Scott Samuels Responds to the Chicago Tribune
Re: an article titled: "Reality Check on Florida's Housing Recovery"
by Mary Umberger, March 15, 2013
Good Morning Mary
I just read your piece on Florida's housing recovery and thought I would give you my prospective as an agent that has worked in the Tampa Bay Market for 32 years. I specialize in distress property management and marking for Bank of America, Wells Fargo and others.
In 2012 I sold over 150 properties to small investors looking for a return on capital just like the hedge funds
With all due respect to your friend Jack Mc Cabe I challenge him on the following points.
"No doubt, there are tremendous buying opportunities out there, but mostly, they're being taken advantage of by foreign buyers who have cash and by hedge funds who are buying homes at the rate of several hundred at a time and fixing them up to be rented out. Those two groups are probably doing 70 percent of the deals"
The key word is probably. In the Tampa Bay Market we have very little influx of foreign money however the hedge funds are buying and paying a premium as most of them came to the party late and values were already on the rise. Most hedge funds missed the bottom of the market. For Jack to say "two groups are probably doing 70 percent of the deals" is not true and I challenge him to back this up with data to support such a claim.
"We're not, by any means, back to a normal, healthy market where the buyers are the retail-type owner-occupants buying their American dream. Floridians haven't, for the most part, been able to participate in these buying opportunities, partly because getting a mortgage is so much harder these days."
MLS reports that in Pinellas Hillsborough and Manatee Counties (Tampa Bay Market) we have 13380 recorded sales with an average sale price of 225k that are NOT Bank owned or short sale. In that same time period we have 7791 recorded sales for Bank Owned and Short Sales with an average sale price of 120k in the same geographic area. It is a fair bet that the REIT's are feeding off of the distress inventory while the healthy part of the demand is feeding off the non distressed inventory. I could go on with stats that would support the theory that we are on our way to a very healthy recovery in the Tampa Bay Area of Florida.
"Their focus is on single-family homes. They weren't interested in them before because it was nearly impossible to buy enough in a concentrated area. For a while they focused on condos, but now they can buy a couple hundred single-families at a time within a single ZIP code."
This is impossible in my market. I have watched and studied the distress market very close since the crash of 2007. While we had a generous supply of Bank Owned two years ago never could you assemble 200 homes in one transaction from one Bank Owned source. FDIC guidelines and many other stop gaps are in place to be sure no inside deals take place for a good old friend at a REIT. Most if not all REO inventory is placed on the open market giving owner occupants first chance before going to the investor market. I agree that the REIT's are buying up many single family homes in many Florida Markets. They are under pressure from the promise they made to investors and the inventory of lower priced distress property has dried up. As a result the REITs are now paying prices over the formulas in the prospectus and investors will find this out until five years up the road when the Reit's can not deliver on the back end return because they paid too much at time of acquisition.
"The data are very fragmented, and the monthly data from the Florida Association of Realtors isn't comprehensive. The (dominance of ) real estate agent-facilitated transactions has been diminished over the years, as foreclosure sales have moved to auction websites."
The practice of placing distress property on auction sites such as auction.com is a practice that has just become the norm in the 1st quarter of this year. Most of this inventory is Bank Of America who is notorious in the industry for being the worst at have a system to dispose of foreclosed assets. This new practice of sending assets to on line auction's for cash only buyers who must buy the asset from a drive by only while accepting the occupant comes with the asset is a practice that will fail. The only reason you as an investor would pay cash for an asset under the terms offered is if you can buy way under value. Did I mention you do not get title insurance and the property will be conveyed by a quit claim deed. What happens when the ROBO signing issues come up in the future. Will the foreclosed party have a right? Who knows. Time will tell. All I can say is that you as a reporter should keep an eye on this It is the next big story I assure you.
"I think people are jumping the gun (in celebrating the return of the Florida market). We've had six very distressed years in real estate. Property values dropped anywhere from 25 to 75 percent"
In the Tampa Bay Market the train has left the station and demand far exceeds the supply. If you wait much longer you will pay higher prices and most likely higher rate of interest as the rates need to come up to curve inflation.
The market is being fueled by positive news media across the nation and around the world. In every news report you hear about Florida being on the front of the recovery. Florida will continue to be a safe haven for real estate investors as well as home owners who prefer sunshine and beaches over cloudy and dreary snow filled days.
Don't wait to buy Florida Real Estate Buy Florida Real Estate and Wait.
I invite you to come to the Tampa Bay Area and do a piece on our market.
End of Post.
