U.S. Homeownership Rate Holds Steady

31 01 2007

Census Bureau data shows that the U.S. homeownership rate held steady in the fourth quarter at 68.9 percent.

Regionally, the homeownership rate was 73 percent in the Midwest, 70.8 percent in the South, 65.3 percent in the Northeast, and 64.5 percent in the West.

The homeownership rate for non-Hispanic whites was 76 percent, vs. 49.5 percent for Hispanics and 48.2 percent for blacks. The data also reveals a jump in the homeownership rate for those in the 65-and-up age segment to 81.2 percent from 80.6 percent in the fourth quarter of 2005, while the rate of homeownership for the 55-64 age group held steady at 80.7 percent.

However, the homeownership rate fell to 76.4 percent from 76.7 percent in the 45-54 segment, to 68.9 percent from 69.7 percent for those between the ages of 35 and 44, and to 42.8 percent from 43.1 percent for the under-35 set.

In terms of income level, the homeownership rate held steady at 84.5 percent for those earning the median income or more and at 52.9 percent for households earning less than the median income.

Source: Inman News





Centex Homes Offers Home Financing Deal

27 01 2007

In an effort to make buying a home more affordable, Centex Homes has teamed with sister company CTX Mortgage Co. to offer home financing interest rates starting at less than 2 percent. Rather than steeply discounting the price of a home, which can reduce property values for an entire neighborhood, the production home builder and CTX Mortgage are advertising “super low payments” and a “Sweet Life” financing offer of 1.875 percent to 4.542 percent.





Centex Homes Offers Home Financing Deal

27 01 2007

In an effort to make buying a home more affordable, Centex Homes has teamed with sister company CTX Mortgage Co. to offer home financing interest rates starting at less than 2 percent. Rather than steeply discounting the price of a home, which can reduce property values for an entire neighborhood, the production home builder and CTX Mortgage are advertising “super low payments” and a “Sweet Life” financing offer of 1.875 percent to 4.542 percent.





2006 Homes Sales Down, Median Price Up

25 01 2007

Sales of existing single-family homes in Jacksonville and across the state fell in 2006 while the median price was climbing.

Sales in Jacksonville fell 10 percent compared with 2005, while the median price rose 7 percent to $200,600. Sales were even slower statewide, falling 28 percent from 2005. But the median price of those homes rose 6 percent to $248,300. The figures are from the Florida Association of Realtors.

Sales fell in all 20 of the markets tracked by the FAR, and in 19 of the 20 they fell by double digits. But the median price fell in only six markets, and nowhere by more than 5 percent.

The National Association of Realtors reported that sales of existing single-family homes nationwide dropped 7.9 percent, but maintains the market should rebound in 2007.

“Home sales appear to have bottomed out, having reached a cyclical low in September of last year,” noted NAR Chief Economist David Lereah, who predicts that 2007 will represent a year of stability for the housing sector.

The sales numbers in Florida were even worse for existing condominiums. Sales in Jacksonville fell 19 percent while the median price dropped 3 percent to $165,800. Across the state sales dropped 33 percent while the median price climbed 1 percent to $211,300.

Source: Jacksonville Business Journal





Gov. Crist Signs Insurance Bill

25 01 2007

Gov. Charlie Crist signed into law Thursday a bill reforming insurance law and cutting property insurance rates in an effort to counteract swelling policy costs for Florida homeowners.

The result will be several changes to Florida insurance law designed to lower rates. Companies will now be required to seek state approval before raising rates, dropping policyholders during hurricane season or delaying payment of claims. They will also be required to allow coverage options — wind coverage, for example, will now be optional — and installation payments on premiums.

Citizens Private Insurance Corp., the state-run insurer of last resort, had scheduled a two-part, 80 percent rate increase for January and March. Those increases have been repealed to make the company more competitive with private insurers. The bill freezes rates at their current level and provides refunds to those that have already paid since the Jan. 1 increase.

