Bradenton Florida Real Estate News

Friday, September 29, 2006

Understanding home price appreciation

Home price appreciation refers to an increase in value of your home and the property. When your property "appreciates" you have greater equity against which to borrow, and you realize a greater profit when you sell. Property values fluctuate regularly for many different reasons, so how do you know the home you’re buying is going to appreciate over the years?

By and large, the economy is the driving factor of real estate appreciation in the U.S. That includes interest rates as well as the current employment rate, business growth in the area, housing supply and demand and affordability. Regional economic and social factors also affect real estate appreciation. Many homebuyers choose to live in areas with the best and most convenient features for households to thrive, such as a close proximity to schools, jobs and commerce.

A good school district can also be an indicator of good home appreciation. It is believed that good schools help foster lifestyles associated with high levels of attainment at the individual, household and community level.

Demographics also play a role in real estate appreciation. For example, during the 1980s, much of the baby boomer generation (People born between 1946 - 1964) was buying real estate, causing homes to appreciate at a faster rate than inflation and made real estate a profitable investment. The group referred to as Generation Y – born roughly between 1980 and now – is the biggest generation since the baby boomers. Their contribution to real estate is expected to be far greater than their older siblings of Generation X (born between 1965 and 1979).

There are some aspects that significantly contribute to real estate appreciation, which you may want to ask your agent about when shopping for a home:

Recent sales. Ask your agent or retrieve public records on real estate sales in the neighborhood you wish to live in. How many home sales have there been in the past year? What are the asking prices? Do the final sales exceed the asking prices? Here in our Bradenton - Sarasota, Florida market knowing recent sales is extremely critical.

Appreciation history. Have home prices risen or declined over the past 5 to 10 years? Is the neighborhood considered desirable because of its location, amenities or affordability? Here in our Bradenton - Sarasota, Florida market home prices went up 145% in a recent five year period. Currently prices have declined somewhat. Understanding which way the market is headed is imperative.

Local business economy. Is there a good mixture of business or does the area rely on one industry? Have any new industries moved into or out of the area? Is there a lot of new development nearby? Economic changes such as a large factory going out of business can dramatically affect demand for housing in a particular area. Our Bradenton - Sarasota, Florida economy is strong with low unemployment. However, housing affordability is becoming more of a factor.

It is important to note that while appreciation is nice to have, it should not be the reason you decide to buy a home in a particular area. Even if you buy a house in a rapidly appreciating area, there is no guarantee that its value will rise by the time you want to sell it. That’s why it’s best to pick a neighborhood – and a home – in an area that suits your own needs.

Thursday, September 28, 2006

Join the Bradenton Real Estate Club

We are happy to announce the new Bradenton Real Estate Club and extend a personal invitation for you to join us.

WHEN: Every Friday, 11:45 - 12:15 Order and enjoy lunch. 12:15 - 1:00 Discussion

WHERE: Stoneybrook Clubhouse in Heritage Harbour, 7515 Grand Harbour Parkway, Bradenton, Florida 34212. (I-75 Exit 220, go one mile East on State Road 64 to entrance).

WHAT: This is a round-table luncheon and discussion of real estate topics and trends open to the general public, investors, landlords, owners, renters, buyers, and sellers.

INFO: For information call Dan Forbes at 941-746-0505 or visit our web site at

We are currently developing the members only section of . This Members-Only section of our web site will contain a wealth of information, resources, and tools. Members will have access to the following:

= Resources like handouts, power point presentations, and notes from our weekly meetings
= A library of articles and advice about real estate trends, topics, and investing
= Real estate investing tips and practical advice
= Tools like spread sheets, calculators, cash-flow analyzers, etc.

I hope to see you there!

Dan Forbes (e-PRO,CRS,GRI)
2005 Realtor of the Year (Manatee Assoc. of Realtors) PREMIER TEAM Inc.
3850 E. State Road 64
Bradenton, FL 34208
Office: (941) 746-0505
Fax: (941) 749-0383
Toll Free 1-877-646-8326
"Premier Service. Premier Results."
Licensed in the State of Florida
Serving Florida's Gulf Coast

Tuesday, September 26, 2006

Bradenton - Sarasota Home Sales Down

Today's area papers carried stories about our local real estate market.

