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Double Daily Breifing

June 6th, 2007 9:01 PM by Ron Mastrodonato

Florida’s existing home sales, median price down in April 2007

ORLANDO, Fla. – May 25, 2007 – Florida’s existing home sales remained soft in April though the inventory of homes continued to ease in many markets across the state, according to the Florida Association of Realtors® (FAR). Statewide, sales of single-family existing homes totaled 12,016 last month compared to 16,283 homes sold in April 2006 for a 26 percent decrease.

Florida’s median sales price for existing single-family homes in April was $237,800; a year ago, it was $245,900 for a 3 percent decrease. The median is the midpoint; half the homes sold for more, half for less. In April 2002, the statewide median sales price for single-family homes was $133,700, for an increase of 77.9 percent over the five-year-period, according to FAR records.

In March 2007, the national median sales price for existing single-family homes was $215,300, down 0.9 percent from the previous year, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $580,090 in March; in Massachusetts, it was $344,000; in Maryland, it was $302,750; and in New York, it was $248,000.

Housing industry analysts anticipate that a decline in subprime mortgage loans, coupled with stricter lending standards, could impact housing activity in the coming months. According to NAR Senior Economist Lawrence Yun, one benefit for the market is the disappearance of speculative behavior, which contributed to abnormal price growth.

“Homebuyers today are purchasing for the long-term, generally with a realistic expectation of modest gains over time,” Yun said in NAR’s latest market outlook. “It’s good that we’re getting beyond the tendency of some buyers to view housing as a temporary asset to accumulate short-term wealth, which is not to be expected in a normal market.” NAR predicts that existing home sales will increase gradually in the second half of 2007, with prices recovering a bit later.

Sales of existing condominiums in Florida also decreased last month, with a total of 4,321 condos sold statewide compared to 5,344 in April 2006 for a 19 percent decline, according to FAR. The statewide median sales price for condos last month was $215,500, up 3 percent from April 2006’s condo median price of $210,000. NAR reported the national median existing condo price was $228,200 in March 2007.

Last month, interest rates for a 30-year fixed-rate mortgage averaged 6.18 percent, according to Freddie Mac, a significant drop from the average rate of 6.51 percent in April 2006. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the Sarasota-Bradenton Metropolitan Statistical Area (MSA) reported 796 existing homes sold last month compared to 685 homes sold a year ago for a 16 percent increase. The market's median sales price for homes was $294,800; it was $302,100 in April 2006 for a 2 percent decrease. A total of 333 existing condos changed hands in the MSA last month, up 11 percent from the 299 condos sold the previous year. The existing condo median sales price in April was $241,300; a year ago, it was $259,000 for a 7 percent decrease.

People in the Sarasota area are getting the message that now is a great time to buy a home, says Joe Hembree, president of the Sarasota Association of Realtors and broker-owner of Hembree & Associates Inc. He points to the association’s promotional campaign “Time2Buy” as a positive medium for spreading the word to consumers. “Low interest rates, a great inventory of homes available and stabilizing prices are positive influences on our market,” he says. “The Sarasota area offers so many benefits for residents: beautiful beaches, a friendly community and great social atmosphere, world-class arts and entertainment. It’s a wonderful place to live and play.”

Among the state’s smaller markets, the Gainesville MSA reported a total of 225 homes sold in April compared to 258 homes a year ago for a 13 percent decrease. The existing home median sales price was $214,200; a year ago, it was $204,200 for a 5 percent increase. A total of 74 existing condos sold in the MSA last month compared to 90 condos the previous April for a decrease of 18 percent. The market’s existing condo median price was $160,000; a year ago, it was $154,000 for a 4 percent increase.

Sherry Patrick, president of the Gainesville Alachua County Association of Realtors and broker-associate with Coldwell Banker MM Parrish, says that the area’s stable economy provides a solid foundation for the housing market. “Having the University of Florida is a big plus for our economy,” she says. “The Gainesville area has a strong labor force and employment outlook, as well as a college-town atmosphere, educational opportunities and cultural activities to attract residents.”

© FLORIDA ASSOCIATION OF REALTORS

 

Citizens’ group pushes for tax-cut vote

MIAMI, Fla. – May 25, 2007 – Members of a South Florida citizens' group with some influential backing have a message for state lawmakers: Lower property taxes soon or we'll do it ourselves.

Citizens for Property Tax Reform announced Thursday it is prepared to raise and spend more than $2 million to put a tax-cut amendment before voters on the 2008 primary ballot. The group has established a campaign headquarters.

