Jacksonville Florida Real Estate Blog

Today's Crunch Feels Like '70s

noreply@blogger.com (Will) — Mon, 14 Jul 2008 01:17:00 +0000

The Atlanta Journal-Constitution published an article today that is quite catchy. It reads:

High oil prices, a sluggish economy, persistent inflation, an unpopular president and the Eagles are out on tour.

Sounds like a rerun of the 1970s.

But it is also a snapshot from the summer of 2008 —- even if it does conjure images from the past.

"The similarities are there," said economist Gerald Lynch of Purdue University. "That was a miserable time for the economy. And the clothes were ugly, too."

Wide ties may not be making a comeback, but hints of the era's economics are in the air.

One of the stars of that original '70s show was stagflation, a term invented to describe a mix of rapid inflation and near-stagnant growth. The word has re-entered the economic vocabulary of late.

"As far as I can see, the wheels have fallen off the wagon," said Peter Miralles, president of Atlanta Wealth Consultants. "This is as close to the '70s as we have seen in the past couple of decades."

First, the sluggishness: Gross domestic product the past two quarters has expanded by less than 1 percent. The economy shed 438,000 jobs in the first six months of the year, while the official unemployment rate has climbed to 5.5 percent.

Meanwhile, the official measure of inflation has been running slightly higher than 4 percent per year —- while energy prices have more than doubled.

Yet comparing the current moment to the 1970s can offer some reassurance: Today's numbers pale beside the Hotel California Era.

In 1975, unemployment peaked at 9 percent, fell for a while and then climbed to 7.8 percent in 1980. Inflation hit double digits in 1974 and 1975, slipped back and then roared up, cresting at more than 13 percent in 1979 and 14 percent in 1980. It was a time, too, when the nightly news rattled the American psyche.

The first half of the decade saw the revolution-promoting Weathermen, Watergate, the bitter, bloody end to the Vietnam War and the Arab oil embargo. The second half of the '70s brought the Soviet invasion of Afghanistan and the Iranian Revolution.

"There was a kind of extremism in the air," said Herb London, president of the Hudson Institute, a conservative, Washington-based think tank. "Conditions now are also kind of frightening. But the situation is not as extreme."

Still, today's list of potential villains sounds like a cast from the past.

The most obvious repeat offender is oil. Oil prices quadrupled in the mid-1970s, then soared again after the Iranian Revolution in 1979.

Now, U.S. troops are fighting in Iraq and Afghanistan, there is renewed talk about a U.S. conflict with Iran, and oil prices are at it again. Crude has doubled in the past year, and the economy again is struggling.

"Oil was at the scene of the crime in both cases," said Jared Bernstein, senior economist at the liberal Economics Policy Institute in Washington. "If you have a police lineup, you really want to have oil in it."

And it's not just oil —- global demand has shoved prices higher on a range of commodities from rice to steel.

But inflation this time has some brand-new accomplices: the housing crash; the subprime meltdown that followed; and the crunch in credit that the meltdown triggered.

"This is a very different world," Bernstein said.

For starters, the sources of inflation are different. During the 1970s, workers —- often through powerful unions —- insisted on raises that matched higher consumer prices.

Those higher payroll costs were then added to the prices businesses charged, which were then used by workers to demand higher pay.

"You can't have a wage-price spiral without wage pressures, and we ain't got wage pressures," Bernstein said. "That is a huge difference."

It's not just that business costs don't rise as much. Companies are also less likely to pass them along.

Many are so afraid of losing customers, they don't dare raise prices as much as their costs. Instead, they slash their own costs or accept a smaller profit margin —- and potential inflation never gets to consumers.

What worries some economists is that, eventually, companies must pass along costs. Other economists argue that the official inflation numbers are wildly understating the pain consumers already feel.

"The part that concerns me the most is that the government numbers do not actually represent what's going on," said Miralles of Atlanta Wealth Consultants. "I just don't buy it."

If the plot of the rerun does mimic the original, then the pain is only getting started.

Led by then-Chairman Paul Volcker, the Federal Reserve decided that inflation was so dangerous it had to be stopped —- even if that meant choking off growth. So in 1979, interest rates were raised dramatically.

The economy spun into back-to-back recessions starting in January 1980.

As the economy stalled, the inflation rate leapt to a high of 14.6 percent. After the second recession, unemployment climbed to a peak of 10.8 percent.

But the Fed won its war: Inflation was dormant for the next two decades.

Even now, inflation —- at least the official measure of 4 percent —- seems modest enough to let the Fed keep rates low.

In the past two years, the Fed has cut the benchmark rate from 5.25 percent to 2 percent.

Any inflation-fighting would mean moving them upward again, which would likely slow the economy more.

At least some inflation may be coming from a "bubble" —- speculation that could pop if demand slackens.

"If oil is a bubble, and there's a good chance it is, then its bursting would lessen the inflationary threat a lot," said Doug Henwood, author of the book "Wall Street: How It Works and for Whom" and editor of the economics newsletter Left Business Observer.

Waiting for the scenario to play out, consumers and companies alike must do their best to plan, hoping to protect and nurture their assets.

"There are quite a few parallels to the '70s, and that is a concern," said Frank Butterfield, principal with Atlanta-based wealth managers Homrich & Berg. "The '70s were a bad time for financial assets. Stocks did poorly, bonds did poorly. That could happen again."

To navigate long term, Butterfield suggests diversifying portfolios, buying inflation-protected securities, using hedge funds and "rebalancing" investments as you go.

The economic trouble so far has been manageable, he said. "Things were worse in the '70s than they are now."

Most experts say the U.S. economy seems stronger than it was in the shaky '70s, more flexible and —- most important during an energy crisis —- more efficient.

The economy is about half as dependent on oil as it was at the time of the first oil shock in 1973, said Robert Whaples, chairman of the economics department at Wake Forest University.

"The '70s were a period of pretty slow productivity growth," he said. "There are important parallels between the two periods, but I don't think we will get double-digit unemployment or double-digit inflation rate."

Some things do return. The Eagles, after all, are playing summer concerts and promoting their latest album. But no amount of hindsight can truly tell the future.

As the Eagles themselves put it: "Who is gonna make it? We'll find out —- in the long run."

That was 1979.

GASOLINE

Now: Gas prices have doubled in a little more than three years. They are up a little more than one-third in the past year. Gas is costly but plentiful.

Then: Gas prices tripled during the decade, rising almost 50 percent from 1973 to 1975, and by 80 percent in 1979 and 1980. Shortages forced restrictions on sales.

PRESIDENTIAL APPROVAL

Now: 28 percent

Then: 29 percent

IRAN

Now: Tension between the United States and Iran over nuclear programs and U.S. involvement in Iraq has led to higher oil prices.

Then: Iranian Revolution in 1979 overthrew a U.S. ally, led to a long hostage crisis and sent oil prices skyrocketing.