From the Sarasota Herald TribuneHeadline:
Housing prices are cooling off
Sales of existing homes have also dropped from last year.


For the second month in a row, the Sarasota-Bradenton market posted a double-digit drop in median sales price.

A single-family home sold for $309,700 during August, down 11 percent from a median of $347,400 during the same month in 2005. That is on the heels of an 11 percent drop during July.

It is a sure sign that the houses that are moving in a market saturated with listings are the ones most competitively priced.

"The biggest mistake today is they price their home off their neighbor's home down the street," said Dan Forbes, co-owner of Bradenton's Premier Team Inc. "Their neighbor's home has been on the market for five months and it still hasn't sold.

Continue reading the article at

From The HeraldHeadline:
Bradenton home sales take a dive
More houses being purchased at below area's average price


MANATEE - The month of August let a bit more air out of the housing market, both locally and statewide.

Existing home sales fell 34 percent statewide, and 28 percent in the Bradenton-Sarasota market, according to the Florida Association of Realtors.

Statewide, the median price of housing flatlined at $248,400, the same as it was a year earlier.

Locally, the Bradenton-Sarasota market hung onto its distinction as the state's fifth most expensive housing market, even though the median price took an 11 percent tumble, falling from $347,400 last year to $309,700 this year.

Continue reading the article at

Monday, September 25, 2006

Florida home sales report just released

ORLANDO, Fla., Sept. 25, 2006 -- Mirroring a national pattern, Florida's housing sector continued to show signs of adjustment in August as many markets reported higher inventory levels of homes available for sale and a slowing pace of sales as buyers weighed more options.

A total of 14,736 existing single-family homes sold statewide last month, a decrease of 34 percent from the 22,421 homes sold during the previous August, according to the Florida Association of Realtors® (FAR). Statewide, the existing-home median price remained unchanged at $248,400 last month; a year ago, it was $248,400, according to FAR.

In August 2001, the statewide median sales price was $130,800, representing an increase of about 89.9 percent over the five-year period, according to FAR records. The median is a typical market price where half the homes sold for more, half sold for less.

Nationally, the median sales price for existing single-family homes was $231,200 in July, up 1.5 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $567,360 in July; in Massachusetts, it was $361,750; in Maryland, it was $316,697; and in New York, it was $269,700.

Economists with NAR point out that, after five years of outstanding growth, the housing market now is going through a period of adjustment and is more of a balanced market between buyers and sellers. Rising mortgage rates, speculative investors pulling back and many first-time buyers being priced out of some markets during the boom years have contributed to the normalizing housing sector, according to industry analysts, who note that 2006 is expected to be the third strongest sales year on record nationally.

Looking to Florida's existing condominium market, sales of existing condos also decreased in August, with a total of 4,375 condos sold statewide compared to 7,398 in August 2005 for a 41 percent decrease, according to FAR. The statewide median sales price for condos last month was $201,300; a year ago, it was $205,800 for a 2 percent decrease. The national median existing condo price in July 2006 was $225,600.

According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage was 6.52 percent last month, up from 5.82 percent in August 2005. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, theJacksonville metropolitan statistical area (MSA) reported 1,368 existing homes sold last month compared to 1,697 homes sold in August 2005 for a 19 percent decline. The market’s median existing home price rose 4 percent to $202,300; a year ago, it was $194,200. A total of 142 existing condos changed hands in Jacksonville in August for a 45 percent decrease over the 260 condos sold the previous year. The market's median existing condo price was $173,000; a year ago, it was $180,000 for a 4 percent decrease."

Right now, Jaguar fever is here and providing positive exposure of the Jacksonville area to the nation," says Kay Seitzinger, president of the Northeast Florida Association of Realtors and assistant manager with the South Beach office of Watson Realty Corp. in Jacksonville Beach. "Our housing market benefits from Jacksonville's strong economy that features diversification of industries and service companies."

