Worst Cities For Homeowner Debt

I read an interesting article tonight from Forbes.com about the worst cities for homeowner debt.

Here are the top 50 cities for worst homeowner debt:
Sacramento--Arden- Arcade--Roseville, CA
Denver-Aurora, CO
San Diego-Carlsbad- San Marcos, CA
Minneapolis-St. Paul- Bloomington, MN-WI
Washington-Arlington- Alexandria, DC-VA-MD- WV
Los Angeles-Long Beach- Santa Ana, CA
Boise City-Nampa, ID
Colordo Springs, CO
Las Vegas-Paradise, NV
Madison, WI
Reno-Sparks, NV
Boulder, CO
Seattle-Tacoma-Bellevue, WA
Detroit-Warren-Livonia, MI
Cincinnati-Middletown, OH-KY-IN
Riverside-San Bernardino-Ontario, CA
Portland-Vancouver- Beaverton, OR-WA
Columbus, OH
Richmond, VA
Atlanta-Sandy Springs- Marietta, GA
Boston-Cambridge- Quincy, MA-NH
Green Bay, WI
San Francisco-Oakland- Fremont, CA
Lexington-Fayette,KY
Cleveland-Elyria-Mentor, OH
Phoenix-Mesa-Scottsdale, AZ
Salt Lake City, UT
Raleigh-Cary, NC
Worcester, MA
Louisville, KY-IN
Baltimore-Towson, MD
Pittsfield, MA
Indianapolis, IN
Charlotte-Gastonia- Concord, NC-SC
Bridgeport-Stamford- Norwalk, CT
Akron, OH
Dayton, OH
Virginia Beach-Norfolk- Newport News, VA-NC
Lansing-E.Lansing, MI
Providence-New Bedford- Fall River, RI-MA
Appleton, WI
Portland-South Portland- Biddeford, ME
Durham, NC
San Jose-Sunnyvale- Santa Clara, CA
Lincoln, NE
Allentown-Bethlehem- Easton, PA-NJ
Omaha, NE-IA
New Haven-Milford, CT
Milwaukee-Waukesha- West Allis, WI
Orlando, FL

Do you see anything interesting? There is only one city in Florida and that is Orlando and #50. It is refreshing to see this.

Market Update

Sarasota MLS shows:
846 single family homes under contract and waiting to close
362 condominiums under contract and waiting to close.

Ft. Lauderdale/Miami Luxury Property Auction

In conjuction with other Sotheby's affiliates SKY Sothebys and Daniel Decaro conducted a portfolio luxury property auction in Ft. Lauderdale yesterday. The auction included properties in the Ft. Lauderdale and Miami area. Take a look at the two stunning properties below. It looks like the auction was successful in uncovering buyers for each of these properties.

One Isla Bahia - listed at $22,999,999

1235 East Lake Drive - listed at $14,999,000

Since the Ft. Lauderdale/Miami real estate markets are behind Sarasota in terms of a recovery the auction failed to get bids on many properties. According to the Florida Association of Realtors—the Sarasota/Manatee area once again outsold the Miami and Ft. Lauderdale markets, which continues the trend for every month of 2007 and 2008. It appears the home sellers in the Miami area need to be punched in the nose with a dose a reality.

Sarasota market recovery

SKY Sotheby's had an outstanding first quarter in terms of transactions. Many of our listings have gone under contract and we represented numerous buyers in the purchase of a property.

Sarasota is recovering faster than other Florida real estate markets. Too bad the national media paints the entire Florida real estate market with one broad stroke.

This market has become more affordable again. Back in 2005 if you wanted to get a condo on the beach side of the road on Longboat Key, Siesta Key or Lido Key you would pretty much have to pay at least $500,000. Now, there are options out there under $400,000. I know of a condo on Lido Key under $350,000.

In 2005 you would have to pay at least $400 a square foot for a Downtown Sarasota condo. Now there are options out there at $250 a square foot.

