Bradenton Florida Real Estate News

Friday, April 28, 2006

Housing Market Mixed Signals

Florida's housing market probably won't improve in 2006, but the long-term outlook remains promising, the chief economist for the National Association of Realtors said Thursday.

"Is this a bad year? Yes," David Lereah told more than 400 people at the Hilton-Palm Beach Airport in West Palm Beach. "Are you going to bust? No."

Lereah predicted that price increases for existing homes in South Florida, once at 25 percent and 30 percent, will fall to about 5 percent and that sales declines in many markets will continue at double-digit clips.

But with the regional economy staying strong and interest rates still affordable, the state's housing industry should pick up in the middle of 2007, Lereah said. "Particular markets may not, depending on inventory levels," he said.

South Florida is one region where the number of homes for sale has increased substantially since last year.

Listings have more than doubled in Palm Beach County, according to the Regional Multiple Listing Service. The MLS figures don't include the town of Palm Beach.

The situation is even worse in Broward, where listings have more than tripled, according to the Realtor Association of Greater Fort Lauderdale.

Lereah blamed Wall Street analysts and the media for perpetuating negative hype regarding the housing slowdown.

"They're telling us we're in a bubble and that we're going to come crashing down," he said. "There is nothing that could be further from the truth."

Some question the economist's alliance with the Realtors trade group and the fact that he wrote a book titled Why the Real Estate Boom Will Not Bust -- And How You Can Profit From It.

But Lereah insists he's not being unfairly optimistic. Although he remains positive about Florida, other areas, such as San Diego, could face sustained slowdowns because of flawed market fundamentals, he said.

Abe Himelstein, managing broker for Prudential Florida WCI Realty in Boynton Beach, said he was encouraged by Lereah's comments at Thursday's event, sponsored by the Realtors Association of the Palm Beaches.

"Real estate is not a quick-fix business," Himelstein said. "But I'm seeing trends that business is increasing. I've had the best month I've had in four months."

Other agents weren't as impressed. Mike Morgan, a Stuart broker with clients in Palm Beach County, said it could be two years before the housing market rebounds. He said it's so slow that builders are paying buyers' mortgages for six months and giving agents double commissions. Individual sellers also are offering incentives.

Lereah is not preparing the industry for rough times ahead, Morgan said. "It was more of a pep-rally speech than anything else."

===From South Florida Sun-Sentinel, Paul Owers. Distributed by Knight Ridder/Tribune Business News.
=========

Here in the Bradenton - Sarasota, Florida market our inventory of single family homes is up 548 percent over this time last year. Sales are down 46 percent. Prices are down 11 percent from the high of 2005.

Thinking of buying or selling? We know the market!

Has "Bubble" Lost it's Meaning?

Maybe people have become so numb to the term "bubble" that its meaning has been entirely lost.

In a survey released by Experian-Gallup, seven out of 10 consumers said they expect a housing bubble to burst in the U.S. in the next year. But as you read further, 65 percent of the same surveyed consumers said that a collapse of a housing bubble within their own area is not likely.

Topping that off, another snippet of the same survey shows that only 11 percent expect housing prices to decline in the next year, while 60 percent expect an increase in prices. After reading through this survey, one starts to wonder what exactly is being defined as a bubble and bubble burst.

The headlines are somewhat confusing and I think that contributes to today's unstable market. Consumer confidence is high and most reports show that consumers expect the housing market to improve. Sales in the Bradenton - Sarasota area are down 45 percent. Buyers are confused and some are paralyzed. Other Buyers are recognizing that there are a lot of GOOD DEALS out there as Sellers respond by lowering their prices.

Hot Markets Cooling Off, Others Getting Hotter

From the Wall Street Journal:

As home sales cool on the East and West coasts, some cities that missed out on the real-estate boom are becoming the strongest markets.

A look at inventories of unsold homes, prices and employment trends points to generally positive signs in Houston, Dallas and Atlanta -- cities that have seen only modest home-price gains in recent years.

Metropolitan areas whose housing markets look less healthy, at least in the short term, include Boston, Los Angeles, Miami, Minneapolis, New York, Philadelphia and San Francisco. All of them have growing inventories of homes and relatively weak job growth. As a result, houses that a year or two ago might have sold in hours now are languishing on the market for months, and some sellers are cutting prices....

In Miami, a building boom has more than tripled the inventory in the past year. Even so, population growth should absorb any excess supply within 12 to 18 months, says Ronald A. Shuffield, president of Esslinger-Wooten-Maxwell Realtors, a big real-estate brokerage firm there.=========

Here in Manatee County Florida we have a 548 percent increase in inventory while sales are down 46 percent. Today's median sale price is down 11 percent from the high of 2005.

If you are thinking about selling, please give us a call. We know the market!

Thursday, April 27, 2006

Boomers Are Buying Vacation, Second Homes

I just read this article...

In the last three years, a couple that I am acquainted with has bought three investment properties in a mountain resort town about three hours from where they live.

The first townhouse they bought was for weekend getaways, but now it will probably more than cover its costs through summer and fall rentals, the couple reports. One of their properties is now on the market for nearly double what the couple paid. In fact, prices in the 3,000-acre community have at least doubled since it opened five years ago.

