New Condos Online is proud to introduce another exiting partnership!  We have joined forces with Realestock.com to provide all of our clients their cutting edge technology platform.  Realestock.com is a new site that features luxury condos and homes and creates a community of two way communitcation between buyers and developers/sales representatives.  Realestock.com provides users with a safe and easy to use portal for viewing new luxury condo and home communities and for gathering the necessary buying information.

Realestock.com has hired Edelman, the largest PR firm in the country, to support the launch of their exciting new platform.  Realestock.com is not a traditional listing site nor does it stive to become another MLS flooded with all types of listings.  The site will focus on luxury lifestyles, new condos and urban communities, resort communities and luxury estates.  Users will be able to communicate directly with the sales representatives through chats, forums, and blogs. 

Another exciting feature of Realestock.com is that users can become members of this exclusive world of luxury real estate offers for FREE.  Users can post profiles and be alerted of upcoming events, grand openings, special offers, etc.  As the leader in online marketing for new condo developments and luxury home communities, New Condos Online was invited to be a featured partner of Realestock.com.  This means that all of our valued clients will also be featured on Realestock.com and benefit from their agressive technology and PR efforts.  We plan to grow the partnership with combined marketing and PR efforts.  More exciting things to come...

Austin, Texas is know as one of the most popular cities in the great state and attracts people of all ages for college, work, recreation, and retirement.  Being from Dallas, I have spent many weekends in Austin which is chalk full of history, art, and a rapidly developing urban village.  More and more commercial and residential developers are acquiring property in Austin to construct condos, restaurants, bars, retail space, and more.  Austin condo developers have been taking advantage of the vast amount of land surrounding the cities including lake front property! 

For example, a new development featured on New Condos Online, Star Riverside, is right on Town Lake.  Star Riverside boasts 66 new modern condos designed by Marchese Partners International and devloped by Constellation Property Group.  River front and lake front property in Austin is a hot commodity.  The landscape surrounding this rapidly growing metropolis is intertwined with rivers and lakes.  This city is a boat owners heaven on earth!

Another massive new condo development we are currently featuring in Austin is MonteVista Condominiums by Premier Financial LLC.  This 348 unit development offers homes starting from the low $100's!  That is another great thing about Austin condos...they are incredibly affordable.  

So if its the luxury of a great urban invironment coupled with supreme outdoor recreation, Austin is probably one of the greatest places to live in the country.   

The general public typically looks at real estate trends on a national scale because that is how the media generally approaches the topic.  Then or course there are your local news channels that can dial down on the condo market from a local perspective.  Overall though the media has been focusing on the down turn of the market and the effects on prices.  Many do not realize however that not all markets have been affected in the same way or at the same time.  Some have hit bottom and recovered to a healthy absorption rate and other have yet to see the slowest times.  The markets with the largest increase in sales and prices are usually the ones to get hit the hardest when things slow.  The markets that remain relatively healthy without a large influx of investors and speculators usually do not feel the pain as badly during a down turn.    To see how this really works for condos in various regions around the country, let’s take a look at some markets that have been affected differently.    San Diego Condos – The real focus of the San Diego condo market has been on the rapidly expanding downtown area.  The rise of Petco Park helped to revitalize the East Village area as 5 new condo projects have sprung up right next to the new ballpark in the last few years.  5,800 condo projects were added to downtown in the last five years with over 6,000 more planned for the next few years.  The long term outlo

As technologies and information systems increase in commonality and availability, more condos and homes are being outfitted with systems that make life that much more convenient.  Technology components in condos are now becoming so common that it is almost expected, just as water and electricity are.  The most simple of these technologies consists of programs that control lighting, the blinds, and climate.  This is just the tip of the iceberg compared to what many condo developers are including in their new projects.  

New condo developments from New York to New Jersey are including full-scale computer systems that can control audio and visual function so you can listen to different types of music in different rooms or transfer a movie from on TV to another.  Other automated systems link condo residents to concierge services so they can make dinner reservations without picking up the phone.  Residents can see if there are lines at local restaurants or nightclubs, receive confirmation when the children come home, or see when washing machines become available in the laundry rooms.  The best part is that there technologies are being offered in New York condos of all price ranges.