Of the state’s smaller markets, the Lakeland-Winter Haven MSA reported a total of 465 existing homes sold in August compared to 541 homes sold a year earlier for a 14 percent decline. The area’s median existing home sales price rose 6 percent to $179,000; a year ago, it was $168,100. Twenty-four existing condos sold in the MSA last month for a 25 percent decrease over the 32 condos sold a year ago. The market's median existing condo price was $125,700; a year ago, it was $95,000 for an increase of 32 percent."

We benefit a lot from our great location between Tampa and Orlando," says Arthur Mattson, treasurer of the Lakeland Association of Realtors and owner of Lakeland Realty. "I don't think there's a better place to live -- our community has a nice, small-town atmosphere, and we have great leadership in local city government that really supports the housing industry. Owning your home is still a great investment -- but buyers and sellers need to understand what’s going on within their local market areas, so it’s even more important now to work with a real estate professional who can guide you through the negotiation process."

Source: Florida Association of Realtors

Friday, September 22, 2006

Sellers Slow to Realize It's a Buyer's Market

It’s not a seller’s market anymore, but some sellers haven’t gotten the word.

“There’s a disconnect between buyers and sellers,” says Dona Crowder, a former president of the San Francisco Association of REALTORS® and an associate with Pacific Union-GMAC.

“We’ve shifted to a normal market where buyers can negotiate, where they’re no longer in hurry. But some sellers are not aware of the change.”

She says it’s hard to convince sellers on issues regarding pricing because they’re often basing their ideas on sales prices from months before. “Pricing is a matter of perspective. Until you have the perspective, you can’t see anything.”

As the real estate market cools, some real estate professionals are finding themselves in the unfamiliar role of explaining to sellers that they can’t hope to get what they want. “It’s a classic dilemma in the changing dynamics of real estate,” explains John Asdourian with McGuire Realty.“Both parties are slow to accept that change.”

Crowder says many sellers balk when they don’t get the price they want and decide to continue living in the home or rent it.

She estimates as many as 30 percent of sellers don’t need to sell and are choosing other avenues when they don’t get their price. Overall, this is one factor in keeping prices from plummeting, but it’s also keeping sales volume low.Source:

San Francisco Chronicle, Carol Lloyd (09/01/06)

Most Overpriced Home Markets

100 cities ranked. Despite a slowdown, some values are still out of whack. Plus: where the bargains are.

By Les Christie, staff writer
July 26 2006

NEW YORK ( -- After years of local home markets getting more and more overvalued, the trend has reversed, according to an analyis published this week.

Each quarter, Local Market Monitor, which provides research to the real estate industry, assesses 100 markets, comparing selling prices to "equilibrium" values. Company president Ingo Winzer bases those values on local economic and population growth, construction costs, vacancy rates, household income in the area and interest rates.

The number of overpriced markets in the first quarter, defined as having a median home price more than 15 percent higher than equilibrium, fell by two to 38. In the prior quarter, the number of overvalued markets had climbed to 40 from 37.

Winzer says that 56 of the 100 markets he covers are now fairly priced, up from 54 last quarter.
The median home, however, is still overpriced by an average of more than 14 percent, Winzer judges, and homes in many markets are still way too high. This matters because those markets have much more potential for the kind of steep decline that could be disastrous for homeowners - and the local economy.

On Tuesday, the National Association of Realtors reported for third straight month in June -- it also said that the market had finally shifted from a seller's market to a buyer's market.

By Winzer's figuring, Santa Barbara is the most overpriced housing market in the nation (see table below). The median home there costs $567,300, 80 percent more than it should.

Naples, Fla. is a close second - the median home there will set a buyer back $417,400, 74 percent above equilibrium. Will Naples pass Santa Barbara as No. 1? Prices there rose 38 percent during the past year versus just 11 percent in Santa Barbara.

The nation's most undervalued real estate market is Fayetteville, N.C. At a median price of $175,800, the median house costs 21 percent below equilibrium.

