Who was our Skookum Jim?

In 1898 President McKinley declared war on Spain (remember - "Remember the Maine"?); My Grandfather arrived in New York from Prague (Hello Elis Island); and Skookum Jim discovered gold in the Yukon.  Skookum Jim was an Indian guide now credited with making the first Gold discovery at Rabbit Creek, a tributary of the Klondike.  What followed was one of the most orderly   and largest gold rushes in our history.  Unwittingly, Skookum Jim started a stampede of over 100,000 dreamers and would be gold diggers on a journey to a little corner of the Yukon.   But interestingly, once in the Yukon, only less than one half of one percent of those gold diggers actually saw gold.   What the Gold Rush did do, however, was make wealthy men out of those that chose to sell support services to the would-be gold strikers.  Skookum, by the way, did well in the Gold Rush as did other early claim stakers.   But for years many of the pioneers that showed up to stake their claims toiled for years and ended up in poverty.  Not so with the support services. Some even went on to form major supply companies that still exist in some form today. 

The boom is Florida real estate has no Skookum Jim to whom we can point to and credit with the beginning of our boom. Yes there were early pioneers in our area like The Rosen Brothers, but our recent boom snuck up on us. No one cried: "CONDOS!  I have discovered CONDOS!  HOLY COW!  Single family Homes in the Cape are a STEAL!" 

My brother did keep telling me that I needed to move to Florida and seek my fortune here. I became a full time resident in Fort Myers in 1992. Along with three other partners we purchased nine acres and developed a single family home community... we did ok - but it was not a boom time. 

My part in the recent boom started in early in 2003 when I received another phone call from my brother Bill.. It seems that a guy that was on his hockey team was a sales rep for WCI up in Burnt Store Marina. He related the story to Bill at Hockey practice - all of the condos in Grand Isle were sold in less than one week.  I might be able, he offered, to get in on it if I called Micheal that night. I did so and Mike informed me that one of his customers that bought two condos dropped out on one and it was the last one available.  Gail and I bought it. 

The next year was a blur. I started www.investinwaterfront.com. I started this newsletter. I started Brixton Development to develop our own condos to sell. I hired Tatiana and she and I sold condos almost every day for two years.  My business model was simple and at that time unique. I sold non MLS listed homes for developers over the internet.  Market America built an informative website that was updated daily with new prices and projects. Brixton built low priced condos that we added to our sales inventory. My weekly e-letter tracked the progress of these projects and promoted the new ones. 

Like Skookum Jim I dug some of that Gold. Gail and I bought preconstruction condos. Fortunately we sold early- before the prices tumbled.  But unlike Skookum Jim, I never gave up being a guide. I was making money showing others where the gold was. Still am, by the way. 

August of 2005 was when things turned sharply. Coincidently this is when I sold Brixton Development.  August of 2005 was when inventory of new homes and condos soured and demand flattened and soon thereafter took a slight downturn. Inventories, however, continued to sour.

 There was a lag time in recognition, we know it was August of 2005 by looking back. We did not know it then. 

Now here is what I know.  Prices have dropped. Builders and developers stopped building. Some went bankrupt. Investors were squeezed. Large inventory of homes lie vacant and unsold; many with mortgages higher than their sellable price - sometimes by two fold.

 Today we are now in the clean up period. There are new investors in town. There are end users in town. They are buying the inventory at greatly reduced prices. End users are slowing picking over the carcasses.  Activity level is higher now that I have seen it for two years. Homes priced right do not languish on the market.  We listed a home off McGregor the other day - at the current appraised price - and had an offer in three days. We listed a canal front home in Cape Coral and it was posted on the MLS by eleven in the morning.. By six that night we had 32 phone calls. (That particular home has its own story - for sharing later.)  Our European marketing team (We now have a full time European relationship coordinator) is busy arranging trips for incoming Europeans.  I need more single family home listings, I need more duplex listings. Our inventory, like the entire markets, is long on condos and short of "priced right" single family homes.

It will take a long time to peck away at the inventory. And yes, we are pecking, not taking big bites.  There is imbalance in the inventory - too may condos and too many upside down sellers that still believe they can get 2005 prices. There were too many gold prospectors that came late to the rush, bought too late, and now are jamming up the inventory with high priced goods.

 The clean up period is happening now. This is where the bargains are.  The new normal.

Gregg

www.eandvflorida.com

www.investinriverfront.com

www.ma-commercial.com