UNEMPLOYMENT

Now: In the past year and a half, official unemployment has increased 25 percent. It remains historically modest: 5.5 percent.

Then: After the Arab oil embargo, unemployment rose by more than 80 percent.

INFLATION

Now: Consumer prices are up 4.1 percent in the past year, the government says, but critics say the data understates reality.

Then: Consumer costs were up an average of 8.12 percent a year through the decade, peaking at 13.3 percent in 1979.

PRODUCTIVITY GROWTH

Now: 2.58, average, 2000-07

Then: 1.73 percent, average 1971-80

Sources: Michael E. Kanell at The Atlanta Journal-Constitution, Bureau of Labor Statistics, Energy Information Administration, Gallup Poll, PollingReport.com

National Home Sales, Prices Continue Decline

noreply@blogger.com (Will) — Wed, 09 Jul 2008 16:00:00 +0000

New numbers from the National Association of Realtors show that the housing market is not out of the woods yet.

The association's Pending Home Sales Index fell to 84.7 in May, down 4.7 percent from an upwardly revised reading of 88.9 in April. The index is 14 percent below its level in May 2007.

The recent decline is steeper than the 2.8 percent fall that economists had forecast, according to a consensus of estimates compiled by Briefing.com.

The index had jumped more than 7 percent in April as falling home prices sparked a bout of bargain hunting. But May's reading proved the housing slump is far from over.

In the report, the association lowered its existing-home sales outlook for 2008, saying it now expects sales of 5.31 million, down from the 5.39 million forecast in April.

The association says existing home prices also are expected to fall. The aggregate median existing-home price is projected to fall 6.2 percent this year to $205,300, and then rise by 4.3 percent in 2009 to $214,100, the report indicated.

Pending home sales declined in all regions, but the drop was relatively mild in the West, where sales fell just 1.3 percent. Pending home sales were down 2.9 percent in the Northeast, 6 percent in the Midwest and 7.1 percent in the South.

The index is based on a national sample, typically representing about 20 percent of transactions for existing-home sales. A reading of 100 is equal to the average level of activity during 2001, the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Source: National Association of Realtors

Developer to Convert Former Race Track to Industrial Park

noreply@blogger.com (Will) — Mon, 30 Jun 2008 13:00:00 +0000

Jacksonville Business Journal reported that a Midwestern development company plans to transform a former auto racing track that was once destined to be a residential development into a 1.5-million-square-foot industrial park.

Farmington Hills, Mich.-based Schafer Development acquired the 118-acre property on Pecan Park Road near Interstate 95 June 18 for $4 million, according to the Duval County Property Appraiser's Office.

The developer responsible for another 2 million square feet of industrial space in the Main Street Commerce Park, the New Berlin Commerce Park and the Faye Road Commerce Park in Jacksonville plans to build another 1.5 million square feet at the newly acquired location.

"Our projects are meeting an anticipated demand for space to support commerce in this region," said Adam Ossipove, vice president of acquisition for Schafer Development. "It's a win-win for Jacksonville and its future economic vitality."

The property served as a raceway from 1968-2004. It was sold to Lennar Homes Corp. for residential development but the project was canceled and that started the process of converting the land use back to industrial in 2006.

Harvard Study Predicts Long Return to Healthy Housing Market

noreply@blogger.com (Will) — Fri, 27 Jun 2008 01:01:00 +0000

A new study from Harvard University predicts housing woes will continue as the economy wavers from the sharp drop in home building, credit and stock market turmoil, and a slowdown in consumer spending.

The report, The State of the Nation's Housing 2008, released in June by the Joint Center for Housing Studies, a collaborative effort by Harvard's Kennedy School of Government and the Harvard Design School that researches housing in the United States, said pressure on home prices will persist until the backlog of vacant homes is sold.

"Further price declines will not only increase the probability that mortgage defaults end in foreclosure, but also put a tighter squeeze on consumer spending," the report stated.

The report comes out as new home price data shows continued price declines in April, and consumer confidence plunged to a 16-year low.

New data from S&P/Case-Schiller and the Office of Federal Housing Enterprise Oversight show the home price gains of the past three years erased.

The S&P/Case-Schiller index, the closely watched measure of housing prices, showed home prices in 20 major cities declined a record 15.3 percent in April compared with April 2007, essentially rolling prices back to 2004 levels.

A separate report from the Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae and Freddie Mac, said that in April home prices in the U.S. fell to the same levels they were at in December 2005.

Even as the housing morass continues, the Conference Board said its monthly measure of consumer confidence declined to 50.4 this month, the lowest level since February 1992 and a drop of more than 50 percent since last July. According to a Reuters poll, economists were expecting a consumer confidence reading of 56.4.

If the economy plunges into a severe recession, housing demand could fall even further, the Harvard researchers said. At least 1 million vacant or for-sale housing units were on the market in early 2008.

If the economic downturn proves to be mild, "the fundamentals of demand are likely to drive a strong rebound in housing once prices bottom out and the economy begins to recover," the report noted.

Source: Jacksonville Business Journal

The Housing Crisis is Over

noreply@blogger.com (Will) — Tue, 06 May 2008 16:07:00 +0000

Is it time to start house hunting? Cyril Moulle-Bertaux opined that April 2008 marked the bottom of the U.S. housing market. I totally agree with him that the Florida housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 7-10 years. It just means that the trend is no longer getting worse, which is the critical factor.

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what's going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

Mr. Moulle-Bertaux wrote in The Wall Street Journal that the boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the real estate market to weaken.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.

The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in "months of supply" terms. That's the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.

Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.

Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.

Many pundits claim that house prices need to fall another 30% to bring them back in line with where they've been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one's income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today's house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.

When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.

More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.

A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets' perception of risk related to housing, the financial system, and the economy.

Brett Arends from WSJ also makes a similar argument. He looks at the data on housing starts since 1972, which shows that new housing starts slumped below the one million mark in March. Every time that has happened in the last 50 years, Mr. Arends writes, it proved to be the bottom of a recession.

“It’s bottom-fishing time, I think,” says Wellesley College Prof. Karl E. Case in the column. Mr. Arends says that he is one of the leading experts on the housing market in the country. “There’s got to be bargains in Florida, Arizona and Nevada.”

In the Journal editorial, Mr. Moulle-Bertaux suggests that the housing market will revive, as more first-time buyers are lured in by falling prices and lower mortgage rates. “Homes on average are back to being as affordable as during the best of times in the 1990s,” he writes. “Numerous households that had been priced out of the market can now afford to get in.”

To be sure, as Mr. Arends points out, there is no guarantee that this downturn will follow the patterns of the past. And he notes that prices in many areas are far from a historic bargain. And where there is a glut, prices — obviously — are likely to stay lower for longer. But in many areas, prices are low and buyers may be tempted.

Are you tempted?