That kind of activity has been replicated in vacation-home areas across the country in the past few years, according to Paul Bishop, manager of real estate research for the National Association of Realtors.

NAR recently released a new study that looks at the vacation- and investment-home markets. Last year, 40 percent of all homes bought were vacation homes or investment properties. That's up 16 percent from 2004, to a record 3.34 million homes.

"We don't have good numbers on this, but the information we do have is a lot of the activity is from buyers who buy one to two or more properties over the course of a year or two," Bishop explained. "The majority of these folks are actively in the market to buy investment properties as opposed to people buying a one-off home to rent. They are serious residential investors."
Bishop said the study showed there is a clear distinction between the people who buy vacation homes and those who buy investment properties.

"Buyers of vacation homes look for lifestyle opportunities, and perhaps residences for retirement. Investment property buyers want to purchase property close to their homes," he noted. "We're talking about both groups together, and that's a pretty broad brush. They have entirely different motivations."

The Midwest is the strongest area for second-home or investment-property purchases, Bishop added. Donna Hofmann, a Coldwell Banker agent located in Chesterton, Ind., says that 90 percent of her vacation- or second-home buyers come from the Chicago metropolitan area, and 80 percent live in the suburbs.

"Most of our buyers want somewhere that is close to the office that they can visit on weekends and get away from the city for awhile. Most of them are purchasing second homes in order to turn them into a retirement home some day. They plan to move there eventually," Hofmann said.

In Alpharetta, Ga., RE/MAX Greater Atlanta agent Tom Zaccaro is working for a new vacation-home division called Resort Connection, selling resort properties in the Florida panhandle to Atlanta-area residents.

"Panama City Beach is where the big boom is now. They're putting in an international airport. It's next to Destin, which is a big hot spot. What's going on there are beachfront condos for $1,000 per foot," he said, adding that "dumpy" hotels are being replaced by exclusive resort property. "Panama City Beach properties are going for $425 per square foot."
Investors, Zaccaro said, are gobbling up everything for sale.

But in Phoenix, which has been one of the hottest markets for more than a decade, Coldwell Banker agent Ann Morgan said there appears to be an oversupply of lower-priced homes in the outer regions of the greater Phoenix area.

At the same time, home prices at the upper end are growing quickly.
"Homes priced at $400,000 a couple of years ago are now priced at $600,000. Retirees and snowbirds are looking in Scottsdale because it's a nice, clean, safe environment. They want the stainless steel appliances, granite tile, an updated house and they're spending $300,000 to $400,000 without thinking about it," Morgan explained.

According to Bishop, the median price of a vacation home in 2005 was $204,100, up 7.4 percent from 2004. The typical investment property cost $183,500 last year, up 24 percent from a year earlier. Eleven percent of all homeowners own two properties, while 4 percent own three or more properties.

What's contributing to these second-, third-, and fourth-home purchases? Bishop says it's the Baby Boom generation (born 1946-1964) flexing its financial muscle.

"The median age of vacation home buyers is about 52, so this is the first wave of Baby Boomers, and about one in five is planning on using the second home they've purchased as a primary residence someday." Bishop explained. "They're thinking about lifestyle issues and their future retirement."

Past research has shown that people aged 55 to 65 are the most active second-home buyers, followed closely by those aged 45 to 55. Since the Baby Boomers are just turning 60, the first wave of Boomers is just hitting their peak second-home-buying years.

Bishop said that with Boomer buying power, second homes could remain a large percentage of all home purchases for the next 20 to 30 years.

By Llyce R. Glink

Wednesday, April 26, 2006

Local Home Sales Continue to Fall

Both of our local papers report on our faltering real estate with these headlines:
Manatee Home Sales Drop, Prices Rise
http://www.bradenton.com/mld/bradenton/14429102.htm
Housing Market Struggles for Balance
http://heraldtribune.com/apps/pbcs.dll/article?AID=/20060426/BUSINESS/604260676

The Bradenton - Sarasota, Florida market led the state with a 45 percent decline in sales for the month of March. The median price of single family homes is still up 5 percent over March of 2005, but it is down 4 percent over the high of 2005.

Conclusion:
We have over a 7 month supply of homes for sale in Manatee County and prices seem to have pulled back a minimum of 5-11 percent. With a 548 percent increase in the number of homes for sale, it will take some time for this market to stabilize.

Stock brokers want you to believe the bubble is bursting and the housing market is in danger of collapsing. Some Realtors want you to believe this is a minor bump in the road and everything is hunky-dory. The truth is probably somewhere inbetween.

If you have a home for sale and no showings, the market is not supporting your price, you must lower it. If you have a few showings and no offers, the market is not supporting your price, you must lower it. After 10-12 showings you should have an offer.

We counsel our clients to be agressive. Here are 10 ideas to help get your home sold in a soft market.

