Bradenton Florida Real Estate News

Saturday, December 31, 2005

Think The New Year Into Being Your Best Year Ever!
In just a few hours 2006 will begin with a bang. One way I like to begin the new year is by feeding my mind with great thoughts. This year I am re-reading "Think and Grow Rich" by Napoleon Hill.

2006 will be my best year ever because I think it so!

If you think you are beaten, you are.
If you think you dare not, you don't.
If you like to win, but you think you can't,
It is almost certain you won't.

If you think you'll lose, you're lost,
For out of the world we find,
Success begins with a fellow's will--
It's all in the state of mind.

If you think you are outclassed, you are,
You've got to think high to rise,
You've got to be sure of yourself before
You can ever win a prize.

Life's battles don't alway go
To the stronger or faster man,
But soon or late that man who wins
Is the man WHO THINKS HE CAN!

Happy New Year!
--Dan Forbes

Friday, December 30, 2005

Local home sales plummet in November
An article in today's local paper reports on the softening Manatee Sarasota Market.

The number of existing home sales fell 39 percent in Manatee and Sarasota counties in November, the sharpest drop in the state.

But the median sales price soared toward the $350,000 mark, a 34 percent increase from November 2004.

The Sarasota/Bradenton market remained the fifth-highest priced in the state, according to numbers released by the Florida Association of Realtors.

The trend of more inventory and fewer sales started toward the end of the summer after a four month period of skyrocketing prices and sales that started in March.

Read the whole article here http://www.bradenton.com/mld/bradenton/13512109.htm

Tuesday, December 27, 2005

Bradenton Listed As Top Place To Retire
Houston-based Where to Retire magazine recently listed Bradenton as a retirement hot spot. They noted Bradenton as a hostoric town that is a "Gulf coast gem" for retirees who want to experience area beaches, golf courses and an active arts community.

The president of Manatee Chamber of Commerce was happy with the news but quick to point out that the area is also a great place to work and start a family.

The median age was 42.8-years-old for 2005 and projected to be 42.3 in 2010.

According to our local economic development leaders Bradenton is getting on a lot of different lists like top places for job growth and a great place to start a business.

No wonder I love this place!
--Dan Forbes

Saturday, December 24, 2005

Bradenton Florida in Top 100 Real Estate Markets
FORTUNE asked Moody's Economy.com and Fiserv CSW to analyze home sales data for the country's 100 largest metro regions. They ranked each area by its projected price change for 2006. No. 1? San Antonio. Dead last: Las Vegas.

Sarasota - Bradenton - Venice was in #30 with 5.6% projected appreciation in 2006. But the 2007 projection was shocking....

To read the the whole list with it's 2006 and 2007 projections send me and email asking for the "Top 100 Real Estate Markets". CONTACT FORM:
http://www.bradentonrealestate.com/index.php?fuseaction=site.contact

Friday, December 23, 2005

What's Ahead for the Bradenton - Sarasota Real Estate Market?
Here's what a Tampa area agent is saying about his market, "Here in the Tampa-Clearwater-St. Petersburg region of Florida, expect a robust housing market in 2006. While there may be more inventory for buyers to choose from, that does not suggest less demand; it suggests that a large number of sellers decided to try cashing out. Housing appreciation will be more normal in 2006 than it has been during the last two years. Sellers who ask too much for their homes, condos or other properties will be hard-pressed to get it in a normalized market, and those listings will sit. Smart pricing and aggressive marketing, though, will move any property that's for sale into a buyer's hands. Real estate values will continue to appreciate at a more normalized rate."

I would say the same about our Bradenton, Florida real estate market. As an agent who sells over 100 homes per year, I know our local market. Sales are down, inventory is up, and price and marketing is once again the most important factor in getting a home sold.

I also believe that January is going to be a strong month for sales. We have a lot of pent up demand that will result in a strong beginning to 2006.

Thursday, December 22, 2005

Wealthy Americans Believe Real Estate Values Will Continue To Rise
Amid signs that the runawayreal estate market is slowing down, the majority of wealthy Americans remain optimistic that their homes will continue to appreciate in value, according tosurvey findings released today by The PNC Financial Services Group, Inc. Sixty-five percent of those surveyed said they expect to seedouble-digit increases in the value of their primary homes over the next fiveyears, with nearly one-third (31 percent) anticipating an increase of 20percent or more.

Florida: in a state where property values have soared, half of the respondents expect the value of their primary residence to increase by more than 20 percent over the next five years, making them twice as bullish on real estate as all respondents compared to respondents in other states (28 percent outside of Florida expect a 20 percent or more increase).

