pensacola has had less inventory than the national average. A surge in new listings or a dramatic decrease in the amount of Realtors who are active are the only 2 scenarios that offer an escape from the new distressed housing market of 2017.

 

Ten Commandments for Real Estate Sales Practices and Principles for new Realtors

Voyage Real Estate 10 Commandments of Client Relationships:

1. Thou shalt qualify all clients as ready, willing, and able to perform, before expending company energy, time, and resources.

A lead is ready, willing, and able to do business today (RWA).
A prospect is two out of the three.
A suspect (as in, “I suspect they will do business someday…”) is a person qualifying in less than two out of the three components of RWA.

When in doubt, ask yourself if the person you are dealing with is RWA. If they are not, set up a plan to keep communications open with them until they are. Avoid exerting a lot of energy into people who are not fully RWA.

Examples of individuals who are NOT RWA:
A person who is anxious to move, has a good job, but has not been financially prequalified with a lender (perhaps the most common).
Someone who is one-half of a decision making team asking you to show them a home for sale- with the other team member in absentia.

2. Thou shalt sell what is available today
This is an acronym known as SWAT. Selling what is available today is the best practice in any sales scenario, and especially real estate. In other retail industries, this phenomenon is referred to as FIFO (first in, first out). If your client has a pressing housing need, a renovation loan such as an FHA 203K is an example of how you can start in earnest selling what is available today.

3. Thou shalt overcome objections
The concept of overcoming objections is founded in the basic principles of the sales industry. If the client has an objection to performing, how do we best overcome that? Listening to your client empathically, and following commandment 4 is a good start.

4. Thou shalt answer questions with questions
Not in an obvious way. Relationships are built upon subtlety. A client telling you that school district is very important, and then asking you how the neighborhood school rates is a good chance to ask them why the school district rating is so important to them. It will surprise you how much they will reveal. And it will lead you closer to the holy grail of client connections: knowing their true Big Why. Every question asked of you is an important catalyst to ask a question of them. Asking “why?” until we get to the crux of the matter is how we build unbreakable rapport, and ultimately, trust.

5. Thou shalt exude enthusiasm
It will be obvious if you generally embrace and enjoy selling. It is an unmistakeable air that resounds and creates tremendous mind share in your client’s sphere of influence. If you are enthusiastic, your clients will be, too. Enthusiasm alone is the single greatest tool you possess in the creation of referrals and return business.

6. Thou shalt never speculate
It’s okay to dream big with your clients, but don’t paint any pictures for them. The road to hell is littered with the corpses of real estate agents who told their clients that they couldn’t lose; that the real estate market could never fail; that Real property always grows in value. What if you had told a client those words in October of 2007? Be enthusiastic, but never speculate. When you find your clients speculating with you, see commandment seven.

7. Thou shalt provide pure data
Clients must make real estate decisions based on numbers provided to them by you, the real estate professional. In a world of ever-available and at times inaccurate data, the information we mine for them shines ever more brightly, compared to what clients dig out unaided. Buyers must determine their purchase offer amount, and sellers must determine their listing price amount- based upon data you provide them. We cannot fill in those blanks. By providing accurate and timely data, clients can easily ascertain a proper purchase amount, or smoothly reconcile what a realistic sales price on their listing would be. If a client is unable to do this, you haven’t provided them with enough data.

8. Thou shalt ask everyone for their business
This one is simple. You literally have to ask everyone for their business, including your closest friends and even family. Just being a Realtor or a broker isn’t enough. You might have the world’s biggest website and a huge Facebook page. You might think that everyone around you knows you are a Realtor, and some of them might. If you haven’t asked them specifically to be their Realtor, they will pick someone else, every time. Practice your elevator speech, and start asking for business, and the referrals will come. Your success depends upon it.

9. Thou shalt clearly explain the processes
Having a good working understanding of the processes involved with a purchase or sale of real property comes only with time and transactional experience. If you are newer to the craft, seek the guidance of a more experienced agent or broker to relate the processes to your client. Provide a realistic timeframe based on data (average days on market, average closing length, etc…) so they are not surprised. Also, ask all listing clients what would happen if they received a full-price cash offer on day one, and they had to close and be out in 21 days. Could they? If not, they may not be RWA.