City officials will be reviewing a new proposal soon that extends greater tax breaks for developers building condos in Seattle.  This plan includes apartment developers as well.  Like many other cities Seattle is struggling with issues of affordable housing in various areas of the greater metropolitan area.  The overall goal of the tax exemption would be designed to give condo developers the incentive to build more affordable units in the pricier neighborhoods. 

Retirees have much to look forward to…traveling, relaxing, spending time with family, pursuing hobbies, etc.  People often look outside the city they currently live to find a place they can move to in order to “retire in style”!  Many move closer to family or to resort and coastal areas that offer amenities for those with much time on their hands.

Many retirees are also planning to downsize from a larger single family home to enjoy the amenities offer by new condos across the country.  New condo developments in areas like Jacksonville for example offer resort-style amenities that give the owner more than living in traditional master planned community could offer.

The St. John, for example, will be a 51-story soaring glass tower containing 300 luxury residences, and will rise nearly 582 feet over the Southbank of the St. Johns River.  The St. John will be the preeminent address for homeowners who want to enjoy the beauty of the St. Johns River in an urban setting near Jacksonville's core, as well as within walking distance of San Marco.  Amenities include a riverfront fitness center and an eighth level club room that opens to a dramatic elevated oasis pool deck with a tai chi lawn, lap pool, private cabanas, and an outdoor summer kitchen.  No this is a place to retire to!!

A recent Business Week article had some interesting statistics on where some builders stand with their debt.  With higher than expected inventory of homes and condos and mounting holding costs, many builders are facing bankruptcy unless lenders are willing to work with them to restructure their debt…all of this “creativity” I’m sure will come at a substantial cost.  Many companies are using tools such as credit default swaps in which bondholders hedge the risk of default.  Others are seeking out hedge funds to buy their loans and renegotiate the terms.  This is an alternative to bankruptcy and will keep many home builds afloat, but the costs will be high.

What is really coming back to bite the builders are years worth of land deals and partnerships where builders have gone in on land purchases with other companies to hold until future use.  This has led many to build up billions in debt which doesn’t appear on their balance sheets.  Many are still confused as to where the housing industry will go from here.  Everything really depends on how long the slow down will last.

NAR is saying that home sales may drop another 18% this year.  It seems at least for the large home builders that the lending institutions will be willing to help them survive the storm.  The hedge fund opportunity will lead to much higher rates and giving up large portions of stock in some cases, but may be a viable way for some builders to stay afloat. 

Too many people that would like to purchase homes and condos focus on national trends and statistics rather than looking at their local activity.  This is not necessarily their fault though.  The media almost always addresses the housing market in broad strokes and discusses rates, prices, homes sales, etc. on a national average.  People really need to dial into what is going on specifically in the area they want to buy a home or condo.   

Homeownership is still the best way to accumulate wealth and add to one’s net worth over a long period of time.  The major correction in the real estate market is due mostly to the investors and speculators leaving the market.  According to NAR, in 2006 the housing market experienced 29% fewer investor purchases than in the previous year.  Notice I used the word correction rather than “crash”.  Critics always feel that people in the real estate industry typically offer a far too optimistic outlook when things slow down.  Sometimes this is true, but many times it is not.  Industry professionals obviously want to hope for the best but they also have a great insight into the external factors causing the shifts…as well as the factors that point towards then end of the storm.  When people say it’s a good time to buy, there is a reason.  It’s not a good time to buy if you’re looking for a quick flip or to live of an equity line of credit.  It’s a good time to buy if you want to invest in your future and own a home for years to come.  Rates are still at historic lows. 

Now we see rents starting to up in many areas around the country.  Between 2006 and the end of 2007, NAR forecasts that rents will have risen by about 7% in many major markets.  This alone may push renters to buy homes and condos. 

Online discount brokerage company Redfin continues to receive press due to the controversial nature of their business model.  As the wave of technology continues to revolutionize the real estate industry, people keep wondering how the agents will react and respond.  Will real estate agents ever become obsolete?  Not a chance….the industry is just too large and the relationships to deep. 

