Florida’s Real Estate Forecast: Still Sunny

23 10 2006

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.

Source: St. Petersburg Times

Homebuyers More Cautious with Their Money

23 10 2006

Compared with a year ago, more adults are buying homes at prices they can afford rather than trying to stretch themselves financially.

Among those who have purchased a home in the past three years, 78 percent say they bought within their price range, up from 67 percent last year, according to a survey conducted by Harris Interactive for Wall Street Journal Online.

Single adults are more likely than married people to stretch their finances; 30 percent of single adults, compared with 15 percent of married couples, say they purchased a home above their price range.

Thirty-eight percent of borrowers said they used “creative” or “pay option” mortgages, up from 33 percent a year earlier.

Fourteen percent used interest-only mortgages, which let them avoid paying principal in early years of the loan. That’s down from 17 percent a year earlier.

Another 12 percent combined traditional mortgages with home equity loans or other lines of credit. Nine percent used mortgages that let them choose what to pay each month, and 3 percent took out mortgages that let them skip some payments.

Source: Planet Realtor

U.S. Population Hit 300 Million Milestone

23 10 2006

According to the U.S. Census Bureau, the U.S. population hit 300 million this month and all those people must live somewhere.

The Census Bureau expects a surge in the country’s population to 400 million during the next 35 years, with immigrants accounting for most of those newcomers. With about
86 people per square mile nationwide now, the U.S. would seem to have plenty of room for more, but where will these new Americans live?

As it grows, the population is increasingly concentrated in just a dozen states, and the heartland in states like North Dakota, Ohio, Michigan, Kansas and Nebraska are either losing population or just staying even.

The Center for Environment and Population, a nonpartisan research group, calculates that more than half the population lives within 50 miles of the coasts, and half of these new residents will join them. But other areas with reasonable housing costs will become a draw, and there’s some sign that’s already happening. The foreign-born population of Tennessee is up 140 percent in the past five years, while Idaho and Utah grew by 10 percent — twice the rate of the U.S. generally.

Source: The Wall Street Journal

Housing Starts Rise in September

23 10 2006

Construction of new homes and apartments, which had been falling in the face of a weakening housing market, posted an unexpected increase in September.

The Commerce Department reported that construction rose by 5.9 percent last month to a seasonally adjusted annual rate of 1.772 million units. It was the first increase after three consecutive monthly declines.

Analysts, however, still expect housing to move lower as builders continue to work through record levels of unsold homes. Building permits, a good sign of future activity, fell in September for an eighth consecutive month.

Source: The Associated Press

One-Stop Shop is Tops

23 10 2006

Homebuyers pay no more in settlement costs when they deal with affiliated real estate companies than they do if they conduct business with independent, unaffiliated companies, according to new research. The study, conducted by CapAnalysis Group for the Real Estate Services Providers Council, whose members include title companies, negates the theory that affiliated businesses provide inadequate service or overcharge customers, says Brian Levy, council chairman. “In fact, vertically integrated businesses are probably held even more accountable for exceptional service and competitive costs, because if something goes wrong anywhere in the transaction, the finger can only point back in one direction,” Levy says. The council commissioned the survey in response to government scrutiny of settlement services that are directly or indirectly owned by the company or individuals referring the business.

Source: REALTORĀ® Magazine Online

Immigration Policies are Deterring Foreign Buyers

23 10 2006

Real estate professionals in Florida are speaking out against federal security and immigration policies that make it difficult for foreigners to purchase homes in the United States.

Agents in the state also say that some longtime foreign property owners have found it difficult to renew their visas in recent years and that some foreigners and/or their relatives have not been allowed to return to the States after leaving to visit their home countries.

“It seems like we’re putting the thumbscrews down on the very type of people we want here,” notes Tony Macaluso, vice chairman of the Florida Association of Realtors’ (FAR) international operations committee.

Foreigners who want to stay in the United States for more than 90 days are required to obtain visas, and even then the Department of Homeland Security can turn them away. They also must undergo more comprehensive background checks as well as routine fingerprinting.

FAR is urging the government to offer a retirement visa to foreigners who meet specified financial guidelines, as visa issues are prompting international property buyers to settle instead in Panama, Costa Rica, Mexico and other countries with fewer barriers to entry.

Source: Planet Realtor

Top Seven Mistakes that Home Buyers Make

23 10 2006

Over the past few weeks, we have examined steps that buyers should take to make buying a home a smooth and easy process. This week, we’ll cover what I believe are the top seven mistakes that buyers make, so you can avoid them:

1. Looking at homes for sale before getting pre-qualified for a loan.

Unless you have the cash to buy without a loan, it makes sense to talk with a lender about what types of loans you might qualify for and how much down payment you will need. Many buyers fall in love with homes they cannot possibly afford.

2. Getting talked into the wrong kind of loan.

We are very likely entering a period of rising interest rates. So it doesn’t make sense to apply for an adjustable rate loan unless you want to pay more interest later.

Instead, focus on fixed rate loans. If you are certain you will need to sell in less than seven years, you might consider a loan that is fixed for only five years, but avoid interest-only loans.

When the time comes, don’t shop for a loan based on the rate alone. Compare each lender’s good-faith estimate of overall costs.

3. Looking at a house in the wrong location.

Because location is so important in the future value of a house, be very sure where you want to live. If that means renting for six months or a year to be sure, so be it.

Remember that metro Atlanta has some of the worst traffic in the nation. There is a reason that people are willing to pay more for a house in a convenient location. Know where you want to live and find a way to own there.

4. Buying the first house you see.

This often happens when a friend calls and says, “There is this perfect house in my neighborhood, but you have to act quickly.”

Your response should be that there is no such thing as the last deal in real estate. Take your time and see a variety of houses in your price range. Compare features and amenities.

5. Waiting for the best deal in the world.

Many buyers, especially first-timers, hope to score a home run during their first at-bat. They want to get a house in great shape for about half of what it’s worth. Unfortunately, most true bargains are snapped up before they hit the market.

Focus on trying to find a fair price, and let time and inflation work for you.

6. Not having a professional home inspection.

It is very important to bring in a disinterested third party to examine the home. Only an experienced inspector can give an unbiased view and help you know what you are getting.

That advice is good for resales as well as new construction. Because builders often rely on subcontractors, they welcome a professional inspector who conducts a “phased” inspection.

That means the inspector visits the site several times during the building phase, then returns for a final walk-through. Many county inspectors are overloaded and may just do a “drive-by” of your home. You deserve better.

7. Lacking professional representation.

In my opinion, it is a mistake to undertake the home-buying process without the services of an experienced real estate professional and the legal advice of an attorney.

In almost every case, your real estate agent will be compensated by sharing in the commission paid by the seller. And the quality of your buying experience jumps dramatically as soon as a real estate professional enters the picture.

There are simply too many opportunities to make a wrong turn, and your agent has “been there and done that” when it comes to the twists and turns of the process many times before and has a better idea of how to make the right turn.

Likewise, you are about to enter into the most important and expensive contractual agreement of your lifetime, signing a five-page document in small print that you simply do not understand.

How could you think of doing this without consulting your legal adviser? Instead, have your attorney review everything you intend to sign, and I mean everything.

And do it before you sign it.

Source: The Journal-Constitution

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