McAuliffe & McCormick “Plan and Attack”

This follow-up article featuring our company, appeared in the Gulf Coast Business Review this week. We are always very honored to be a part of great news stories. Thank you Alex Walsh.

Plan and Attack

In the long run, selling out the Towers of Channelside will likely end up as a secondary achievement on the resumes of Cheryl McCormick Brown and Steve McAuliffe.

More importantly, their success as a sales team taught the two how best to execute their idea for a new business. The new firm, called McAuliffe & McCormick, is now actively searching for clients with properties that need selling.

In February, the pair was tasked with finding buyers for 137 luxury condos at Towers of Channelside in Tampa — an inventory representing more than half of the building’s total number of units. At the time, McCormick Brown was the Towers’ sales director; McAuliffe was a broker with St. Petersburg-based JMC Realty.

Cheryl McCormick Brown and Steve McAuliffe parlayed their sales success at Towers of Channelside into a new, full-time business.

Four months later, all 137 remaining units had been sold, and the duo’s first “clients” — four banks (Wells Fargo, Fifth Third, M&I and PNC) and a hedge fund known as The Madison Group — were pleased.

McAuliffe and McCormick Brown were pleased, too. The two had begun talking about working together more than a year prior to their success with the Towers; and when Ryland Homes, McCormick Brown’s most recent employer, decided to cut back on its marketing operations, the time to act had arrived.

To sell the remaining inventory at Towers of Channelside quickly, McAuliffe and McCormick Brown cut prices by an average of 40% for all empty units. The strategy may sound simple — lower prices spur sales. But as McAuliffe explains, the team’s approach to pricing was anything but guesswork.

McAuliffe looked at 20 years of real estate price data to try to isolate the impact on values caused by the overheated market of the last half-decade. By his count, prices at the Towers were 40% higher than they should be; thus, the aforementioned cuts.

The team also says it was important to cut prices just once, rather than allow them to slowly creep downward over time. Holding new prices steady convinced lurking buyers to stop waiting for further decreases.

The scale of that sale was impressive: If a 40% discount brought in $45 million, that’s $30 million gone from the original price point. But McCormick Brown is confident the banks would have gotten “about half” of the revenues she and McAuliffe generated had they settled on a bulk sale of the properties.

Going forward, that’ll be the key to the sales pitch for McAuliffe & McCormick: the promise of better revenue recovery from working with them, as opposed to a bulk sale.

They’ll also need properties to sell. Like so many Floridians, the two are forced to wait for the owners of distressed properties to decide what to do with those troubled assets.

“It’s definitely wait-and-see,” McCormick Brown says. “It takes a while for a lot of these properties to come to fruition.”

In the meantime, the new company will provide consulting, marketing, and even Web design services to slowly recovering homebuilders looking to grow a little without making a dozen full-time hires. McAuliffe & McCormick will likely remain a two-person company for the foreseeable future, but working with former partners from past projects on individual cases makes the firm flexible in the long run.

In fact, of all the details behind their new business, it’s that diverse line up of supporting cast members that the pair is most reserved about — questions about their partners were met with silence, and then, “Next question, please.”

The new company won’t limit itself to work in the Tampa Bay area; in fact, McAuliffe thinks his firm’s home turf is lagging furthest behind in terms of recovery. “We haven’t seen a lot of progress,” he says.

But despite that slow movement, and with signs of life in other nearby markets, McAuliffe and McCormick Brown remain confident that there’s a need for their business in this market.

“There are definitely buyers out there,” McAuliffe says.

Please note: The sellout of the Tower’s 147 inventory homes took 12 months.

McAuliffe & McCormick Brochure

 

ULI Presents Recommendations to Vitalize Downtown Tampa

Coordinated by the City of Tampa and the Tampa Downtown Partnership, experts from the Urban Land Institute’s Advisory Services Panel examined the central business district and all or parts of Tampa Heights, Encore, Ybor City, Channel District, West Tampa, West Riverfront, Old West Tampa and North Hyde Park, last week.

According to ULI (per St Pete Times), to create a downtown with a soul, Tampa needs more urban housing, more pedestrians, better transit and less parking.