Recently, an expose on 60 Minutes featured the topic of online brokerages and how they save the buyers money.  This episode sparked controversy as well as criticism from NAR.  NAR, who had offered to be a part of the feature, was left out of the interview.  Apparently, NAR found many flaws in the 60 Minutes piece and notice inaccurate information being communicated.  Let’s be honest, discount online brokerage companies are playing in a very competitive space as well as confronting the traditions of an industry that has been around forever.  Obviously, there is nothing wrong with saving home buyers time and money through streamlined technology but many feel there is something missing from the online model.

The real estate industry, whether its home, condos, or castles, has always prided itself on the relationship side of the business.  People need to feel comfortable knowing they have someone on their side that will negotiate the best purchase price or selling price possible.  The opponents of the online discount model agree that some services save the buyer time and money but also feel that they definitely do not offer the full services that a traditional agent can.  The online model does take the personal side of the transaction out completely…the buyer or seller is also not represented by someone with in depth knowledge of the market.   

A ferocious fire has been blazing on Catalina Island of the coast of California!  What is the deal with California and our natural disasters?  If it’s not fires, it’s floods and mud-slides.  As if the prices of homes and condos are not enough in California, people also have to worry about their house getting caught in a rapidly spreading brush fire and sliding down the hill due to rain and flooding!  The fire on Catalina Island is yet another example of fire destroying precious real estate, both commercial and residential.  Luckily, our client Mitchell Development, was not effected by the fire.  Their community, Vista Glenar which is a beautiful mix of condos and townhomes with prices over $1.3 million, was left unharmed. 

The Federal Trade Commission and the Department of Justice recently came out with a report supporting research by the National Association of Realtors and showing that over 80% of home buyers use the Internet as a primary tool in their search process.  The FTC and DOJ also stated that some state laws are preventing buyer and sellers from gaining the full benefit that the Internet was expected to bring to the real estate industry.

These laws that ban rebates and require agents to perform a minimum amount of work during the buying or selling process of homes and condos are preventing buyers from benefiting from the costs savings that come from online competition, rebates, and incentives.  Other restrictions by state law affect fee-for-service listings where brokers offer a flat fee to list the property instead of a commission.  These laws affect MLS type services and online resources offering rebates and do not affect other national advertising portals such as NewCondosOnline.com. 

FTC and DOJ recommend that states repeal the laws and regulations that limit competition and both agencies are doing what they can to counteract anticompetitive behavior in the business.  Many states have agreed to remove these restrictions.

We have all seen the special incentive offers that have been promoted over thepast couple years by hombuilders and real estate sales teams.  Most of the time we see ads for condos, the incentives will offer money towards closing costs, no HOA’s for a certain period of time, zero down, etc.  We have also seen condos offering plasma TV’s and cars to further incentivize the buyer to act quickly.   

California seems to be a good catalyst to use in comparing national real estate markets.  Having led the home building boom for the last 5 to 10 years, we can now see the contrasting effects of slowing sales, higher land prices, higher construction cost, and the overall negative hype about the market.  Many builders however are marching forward seemingly unaffected by the conditions of the market. 

San Francisco condos and San Diego condos continue to be built though there is an obvious decrease in the pace of construction compared the recent years.  Nationally, building permits fell by 25.9 percent in March as compared to March 2006, according to the U.S. Census Bureau.

According to industry experts, the real estate downturn which essentially started in 2005 could last through 2008 and begin to correct in early 2009.   That means we have another couple years to weather the storm before things get much better.  These are overall nationwide estimates and local markets will see a lot of variation. 

Markets that have experienced the largest amount of price appreciation in homes and condos, high demand, and of course speculation will continue to be hit the hardest by the slow down.  Over the next twelve months many expect to see prices to drop by about 8% or 9% in the top fifty nations around the country.  The housing market is expected to struggle in other markets that have less of a bubble, but it will be more do to the job market rather than inflated prices.  In many areas of the country that didn’t experience double-digit price increases, home values will continue to appreciate in a healthy manner.

