Adapting to a new market

October 10, 2008

A lot of builders have stopped building spec homes all together.  It’s contracts or nothing.  It’s just to risky right now to sit on a high end spec home.  What some have done is move down in price range,  140,000 to 180,000 homes as opposed to 300,000 and 400,000.  Hey, why not right? if they sell early in the construction process, or just at completion you have a good chance of making the same profit margin as you would sitting on a high end spec for 6 to 12 months.  It keeps the subs busy, keeps the draws coming and keeps the bills paid.  Adapt, that’s what you have to do.

That goes for Realtors as well, I recently spent two information filled days near Detroit learning about short sales.  I received my designation as a Certified Distressed Property Expert.  In the past, I haven’t had to explore this end of the market to maintain my career, well, now I do.  With the slow down in new construction which has contributed to nearly 90% of all my sales, it is time to get educated, put my nose to the grindstone and try to help some people avoid foreclosure.  Lord knows there are a lot of people in desperate situations who have a wealth of mis-information regarding this subject.


Big price tags in Monclova

October 10, 2008

Two big spec houses in the Ridge have recently been sold.  Both over 800K.  Congrats to both Rick Byersmith of Transtar and Dan Bollen of Eagle Creek.  Those are a couple hefty interest payments I’m sure they are glad to have off the books.  

Speaking of the Ridge, located off Albon, between Maumee Western and Monclova, what a great sub-division.   Varied price range, along with large lots, many of them wooded, and or ravine lots.   Homes ranging from mid 300k over 1million.  Only a few building lots left as of this week.  I just happen to market one so give me a call if your interested (shameless plug).

The question…

“So, when is this market going to come around?”

Ugh!  How many times does anyone in this business have to answer that question?  It is the first thing out of any body’s mouth when they find out what I do for a living, it is the number one question my builder asks every time we meet.

The answer, It’s not.  We had all better get used to it and adapt accordingly.  The market is what it is, and its here to stay.  There’s nothing anyone can do.  The government is trying to make you think their on top of it and doing what they can to help.  This $700 billion dollar bailout, it is a down payment, were looking at losses in the trillions of dollars.  Just the retirement accounts alone of Americans has lost 2 TRILLION dollars in the last 15 monthes, you can read about it here ..  Thats just retirement accounts, now add up lost equity in your home, unemplyment, 4$ a gallon gas, rising education costs, heath care costs going through the roof, the list goes on, $700 billion is not even a drop in the bucket.

So in aswer to the question “When is this market going to come around?”

All I can say is “Put on your boots, and pack a lunch,  and get to work figuring out what you and yours need to do in order to adapt to the NEW market. ”  Thats what I’m doing.

When did the bubble burst?

October 9, 2008

I’ve been selling new construction for nearly 8 1/2  years now, and during that time their was always one thought in the back of my mind…”This bubble has to burst some time.”  The bubble I am talking about was unbelievable amount of new construction being built and sold in our area.  How can it continue?  Where will all these people come from?  Where are they getting all this money?  Well, we all know now how many people were affording these new homes, just pick up any paper, watch any news program, or just listen to the number one topic in the current presidential debates, its no secret,  the disaster which is our lending institutions is a joke, but that’s for another time. 

Just how far have we fallen?  Lets go back to 2001, and I am only talking about lucas county here, there were 818 single family building permits issued, read about it here…   According to the Lucas County Building Regulations Dept. ’02 had 844 permits issued, ’03 had 937, ’04 had 974, back to normal in ’05 with 798, then “POP” there went the bubble..2006 saw a decline to down to 464 single family building permits, and last year, 2007, how about 264! So far this year, 2008, a incredible 150.   If my math is correct, that’s almost an 85% drop in 4 years…What does 2009 hold for builders in the area?

Over the past several weeks my boss has been driving one word home to myself along with all the other agents in my office…”Blog”.   So I ask myself,  “Blog?  Will anyone read it? What good could this possibly do me?  Do people really care what I have to say about the current state of the residential construction industry around Toledo?  Is this Blogging going to help me attract new clients?”  These are questions I have been asking myself as I put it off time after time.  Well, after much thought and additional discussions,  I have come up with an answer, and that answer is “Who knows?”  You don’t know until you try right?  So this is my first post in the world of blogging.  Check back periodically and read some of my thoughts on the residential construction going on in and around Toledo.