April 2010

It's the week after the Ragatz Conference, which had a smaller attendance than in the past, but it made networking all the better. Surprisingly for me there were some quality deals there. Here are my top line impressions:

1. No bank money now and probably not 'till well into 2011, so go the private capital route. The banks are still whipsawed between what the White House says to do and what the FDIC examiners demand not to be done = lend money.

2. Take out the bottom-feeders and there are few buyers. A handful of projects report decent sales volume, but I question that in light of our experiences.

3. Broad agreement that buyer motivations have changed, and for the foreseeable future, too. More cautious, value and quality oriented and as usual the Harrison Group gave a very interesting report.

4. Discussions about cutting prices, and for those who do the length of time it will take to raise them back up to pre-financial collapse levels vs. using other incentives. Will the prices ever get back to yesterday's levels?

5. Conversions from whole units to fractions got a broad 'thumbs down' due to the innumerable hurdles involved.

6. Still no success with the conversion of single-family homes to fractions.

7. Some thought that fractions will become a points-based product.

8. Rental income is a necessity today for owners.

9. Star is the only full service company of its kind still in business today.