Supporting the cause: the powerful Latin Builders Association.

The challenge is daunting: They must gather and verify more than 611,000 signatures for a yet-to-be written proposal that lowers property taxes enough to win the approval of 60 percent of voters.

The group's call for action comes at a time when the House and Senate, unable to solve the inequities of the current property tax system, are scheduled to meet next month in a special session in Tallahassee solely to work on property tax reform.

House Speaker Marco Rubio, who raised expectations in the Legislature earlier this year when he proposed eliminating property taxes altogether, met with the group last week and supports its efforts. He said it "adds to the pressure" to find a solution.

At a Thursday morning press conference in Little Havana, the citizens' group outlined the proposal. It calls for seniors to pay 30 percent of their assessed tax bill, homesteaded-property owners to pay 40 percent and commercial and investment property owners to pay 50 percent.

Bernie Navarro, the group's chairman, knows there's much work to be done before the measure appears on any ballot, but he says there's no shortage of outrage among property owners over the property tax issue.

MOMENTUM

"I've gotten calls from people in Jacksonville, people in St. Petersburg," he said. "We've got a lot of momentum. We could really get somewhere."

Citizens for Property Tax Reform was founded earlier this year when Navarro, a west Miami-Dade mortgage executive, and two friends traveled to Tallahassee to observe Florida lawmakers tackling property taxes.

The group is heavily backed by the Latin Builders Association and Miami-based supporters of Rubio, embracing the lawmaker's original plan to swap a hike in sales tax with eliminating all taxes on homesteaded properties.

The measure was rejected by Gov. Crist and the Senate.

MIAMI IS 'HOTBED'

Rubio now predicts that if legislators don't resolve their differences, more groups will sprout up around the state. "Miami is one of the hotbeds of property tax because it's a particularly egregious problem here," he said.

Next month, lawmakers are set to debate several proposals to lower property taxes.

Rubio supports creating a super-sized exemption on homesteaded property, which would be based on each home's market value.

All primary homeowners would pay a base rate of 20 percent on the market value of the home, up to $300,000. Owners of more expensive homes would pay 30 percent on the portion between $301,000 and $1 million and 70 percent on the portion beyond $1 million.

Democrats have countered with a plan that gives homesteaded property owners their existing $25,000 exemption plus a write-off that's equivalent to half the median value of a home in their county.

Rubio said Thursday he is looking at another option that would take pieces of the Democrats' plan but expand it to give heftier tax breaks to owners of higher-priced homes.

Under Rubio's new option:

-- Homeowners would get a super-exemption of 75 percent of the median value of a home in their county unless they are over age 65, in which case their tax exemption would be 90 percent.

-- Homes whose market value is between median value in the county and twice the median value would get an exemption worth 50 percent the median value;

-- Homes worth more than twice the median value would get a 25 percent exemption on their taxes.

FAIRNESS

Rubio said he sought the option because he is concerned about the impact a flat percentage would have on small cities and counties and because a fixed number in the constitution would require constant change.

He said he will not back off the notion that all homeowners, regardless of the value of their homes, deserve a substantial tax break.

"The purpose of our tax system is not to redistribute wealth," he said.

"We're not doing this to start class warfare. Someone with a $12 million home can be paying unfair taxes as much as someone with a $200,000 home."

© Copyright 2007, The Miami Herald, Kathleen Mcgrory and Mary Ellen Klas. Distributed by McClatchy-Tribune Information Services.

 

10 ways to build a niche with foreign clients

WASHINGTON – May 25, 2007 – Working with international clients can be professionally rewarding and extremely profitable, but it’s not for the faint of heart.

Developing a successful niche in this area requires plenty of patience, personal attention and problem-solving abilities, says broker James Wright, president and CEO of Century 21 All Islands in Oahu, Hawaii, and holder of the RSPS (Resort & Second-Home Property Specialist) certification.

If you’re up for the adventure, Wright says that working with foreign nationals is a marketable skill that will earn you lots of money in an increasingly global marketplace. “Globalization is becoming such an important part of our lives,” he said at the Realtors® Midyear Legislative Meetings & Trade Expo. “The lines between countries are just evaporating. One day, possibly even in my lifetime, I really think that we’ll have a single worldwide currency.”

10 tips for working with foreign nationals

Wright offered the following personal insights into what it takes to excel with foreign nationals who want to invest in a U.S. property:

1. Really know the culture and language. If your market has an influx of investors from Thailand, for example, study up on the cultural norms and business practices from that country. Ideally, you will have traveled to the country that your clients are from. It will give you common ground, provide fodder for discussion, and prove that you’re really interested in their background. Also, take at least a basic language class so you have a foundation on which to communicate.