Texas has some of the best bargains around. McAllen homes cost a median of $123,200, 19 percent undervalued. Among the bigger cities, Dallas (-14 percent), Houston (-14 percent) and San Antonio (-8 percent) all have great buys.

See the table for below for a look at all 100 markets that Winzer tracks.

Monday, September 18, 2006

Florida's real estate forecast is sunny

Florida real estate may be in a slump, but its future is golden. That's the good news former Wall Street economist Richard Hokenson delivered last week to Tampa Bay's Chartered Financial Analysts. "Ride the wave," he told them, but he wasn't talking about surfing. Hokenson, who runs a demographics consulting firm in New Jersey, said the wave of baby boomers rolling into retirement provides an investment opportunity. "There's a baby boom tsunami and a fixed supply of coastal land," he said at the meeting at the University Club. Whether boomers can afford a Florida retirement may depend on whether they can shed their NIKEs, the acronym Hokenson bandied for "No Income Kids with Education." Hokenson says population trends explain 70 percent of what happens in the economy.

© St. Petersburg Times. All rights reserved.

Sunday, September 17, 2006

Appraisas getting tougher

Today's Sarasota Herald Tribune ran the story below. It focuses on the trouble appraisers are having valuing properties in a declining market.

Cooling market challenges appraisers

In cooling real estate markets, it's the hottest question: How do you value a specific piece of property when local home sales are down 20 percent to 40 percent from last year, inventories of unsold homes have ballooned by 200 percent or more, and all the trend lines are pointing negative?

It can be tough. Traditionally, real estate appraisers focused heavily on sales of similar properties -- "comparables" that closed in recent months -- to make their valuations. But that doesn't work well in markets that had been superheated -- prices rising at 1 percent to 2 percent a month -- but are now stalled out or falling.

Continue reading at

Friday, September 15, 2006

Home prices expected to fall

Housing prices will have a limited fall throughout 2006, according to testimony submitted by the National Association of Realtors® (NAR) at yesterday's Senate Banking Committee hearing on the economy. In addition, NAR noted that the sellers’ market is transitioning to a buyers’ market, which can be healthy for some local economies.

"For the past five years, the housing market has been a steadfast leader in the U.S. economy," Thomas M. Stevens, president of NAR, told the Senate Subcommittee on Housing and Transportation and the Senate Subcommittee on Economic Policy. "After five years of outstanding growth, the housing market is undergoing a period of adjustment and becoming more and more of a balanced market between buyers and sellers."

Stevens said that home prices nationwide are still showing slight appreciation -- though less than 1 percent -- where over the past few years homes were appreciating at double-digit rates. "While recent developments raise concern, it is important to remember that the housing market varies significantly across the country," said Stevens. One-third of the country (by population) is still seeing rising home prices, including Alaska, New Mexico, Vermont and many states in the South, excluding Florida. States that experienced the greatest increases in home prices in recent years are experiencing significantly lower sales, such as Arizona, California, Florida, Nevada and Virginia.

"Contrary to many reports, there is not a 'national housing bubble,'" said Stevens. "We were seeing home prices and mortgage debt servicing cost-to-income ratios increase to unhealthy levels in some housing markets, which precipitate an adjustment." Also contributing to the cooling housing market is an increase in mortgage rates of nearly one point, speculative investors pulling back and first-time buyers being priced out of the market.

Adjustments to the housing market are not unique and can often times be necessary, said Stevens. In addition to the rapid appreciation of years past, the rise in mortgage rates affects a homebuyer’s ability to finance and purchase a home. "Pressure is being felt in the housing market due to rising mortgage rates," said Stevens. "With rising interest rates, homebuyers have become exhausted financially which explains why sales have tumbled in higher-priced regions of the country."

NAR forecasts a drop in home sales of around 8 percent in 2006, followed by another 2 percent decline in 2007. These numbers are based on the stabilizing of mortgage rates and modest expansion of the economy. Also predicted is that home price growth will be minimal -- less than 3 percent in 2006 and 2007. However, NAR warns that a significant shift in interest rates or a change in the economy would change this forecast. NAR notes that a soft landing is possible under the right circumstances and affordable mortgage financing is an important component in achieving this.