 

Over the past 10 years or so the number of real estate related websites has grown by about 75% to 80% each year.  This of course includes anything and everything real estate.  Obviously the major players such as Google and Yahoo have become involve, but it’s the vertical search engines and destination sites that really supply the specific information that buyers are looking for.  Sites like NewCondosOnline.com are a combination of search portal and destination site where you want the user to stay for a while and gather information but then be on their way to the true destination site.  We have then seen these vertical search engines branch into even more industry specific niches such as resort communities, condos, time shares, etc. 

In the past, home buyers relied mostly on agents who held the key to all the information.  As the Internet has progressed from Web 1.0 to Web 2.0 the level of communication and information gathering has gone through the roof.  Now buyers spend months gathering information before ever contacting an agent. 

Will agents ever become obsolete?  That is doubtful.

Buying a home or condo is a very emotional experience and large commitment and people want to hold someone’s hand through the process.  Of course, the agents are necessary for all the detail work and negotiations, but they provide the necessary emotional support as well.  Agents these days probably spend less time in the car because the buyers come to them already knowing what they want.  Some agents were initially a bit intimidated by the introduction of technology to the world of real estate but it has really only proven to enhance the overall information sharing process.  Agents can gain more exposure, more clients, and more commissions…builders can market their projects more efficiently, etc. 

As many other major markets, the condo conversion waive has hit Seattle in a big way over the past two years.  Since late 2004, there has been a 450% increase in the amount of apartments converted to condos!  Of course this topic is very controvercial and each city attacks it differently. 

Many cities in California have imposed caps and restrictions on the number of apartments acquired for conversion.  San Diego and San Francisco to name two.  Seattle condos, especially conversions, are in abundance but what do these conversions do to the rental market.  In Seattle there is no rent control so as the apartments availability dwindles, guess what happens to rents…they go up.  Affordable housing issues then come in to play.  The city has recently passed some legislation to protect renters, but many feel it will not be enough.

Once a building’s owner decides to convert their building to condos, do not receive much assistance from the builder or the city. Owners must only provide 90 days notice, and construction, remodeling or repairs can begin soon after notification. Assistance for relocation is limited to $500 per unit for low income renters.  This is part of the new legislation but there was no cap placed on the number of apartments that could be converted to condos! 

Will the warmer weather bring out more buyers?  Many markets that experience colder weather such as Boston, New York, and Chicago saw a slight upturn in sales towards the end of the first quarter.  In Boston for example, sales were still down in March from where they were in March 2006, but the overall Q1 sales came out fairly even with last year.  The decline in median home prices also slowed during the first quarter and the median prices for condos continued to rise a bit.  For example, the median selling price of a Massachusetts condominium rose 3 percent to $279,000 (from March 2006), while the number of condos sold fell 1.4 percent from March 2006 to 1,765.  Overall condo sales for the first quarter however did rise about 2%.  We must think in these positive terms because this does actually show possible positive stats for the next couple quarters.

In markets with more extreme weather, we typically see more buyers emerge during the Spring and Summer months simply because the house hunting weather is more agreeable.  With the power of the Internet now, home buyers and condo buyers use this time to do research and gather sales information.  Will these researchers turn into buyers over the next few months?  Let’s hope so.

I would first like to announce that NCO had one of our best weeks in history last week, signing 31 new developments both in the United States and in Mexico!  The market for condos is not as dismal for many as it may seem for others.  Many builders are still having great success with pre-sales and moving forward steadily with their projects. 

I had the honor of being a guest panel expert on the CBS news show called Mind Over Money which airs in the Washington DC, Virginia, and Maryland areas.  During the show panel experts field calls coming from viewers about everything from credit card debt to real estate and personal finance.  Many of the questions I received were about issues that many people face today. 

The problem is that many people find themselves stuck with mortgages they can’t pay because lenders gave them loans for homes they can not afford…or could just barely afford.  People with interest only loans and adjustable rate mortgages are finding themselves in severe financial trouble now.  Sometimes it is the real estate market conditions and sometimes it is circumstances in people’s lives that change.  Those circumstances create tough financial situations where people need to sell their homes because they can now longer afford the payments.  Unfortunately, they are now trying to sell their homes quickly in a market that is flooded with product. 