Want a house under $150,000? You have 659 to choose from in the Sarasota MLS.

Want a gulf front condo under $500k? You have 68 to choose from on Siesta, Lido and Longboat Keys.

Want a house built within the last 5 years in the Sarasota area under $350k? There are 175 of them to choose from.

Want a condo built within the last 5 years on the barrier islands less than $2 million? You have 43 to choose from.

We are affordable again. I see the light at the end of the tunnel. The Sarasota MLS shows 747 homes and 309 condominium under contract. The downward movement on price is turning to go sideways.

Florida home sales show some resilience

The Florida Association of Realtors issued their statistics for February home sales for Florida.

Sales in the Sarasota-Bradenton market dropped 10 percent when comparing February with the same month a year ago. The number of homes sold dropped from 672 to 608.

Only two Florida markets improved from February of 2007: Fort Pierce-Port St. Lucie was up 4 percent while Fort Myers-Cape Coral, a market that had the highest per-capita number of foreclosures nationally in February, was flat at 445 sales.

Prices fell 25 percent in Sarasota-Bradenton and 20 percent in Charlotte County-North Port. While sounding drastic, it was at roughly the price range that houses have held for months.

The $254,200 February median in Sarasota-Bradenton compares with $246,300 in January, $246,900 in December and $267,700 in November.

Here is an interesting statistic:
Sarasota-Bradenton's 608 sales were more than all but three of Florida's 20 largest markets: Jacksonville, Orlando and Tampa-St. Petersburg-Clearwater.

According to FAR there were only 244 homes sales in Miami. For such a large market that is amazing. I sometimes wonder about the accuracy of these numbers.

Here is some valuable information from the real estate veteran Howard Rooks of Rooks-Morris brokerage firm. "I have seen many, many cases where properties are worth less two or three years later," he said. "But they've always been higher five years later. We are going into our third year of a tough market now."

Homes are becoming affordable again. The Sarasota MLS shows 645 homes for sale under $150,000. Someone can buy a beach front condo under $500,000 again. Want a winter condo getaway in a downtown Sarasota? You can get one under $400,000. Want a condo with gorgeous water views? I just saw one close in Condo on the Bay for $340,000.

House Price 'Bubble' Now Deflated

According to a new study by SMR Research Corporation the housing "bubble" -- whose bursting triggered the current mortgage credit crisis -- has now fully deflated.

This sets the stage for a mild housing recovery, which SMR said would begin prior to year end 2008.

The recovery is likely to be gradual, with house prices merely firming up or increasing slightly, rather than returning to the strong growth they showed from 2002 to mid-2006, the firm said.

SMR specializes in mortgage and home equity loan industry research. An SMR study was among the first to declare (in 2002) that a housing price bubble existed, defined as prices rising faster than consumer incomes. In a 2004 study, SMR forecast that a "perfect storm" in credit quality would cause an explosion in foreclosures within two years.

"Our prior forecasts were accurate but widely disbelieved when issued," noted SMR President Stuart A. Feldstein. "We similarly expect a skeptical reaction now to a recovery forecast, which is not the common view. But the numbers are what they are."

The new recovery forecast was published within SMR's annual Spring study on mortgage industry trends and leading players: Giants of the Mortgage Industry, 2008. More than 230 pages this year, Giants has been in continuous publication since 1986.

A special section in the study used home price and consumer income data from several sources to show how the bubble grew from 2002 to 2006. The same data now show the bubble has evaporated at current mortgage interest rates after 18 months of rising incomes and falling home values.

"Homes are now affordable again," Feldstein said. "Consumer psychology is the biggest remaining hurdle to recovery."

Prospective home buyers, still hearing predictions that prices will fall further, keep waiting to buy, SMR noted. This becomes a self-fulfilling prophecy, as scant demand pushes home prices lower.

"The stage is set for recovery, but the play won't go on if no one buys a ticket," Feldstein said. "Consumers must believe prices have bottomed out, or nearly so, before they will buy in larger numbers."