"Because the housing market strongly supports the economy and drives consumer spending, it is imperative that the Congress adopt policies that encourage homeownership and make purchasing a home obtainable for the millions of families who desire to own a home of their own. NAR stands ready to work with Congress to continue to open the door to the American dream of homeownership," said Stevens.

In 2005, the housing sector directly contributed more than $2 trillion to the national economy, accounting for 16.2 percent of the economic activity, according to the NAR testimony.

Source: Florida Association of Realtors

Tuesday, September 12, 2006

Internet is number one choice for homebuyers

More and more consumers are turning to the internet to search for homes. Recent studies show that 77% of homebuyers used the internet in their home search in 2005, up dramaticly from 41% in 2001.

Monday, September 11, 2006

Will home prices be flat next year?

NEW YORK -- Sept. 11, 2006 -- Home prices will gain an average 0.43 percent next year in the closely watched index of house prices compiled by the Office of Federal Housing Enterprise Oversight (OFHEO), say economists in a survey.

Five of 48 economists surveyed forecast gains of 5 percent or more, but 25 of them expect either no increase next year or a decline.

For this year, the economists expect an average 3.5 percent rise in prices, compared with gains of 13 percent in 2005 and 12 percent in 2004.

The OFHEO numbers are closely watched because they track the prices of the same houses over time, and aren't affected by the higher prices paid for better or bigger homes.

David Wyss, chief economist at Standard & Poor's Corp., says he expects price declines in areas that are overvalued, such as Florida, California and the Northeast, or those that are especially susceptible to economic weakness, such as the Great Lakes region.

Source: The Wall Street Journal, by Phil Izzo (09/08/2006)

Friday, September 08, 2006

Home prices may continue to fall

WASHINGTON - U.S. home prices will probably fall temporarily as the housing market corrects, the National Association of Realtors said Thursday.

Prices should bounce higher in a few months, said David Lereah, chief economist for the real estate group, "as the market works through a build in housing inventory."

Median existing-home sales prices should rise about 2.8 percent this year and 2.2 percent next year, the group said in its monthly economic outlook. Median new-home prices are expected to rise 0.2 percent in 2006 and 2.4 percent in 2007.

After adjusting for inflation, median home prices would be lower at the end of 2007 than they are now, the group projects.

Locally, the median price of existing homes in July tumbled 11 percent from July 2005, but that didn't alleviate the slump in sales.

"Buyers are sitting back waiting for the market to bottom out," said Barry Grooms, real estate agent with Re/Max Gulfstream.

Whereas last year there was more demand than supply, the numbers have now completely reversed.

"Last year we had to work all hours begging for listings," Grooms said.

The number of listings is now through the roof and it is buyers agents are struggling to find. In August, there were more than 6,500 properties for sale in Manatee County, according to the Multiple Listing Service.

Nationally, existing-home prices have risen at an average of 9.6 percent annually in the past four years, well ahead of the inflation rate. New-home prices rose 13.3 percent in 2004 and 9 percent in 2005.

"This year, sales are slowing, homes are plentiful and sellers are negotiating," Lereah said.

"Under these conditions, we'll probably see prices dip temporarily below year-ago levels as the market works through a build-up in housing inventory."

Other economists expect declines or little gain in home prices next year. Twenty-five of 48 economists surveyed in the Wall Street Journal's monthly survey said they expect little or no growth in the Office of Federal Housing Enterprise Oversight's home price index in 2007, the newspaper reported Thursday in its online edition.

The average gain in home prices predicted by the economists in the survey was 0.4 percent. The OFHEO index has never shown an annual decline in its 30-year history. The smallest gain ever was 1.3 percent in 1991.

Lereah said home prices typically appreciate at the rate of inflation, plus one or two percentage points. Buyers who plan to stay in their homes should see those gains, but "people who purchased last year with the intent of flipping are likely to get burned," he said.

From 1968 through 2000, median sales prices rose about 6.2 percent annually, while the consumer price index rose at a 5.1 percent annual rate. Consumer prices excluding shelter costs have risen 4.4 percent in the past year.

