Say NO to new tax burdens on real estate!

28 05 2010

Congress is considering changes to the tax code in order to pay for a number of tax provisions expiring in 2010. Two of these provisions would impact real estate.

What’s At Stake:

1. ANYONE who receives rental income will be required to file IRS Form 1099 reports if they pay any contractor (plumbers, repairmen, etc) $600 or more in any given year. This onerous provision would apply to even the smallest landlord.

2. Congress is considering taxing “carried interest” at ordinary income rates instead of capital gains. Carried interest rules govern how general partners in real estate investments pay taxes when the investment is sold. Currently, carried interests is taxed at 15%.

These new tax burdens will further delay the real estate market recovery. These proposals are ill-advised, inopportune and potentially destructive.

Please tell Congress to oppose them today.

Existing Home and Condo Sales Edge Up in April

26 05 2010

The median price of a Florida home inched up 1 percent in April from a year ago as sales shot up 27 percent, according to the latest housing data released by Florida Realtors yesterday.

The median price of $140,100 was 2.3 percent higher than the median price in March, marking the second straight month of price increases, raising the prospect that the real estate market may be finally starting to head the other direction in price after two years of declining values.

Sales of existing homes continued to climb out of the 2008 slump as the number of sales in most metropolitan areas was up for the 20th consecutive month when compared to year-ago rates, the statewide association reported. Florida’s sales boost eclipsed that of the national average for the month.

Both state and national Realty groups attributed the continued climb to stabilizing credit and the extension of federal homebuying efforts included in the recent economic stimulus package.

“Buyers responding to the federal homebuyer tax credit before it expired helped to boost home sales across Florida,” said 2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville. “And buying conditions remain favorable, with a variety of housing options available in local markets at attractive and affordable prices. Plus, current mortgage interest rates are at historically low levels, which gives buyers more ‘bang’ for their buck.”

Florida Realtors also reported a 55 percent increase in statewide sales of existing condos in April compared to the previous year’s sales figure; statewide existing condo sales last month rose 2 percent over the total units sold in March. Though April’s statewide existing-condo median price of $103,600 was down 3 percent compared to the year-ago figure, it was 6.9 percent higher than March’s statewide existing-condo median price.

The median home price varied widely from the $140,100 median depending on location. Miami’s median value jumped 8 percent to $192,000. Orlando’s dipped 4 percent to $135,900 while Tallahassee prices fell 10 percent to $163,000.

The national median sales price for existing single-family homes in March 2010 was $170,700, up 0.6 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $301,790 in March; in Massachusetts, it was $280,000; in Maryland, it was $235,785; and in New York, it was $209,900.

Nationally, April existing home sales increased 23 percent from April 2009. Sales climbed 7.6 percent from March to a seasonally adjusted annual rate of 5.77 million.

“The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market,” said Lawrence Yun NAR chief economist, in a statement.

“For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low,” Yun said.

According to NAR’s latest outlook, two trends are influencing a broader stabilization of home prices in housing markets across the nation: months of increased sales activity and lower levels of inventory. “Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably,” said NAR Chief Economist Lawrence Yun. “With home values stabilizing, a revival in homebuying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears.”

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in April while all but one MSA had higher condo sales. A majority of the state’s MSAs have reported increased sales for 22 consecutive months.

The Jacksonville area had the fourth highest number of existing single-family home sales in the state in April, as sales continued to rise 56 percent, according to Florida Realtors.

There were 1,270 home sales last month in Jacksonville, up from the 813 sales in April 2009. Tampa reported the highest number of sales at 2,962, followed by Orlando with 2,529 and Fort Myers with 1,473.

Median home prices continued to fall last month in Jacksonville 6 percent to $142,700. But a growing number of markets – Fort Lauderdale, Fort Myers, Fort Walton Beach, Miami, Panama City, Punta Gorda, Sarasota and West Palm Beach saw an increase in home prices.

Statewide home sales rose 27 percent to 16,781 and home prices rose 1 percent.

Jacksonville condo sales rose 173 percent to 240 while the median price fell another 45 percent to $64,400. Jacksonville now has the fourth lowest median condo price in the state.

Statewide condo sales rose 55 percent to 7,291 and median sales dropped 3 percent to $103,600.

Source: Florida Realtors

Slow, Steady Job Growth Predicted for Jacksonville

16 05 2010

Moody’s, an independent provider of economic and industry research to financial institutions, predicts an 0.6 percent increase in jobs for Jacksonville Florida when comparing the fourth quarter of 2009 with the fourth quarter of 2010. Of 14 sectors, eight are predicted to see job growth over the next seven months:

Construction. A University of Florida study says Florida’s real estate market has bottomed out, paving the way for what Moody’s says will be an 8.5 percent increase in construction jobs.

Retail trade. Another survey by the University of Florida says the state’s consumer confidence rose six points to 77 in April — the highest since a 79 point finding in October 2007. That indicates a recovering retail sector, which is predicted to add jobs by 4.4 percent .

Other services. An optimistic outlook by consumers also improves the outlook in the service sector, which includes maintenance, repair and personal care. It’s predicted to grow by 3.4 percent.

Wholesale trade. Relatively strong growth of 2.9 percent is predicted.

Transportation and warehousing. Continued growth at the Port of Jacksonville, combined with an improving economy, should lead to a 1.6 percent increase.

Utilities. A 1.5 percent in job growth is predicted.

