Marcus Burke

A recent report by the Florida Association of Realtors suggests that for the month of November 2007, Orlando saw a 35% decline in sales of single-family homes compared with November 2006, while condo sales plumeted by a massive 55%. Orlando condo sales were a meagre 125, down from 276 sold in November 2006 (already a bad year!). Median condo prices fell 18% from $172 to $140.5.

Statewide, sales dropped by 29% with a median sales price of $186,700, a drop of 9% from $204,500 in November 2006. (Source: Orlando Regional Realtors Assoc.) All of which suggests that the strong Florida buyer’s market is likely to continue well into 2008. 

Something I’m noticing for 2008 that has the potential to drastically reduce inventory, is the trend for desperate developers to sell off their entire inventory at 50-60c on the $$ to investors who convert the conversions back to rental - and hold.

Our business in this area grows daily and I expect it to have a serious impact on the number of condos available for sale by the end of 2008 - which will start to drive prices up again. 2008 could go down as the year of the Great Condo Sell-off.

If you’ve been waiting around for rock bottom pricing - I’d start moving, because when the vulture-investors start grabbing condos by the bucket load, you know that’s exactly where we are.

See also this Realty Times article for further analysis.

DEVELOPERS / INVESTMENT SYNDICATES - Contact CondoMetropolis.com or call 407-290-3048.

We’ve posted over 250 articles on the Orlando condo scene since we went live just over a year ago, covering every conceivable condo angle from financing to home owners’ associations, to the very best deals Orlando has to offer. To celebrate the end of our first year, we’ve picked the TOP TEN posts that we thought were the funniest, most newsworthy or were the most helpful to our readers. Thanks for leaving your comments!

Thanks also to our staff, our blog writers, and most of all you - our readership and condo customers, for participating and for helping to make Condo Metropolis Florida’s best read condo blog - have a great holiday!

We’ll see you again in 2008! 

1.) Buyer’s Market? So Why Aren’t Buyers Buying?
There’s a new Disney rollercoaster called The Volatile Real Estate Market ride (you have to be at least “this desperate” to ride), but I’ve been on it - and only half the ride is working. Sellers are selling, but why aren’t buyers buying when it’s so clearly a ‘buyers’ market? …Right now you can pick up some amazing deals best deals, with some unheard of incentives (someone just offered me their first-born child, if I could close in 30 days)…

2.) What’s In A Condo Name? Not Much…
People often tell me that they’re interested in seeing this new condo place, you know, the one… can’t remember the exact name, the one with “Millenia” in the title. Ok, that’s easy enough right? I mean, how many can there be? Other than the Residences at Millenia, Millenia Cove, Millennium Palms, The Plaza at Millenia, The Fountains at Millenia, and um, I’m already bored…

3.) Soup Kitchen For Starving Real Estate Agents:
In the face of the current housing bust, Orlando City Council is setting up a soup kitchen for the town’s starving real estate agents. Several varieties of soup including Chicken Noodle and Leek and Potato, will be available all over the holiday period from December 20th until the New Year…

4.) So What Exactly Is A Condo Conversion?
A girlfriend asked me at a party this weekend: “So what exactly IS a condo conversion?”
“That’s easy,” I said, “It’s when a community that was once for sale converts back to being rental again.”
“Oh, I see,” she replied…

5.) Orlando’s Buyer Market: The Beginning Of The End?
Take a gander below at the condo projects that have gone south in the last month or so. It’s depressing. Or is it? What else does it signal? (other than an increase in the sales of Head On: Apply Directly To The Forehead)…

6.) Orlando’s Condo Hotel Scene:
Every so often, I feel blessed. Like last month, when they came out with that new pill on TV where you can “Eat as much as you like and still loose weight!” (and they couldn’t say it if it wasn’t true). Ok, so maybe I wasn’t so lucky with that one since during the great “Prove-them-wrong-eat-athon” of October ‘07, I actually gained ten pounds…

7.) Price That Condo Right!
Most days, we get frantic calls from investors asking “Please sell my condo!?” I usually have to tell them “No” without even asking what or where it is. Because unless they’re willing to price it according to what they can actually get, as opposed to what they think they deserve to get, then we’re all wasting our time. Sound harsh?…

8.) Another Condo Hotel?!
Yep, you heard it right. There’s another on condo hotel the way. Lost count yet? According to the Orlando Business Journal, the proposed 16-story, 350-room condotel is set to break ground in spring 2008 and should be ready in 2009 at a cost of some $140 million - which really means (if it gets built at all) that it will come online around 2011 at double that cost. Call me a cynic…

9.) Do Condo Buyers Need an Agent?
Most sellers use a real estate agent when they list their homes for sale - even though it costs them a commission. Most buyers do not use a real estate agent - even though the service is free to them as buyers. (Why free? Because the seller usually pays the commissions.)…

10. How To Spot A Condo Community Deal:
I saw a rather pathetic site this morning. He was supposed to be the Statue of Liberty: A middle aged man with facial hair wandering around the intersection of Kirkman and Colonial wearing a green dress and a pointy star thing on his head. He was carrying a sign for Liberty Insurance…

Top 3 Videos

1.) Canada Goes Condo Crazy!
These guys are just too much…

2.) We were at the Orlando 2007 Home Buyer’s Expo!

3.) Free Hugs!
Nothing to do with Condos. Nothing to do with Orlando. Nothing to do with real estate. Just 23 Million views worldwide.

Some condominiums have been postponed, others have been axed completely. I can rattle off over half a dozen condo communities that have done a vanishing act like this in the last few months (read more here). The inventory of condos for sale has dropped by several thousand, and the previously much sought after rental property has increased by much the same amount. Take a look at the leasing signs that have appeared outside former conversions in the last few months.