Recommendations include:

• Put in better landscaping, especially at entry ways to downtown. Got an ugly, empty lot? Get creative. Bring in a farmers market.
• Finish the Riverwalk, and allow food carts and restaurants near the Hillsborough River.
• Steer new housing toward three areas: Tampa Heights, the area around the Marion Street Transit Station and a redevelopment of the North Boulevard Homes public housing complex.
• Re-engineer roads like Ashley Drive to be less daunting to pedestrians. Think fewer lanes, more trees and lower speed limits.
• Ban new private parking lots as well as parking lots on street corners, convert some existing lots to parks or housing and increase on-street parking.
• Improve transit. Look at expanding the TECO trolley up to Tampa Heights and west of the Hillsborough River. Consider changes, like a fare-free zone, to make bus transit more attractive.

Mayor Bob Buckhorn said the report gives the city a “road map” for its next step: using a $1.18 million federal grant to create a master plan for downtown and areas like Ybor City, the Channel District and Tampa Heights.

Tampa’s future presented in less than a week… It appears Mayor Buckhorn is all in.

The slogan for Tampa 20 years ago was, America’s Next Great City.  Is now the time???   What do you think???

www.McAuliffeMcCormick.com

New Opportunity… New Company… McAuliffe & McCormick

As times change, we sometimes face extraordinary opportunities to chart a new path. After 20 years with JMC Communities, I am pleased to share with you that I am now embarking on a new and extremely exciting endeavor.

On the heels of our powerful success at Towers of Channelside, my sales partner, Cheryl McCormick Brown, and I are launching a new company, McAuliffe & McCormick, Inc., marketing and selling residential real estate with integrity, professionalism, and a competitive edge.

Cheryl McCormick Brown and Steve McAuliffe at Towers of Channelside

As you may have heard or read about in the news, Towers of Channelside has all but sold out (only one home remaining), and has become known as the fastest selling condominium community in the Tampa Bay area. We sold 137 homes in just over 12 months which, as we all can attest to, have been some of the most challenging times in real estate history.

We accomplished our goal – resulting in $45 million in sales – through tactical pricing, building a champion sales team and a establishing a creative marketing program targeted to the Towers’ unique attributes.  McAuliffe and McCormick Brown took this bank syndication property in receivership and turned it into a success story – exceeding the aggressive velocity targets of the Towers of Channelside property owners and completing the project under budget.

The launch of McAuliffe & McCormick is a natural next step for Cheryl and me, as we have discovered that our combined experience and knowledge gives us exceptional insight into the residential real estate market. We fully recognize that a cookie-cutter approach will not sell homes in this market. Our marketing approach and initiatives are tailored to each unique property, and are flexible to ensure we maximize opportunities and profits for each of our client-partners.

Cheryl and I have known one another for more than 15 years, with our paths crossing in different aspects of the homebuilding industry. Our understanding of residential real estate and our track record of continued success position us well to consistently exceed sales goals. We know how to quickly and decisively adapt to shifting trends. We know the market. We know our craft. And we execute it with efficiency to ensure our client-partners achieve maximum benefits.

Our extensive services can meet a broad array of sales, marketing, and leasing management needs, including:

• Strategic project positioning
• Creatively targeted marketing programs
• Program launch and implementation
• Tactical pricing and phasing within realistic time frames
• Professional full-time sales management and administration
• Maximized traffic-to-sales-conversion ratios
• Process Management of financing, title, escrow, legal, closing, construction and design
• Seamless conversion of lessees into buyers
• Timely and meaningful reports tailored to your needs
• Scrupulous budget management
• Comprehensive media management, including social media channel

Please visit our website to learn more about our company. We’d be honored to have the opportunity to speak with you in the near future to learn about your needs and how we may be of assistance to you.

Poll: Americans still believe deeply in homeownership

WASHINGTON – March 18, 2011 – Despite a historic real estate market upheaval that sent foreclosure rates skyrocketing and home values plummeting, Americans still have a deep attachment to homeownership. Furthermore, they consider homeownership an integral part of an American Dream in which they still believe, according to poll results announced today by The Allstate Corporation and National Journal.

The eighth quarterly Allstate-National Journal Heartland Monitor Poll revealed that nearly nine out of 10 homeowners say they would buy their homes again. That percentage held true even among homeowners who said their home values had declined. Seven of 10 Americans say they would advise a friend or family member to buy a home as a long-term asset. However, while homeownership is perceived as a good personal decision, there is much greater uncertainty about whether expanding homeownership should be a government priority.