SMR noted that home price depreciations always do come to an end eventually, as occurred over the last 20 years in California, New England, New York, and Hawaii. Falling mortgage interest rates could trigger the end of this one.

The recovery in housing will be tempered by three negatives, SMR said.

First, borrowers with low credit scores may be unable to participate. Second, existing home owners who owe more money than their homes are worth may find it difficult to move until prices firm up.

Third, there is another type of housing "bubble" that may still exist, SMR said. It is the difference between home purchase downpayments and household savings.

SMR cited IRS data showing a big increase over 10 recent years in the percentage of tax filers reporting zero taxable interest income, implying no available cash savings. It is more difficult and expensive today to get 100% home purchase financing, so most buyers must have some downpayment funds.

Still, even though these problems will make the housing recovery modest, they will not prevent it from coming, SMR said.

In its analysis of the house price/income bubble, SMR used gross household income data from the Census Bureau as well as per capita disposable incomes from the Commerce Department's Bureau of Economic Analysis.

The firm used house price data reported separately by the Census Bureau on newly constructed homes and from the National Association of Realtors on existing homes.

In addition, SMR compared income trends to required average monthly mortgage payments under prevailing annual interest rates from 1990 through February, 2008. Results showed that gaps created from 2002 through 2006 are now closed.

SMR's annual Giants study also includes the firm's complete coverage of full-year 2007 mortgage originations and servicing data by lender and for the industry, plus new measures of loan delinquency, foreclosure, and other industry and company statistics.

Founded in 1984, SMR Research Corp. is the nation's largest provider of industry research studies on mortgage and home equity loan subjects.

Realtors throwing in the towel

Membership in region's largest associations affected by housing slump

With the housing market flat, Southwest Florida real estate agents are retreating or quitting the business in large numbers. The Sarasota Association of Realtors is down 11 percent over last year; the Manatee County association 19 percent; and the Punta Gorda-Port Charlotte-North Port Association of Realtors 11 percent.

The Sarasota association's membership peaked with the real estate boom. In 2005, the group had 4,300 members. That has dropped to 3,600, says Kathy Roberts, the association's chief executive officer.

The ranks of the parent Florida Association of Realtors swelled by 25 percent in 2004 alone. As the market contracted -- and with it Realtors' pay stubs -- many in the industry have adopted other lines of work to supplement their income.

It is sad to see Realtors giving up on the profession but too many of them came in when the business was easy. Right now, this profession is difficult. The sellers think every offer is too low and that their home is worth more than it really is. Buyers think they are doing the sellers a favor by purchasing their home and they always want to pay less than the property is worth. Mortgages are tougher to get. There are tons of people looking at property but waiting to time the bottom perfectly before buying. Realtors are complaining, attorneys are complaining, title people are complaining, inspectors are complaining, mortgage professionals and banks are complaining. I can see why some Realtors are looking for greener pastures.

Here are a few tips on choosing a Realtor to work with:

Experience - Make sure your agent has closed some deals. I don't consider years in the business a good measure of experience. I have met so many agents that have been in the business for 10 or 20 years but really aren't all that experienced. In a market like this experience goes a long way.

Full Time - Is your agent full time? How can a Realtor effectively market your home or help you buy a home when they have another job taking up the majority of their time? I'm not trying to throw the part timers under the bus but servicing customers properly can take a lot of time. I believe the overall customer experience is better when you are working with a full time, experienced agent.

Communication - Make sure you pick a Realtor that you can talk to and who listens to your needs. You might be working with your Realtor for months or years depending on whether you are buying or selling. Good communication in the process is crucial. Make sure your Realtor is accessible. That does not mean you should bother your Realtor every second of the day but make sure they call back in a timely fashion.

Zell predicts housing recovery in spring

Real estate billionaire Sam Zell, chairman of Equity Group Investments, suggested the housing market will begin its recovery this spring.