The real estate group is forecasting existing-home sales to fall 7.6 percent in 2006 and a further 1.7 percent next year. New-home sales are expected to fall 16.1 percent in 2006 and 7.1 percent in 2007.

Source: The Herald
- Herald Staff Writer
Melissa Followell contributed to this report.

Wednesday, September 06, 2006

How to make your home stand out from the competition

If you are thinking about selling your home you want it too stand out from the competition. Here are some helpful tips:
  • Test all door and cabinet knobs. Replace mis-matched or inexpensive hardware for a quick update. Buyers rarely can get beyond a knob that comes off in their hand as they attempt to use a door.
  • Take the time to paint walls, trim and ceilings. Keep adjoining rooms in the same color palette which will make your home appear larger and flow better. Clean up spills from messy painters. Hire professionals to paint mullions on windows and staircase spindles.
  • Slipcover mismatched furniture in a room that requires visual unification.
  • Discover ways to organize day-to-day room needs. Substantial wicker baskets or square stainless steel or brass can organize magazines, remote controls and toys. Books provide a good look, but vary them by laying some down and standing some up.
  • Wallpaper is considered fill-in-the-blank decorating . No two people have the same taste in this instant decorator wannabe. If it's more than three years old, take it down and paint in a neutral color. And wallpaper boarders are out.
  • Simple furniture rearrangement can bring new life to a tired space. Float sofas and coffee tables away from walls for a designer look. Use area rugs to anchor furniture groupings on bare tile and wood floors. Place groupings of candles and clear glass bowls filled with natural potpourri, fresh fruit or glass crystals on side and coffee tables.
  • Make sure there is balanced lighting in every room for dusk and evening showings. Dimmers help set the right tone.
  • Polish and wax hardwood floors to brighten and blend an old finish.
  • Clean every surface until it shimmers and shines. Clean can seal a deal. Don't forget the windows.
  • Purchase the best quality carpet pad which can make any new carpeting "cushy", and home buyers love cushy. Stay away from shag styles, buyers know it won't be around long in style cycles.
  • Streamline window fashions. Heavy drapes are in the minority. Think "let the light shine in" when placing blinds and shades. Light and bright can overcome other issues with home.
  • Freshen-up closets with closet organizers to maximize storage space and paint a neutral washable color. Make sure buyers can see the back of all closets and cupboards. Lighting is often overlooked feature in closets, but buyers will always turn on lights when viewing a closet, big or small. Thinning closets, cabinets, basements, attics and garages will also help your storage spaces look larger. If you can't part with items, rent a storage locker to hold items for decision making later.
  • Clean up the garage. Organize storage areas and take the time to clean the washing machine and dryer. To spruce up the hot water heater and furnace, wipe down with a strong cleaner.
  • Take a good look from the street or road at the front of your home. Look for shrubs that are over grown or dead and remove and replace with shrubs that are to scale to your home. Small inexpensive bushes send the wrong message.
  • Limit yard ornaments to a favored few. Excess ornaments can make yards look busy and buyers might want them included in a purchase contract.
  • Paint and refresh yard lights, flagpoles, mailboxes, fences and trellis. Don't forget the swing set or play equipment.
  • Replace broken bricks on terraces, cracked concrete patios and steps. Eliminate trips and falls on property showings.
  • Restore screens on porches and lanai's. Dirty, rusty and ripped screens limit functionality to homebuyers.
  • Don't l eave pets unattended for property showings especially when you know they can be aggressive or territorial around strangers.
  • Have carpets and area rugs cleaned before showing your home to potential buyers. Those allergic to animal dander and hair, even if they can't see your pet will know when their eyes and nose start to alert them to an allergic reaction. Many will not purchase a home that poses strong allergy problems.
  • Pick up dog droppings in the yard. Buyers out to take a look at the roof don't want any "take away".
  • A barking dog or overly friendly cats can kill a showing. Be pro-active and take your pets off site for showings. Hire a dog walker to occupy pets if you can't be home.

