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Trust This.
By Joseph E. Seagle, Esq. ● Jan 20, 2023
Smart Brevity® count: 3.5 mins...974 words
👋 Happy Friday! Today is the International Day of Acceptance 👨🦽♥️. Fifteen percent of the world’s population has some form of disability, and up to 190 million people have a significant disability. Today we encourage everyone to embrace those of all abilities and support those with disabilities to realize they are not living disabled. They are simply living.
I’ll be on vacation next week but will return on February’s first Friday. See you in your inbox!
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1 big thing: Rates down; demand up
The average rate for a 30-year mortgage dropped to 6.23% from 6.42% last week, the lowest since September.
Why it matters: The drop has driven new mortgage applications up by 28% over the previous week.
Yes, but: A year ago, the average rate was 3.64%. Any way you slice it, buyers remember those rates and are having difficulty swallowing a “6” as the first number they see.
By the numbers: The numbers in Central Florida, in particular, show demand increasing while supply is chipping away.
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Home sales picked up, with almost a 25% increase in sales.
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Condo and townhome sales increased by over 37.5% over the prior week.
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While condo inventory increased, the number of listed single-family homes decreased.
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The average price of a single-family home in the Orlando Regional Realtor Association market area increased by 3.0% over the prior week to $395,000.00.
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Orlando also recently ranked as the nation's third most competitive rental market for 2022, with an average of 21 applicants for every unit.
What they’re saying: Things are looking up in Central Florida for home sellers and buyers. But nationwide, stats are mixed.
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The US hit its debt ceiling, and legislators are squabbling over whether to raise it, putting the nation’s credit rating at risk as we near default on our sovereign debts. Estimates, if this happens, put job losses at 6 million, a loss of $15 trillion in household wealth, and an unemployment rate of 9%.
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Unemployment rates overall are down, but tech and housing-related industries that boomed in the pandemic are now in full layoff mode.
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New housing starts are down 22% from December 2021’s numbers, meaning the supply of new homes isn’t increasing soon.
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Spending by those who make more than $100,000.00 a year is decreasing, which helps slow inflation and hurts retailers.
What we're seeing:
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Investor-buyers on the sidelines.
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Investor-flippers biting their nails and praying the closing happens.
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Real estate agents driving for Uber.
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Mortgage brokers going back to school to learn computer programming.
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Computer programmers jumping from job to job, not for higher pay, but at least they keep their visas.
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2. What makes partnerships tick
Similar missions and core values are keys to partnerships that last and thrive.
Why it matters: Most partnerships fail before they even begin when one party’s reason for getting out of bed each morning is at odds with her business partner’s reason.
State of play: This week, I spoke to the CFRI Orange County investors’ group about the reasons behind partnership failures and what are some steps real estate and other business investors can take to make sure they work.
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We also covered written terms to have in place to address problems when (not if) they spring up.
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Partners with different missions, core values, and philosophies on how to run a business are like gasoline and water — they don’t mix. Whenever I scratch the surface of a dispute between partners, this is typically the cause.
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Honest and complete communication before jumping into a working relationship is essential.
What we're seeing: Clients with experience in partnerships that failed and worked have these tools in their transactions first:
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Buy-sell provisions determine how to value the venture’s assets, so they can be bought out or sold if a partner dies, divorces, declares bankruptcy, or is forced out of the company.
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Negotiation-mediation-arbitration terms guide the parties through deadlocks and disputes. The best ones identify a third-party arbiter who all the partners trust and admire (i.e., a mentor or coach) and whose decision will be final and binding on everyone.
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Competition terms clarify whether partners can engage in similar business on their own, outside of the partnership, without the other partner’s knowledge; or whether they must give the partnership notice and an opportunity to take the deal first.
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Land trusts coupled with beneficiary co-venture agreements are used to test the waters with potential partners on a deal or two before making the jump to forming a limited liability company or corporation.
The bottom line: Thriving partnerships have the alignment of purpose, mission, and values first. Then, they make sure their documents are comprehensive and well-drafted.
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The 10-best real estate markets for first-time homebuyers. BTW, none are in Florida. Realtor dot com
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Five things to post on your social media accounts to generate more leads. RealTrends
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The top-10 safest “large” cities in the US. BTW, non are in Florida. Far & Wide
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Condo reserve requirements could bust Floridians’ wallets. Fox Business News
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Zillow predicts the hottest 2023 housing markets. BTW … two Florida cities are on this list. The Title Report
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These ducks from up North probably thought some warm air would come out of our chimney earlier this week when the cold front was sweeping through Orlando. If they only knew that the oil furnace in our basement had been replaced by electric heat pumps decades ago, they wouldn’t have wasted their energy flying up there.
I wonder if either of these ducks can play piano as well as this one did.
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We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below.
Be on the lookout for our next issue! 👋
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