"I think (housing) starts have already pretty much bottomed out," Zell told CNBC Tuesday. "I think sales will start to occur, and we'll start to clean up the inventory."

Here is a link to the Chicago Trubine article.

For those who don't know. Sam Zell is a billionaire and real estate entrepreneur. He is co-founder and Chairman of Equity Group Investments, a private investment firm and has an estimated net worth of $6 billion dollars. Zell also owns Tribune Company, the publisher of the Los Angeles Times, the Chicago Tribune, New York Newsday and owner of the Chicago Cubs.

Vulture funds looking at Florida real estate

I have been in touch with a few private equity firms looking to make a bulk purchase of property in the Sarasota area. There are alot of "vulture funds" or "opportunity funds" looking to pick up Florida real estate at depressed prices. They typically seek out hurting condo developers who are sitting on a ton of inventory and make offers to purchase condos in bulk at reduced prices. Once they purchase them they typically rent them out for several years.

The money comes from all over. Basically, these private equity firms or vulture funds are just a group of wealthy individuals pooling their money together to purchase in large quantity. Buying in quantity allows them to get a price discount and better returns on their money. I even read that Jack McCabe, the economist who spoke in Sarasota last week, has created a McCabe Acquisitions LLC to purchase distressed property.

This can be a good thing for the market. In a market like this reducing inventory levels will lead to a more balanced market. Demand will increase because buyers will be less apprehensive about the market.

While our inventories are hovering around a historic high we appear to be in a better situation that south Florida. I recently heard that there were 24,000 condos for sale with another 19,000 new condos scheduled to be completed soon.

Here are a few of the buildings where the developer is still trying to sell units.

Alinari
Broadway Promenade
Rivo on Ringling
Kanaya
Positano
1350 Main
Phillippi Landings
Bel Mare at Riviera Dunes
Promenade at Riverwalk

I am forgetting a few but this is the bulk of them. We appear to be in much better shape than south Florida.

Don't list your property unless you are truly motivated to sell it

I turned down another listing yesterday. I hate to turn down the possibility of making a buck but the best advice I can give to many potential sellers is to not list. If you are unmotivated to sell there is a slim chance your property will sell. In most cases, you have to be the best property at the best price in your market segment. You have to be the bright flower in the field of weeds.

Another problem with a bunch of overpriced properties on the market is that it affects our supply statistics which in turn affects our demand. Newspapers often report that there is enough property on the market to last several years. This kind of stuff scares buyers into not acting. If you are a possible buyer and you read in the newspaper that the Sarasota real estate market has a 3 year supply of properties for sale that is going to make you think twice.

There will always be overpriced properties on the market. That will never go away. We had them in a strong market and we have much more of them in a weak market.

If you are thinking of selling your property hire an appraiser or a competent Realtor to give you a realistic valuation. You will save yourself a ton of headaches. Be objective about your property and put yourself in the buyers shoes. Visit other like kind properties to compare. The value of your property does not have anything to do with how much you owe on it, how much your friend "thinks" it is worth (unless they want to buy it) or what it appraised for 2 years ago.

Can you imagine what our inventory levels would be if Realtors stopped taking grossly overpriced listings?

"You can buy Florida real estate at 50 cents on the dollar"

I am a little tired of reading the doom and gloom articles about the Sarasota Florida real estate market. A client from Canada sent me an article from one of his newspapers about the Florida market. Like so many other articles it talks about how bad it is here. I am not saying these reporters are completely wrong. But some of them are blowing things out of proportion. One of them stated that you can buy real estate here for 50 cents on the dollar.

The reason I bring this up is because I had a client over the weekend who wanted to put in a rediculously low offer on a home that is already priced well. When I checked the recently sold homes in the community the home they were interested in was within 10% of those prices. My client wanted to submit an offer of about 60% of list price. After analyzing the recently sold homes in the community he agreed that there was little chance of getting the home at that price.

