THE UPSIDE OF A DOWNTURN - original post 6-11-07

July 7th, 2007

There have been many articles in papers like the Wall Street Journal and NY Times on grim realities now facing the national housing market and Fort Myers/Cape Coral have been used as examples.  For Fort Myers and Cape Coral in particular the housing swoon has had a devastating impact since so much of the real estate industry here is concentrated in the residential sector.  But a housing boom typically results in the universal equation: 

Large number of buyers + rising prices + easy money = Too many marginal ‘Professionals’ who are not prepared  to work through ups and downs of a typical business cycle whether they are Realtors, Mortgage Brokers or Title Companies.

I have heard the same said about individuals in the construction industry, but since I am not in construction I will stick with what I know – real estate.

And although I would not wish harm on anyone, one thing is for certain- this downturn will properly weed out many of those marginal individuals in the real estate industry (the ones who make the rest of us who are serious about our business look bad) and make them go away.  Here is a good example for you (of course the names have been changed to protect the innocent…)

It’s a Friday and for the sake of my client I have prayed, crossed my fingers, and contemplated pagan rituals in hopes that the closing which should have taken place last week will happen today.  I am hopeful as the mortgage broker ‘Paula’ assured me that she had everything she needed and was just waiting for “one more thing to go through and verification of the wired deposit”.  

*Take note:  I am not the closing attorney nor I am not the Selling agent.  I am the Listing agent and for the sake of my client I did the daily follow-up with the mortgage broker for these reasons:

1.  the closing attorney complained that he never got calls and couldn’t reach anyone

2.  Mirian, the Selling agent who happened to be Spanish speaking with almost no English never called me (and refused to chip in with me to pay a bi-lingual agent to assist in the transaction communications.  Now I know some Spanish, but she felt very nervous about communication which made it impossible for me to communicate with her directly.)

 

Back to Friday; I am hopeful because after all, the mortgage broker seemed so confident that everything was on track.  Even though I did not hear from her at the end of the day for an update, as I requested, I certainly did not expect to call her office Friday morning and hear a recording that the number was ‘not in service’.   Well, I knew not to call the closing attorney, because I called him first and he knew nothing – he was busy working on his own house.  So I called the Selling agent – three times and never got a response.  So after leaving an appropriate voicemail for the Selling agent and not getting a human at her Broker’s office, I drove over to the Broker’s office to complain about the Selling agent’s unresponsiveness. 

The office was empty with the door locked and on the door was a sheet of paper with a hand written message that said,’ For more information contact Tim at xxx-xxx-xxxx.  Well I contacted Tim.  He knew nothing about the closing, added as a disclaimer that he would try to reach Mirian, but she left the brokerage last Friday and was no longer with their office.

‘Fine’, I responded.  But the closing should still be your office‘s responsibility, shouldn’t it?  You didn’t let her take the deals with her did you?

He didn’t know.  He would have to contact the Broker to see how these things worked.  Or would I like the Broker’s number?  Yes, as a matter of fact I would!

*Mind you Pedro was not the name I saw listed as “Broker” on the door, but it probably didn’t matter.  The other guy was probably in Miami too.  This was obviously a satellite office where the agents just pay for space with little management.

Pedro answered the phone and made it clear that he knew nothing about the deal.  After I told him I expected the office to sign a release for the earnest money for my client, the best he could come up with was, ‘Are you sure the deal is dead?  How do you know the deal is dead?  Let me get your phone number, get some information and get back to you’.  No, he never called back.

Just to summarize the rest of this “crash & burn” I made several calls to the lender in hopes of being able to resolve the problem but could not even get the lender to touch base with the buyer to see if he was still interested in closing, due to privacy laws.

Fortunately for my client, this story had a somewhat happy ending.  There was another very eager buyer (with a good Realtor) waiting in the wings with the ability to close.  But I felt very bad for the original buyer who thought he was in good hands.  Instead, he was dealing with individuals who will all probably soon be out of the “game” - who should never have been allowed to play in the first place.

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The Impact of National Demographic Trends on Small Cities (Like Fort Myers) - original post 5-25-07

July 7th, 2007

This past week I attended a conference featuring sustainable development for the Yellowstone-Teton Region, which includes cities located in Idaho, Montana and Wyoming.  Anyone who has been to Yellowstone knows the thrill felt when taking in all of the natural beauty and fresh air.  Having an opportunity to see big horn sheep at play or one of the many other local animals with their offspring only adds to what many all over the world consider a very memorable experience.  But how to keep the natural habitat undisturbed as much as possible and introduce smart-growth practices in the surrounding small communities that are now experiencing growth as never before?  I found the conference highly informative as well as provocative and insightful in terms of the region’s similarities to southwest Florida.

What were some of the conference topics?  Land Use and Conservation, transportation and connectivity and community vitality were a few.  And although they were talking about growing cities (and towns) within the Yellowstone region, these challenges which have been created due to national demographic and market trends are the same challenges facing Fort Myers and the Southwest Florida region.  

According to the Census Bureau, the State of Florida is expected to grow from 16 million in 2000 to 28 million in 2025 and southwest Florida is expected to receive 10% or more of Americans who decide to migrate between now and 2025.  For many, the main demographic focus has been on the baby boomers migration to Florida.  I can’t tell you how often I heard people chant, ‘The Boomers are coming, The Boomers are coming’, in order to justify the speculative “greed-fest” created during the real estate boom occurring a few years ago.  This however does not represent the growing demographic “gumbo” I begin to see developing here in Lee County.

The migration to this area will be much more interesting than just the “boomers” – not that boomers aren’t interesting enough (I should know, having married one). But more about “the boomers” later - let’s talk about gumbo. 