For a full smmary of the survey send me an email request: danforbes @ premierteam.com
(no spaces).

Slower Pace of Existing Home Sales
Dec 22, 2005
The pace of existing-home sales was the slowest in seven months, according to the National Association of Realtors.

Existing-home sales in October were:
2.7 percent decline from September 2005
3.7 percent higher than October 2004

Inventory of homes for sale in October was:
3.5 percent higher than September 2005
16.3 percent higher than October 2004

4.9 month supply in October
6.5 percent increase from September 2005
14 percent higher than October 2004

Existing-home sales fell in all four U.S. regions compared to September 2005:
1.12 million in the Northeast, a 7.4 percent decline
1.58 million in the Midwest, a 1.9 percent decrease
2.76 million in the South, a 1.8 percent decline
1.64 million in the West, a 1.2 percent dip

If you would like a FREE report showing the data from specific metropolitan markets including the Sarasota - Bradenton real estate market send an email. Ask for the Sarasota-Bradenton Market Report. Contact Form:
http://www.bradentonrealestate.com/index.php?fuseaction=site.contact

-Dan Forbes

Wednesday, December 21, 2005

Real Estate Forecast For Bradenton Florida

David Seiders, chief economist for the National Association of Home Builders predicted yesterday that housing prices, which he said increased about 11 percent nationally this year, would increase about 6.5 percent in 2006 and about 4.4 percent in 2007.

Here in Bradenton, Florida we have seen two years of 30%+ appreciation. The market is now in transition and many Realtors in our area feel we may see about a 10% increase in 2006.

Our area should continue to outpace the national market for several years.

Dan Forbes

Tuesday, December 20, 2005

Few Real Estate Investors Worried About A Bubble

I just read an article today that noted a survey conducted this month showing that only 14% of those surveyed are "very concerned" about a real estate crash within the next six months.

Some people are just plain confused about real estate and try to liken the real estate boom to the stock boom of the 90's. There's just no comparison. I mean, think about it....

If you buy $100,000 worth of stocks today, what's it worth. It's worth $100,000. Buy you might buy a piece of real estate for $100,000 and find that it's worth $150,000. It's called getting a good deal. You can't do that with stocks.

If you buy $100,000 of stocks today, what can you do to improve it's value. Nothing. But if you buy a $100,000 house there are lots of things you can do to improve it's value.

If you want to buy $100,000 of stocks tdoay, how much money will you need. You'll need $100,000. But it's quite possible to buy a $100,000 house for little or nothing down. That's called leverage. The bonus is if the market goes up 5% you've got a $5,000.00 gain. Even if you put $10,000 down, that would be a 50% return on your investment.

It's too bad that all this "bubble" talk seems to create fear in some people's minds. However, the wise investor will see this as an opportunity. What about you.

--Dan Forbes

How Can Buyers or Sellers Capitalize on our changing real estate market?

Find out by reading your own copy of the FREE “Anti-Bubble Report for the Sarasota-Bradenton Market”.

Everyone’s asking us about the market because our market has definitely shifted in the last 90 days. The media is suggesting we may be facing a market bust. A thorough analysis of the Sarasota-Bradenton market, as detailed in this special report, reveals there is very little danger of a bust. In fact, the local market continues to show promise for significant housing equity gains, particularly for homebuyers who plan to remain in their house for the long run.

Is our market slowing down? Yes. Is it a bust? No. What’s causing the slow down? We see 5 major factors creating the current slow down.
Increased Inventory. This is the major factor with nearly quadruple the number of homes for sale since July 2005. Buyers have more choices.
Rise in Interest Rates. Mortgage rates have continued to rise, forcing some buyers out of the market.
Holiday Slow-Down. Less of a factor. The market normally slows down this time of the year.
Unsustainable Price Increases. This is the second major factor. Some sellers are in denial and refusing to acknowledge that real estate markets change. After two years of 30+% appreciation, the market is naturally pulling back.
Hurricanes, Increased Taxes, Increased Insurance Costs. Although less a factor, these three forces have caused some buyers to choose other areas entirely.

Whether you are a buyer or a seller you need to know how to capitalize in a changing market. This FREE special report will arm you with the information you need in order to make the right real estate decision. Along with the “Bubble Report” we will also send you the Q & A Document which answers questions like:
What is a housing bubble?
Has there ever been a national housing price bubble?
What are the prospects of a housing bubble?
What is likely to happen with home prices?