The December statistics from the Sarasota Board of Realtors show that the average sales price to list price for sold properties is 90%. In November it was 93%. January numbers should be out soon. Over the last year it is consistently between 90%-93%.

I checked MLS for all of the single family home and condo sales in January for Longboat Key, Siesta Key, Lido Key, Bird Key, Casey Key, Lakewood Ranch and Sarasota. In this specific area there were 247 sold properties (don't confuse these numbers with all of Sarasota county).

Of the 247 properties:

6 properties sold from 66% - 74% of list price
241 properties sold 75% of list price or over
81% of the properties sold for more than 85% of the last asking price
59% of the properties sold for more than 90% of the last asking price
24% of the properties sold for more than 95% of the last asking price

It is not all sunshine and rainbows out there but it is not as grim as some believe. Arm yourself with the facts not the opinions of a reporter spouting doom and gloom in an effort to sell newspapers.

Good news:

Currently there are 468 properties under contract in the area I mentioned above.

There are 697 properties under contract in the Sarasota MLS. Not all of the Manatee county transactions are reported in the Sarasota MLS so this number will actually be larger.

Why the snowbirds come to Florida

Up north



Sarasota, Florida


Chicago 11 27

New York 31 39

Atlanta 40 49

Charlotte 35 49

Columbus 31 37

Sarasota 56 75

Best Places to Retire: Venice, Florida

U.S. News and World Report recently named Venice, Florida as one of the best places to retire.

"Coming into downtown Venice, Fla., feels a bit like slipping back to an older
America, where once thriving Main Streets sat at the center of quiet,
walkable neighborhoods. It's no accident. Venice was designed to re-create
the atmosphere of a traditional small town, specifically for retirees."

Sarasota, Bradenton and now Venice have all been voted as one of the best places to retire in some form or another.

Five Credit History Boo-Boos and How to Fix Them

Guest Author: Calum MacKenzie

With lenders tightening up their mortgage restrictions all around the country, a clean credit report is going to be more important than ever. If you’re thinking of buying and will need a mortgage, the time to start thinking about your credit is well before you make your mortgage application. That will give you time to fix it up. These are five of the most common credit boo-boos and the quickest way to fix them.

1) Not knowing what the credit reporting agencies know. Seriously, it’s important to keep an eye on your credit report. You’d be amazed how often errors make their way into those files. You’re entitled to order your credit report for free once a year from each of the three major credit reporting agencies. You can’t fix something if you don’t know it’s there.

Fix: Get your credit reports and check them over carefully.

2) Not enough credit history. Your credit report can be TOO clean. If you’ve never held a credit card or taken out a loan of any kind, the lenders have no way to judge how you’ll handle paying your bills. Sometimes, they’ll turn to your utility payments, but more often than not, they’ll just say no.

Fix: Get a credit card or take out a personal loan and pay it off promptly and on time. Depending on other parts of your life – job and residential stability, specifically – it could take as little as four to six months to fix this one.

3) Late payments on your accounts. The effect that late payments have on your credit report/score depends on how long ago they happened and how often your payments are late.

Fix: Time and money is the only thing that will fix this one. Make payments on all of your accounts on time. For best results, get at least a year of on time payments behind you before you apply for a mortgage.

4) Not communicating with creditors. Communication is one of your most potent tools in any situation. When it comes to your credit, it’s vital. When your creditors don’t hear from you, they’ll assume the worst. A telephone call to make payment arrangements – BEFORE the due date on your bill – can be all it takes to avoid a black mark on your credit report.

Fix: Pick up the phone and call!

5) Maxing out your credit cards. Creditors look at more than whether you pay your bills and when. They also look at how much you owe in relation to how much credit you have available. Carrying big balances on your credit cards and revolving loans will bring your credit score down.

Fix: Pay down balances on all of your credit cards and loans. At very least keep them to less than half of your available credit.

6) It is possible to fix your credit. However many of these are not “quick fixes”. It’s even better to keep your credit clean in the first place. Beware of an ever increasing number of companies out there that claim to be able to “fix” your credit.