Our aging American population can not possibly function properly without some younger folks from other places to help us out (and not just Mexico).  This should not be a surprise to anyone – many Americans have ancestors who considered America to be the ‘land of opportunity’.  There are people of working age coming from many of the Caribbean and South American countries as well as Europe, Asia and Canada.  Florida is not just attracting individuals close to retirement.  Many of the people migrating to this area, both American and foreign born, are coming as families with young children.  In the future Florida as a whole is expected to become more diverse, urban and younger than the national average, due to the direction of our demographic changes.  The State of Florida is aware of this and actually markets itself as an international gateway for business and not just a great place to reside.

Back to “the Boomers” – are we really prepared?  Do we have the necessary infrastructure in place for the anticipated number of individuals representing an older population (healthcare, public transportation, etc.) coming to this area?

There is also the question of the appropriate housing.  Yes, there are families coming to southwest Florida, but the American population itself is moving towards denser living populations and urban environments – increasingly people are staying single longer, empty-nesters, or they are coupled but don’t have children.

These are all issues impacting patterns of housing demand and land development in southwest Florida as they are other areas like the Yellowstone-Teton region.

Is southwest Florida ready for all of the change – I’m not sure.  But ready or not, here it comes.

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Moving Toward a Needed Downtown Revitalization in Fort Myers -original post 5-12-07

July 7th, 2007

First of all I want to state (once again) that my passion is with Smart Growth and livable, thriving communities.  That being said, it can not be a surprise that I am very concerned about the planning and development decisions continuing to be made in Downtown Fort Myers. 

 Downtown revitalization is something that is occurring in most major (and smaller) cities across the country.  Rising gas prices and long commutes from the suburbs have been catalysts for the trend, but most importantly, people young and old have begun to warm up to the idea of living a more cosmopolitan lifestyle  - singles and couples without children in particular(living close to work, shopping, restaurants/bars, etc.).  What does this mean?  Downtown is beginning to come alive (or has already come alive) in many cities.  The real estate boom over the last decade helped to quicken the pace and so now in many cities populations have been growing rapidly over the past decade.  The potential for this phenomenon to occur in Ft. Myers was present just as it was everywhere else. 

So what is happening in downtown Fort Myers?

Downtown Fort Myers is a charming little historic district of a few blocks with a riverfront that carries a marina.  Yes, charming it is.  But should it attempt to be a Sarasota or a Naples?  Absolutely not!

The economic demographics in Fort Myers are no where near what they are in Naples and Sarasota.  That being said, wouldn’t make more sense for Fort Myers to capitalize on its own unique charm and become a true destination in it own right?  Downtown Fort Myers is not meant to be a suburban styled shopping post or play ground for only the rich.  It has the potential to be an eclectic and vibrant destination with the assets of an historic district, a riverfront, green space in different parts of downtown for out door concerts/activities and more. 

The City of Ft. Myers is trying very hard to improve downtown with streetscapes, and by developing ‘The River District’.  But more needs to happen in order to truly develop a ‘vibrant’ downtown.

Presently, the downtown real estate environment is not inviting enough to the groups that would normally act as catalysts to revitalization – commercial or residential. 

How to turn this around?

 Here are some community revitalization basics:

-          The artists and creative small business owners are the catalysts for revitalization. 

-          To jump-start growth, both residential and commercial real estate has to be reasonable affordable for the pioneers who will play a role in that revitalization

-          The higher-end retail and entertainment won’t take a chance until it sees the little guy thrive (this one happens to be just plain common sense)

One way to set this in motion is to make changes in zoning downtown.  Store fronts should be limited to retail and entertainment (restaurant, bar, etc.).  Obviously you can’t remove the attorneys and other businesses who have opened offices in these store fronts, so they would be ‘grandfathered until the business folds or the property changes hands.  Those in charge should warm up to the small businesses needed to enliven downtown,  encourage more small businesses to come by truly getting creative about marketing the downtown (as a whole)as a unique and entertaining destination – not just ‘The River District’.

Another way to set this in motion is to not just focus on ‘The River District’, but to look south.  South of the main downtown government district we have a lovely area which holds the ‘Red Sox’ stadium and green space for open out door concerts with recreation facilities nearby.  South is the only direction downtown can grow with the North end being the riverfront.  On the Southside there are other opportunities to push the revitalization and help downtown grow that are under radar:  The public library, the historic museum, and a recently built bus terminal (which can only become more important to the area as gas prices rise and activity grows downtown).  Presently, none of these places are perceived as part of downtown Ft. Myers.

Ultimately, people want to be ‘where the action is’ – They want to be in urban, cosmopolitan areas that offer culture, interaction with others, and/or just basic people watching.

Reason for Concern

First Street Village (http://www.firststreetvillage.com/).  Believe me – I am also excited about First Street Village, a large mixed-use development which will be located on the other side of 41(Tamiami Trail) from downtown Ft. Myers.  I will finally have a grocery store that I can walk to if in the mood and rumor has it there will be a book store there (anyone who knows me knows that this is a real turn-on).  There will also be a Starbucks (just as there is on our side of First Street)and other restaurants for the public.  But there is great potential for the public to perceive First Street Village as becoming ‘the new downtown’

But with the right mix of eclectic businesses, Ft. Myers can grow into a popular destination with an energy and personality of its own.  Downtown must be encouraged to be what it is – a ‘downtown’ with some of the urban characteristics and edginess of most downtowns.  As I have said to more than one client, ‘A little edginess is good’.

Other stuff to read:

http://www.lib.niu.edu/ipo/1995/im950807.html

http://www.mainstreet.org/

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