For a limited time you may receive your copy of this FREE report by email. Simply log onto BradentonRealEstate.com and click on the “FREE Bradenton-Sarasota Anti-Bubble Report.”

BradentonRealEstate.com

Friday, December 16, 2005

Mortgage Rates Dip Slightly

Mortgage rates dipped slightly this week as financial markets liked signals from the Federal Reserve that its string of interest rate hikes could be drawing to a close.

Mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.30 percent this week, down slightly from 6.32 percent last week.

Rates on 30-year mortgages had hit 6.37 percent on Nov. 17, the highest level in more than two years. Analysts said even with the small declines in recent weeks, they expect the general trend will be for rates to move higher over the next year.

For that reason, they are forecasting that the housing sector, which has been cooling under the weight of rising rates, will slow further in coming months. The slowdown, however, won't be enough to stop sales of both existing and new homes from setting a fifth straight record in 2005, economists said.

Which way will mortgage rates go? Expect more of the same over the next 30 to 45 days, say half of the economists surveyed by Bankrate.com. Of the remaining half, 25 percent predict an increase while 25 percent predict a decline.

Wednesday, December 14, 2005

REALTORS of the YEAR

REALTOR of the Year awards are given annually to those that deserve to be recognized for their significant contribution to the real estate profession and the community over the past year.

On Thursday, December 8th, Marie Avery was named the 2005 REALTOR of the Year for the Manatee Chapter of the Women’s Council of REALTORS.

On Friday, December 9th, Dan Forbes was named the 2005 REALTOR of the Year for the Manatee Association of REALTORS.

We are so pleased and honored to have recieved these awards from our peers. Our clients can be proud of their Realtor... and that means a lot to us.

North Manatee gets ready for its boom
Developer Alan Zirkelbach says the area is "the center of everything."

By TOM ARTHUR
Herald Tribune


NORTH MANATEE -- All of the talk about developing thousands of acres of pasture and woods in far northern Manatee County is starting to become a reality.

Site preparation on a 230-acre development off Moccasin Wallow Road is nearly completed, and site work on a 1,000-acre development nearby is expected to begin within eight months. Together, they will transform an area where wild hogs have long outnumbered people.

"I never imagined it would become what it is today," said developer Alan Zirkelbach, who grew up in Palmetto.

Zirkelbach Construction Inc. is finishing the site preparation at the Woods of Moccasin Wallow, a mixed-use development that borders Interstate 75 to the east and Moccasin Wallow Road to the north.Zirkelbach remembers the weekends he spent as a youth camping and hunting on the site where workers are now turning the earth in preparation for homes, retail space and warehouses.

He said the location, where Interstate 275 meets I-75, is ideal for the mixed uses planned for the site."I like to call it the center of everything," he said. "It's close to Bradenton, Sarasota, Tampa and St. Petersburg"

The project is one of Zirkelbach's most ambitious, incorporating 147 homes priced at about $300,000, with about 600,000 square feet of warehouse space and 200,000 square feet of retail space. On a recent tour of the property, Zirkelbach pointed to woods bordering the acreage where homes will be built, and thick stands of foliage that will obscure the homes from the warehouses that will border the interstate. He said the contours of the acreage being developed were shaped in part by existing pastureland, an effort to preserve the woods.But make no mistake, it won't be long before the changing landscape is visible to travelers along Moccasin Wallow Road and the interstate.

Retail establishments attached to the project will front Moccasin Wallow Road. Expect to see restaurants, banks and a grocery store. Zirkelbach said national chains are being lined up, but he would not be specific because leases have not been signed.

Homes will be built a half-mile off Moccasin Wallow Road, and will line an 18-acre lake that will be nearly 20 feet deep in places. The homes will be built by Denver-based Richmond American. The project is one of a handful planned for an area bordered by U.S. 41 to the west, Hillsborough County to the north, Interstate 75 to the east and east and Interstate 275 to the south.

The projects could bring 7,300 homes to the area.In July, work is expected to begin on the largest of the projects, the 2,500-home Artisan Lakes, a Taylor Woodrow project that will include land for an elementary school, a fire station and a park. That project, first approved in 1992, also is expected to include a retail component similar to that being built across the street at the Woods of Moccasin Wallow.

To accommodate the growth, Moccasin Wallow Road will be widened to four lanes, and a new north-south road, Gateway Boulevard, will connect Moccasin Wallow to Buckeye Road to the north.

The first homes at Artisan Lakes are expected to be completed by late 2008, and the businesses are expected to be open by early 2009. Five other housing developments within a few miles of Moccasin Wallow Road have already been approved or are pending county approval.

