Brokers Blog

Home brokers in Southwest Florida will still face home price declines in the coming months, and full market recovery is still years away, according to speakers at the Market Watch 2010 event held in Fort Myers last week.

Veteran broker Denny Grimes, co-founder of the event and head of Denny Grimes and Company, told more than 700 realtors, brokers and other real estate professionals who attended the event to be realistic about home prices and to prepare for further price declines and further troubles in the commercial property sector.

Grimes said that the housing market has become obese and that it needs time to correct itself. He added that home prices are still low, but low price levels would increase sales and would cut down housing inventories.

According to Grimes, only 12 Lee County homes priced below $100,000 were listed in 2006. Today, he said, about 2,200 houses priced under $100,000 are being offered for sale in the area.

He also explained that total home sales last year broke the sales record achieved in 2005 and posted a 40-percent increase over total sales in 2008. The increase in number, however, did not translate into a corresponding surge in dollar volume as low home prices put the dollar volume increase at only 16 percent.

Grimes also told the home brokers that he believes the median home sales price has stabilized at around $98,000, which is 18-percent above the $79,900 median price in June 2009. However, recently built houses priced above $300,000 will continue to struggle in the market and owners will be forced to cut their listing prices. He mentioned Estero and Bonita Springs, which are still struggling from a 17-month supply of homes, most of which are priced above $300,000.

Another veteran broker Stan Stouder spoke about trends in the Southwest Florida commercial property sector. He said that high unemployment rates and uncertain capital markets will drive more commercial foreclosures. He added that developers will continue to face financing difficulties, but they will still attract entrepreneurs and investors if they incorporate in their projects the benefits of a busy airport, a sunny climate and the commitment of the county to green technology.

At the end of the session, most home brokers probably echoed the view by real estate appraiser and valuation counselor Anthony Mollica who said that Grimes and Stouder both were right in setting a cautious optimism for the residential and commercial real estate markets in Southwest Florida.

Commercial real estate brokers have been downsizing their costly marketing strategies to cope with lower commissions from sales, according to interviews with commercial and residential real estate agents and brokers.

In Oregon and Washington, Certified Commercial Investment Members have been cutting down the number of their expensive social events like golf tournaments and hotel lunch programs and relying on lower-cost marketing strategies such as online networking, real estate blogging, classified ads listing and meeting people at events organized by other people.

According to Linda McClellan, head of the Clark County Association of Realtors in Washington State, the struggles of the real estate selling industry are shown in the sharp drops in realtor association membership across the country.

Her 88-year-old association, for instance, has already lost 800 members since 2005, when 2,200 real estate professionals were enthusiastically earnings loads of money from selling and buying properties. This year, McClellan expects about 200 more members to cancel their membership.

CCIM, meanwhile, expects its average of 300 members to drop this year due to continued uncertainties in the residential and commercial property subsectors. Association leaders feel that commercial real estate brokers are being swayed by the rising trend of finally retiring from work or retooling for other jobs or businesses.

To cope with declining membership, associations have been eliminating the perks they previously offered to their members. When holding retreats or other big events, they approach companies for sponsorship.

Linda Fisher, president of the Portland chapter of Commercial Real Estate Women, said she has been working harder to solicit sponsorship from companies. During the boom, most companies can easily give $2,000 to be the sole sponsor of an event. These days, Fisher said, the most she can collect from one firm is $500.

According to Anita Rifberg, president of the Southwest Washington-Oregon chapter of CCIM, real estate brokers today need to exert more effort to find networking opportunities in affordable ways. They also need to update themselves continually about changes in the market. Once they fall into complacency, it would be very difficult to get back, reconnect with movers in the business sector and start again.

According to many real estate professionals, it would still benefit commercial real estate brokers to stay as members of professional associations because these groups exercise greater power in business communities, provide networking opportunities, support advantageous legislation and conduct continuing education in the real estate business.

A rising number of real estate brokers are thriving in short sales despite the wide perception that short sales take a long time and are difficult to work out and complete.

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