With a buyer, working a purchase to coincide with the termination of their rental agreement is a great example of the value in timing. Remember, a successful transaction leaves no one displaced. You are being hired to provide clarity to a is a very intimidating process for most folks. If they feel comfortable with your mastery, they will perform accordingly. Take this chart from the National Association of Realtors, for example:

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10. Thou shalt not let a client die on the vine without referring them.
We all have had that one client that we couldn’t please, no matter how hard we tried. If you find yourself at wit’s end and you are feeling like the client is being lost, refer them to another agent. Be clear with your referral percentage expectation with the recipient agent, and get a signed referral agreement at the time you refer the client.

Remember, 25% of something is better than all of nothing. Some agents specialize in only agent-to-agent referrals.

Newly Constructed Tiny House For Rent in Lakeview, East Hill, Pensacola

This 375 square foot house is an everything included rental, built in 2016 to ADA compliance standards. Wifi, 3D TV, DirecTV, electricity, water, and trash service are all provided. Located in Lakeview, it is incredibly private and secure, and invisible from the street. There is a small driveway that is protected by motion lighting and a security camera system. Rental includes the carport and storage room, and some outside storage space as well. The house is fully functioning, with a real kitchen and inside laundry. There is additional attic storage, and a 13′ lofted main room.

The kitchen features a hand hammered copper backsplash by Kevin Marchetti, indigo granite counters, and Pinnacle custom cabinets. The flooring is USA porcelain wood grain tile, and the shower is river rocks. The pergola style carport has a metal roof, as does the front porch.

There is a tree well with Meyer Lemons on the left side. Behind the carport is a storage shelf specifically designed for a kayak, but can double for anything else you have. The storage room has good indirect lighting, and you could shelve it out if needed.
A Samsung 46″ 3D TV with DirecTV installed in the front room, included, as well as Cox high speed internet. Transfer speeds are pretty good here.

It is quite separate from the main house, so there are no privacy issues. Privacy fence surrounds it, and that gives it a residential detached feel. We have two dogs, and the development approach was for them to be integrated yet separate.

Construction was completed in June of 2016. No one has rented it or lived in it, so you could be the first. The Google Earth images are quite outdated, and the property is vastly improved as a whole than it appears on various internet sources.

If you need accessibility for a chair or scooter, you can drive directly from the carport into the shower with only the doorway threshold to roll over. Even the refrigerator is ADA.

Now, the rules and the money: No pets, and there are no exceptions. First and last month’s rent on a 7 or 12 month lease at $925 a month. You must be able to pass a very basic credit check, or have three solid rental references if you lack credit. Do not drive by, because you can’t see it from the road. Do not ring the doorbell, as we don’t operate well when surprised. Check out the Craigslist ad.

Call or text for an appointment to 850-384-9362 .

Disclaimer: I am a Realtor with Voyage Real Estate, LLC. I hold no financial interest in this property, and you will be dealing and renting directly from the owner. It is her personal property. 

Five Things You Don’t Know About Pensacola, Florida Real Estate

Statistics are life. Here are some of the greatest and latest from the data mine:

1. New and preexisting homes sales fell 9.2% and 7.1% respectively nationally, while sales of residential detached soared 26% in Pensacola in March (470 sold in February versus 632 sold in March).

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2. It takes twice as long (105 days) to sell a house in Pensacola versus the national average of 55 days in March of 2016.

3. Across the nation, there is around a 4.4 month supply of inventory, and Pensacola has approximately 5.4 months available. The hotter areas are firmly lodged in a seller’s market throughout Escambia and Santa Rosa counties. For historical perspective, I recall a month in 2010 with a 21 month supply of inventory available.

4. If you want to buy a house built after 2010, there is only a 4 month supply (148 sold in March versus 586 available). One major tract builder in Pensacola reported to me that they were “out of houses.”

5. The 2016 stock market turmoil has had little to no effect on Pensacola real estate. The northeast fell 17.1% in sales for January and February, while Pensacola outperformed in nearly all respects.

The Ideal Location for a Downtown Pensacola Verizon Tower is on the Roof of City Hall

File this one in the “hear me out” category. 

Recent clandestine efforts by city officials and Verizon Wireless have made the possibility of an old style cell tower and out buildings at the corner of Cervantes and B Streets a reality. The proposed installation would lie on the fringe of Historic North Hill, and in the middle of an area already struggling against drag and blight. When I drove downtown yesterday, the perfect alternate location occurred to me- the roof top of City Hall. Here’s why:

  • The building is obscured by trees from the road, so the tower would almost be invisible from Bayfront Parkway
  • Verizon has the capability to build these roof top towers using transparent antennae enclosures (making them ‘invisible’)
  • Even if they installed an old style antennae, it would be blocked from view by the trees to the south, and would also be obscured by the Court House to the north
  • The city has proven that zoning regulations and height restrictions are subjective. A variance for this tower would be a no-brainer.
  • At that height and location, the signal strength would be incredible, and would satisfy those of the opinion that service and/or coverage is lacking downtown (I have never had this problem).
In Echo Park, CA, Verizon is installing invisible tower enclosures on the tallest building in the city.