2. Explain your credentials in detail. Most foreign nationals want to know about your educational background, your advanced degrees and honors, your designations or certifications, awards and any specialized training you’ve received. This will build credibility and assure clients that you’re qualified to handle their complex transaction.

3. Promise to work with them until the end. A transaction with a foreign national can take a long time – up to several years – and it can get very complicated to arrange financing and to secure the appropriate residency status with the U.S. government. Let clients know you’re in this for the long haul. Put in writing the service expectations you will meet and exceed.

4. Let them know how you do business, how you get paid.
Don’t assume your foreign clients know how things work in the United States. Explain how you typically work with clients and emphasize that you are not paid until the deal closes. Be sure to get a buyer agreement signed.

5. Understand a thing or two about U.S immigration law.
Understand common visa options and the requirements or limitations that an investor and his or her family will face. There’s a wide range of immigration statuses, from permanent resident alien – which is most similar to being a U.S. citizen – to undocumented alien, which presents far more hurdles in obtaining a mortgage and buying a home. Immigration law is very complicated, so be sure you have a trusted legal expert who you can consult on these issues.

6. Translate all contracts and disclosures into your clients’ native language. This is not only for their benefit, but also for your legal protection. If a translator is needed, be sure that it’s someone who you deeply trust. You can’t be certain that a third party brought in by the client is translating your messages correctly. If the client brings in his or her own translator, you also will want to have one of your own.

7. Don’t forget conversion rates. This is extremely important. If a client has the equivalent of $1.5 million in his bank account, but the money is in his native currency, a sudden change in currency rates can reduce the funds to $700,000 and throw the whole deal off track.

8. Help them integrate into society. Clients who are brand new to the United States may need a hand in learning local customs and culture. Show them around town — point out the banks, schools, and hospitals. Take them on a trip to the grocery store and explain how it works. Give them contact information of other clients from the same country, and provide names of local organizations or groups that can be resources. Don’t forget about the trailing spouses and children; they might be depressed about the move and will need help integrating, too.

9. Patience, patience, patience. Build rapport slowly but surely; trust is absolutely essential. In America we have a habit of jumping right into business, but international clients might need more time simply getting to know you before they share their personal information and motivations. Once the deal is under way, be ready for all sorts of hurdles. Documents and verifications from other countries take a long time, especially if they must be notarized by a U.S. embassy. Lending also can take longer if the client lacks a traditional credit report.

10. Get ready for referrals. If you’re good at what you do, watch out – you just may become an unofficial member of your client’s family! Working with foreign nationals is an intimate process, and you can expect lots of referrals to their friends and family if you exceed their expectations.

Source: Kelly Quigley for Realtor® Magazine Online

© 2007 FLORIDA ASSOCIATION OF REALTORS®
 
 
 
Can Florida save itself from sprawl?

ORLANDO, Fla. – May 25, 2007 – If Florida continues to grow at its current rate, by mid-century, a third of the land will be covered in roads, homes, and businesses. And the population will double to about 36 million, fueling sprawl across most of the peninsula, according to a study commissioned by the Metropolitan Center for Regional Studies at the University of Central Florida.

Such population growth in the next half-century could be accommodated, the study says, on far less land and for far less money if government officials consider the following:

* Construct a high-speed-rail system connecting Florida's large and midsize cities.

* Develop local rail routes serving each high-speed-rail stop.

* Change land-use regulations to allow developments that mix high-density housing with retail and office spaces.

* Buy 8.5 million acres of land critical for wildlife survival as well as aquifer and wetland protection.

* Conserve more water and encourage less use in the home.

Source: Orlando Sentinel, Vicki McClure (05/23/07)

© Copyright 2007 INFORMATION, INC. Bethesda, MD (301) 215-4688
  
 
 
 
Bankrupt condo-hotel reflects downturn

MIAMI – May 29, 2007 – Aug Funding lent the owners of the St. Augustine condo-hotel $5 million in late 2005 and hoped to be paid off with interest by now.

But its attempt to auction off the 24-room South Beach hotel failed, despite more than 100 inquiries.

“Nobody showed up,” said Phillip Hudson III, head of the Florida bankruptcy practice at Arnstein & Lehr and the St. Augustine developers’ lawyer. On Friday, the fund bought the hotel in bankruptcy proceedings.

