The wrong kind of closings
The real estate sales slump is shutting realty offices.
By James Thorner
Published May 15, 2007
Tampa Bay area home sales are sluggish, but one type of property is turning over faster than it has in years: realty offices.
With half as many homes selling this year as during the boom in 2005, Realtors are closing, selling or consolidating their physical property.
The biggest casualty so far is Century 21 Mills First Real Estate, a onetime dominant agency that has shed six of seven offices in a little more than a year.
The company never fully recovered from the death of founder Thomas Mills in 2003, but the current real estate doldrums sealed the company's fate, said Shirley Pheasant, manager at the agency's sole surviving office, in New Port Richey.
"I don't think the agents always know how a company's doing. If there's money coming in, you assume the company is doing fine, " Pheasant said.
Prudential Tropical Realty, among the top three in regional sales with 425 agents, has closed its Palm Harbor office and shifted employees to its Countryside branch. Both had operated at half capacity.
"It just made more sense to merge, " said Dewey Mitchell, Prudential Tropical's owner.
Thanks in part to high property taxes on second and vacation homes, beachfront property has taken a pounding, and so have Realtors on the coast. One of the most successful, Sand Key Realty Sales and Rental, closed one of its three offices, the one in Indian Rocks Beach. It will probably become a restaurant.
"To maximize profits, you have to cut some of your losses, " owner Jim Robbins said. "We're still doing $6-million to $7-million in sales a month. It's just not the $15-million we used to do."
The culprit is home sales that have plunged from their record-setting peaks of 2005. In Pinellas, Hillsborough and Pasco counties, Realtors sold 2, 488 houses and condominiums last month. That compares with 4, 998 sales in April 2005 and 3, 783 last April.
Trade groups representing Realtors report comparatively modest drops in membership. In the case of the Pinellas Realtor Organization, membership stands at 7, 300, a 7 percent dip from a year earlier. But even if Realtors keep their licenses active, fewer are making a living selling houses.
Office closings aren't always tied to Realtor ranks. Some firms, like Robbins', have the same number of agents wedged into tighter quarters. Other firms, like ERA-Dennis Realty in Land O'Lakes, have culled dozens of agents but maintain the same showy office building.
One Realtor's loss is often another Realtor's gain. Some of the larger agencies are taking advantage of the slump to line up expansion sites for when the market improves.
Pinellas-based Century 21 Sunshine bought out Tampa-based Century 21 West Bay last year.
Craig Beggins, president of Century 21 Beggins Enterprises in Apollo Beach, snagged an ailing Century 21 Mills First branch on St. Pete Beach. He's eyeing three more undisclosed acquisitions.
"A lot of companies can't make it in tough times, " Beggins said.
Prudential Tropical just bought a Coldwell Banker Real Estate office on Park Boulevard in Seminole that shuttered several months ago.
"We're trying to position ourselves for the future, " Mitchell said. "We always want to branch into new territory, especially lower Pinellas County."
The shakeout isn't necessarily over. More than a few small realty companies, many serving pricey Gulf-side property, have shed agents and struggle to pay monthly office rent.
"It's an issue for everybody, " said Prudential Tropical's Mitchell. "This isn't our first time around. This is the fourth time I've been through a downturn."
James Thorner can be reached at (813) 226-3313 or email@example.com.
Many Tampa Bay area realty companies are closing, selling or consolidating offices. Here's a sampling:
1. Century 21 Mills First: Closed or sold six of seven offices, in St. Petersburg, St. Pete Beach, Tarpon Springs, Seminole, Clearwater and Belleair.
2. RE/MAX Advantage: The Port Richey company shut down in February, laying off 25 agents.
3. Sand Key Realty Sales and Rental: The Clearwater Beach company closed its Indian Rocks Beach office, but two others remain.
4. Prudential Tropical Realty: The Pasco County company closed its Palm Harbor and Polk County offices.
5. Century 21 West Bay Properties: The Tampa company sold last year to cross-bay rival Century 21 Sunshine. Seventeen offices operate post merger.