Pensacola, Florida
Monday October 14th 2019


Making Lemonade Out Of Lemons

Finding opportunities in a challenging housing market
by Sean Boone

It’s become a market of inches.

Although the Obama administration has made financial push after push to boost real estate sales in the past year, the continued turbulence of the economy has kept the housing market shaky.

Despite more incentives to buy property, the market is still proving to be too much of a risk for most buyers. Recently released federal housing numbers show a 26 percent drop in sales in July from the previous year, even though interest rates are at their lowest in more than 30 years.

But should buyers who have the money to buy be worried to do so? Experts say yes…and no.

“If someone is looking to buy a house it’s not a bad time to be buying,” says Brian Hoffman, a Pensacola attorney who specializes in real estate closures and litigation. “The prices and interest rates are lower than they have ever been, and there are more and more bank foreclosures…the banks don’t want to own a bunch of property so they are trying to get rid of it as fast as they can.”

Hoffman, who will be speaking at the third annual Escambia-Santa Rosa Real Estate Council/IN/PYP Housing Seminar on Sept. 14, says the gamble that you take right now is buying in a market that could continue to fall.

“It’s the right time to buy, but you’re making major assumptions,” he says. “There’s a lot of uncertainty and most people have a friend who got utterly slammed by the falling values in the market.”

This year’s Real Estate Council meeting is themed “Making Lemonade Out of Lemons” and will feature eight local attorneys and experts as well as a discussion panel that will speak on various aspects of the local housing market and answer questions from the audience.

“It is essential to have a real estate attorney be a part of the process so that you get clear and good title,” says Greg Farrar, president of the Real Estate Council.  “It is still a buyers’ market and prices and mortgage rates are the most favorable to buyers since I began practicing law in 1987. The opportunities are great but so are the risks.

“Our council is offering the public an opportunity to listen to experienced attorneys for free.

Appraisal Fallout

The county is currently losing about a half to one percent of residential property values per month, according to Escambia Property Appraiser Chris Jones.

He says that value depletion is even worse with waterfront properties and undeveloped land. Jones notes that acquiring loans—particularly jumbo ones—is particularly difficult right now.

“The worst investments to have right now is vacant land,” he says. “Why would you build something right now when you can buy an existing building that is cheaper? No one is interested in the long time holding. Inventory is still somewhat high and it’s becoming more and more difficult scoring on loans. Credit is becoming more and more important.”

And with the dismal market on large real estate investments, the county’s revenue stream has continued to fall. Current projections show a 5.16 percent drop from last year for the county and a 3.10 percent skid inside the City of Pensacola.

Jones says he’ll be speaking at the Real Estate Council meeting to discuss where we are today compared to last year and where we are headed, as well as TRIM (truth in millage) notices, current actions by the Florida Legislature and Gov. Charlie Crist’s oil spill executive order.

“Historically there have been tax rebates for natural disasters,” he says. “My thought was to get the legislature get on board with this, but that has not occurred yet. I’m disappointed the Speaker (Larry Cretul, R-Ocala) has not decided to do a special session in September to look at that. Because none (of the millions BP has given the state of Florida) is covering property values, there will likely be a lawsuit.”


One of the biggest changes in the real estate market this year has been the addition of foreclosure protection for both the buyer and the banks.

Hoffman says the court system’s attempt to absorb the foreclosures was not working, which prompted the state to create mandated mediation—something that he says is still relatively “cumbersome.”

“(The state) recently set up judges in each county for foreclosures,” he says. “From the perspective of a homeowner, someone had to represent the bank and could sit down and go through the options. From a public perspective, it really isn’t doing much. If someone hasn’t been making mortgage payments and it has been going on for quite some time, the process is still requiring at least six months before notification is sent (that they are not making payments).”

Although the state has laws that protect borrowers from getting snubbed by financial backers by insuring that the institutions own the property, the number of foreclosures continue to rise in the current market.

As of Sept. 6, there are currently 66,914 foreclosures statewide and 533 in Escambia County. According to a recent New York Times report, more than 20 percent of mortgages in Florida were delinquent or in foreclosure, which is the highest in the nation.

“The sad part about it…say if you bought a home in 2005 for $150,000…now your house may be only worth $110,000 and now you are $40,000 out,” says Hoffman.

“Those people can’t go out and capitalize on the current rates because they are stuck with the same loan and can’t refinance unless they have $40,000 to pay.”

Moving Ahead

Late last year, many analysts predicted a steady upswing in the market for 2010. But those predictions were altered in late spring as interests in mortgage purchases dropped along with existing home sales, proving that the market had not hit its bottom.

“Some people say it can only go up,” says Hoffman. “In 2009, it actually went down. I think it will probably be another year or two before things get better.”

The other element to the equation for our area is the long-term effects of the oil spill. During the summer, some rentals saw a drop of more than 60 percent in sales.

Could that scare linger?