The housing market's slowdown in recent months does not concern Zirkelbach, who has projects in the works from Tampa to Naples.He considers Southwest Florida to be fairly bubble-proof. Especially his project at Moccasin Wallow, where he plans to build a new headquarters building on three acres." It's hard to find another location with 100,000 cars going by every day," he said, pointing toward the busy interstate traffic visible in the distance.

Monday, December 12, 2005

No Housing Bubble in Bradenton-Sarasota

A just released article by USA identifies 65 housing markets considered over-valued. You can read the article at
http://www.usatoday.com/money/economy/housing/2005-12-08-overvalued-housing_x.htm

We do NOT believe a housing bubble exists in the Bradenton-Sarasota market. We live here, work here, invest here, and know the local real estate market.

If you have any concerns about the Bradenton market you need the Anti-Bubble report on
http://www.BradentonRealEstate.com

It would be our pleasure to send you a free copy of the report. You may request it through the website.

Dan Forbes & Marie Avery

Friday, December 09, 2005

Rates on 30-year mortgages rise for the first time in three weeks

WASHINGTON -- Dec. 9, 2005 -- Rates on 30-year mortgages, which had fallen for two weeks, resumed their increases this week.

Mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.32 percent this week, up from 6.26 percent last week.

Rates three weeks ago had hit 6.37 percent, which had been the highest level in more than two years.

Anaysts said the booming housing sector, which has been cooling a bit under the weight of rising rates, should slow further in coming months. The slowdown, however, won't be enough to stop sales of both existing and new homes from setting a fifth straight record in 2005, economists said.

Frank Nothaft, chief economist at Freddie Mac, said even with the recent increases, 30-year mortgages, by far the most popular mortgage type, so far this year have remained close to the averages set in the past two years.

"These low rates helped the housing market set records for home sales and new construction over the past three years," he said. "Looking ahead, as mortgages rates rise, housing activity will ease somewhat."

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.87 percent this week, up from 5.81 percent last week.

One-year adjustable rate mortgages were unchanged at 5.16 percent while rates on five-year hybrid adjustable rate mortgages averaged 5.78 percent this week, up slightly from 5.76 percent last week.

The nationwide averages for mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.6 point while one-year ARMs had a 0.8 point fee and five-year hybrid ARMs carried a fee of 0.7 point.

A year ago, 30-year mortgages averaged 5.71 percent, 15-year mortgages were at 5.14 percent and one-year ARMs averaged 4.15 percent. Freddie Mac does not have historical data on the five-year ARM which it began tracking this year.

If the mortgage experts polled by Bankrate.com are right, mortgage rates will remain steady for the next 30 to 45 days. Of those polled, half expected no change while 25 percent expected an increase and 25 percent forecast a decline.
On the Net:Freddie Mac: http://www.freddiemac.com

Thursday, December 08, 2005

Bradenton Home Prices Up 36.2%

203 home sales were reported by our local multiple listing service for the month of November 2005. Those homes sold in an average of 38 days for 96% of the asking price. The median sale price of $339,900 represented a 36.2% increase over November 2005.

Average U.S. home prices increased 12.02% for 12 month period ending Sept. 30,2005.

Our local market is moving toward a more balanced market and homeowners will continue to enjoy gains in appreciation.

We prepare the Premier Team Real Estate Report each month which is a statistical analysis of residential or condo sales by various price ranges. If you would like a copy send me an email with your name, address, phone, and email.
Contact Form:
http://www.bradentonrealestate.com/index.php?fuseaction=site.contact

Wednesday, December 07, 2005

Bullish on Bradenton

An Open Letter To Our Listing Clients:

As part of our continuing effort to deliver excellent service, we wish to keep you advised of trends and events that may affect your real estate selling, purchasing or investment decisions.

Today’s local paper carried a story entitled:” Realtors say tide turning in homes market; it's becoming a buyers market.” You can read it in the previous post.

In light of the changing market we want you to know our philosophy and marketing strategy.

Our Philosophy
We are bullish on Bradenton. We believe Bradenton is a great place to live and will continue to be a great place for real estate investors and owners for the long term. Our prices will continue to go up, although not at the 30%+ pace we’ve seen the last two years. Baby Boomers will continue to retire and come to Florida to escape the snow and cold weather up North. Many of them will move to Bradenton.

Double-digit growth is expected to continue in Manatee County. We invite to see the document on the front page of our website (BradentonRealEstate.com) entitled: Why Manatee County Real Estate is Hot!