Insurers will now be required to return excess profits to policyholders and will face new restrictions when “cherry-picking” — selling only automobile insurance and neglecting to offer more risky property insurance in Florida.

The bill is expected to save the average Florida homeowner 21.8 percent on property insurance payments.

“Today, we have a message for the people of Florida: ‘Help is on the way!’ We have heard the calls for help from Floridians suffering from high insurance rates,” Crist said in a release. “With this legislation, the powerless have become the powerful.”

The move has already been criticized by Chicago-based Fitch Ratings, which said rates are already too low to cover the cost to insurance companies and competition in the Florida market should determine insurance rates.

“Fitch views Florida’s proposed legislation as a mechanism to further suppress homeowner’s insurance rates in a market where rates continue to be inadequate despite several large recent rate increases,” the company said in a release. “The best long-term solution to the Florida homeowners market is for the state to allow competitive market forces to set rate levels.”

In addition to directly addressing insurance rates, the bill expands the Florida Hurricane Catastrophe Fund — a move that’s designed to make purchasing reinsurance less expensive for insurers in the hope that they will pass those savings on to consumers. Regional exemptions to the Uniform Building Code will also be eliminated, with the goal of minimizing storm damage to buildings.

Soure: Jacksonville Business Journal





2006 Homes Sales Down, Median Price Up

25 01 2007

Sales of existing single-family homes in Jacksonville and across the state fell in 2006 while the median price was climbing.

Sales in Jacksonville fell 10 percent compared with 2005, while the median price rose 7 percent to $200,600. Sales were even slower statewide, falling 28 percent from 2005. But the median price of those homes rose 6 percent to $248,300. The figures are from the Florida Association of Realtors.

Sales fell in all 20 of the markets tracked by the FAR, and in 19 of the 20 they fell by double digits. But the median price fell in only six markets, and nowhere by more than 5 percent.

The National Association of Realtors reported that sales of existing single-family homes nationwide dropped 7.9 percent, but maintains the market should rebound in 2007.

“Home sales appear to have bottomed out, having reached a cyclical low in September of last year,” noted NAR Chief Economist David Lereah, who predicts that 2007 will represent a year of stability for the housing sector.

The sales numbers in Florida were even worse for existing condominiums. Sales in Jacksonville fell 19 percent while the median price dropped 3 percent to $165,800. Across the state sales dropped 33 percent while the median price climbed 1 percent to $211,300.

Source: Jacksonville Business Journal





Gov. Crist Signs Insurance Bill

25 01 2007

Gov. Charlie Crist signed into law Thursday a bill reforming insurance law and cutting property insurance rates in an effort to counteract swelling policy costs for Florida homeowners.

The result will be several changes to Florida insurance law designed to lower rates. Companies will now be required to seek state approval before raising rates, dropping policyholders during hurricane season or delaying payment of claims. They will also be required to allow coverage options — wind coverage, for example, will now be optional — and installation payments on premiums.

Citizens Private Insurance Corp., the state-run insurer of last resort, had scheduled a two-part, 80 percent rate increase for January and March. Those increases have been repealed to make the company more competitive with private insurers. The bill freezes rates at their current level and provides refunds to those that have already paid since the Jan. 1 increase.

Insurers will now be required to return excess profits to policyholders and will face new restrictions when “cherry-picking” — selling only automobile insurance and neglecting to offer more risky property insurance in Florida.

The bill is expected to save the average Florida homeowner 21.8 percent on property insurance payments.

“Today, we have a message for the people of Florida: ‘Help is on the way!’ We have heard the calls for help from Floridians suffering from high insurance rates,” Crist said in a release. “With this legislation, the powerless have become the powerful.”

The move has already been criticized by Chicago-based Fitch Ratings, which said rates are already too low to cover the cost to insurance companies and competition in the Florida market should determine insurance rates.