Great Time to Buy Real Estate in Florida

noreply@blogger.com (Will) — Fri, 25 Apr 2008 03:46:00 +0000

I read an article in USA Today that points out more foreign buyers vie for U.S. real estate. As the falling dollar makes the U.S. second-home market more attractive to international buyers, we see more and more foreign buyers express their interests in investing in Florida's real estate market. Fifteen percent of all Florida home sales now involve foreign buyers. Now is the best time to buy real estate in Florida.

More than 100,000 homes are sold to foreigners annually in the international second-home market, particularly to buyers from Europe, North and South America, Africa and the Middle East. Current valuations of the U.S. dollar against foreign currencies have made U.S. property one of the world’s great bargains, and the prestige of owning U.S. property remains high.

Real estate agents are increasingly courting foreigners to buy homes in the USA – hiring agents fluent in other languages, marketing to foreign buyers and in some cases, offering to pay the airfare and hotel bills of foreign shoppers who buy a home.

The agents are eager to win the business of foreign investors who are swooping in to buy property in the USA as home prices plummet and the dollar’s weak value produces eye-popping deals for international buyers.

Because of the sinking value of the U.S. dollar relative to other currencies, a home bought by a foreigner comes with a discount averaging 30 percent, the National Association of Realtors estimates. Between April 2006 and April 2007, about 30 percent of foreign buyers came from Europe, according to an NAR survey.

Nearly one-third of Realtors reported in that survey that they had done business with foreign buyers. Activity is especially busy in affluent cities such as New York and in warm-weather vacation destinations such as Miami and San Diego. Many of these investors, Realtors say, are buying homes as vacation retreats.

Florida Existing Home Sales Improve in March Compared to February 2008

noreply@blogger.com (Will) — Wed, 23 Apr 2008 03:56:00 +0000

Florida Realtors® statewide reported slight gains in existing home and condominium sales from February to March 2008, according to the latest housing statistics released by the Florida Association of Realtors® (FAR). A total of 9,330 existing single-family homes changed hands in March, a 12.3 percent increase over the previous month when 8,310 homes sold. Existing condo sales statewide rose almost 16 percent, with 3,207 units sold in March compared with 2,765 condos in February.

The median price for both housing types increased slightly as well during the one-month period. The median price of an existing single-family home reached $205,100 in March, compared with $198,900 the previous month. The median price of an existing condo rose to $176,300 in March from $175,600 in February.

In the latest National Association of Realtors® (NAR) housing outlook, Chief Economist Lawrence Yun says, “Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure. We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets.

In the year-to-year comparison, a total of 9,330 existing homes sold statewide last month while 12,356 homes sold in March 2007 for a decrease of 24 percent, according to FAR. Florida’s median sales price for existing homes last month was $205,100; a year ago, it was $242,800 for a 16 percent decrease. But, looking back to March 2003, the statewide median sales price for single-family homes has increased about 35.2 percent, according to FAR records – at that time, the statewide existing-home median price was $151,700. The median is the midpoint; half the homes sold for more, half for less.

In a year-to-year comparison for condos, 3,207 units sold statewide compared to 4,163 in March 2007 for a 23 percent decline. The statewide existing-condo median sales price last month was $176,300; in March 2007 it was $220,700 for a 20 percent decrease. NAR reported the national median existing condo price was $211,700 in February 2008.

The national median sales price for existing single-family homes in February 2008 was $193,900, down 8.7 percent from a year earlier, according to NAR. In California, the statewide median resales price was $409,240 in February; in Massachusetts, it was $310,000; in Maryland, it was $284,822; and in New York, it was $230,000.

Last month, interest rates for a 30-year fixed-rate mortgage averaged 5.97 percent, down from the average rate of 6.16 percent in March 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Several of Florida’s smaller metropolitan statistical areas (MSAs) showed slight gains in existing home sales for the month. Realtors around the state reported more buyer interest as demonstrated by increased phone calls, showings and other positive movement in their local housing markets.

Among the state’s smaller markets, the Fort Pierce-Port St. Lucie MSA reported a total of 387 homes sold in March compared to 338 homes a year ago for a 14 percent increase. The existing home median sales price was $169,700; a year ago, it was $239,700 for a 29 percent decrease. A total of 69 existing condos sold in the MSA last month compared to 87 condos the previous March for a 21 percent decrease. The market’s existing condo median price was $182,500; a year ago, it was $202,300 for a decrease of 10 percent.

Dave Derrenbacker, president of the Realtor Association of Martin County and a broker with Water Pointe Realty Group, agrees that buyers are recognizing the long-term value of homeownership. “There are some encouraging signs,” he says. “It looks like home prices are starting to stabilize and buyer activity is picking up. In many cases, Realtors are able to show that homes in our area are back to a valuation of pre-real estate boom figures. I tell people, ‘If you missed your chance the first time around, then now is a great time to buy.’”

Source: FLORIDA ASSOCIATION OF REALTORS

NAR: Existing-Home Sales Slip in March

noreply@blogger.com (Will) — Tue, 22 Apr 2008 13:30:00 +0000

Existing-home sales edged down in March, remaining within a narrow range of sales activity that has persisted since last September, according to the National Association of Realtors® (NAR). Existing-home sales – including single-family, townhomes, condominiums and co-ops – were down 2.0 percent to a seasonally adjusted annual rate of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March offset a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.

Lawrence Yun, NAR chief economist, says the market is performing unevenly. “Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets,” he says. “At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.”

The national median existing-home price for all housing types was $200,700 in March, down 7.7 percent from a year ago when the median was $217,400. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets.

A mix of market conditions continues around the country, but areas showing healthy price gains include Des Moines, Iowa; Austin, Texas; and Durham, N.C.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.97 percent in March from 5.92 percent in February; the rate was 6.16 percent in March 2007.

“It appears there is some over-reaction on the part of some lenders now in requiring higher downpayment percentages than may be necessary,” says NAR President Richard F. Gaylord. “On the other hand, buyers in many parts of the country are able to take advantage of more lenient policies for FHA loans. However, because lenders don’t have enough underwriting experience with FHA loans in high-cost areas, there are localized bottlenecks in loan processing. Consumers should consult with a Realtor in their area to learn about the kind of financing that may be available to meet their needs.”

Yun offered a caution: “With elevated inflation, the Federal Reserve should be extra careful about further rate cuts. Mortgage interest rates, which do not move directly with Fed funds rates, may rise measurably and hurt the housing recovery if inflation gets out of hand. Monetary stimulus is plentiful – what is needed more at this point is a home buyer tax credit to get buyers off the sidelines and prevent the market from overshooting on the downside.”

Total housing inventory rose 1.0 percent at the end of March to 4.06 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, up from a 9.6-month supply in February.

Single-family home sales fell 2.7 percent to a seasonally adjusted annual rate of 4.35 million in March from 4.47 million in February, and are 18.4 percent below the 5.33 million-unit pace in March 2007. The median existing single-family home price was $198,200 in March, down 8.3 percent from a year ago.