For more information on fixing your credit score read The Credit Fixer Upper.

Calum MacKenzie is Broker-Owner of Real Living Southern Homes, a top residential real estate company serving the Wesley Chapel real estate and Land O' Lakes real estate markets.

Florida Tax Reform is a Good Start

By Guest Author Calum MacKenzie, New Tampa, Florida

The recent bills passed by the Florida legislature represent a good start toward repairing our very broken system, but they stop short of being a full solution. The current broken tax situation is the culminations of years of explosive growth in real estate values coupled with a well-intentioned attempt to limit the damage done to long-time Florida homeowners. The tax cut and tax cap bills passed by the House and the constitutional amendment each address parts of the situation that have made Florida notorious for its high property tax values, but they do nothing to address the inequities of a system that offers special tax breaks to some homeowners by displacing their fair share of the burden onto the shoulders of others.

In 1995, the legislature recognized the effect of rapidly rising real estate values on current homeowners by instituting Amendment 10, known as Save Our Homes. In essence, homeowners were feeling the down side of the real estate boom. Rising home values meant higher taxes, in many cases, so much higher that some were in danger of losing their place of residence. Save Our Homes mitigated the tax rise by putting a cap on how fast the assessed property value could rise. The fact that the amendment only applied to homes that are classified as primary residences is consistent with the intent of the bill – to prevent those who had limited income (not necessarily LOW income, but limited in the sense that it was dependent on the income of a single homeowner) from being taxed out of their homes.

Unfortunately, it was a nearsighted solution. Over the course of ten years, Save Our Homes has been the main contributor to the inequity in a system that can tax one homeowner $4000 while his next door neighbor in an identical home pays $2,300. In addition, it offered no benefits whatsoever to those who own rental property, businesses or second homes.

The effect of the proposed amendment will be to phase out Save Our Homes and replace it with a far more equitable property tax exemption that will apply evenly to all primary residences. While this doesn’t address the inequities completely, it is an important first step in fixing a system that has become irretrievably broken. The danger is that in all the congratulatory hand-shaking, our elected officials will lose sight of the fact that they have only cleared the first hurdle. It’s important that we all keep the pressure on and hold our politicos accountable to fulfilling the promises that got them elected.

Read more at Florida's Super Exemption.

Calum MacKenzie is Broker/Owner of Real Living Southern Homes and can be reached at (813) 948-5900.

Home prices and sales decline

There was an interesting article in today's Sarasota Herald Tribune about the decline in real estate prices and sales volume across the state of Florida. The report indicates that Charlotte County-North Port's median price was 21 percent below July 2006 while Sarasota-Bradenton's was 12 percent below the comparable month last year. These two figures marked the biggest declines statewide among Florida's 20 largest markets.

I am not sure if this information comes to a surprise to anyone. It is not like the newspaper has been quiet about the real estate slow down. Articles like this are usually in big, bold print on the front page.

Part of me is happy to read this kind of article because it just means that we are that much closer to the bottom in my opinion. Sellers need to realize that market values have dropped and if they truly want to sell they need to drop their asking price accordingly. If they don't drop their price to realistic levels then they are just wasting a lot of people's time.

In addition to wasting time they screwing up inventory levels. If you took our total inventory and removed all of the unmotivated sellers who have not adjusted their pricing to realistic levels it would cut the number of homes for sale dramatically.

I am not tooting my own horn (mainly because the home has not closed yet) but I sold a property I own in about 60 days because of proper marketing, staging and pricing. It can be done but you need to remove your emotions from the equation in most instances.

Lawrence Yun, who is an economist with the National Association of Realtors so his view might be skewed, think that this is a short term problem

"There is an underlying pent-up demand, which I believe will begin to show up in home sales.

"So temporary softness, but toward the end of the year, sales should be beginning to show a rise."

