Real Estate Agents Too Busy to Return Calls?
Thursday, August 7th, 2008
By Michael Lombardi, MBA for Profit Confidential
Back in 2007, I predicted that, by the time the fallout in the U.S. housing market was over, at least one major American homebuilder would go bankrupt. While many smaller homebuilders have closed their doors since last summer, on Monday, WCI Communities, Inc., a major large player in the U.S. new homebuilding market, filed for bankruptcy protection.
WCI started up back in the 1940s and was awarded the National Association of Home Builders coveted award “America’s Best Builder” in 2004. The company listed debt of approximately $2.0 billion dollars in its bankruptcy filing. It was a major player in the Florida home-building market with a focus on high-end condominiums.
Having spent the last week in Miami, I can attest firsthand to the soft Florida realty market. But the activity and lower prices are becoming more and more select.
The market for older, non-core location product has fallen the most in price. A listing I have on my desk right now shows a condominium unit that sold in 2006 for $350,000. Now foreclosed upon, the bank that owns it is asking $175,000 for the unit. This unit is at least 30 years old. Across the street, and on the beach, a building that had 35 units for sale last year only has 25 units for sale now. Prices for three bedrooms in this building sell for over $1.0 million. In this building, prices have not gone down and activity is brisk.
So, it’s the old real estate cliché: location, location, location, quality, quality and quality. If you are looking for a deal, maybe a vacation home, you will not find it on the beach in a new building. But you will find it inland in older buildings that “caught the fever” during the real estate boom.
Of the five real estate agents I called last week who have active listings, only one returned my call. While housing prices are not rising, the market is busy with “bottom fishing” investors picking up the best deals they can. And that is keeping the agents in traditional vacation states like Florida busy.
Is the bottom in for the real estate market? From what I can see from the charts of the remaining “solid” homebuilders and the activity in the marketplace, I’d say we are almost there. But as for prices, I would not be surprised if they do not rise for years to come.
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Michael bought his first stock when he was 17 years old. He quickly saw $2,000 of savings from summer jobs turn into $1,000. Determined not to lose money again on a stock, Michael started researching the market intensely, reading every book he could find on the topic and taking every course he could afford. It didn’t take long for Michael to start making money with stocks, and that led Michael to launch a newsletter on the stock market. Today, Michael only employs the top market analysts and editors. Some of our recommendations have posted gains in excess of 500%! Michael has authored and published over one thousand articles on investment and money management. Along the way to building Lombardi Publishing Corporation, now with over one million customers in 141 countries, Michael became an active investor in real estate, art, precious metals and various businesses. Readers of the daily Profit Confidential e-letter are offered the benefit of the expertise Michael has gained in these sectors. Michael believes in successful stock picking as an important wealth accumulation tool. Married with two children, Michael received his Chartered Financial Planner designation from the Financial Planners Standards Council of Canada and his MBA from the Graduate Business School, Heriot-Watt University, Edinburgh, Scotland.Follow Michael and the latest from Profit Confidential on Twitter
