Attorneys Feeling the Sluggish Real Estate Market
By: Nick Deonas
The U.S. Census Bureau released figures on June 25, in conjunction with The United States Department of Housing and Urban Development. These numbers were based on 512 thousand new single-family homes that were sold in the month of May. The numbers are 2.5% below April’s numbers. Also, using seasonally adjusted predictions, the anticipated estimate of new homes for sale at the end of May was over 450,000 homes. This large supply would last almost 11 months at the current demand and pitiful sales rates.
Real estate agents and developers are not surprised by the confirmed data, because no one is developing, building or selling. Now, attorneys who practice real estate law are feeling the slump as well, with drastic reductions in their normal case loads. Bryan Goode of DiRito Goode Dempsey at Jacksonville Beach, said, “Compared to a year ago, my real estate practice is only a third of what it was. Obviously closings are down but our firm is diversified, so we’re focusing on other areas like wills, trusts, probate and commercial litigation. We’re continuing to pursue real estate but we’ve got to watch our overhead,” he added.
Bill Ryan of Ryan and Marks has been practicing since 1972 and said this isn’t the first time real estate and the economy has had a hiccup. “This slowdown really started in early 2007 but I think a lot of people didn’t recognize it then. I’ve asked my friends in the real estate industry how they compare now to the early 1980s when there was also a severe downturn. Back then inflation and raising the interest rates finally worked but it was very difficult business for several years,” he said. Ryan also said that while he does mostly residential work, he sees the effects of the slump on the commercial side as well. “Commercial is following residential. When homes slow down construction of shopping centers and fast-food restaurants also slows down.” The veteran of cyclical economics doesn’t have a prediction as to when the housing market will rebound and said, “Every now and then we see a blip and think it’s going to get better but then the blip disappears.”
Crabtree & Fallar’s Randy Crabtree has also watched his practice change with the real estate market. “Our market is down 75 percent. It (real estate law) is predominantly all I used to do. We were very much transactional and our main client base was developers and builders. When the builders lost sales momentum we had to find something else to do like foreclosures and real estate litigation. Cases we would have referred we now litigate,” said Crabtree. He has also weathered national economic storms in the past but said this one is different. “I went through the high interest rates in the 70’s and the depreciation in the 80’s and the lean periods in the 90’s but I’ve never seen anything like this before. I think the sub-prime loans are the main factor in the current dynamic. It has caused investors to have no faith in the mortgage companies.”
Crabtree also has no idea as to when the market will turn around but did predict, “It could be an astronomical collapse if something isn’t done to get things going again. But even if you could get land at zero cost, you can’t build right now for a price anyone can afford. And even if interest rates were at 0 percent, nobody would make any money so the system wouldn’t work. It’s like a tornado. Everything we knew about real estate is no longer true.”
All three attorneys agreed diversification, and running their businesses as efficiently as possible are the only ways to weather the conditions until they improve. “We’re more aggressive in getting the word out,” said Goode. “I’m beating the pavement looking for deals. It’s just a time to get out there and hustle.”