1. Provide a free home warranty to your buyer. It's a nice perk.
2. Clean, Clean, Clean.
3. Add fresh paint and new carpeting. Eliminate all objections.
4. Consider offering a bonus to the agent who sells your home.
5. Lower your price. You absolutely must be the BEST value in the area. If you have few or no showings, you aren't in the running.
6. Offer to pay a few thousand dollars of the Buyer's closing costs.
7. Do you own a vacation home that you could give a free vacation stay to the buyer? One listing is offering a free big-screen TV.
8. Spruce up the landscaping and the entry to the home.
9. Raise the commission. Offer more money to Agents who show and sell your property. They have a lot of homes to show, be sure they pick yours.
10. Hire a Realtor who can provide perks to your buyer. We offer a free moving truck to your Buyer and a possible $2,000 toward closing costs if they work with our preferred lender.

Tuesday, April 25, 2006

The Most Expensive ZIP Codes

What's the difference between 11962 and 28741? When it comes to house prices, the answer is $2,125,000.

Those ZIP codes bookend Forbes.com's annual list of the priciest areas in the country -- neighborhoods where home costs soar far above the norm. This year, Forbes.com collected the top 500 most expensive ZIP codes in the U.S. They include the most famous (perhaps the only famous) ZIP in the country, Beverly Hills, 90210; some towns that are well-known for harboring ritzy residents; and neighborhoods that few besides locals have ever heard of.

Top 10 most expensive ZIP codes
Rank, ZIP Code, Location, County, State, 2005 Median Sale Price ($)
1 11962 Sagaponack Suffolk NY 2,787,500
2 92067 Rancho Santa Fe San Diego CA 2,445,000
3 92662 Newport Beach Orange CA 2,397,500
4 94528 Diablo Contra Costa CA 2,266,000
5 94957 Ross Marin CA 2,247,500
6 11976 Water Mill Suffolk NY 2,150,000
7 93108 Santa Barbara Santa Barbara CA 2,050,000
8 90402 Santa Monica Los Angeles CA 2,005,000
9 92661 Newport Beach Orange CA 1,996,500
10 33109 Miami Beach Miami-Dade FL 1,942,500

Outlook for the Housing Market

Wachovia has just released their latest "Regional Economic Review" showing their outlook for the housing market.

Their conclusion states: "There is little doubt that the housing boom has ended. Homse sales have declined, inventories of unsold homes have increased, and buyer traffic through model homes and mortgage applications have both decreased. ....We expect sales of new and existing homes to fall 20 percent over the next two years."

If you would like a copy of the ful 12 page report email to you just send me an email asking for the "Wachovia Report". Contact me at:
http://www.bradentonrealestate.com/index.php?fuseaction=site.contact

Monday, April 24, 2006

Showings Are Picking Up

We are seeing an increase in the number of showings for our listings.

Spring buyers may bring some good news to sellers in the Bradenton - Sarasota, Florida area. We typically see an increase in listing and buying activity during Spring and Summer. Families tend to move when school is out so that the kids can adjust more easily.

Friday, April 21, 2006

Will Housing Prices Fall?



Monday's Financial Times features an in-depth treatment of the global housing market. The headline reads:
The Global Property BoomDangers of the Housing Market Delusion


The opening article is by Martin Wolf. Some interesting excerpts:

Higher prices merely redistribute income among residents [as opposed to creating real wealth], mainly from young to old


Where prices have risen far faster than underlying incomes, only two possibilities exist. Either prices have moved to a higher equilibrium level, in which case future purchasers will have to save more and consume less. That would itself have significant economic implications. Or they have reached an unsustainable level, in which case they will fall in real terms. That would have more significant economic implications. [Note that both possibilities have very significant economic implications]


The future will tell us which and where — possibly quite soon.

Gifting Your Home to a Child or Friend

If you are getting ready to move out of your longtime home and into more sunshine, you can actually gift your home to a child or friend but that gift will come with a few strings attached.

In many countries around the world, once the parents die, the children simply move into the home and take over the master bedroom. While that progression still occurs in the United States, estate taxes, rising home values, job transfers, and the desire for a separate space and different environment have changed the use of the traditional family home.

The bottom line is that the home has evolved from basic shelter to the average person's most valuable possession. It needs to be carefully protected, guarded, and even nursed along--much like the responsibilities that took place within the home itself. And the financial value is usually accompanied by priceless memories and experiences, making the family home beyond doubt the ultimate asset.

First and foremost, your child or friend's basis in the house will be what you paid for the property, plus major improvements. Because this cost you paid years ago is probably much lower than today's soaring home value, there's a chance tax will be owed on a subsequent sale.

For example, if you purchased your home in 1970 for $60,000 and it is now worth $450,000, your child's basis would be $60,000 if you chose to transfer the home to the child as a gift. If the married child sells the home 10 years down the road for $760,000, their tax liability would be on $200,000 ($760,000 minus the $60,000 basis, minus the $500,000 exclusion for married couples). Taxpayers in the 15 percent tax bracket would thus owe the Internal Revenue Service approximately $30,000 in capital gains tax.

