December 29, 2007
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.
We have spent the last 3 years building a profitable company and striving to serve our clients and produce the greatest results possible for them. Now that we have the largest web traffic in the industry today, it makes sense to leverage that traffic and provide new condo news and information to our users and to everyone in the real estate field. Without the proper amount of web traffic, we would not be able to support such a community. There would have been no reason to launch this until we had the full attention of a the real estate community. With over 60,000 terms optimized in the search engines, we draw thousands of home buyers, agents, and developers to our site every site each day. We have been successful because all we do is focus on driving quality web traffic and large amounts of it to our site. Our users and our community crave more information and the new NCO Blog strengthens our online community buy bringing a wealth of condo information to our users. We look forward to continuing to build blog partners and adding value to our clients and users. Thank you to all of our partners for your efforts in starting The New Condo Blog.
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.
New Condos Online donates to the Naval Special Warfare Foundation and encourages everyone who supports our troops to learn more about what you can do to help the widows and children of our fallen Navy SEALs. The home building industry in full of former military which is why we want to seek out those that enjoy giving back to one of the cornerstones that made them who they are today.
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…
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.
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.
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
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.
I spoke to many people that had purchased condos a year or two ago and are now renting them out. They want to know if they should refinance to reduce their payments or if they should sell it. They realize selling the condo will be difficult, costly, and take quite some time. On the other hand, they need to get the mortgage payments off their books. Many people are now “upside down” with their mortgages. When they try to sell, they can’t get the value they are looking for, so when it comes time to sit down at the closing table, they owe $30,000.
The panel experts did our best to answer these questions and help educate people about loan products and figuring out the right timing in the market. So many people have been taken advantage of buy lenders who are offering inappropriate loan products to people who can’t afford them. Overall the show was a success and we hopefully helped some people.
Just being in DC was great because I had a chance to visit some clients we have worked with for 2 years…but we have never met. Merrick Towel, the third largest media/marketing company in the area was one of those clients! It’s always great to put a face to a name. I was fortunate to see many of the projects we have been advertising for some time now and view their progress. DC looks like many of the major metropolitan areas do now with cranes everywhere! Almost all of them are for new condos.
DC is not the only hot construction market for condos. Of the 31 new developments we signed this week, the locations include
Ft. Myers, Las Vegas, Clemson, Chicago, Palm Bay, Livermore, Tampa, San Diego, Telluride, Chandler, Phoenix, Reno, Stamford, New York, San Ramon, Hyattsville, and Nuevo Vallarta. We’ll keep them coming!
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.
Where will technology and the Internet take us from here?
We will start to see real estate websites integrate better and better technology to support the flow of information from the buyers to the sellers. The most important aspect of this technology integration will be increasing the accuracy of tracking “clicks” through to sales transactions. Most industry professionals see the value in the Internet for marking homes and condos, but many still don’t know why they see the value. The bottom line for real estate will always be getting people in the sales office.
Do real estate websites get people in the sales office?
Of course! Do the sales agents accurately track where these people come from and really know what resources actually brought them to the sales office…not usually. Too much human error is involved in tracking marketing dollars these days. The more automated the system can be, the more accurately we will be able to track the value of online based advertising. Until the transactions are actually occurring online (which may never happen) industry professionals in the online space need to continually pursue the use of better technology so that they get credit for the leads they send.
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.
Many home builders placing production on hold or cancel plans for new condos and home communities until they can get their financial “legs” underneath them. We have seen some of the nation’s leading home builders take a big hit in sales recently, but recovery is in site and absorption will pick back up as it always does. The question for now is how to weather the storm and negotiate the obstacles ahead. Some home builders in areas of
for example are doing just fine due to product affordability and the types of buyers they are receiving. KB Homes, for example, whose presence in
Southern California is huge, continues to build and sell homes at a healthy pace. Many of their homes start in the low $200,000’s and the buyers are end users looking to stay for a long time!
In other areas of
Southern California where building has been booming, we still see many permits issued and construction plans moving forward. Downtown
San Diego is one of these areas that seems not to be intimidated by slower absorption rates. The demand will come again and absorption will become healthy.
Many builders who have been focusing on the condo conversion industry will continue to have additional struggles other than slowing sales. Cities are creating stricter guidelines for builders wishing to convert apartments to condos. These restrictions and increasing the cost and time it takes to complete a project as well as diminishing the availability of apartment communities to concert.
All of these issues are hitting the construction industry hard. There are now fewer construction jobs available in the home building industry. Many contracting companies may have to take a serious look at the possibilities of non-residential construction as the commercial markets continue to do well.
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.
Many think this is a sign of tough times ahead but most of the time these are just creative marketing tools that help separate one condo development from another’s. With so much inventory on the market in most major cities, buyer have much to choose from as well as many incentives to purchase. This is the time to cash in as long as you have no delusions about quick appreciation gains and turning a fast profit on your home.
Some condos are really pushing the incentives hard and offering unbelievable discounts. For example, Grand Treviso in
Dallas is offering condos from the $140’s up to over $1,000,000.
On top of their reasonable price points (at least to those of us who live in California or other major coastal regions), Grand Treviso is offering NO payments on principle or interest for 6 months, no HOA’s for an extended period of time, and no closing costs!
That’s just about as good as it gets.
These incentives may not be as creative as some, but money talks.
Other condominium communities in
Dallas are trying real estate auctions and bulk purchase models to move units.
Texas has always been a more traditional real estate market though and
will sell at the pace the market sets regardless of auctions or bulk purchases.
The upside is that
Dallas, unlike many markets does not usually overbuild and absorption stays fairly healthy.
The National Association of Realtors says
U.S. home prices have risen 50 percent since 2000.
But with higher inventory level for homes and condos, major builders like Toll Brothers, Lannar, Pulte, and D.R. Horton are offering the incentives to keep the buyers “on the market”. Builders are even offering bridge loans to buyer until they can sell their existing homes which could take over a year. Unfortunately, it is hard to measure if the incentives are really boosting sales and keeping buyers interested. Buyers know that there is plenty to choose from right now as the market has been flooded with new and re-sale product. Most of the major builders know they will survive the downturn and go back to business as usual in the near future. Most economists however, are wondering what the slow down will do to the
U.S. economy as a whole.
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.