I think there is truth to these statement only from my own personal experience. My phone has been ringing lately with people who are looking to enter the market because they are smelling blood in the streets. And, perhaps more importantly, they would like to own a nice property in a great part of Florida - Sarasota.

Is this what future Florida homes will look like?

I read an article this morning from the Sarasota Herald Tribune's website about a couple building a dome home in Parrish, Florida. Tropical Storm Gabrielle left their Parrish home knee-deep in water in 2001. For fear of hurricanes they are building a dome home on an 8 acre plot in Parrish.

Dome homes are supposed to withstand winds of 200 miles an hour. The dome is made up of concrete and is up to 4 inches thick. This strength has led to domes being touted as the answer to Florida's hurricane and insurance woes.

The dome home they are building has 5,600 square feet of interior space, including 4,200 square feet of air-conditioned space. The unusual shape allows for neat features like a drive-through garage, so there is never a need to back out. The structure's 3-inch foam insulation and seamless shell also make it only use about half the energy of a traditional home.

For more information on Dome home you can visit the Monolithic Dome Institute.

Some of the designs of these homes are not too bad. Many of them have nice outdoor living spaces with balconies. The ongoing maintenance costs would probably be less as well. I can't imagine you need to change the roof every 15-20 years and it does not look like it would blow off in a storm.

Here is a photo of one in a neighborhood of traditional homes. It looks like it is from the Jetson's.

Sarasota-Bradenton home sales buck national and statewide trends

The Sarasota Herald Tribune reported today that the national and state existing home sales plunged in March of 2007 compared to March of 2006. However, the Sarasota-Bradenton real estate market was a bright spot in an otherwise dismal national and state real estate market during March.

While national sales of single-family homes fell 13 percent and statewide sales dropped by an even larger 28 percent, Sarasota-Bradenton saw a 16 percent increase last month compared with March 2006.

Other important highlights from the article:

Sarasota-Bradenton posted 834 home sales in March of 2007 compared with 721 a year ago.

"It's definitely the time to buy," said John Schaub, a Sarasota investor and author of "Building Wealth One House at a Time." "There are more and more opportunities out there."

Even the hard-hit condominium market saw a turnaround in March. Sales rose 7 percent to 378 from 354 during March 2006.

The median condo price in Sarasota-Bradenton rose 5 percent to $276,200 from $264,000 in March 2006.

"Price is dictating everything, It's all about getting sellers to understand where the market is and getting properties priced where they will sell."

and the best quote of the article:

"I think sellers in our market have a clearer picture of what their properties are worth," said Sky Sotheby's agent Marc Rasmussen. "They had trouble with that in 2006. Now buyers who were on the fence last year are feeling more comfortable about jumping in."


Remember the contrarian investor - they seek opportunities to profit from situations when the crowd mentality leads to unreasonable valuations for assets, either on the upside or the downside. In 2009 will we be saying, "I wish I had bought in 2007 when everyone was selling"?

Billionaire Carl Icahn is betting on Florida real estate

Billionaire Carl Icahn has announced a tender offer for the common stock of WCI Communities Inc. at $22 a share. Since last year, Icahn has been buying stock of WCI (NYSE: WCI), a Bonita Springs-based homebuilder and real estate services firm with several communities in the Tampa Bay area. He controls nearly 14.6 percent of the company's outstanding shares, according to the most recent disclosure he has filed with the Securities and Exchange Commission.

"If you look at long-term trends and don't think about short-term turmoil, that is where the risk returns can be greatly in your favor," Mr. Icahn said in an interview.

Mr. Icahn explained it this way: "My investment philosophy, generally, with exceptions, is to buy something when no one wants it. We made a fairly large investment and took control of several energy companies seven or eight years ago when they were way down. Housing is somewhat analogous."

Icahn noted the medium- and long-term factors that should help Florida real estate: aging baby boomers looking to head south to warmer temperatures.