The actual gain is the difference between the adjusted sales price (selling price less selling expenses) and the adjusted basis. The adjusted basis is the original cost plus capital improvements. Capital improvements are the cost of improvements having a useful life of more than one year. Examples include the new roof, dock, deck, remodeled bathroom, and finished basement. Generally, an expense is a capital improvement if it adds value to the property or extends its useful life. If these criteria are not met and the expenditure is considered necessary to maintain current usefulness, it is a maintenance cost.

The outright gift would also reduce your lifetime gift tax and estate tax exemptions. While the limits on both the lifetime gift tax and estate tax used to be the same (there was one overall exemption, and the individual used it up by making gifts during life and at death), the 2001 legislation set the gift tax and estate tax on different roads beginning in 2004. Both were combined into a "unified" exemption because gifts made during life also counted against the total. The overall, or unified, exemption remains for the entire estate, but a gift exemption limits the amount that can be given during a lifetime.

Once the unified exemption is used up, the tax rates that apply are quite high. The estate tax is being phased out over a 10-year period, but the gift tax will remain in place. The gift tax exemption is $1 million in 2006, but the estate tax leaps to $2 million. In future years, the gift tax exemption will remain at $1 million, while the estate tax exemption rises until the estate tax is fully repealed in 2010. At that time, the top gift tax rate again will equal the top income tax rate.

If you are going to gift your home to an individual, it's best to offset the amount by first using your annual gift tax exclusion of $11,000 per gift. You can gift $11,000 (this amount will rise and is tied to inflation) to any one person in any year. Hence, if you and your spouse each make a gift to both your child and her spouse, you can offset $44,000 of the home's value. Then, as long as the home's net figure is less than $1 million, you won't owe any current tax (unless you made substantial gifts earlier that reduced your remaining exemption).

Take the time to check with a tax attorney or an accountant before making any major moves. Be certain that goals are shared and discussed. You'll find it saves time, money and anxiety.

Thursday, April 20, 2006

Grim News in the Florida Real Estate Market

Sarasota-Bradenton - 48 percent drop in home sales
Sarasota-Bradenton - 41 percent drop in condo sales
Charlotte County North Port - 18 percent drop in home sales
Charlotte County North Port - 92 percent drop in condo sales
Palm Beach County - 39 percent drop in sales
Martin and St. Lucie counties - 44 percent drop in sales
Broward County - 36 percent drop in sales
Broward County - the fewest used homes sold in the county in one month since 1994 Miami-Dade County - 28 percent drop in sales
Naples - 31 percent drop in sales
Lee County - 9 percent drop in sales

See this Blog for the full posting:
http://globaleconomicanalysis.blogspot.com/2006/03/florida-bubble-busts-wide-open.html

But wait, this author is a stock market consultant and I suspect a salesperson. Stockbrokers love to tell people how terrible real estate investing is....because they make no money that way.

FACT: Our Bradenton - Sarasota market has experienced 145 percent appreciation in the past 5 years.

FACT: Our median sale price is up 10% over this time last year.

FACT: The number of sales are down because investors and speculators fueld the market and now are selling.

So what if you have to give up 10 percent to sell your house today, that still leaves a 135% gain. Becareful to investigate what you read!

More and More People Moving to Florida

The Census Bureau released its latest study on where people move -- and in total number of new residents from 2000 to 2004 -- Florida tops the list with an influx of 190,894 residents. Seven Florida counties also ranked in the top 25 in total number of new residents moving in.

Florida counties in the top 25 for number of inbound residents

Rank -- County -- Average number of new residents per year
7. West Palm Beach: 18,106
8. Pasco: 15,934
9. Lee: 15,654
13. Hillsborough: 12,978
17. Lake: 12,124
22. Brevard: 10,283
24. Volusia: 8,953

Florida counties in the top 25 for growth rate, comparing number of new inbound residents to the number of existing residents

Rank -- County -- Average annual rate of growth
1. Flagler: 79.1
9. Lake: 51.2
12. St. Johns: 48.4
19. Pasco: 42.2
21. Walton: 40.9
24. Hernando: 39.8


Though national statistics reflect a slowdown in home sales, University of Florida economist Dave Denslow expects demographics to bolster Florida's housing market, unless interest rates dramatically rise. The state's warm climate, scenic views, reasonably priced land and low taxes continue to draw buyers.

However, Denslow is waiting for data from the spring and summer months -- which traditionally record the most sales activity -- to gauge the direction of the market. The market presently is adjusting to the end of speculative sales as investors take their money elsewhere, as well as a boost in the cost of construction materials and a shortage of skilled laborers.

For the long run, Florida will continue to be a desired destination for retiring baby boomers. Investors like this good news.

Buyers Are Worried About A Bursting Bubble

Recent economic reports -- from declining residential construction to rising prices to an increasing supply of unsold homes -- underpin the theory that some housing markets may soon face stagnant sales and prices.

According to the findings of the Experian/Gallup Personal Credit Index poll for April, many of the nation's consumers seem to agree with this scenario with the survey showing that more than 70 percent of consumers consider it either very likely or somewhat likely that residential property prices will collapse nationwide within the next year. At the same time, however, the public is much more upbeat on the outlook for their local markets: only 32 percent of those polled agree that a bubble burst is either very likely or somewhat likely in their area.