We are committed to educating Buyer prospects on the benefits of buying your home today!

Our Strategy
With over 25 years of combined real estate experience you can rest easy knowing that we know how to sell real estate in every kind of market. Different markets require different strategies and we want you to know that we constantly adjust our strategy to make sure our listing clients get the most money in the least amount of time and with the fewest hassles.

Our strategy includes, but is not limited to the following:
· Keeping our clients informed about market conditions so that you can make wise decisions.
· Offering suggestions about price, showcasing the home, and preparing for showings, etc.
· Superior exposure through massive advertising including direct mail campaigns, internet marketing, magazine and newspaper advertising, 24-hour real estate hotline and much, much more.
· A team of experts working together to get your home sold.
· Expert negotiating skills used to get you the highest price possible.

We appreciate your business and we are 100% committed to getting your home sold for top dollar. We are excited about successfully selling your home very soon.

To your success,

Dan Forbes & Marie Avery

Realtors say tide turning in homes market; it's becoming a buyers market

MELISSA FOLLOWELL
Herald Staff Writer

MANATEE - The number of homes on the market in Sarasota and Manatee counties more than doubled from October 2004 to October 2005, while sales have fallen slightly. This may be the reprieve that discouraged buyers have been anticipating.

"We've had such a red-hot market, nobody expected it to last indefinitely," said Rod Rawlings, owner/broker of Action Team Real Estate of Bradenton.

Local real estate agents at several agencies, including Michael Saunders & Co. and Coldwell Banker, use a computer program called Trendgraphix to interpret Multiple Listing Service information and to chart local changes in the market.

In October 2004, 776 homes were on the market in Manatee County, 276 sold and 301 sales were pending. October 2005 saw 1,721 homes on the market, 255 sales and 214 pending sales.

"The change is dramatic. It'll be great for buyers and brutal for sellers," said Ruth Lawler, real estate agent for Michael Saunders & Co. Lawler keeps a close eye on the data and was startled by the dramatic changes she has seen since the sales peak in the spring.

"March through June were frantic, and a lot of buyers were priced out of the market," Lawler said.

During those months, there were less than two months inventory. In an ideal market, there would be a two- to three-month supply, Lawler said. From having less available properties than desired to having an overabundance with five months supply available in October has led to a shift, giving buyers the upper hand.

Lawler had a client with several investment properties who asked when he should sell in order to maximize his profit.

"I told him 'you just missed the peak,' " she said.

Barbara Szumski, managing broker of three Coldwell Banker offices, also keeps an eye on the market using Trendgraphix. "The market, quite frankly, made a turn. I don't think it's for the worse," Szumski said.

Even though data shows that the average price per square foot was down $3 to $216 in October, she said a calmer market helps both buyers and sellers make more-educated decisions.

"Before, people were buying before they came down. They had no time for thinking and had to make a decision immediately," Szumski said. "This is a healthier market."

Lawler isn't so sure. She thinks agents need to stay optimistic but keep a watchful eye on what the numbers will do in the next few months.

"What's happening right now will directly effect the next three to six months. This is not going to turn around overnight," Lawler said.

Lawler thinks the cooling trend will continue into November and December, with prices per square foot falling a bit, but hopes the changes will be less dramatic in January.

Joan Olizewski, president of the Manatee Association of Realtors and Wagner Realty sales associate, is optimistic that January will see another upswing in the market.

"It's just really checking itself. We got a little spoiled because things were moving so quickly," Olizewski said.

Other real estate agents are aware of the changes but say that the differences between October 2004 and October 2005 are due to quite a few things and that the national trend may actually have less of an affect on Manatee and Sarasota than in other places.

A recent National Association of Realtors survey showed the Bradenton/Sarasota metropolitan area had several factors that help keep the market strong, including job creation, interest rates, attractiveness and climate.

"Each of these are on the plus side for Manatee County," Rawlings said.

As far as prices evening out and leading to even more jobs in the area, that situation is wait and see.

"It all boils down to what the worker can afford," said Nancy Engle, executive director of the Manatee County Economic Development Council.

Wages in Manatee County are below the national average, which has made the lack of affordable housing a problem. For that reason, Engle said the council focuses not only on growing new jobs here but also the value of those already here.

Rawlings said he has seen a reduction in asking prices but not in overall sales prices.

"Sellers are going to have to be more realistic when pricing their properties," Rawlings said.
When the market kept picking up momentum, many new investors were attracted to the area as a great way to make some money on a sure thing. While there are still some out there, Rawlings and Lawler said, many investors have already flipped their properties and headed out. Investors still in the market will still see a return on their investment, since prices are expected to level out more, not plunge.