“Fitch views Florida’s proposed legislation as a mechanism to further suppress homeowner’s insurance rates in a market where rates continue to be inadequate despite several large recent rate increases,” the company said in a release. “The best long-term solution to the Florida homeowners market is for the state to allow competitive market forces to set rate levels.”

In addition to directly addressing insurance rates, the bill expands the Florida Hurricane Catastrophe Fund — a move that’s designed to make purchasing reinsurance less expensive for insurers in the hope that they will pass those savings on to consumers. Regional exemptions to the Uniform Building Code will also be eliminated, with the goal of minimizing storm damage to buildings.

Soure: Jacksonville Business Journal





Women Pay Higher Mortgage Rates Than Men

21 01 2007

Women are 32 percent more likely to carry mortgages with high interest rates than men with similar incomes, even though women generally have better credit scores, according to a study released recently by the Consumer Federation of America. The study also found that wealthier women were 50 percent more likely to carry expensive loans than their male counterparts. In 2005, 10 percent of women who took out mortgages received the highest-cost sub-prime loans, compared with about 7.5 percent of men. Why do women pay more? Allen Fishbein, the federation’s director of housing and credit policy, speculates that the most likely reason for the disparity was that women were less familiar with the mortgage market than men and didn’t shop around.
“There is some research indicating that women are, on the whole, less likely than men to bargain for major consumer purchases and credit transactions,” he says.

Source: The New York Times





Women Pay Higher Mortgage Rates Than Men

21 01 2007

Women are 32 percent more likely to carry mortgages with high interest rates than men with similar incomes, even though women generally have better credit scores, according to a study released recently by the Consumer Federation of America. The study also found that wealthier women were 50 percent more likely to carry expensive loans than their male counterparts. In 2005, 10 percent of women who took out mortgages received the highest-cost sub-prime loans, compared with about 7.5 percent of men. Why do women pay more? Allen Fishbein, the federation’s director of housing and credit policy, speculates that the most likely reason for the disparity was that women were less familiar with the mortgage market than men and didn’t shop around.
“There is some research indicating that women are, on the whole, less likely than men to bargain for major consumer purchases and credit transactions,” he says.

Source: The New York Times





KB Home Charges Off $343M

20 01 2007

One of Northeast Florida’s largest home builders will take a nearly $350 million charge against fourth-quarter earnings.

Los Angeles-based KB Home said the value of its housing stock dropped $255 million. In addition, the company will record $88 million in penalties as the result of canceling land purchases.

In the Jacksonville area, the company built 800 homes during 2005 for a total value of $170 million, making it the fifth-largest home builder in the area.

The non-cash charges will affect earnings for the company’s fiscal quarter ended Nov. 30.

The charge-offs come as the U.S. housing marking continues to slip. KB Home (NYSE: KBH) reports that home sales were down 4.1 percent for the three-month period ending Aug. 31.

Source: Jacksonville Business Journal





Court Orders Jerry Seinfeld to Pay $100K Commission

20 01 2007

Jerry Seinfeld’s high-priced Manhattan home is going to cost him more than he thought, about $100,000 more.

A Manhattan judge has ruled the 52-year-old comedian owes about that much as a commission to the broker who helped him find a town house on the Upper West Side that he and wife Jessica bought for $3.95 million in February 2005.

Seinfeld had argued that the broker, Tamara Cohen, didn’t deserve the commission because she failed to show the West 82nd Street brownstone on the Jewish Sabbath, the day the Seinfelds wanted to see it.

The Seinfelds looked at the house and made a deal to buy it without Cohen after they were unable to reach her and she failed to return their calls.

Cohen said she had told the Seinfelds she observed the Jewish Sabbath and couldn’t work between Friday evening and sundown Saturday. But the Seinfelds told the court they didn’t know why Cohen didn’t return their calls.

State Supreme Court Justice Rolando Accosta said “the evidence clearly indicates she served as the Seinfelds’ real estate broker” and that she had shown them a number of residences before finding the town house.