Although only 35% of respondents expect their personal financial situations to improve over the next year, three-fourths of those surveyed said it is still possible for people like them to achieve the American Dream, which the poll defined as the ability to advance as far as their talents will take them and live better than their parents did. A total of 59% said they currently are living the American Dream. Respondents identified owning your own home as one of the most critical parts of the American Dream, second only to raising a family.

“Owning a home continues to be the bedrock of the American Dream – even as incomes are down, jobs are scarce and families struggle to make ends meet,” said Thomas J. Wilson, Allstate chairman, president and chief executive officer. “Homeownership is viewed positively by the vast majority of Americans as both a place to raise a family and a sound investment. As a result, financial institutions and the government must work together to ensure that those who can afford their homes stay in them and this opportunity remains a viable alternative for all Americans.”

Despite their positive statements about owning a home, only 42% of those polled said that government’s push to expand homeownership created more stable communities, while 51% said these policies made communities less stable because it “encouraged people to take on too much debt” and led to foreclosures. Those surveyed split exactly in half – 46% on each side – on the broad question of whether Washington should continue or scale back its efforts to promote homeownership through policies such as tax incentives for first-time buyers and the mortgage interest deduction.

“Homeownership retains a powerful, almost tidal, grip on the American imagination,” said Ronald Brownstein, editorial director of National Journal Group. “Even the economic experiences of the last several years don’t seem to have dimmed the yearning for ownership. But we do see that the public is much more ambivalent about whether the nation’s focus on expanding homeownership is a good thing for the country overall.”

Key findings from the eighth Allstate-National Journal Heartland Monitor Poll include:

1) Americans still believe in homeownership as a sound investment. A solid majority (70%) of Americans would advise a family member or close friends to buy a home to build long-term assets.

* Just 27% disagree with this statement and say homeownership is too risky. This measure is essentially unchanged since the first Heartland survey in April 2009.

* Young Americans (aged 18-29) are less convinced, with 49% who agree that homeownership is a sound investment and 49% who say it is too risky.

* Asked to name the best investment, 24% of Americans say “buying a home,” which ranks behind “investing in retirement savings” (38%), but ahead of “saving money in the bank” (20%), and “investing in the stock market” (6%).

* Most Americans (63%) believe that the current housing crisis is temporary and will improve over the next several years.

* Surprisingly, 58% of those who believe the housing crisis will remain a serious problem would still recommend buying a home.

2) Most Americans (59%) say they are living the American Dream.

* Those most likely to disagree include groups that typically have less of a safety net in a struggling economy: low-income households (51% disagree), those with a high-school education or less (43%), African-Americans (46%), and single mothers (68%).

* Three-quarters of Americans believe the American Dream is still achievable for people like them.

* 58% of Americans believe that the ability to achieve the American Dream is affected more by their own skills and hard work than by the state of the economy. This belief in hard work cuts across every demographic and socioeconomic subgroup.

For more results or to download the poll, go here.

The poll was conducted March 4-8, 2011, among 800 adults via landline and 200 adults via cell phone.

Copyright © 2011 Allstate-National Journal Heartland Monitor Poll.

Towering Success

Cheryl McCormick Brown & Steve McAuliffe on Towers of Channelside's Penthouse Balcony

We have been very fortunate over the past couple of weeks to receive excellent press surrounding our SUCCESS at Towers of Channelside.

Headlines in the St Petersburg Times (“Luxury condo project’s pricing strategy helps it emerge from bankruptcy”), Tampa Bay Business Journal (“Towers nearing sold out status”) and Gulf Coast Business Review (“Towering Success”) have led to very positive articles about the fact that our team has sold over 100 condominium homes in 10 months.  Here are some excerpts:

“We had to create a new story to go with it,” says Steve McAuliffe, a broker for St. Petersburg-based JMC Realty Inc., which was put in charge of marketing the Towers a year ago. He and colleague Cheryl McCormick Brown, sales director at the Towers, have sold 103 of the 257 total units and aim to completely sell out both buildings this spring.

Cheryl McCormick Brown and Steve McAuliffe urged the project’s current owners — four banks and a hedge fund — to slash prices. The owners agreed to an across the board 45 percent price cut; they took it a step further and paid homeowner association fees for vacant units so new buyers weren’t saddled with the costs.

McAuliffe and Brown have exceeded the owners’ goal of selling eight condos a month. “There is no room for negotiation, she said. “We’re reaching the right people.”  The sales success means that The Towers of Channelside is emerging from bankruptcy and will be turned over to the homeowners association.