Existing condominium and co-op sales rose 3.6 percent to a seasonally adjusted annual rate of 580,000 units in March from 560,000 in February, but are 25.5 percent below the 779,000-unit level a year ago. The median existing condo price was $219,400 in March, which is 2.8 percent lower than March 2007.

Regionally, existing-home sales in the Northeast rose 2.2 percent to an annual pace of 910,000 in March, but are 18.8 percent below March 2007. The median price in the Northeast was $284,300, up 4.6 percent from a year ago.

Existing-home sales in the West rose 2.2 percent in March to a level of 940,000 but are 22.3 percent below a year ago. The median price in the West was $285,100, which is 14.7 percent lower than March 2007.

In the South, existing-home sales fell 3.5 percent to an annual rate of 1.92 million in March and are 20.0 percent below March 2007. The median price in the South was $167,200, down 7.1 percent from a year ago.

Existing-home sales in the Midwest dropped 6.5 percent to an annual rate of 1.16 million in March, and are 15.9 percent below a year ago. The median price in the Midwest was $152,600, down 5.3 percent from March 2007.

Source: FLORIDA ASSOCIATION OF REALTORS

St. Johns is One of 10 Most Endangered Rivers

noreply@blogger.com (Will) — Fri, 18 Apr 2008 03:37:00 +0000

The St. Johns River has been named one of the 10 most endangered rivers in the country by a nonprofit group dedicated to waterway conservation.

The river landed on the Washington D.C.-based American Rivers' list because of plans to allow the removal of up to 262 million gallons of water per day to quench Central Florida's growing thirst.

Opponents of the St. Johns River Water Management District's plan say the withdrawal will harm the river's plant and wildlife. The district counters that early research indicates no such effect, but that it will make a final decision on allowing "significant withdrawals" when a two-year environmental impact study is complete.

"No matter what the problem is, stealing is never an acceptable solution," Rebecca Wodder, American Rivers president, said in a news release. "Yet, instead of embracing water smart solutions like conservation and efficiency, Florida lawmakers seem set on sanctioning this river robbery."

The American Rivers' reasoning for the St. Johns making the list was a two-page advocacy paper with no scientific basis, said Alfred Canepa, the water management district's assistant director of resource management. The proposed withdrawals would account for less than 1 percent of the river's flow.

"The withdrawal from the St. Johns River is not the biggest danger," Canepa said. "The biggest dangers are wastewater discharges and stormwater runoff that add pollutants and nutrient loads to the river."

The American Rivers report will help keep the St. Johns Riverkeepers' fight in the forefront and stir agitation among people who don't completely understand the issues.

The issue isn't just an environmental one but also an economic one, said Riverkeeper Neil Armingeon. He warned that millions of dollars in commercial fishing and recreational activities will be lost if the withdrawals are allowed.

"In a state with theme parks, cruise ships, and any number of other tourism-based ventures, it's simply mind boggling that decision makers are telling those who enjoy the St. Johns to take their money elsewhere," he said in a news release.

Duval County and Northeast Florida are improving conservation by increasing reclaimed water usage and will improve the quality of stormwater by making drainage improvements, which are funded through the new stormwater fee, said Mayor John Peyton in a news release.

Source: Jacksonville Business Journal

New Housing Permits Down 41 Percent

noreply@blogger.com (Will) — Wed, 16 Apr 2008 15:35:00 +0000

The construction of new housing continued to slow around the nation in March with permits falling by 41 percent.

According to the U.S. Census Bureau, 927,000 permits were issued for privately-owned homes, down from about 1.6 million during the same period last year. The South accounted for 501,000 of those permits, down 33 percent from 753,000 in March 2007.

Housing starts were also down around the nation and in the South. The 947,000 privately-owned houses that started construction in the U.S. in March were 36.5 percent down from about 1.5 million filed in March 2007, and the 499 started in the South were down 35 percent from the 765 started a year earlier.

Lastly, privately-owned housing completions were down 24.5 percent in the U.S. from about 1.6 million in March 2007 to 1.2 million. In the South completions were also down 24.5 percent from 828 in March 2007 to 625 in March 2008.

Source: U.S. Census Bureau

How the Super-Rich Buy Homes

noreply@blogger.com (Will) — Fri, 11 Apr 2008 16:00:00 +0000

It’s not easy for a movie star, basketball player, or corporate chief to buy a house without attracting a bit of attention.

It requires ingenuity – and help from pricey lawyers – to keep the paparazzi, celebrity bloggers, and stalkers guessing. Last year movie star couple Brad Pitt and Angelina Jolie failed to hide their $3.5 million purchase of a 19th century house in New Orleans’ French Quarter. News got out despite real estate records that listed the buyer as the “Mondo Bongo Trust,” a reference to the Joe Strummer song, Mondo Bongo, which Brangelina danced to in the 2005 movie Mr. and Mrs. Smith.

Other stars have hidden behind trusts with such clever names as “Ingodwe Trust,” “I before E Trust,” “Poopie Trust,” “Senior Moments Trust,” and “Thank You For the Trust Trust” [used by the late actor Heath Ledger], according to Bob Goldsborough, the blogger for bigtimelistings.com who has become an expert at unmasking celebrity home transactions.

Hidden identity

The super-rich also use holding companies to hide their identities and, in some cases, shelter themselves from taxes. But for many elite buyers, who live behind gates or hedges far from the street, privacy is the primary concern. They require real estate agents to sign confidentiality agreements and arrange for private showings during which the owners and all household staff are absent.

Some wealthy buyers do their research on the Internet. They can view photos, videos, and floor plans, and decide without even visiting the home, says Laurie Moore-Moore, founder and CEO of the Dallas-based Institute for Luxury Home Marketing. According to her, a house listed for $100 million kept the most sensitive information such as floor plans and specific inside views hidden on a password-protected site. The passwords were given only to pre-qualified billionaires.

Moore-Moore also reveals that a property of this type often has a three-tiered marketing program. A casual inquirer would get a two-sided brochure with exterior photographs and a little more information on a Web site. A luxury agent with a top client would get a 16-page brochure with exterior views and a few carefully chosen interior shots [with haiku poetry alongside each photograph]. Only a fully qualified client would have access to the password-protected Web site with floor plans, information about the heating and air-conditioning systems, and interior photos and videos, she says.

Discretion advised

Regardless of the house, the buyer might be invisible throughout most of the transaction process. “Screeners” sometimes visit an estate and conduct negotiations on behalf of celebrities or high-income buyers who don’t want their fame to influence the sales price. “If Madonna suddenly expresses interest in buying your house, you might say, ‘Well she can afford it, I’m not going to be negotiable,’“ Moore-Moore says.

Some wealthy sellers also like discretion, especially if they’re going through a divorce, illness, bankruptcy, or some other personal crisis that they’d rather not draw attention to. In some cases, the agent is told not to place the home on the multiple listing service or even to advertise it. The agent might suggest selling the house without a traditional marketing campaign.

A well-connected agent can find a buyer by calling another luxury agent or wealthy client interested in a great off-market listing with unique characteristics.