So slowly, the tide is turning and the market, always a slave to market forces, will eventually reach equilibrium again. For those of you waiting for even better pricing, for even better incentives; for those who think the worst is still to come, you may be about to miss the boat - and along with it, the opportunity to acquire property when the going was good. Legions are those who will eventually join the masses to buy - just as soon as the next scramble for equity begins - (which will be just as soon as the media tells you it’s okay to buy again). But by then of course, it will be too late, you’ll be the wrong side of the curve, just another body on an over populated bandwagon. And then will come that familiar refrain: “If only I’d bought when… I’d be laughing right now.”

If you want to be one of Orlando’s future hyenas, the trick is to stop doing what everyone else is doing and get back to basics: Buy low, sell high. It might seem pretty obvious, but if so, why did everyone buy high? Those same investors are now being forced to sell low. Now if you have a house to sell before you can take advantage of the current “buyers” market, I grant that makes life more complicated, but if you’re a first time buyer, there’s really no excuse for waiting. And if you’re hovering simply because relatives are telling you to wait, please shoot them, because developers are bending over backwards right now to sell you their condos. And their offers of free upgrades, waived HOA fees and countless other incentives will disappear overnight, the second the masses decide to join the party again. And that’s a promise.

Everyone wants to get ahead. But it’s impossible to get ahead of the crowd if you’re a follower - if you wait for everyone to tell you that the time is “right”.

Let me put it this way: Don’t you just love it when you’re driving into the city at the end of the day just as everyone else is trying to get out? You should try it some time. It’s fun when you’re doing 70mph eastbound (cough, by which I mean 55mph), while everyone else is doing 10mph westbound. The only people moving on I4 are the folk moving in the opposite direction to everyone else.

Real estate and stock trading are no different. In order to get ahead, you have to do the opposite of what everyone else is doing. I have a friend who claims to make more money day trading before his 10am cup of coffee, than he makes the entire rest of the day in his own business. I asked him what his strategy was and he said: “Buy when no one else wants to buy. And sell when no one else feels like selling.” It’s simple economics. And it feels great. Unless, of course, you’re a fan of the parking lot we affectionately call I4.

See also: The Orlando Condo Market: Part I - The Blackjack Analogy.

According to data gathered by the Orlando Regional Realtor Association, the median resale price of a home in Central Florida is about $250,000. At a quarter of a million dollars, most first time home buyers are effectively priced out of the housing market. But believe it or not, it is still possible to find an Orlando condo for under $100,000. And that could prove to be a vital first foot on the property ladder. In other words, condos are still affordable - just. But they probably won’t be in a couple of year’s time. Remember that between 2004 and 2005, the median resale price of a home in the Orlando area rose more than 60% according to ORRA and although prices are now dropping again, it is still likely that within the next decade, Orlando will be just another expensive city that regular folk can’t afford to live in - unless you’ve played your hand well today. Which means not allowing fear to make you keep your strongest cards until last.

Good card players play their cards at pivotal moments in the game. Aces are not your favorite pieces of candy in the packet, to keep until last so you can savor them at your leisure. When I did that as a kid, my friends would usually steal them right in front of me and then claim that because I wasn’t eating them, they figured I didn’t want them.

In short, it’s a mistake not to buy today because you’re unconvinced that the market is at its lowest. Because no one knows for sure when that is until it’s already passed - and rates are on the rise again. In truth, you don’t have to know when the market is at its lowest, just plain low is the right time - and we’re clearly there. Like Black Jack one must play the odds. You don’t have to make it exactly to 21 in order to win, you just have to be smart enough to know that 19 is probably close enough to win the game. Those who try and hit 21 nearly always “bust.”

Condo prices have dropped dramatically in the last year and are currently very low. They may go just a little lower before they begin to rise again. Then again, theyy may not.

Question: Are you going to “twist” and risk busting your whole hand by waiting another 6 months for an uncertain saving, or are you going to “stick” and buy one of the incredible deals that are out there right now?

Next week: The Orlando Condo Market: Part II – The Interstate 4 Analogy.

PRESS RELEASE

FOR IMMEDIATE RELEASE

CondoMetropolis.com adds MLS access to website:

Creates largest e-roof for Orlando condo shoppers.

“Frankly, if I were searching for a new condo, I’d probably continue to use the developer database, because that’s where most of the best deals are,” said Marcus Burke, company founder. “Developers understand the current market and are doing whatever it takes to move their units. They’re offering a ton of incentives from paid closing costs, to paid HOA fees, to complete kitchen upgrades. An individual reseller is never going to be able to compete with those kinds of terms. Many private sellers still don’t understand that their condo might not be worth what they actually paid for it and they’re asking way to much because they think that they’re entitled to get back what they spent. But the market doesn’t work that way. The only folk successfully selling condos on the MLS right now are those who are truly motivated to sell and don’t mind loosing a few thousand dollars to cut their losses. Now, if you can find one of those deals, then I’d take it.”

Launched in December 2006, CondoMetropolis.com hosts Orlando’s largest online database of condominiums - from pre-construction to condo-hotel and condo conversion. Developers are able to list for free and buyers are also able to browse Orlando’s condos for free without having to leave the comfort of home - and without hopping from site to site. Once a potential buyer finds a condo they are interested they can contact a Condo Metropolis agent who will visit the condo with them, help them negotiate the best incentives, take care of the paperwork, and close the deal - all at no charge. The company also has a condo news blog with all the lastest Orlando condo news.