The judge also noted that Cohen had agreed with Maximillan Sanchez, the broker who listed the house for its owners, to split evenly a 5 percent or 6 percent fee, her half paid by the Seinfelds and his half paid by the owners of the house.

“The only real issue here, as far as the court is concerned,” Accosta said in his decision earlier this month, “is whether the broker’s fee was 5 or 6 percent.”

The judge ordered a trial to determine how much Cohen should get. At 5 percent, the total fee would be $197,500 and Seinfeld would owe Cohen $98,750; at 6 percent, the fee would be $237,000 and Cohen’s cut would be $118,500.

Seinfeld’s lawyer, Richard Menaker, wasn’t immediately available, his office said.

Cohen’s lawyer, Steven Landy, said he was “gratified and happy with the decision, and we believe it was the correct one.”

Source: Associated Press





KB Home Charges Off $343M

20 01 2007

One of Northeast Florida’s largest home builders will take a nearly $350 million charge against fourth-quarter earnings.

Los Angeles-based KB Home said the value of its housing stock dropped $255 million. In addition, the company will record $88 million in penalties as the result of canceling land purchases.

In the Jacksonville area, the company built 800 homes during 2005 for a total value of $170 million, making it the fifth-largest home builder in the area.

The non-cash charges will affect earnings for the company’s fiscal quarter ended Nov. 30.

The charge-offs come as the U.S. housing marking continues to slip. KB Home (NYSE: KBH) reports that home sales were down 4.1 percent for the three-month period ending Aug. 31.

Source: Jacksonville Business Journal





Court Orders Jerry Seinfeld to Pay $100K Commission

19 01 2007

Jerry Seinfeld’s high-priced Manhattan home is going to cost him more than he thought, about $100,000 more.

A Manhattan judge has ruled the 52-year-old comedian owes about that much as a commission to the broker who helped him find a town house on the Upper West Side that he and wife Jessica bought for $3.95 million in February 2005.

Seinfeld had argued that the broker, Tamara Cohen, didn’t deserve the commission because she failed to show the West 82nd Street brownstone on the Jewish Sabbath, the day the Seinfelds wanted to see it.

The Seinfelds looked at the house and made a deal to buy it without Cohen after they were unable to reach her and she failed to return their calls.

Cohen said she had told the Seinfelds she observed the Jewish Sabbath and couldn’t work between Friday evening and sundown Saturday. But the Seinfelds told the court they didn’t know why Cohen didn’t return their calls.

State Supreme Court Justice Rolando Accosta said “the evidence clearly indicates she served as the Seinfelds’ real estate broker” and that she had shown them a number of residences before finding the town house.

The judge also noted that Cohen had agreed with Maximillan Sanchez, the broker who listed the house for its owners, to split evenly a 5 percent or 6 percent fee, her half paid by the Seinfelds and his half paid by the owners of the house.

“The only real issue here, as far as the court is concerned,” Accosta said in his decision earlier this month, “is whether the broker’s fee was 5 or 6 percent.”

The judge ordered a trial to determine how much Cohen should get. At 5 percent, the total fee would be $197,500 and Seinfeld would owe Cohen $98,750; at 6 percent, the fee would be $237,000 and Cohen’s cut would be $118,500.

Seinfeld’s lawyer, Richard Menaker, wasn’t immediately available, his office said.

Cohen’s lawyer, Steven Landy, said he was “gratified and happy with the decision, and we believe it was the correct one.”

Source: Associated Press





FSBO Down 12% in 2006

19 01 2007

NAR reports a drop in the number of for-sale-by-owner (FSBO) transactions to 12 percent of all sales today from 18 percent in 1997.