A contrarian seeks opportunities to profit from situations when the crowd mentality leads to unreasonable valuations for assets, either on the upside or the downside. In 2009 will we be saying, "I wish I had bought in 2007 when everyone else was selling"?

Florida's population grows to 18 million

Here is an interesting article from the front page of the Sarasota Herald Tribune today - according to new estimates from the U.S. Census Bureau Florida added another 321,697 people from 2005 to 2006, pushing the population past 18 million.

Among those fastest growing areas were Sarasota and Manatee counties, which between them have added nearly 93,000 more residents in the past six years. Manatee County's population surged to 313,298, up 7,044 in a year, while Sarasota's reached 369,535, an increase of 4,418.

"Fundamentally, in terms of climate -- even with the hurricanes, insurance rates -- (Florida) is still an attractive location," said Sean Snaith, a business professor and director of the Institute for Economic Competitiveness at the University of Central Florida. "It's not the only place in the country where people are retiring, but it's going to remain a popular place for retirees."

It is interesting to see that despite the higher property insurance rates and property taxes the population of Florida still increased by almost 900 people a day. It looks as though the state government will find a way to provide property insurance and tax relief. This coupled with a 20-25% decline in property values, Florida will again become a great place to move to for people that could not previously afford it.

Florida’s Single-family Housing Market May Have Bottomed

The Bergstrom Center for Real Estate Studies, Warrington College of Business Administration at the University of Florida conducts surveys quarterly. UF’s Survey Research Center asked a series of questions of 318 industry executives, real estate lawyers, market analysts, title insurers, financial advisers, market research economists, real estate scholars and other experts in the field.

The most important finding from the January round of our Survey of Emerging Market Conditions is that residential development may have bottomed out. Given the scale of the residential development market, this would be good news for all real estate markets and for Florida in general. Meanwhile, most other real estate markets are stable, if not improving, giving a sense that almost all is nearly well in the land. An exception may be condominium markets and apartments for condo conversion that continue to struggle, though they, too, are perceived to be improved.

“If you’re thinking of buying a house, there’s probably not much to be gained by holding out at this point,” said Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “It doesn’t look like prices are going to fall anymore.”

The quarterly survey of experts in the real estate industry completed in January shows that the share of respondents observing a drop in single-family housing prices has dipped, while a growing number find prices staying even with inflation, Archer said.“We see that as a benchmark,” he said.

“When prices maintain the same level as inflation, then we’re probably in some kind of equilibrium. It indicates the market is stabilizing.”

The exception is condominiums, which are overbuilt and prone to speculative and naïve investors, he said.

Source: Bergstrom Center for Real Estate Studies - Warrington College of Business & Newswise

Sellers , Realtors and everyone else involved in the real estate industry obviously welcome this good news. It is great to see it come from a reliable source - Warrington College of Business at the University of Florida. The survey had 318 participating real estate professionals, with an increasingly broad coverage of thirteen urban regions in the state and fifteen property types.

The Sarasota real estate market went from one extreme to another in a short period of time. We had an extreme sellers market and quickly went to an extreme buyers market. Neither condition can last forever. The fundamentals are still pretty good and with property insurance and tax relief on the way they will get even better.

Property insurers to reduce rates

Regulators say the cost of coverage will fall up to 35 percent in local counties.

Homeowners in Southwest Florida will see property insurance rate cuts of up to 35 percent from the state insurance reform law.

Insurance companies are expected to adopt the lower rates effective June 1.

Average rate cuts will run from 21.1 percent in Sarasota, Manatee and Charlotte counties to as high as 34.5 percent in Sarasota and Manatee and 35.9 percent in Charlotte, state insurance regulators said Thursday.

The statewide average will be 23.9 percent, according to the Office of Insurance Regulation.

Source: Sarasota Herald Tribune

This is positive news for the Florida real estate market. The property tax issues will have to be addressed at some point as well. Perhaps this will help start the bottoming out process for the market. Lower property taxes, lower insurance rates and lower home prices will eventually lead to a more balanced real estate market.