“Lots of really good stuff, you don’t even need to put on the market,” says Christopher Hain, real estate agent with Hollywood Hills [Calif.]-based Ramsey-Shilling. “Agents facilitate the deal because it allows them to do both ends of the deal.”

Marketing plan

But most clients selling expensive homes are happy to have a strong marketing campaign. Their agents might set up a booth with brochures at an air show or boat show and put an advertisement on the Internet, in The Wall Street Journal, The New York Times, European publications, and niche magazines such as Unique Homes, Moore-Moore says.

“The more expensive a house is, the smaller the pool of potential buyers in the area,” says Rick Goodwin, publisher of Unique Homes, a magazine and Internet site devoted to the luxury market. “As the price goes up, so does the need to expose it outside the marketplace and outside the country.”

But the advertisements frequently provide limited details. Goodwin says it’s common for ads for expensive properties to say “price upon request.” The owner of a house on the market in Beverly Hills asked that the name of the property be digitally removed from a photograph appearing in the magazine; the name was displayed on the welcome mat in front of the house, Goodwin says.

“Some people may not want to make a big deal about it,” Goodwin says. “They might think, ‘I don’t want the fact that I’m selling my house to be a big item in the newspaper.’“

Source: McGraw-Hill

Rail America Moving to Jacksonville

noreply@blogger.com (Will) — Fri, 14 Mar 2008 04:51:00 +0000

Short line and regional railroad company Rail America Inc. will move its headquarters to Jacksonville from Boca Raton sometime after June 1.

Senior Vice President and General Counsel Scott Williams said the company is in the process of combining with Jacksonville-based Florida East Coast Railway, pending regulatory approval from the Surface Transportation Board. Fortress Investment Group owns both companies.

Rail America said the move will affect the jobs of no more than 95 employees, and that it has made offers to many of those employees and expect between 20 and 30 to relocate to Jacksonville with the company.

St. Joe Auctioning Off 3,000 Acres Online

noreply@blogger.com (Will) — Wed, 12 Mar 2008 04:48:00 +0000

The St. Joe Co. is using the Internet to auction off more than 3,000 acres of land in the Florida Panhandle.

The bid deadline is May 1 and the offering includes land in three St. Joe properties -- slightly more than 3,000 acres of recreational property in Gadsden County near Tallahassee called Concord, 56 acres in Port St. Joe with plans in place for an 18-lot residential subdivision called Sabel Island, and 29.5 acres in Bay County near Panama City that is residentially zoned for 50-60 lots called Brewton Lane.

During the online auction marketing campaign, buyers will have the opportunity to bid on one or all of the properties at Concord, Sabel Island and Brewton Lane. Clay Smallwood, president of land sales at St. Joe, said the company chose the online auction to reach a national and international market for the land that is not part of the company's strategy for its core development business.

LFC Group of Cos. of Newport, Calif., is the Internet real estate auction marketing firm that will conduct the auction.

Based in Jacksonville, The St. Joe Co. is one of Florida's largest real estate operating companies. It focuses on real estate development and sales, with significant interests in timber. At the end of September 2007, it owned about 718,000 acres, mainly in northwest Florida, and had $1.2 billion in assets.

Source: Jacksonville Business Journal

Safe Harbor for 1031 Exchange

noreply@blogger.com (Will) — Mon, 10 Mar 2008 05:20:00 +0000

Effective for all exchanges on or after March 10, 2008, Rev Proc 2008-16 creates a safe harbor (meaning the IRS will not challenge the exchange) for “dwelling units” that meet the following criteria:

The relinquished property:

1. Was owned by the Taxpayer for 24 months prior to the exchange, and
2. Was rented for 14 days or more in each of the two 12-month periods immediately preceding the exchange.
3. The Taxpayer’s personal use in each of those years did not exceed the greater of 14 days or 10 percent of the number of days the property was rented at fair rental rates.

The replacement property must meet the same criteria. And the exchange must meet all other §1031 requirements.

It is unknown how the IRS will view properties that do not fall within this safe harbor.

McDonald's Tries Feng Shui Makeover

noreply@blogger.com (Will) — Mon, 25 Feb 2008 17:33:00 +0000

Feng Shui got mentioned in the press again. This time it's McDonald's, world's largest hamburger chain. I thought I share with you the article published by AP in Hacienda Heights, California:

The only familiar signs at the McDonald's in this large Asian community are the golden arches, the drive-through and the menu.

Gone are the plastic furniture, Ronald McDonald and the red and yellow palette that has defined the world's largest hamburger chain. Leather seats, earth tones, bamboo plants and water trickling down glass panels have taken their place.

The makeover elements are meant to help diners achieve happiness and fortune -- whether they realize it or not.

That's because the restaurant was redesigned using the principles of feng shui, the ancient Chinese practice of arranging objects and numbers to promote health, harmony and prosperity.

The concept is an unlikely fit with fast food. But the restaurant's owners say the designs are aimed at creating a soothing setting that will encourage diners to linger over their burgers and fries, and come back again.

The makeover is part of the attempt by McDonald's Corp. in recent years to remodel hundreds of its restaurants to attract more patrons with unique decor and amenities that might entice them stay awhile.

It also fits into McDonald's larger corporate practice of catering to local tastes, such as a fondue-style burger in France or a pita-wrapped "McArabia" sandwich in the Middle East.

"We can't look too cookie cutter," Mark Brownstein, one of three owners of the restaurant, said about the new decor.

The basic principles of feng shui include placing strategic representations of five natural elements -- earth, water, fire, metal and wood -- around the room to increase the flow of chi, or energy.

Feng shui (fung shway) has been employed in the designs of high-rises, banks, even zoo exhibits, and has been popularized by countless coffee table books and TV shows such as HGTV's "Fun Shui." It's also used in the designs of the Panda Express Chinese food chain.

The McDonald's in this Los Angeles suburb boasts wood ceiling, silver-coated chairs, plus red accents throughout the dining area to symbolize fire and "good luck, laughter and prosperity," said Brenda Clifford, who designed the dining area.

The textured walls patterned after ocean waves symbolize "life and relaxation -- the balanced things that you want in your life," she said.

Customers are responding positively, whether or not they recognize the feng shui elements.

"When we first walked in we were amazed, we were happy we skipped the drive-through and went inside," Andrew Chen said while lounging in a white leather booth with a friend.

Chen, 20, said he didn't notice the feng shui elements. He just thought it was a modern interior.

Two workers at the nearby post office said they've been taking more lunch breaks at the remodeled McDonald's, which opened in late December.

"We're here two, three times a week," Waldo Alfaro said as he munched on a Filet-O-Fish and a salad. "It's relaxing, you don't feel any pressure here."

Nevermind that this is the same McDonald's that's been vilified by critics over its artery-clogging Big Macs and fries.

The buzz about the feng shui McDonald's is starting to attract curious onlookers.