NAR spokesman Walter Molony says property owners believe agents are better equipped to achieve fast sales at top dollar in a slow market, adding that the median price for agent-assisted transactions was about 16 percent higher than FSBO sales last year. Molony notes that agents orchestrate showings, handle paperwork and identify serious buyers for sellers – who often lack the time or experience necessary to complete such tasks. NAR’s 2006 Profile of Home Buyers and Sellers shows that 5 percent of sales from mid-2005 to mid-2006 involved FSBO sellers turning to an agent, with only 1 percent of sales involving sellers who abandoned their agents to go it alone.

Source: Investor’s Business Daily





FSBO Down 12% in 2006

19 01 2007

NAR reports a drop in the number of for-sale-by-owner (FSBO) transactions to 12 percent of all sales today from 18 percent in 1997.

NAR spokesman Walter Molony says property owners believe agents are better equipped to achieve fast sales at top dollar in a slow market, adding that the median price for agent-assisted transactions was about 16 percent higher than FSBO sales last year. Molony notes that agents orchestrate showings, handle paperwork and identify serious buyers for sellers – who often lack the time or experience necessary to complete such tasks. NAR’s 2006 Profile of Home Buyers and Sellers shows that 5 percent of sales from mid-2005 to mid-2006 involved FSBO sellers turning to an agent, with only 1 percent of sales involving sellers who abandoned their agents to go it alone.

Source: Investor’s Business Daily





Mortgage Insurance Deductible But Only for a Few

14 01 2007

Mortgage insurance is now deductible on federal income taxes but accompanied by so many restrictions that only a handful of Americans benefit.

President Bush signed a multi-faceted tax bill (H.R. 6111) that includes, among a host of other provisions, a very narrow new income tax deduction for some mortgage insurance (MI) premiums. According to the National Association of Realtors® (NAR), it’s not clear when or if the IRS will provide additional guidance for this provision since it will be in effect for only one year and available only to a limited number of homebuyers.

Key features of the provision:

• The deduction applies only to MI policies issued in 2007 for homes purchased in 2007.
• The deduction does not apply to premium payments for policies issued before 2007.
• The deduction applies to private MI, and to FHA, VA and Rural Housing premiums, as well. The MI premium amount will be treated as mortgage interest.
• The new deduction is available only to individuals or families with less than $100,000 adjusted gross income (AGI) on a joint or single tax return ($50,000 for married filing separately returns).
• The provision phases out by 10 percent for each $1000 of AGI over $100,000 ($50,000 for married filing separate). Thus, there is no MI deduction for individuals or families with AGI above $110,000 ($55,000 for married filing separately).
• Individuals who claim the deduction are not permitted to prepay premiums that are otherwise due after 2007. The provision expires for any premium payment that is paid or that accrues after December 31, 2007.
• If a mortgage (other than a VA, FHA or RHA mortgage) is prepaid during 2007, the unamortized premium balance on that mortgage is not deductible. (The unamortized premium balance is the amount of premium that would have been paid in a particular year if the payments had extended throughout that year.)
• The homeowner will receive a statement from either the lender or the MI provider stating the proper amount of the MI deduction. That information will also be provided to the IRS.
• The MI deduction will not be available if an existing mortgage is refinanced in 2007 for an amount larger than the amount being refinanced.

Source: Florida Association of REALTORS®





Mortgage Insurance Deductible But Only for a Few

13 01 2007

Mortgage insurance is now deductible on federal income taxes but accompanied by so many restrictions that only a handful of Americans benefit.

President Bush signed a multi-faceted tax bill (H.R. 6111) that includes, among a host of other provisions, a very narrow new income tax deduction for some mortgage insurance (MI) premiums. According to the National Association of Realtors® (NAR), it’s not clear when or if the IRS will provide additional guidance for this provision since it will be in effect for only one year and available only to a limited number of homebuyers.