“No one knows about that intangible,” says Hoffman. “You’re banking on people moving into the area…some people may be scared off by tourism. A lot of people are sitting on the sidelines.”

Hoffman believes the market will go down for at least another year, despite the speculation that interest rates could dip to near 4 percent by the end of the year.

County officials are still looking at data from this year before making predictions for the future of the market. According to Jones, the real answer to pulling the area’s housing market from the bottom is job creation.

“I think the recovery will be slow, but it all hinges on having jobs in the area and I’m hoping the new Chamber president has new ideas to put in place for Escambia County,” Jones says. “I think when we do turn that around we will be poised to take advantage of the resources and draws to this area.

“We have a brand new hotel (Margaritaville) and it could be a centerpiece of that island and my understanding (Jimmy) Buffett is committed to put in a restaurant,” he adds.

But as it stands now, there is a 31 percent chance the nation will fall back into a recession next year, according to a recent Pensions & Investments analysis of predictions from national investors and economists.

The good news? The National Association of Realtors (NAR) reported earlier this month that the pending home sales index rose 5.2 percent to 79.4. The bad news is its still 19.1 percent below its July 2009 rate of 98.1 percent.

NAR reports that there are currently 10 things to know about the market:
1. The economy is growing, though slowly.
2. The private sector is finally creating some jobs.
3. Consumer confidence remains low, though clearly off bottom.
4. The 30-year mortgage rate is at generational lows.
5. The national median-home price is stabilizing.
6. Other home-price measurements also are showing price stabilization.
7. Home price-to-income ratios have returned to fundamentally justifiable levels.
8. Economists expect price increases in upcoming years
9. Delinquencies are high but recent loan originations are performing well.
10. The long-term path to self-reliance may be helped from long-term housing-wealth gains.
“For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity,” said Lawrence Yun, NAR chief economist in the release. “Home buyers over the past year got a great deal and buyers for the balance of this year had an edge over sellers.
“The recovery looks to be a long process,”

▶Third Annual Housing Seminar

Sponsored By Escambia-Santa Rosa Real Estate Council.
Independent News And Pensacola Young Professionals
WHEN: Tuesday, Sept. 14  6 p.m.
WHERE: New World Landing, 600 S. Palafox St.
Greg P. Farrar, Esq.— Foreclosures and legal advice
Brian Hoffman, Esq.— Status of Market and Foreclosures
Chris Jones, Property Appraiser—Oil spill executive order and appraisal issues
Kerry Anne Schultz, Esq.—Residential closing issues buyer or seller
Raymond Palmer, Esq.
Stephen Shell, Esq.
Charles James, Esq.
Jeffrey Sauer, Esq.

Featured Real Estate Seminar Participants:

▶Carver, Darden, Koretzky, Tessier, Finn, Blossman and Areaux, LLC
801 W. Romana St., Suite A, 266-2300,
Since its founding in 1994, Carver Darden’s guiding commitment has always been to provide clients with the highest standards of professional expertise, innovative thinking and strong service. From their offices in New Orleans and Pensacola, the firm represents clients throughout the region in both litigation and transactional business matters in areas such as banking, oil and gas, construction, gaming, healthcare, insurance coverage, labor and employment, maritime and admiralty, real estate, software and information technology, professional services, retail and manufacturing.

▶Farrar Law Firm
109 N. Palafox St., 434-8904,
The mission of Farrar Law Firm is to provide comprehensive legal services and solve all of its clients’ legal problems. The Farrar Law Firm is a full-service law firm that provides dedicated legal representation. Their attorneys represent individuals and businesses in the key practice areas of family law, bankruptcy, personal injury, real estate and estate planning. The firm also includes Barrister Title Company, which provides superior real estate information services and solutions to clients regarding refinancing or purchasing residential or commercial property.

▶Fountain Schultz & Associates, P.L.
2045 Fountain Professional Court, Suite A, Navarre, 939-3535,
Fountain Schultz & Associates exists to provide clients with exceptional legal service in the areas of real estate, business, estate planning, probate, and civil litigation. Kenneth Fountain, Kerry Anne Schultz and Scott Bridgford practice throughout Florida, and handle a full spectrum of real estate issues including contracts and financing, residential and commercial closings, foreclosures and short sales, landlord/tenant, homeowners’ and condominium associations, and litigation.

▶Shell Fleming Davis & Menge
Seville Tower, 226 Palafox Place, 9th Floor,
Shell Fleming Davis & Menge formed in 1956 and has since built a reputation of integrity and trust for its legal work and dedication to the community. The firm, made up of 14 attorneys, holds the Preeminent Lawyer designation from the Martindale-Hubbell Bar Registry. Its legal team has represented thousands of clients over the years, including banks, hospitals, individuals, developers and governments in a wide variety of practice areas, such as real estate, insurance defense, family law, criminal law, wills, estate planning, taxes, construction litigation, and business and corporate law.