Prices for the remaining units will not go lower, Brown said.  “There is no room for negotiation, she said. “We’re reaching the right people.”

The sales success means that The Towers of Channelside is emerging from bankruptcy and will be turned over to the homeowners association.

Holding the line on pricing, at roughly $200 per square foot, is a testament to the patience of the Towers’ current financial sponsors, McAuliffe says. The sponsors include four banks — Wachovia/Wells Fargo, Fifth Third, M&I and PNC — as well as the Madison Group, a hedge fund.

This shows that there are active homebuyers in the market… sellers just have to be realistic about their pricing.

Candice Tells All

How can you not like, appreciate and admire”Divine Design’s” Candice Olson?  Candice has a new HGTV show, “Candice Tells All”  showcasing one principle or design scheme per episode. This short 5 question clip was in the Detroit Free Press a few days ago. 

Q: Who or what inspired you to become a designer?

A:I always knew I wanted to do something in art. And I knew I couldn’t always play volleyball. (Olson was a member of the national women’s volleyball team in Canada.) I have a degree in interior design from Ryerson University here in Toronto. With almost 20 years in the business, I’m really excited about the new show. There is a real thirst for great design that is not only informative but also entertaining.

HGTV's Candice Olson

Q: What defines your sense of style?A:I look foremost to clients. It is their space, their home, their lifestyle. This should be a room that is about them, not me. There has never been a room that somebody doesn’t like. There have been rooms that were not my particular style. I bring sensibility to a more contemporary, casual and livable space.

Q: What are some of your favorite design tricks?

A:Probably not a trick, but overlooked, is lighting. I love using lighting tricks to bring up highlights. When I started (as a designer), I had to take a $30 blouse and with proper lighting make it look like a $300 blouse. I use that in residential design. Take drapes — with the proper lighting, they can look more expensive.

Q: What is the biggest design mistake that homeowners make?

A:A lot of time, people don’t do a reality check. They see something in a magazine that they like. But does it work for your lifestyle?

Q: What do you see as a trend?

A:People are looking for modern contemporary with natural materials. That element of craft brings softness and warmth to contemporary design.

To Buy or To Rent… You Decide

For the past decade or so, renting a home has typically been a better financial move than buying one. It’s been true in Southern California, San Francisco, Phoenix, Las Vegas and large parts of Florida, the Pacific Northwest and the Northeast.

By renting you most likely had to put up with friends and relatives who believed that owning a home was almost always superior. But renting also would have typically saved you thousands of dollars a year.

Now, as David Leonhardt of the New York Times continues to point out, the situation is getting more complicated because the housing bust has been playing out unevenly across the country.

“In some once bubbly markets, prices have fallen so far that buying a home appears to be a bargain, based on a New York Times analysis of prices and rents in 54 metropolitan areas. In South Florida, Phoenix and Las Vegas, house prices — relative to rents — are as low as in places that never experienced a bubble, like Indianapolis and St. Louis.

But in a handful of other areas, including San Francisco, Seattle and Portland, Ore., house prices remain significantly higher than they were before the bubble began. People who buy a home in these areas will face higher monthly costs than if they rented, even after taking tax deductions into account. As a result, buyers are effectively betting that prices will rise enough in future years to cover the difference.”

Below is an list of rent ratios — the price of a typical home divided by the annual cost of renting that home — for 55 metropolitan areas across the country.

According to Leonhardt, a good rule of thumb is that you should often buy when the ratio is below 15 and rent when the ratio is above 20. If it’s between 15 and 20, lean toward renting — unless you find a home you really like and expect to stay there for many years.