"It's successful as a design. It's got a very clean, open, airy appearance," said Elaine Bjorklund, a professor emerita of cultural geography at the University of Western Ontario in Canada, who was in town visiting a friend.

"I'm not a McDonald's habituee," she added as she snapped pictures of the dining area. "It would be interesting to see if this trend will spread."

Brownstein said he and his partners chose the feng shui makeover because the restaurant is located near a renowned Buddhist temple, which is considered good luck. The designs were meant to appeal to the area's growing Asian population, but were also done in a way that would help all customers tap their inner Zen.

With the help of a feng shui master, the designers added details that only feng shui practitioners could appreciate. They include positioning the doors in a way that would block out bad spirits while keeping good ones inside, Clifford said.

The eight rows of red tiles near the food counter are another symbol of fortune, because the number eight is considered auspicious, she said. Meanwhile, the metal sculptures of a crane and Koi fish adorning one wall represent fertility and prosperity, she said.

Clifford said she made the nearly fatal mistake of putting 44 seats in the dining area, until she learned that feng shui followers consider the number four a symbol of bad luck. So she added an extra seat to make it 45.

"Few people would notice it, but if you're in the know, you'll say 'Oh my God, that's terrible,'" she said.

She went as far as staggering the grout lines in the tiles rather than keeping them straight.

"You want to have obstacles in life, it makes you grow," she explained.

While the menu remains the same, there is a McCafe offering lattes and gourmet coffee drinks.

When McDonald's restaurants in Europe upgraded their decor several years ago by adding hardwood floors, armchairs, TVs and other enhancements, sales went up, Brownstein said.

He said business has picked up at his restaurant too.

Other franchise owners are taking notice. Clifford said her company has been hired to feng shui two more McDonald's in Southern California.

Source: Associated Press

Will Vasana Recognized for Internet Marketing Excellence

noreply@blogger.com (Will) — Tue, 05 Feb 2008 14:00:00 +0000

Jacksonville, FL – Nationally renowned real estate marketing and technology speaker and REALTOR.com® Vice President, Max Pigman, has presented to Will Vasana of Watson Realty Corp. the “2008 Real Estate Online Marketing Award of Excellence”. The Award of Excellence recognizes top producers who consistently provide great marketing services on behalf of their buyers and sellers.

“There are but a select number of real estate professionals who distinguish themselves from other agents by doing a little more for their sellers—and Will Vasana of Watson Realty is one of them. In particular; when the home they are selling is placed on a well trafficked site such as the 1st ranked REALTOR.com®, even simple efforts like having more photos displayed, crafting better descriptions or adding a full motion video, can make a home stand out from competing properties,” says Max Pigman, Vice President of REALTOR.com®.

The excellence award was presented to Will Vasana at a recent real estate marketing and technology seminar on February 5, 2008 at The Jacksonville Marriott Hotel. The seminar demonstrated cutting edge techniques for leveraging the Internet and technology in real estate marketing.

Vasana says, “My customers appreciate how I can help bring more attention to the unique selling attributes of their home and ultimately help attract more qualified buyers. Buyers are also appreciative of a well presented home that has a better description and more ways to learn about the property before arranging an appointment. While it’s certainly an honor to receive this award, I think ultimately it would be a disservice not to make Internet marketing part of your standard home marketing plan. Some day soon most agents will see it as a must have requirement instead of something special. We’re already seeing that change”

“The extra steps agents like Will Vasana are taking on behalf of their clients is the reason we thought it worthwhile to call out the effort we have seen these agents make online and to recognize them for providing these added value services,” says Mr. Pigman.

Maximizing marketing exposure for a seller is critical in today’s market. The combination of turn-key marketing system and REALTOR.com® are just one of the many ways Will Vasana is leveraging recent trends in home buyer online behavior to his clients’ benefits.

To find out more about Will Vasana’s award-winning marketing system, call him at (904) 307-8998.

Giuliani Promises to Bring Nuclear Carrier to Mayport

noreply@blogger.com (Will) — Wed, 16 Jan 2008 05:15:00 +0000

Republican presidential candidate Rudy Giuliani, if elected, would work to base the nuclear-powered aircraft carrier George H.W. Bush at Naval Station Mayport after it's commissioned in 2009.

Giuliani promised to do so during a campaign speech in front of the Duval County Veterans Memorial Wall outside Jacksonville Municipal Stadium.

Giuliani cited one of the reasons local leaders have given for years -- fleet dispersal. All the East Coast-based carriers, all of which are nuclear-powered, are based in Norfolk, Va.

Giuliani acknowledged that making Mayport capable of supporting a nuclear-powered carrier will require new infrastructure.

The candidate has garnered the support of some of the most influential retired officers in Jacksonville, including Robert Natter, the retired four-star admiral who led the state's efforts to preserve its military bases during the 2005 Base Realignment and Closure process.

Retired Adm. Kevin Delaney, who is a former commander of Navy Region Southeast and commanded Naval Air Station Jacksonville, joined Natter on the stage behind Giuliani, as did Dan McCarthy, a former captain in the Navy Judge Advocate General Corps and current director of military affairs for the city.

"He thinks it's the right thing to do," Natter said about Giuliani's decision to make Mayport's nuclear capability an election promise.

Giuliani credited Natter as being a close advisor to his campaign on military matters.

McCarthy noted that the Bush, with its 3,300-member crew and the shore-based personnel needed to support it, would have an economic impact as big as any company relocating or starting new operations in Jacksonville. The Bush, whose keel was laid in May 2003 and which was launched in October 2006, is under construction in Newport News, Va.

Source: Jacksonville Business Journal

Joint Venture Buys The Strand

noreply@blogger.com (Will) — Wed, 16 Jan 2008 05:08:00 +0000

The developer of The Strand residential tower on the Southbank has formed a joint venture with a real estate equity fund to purchase the project.

American Land Ventures of Miami developed The Strand, a 28-story apartment building. The company formed a joint venture with Real Estate Capital Partners, an equity fund based in New York.

The joint venture bought The Strand for an undisclosed amount. Merrill Lynch Capital provided $46 million in financing for the purchase, and additional funding was provided by IVG Institutional Funds GmbH.

The 295-unit project was originally planned as apartments. Late in 2006, before construction was complete, American Land Ventures announced plans to convert it to condominiums, but that conversion never took place. The project was sold as apartments, but a conversion could take place later, depending on the market, said Tom Angelo, a lawyer who represented American Land Ventures in the transaction.

Source: Jacksonville Business Journal

New Town Home Development in Ponte Vedra

noreply@blogger.com (Will) — Tue, 15 Jan 2008 05:11:00 +0000

One of the last remaining parcels of developable land east of State Road A1A in Ponte Vedra Beach may be developed into town homes.

The St. Johns County Concurrency Review Committee is scheduled to review Jan. 24 a concurrency application for a proposed 60-unit town home project on an approximately 10-acre parcel on Mier Road that is south of Corona Road, and west of Sea Winds Lane.