Right now in our Bradenton - Sarasota, Florida market the re-sale median price of a single family home is 11 percent below the high of 2005. What's the good news? In the last five years we have enjoyed 145 percent appreciation. So if you have to lower your price 10 percent to sell your home, you are still ahead by 135 percent!

Selling a Home is Not Easy Today

I just read this article today,

"NEW YORK -- April 19, 2006 -- Pete Montero first listed his Ann Arbor, Mich., home nearly a year ago at $379,000. The 2,600-square-foot home didn't attract buyers so Montero dropped the price in $10,000 increments -- he's now asking $329,900 -- and he's even considered remodeling the kitchen.

"We really didn't think any individual thing about the house would make it difficult to sell," said Montero, whose four-bedroom home has a finished basement and sits on a cul-de-sac to ensure privacy.

"Spring is typically the busiest time of the year for home sales. But with mortgage rates rising and sales slowing, sellers find they have to work harder to get a sale.

"In February, there were 3.03 million previously owned homes for sale, a level not seen since 1991, when 1.91 million homes were up for sale, according to the National Association of Realtors.

"Business is tough. The inventory of available properties has increased," said Martin Bouma, an Ann Arbor real estate agent. "You are looking at (the number of) buyers going down, and inventory is going up."

Some incentives offered by sellers include a year's worth of free landscaping or lawn care, free snow removal for a year or a year's worth of alarm service. And, that's just from the owners of existing homes -- builders sitting on a mound of inventory have also had to come up with new ways of wooing buyers."

Here in our Bradenton - Sarasota, Florida market we are suggesting these proven strategies to our Sellers:
1. Raise the commission. Offer more money to Agents who show and sell your property. They have a lot of homes to show, be sure they pick yours.
2. Provide a free home warranty to your buyer. It's a nice perk.
3. Clean, Clean, Clean.
4. Add fresh paint and new carpeting. Eliminate all objections.
5. Consider offering a bonus to the agent who sells your home.
6. Lower your price. You absolutely must be the BEST value in the area. If you have few or no showings, you aren't in the running.
7. Offer to pay a few thousand dollars of the Buyer's closing costs.
8. Do you own a vacation home that you could give a free vacation stay to the buyer?
9. Spruce up the landscaping and the entry to the home.
10. Hire a Realtor who can provide a free moving truck to your Buyer (like Premier Team)

Wednesday, April 19, 2006

Homebuying Sinks In Response to Rising Mortgage Rates

Overall mortgage applications slid 1.7 percent last week on a seasonally adjusted basis from the week before, as interest rates continued to climb, the Mortgage Bankers Association reported today.

The seasonally adjusted purchase index decreased by 2.7 percent to 407.4 from 417.7 the previous week whereas the refinance index decreased by 0.4 percent to 1,526.1 from 1,532.4 one week earlier.

The Bradenton - Sarasota, Florida market continues to suffer from a decline in the number of buyers and excessive inventory.

Florida Foreclosures Third Highest of Any State

Across the nation the number of properties entering the foreclosure process in March were down 13 percent from February, but were up 63 percent from the same period a year ago, according to an industry report today.

A total of 101,587 properties entered some stage of foreclosure in March, according to Realty Trac's March foreclosure market report. The report shows a March national foreclosure rate of one new foreclosure for every 1,138 U.S. households.

"After rising more than 20 percent during each of the first two months of the year, foreclosure numbers experienced a fairly sharp correction in March," said James J. Saccacio, RealtyTrac CEO. "We saw a similar drop in March of '05, followed by four consecutive months of increases. Many buyers and investors typically start looking for properties in the spring, and that could have provided distressed homeowners a better chance of selling their properties to avoid default or foreclosure."

Florida foreclosures decreased 7 percent from the previous month and 12 percent from March 2005, but the state still reported 9,283 properties entering some stage of foreclosure in March -- the third most of any state and a foreclosure rate 1.5 times the national average.

Here in our Bradenton - Sarasota, Florida market we work with investor's looking for bargain properties. And, right now, it's a buyer's market!

Tuesday, April 18, 2006

Danger of Prepaying Your Mortgage

QUESTION: About two years ago, we refinanced our home mortgage and obtained a 5.25 percent fixed-rate mortgage. We loved the low monthly payments. Then, about six months ago, my wife inherited enough money to pay off our mortgage in full, which we did. Next, I received an excellent buy-out offer from my employer to take early retirement, which I did. But now my former employer drastically cut my retirement pension and eliminated health care coverage. As I am only 63 and my wife is 57, we are not yet eligible for Medicare. I took early Social Security, but that doesn't help much. We are rapidly eroding our savings, which were drawn down when we paid off our mortgage early. We "maxed out" our home equity credit line and can barely afford the payments. What can we do? --Richard R.


DEAR RICHARD: Your situation shows why I constantly recommend not prepaying a mortgage in full unless you have so much money you will never need to borrow on your home equity. Obviously, that is not your situation.

Because you have insufficient income to qualify for a new home mortgage, except perhaps from a "loan-to-own" mortgage shark, your only viable alternative is a senior citizen reverse mortgage.