"It's a balancing effect, a stabilization," Olizewski said.

New real estate agents may be hurt the most by the frantic market's return to normalcy. Rawlings said it's an easy profession to get into but a hard profession to make a living.
"The pie is only so big, and you can only cut the slices so small," Rawlings said.

Getting the most out of your second-home investment
Don't let emotion overrule logic when it comes to buying
By Tom Kelly
Inman News

If the recent downfall of snow has you running to the slopes (or to a plane en route to warmer weather) don't get carried away with the first possibilities of a recreational investment. Yes, there very well could be more potential rental days for cozy chalets near ski hills this year, but do the research before you take the leap to become a landlord.

There are certain basics to consider if you are going to make the most of your second-home investment. It's easy to lose money on an emotional whim. Powder snow and picturesque mountains have ways of working wonders on the mind during a long weekend to "just check out the opportunity." Lots of people can lose money in real estate -- even in appreciating locales -- so try and do the most to protect your hard-earned cash.

Making a profit anywhere -- stocks, bonds, commodities, real estate, sales -- requires basic understanding and research. Regardless of what you see on television, there is no secret sauce that will absolutely guarantee big-time revenue and success. Your return, however, will be gauged differently if you decide it is only for personal use and not necessarily for investment income. How can you put a price on experiences and memories? For now, let's review some basics that are often overlooked in an emotional decision.

Picking your place. The three most-used words in real estate -- location, location, location -- are repeated for a reason. If the property will be solely a personal residence, will its style and layout hold its appreciation over the long term? Then think resale: If you had to sell in five years down the road, what would lure the next buyer? Finally, if you had to rent it out, is this the type of property that could definitely catch renter's eyes and possible rental dollars? What appeals to just you may not appeal to the rental pool you may depend upon for consistent income.

Picking your community. Even if the house is perfect, is the neighborhood one that you see yourself enjoying? Do you think most of the people you know would like it too? Remember, you can always add a bedroom or convert a patio space, but the area is set. Again, play the dual role of renter and resident. If the parcel will eventually serve you and your family exclusively, you need to choose a place where you will be comfortable later in life.

Finding the cash. If you've got some semblance of a down payment and can show the likelihood of rental income, you are in better shape than you think. One of the biggest changes in real estate over the past five years has been the easing of financing. Lenders have simply made funds more available.

Tax is a benefit, but... While mortgage interest is deductible on second homes, it's usually not wise to buy a home solely for tax reasons. If your property eventually becomes your primary residence, you can sell it after two years and pocket $500,000 of gain (married couple) or $250,000 (single person) tax-free. Sale of an investment property would not qualify for such a generous tax treatment.

Who's minding the store? Before you invest in this wonderful getaway, you must decide how you will handle management. Having tenants, short- or long-term, will require that the property be managed effectively. It's a business, unless you will be the only occupant. This means maintenance and improvement, as well as simple rent collection. You will either do it yourself, or you will hire others to do it for you.

Management is a cost and will diminish your cash flow. Either you will spend your time to do it, or you will pay someone else. Choosing the more cost-effective approach will affect the return on your investment.How much can you handle? Real estate that will ultimately prove a good investment because of price appreciation might be a challenge every month because of negative cash flow. You are responsible for paying for and maintaining your property regardless of whether or not the property is generating revenue. Before you invest, you need to create and hold a cash reserve to cover those weeks when the house is not rented, when the rent is late or when the toilet needs repair.

Monday, December 05, 2005

Americans believe in real estate bubble
66% of survey respondents say there is a housing bubble
Monday, December 05, 2005
Inman News

More than two-thirds of Americans responding to a survey believe there is a real estate bubble, though many said they wished no one would discuss it in the interest of avoiding a self-fulfilling prophecy.

According to a survey conducted by real estate advice and information site ThinkGlink.com, 66 percent of respondents said there is a housing bubble, and nearly 45 percent said that people shouldn't talk about a real estate bubble because the more it is discussed, the more likely there will be panicked selling that would lower property values.

Speculation over whether a real estate bubble exists has persisted in the last few years as home-price appreciation has outpaced income growth.

Of those who believe there is a real estate bubble, 18.1 percent said they believe the bubble will burst within six months, while the other 81.9 percent think the bubble won't burst for at least six months. Another 41.3 percent indicated that the bubble won't burst for at least a year, and the remaining 40.6 percent predicted a real estate bubble would burst six to 12 months from now.

