Archive for February, 2008

“Change also means chance. We have the opportunity for selecting all different types of properties that may be coming to the market.” Read the rest of this entry »

But pending sales see sharp increase, predicting better days ahead

January 2008 saw a dip in overall property sales in the local market, according to statistics pulled from the Sarasota MLS system. One of the primary reasons for the lull was likely the pending vote on a property tax reform package on Jan. 29, 2008, which may have contributed to some buyers remaining on the fence. However, with voter passage of the reforms, many experts predict a rebound in property sales in Sarasota and across the state in the coming months. In fact, pending sales in January 2008 were at the highest level since June 2007.

Property sales had strengthened considerably in December 2007, besting November 2007 sales by more than 22 percent as the buyer’s market began to gain strength with the arrival of the seasonal population. But January sales, which often show weakness due to the holiday slowdown in home shopping and closings, were considerably lower than December, and lower than the previous January totals.

There were 329 overall property sales in January 2008 – 221 single family homes, and 108 condominiums. That represented a 19 percent decline from January 2007 total sales of 407. The drop was more than 20 percent below the total of 426 closed transactions recorded in the Sarasota MLS in December 2007.

Statewide, single family home sales were down 28 comparing January 2008 to January 2007, while condominium sales were down 30 percent. The statistics continue to indicate that in a down market, the Sarasota area is faring better than the overall state.

“There was obviously some hesitation from buyers during the month of January, with the pending property tax reform vote coming up,” said Helen Sosso, 2008 SAR President. “Now that the issue is settled, and was favorable to the home buyer, we should see prospective buyers taking advantage of the historically low interest rates, the incredible property selection, and all of the attributes that always make our area a great place to buy a home and live.”

One of the bright spots in the January 2008 report was the strength in pending sales, which stood at 516 – the highest level in the past six months. June 2007 pending sales were 534. The figure stood at 397 in September 2007, 446 in October 2007, 489 in November 2007, and only 374 in December 2007. Crossing the 500 threshold bodes well for future transactions.

Inventory levels also dropped slightly in January 2008, compared to January 2007. The January numbers stood at 9,976 single family homes (compared to 10,219 in January 2007), and 5,610 condominiums (compared to 5,744 in January 2007).

The days on market, which translates to the average time it took to sell a property, was at 158 days for single family homes, a slight rise from the 144 days in January 2007, and 182 days for condos, a big drop from the 250 days reported in January 2007.

Prices continue to correct and fluctuate, with the median single family home sale price settling at $265,000, an 11.6 percent drop from the January 2007 median of $300,000, but unchanged from December 2007.

The median condominium sales price stood at $303,500, which represents a 27 percent decline from the January 2007 figure of $416,500, but actually a 12.5 percent increase from December 2007’s median sale price of $281,250. The January 2007 number was an anomaly from the price pattern in 2007, which saw condos selling between $260,000 and $300,000 for most of the year.

Statewide, prices declined by 14 percent for single family homes, and 11 percent for condos, comparing January 2008 to January 2007.

The current market correction from the boom days of 2003-2005 is showing up in every segment of the market. This means there are incredible buying opportunities in the Sarasota area, which will likely continue into 2008. Eventually, however, prices in the market will flatten, and then start to rise. It is extremely difficult to time a market’s fluctuations, which are dependent on many factors. But it remains a fact that well-priced homes in resort-style destinations are always in demand.

There are numerous other factors that continue to make Sarasota a great choice for potential home buyers – the affordable cost of living, tremendous natural beauty, great education system, fabulous restaurants, recreational and cultural opportunities, safe and clean environment, and world-class health care.

These facts, plus the historically favorable mortgage interest rate levels, high-quality inventory of available homes, the moderation of prices, and willingness of sellers to negotiate continue to support SAR’s assertion that now is a great time to buy in Sarasota.

Ashvin Srivastava is rebuilding his stone products firm after being caught in the severe construction downturn

By Michael Braga

Published Monday, Feb. 25, 2008 at 4:30 a.m.

ARCADIA — Ashvin Sriva-stava could have disappeared after his stone-casting company ran into financial trouble and he was forced to file for bankruptcy protection.

His wife, Pramila, lives in Thailand with their two children. She has a top-level position at PepsiCo. The family would have been fine.

