Developers finally broke ground on City Centre Kissimmee on November 15. The mixed use building will feature 31 luxury condos (in the second phase) as well as 56,000 feet of office space and 12,000 feet of retail. Let’s hope the’re not all fish-and-chip shops.
With news of the Wyndham Hotel Group’s $300 million, 504 unit condo hotel, central Florida is now looking at a total of approximately 17,300 presale units. That’s a lot of inventory. And a lot of risk money. And at this point in time, it’s anyone’s guess whether condotels will be the world of tomorrow – or are already yesterday’s news. But if the concept works anywhere, it’s likely that Orlando’s a a pretty good bet. That’s what I’d say. If I were a betting man.
I’m sometimes asked about the best way to negotiate with developers.
Eighteen months ago, someone else would have closed on your condo before you could spit out the word offer. But now? Sure. Absolutely. But keep it real. The market in central Florida is slow – but it’s not open season. Yet.
And while we’re on the subject, let’s get another thing straight: Buyers: statistics show that agents generally do a much better job at saving buyers money than buyers do themselves, but if you decide not to use an agent, that’s your prerogative. But not having an agent doesn’t entitle you to recoup that agent’s commission yourself – unless you have a real estate license that is. So, if you fancy yourself as a negotiator, by all means negotiate. But stick to price, amenities and finishes. Developers are unlikely to be impressed with statements like “Well I don’t have an agent, so I want another 3% off.” Folks, it just doesn’t work that way. Or does it?
Developers: by all means drop your prices. But be clear that you’re not negotiating on the basis that buyer doesn’t have an agent. Allowing buyers to think they can save in this way not only encourages ignorance but is a risky strategy to adopt. And word travels fast. If you value the trade that agents bring, allowing buyer discounts on this basis, might just backfire.
The University of Florida’s Center for Real Estate Studies recently conducted a new statewide survey to gain insight into current trends in Florida’s real estate industry. The result predicts that even in the event of a worsening situation nationally, Florida will be less affected than other states due to the insulating effect of its population growth. Dr. Wayne Archer, director of UF’s Center for Real Estate Studies, says: Despite some people’s worst fears, housing is unlikely to suffer the same fate as tech stocks at the beginning of the decade. Read More
According to a University of Florida study, the state’s population is supposed to grow another 2 million by 2010. Now, call me cynical, but that sounds like a lot of extra alligator food to me. And by 2025, the Hurricane, I mean Sunshine State is expected to house a whopping 25 million residents.
Overall, Florida is one of the fastest-growing states in the country, and that is unlikely to change, says Stefan Rayer, a demographer with UF’s Bureau of Economic and Business Research.
So what does it all mean? Longer lines at my local Taco Bell drive thru for sure. But for you die hard pessimists, it might also mean that while we currently have a situation of too much inventory, the problem will probably be short lived. Developers are just a little ahead of the game right now, that’s all. Okay, a lot ahead. But with a growth pattern such as the latest study predicts, it looks like we’ll probably succeed in breeding our way out of this issue. And with all those extra mouths to feed, Taco Bell will have to open a new store at the end of my street. So what’s the problem?
Read the report here.
I’ve suggested elsewhere in this forum, that the reason there are so many condos still going up, despite the slowdown, is because they were already in the “Oh-crap-can’t-stop-it -now” pipeline.
But there’s another reason. A more encouraging one. Despite what you may have been reading about the market, developers from other states recognize that Florida just isn’t like the rest of the U.S.
Take MCZ/Centrum Development Corp., for example, a Chicago based firm. Even this late in the game, they are planning two more conversions for the Orlando area. Mirabella, located at the far end of International Drive, and The Palms Club, located in, yes, you guessed it, Metrowest.
“What?” I hear you scream. “Are they nuts?” Maybe. But principal Michael Lerner believes that Orlando is still a growth market. “Orlando is a vibrant city and is becoming the business center of Florida,” he said.
You have to believe folks like this know what they’re doing. After all, buying the two complexes cost them over $100 million. Now that’s what I call putting your money where your mouth is.
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.
Except she didn’t. Thankfully, she’ll probably never sue me for my humor because the truth is, nobody has any idea anymore who’s going condo or, more importantly, who’s turning back to the dark side “or, who’s turning back (but only half way); or even, who was turning back (but isn’t anymore because they think they might just pull it off – if only the Fed would stop screwing with the interest rates.)
Anyway, welcome to Rumor Control. If you have a rumor, I’ll be waiting!
BusinessWeek.com screened data from the National Association of Realtors (NAR) to identify markets with the highest home-price appreciation during the second quarter.
Nationally, home prices increased 3.7 percent in the second quarter. But these top 10 markets all saw prices climb at least three times faster than that:
* Virginia Beach-Norfolk-Newport News (Va.-N.C.), up 23.6 percent from a year ago
* Portland-Vancouver (Ore.), 19.1 percent.
* Tampa-St. Petersburg (Fla.), 18.8 percent.
* Eugene-Springfield (Ore.), 18.3 percent.
* Orlando (Fla.), 17 percent.
* Los Angeles-Long Beach, 14.6 percent.
* Phoenix-Mesa (Ariz.), 11.8 percent.
* Philadelphia-Camden-Wilmington (Pa.-N.J.-Del.), 11.4 percent.
* Hagerstown-Martinsburg (Md. -WVa.), 11.4 percent.
* Norwich-New London (Conn.), 11 percent.
Source: Business Week Online, (08/23/06) Christopher Palmeri and Douglas MacMillan