The dud of a fire sale offers another measure of a once-hot corner of South Florida’s real estate market. When condominium sales were soaring, dozens of hotels offered their rooms for sale to individuals, who could then rent out their units for a share of the profits. But as the condominium market went cold – sales were down 35 percent in April across South Florida – the condo-hotel sector slowed down, too.

Certainly, some condo-hotel developers are still moving ahead.

As of February, more than half of all hotel rooms under development in the United States were being sold as condo-hotel units, according to Smith Travel Research.

Two condo-hotels by W, a well-regarded boutique brand by Starwood Hotels & Resorts, are under construction in Fort Lauderdale and South Beach.

And Miami’s Related Group is selling almost 300 condo-hotel units at two Viceroy hotel properties – one in South Beach and one on Miami’s Brickell Avenue.

“If it’s a real high-end project, there’s still a market for that,” said Victor Lopez, a top development executive for Kor Hotel Group, Related’s partner in the Viceroy ventures. He said wealthy buyers see the rental income as a bonus, but mostly value having a worry-free vacation home with hotel amenities.

Even so, two South Beach hotels converted by the once-prolific developer Robert Falor, the Breakwater and the Edison, are in bankruptcy. A third, the Royal Palm, has halted sales. The St. Regis is set to replace the Sheraton Bal Harbour, which once was slated to have 230 condo-hotel units; now it will have only three dozen.

In Islamorada, the Ocanos condo-hotel resort was scrapped just eight weeks after sales started in the face of weak demand; developers said they will build the resort and rent the rooms themselves instead.

End of a trend

The May 7 report from Smith Travel noted that 15 percent of all hotel projects nationwide have a condominium component, down from 25 percent just two years ago.

With condo-hotels less popular, some South Florida developers are selling their resort properties as “fractionals” – the marketing term for high-end time shares.

Typically sold off weeks at a time – as opposed to the seven-day slots most time share properties sell – fractionals give buyers only limited opportunities to rent out their units. That’s a big difference from the condo-hotel model, where owners usually expect cash flow by renting out rooms to the public.

“If you’re selling a condo-hotel, there’s a certain investment aspect to it, which certainly complicates the sale,” said Scott Oldakowski, sales director for Ritz-Carlton’s new condominium and fractional resort in Miami Beach.

But with the lodging industry enjoying flush times – room rates are up about 11 percent this year in South Florida – condo-hotel developers think their hybrid product still has appeal.

The St. Augustine had reservations or contracts for about a third of its units before friction between the lender and developers prompted some buyers to walk away, Hudson said.

“I think there are still people interested in pursuing it,” said Bryan Wasmer Dempsey, head of bankruptcy sales for Kerdyk Real Estate, the Coral Gables firm that tried to find a buyer for the hotel at 347 Washington Ave.

A bargain

And while condo converters once paid more than $500,000 a room for hotels, the St. Augustine’s $5 million asking price amounted to half that – and included a vacant lot next door.

Still, without condo sales, many would-be buyers said they couldn’t make their money back simply by renting rooms at the St. Augustine. “Some investors told me they thought it was a little extravagant for a boutique hotel,” Wasmer Dempsey said.

Copyright © 2007 The Miami Herald, Douglas Hanks. Distributed by McClatchy-Tribune Information Services.
 
 
 
 
Don’t fence me out

NEW YORK – May 29, 2007 – The loss of open space is prompting many Americans to decry gated residential communities, many of which block access to hiking trails and other areas once at the disposal of the public.

From 1982 to 2001, the U.S. Forest Service reports, 34 million acres of open space was handed over to developers; and the Census Bureau’s most recent American Housing Survey shows a 13.7 percent jump in the number of people living in gated communities between 2001 and 2005.

Courts typically rule in favor of homeowners, who shell out money to maintain the open space within their developments’ boundaries; but some developers have been forced to make changes if trails, lakes, and other natural resources once used by the public or maintained with taxpayer money is involved.

While some municipalities continue to sell off open space to developers – insisting that limited budgets prevent them from retaining the land and making the necessary improvements – others are concerned about the increasing amount of land made inaccessible to the public. Gated developments have been banned in Boulder City, Nev., and officials in Asheville, N.C., might approve a similar measure.

Source: Wall Street Journal (05/25/07) P. W1; Fletcher, June

© Copyright 2007 INFORMATION, INC. Bethesda, MD (301) 215-4688

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Posted by Ron Mastrodonato on June 6th, 2007 9:01 PM

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