A group of investors acquired the property for about $2.2 million under the name LGT Holdings LLC in August 2007, according to the St. Johns County Property Appraiser's Office.

A representative of LGT Holdings said the investment group is pondering a single-family or town home development on land surrounded by The Inlet at Ponte Vedra Beach condominiums, the Colony at Ponte Vedra condos and the Ponte Vedra by the Sea single-family community. Although the details of the project have not been determined, the representative said it would be a high-end, luxury development.

Some of the 215 homeowners in The Inlet at Ponte Vedra Beach condos and Ponte Vedra by the Sea have concerns about traffic during construction and afterward on the shared road Sea Winds Lane as well as the appearance of the entrance to the new community, said Larry Steiner, the president of The Inlet at Ponte Vedra Beach Master Association. That association manages common property among The Inlet at Ponte Vedra Beach condos and Ponte Vedra by the Sea.

"We've talked about what the potential might be," Steiner said of the property, "but when the sign went up a couple of weeks ago we were all pretty shocked." The investment group would have two years, plus a one-time three-year extension, from the date of the concurrency approval to develop the property.

Source: Jacksonville Business Journal

Brooks Donates Fitness Center to YMCA in $16M Deal

noreply@blogger.com (Will) — Tue, 08 Jan 2008 05:02:00 +0000

Brooks Rehabilitation is donating its Southside health and fitness center to the YMCA of Florida's First Coast. The donation, valued at $16 million, is the largest gift to the local YMCA in its history.

Effective Feb. 1, Brooks Health & Fitness will become the 19th YMCA location in a network of facilities that covers a five-county area in Northeast Florida. The facility opened in May 2006.

Brooks officials said donating the 60,000-square-foot center is the best way to expand its programs, such as adaptive sports, injury prevention and wellness.

"We determined that a gift to the YMCA with its existing network of 18 facilities and 65 program locations would best accomplish our goal," said Brooks President and CEO Doug Baer.

Members of Brooks Health & Fitness will be given the option of joining the YMCA when the switch officially takes place Feb. 1, and will have the added enticement of lower rates. An individual membership at Brooks is $75 a month, while a similar membership at the YMCA, which includes access to all YMCA locations in Northeast Florida, is $55 a month.

"We currently have about 3,800 members," said Betsy Fallon, marketing vice president at Brooks. "We believe we could have more."

Fallon said she expects most of Brooks' members to join the YMCA.

Brooks will continue to operate its Center for Sports Therapy at the facility, and Native Sun Natural Foods will continue to operate a cafe at the site.

Not everything will remain the same, though. The YMCA will close the saunas and whirlpools at the facility because they are in open corridors and unmonitored, and the pool will be monitored by lifeguards during all operating hours.

Source: Jacksonville Business Journal

Floridians: Vote Yes on Amendment 1 on 1/29/08

noreply@blogger.com (Will) — Wed, 02 Jan 2008 14:57:00 +0000

Floridians, our fate is in our hands. Passage of Amendment 1 will return money to homeowners right away and put nearly $10 billion back into Florida’s economy over the next five years.

This tax cut is in addition to the $15 billion property tax cut created during a June special legislative session that rolled back property taxes to 2006 levels. Here's a recap:

Early in summer 2007, lawmakers passed landmark legislation to create the largest tax cut in Florida's history. What passed was a two part process that put the people in control:

1. Step one was a law that required local governments to roll-back taxes in 2007, and then to grow at a responsible rate in the future.

2. Step two is in the hands of the People of Florida. On January 29, the people will have the power to cut their taxes in a historic way by passing the constitutional amendment. Floridians have the power and choice to lower their tax bill. They can decide what is best for their pocketbook on January 29, 2008.

Floridians need property tax relief

With the passage of Amendment 1, citizens will gain the freedom to purchase a new home without huge tax penalties, and rental home owners, second home owners and businesses will benefit by limited future tax increases.

The amendment contains two provisions: doubling the homestead exemption and portability of the Save Our Homes tax benefit.

Double the homestead exemption for almost all homeowners, providing an average savings of about $240 annually. The new exemption applies fully to homesteads valued over $75,000 and partially for homesteads valued over $50,000. This new exemption does not apply to school taxes.

Allow portability: Portability will allow homeowners to transfer their Save Our Homes tax benefits from their old home to a newly purchased home. Portability applies to homes purchased in 2007 and later, and the benefit is capped at $500,000.

If you upsize, you will be able to apply the dollar value of your Save Our Homes tax benefit to your new home.

For example:

Homesteader owns home valued at $300,000 and buys a new home valued at $400,000
If you downsize, you will be able to apply the percentage of the Save Our Homes benefit to your new home.

For example:

Homesteader owns home valued at $300,000 and buys a new home valued at $150,000
Provide an assessment cap of 10% for all properties, not previously capped: While homestead properties are already capped at 3%, now all other properties, including rental properties, second homes, and business properties, will be protected from huge increases in valuation. This new exemption does not apply to school taxes.
Create a new $25,000 exemption for business property, including office furniture, computers, machinery and equipment.

Estimates provided by the Legislature show that Florida homeowners and businesses will save over $12 billion in property taxes over the next five years.

Here are some fast facts about Amendment 1.

1. The property tax cut plan on the January ballot that would save taxpayers nearly $10 billion over five years.
2. Floridians have the power to cut property taxes by voting 'Yes on 1' on January 29, 2008.
3. Property taxes have doubled in the past six years outpacing the average growth of homeowner’s salary.
4. Local governments have used their increase in revenues to greatly expand their budgets and reserves, instead of returning it to Florida’s families and small businesses

Amendment 1 benefits those who want to move into a different home, seniors seeking to downsize, and business owners facing rising property values.

Have you been dreaming of moving into a bigger house because your family is growing? Have you lived in your home for years and are looking to buy a smaller home because the kids have grown up and moved to a new city? The scenarios below can help explain how the property tax cut from Amendment 1 will save your money.

Looking for a larger house?

If you bought a house for $95,000 in 1995 and its current market value now is $300,000 and the assessed value is only $150,000--you could transfer the full $150,000 difference to buy a more expensive home.

If the purchase of your new home costs $400,000, you would be paying about $6,300 in taxes without portability. But with the tax savings from Amendment 1 including the Save our Homes portability and the double homestead exemption, the new annual taxes would be about half or $3,600.

Want to downsize?

Under the new tax plan, portability also will apply if you want to move to a less expensive property. Instead of transferring the difference, your transfer will be your existing Save our Home percentage.

For example, if you live in a $300,000 house with an assessed value of $150,000, you pay taxes on $125,000 or about $2,100. If you wanted to move to a $200,000 condo the savings will be significant.

In this case, you would bring 50% or $100,000 in savings that reduces your assessed value to $100,000 on the new property. With the newly increased $50,000 homestead exemption from Amendment 1, the taxable value for all local government taxes other than school taxes would fall to $50,000. The new total annual tax bill would be about $1,000 or about half of the old tax bill.