Key features of the provision:

• The deduction applies only to MI policies issued in 2007 for homes purchased in 2007.
• The deduction does not apply to premium payments for policies issued before 2007.
• The deduction applies to private MI, and to FHA, VA and Rural Housing premiums, as well. The MI premium amount will be treated as mortgage interest.
• The new deduction is available only to individuals or families with less than $100,000 adjusted gross income (AGI) on a joint or single tax return ($50,000 for married filing separately returns).
• The provision phases out by 10 percent for each $1000 of AGI over $100,000 ($50,000 for married filing separate). Thus, there is no MI deduction for individuals or families with AGI above $110,000 ($55,000 for married filing separately).
• Individuals who claim the deduction are not permitted to prepay premiums that are otherwise due after 2007. The provision expires for any premium payment that is paid or that accrues after December 31, 2007.
• If a mortgage (other than a VA, FHA or RHA mortgage) is prepaid during 2007, the unamortized premium balance on that mortgage is not deductible. (The unamortized premium balance is the amount of premium that would have been paid in a particular year if the payments had extended throughout that year.)
• The homeowner will receive a statement from either the lender or the MI provider stating the proper amount of the MI deduction. That information will also be provided to the IRS.
• The MI deduction will not be available if an existing mortgage is refinanced in 2007 for an amount larger than the amount being refinanced.

Source: Florida Association of REALTORS®





Housing Analysts Forecast Summer Warming Trend

12 01 2007

Housing experts, speaking at a recent Real Estate Connect conference, said stabilization or improvement in mortgage rates, residential prices and household incomes will spark a rebound in the housing market by the middle of the year.

Freddie Mac chief economist Frank Nothaft forecasts “some pretty clear, consistent signs of recovery in home sales and single-family construction” by summer.

Expectations that the Federal Reserve will hold interest rates steady or take steps to boost the economy by cutting rates are responsible for predictions of a housing rebound, with experts noting that a jump in interest rates or unemployment rates could worsen the downturn.

Housing economists also anticipate problems in the subprime niche, with some cash-strapped borrowers forced out of their homes as their monthly payments rise and become less affordable. This pattern could drive up inventory and exert downward pressure on prices.

According to California Association of Realtors chief economist Leslie Appleton-Young, “Housing is always going to be sexy, but I think some of the buzz, when there’s less money being made, is going to go away.”

Source: Investor’s Business Daily





Housing Analysts Forecast Summer Warming Trend

12 01 2007

Housing experts, speaking at a recent Real Estate Connect conference, said stabilization or improvement in mortgage rates, residential prices and household incomes will spark a rebound in the housing market by the middle of the year.

Freddie Mac chief economist Frank Nothaft forecasts “some pretty clear, consistent signs of recovery in home sales and single-family construction” by summer.

Expectations that the Federal Reserve will hold interest rates steady or take steps to boost the economy by cutting rates are responsible for predictions of a housing rebound, with experts noting that a jump in interest rates or unemployment rates could worsen the downturn.

Housing economists also anticipate problems in the subprime niche, with some cash-strapped borrowers forced out of their homes as their monthly payments rise and become less affordable. This pattern could drive up inventory and exert downward pressure on prices.

According to California Association of Realtors chief economist Leslie Appleton-Young, “Housing is always going to be sexy, but I think some of the buzz, when there’s less money being made, is going to go away.”

Source: Investor’s Business Daily





Buy Small, Earn Big

10 01 2007

In today’s real estate market, a hands-on real estate investor can make money with smaller properties that are easy to acquire and manage. Here are some suggestions to get started:

• Rent out a part of your own home for $400 a month and use that money every month to pay down mortgage principal. Shaving 10 years from a $350,000 30-year mortgage will reduce total payments by more than $165,000. And you’ll be able to write off all your costs on your income taxes, including depreciation on the unit, up to your actual rental income.

• If buying a single family home, make sure you can put 10 percent down and rent the property for more than your monthly payment, interest, taxes, insurance and a $200 expense budget. Purchasing a foreclosed home owned by a lender is one way to find such a property.

• Consider buying a two-family home, where you’ll make nearly twice as much in rent for a property costing little or no more than a single family.

Source: The Wall Street Journal








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