Metro area	Ratio
East Bay, Calif.	35.9
Honolulu	34.4
San Jose, Calif.	32.7
San Francisco	27.9
Seattle	27.3
Charlotte, N.C.	27
Orange County, Calif.	27
New York (Manhattan)	26.7
Raleigh, N.C.	26.2
Portland, Ore.	25.9
North – Central New Jersey	25.2
Nashville	24
Denver	22.6
San Diego	22.1
Long Island, N.Y.	21.4
Milwaukee	21.4
Austin, Tex.	20.5
Norfolk, Va.	19.9
Richmond	19.7
Memphis	19.3
Bridgeport, Conn.	18.5
Hartford	18.4
Boston	18.4
Washington–N. Virginia-MD	18.3
Oklahoma City	18.2
Baltimore	17.6
Columbus, Ohio	17.6
Palm Beach County, Fla.	17.6
Salt Lake City	17.6
Sacramento	16.7
San Antonio	16.7
Chicago	16.6
New Orleans	16.2
Philadelphia	16.1
Houston	15.9
Fort Lauderdale, Fla.	15.7
Miami	15.6
New York	15.4
Los Angeles	15.4
Kansas City, Kan.	15.3
Inland Empire, Calif.	15.1
**National Average for    metro areas	15.1
Indianapolis	15.1
Jacksonville, Fla.	15
Minneapolis	14.9
St. Louis	14.6
Las Vegas	14.3
Atlanta	14.3
Orlando, Fla.	14.1
Tampa, Fla.	14
Cincinnati	13.9
Dallas – Fort Worth	13.8
Phoenix	13.3
Detroit	12.4
Cleveland	11.7
Pittsburgh	11.4

 –Towers of Channelside Ratios ranged from 10 to 13, indicating that buying is better than renting if planning to stay in the home longer than 2 years.

It’s pretty amazing when you think about it. The country has suffered through a terrible crash in home prices, yet buying a house remains an iffy proposition in many markets.

The data comes from Mark Zandi of Moody’s Analytics and covers the second quarter of this year.

President Obama signs $858 billion measure that extends Bush tax cuts for two years

Had no action been taken, all of the marginal tax rates would have risen in January, with the top rate jumping to 39.6%. 

The tax package, estimated to cost $858 billion over 10 years, includes several positive provisions for NAHB members, as well as a couple of concerning aspects. 

Specifically, according to NAHB, it will: 

Reinstate the expired estate tax for two years at a rate of 35%. Adjusted for inflation, the first $5 million of an individual’s estate (indexed for inflation) would be passed on to heirs tax-free and couples could exempt $10 million of their estate’s value. While NAHB would prefer to see the estate tax eliminated, this was the best proposal that was offered. Except for the temporary repeal of the estate tax this year, the rate has not been lower than 45% since 1931. Without congressional action, the tax was scheduled to return next year with a top rate of 55% for estates larger than $1 million for individuals and $2 million for couples.

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Provide an estimated 21 million middle-class households and small businesses relief from the Alternative Minimum Tax through 2011.

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Maintain the current long-term tax rate on dividends and capital gains through 2012. The highest capital gains rate of 15% was expected to rise to 20% next year. Had no action been taken, dividend payments could have been taxed at a rate of as much as 39.6% for top earners.

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Renew the New Energy Efficient Home Tax Credit (45L) for 2010 and extend it through the end of 2011.

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Allow businesses to write off the full cost of capital investments (excluding residential and commercial buildings) after Sept. 8, 2010 and through the end of 2011.

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Provide a 50% bonus depreciation in 2012.

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Extend the expensing of brownfields remediation costs through 2011.

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Eliminate the Pease itemized deduction phase-out through 2012. The Pease rule reduces the value of itemized deductions such as the mortgage interest deduction and the real estate tax deduction for high-income taxpayers.

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Extend tax deductions in the Gulf Opportunity Zone for an additional 2 years beyond the placed-in-service date.

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Extend the deductibility of Private Mortgage Insurance through 2011; however, the existing adjusted gross income limitation of $110,000 remains.

There Is No Better Time To Buy A Home!

Based on the latest S&P Case-Shiller index, Capital Economics has concluded that house prices are now 17 percent undervalued relative to disposable income per capita. Housing has never before looked as undervalued, the firm pointed out in a research note released to DSNews.

Lack of consumer confidence has caused many buyers to refrain from taking advantage of the golden opportunities that exist in housing today. However, buyers should look at COST (price and interest rate) not just price. People who purchase today will reap the reward of buying an undervalued asset and should enjoy excellent appreciation when inventory levels return to normal levels. -KCM

Tax Credit Still Available For Veterans

As we move between Veterans Day and Thanksgiving, let us extend our gratitude to our armed forces and their loved ones.

Eligible Veterans are still able to take advantage of the Federal Tax Credits that expired for everyone else last spring. First Time Veteran Home Buyers that contract by April 30, 2011 and close by June 30, 2011 qualify to receive up to $8000 tax credit on their income tax return, and eligible Repeat Home Buying Veterans can receive as much as a $6500 credit.

Below is the wording from the www.irs.gov website.

Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.