However, there is one little problem. Your wife is too young. To qualify for a reverse mortgage, she would have to quitclaim her half of the house to you.

Because you are only 63, with a long life expectancy, you won't qualify for much monthly lifetime reverse-mortgage income. I wish I could be more positive, but now you know why I do not recommend prepaying mortgages unless you have lots of spare cash.

Monday, April 17, 2006

Are Real Estate Housing Market Headlines Confusing?

I just read this Inman News article with began...

"On Jan. 20, 2005, a headline in the San Francisco Chronicle stated that Bay Area home sales were down and that prices slid. If you, like many readers, scanned only the headlines, you might have thought home prices in the area had plummeted. Actually, they rose 14.3 percent between December 2004 and December 2005, according to DataQuick Information Systems.

"Sensational headlines sell newspapers. Who wants to read about a real estate market that's not as robust as it was a year ago--one in which home prices aren't going up as fast as they were this time last year? Ho-hum news doesn't do much for newspaper sales.

"Behind the scenes of the Bay Area home sale market, the real story is not that home prices "slid" from one month to the next. It's that the market is doing surprisingly well despite the negative press. In a nutshell, well-priced homes that are properly prepared for sale are selling for good prices and within a reasonable period of time."

Our Bradenton - Sarasota, Florida market has had it's share of negative headlines, however we (at Premier Team) are actively selling homes. Even though there is a 7 month supply of homes on the market, the listings that sold last month sold in an average of 61 days.

We have a strategy that is working, even in this less than ideal market. Give me a call and we can talk about it! --Dan Forbes

Sunday, April 16, 2006

How To Own Real Estate in Your IRA SEMINAR April 20th

The Florida real estate market is exploding, which means that some of you are making hefty profits. Unfortunately, profit creates what I consider a "high quality problem".. taxes!

Here are few tips about how you can shelter some of these profits:

A lot of people lessen the importance taxes have on real estate profits due to the reduced tax rate given to long-term capital gains, but that is only part of the story. If you purchase and sell a property within a twelve-month time period, you will have to pay taxes on profits at levels as high as 35%. Ouch - 35% of your return on investment could disappear!

What can you do to eliminate this tax burden?

How about making your investments inside a taxexempt trust? In particular, a trust that most of us refer to as an Individual Retirement Account, or IRA.

The most common misconception about IRAs is that they are just a different type of brokerage account, limited to investments in stocks, mutual funds, bonds, annuities, etc. That is simply not true. By definition, an "individual retirement account means a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries." My intention is not to bore you with IRS codes or technical jargon, but to leave you with a clear and simple message. An IRA is merely a trust that, when created properly, can be used to accumulate wealth for retirement.

Let's walk through a simple example: You have $150,000 inside your IRA account, and you're sick and tired of losing money in the stock market. You decide to open a self-directed IRA and choose to have your IRA invest in a land deal in Coolidge, Arizona. Eight months go by and you find a buyer for your parcel for $225,000. Your IRA sells the property and creates a $75,000 profit on the investment.

How much do you have to pay Uncle Sam in taxes on the $75,000 profit within your account? Zero, zilch, nada, nothing!

You also do not have to worry about doing a 1031 exchange since your IRA is already a tax-exempt entity. Exciting? I tend to think so

Attend our seminar April 20th to learn more!

Do you have funds in a Roth IRA, Traditional IRA, or 401K that you would like to use to invest in real estate? This seminar will cover what you MUST know about investing in real estate using your retirement account.

Take away a step-by-step strategy to build wealth through real estate using your retirement account while minimizing your taxes.

In two hours you will learn:
  • The secrets on how to make this complicated (but VERY lucrative) process as simple and hassle-free as possible.
  • How to not only get your investment income tax-deferred, but actually get it TAX-FREE for life!
  • Using financing to purchase property inside you IRA
  • How to choose the right investment property and exactly how to get started.
  • How to implement your strategy and find opportunities for investing.

Register at:

http://www.bradentonrealestate.com/?fuseaction=site.seminar

Friday, April 14, 2006

An Easter Message From President Bush

The Lord is risen indeed… Luke 24:34

I send greetings to Christians around the world as they gather to celebrate the Resurrection of Jesus Christ. Jesus' life and teachings continue to speak to every generation, and Christians believe his miraculous Resurrection provides hope for the future and offers us the promise of new life.

Through His ministry and sacrifice, Jesus demonstrated God's unconditional love for us. He taught us the importance of helping others and loving our neighbors. His selfless devotion and mercy provide a remarkable example for all of us.

As families and friends gather to enjoy this Easter season, we celebrate God's gift of freedom and His love that conquers death. For those who observe Easter, our faith brings confidence that good will overcome evil and that joy is everlasting. Today, we give thanks for God's many blessings and pray for His peace in the affairs of men.

Laura joins me in sending our best wishes for a happy Easter.

GEORGE W. BUSH

Thursday, April 13, 2006

Housing Bubble: Top 30 Cities To Watch

The real estate market is shifting -- in what direction depends largely on where you live.

Bank Rate.com has released their forecast of the 10 cities where prices and values should continue to rise, 10 cities with little room to run and 10 that are most likely to decline.