It is no secret that home builders are expecting a bit of a slide on thier bottom line this year as many did last year.  Everyone fears the worst in real estate and condo sales as the negative hype spreads.  Home builders are feeling the pressure, but online based real estate companies and lead generation portals for loans, listings, etc. are contiuing to show growth in revenue.  The public sites like Move.com, Realtor.com, etc. have continued to expand as agents and builders seek more cost effective ways to advertise and generate leads.  This online phenomenon has leaked over into the world of commercial real estate as well.  The focus is to not simply generate leads but to close transactions online as well.  Selling condos online will become even easier as technology and systems for tracking leads through to sales improve.

Everyone now is looking for ways to profit in the current real estate market conditions.  Just as you can in the stock market, there are ways to actually make money in a down market.  However, it only works if the buyer or investor is well educated on the terms of purchase and has specific stipulations that will protect them if values fall. 

We have recently partnered with Vertical Realty Advisors, LLC to educate the general public on these sophisticated new models which coin the phrase “Vertical Ownership”.  Vertical Ownership is designed to obtain the best value for pre-construction condos for a respective floor plan with added mechanisms to protect the buyer from a drop in real estate values. 

If you live in the Washington DC, Virginia, or Maryland area, tune in to “Mind Over Money” on WUSA9 (CBS) on Friday at 9 AM EST.  I will be one of the panel experts discussing finance, real estate, and economics.  We will be taking calls from viewers about a range of topics from the current market conditions, mortgages, financing, etc.

Naturally, I will be trying to steer the discussion to that of Washington DC condos, Virginia Condos, and Maryland condos.  The focus of the show will be broad but each expert will be discussing topics in their specific field.  I will be answering questions from the interviewers Andrea Roane and Mike Walter as well as from viewers.  The questions I will be taking will be about real estate investing specifically for condos, renting vs. owning, the right time for buying and selling, etc. 

The episode will last one hour.  Each expert will be interviewed individually for about 5 minutes.  The show has a fairly wide viewer base and should provide some great additional exposure for www.newcondosonline.com and our clients.  We will post the show on the site in a few weeks.

 

We often forget how long this war has been going on.  Having endured two long deployments to Iraq, I have mixed emotions about the reasons for the war and the controversy of the United States' continued involvement.  From the perspective of Special Operations, we are continuing to involve SEALs and SOF forces from other branches in conventional warfare which is not what SOCOM is intended for.  This is a severe missuse of resources.

 When I was honorably discharged from the Navy, I attended graduate school at the University of San Diego to earn a masters degree in real estate.  I had the honor of meeting my business partner, Brandon Fishman, and we launched New Condos Online soon after.  One thing we never wanted to loose sight of was the important concept of "giving back".  New Condos Online is now in it's third year of operation and extremely profitable.  Our blessings have afforded us the opportunity to give to four extremely important causes...The Naval Special Warfare Foundation, The Susan G. Komen Foundation, Reach Global, and the Prison Entrepreneurship Program.

The Naval Special Warfare Program is the cause closest to my heart because it supports the families of our fallen brothers in the United States Navy SEAL Teams.  New Condos Online is based in San Diego which is the home to four of our country's finest SEAL Teams.  Finance, home building, condo development, and other business industries in San Diego are full of former "team guys" who all have strong feelings about supporting the SEAL community. 

A few pieces of wisdom that we have gathered while operating NewCondosOnline.com...

• Almost everyone these days uses the Internet to find a home
• Buyers looking for condos on the Internet are in the early stages of reseach and may not be ready to puschase for up to 6 months
• Agents need to understand that Internet leads may take a bit longer to close due to this fact
• Capturing registrations is the first step in closing Internet leads
• Channeling buyers to the property websites is the foundation of capturing these registrations
• Lead generation via the Internet is and always will be more cost effective than utilizing other types of media
• Website traffic is just as important as gathering email based leads as the traffic converts to registrations and phone calls
• Marketing new condos online will always be the foundation to any great sales effort

Some of you know that I was a Navy SEAL and one lesson never to forget is that you should never enter any battlefield or mission unless you are fully prepared. During my time in Iraq with my SEAL team, we often had to wait many hours and sometimes days just waiting to go through with the mission. Business is no different and this ties into why we feel this is the perfect time to launch the Condo Blog.