"In recent years, home-price appreciation has been running far ahead of rates of inflation, wage increases, and national economic growth," said Ilyce Glink, real estate expert and ThinkGlink.com editor. "Real estate is a huge part of the typical American family's net worth, so it's important to assess whether Americans believe their net worth is here to stay or is at risk of steep decline. For better or worse, when it comes to real estate, perception is often nine-tenths of reality."The ThinkGlink.com survey also asked what effect a real estate bubble burst might have on the economy. Of those who believe there is a bubble, 57.6 percent said they think a bubble burst would have a mildly negative effect on the economy. Nearly a quarter of respondents have a more dire view, predicting a massively negative effect on the economy. To the contrary, 16.8 percent of those who think the real estate bubble will burst believe it would be good for the economy.

A forecast less gloomy
Harold Bubil - Herald Tribune
Article published Dec 3,2005

In a region where real estate is king, economist John Tuccillo has good news.
The king is not dead."

There is no bubble in the real estate market because there is no 'the real estate market,'" Tuccillo told a group of developers Wednesday at Fleming's restaurant in Sarasota. "

There are hundreds of thousands of real estate markets," separated by location and price, and the underlying economy is key to the health of each of them."

The most vulnerable market is Detroit," said Tuccillo, a Sarasota resident who is former chief economist for the National Association of Realtors. All those nasty General Motors job cuts will make Rust Belt real estate even cheaper, but not affordable. Even cheap real estate, he said, is not affordable for those who don't have jobs."

There has never been a real estate bubble except where the underlying economy has been pulled out ... from under the market," Tuccillo told the developers, who were brought together by Michael Saunders.

"Where the underlying economy is weak or sour, you have a vulnerable housing market. Where it's not, you don't."

Does that mean the world will continue to go on as it has?" he asked. "No. When the activity in the market outstrips its capacity, the market simply stops. Sales go down, prices drop off. And so it's a series of plateaus broken up by upward movements."

What about the increases of inventory and decreases in sales we're seeing now?"

We see them because there's greed out there and there's fear out there. There's greed in the sense that homeowners are anxious to take their paper gains and convert them into actual cash. There's fear ... because people fear they're going to miss it and they want to get out of the market as it is. And so what you've got is a lot more houses being put up for sale."

You also have a lot of unrealistic sellers. Sellers are always the last to get it. Sellers believe that their houses are worth the highest number that anyone's ever mentioned in association with it, plus 10 percent. So in a market that is starting to cool off, sellers will insist on wildly overpricing their houses."

Tuccillo said the recent inventory figures represent a market that is coming into balance. "Sales are down. Inventories are up. Is this the end of the world? Well, inventories are up to 4.9 months. The benchmark number is 5.5 months. That's a balanced market. We're still in a seller's market; we're down from a wildly seller's market to a mildly seller's market."


Dan Forbes & Marie Avery Posted by Picasa

More homes are listed, but sales and prices are dropping
Agents agree market is improving for buyers
By Michael Pollick - Sarsota Herald Tribune.

Sarasota-Bradenton real estate agents sold 19 percent fewer homes in October than they did a year earlier, but agents report prices are softening in the face of listing inventories three times that of fall 2004.

The softening is a phenomenon that has yet to wind its way into the monthly reports released by the Florida Association of Realtors. In fact, the association's report Monday showed something of the opposite, with the October median sales price hitting $340,700, about $6,700 off the Sarasota-Bradenton market's all-time high of $347,400 set in August. The October price was a remarkable 32 percent higher than during the same month in 2004. In fact, the lowest price for the past six months was still solidly above $300,000.

But for real estate agents surveyed Monday, the market sentiment definitely appears to have changed from a pure seller's market into one in which buyers have a much better chance of negotiating a price below what is asked.

In the Sarasota market alone, buyers had 4,346 listings to choose from at the end of October, compared with only 1,465 a year ago.

It is a change that real estate agents say was inevitable and one that is better in the long run because it gives buyers more of a chance to find something they like.

But the adjustment could clearly be painful for would-be sellers who thought they could add 3 percent a month to their favorite comparable price and get it in a week. "Listings are up, sales are down," said George Abt, broker-owner of Sellstate Best Coast Realty, a new franchise with offices on Bee Ridge Road in Sarasota. "

Compared to where it was five, six months ago, it has kind of leveled off and dropped down a little bit."I think prices are adjusting downward."