In Echo Park, CA, Verizon is installing invisible tower enclosures on the tallest building in the city.

In Eagle Rock and Echo Park, California, there is a plan to install invisible antennas on top of old folks homes.

If the Pensacola city officials are so committed to this idea that they would quash dozens of letters of concern from citizens two different times, all the while courting Verizon Wireless, I suggest that they literally live with the decision that they are trying to force on us. There are no downsides to this plan that I can find, other than it would indirectly but literally bring something transparent to city hall.

Put the Verizon antennae on the roof of City Hall. Stop blighting our neighborhoods with bad real estate decisions that enrich only a select few. 

Proposed Look of Towers for Eagle Rock and Echo Park, CA

Proposed Look of Towers for Eagle Rock and Echo Park, CA

How one Prude from the 19th Century has Shaped the Spirit of Downtown Pensacola

In 1817, Pensacola was a settlement of 713 people, under Spanish rule. President Madison wanted Florida as a part of the union, so he sent Andrew Jackson to the panhandle tie up the loose ends. As Jackson mopped up the remaining resistance, he was appointed the first Governor of the Florida territory. Before he could get to Pensacola, his wife Rachel grew weary of her temporary lodging in Cantonment. She was invited to the waterfront home of Dr. John Brosnaham, which allowed her to fully experience a weekend in downtown Pensacola. She was a highly devout Christian, and her opinions carried a tremendous amount of weight with the steely Governor Jackson.

The following are excerpts from a letter Rachel sent a friend in Tallahassee which vibrantly outlines her opinion. A copy of this letter was given to Andrew Jackson, which he used to draft numerous ‘blue laws,’ which immediately went into effect. While speaking of a typical Sunday, she wrote, “The Sabbath profanely kept; a great deal of noise and swearing in the streets; shops kept open; trade going on, I think, more than on any other day.” She would become so disturbed that she would send Jackson lackey major Stanton to issue notice that the following Sunday would be differently kept. After Stanton went on a rampage through downtown, Rachel continues, “Yesterday I had the happiness of witnessing the truth of what I said. Great order was observed; the doors kept shut; the gambling houses demolished; fiddling and dancing not heard anymore on the Lord’s day; cursing not to be heard…”

Jackson would hastily draft the state, county, and local ordinances, and would add specific blue laws Rachel found favorable to our first charter. More specifically, and almost unbelievably, the honoring of the Christian Sabbath became the law of our land, even before any organized religion had taken a foothold and created a presence in Pensacola.

Today, our downtown is still relatively quiet on Sundays, and some reductions and variances to the ancient blue laws have been enacted, allowing bars and restaurants and retail to open on Sundays; albeit with stricter regulations regarding hours of operation and alcohol sales. There has been a recent move to add more blue laws, like this open container ordinance, proposed in 2015.

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In the current national political climate, where there are grumblings about removing Andrew Jackson from our money, Pensacola could take this chance to repeal these morality based laws drafted by his wife, and open downtown 24 hours a day, 7 days a week. Business revenue and tax collected would likely rise by 15% a year. Vacationers would not leave here scratching their heads in wonder. As a community, we have all worked to create a downtown that people are talking about.

Let’s just make sure they are talking about it for the right reasons, and not because we are perceived as being firmly planted in the early 19th century- with a decided disdain of live music and retail transactions on Sundays and weeknights.

August Pensacola Trivia Challenge with Good Clean Living and Wisteria Tavern- Win $50

The history of Pensacola International Airport is storied. For our August trivia contest, we want to know the following:

Who made the first jet landing at Pensacola Airport? What was the date? What kind of plane was it? 

Before you get your flight suit in a wad, this particular landing was of special historic importance. The winner will be selected by random from correct answers who have liked our Facebook page and shared the post on their social media. If no one is able to get the complete answer (all 3 questions), a winner will be chosen from the most correct entrant. So, 2 out of 3 might not be bad. There is a $50 Wisteria Tavern tab up for grabs. Good luck, Pensacola historians.

Published in 1934, this chart provided info on Florida aviation facilities.

Published in 1934, this chart provided info on Florida aviation facilities.