Source Mark Nash / BrokerAgentNews

4 renovations that kill a home's value

4 renovations that kill a home's value
As the housing market cools, you need to think twice about these upgrades.

By Gerri Willis, Money Magazine contributor
August 30 2006
NEW YORK (Money Magazine) --

Read a home decorating magazine or watch a cable-TV home improvement show, and you might easily conclude that any upgrade will pay off when you sell.

Not so.

Even in good times, not all projects have widespread appeal. You'll earn back virtually your entire investment in a kitchen or deck, but less than 75 cents on the dollar if you add a home office or sunroom, according to "Remodeling" magazine's annual cost vs. value survey.

What's worse, some renovations can even hurt you in the eyes of home buyers, a costly problem if you hope to sell in a softening market like today's.

The Swimming Pool
In some areas, especially hot-weather spots like Arizona and Florida, a pool is a must-have. In the Southwest, adding one boosts your home's value by 11 percent on average, according to a National Association of Realtors study.

But elsewhere it can just as easily turn off buyers, who worry about affording the upkeep and insurance. And if the most likely buyer of your home is a family with small children, think long and hard before installing a pool.

"People with younger children may be leery of houses with pools for safety reasons," says Barry Graziano, a real estate agent with Prudential Rand Realty in White Plains, N.Y. "I've had families walk away. A pool can cut down on the number of people who will want to buy your house."

The Addition
You've thought about how that great room and master bedroom wing will let the family spread out. But what you probably haven't considered is what the space will look like from the outside.

"A badly designed addition can kill your resale value," says Sal Alfano, the editorial director of Remodeling. "People focus on the floor plan and the flow, but not on how it fits into the neighborhood or even the house itself."

Watch out for boxy, poorly detailed additions. Proportions matter.

Trendy Finishes
Be careful of a style that will look dated when you throw your open house. Spotting the trend that's on its way out is trickier than you think. While it is easy to assume that sleek red European kitchen cabinetry is tomorrow's harvest gold fridge, other design staples that seem like sure bets can quickly drift into obscurity too.

That's what Mark Johnson, a Whirlpool design manager, says is happening to stainless-steel appliances. "For a period of time, people aspired to a commercial kitchen," he says. "What I am seeing is more interest in warmer finishes."

You want a design trend with legs. Johnson says custom panels that dress appliances in maple or mahogany finishes are likely to remain popular for several years.

Also, think about the materials for hardware like hinges and light fixtures. Polished brass or anything shiny is out. Brushed nickel is a better option. Johnson is betting that oiled-bronze finishes will take off next.

The Jacuzzi
The elaborate master bath is okay, but the big circular tub with 15 jets that can pulse or massage is risky.

According to Holly Slaughter, brand manager at, you're better off with an oversize shower that has a rain showerhead and multiple jets (think of it as a car wash for humans).

Busy boomers have little time to spend hanging out in the bathtub, and parents with small kids prefer a conventional tub. Ultimately, don't expect a future buyer to pay up for the luxury you considered an essential.

Monday, September 04, 2006

Announcing: The Bradenton Real Estate Club

You are invited to join the Bradenton Real Estate Club serving the Bradenton , Palmetto, Ellenton, and Manatee County Florida area.

Our purpose is to develop a network of people with an interest in owning, buying, and selling real estate in Manatee County and/or working with those who do. Membership is open to investors, landlords, owners, renters, buyers, and sellers.

We focus on helping people understand our current real estate market by educating our members on real estate topics and trends.

Is this club for you? Do you have an interest in any of the following?

-Manatee County real estate market conditions and trends
-Investing in real estate in Bradenton , Palmetto, Ellenton, or Sarasota
-Homes for sale in Bradenton , Palmetto, Ellenton, or Sarasota
-Buying a home in Bradenton , Palmetto, Ellenton, or Sarasota
-Landlording and Rentals
-Providing services to buyers, sellers, investors, or landlords.
-Providing services to homeowners in Bradenton , Palmetto, Ellenton, or Sarasota .
-Developing your network of Realtors, lenders, title companies, and other real estate related businesses.