It is the same story in Bradenton, at the offices of another franchise new to the area, Century 21 Sunbelt Realty." Sales are going on, but there is a leveling out now," said John Calvert, who manages the Cape Coral business's new Bradenton office.

"Where people were paying just about anything for a property, there are now more properties that are available, so that in retrospect levels out the prices of homes. They are becoming more affordable."

Statistics from the Charlotte County-North Port market were unavailable from the Florida Association of Realtors, which has a standing policy of not releasing data with comparable figures from the prior year. (Hurricane Charley wiped the 2004 numbers off the map).

But Dave Hofer of Colcott Corp., a Punta Gorda builder, keeps his own stats. He says the Port Charlotte-Punta Gorda Multiple Listing Service is showing 2,220 single-family home listings at the end of October, up 250 percent from a year ago. Median prices range from $239,000 in Port Charlotte to $725,000 in Punta Gorda Isles and Burnt Store Isles.

Hofer thinks a flattening out of the price curve is inevitable." There's a lot of overpriced inventory," he said. " The prices are still up 25 to 30 percent from a year ago, and that is just too much of an increase for the buying public to swallow. It was already slightly overpriced a year ago. "Now it is just ridiculous."

Dream Team associate Paul Nienaber came up with roughly the same story from Nokomis, where his office handles Venice and North Port sales. He calls the market's transition from seller to buyer-dominated "subtle but rapid."

"There was no advance warning. It was like somebody flipped a switch and, by mid-September, all of a sudden, the inventory of houses kept growing and growing and growing," he said.

There is no clear-cut explanation for the shift. Mortgage rates are higher, but not that much. Interest rates for a 30-year fixed rate mortgage averaged 6.07 percent in October, compared with 5.72 percent in October 2004.While rates are still moderate, Abt, the Sellstate Best Coast broker, said, "lenders are reining this market back in."

"The lenders have plenty of money, but they are appraising harder." Abt, who provides mortgages as well as selling homes, gave an example of how a tighter mortgage deal can bring down the price. Some customers of his agreed to pay $349,000 six months ago for a house that was appraised at only $285,000. Because of the low appraisal knocking the stuffing out of the contract, the buyer and seller had to renegotiate."

They ended up agreeing to a sales price of $305,000," Abt said.

Thus, even with the lower price, the buyers had to pony up an extra $20,000 to cover what the lender wouldn't.

Hurricane worries and higher taxes might also be catching up with the market, said Joan Hawkins, broker manager at Key Realty in Englewood. The increasing frequency of hurricanes in the past two years has caused insurance companies to jack up their rates, noted Hawkins, whose agency has a twin in that business, Key Insurance." They come in our door for insurance all the time. 'My insurance has been canceled and I need a policy today,'" she said. " They are like in shock when we tell them how much it is."

At the same time, the 30 percent back-to-back price increases of the past two years have sent tax tremors through second-home owners accustomed to affordable Florida. "I've seen taxes that used to be $500, $600 on a very older style home come in at $2,000 this year, and that takes a big bite out of the second-home market," she said.

There are now 51 homes available in Englewood at less than $200,000, compared with only five or so a year ago.

Nienaber, the Dream Team associate, has his own theory about hurricanes, but it's not the usual one that the massive storms are scaring away buyers. Areas ravaged by Hurricane Katrina have drawn many of the fast-money players who had been playing with Southwest Florida property, resulting in less demand than earlier months, Nienaber contends.

In another sign of the tone of the market, he is getting increasingly lucrative offers from home builders to bring them buyers, especially those who can close before the end of the year. The normal rate for bringing a buyer to the table on a new home is 3 percent at Lennar/U.S. Homes, he said." Not specific to Lennar, I've seen numbers of 31/2 to 4 percent lately," Nienaber said. "I've also seen bonuses of $1,500 to $2,000 over and above the commission if you can get somebody to buy the house and close on it before the end of the year."

It seems like the builders are trying hard to get good year-end numbers." The conversion from a seller's market to a buyer's market is not just happening here. Shawn M. Goepfert, president of the Daytona Beach Area Association of Realtors, told the state association that demand is catching up with supply there, too."

We started 2005 off with only about 1,000 residential listings, really robust sales and it taking only about two or three weeks to get a contract," Goepfert said. "That demand really pushed up our sales price, but in the last 30 days, our inventory has increased to about 3,000."

The association's October report showed a statewide median sales price of $241,000, up a whopping 28 percent from a year earlier. Meanwhile, the total number of real estate agent sales softened by 5 percent, from 16,844 statewide in October 2004 to 16,029 last month.