Leisure and hospitality. Positive national unemployment data points to a brighter future for tourism. Jacksonville is expected to benefit as well, growing by 1.1 percent.

Professional & business services. The sector is predicted to see modest growth of 0.7 percent.

Six sectors are predicted to continue to shed jobs, ranging from a 0.4 percent decrease in education and health services to a 4.2 percent decline in the Information sector, which includes broadcasting, telecommunications and data processing. In between are a 1.0 percent decrease in financial activities, a 2.3 percent decrease in manufacturing, a 3.5 percent decrease in natural resources, and, perhaps not surprisingly in light of the City’s financial woes, a 3.7 decrease in government.

In conversations with business owners and professionals, the mood seems to be one of optimism.

Lenny Curry, co-managing director of ICX Group Inc., an accounting and IT consulting firm, said he started seeing improvement before the end of 2009.

“We’re seeing an increase, month after month,” Curry said. “But, we’re not seeing the salary ranges from several years ago, particularly for junior level employees.”

Joseph McCann, dean at Jacksonville University’s Davis College of Business, said there are areas the state can focus on for growth, beginning with higher education.

“We can be importers of students,” McCann said.

He believes Jacksonville is well positioned to lead a recovery with a strong healthcare sector and the state’s only commercial spaceport.

The numbers tell the very real story that any recovery will take time — much longer, perhaps, than the sudden decline. But, positive trends, however fragile, are beginning to emerge.

Source: The Florida-Times Union

Jacksonville Foreclosure Notices Decline for Third Month

14 05 2010

The number of foreclosure notices mailed to Jacksonville metro area addresses dropped for the third straight month in April, according to real estate data aggregator RealtyTrac.

At 2,415, mailed foreclosure notices dropped by 14 percent from 2,805 in March. March’s total was a drop from 2,817 in February.

Although the number has remained above 2,000 since February, 2009, it’s still trending down from the high level of 3,864 noted in September of that year.

It is an indicator that numbers of foreclosure homes are decreasing in the area. Less foreclosure means home prices will further improve in the near future.

Source: Florida Times-Union

Pending Home Sales at 5-Month High

5 05 2010

Pending sales of previously owned homes hit a five-month high in March as buyers rushed to sign contracts before a tax credit expired, while a jump in factory orders underscored manufacturing strength.

Analysts said the data on Tuesday suggested the economic recovery was gaining more muscle and was setting the tone for a strong second-quarter growth pace. The economy expanded at a 3.2 percent annual rate in the January-March period.

“The second quarter is going to be stronger than the first quarter in terms of growth. The data continues to point to a sort of chewing up some of that output gap that widened out when the recession hit,” said John Canally, an economist at LPL Financial in Boston.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in March, rose 5.3 percent to 102.9, building on the prior month’s 8.3 percent rise. Markets had expected pending sales, which lead existing home sales by one to two months, to rise 4 percent in March.

Separately, new orders for manufactured goods received by U.S. factories unexpectedly rose 1.3 percent in March, after an upwardly revised 1.3 percent gain in February initially reported as a 0.6 percent rise, the Commerce Department said.

Economists had looked for a decline of 0.1 percent. The upbeat reports had little impact on U.S. financial markets and were overshadowed by persistent doubts over Greece’s ability to tackle its debt problems.

Wall Street stocks suffered their biggest one-day loss in three months, with all major indices dropping more than 2 percent.

Treasury debt prices rallied and benchmark yields, which move in the opposite direction, hit two-month lows, while the U.S. dollar rose to a one-year high against the euro.


The surprise surge in factory orders confirmed the manufacturing sector continued to led the economy’s recovery from the worst downturn since the 1930s. Data on Monday showed manufacturing activity, as measured by the Institute for Supply Management, grew at its fastest pace in nearly six years in April.

The strong bounce back in production follows a prolonged period of drawdown in business inventories to exceptionally lean levels.

Excluding transportation orders, factory orders surged 3.1 percent in March, the biggest gain in almost five years, the Commerce Department data showed.

Non-defense capital goods orders excluding aircraft, viewed as an indicator of business confidence, jumped 4.5 percent, the largest increase since December 2007.

While the rise in March pending home sales was a reflection of the boost from the homebuyer tax credit, it bode well for the spring sales season, analysts said.

They said the increase in pending home sales suggested sales of existing homes likely rose to an annual rate of between 5.6 million units and 5.8 million units last month. Sales of previously owned homes rose to rate of 5.35 million units in March.

“People do feel slightly better than they have in the past. You will see the numbers hang in there while there is still value to be had, but summer will be quite slow,” said Paul Anastos, president of Mortgage Master in Walpole, Massachusetts.

Prospective buyers had to sign contracts by the end of April and close by the end of June to be eligible for the tax break. Until recently, buyers had been slow to respond to the tax credit, which was extended and expanded last year, causing the housing recovery to stall.

Though home sales started improving in March, they are not expected to match the gains registered with the initial tax credit. Still, analysts do not see the housing market slipping back into the slump that helped to trigger the recession.

“We expect a pullback after the tax credit expires. Ultimately, the demand for housing is determined by the underlying economic fundamentals and they are gradually improving,” said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Employment, which is key to sustaining the economic recovery, is gradually rising.

According to a Reuters survey, nonfarm payrolls likely increased by 200,000 in April, adding to the prior month’s 162,000 gain. The unemployment rate, however, is expected to remain unchanged at 9.7 percent for a fourth month.

The employment report is due for on Friday.

Source: Reuter

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