Luncheon Meeting Every Friday, beginning September 8th at 11: 45 a.m.
The Stoneybrook Clubhouse in Heritage Harbour
7515 Grand Harbour Parkway , Bradenton , Florida 34212

Directions: I-75 to Exit 220. Go one mile East on State Road 64 to Heritage Harbour

This meeting is a round-table luncheon and discussion of real estate topics and trends.

The meeting is open to the general public, investors, landlords, owners, renters, buyers, and sellers.

Vendor-members are subject to approval. Our goal is to limit the number of vendors to one or two representatives per business category. For example: loan officer, mortgage broker, title company representative, home inspector. Vendors should call before attending a meeting.

Hosted by Premier Team Inc., REALTORS, Dan Forbes 746-0505

Friday, September 01, 2006

When is an Investor, Not an Investor?

Sometimes real estate investors get nasty little surprises at tax time. It happens when they discover they really weren't investors after all -- at least not in the eyes of the IRS.

There are three different definitions the IRS uses to define taxpayers who buy, sell or hold real estate. Your tax treatment will differ based on the definition that the IRS gives you. These three definitions are:
Real Estate Dealer
Real Estate Developer
Real Estate Professional

Now, let's look at each of these in more detail.

A real estate dealer is someone who is in the business of buying and selling real estate for short-term profits. A real estate dealer is known by other names: wholesaler, flipper, or rehab'er. Although the person gets the label of "real estate dealer," it's a decision that's made based on each property. It's possible to be a dealer on one property, but not on another.

The key question is whether the property was purchased to sell or purchased to hold. If you "flip' the property for a short term property, it's just the same as if you flip a burger -- you have a business. That means as a real estate dealer your income is subject to self-employment taxes and is taxed at the ordinary income tax rate. There's one more additional wrinkle, as well.

Normally when you sell a property "over time" you can take what's called the "installment method" for calculating tax due. You pay tax only as you collect payments. A real estate dealer can not take the installment method. That means if you're considered a real estate dealer for a property that you sell and carry back paper on, you'll pay tax on the whole profit now -- whether you've collected any money or not.

The second definition is real estate developer. A real estate developer is someone who renovates or changes the use of a property. It could be the person who buys an apartment building for a condo conversion, the developer who turns bare land into a trailer park or simply the person who buys a wrecked house and does extensive work before it's habitable.

The tax challenge for a real estate developer occurs when he or she remodels or constructs a property. Costs that are incurred during the time the property is in development must be capitalized and later either expensed or amortized when the property is put in service or sold.

Just imagine: You might be paying mortgage interest, property tax, construction costs, and other property related costs and not be able to deduct a dime of it.

The tax news gets even worse still, though. As a real estate developer, you also must capitalize your "indirect costs." This includes administration, management and just the ongoing costs of running a business.

That's what happened to Jack and Sue when they expanded their rental business to include business development. They bought a piece of land to be developed into a trailer park. They grumbled about the fact that they couldn't take a current deduction for the interest and property taxes paid for the trailer park. They even knew that they couldn't take a deduction for the costs of developments. The bad tax surprise occurred when they discovered that the cost of their rental office was now not completely deductible. Their office secretary, for example, fielded calls related to the construction. That meant part of her salary had to be capitalized into the trailer park as well. There is a cost to development and it isn't always the obvious cost of the bills you pay for the development. It also includes the additional tax burden you'll have during the development.

The final classification is "real estate professional." Finally, we have an IRS definition that will put money in your pocket. A real estate professional is someone who is involved in real estate activities and owns 5 percent or more of his or her business. If the real estate professional is employed somewhere else, he or she needs to spend more time in real estate activities than the other employment and a minimum of 750 hours in real estate. If you're a real estate professional, you'll be able to take a full deduction for any real estate losses against your other income.

A rose by any other name would smell as sweet, Mr. Shakespeare tells us. But a real estate investor with the wrong name could cost you big time in taxes, the taxman says.

Written by Diane Kennedy
Source: Realty Times