The forecast has three parts:
10 markets where housing prices and values will continue to remain strong
10 cities where appreciation will pretty much top out
10 cities most likely to experience a decline

If you would like the forecast in pdf format just drop me an email asking for the "Top Ten Forecast". It's free! Contact me at:
http://www.bradentonrealestate.com/index.php?fuseaction=site.contact

Speculation Fueled Bradenton Sarsota Market in 2005

Today's Sarasota Herald Tribune writes...

A national study of housing sales during 2005 confirmed what many had suspected -- that speculation has been rampant in the booming real estate market.

Almost 40 percent -- or 3.34 million -- of the homes and condominiums bought last year nationwide were by people who had little or no intention of living in them, the National Association of Realtors found.

Of those, 27.7 percent were strictly investments while 12.2 percent were vacation homes, arguably investments themselves.

A Herald-Tribune analysis of single-family home ownership records in Florida shows the same pattern, with far fewer recent new owners taking advantage of tax breaks reserved for resident homeowners, implying that they are investment properties.

What affect might this have on the market? Read the whole article at
http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20060413/BUSINESS/604130618

Wednesday, April 12, 2006

Housing Market to Remain Strong for 2006

According to the National Association of Realtors'® (NAR) monthly housing market report, home sales should generally level out and remain at historically high levels, making 2006 the third-strongest year on record.

David Lereah, NAR’s chief economist, says mortgage interest rates are trending up but will remain favorable. “Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect,” Lereah said. “Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau, meaning this will be the third strongest year on record.” He expects the 30-year fixed-rate mortgage to rise to 6.9 percent by the end of the year.

What's the most important ingredient of a strong housing market?

Multiple Choice:

What is the most important ingredient of a strong housing market?
1. Super low interest rates
2. Housing supply
3. A robust MLS
4. None of the above

Right answer: None of the Above.

What was missing is the right answer: a job.That is why we were happy to read yesterday that the unemployment rate slipped to 4.7 percent from 4.8 percent, the lowest rate since July 2001.

Manatee County Stats as of June 2005
POPULATION: 293,837
5-YEAR GROWTH RATE: 11.3%
MEDIAN AGE: 43.1 years old
MEDIAN HOUSEHOLD INCOME: $42,185
2004 UNEMPLOYMENT RATE: 4.1 %
MEDIAN HOME PRICE: $316,000

"Job growth from 2001 to 2005 has been the strongest in the southwest corner of the state, led by Manatee County, with a growth rate over that period of 14.8%." (Florida Trend, Economic Yearbook 2005)

Florida is generating jobs at the fifth-fastest rate in the nation and tops in the Southeast. Construction, retail and temporary jobs are multiplying the most, creating pockets of worker shortages in southwestern parts of the state. As a result, the state has the third-best unemployment rate in the United States.

Our Bradenton - Sarasota area is in great demand for people relocating to Florida. We love working in this beautiful market.

Tuesday, April 11, 2006

New Housing Market is Booming in Plant City

I just came across this news today on TBO.com News.

"PLANT CITY - If there's a slowdown in the new housing market, the city's latest building permit report doesn't reflect it.

"Residential development accounted for slightly more than half of the $6.5 million in permits pulled during March. Permits for single-family homes have been strong for months as developments continue to move off the drawing boards.

"Things are booming," said Marion Smith, president of the Greater Plant City Chamber of Commerce.

"National experts have talked recently about a cooling of the new home market due to rising interest and a glut of inventory. But Plant City's building permit reports show now signs of a slowdown."

We are encouraging our Bradenton - Sarasota, Florida buyers and especially investors to consider looking North of the Manatee River in Manatee County and Hillsborough County.

Where is Plant City? It's located along the Interstate 4 between Tampa and Lakeland.
http://www.ci.plant-city.fl.us/

Interested in investing in Real Estate? We can help.

Dan Forbes

Sarasota Overpriced by 59% - Good Grief!

A recent article on cnn.money.com refers to a study byGlobal Insight, a financial information provider, and National City Corp. listing what they consider overvalued and undervalued markets.

The article says, "California and Florida accounted for 18 of the 20 most overvalued markets, with Naples, Fla. leading the way. A median home in Naples now costs $367,100, according to the Office of Federal Housing Enterprise Oversight (OFHEO), nearly double what the study's authors estimate it should."

A look at the list shows that the study concludes the Sarasota market is 58.90 percent overvalued. Good grief! Where do they come up with that? True statistics show the Sarasota market is still up about 25% over last year according to an appraiser I just spoke with.

Request a link to the article by sending an email. Contact me at:
http://www.bradentonrealestate.com/index.php?fuseaction=site.contact

The lesson: Be careful of what you read! Yes, the market is slower and prices are not escalating like they have been. But the sky is not falling.

Monday, April 10, 2006

Vacation Homes and Second Homes Set Record

According to the National Association of Realtors vacation homes and investment home sales both set records in 2005. These sales accounted for 40 percent of all transactions.