But Srivastava was not about to leave his suppliers and creditors in the lurch and give up on his dream of building a nationally respected masonry manufacturing, installation and distribution business.

So after four months of rest and recuperation in Bangkok, he returned to Southwest Florida, sold off one of his commercial real estate properties, repaid more than 30 percent of the $5.1 million he owes to creditors and refreshed his business plan.

“We think he will be a survivor,” said Charlie Conoley, chief executive of Horizon Bank, who provided more than $1.5 million in loans to fund Srivastava’s fledgling business since 2004.

“He has tried to do, or he has done, everything we have asked.”

In a downward spiraling economy in which developers, builders, subcontractors and their suppliers are having an increasingly difficult time paying their bills, it is refreshing to some to see someone who has hit bottom, both emotionally and financially, start back up again.

“A lot of companies have had to learn this lesson — GM’s founder went bankrupt three times,” Srivastava said. “The difference is I’m trying to pay my creditors. I’m trying to pay back the people who believed in me.”

Srivastava, an India-born engineer with a doctorate in solid state science from Penn State University, launched a collection of companies under the Liberty Cast Stone umbrella during the real estate boom.

The stone facade on 1350 Main in downtown Sarasota is one of the results of Srivastava’s handiwork.

But like so many other Southwest Florida construction-related companies, Srivastava’s businesses got hit by the downturn.

When contracts for his masonry products dried up, he was unable to pay his 42 employees and was forced to shut down and seek bankruptcy protection, claiming assets of $2.7 million and debts of $5.1 million.

“I suffered a complete breakdown,” Srivastava said. “I just collapsed. I couldn’t function. I was bedridden for four months.”

But Srivastava’s wife would not let her husband give up. After returning from work at Pepsi in Bangkok, she would use the evening hours to deal with his creditors in the United States.

Her loving care and business acumen got Srivastava back on his feet. He returned to Sarasota in March and began working with the bankruptcy court to sell off land and buildings he had bought in Sarasota and Bradenton to house his manufacturing operation.

Last month, he was able to sell a 7.5-acre parcel, which he bought for $600,000 in 2005. The sales price was $1.4 million, and he used the proceeds to pay off a $1.22 million loan to Horizon and $5,200 in back taxes owed to the Florida Department of Revenue.

Srivastava is very proud of that achievement, and he believes he can repay other creditors as well.

“I filed for Chapter 11 to protect my assets and buy time,” Srivastava said. “I thought that by selling off the real estate, instead of just foreclosing, I would not only be able to serve the first mortgage holders, but the second and third mortgage holders would get something as well. I’m trying to make that happen.”

Besides selling real estate, Srivastava also has revived his business.

He has won contracts to make and install stone on a Hindu temple in Atlanta and to make stone umbrella stands for Tropitone, a outdoor furniture maker based in south Manatee County.

At the same time, Srivastava is building a 13,000-square-foot research, development and manufacturing center on eight acres off State Road 70 in Arcadia.

From there, he intends to supply masonry products to developers and road builders in the Carolinas and Georgia until the Florida market rebounds.

Srivastava also has an agreement with a masonry contractor in New England to make high-quality masonry products in that part of the country. Srivastava will supply the molds from Arcadia and his New England partner will cast the stone.

“He’s a mason,” Srivastava said of his unnamed partner. “He works on large projects, schools and government buildings, which are not impacted by the economy.”

Srivastava expects to start production in New England in June or July, and might open another mold-manufacturing operation in Mexico at the end of the year to supply the California market.

But the real payoff will come when Florida claws its way out of its current downturn, Srivastava said.

“Consider all the $5 million to $15 million homes that will be built on both coasts of Florida,” Srivastava said.

“Ten percent of the cost of construction is stone, and given that there are only a few high-quality manufacturers in the state, we should get a large share of the market.”

If Srivastava is able to get 10 contracts a year, that would amount to $2.5 million to $5 million in annual sales.

Add to that the potential to make precast highway dividers and tilt-walls, and annual revenues could be much higher than that.

“The strength of the market in Florida will always be there,” Srivastava said. “Otherwise, we would move the company to Atlanta or the Carolinas.”

Last modified: Monday, Feb. 25, 2008 at 3:15 a.m.

Original Story Here: http://www.heraldtribune.com/article/20080225/REALESTATE/802250355/1448