Have you considered owning a second home or vacation home as part of your retirement planning? You may be interested in our Seminar April 20, 2006 on How to Use Your IRA to Invest in Real Estate.

You can see the details on our website http://www.BradentonRealEstate.com

Friday, April 07, 2006

Mortgage Rates UP But Still Historically Low

Rates on 30-year mortgages rose this week to the highest level in 2 1/2 years as financial markets began to worry more about inflation.

Mortgage giant Freddie Mac reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.43 percent this week, up from 6.35 percent last week.

The increase meant that rates surpassed the previous 2006 high of 6.37 percent set in early March and climbed to the highest level since the 30-year mortgage was at 6.44 percent the week of Sept. 5, 2003.

Analysts attributed the increase to a pickup in economic growth in the early months of 2006 and renewed concerns about higher energy prices.

Thursday, April 06, 2006

Florida Still The Hottest Market

Florida still holds the title as the hottest market in the Southeast for home prices, soaring nearly 27 percent last year, according to an analysis report issued by the Federal Deposit Insurance Corp. The median price for a home in Florida rose by a record rate of $56,000 in 2005. Leading the pack was Naples at $113,000 in appreciation last year. The overall report also shows healthy job creation across the region. Florida is generating jobs at the fifth-fastest rate in the nation and tops in the Southeast. Construction, retail and temporary jobs are multiplying the most, creating pockets of worker shortages in southwestern parts of the state. As a result, the state has the third-best unemployment rate in the United States.

Our Bradenton - Sarasota area is in great demand for people relocating to Florida. We love working in this beautiful market.

Pending Sales Indicate Market is Balancing

Pending home sales are showing signs of leveling out, indicating that the housing market is entering a period of stabilization, according to the National Association of Realtors® (NAR).

The index is based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.

David Lereah, NAR’s chief economist, said most of the cooling in the housing market has already occurred. "We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations," he said. "This normalization is healthy because it is taking a lot of the pressure off of the decision process for both home buyers and sellers -- pressure that was driving abnormal rates of price growth across much of the country over the last few years."

Here in Bradenton, Florida our pending sales are UP for the first time in several months. We are seeing more buyer activity and expect the Spring season to usher in higher sales.

Wednesday, April 05, 2006

Housing Bubble Fears Overblown

Fears of a real estate bubble are overblown, and homes remain undervalued in many markets, according to new research from a pair of Pomona College professors who developed a fresh methodology for gauging bubble trouble. By comparing the cash flow generated by owning a home to the cost of renting a comparable house, economics professors Gary Smith and Margaret H. Smith found bubble conditions in only one of the 10 metropolitan U.S. housing markets evaluated.

In a paper presented March 31 at the Brookings Institution in Washington, D.C., the husband-and-wife team concluded that buying a home generally remains an attractive long-term investment - even if buyers are conservative in their assumptions about how much home prices will rise in the future.

''Most of the country is certainly not in a bubble if you define a bubble as prices far above fundamentals,'' said Gary Smith, who is the Fletcher Jones Professor of Economics at Pomona College. ''The average person in the U.S. is still better off buying than renting.''

So why all the talk about a housing bubble? The Smiths note in their paper that as housing prices have risen dramatically in recent years, some researchers have concluded that homes are now priced well beyond their fundamental values. But the Pomona College professors question the implicit assumption that market prices previously matched fundamental values but now have exceeded them. ''Perhaps housing prices were too low in the past and recent prices have brought market prices more in line with fundamentals,'' they write.

Beyond that, the Smiths question the methodology by which some researchers have concluded that the housing market is ''bubbly.'' The report notes that ''housing-bubble discussions generally rely on indirect barometers such as rapidly increasing prices, unrealistic expectations of future price increases, and rising ratios of housing price indexes to household income indexes. These indirect measures cannot answer the key question of whether housing prices are justified by the anticipated cash flow.''

50 Riskiest Housing Markets - Free Report

Forty-eight of the nation's 50 largest metropolitan statistical areas face a greater risk of declining home prices this quarter, but the continued strength of national and local economies suggests that in the absence of an economic shock, the once red-hot housing market will cool gradually, an industry report found today.

House-price appreciation has slowed in nearly half of the metropolitan statistical areas compared with last quarter, according to PMI Mortgage Insurance Co.'s latest risk index.

To receive your FREE copy of this timely report send me an email asking for the "50 Riskiest Markets Report". Contact me form:
http://www.bradentonrealestate.com/index.php?fuseaction=site.contact

Saturday, April 01, 2006

Bradenton Makes Top 100 List...

Best cities in which to live.

Relocate America has included eight Florida cities in its 2006 list of the 100 best cities to live. The list takes into account such factors as schools, economic health, population and crime rates. Bradenton, Venice, Sarasota, Punta Gorda, St. Petersburg, Clearwater, Jupiter and Mount Dora all made the list. Manatee Chamber of Commerce President Bob Bartz thinks Bradenton's inclusion proves that it has been discovered, and he anticipates new development and redevelopment projects to emerge as a result. "We've been able to maintain much of our small-town feel in the area even while we're part of a major metropolitan area," says Bradenton Ward 4 Councilman Bemis Smith.