Do you live in a mobile home?

More than 1.1 million Floridians currently live in mobile home or manufactured housing parks and communities. Currently, if you live on a leased lot in a park or community, you are paying tangible personal property taxes on your porches, sunrooms, storage rooms, and carports. With the passage of Amendment 1, you will have an exemption up to $25,000…so most of you will no longer pay this tax at all!

For more information, visit http://www.yeson1florida.com

Happy New Year 2008 with Feng Shui

noreply@blogger.com (Will) — Tue, 01 Jan 2008 14:44:00 +0000

New Year's Day celebrations date from around 4000 years ago when the ancient Babylonians (modern Iraqis) celebrated Samhain for 11 days in the early spring.

In North America the Auld Lang Syne is often sung right after the stroke of midnight. The literal translation from Scottish is "old long ago."

The English name for the first month is from the Roman god Janus, the god of beginnings and the gatekeeper of doors and entrances.

The Rose Bowl Parade is the most watched New Year's Day parade in North America. Initially, football was not so well received so chariot races were run at the Rose Bowl Stadium from 1903 - 1915.

Roman Emperor Julius Caesar officially established January 1st as the first day of the new year of the European calendar. The day was kept in the 16th century adoption and conversion to the Gregorian calendar, the most widely used calendar in the world.

Year 2008 marks the beginning of the Rat Lunar Chinese Calendar Year. Master Feng Shui Raymond Lo wrote about what to look for in 2008 which I would like to share:

The Year of the Rat, 2008, in the Hsia calendar, is symbolized by two elements – with earth sitting on top of water. According to the cycle of birth and destruction, which governs the inter-relationship between the elements, earth is the conqueror of water. Therefore, earth sitting on water is a symbol of control. But the water of the Rat year is very strong and the earth floating on top of water has no foundation and cannot control the ocean of water. As such, instead of conquering water, it is more like confrontation between earth and water elements. The Earth on top is Yang earth which symbolizes a mountain, and mountain gives sense of stability and firmness. But such floating earth in the ocean is weak in foundation and the stability appears to be fragile. This elemental relationship will bring a year which apparently is more stable but there are a lot of underlying tensions and confrontations.

The Chinese calendar year goes on 60-year cycle. This means that we have experienced the same year of yang earth on rat in 1948. This was a year when the confrontation between USSR and the west intensified with the Blockade of Berlin started and the formation of the Western Union by the Brussels Treaty to confront the threat of USSR; this is the predecessor to NATO. In May this year, the State of Israel was established and also the confrontation between Israel and Arabian countries began leading to the Arab-Israel war.

The Chinese character for “Yang Earth” represents a big mountain. It is associated with the quality of a firm and steady person. People born in a day of “Yang Earth” are often calm and steady and faithful, practical and “down to earth”. Some examples of famous earth people born on a “Yang Earth” day are Hillary Clinton, Denzel Washington, David Beckham, Mahmoud Ahmadinejad, Michael Jackson, Dick Cheney, Eric Clapton and Ben Affleck.

The Rat belongs to the strongest water element and it is the first of the 12 animal signs. So it also represents the beginning of a new 12 years cycle. As such, the Rat year can bring a new beginning of international relationships and social order; this could bring new regimes with new government in some countries. Indeed, there will be many major elections happening between 2007 and 2008 with change of leadership in many countries including USA, United Kingdom, Russia, France and Taiwan. The rat is also considered as a “Flower of Romance” so years of the rat will stimulate more romance and sex scandals. The Rat is in clash relationship against the Horse. This is a clash between water and fire elements and will often bring accidents related to both fire and water, air and the sea. The Rat is the most powerful ocean water and it will bring heavy flooding or even tsunami disaster. The most famous water disasters in history, such as the South Asia tsunami on 26/12/2004 and the sinking of the Titanic on 14/4/1912, both incidents happened on a date with prominent appearance of the Rat. Looking at past history, in 1228 a year of Earth Rat, there is big flood in Holland killing 100,000 people, and in 1588 another year of Earth Rat, the Spanish Armada encountered storm in Ireland and 5000 people died in this heavy storm. In 1888, year of Earth Rat, there is “Great Blizzard” in the east coast of the USA and 400 people died. The clash between fire and water will also bring accidents related to fire and the airline business is in the category of fire element. As such, it is observed that the year of the Rat seems to experience more air disasters. A typical year with many aviation disasters is the previous Rat year in 1996. During this year, there are over 20 major airplane crashes including the U.S. TWA Boeing 747 crashed in July, 1996 killing 230. Looking at the immediate last Earth Rat year in 1948, there were also quite a numbers of airplane crashes including the hijack of a Cathy Pacific airplane in June, 1948.

Yang earth on the rat also symbolizes unstable earth, this will also bring earth disasters such as earthquake, landslide, collapse of buildings. The Earth element is also associate with homosexuality. It so happens many famous homosexuals is born on the day of earth – this includes Leonardo Da Vinci, Michael Angelo, Tchaikovsky, George Michael, Boy George, Andy Warhol, Tracy Chapman, K.D. Lang. Rosie Odonell, etc. As such, there could be more issues in this aspect in 2008. It is not really clear how earth element is linked with homosexuality. Perhaps earth is an element of more neutral nature, compare against the other four, water and fire, wood and metal.

The clash between the Rat and Horse is a serious clash between water and fire elements. This will often bring injury and bloodshed. Therefore people born in years of Horse have to be particularly careful in 2008. As it is water clashing against fire, the danger could be associated with water and fire disasters such as traffic accidents in the air or at sea. Therefore, for people born in the year of Horse, it is recommended that they carry the pendant of an Ox which will help to attract away the Rat, so as to minimize the negative influence of the clash. Anyhow, people who are born in the year of Horse will experience a more turbulent year with more movements and traveling, changes. It is suitable to engage in such movements, such as moving house or moving offices. Traveling is also good but one should avoid going straight towards the North direction as it is the direction of the Jupiter (Grand Duke known as Tai Sui) in 2008.

The Rat also forms a penalty relationship with the Rabbit. Such penalty may cause disharmony, worries and irritations, or hidden sickness. Therefore people born in the year of the Rabbit is also recommended to carry the pendant of the Ox to minimize such penalty influence in the year of the Rat.

The Five basic elements also represent different parts of our body, earth in general relates to stomach, pancreas, muscle and cells. As such, the health problems related to earth could be stomach problem, food poisoning, and diarrhea. Disorder of earth elements can mean problems of muscle and cells, this can bring obesity, diabetes, and cancer…these are all sicknesses caused by imbalance of earth elements. Diabetes is a sickness caused by disorder of insulin which is produced by the pancreas which is also symbolized by earth element in Chinese medicine. So diabetes problem is also caused by imbalance of earth element. As such, these kinds of health problems will also come in focus in the Earth water year of 2008.

In recent years the most imminent issue threatening the survival of human race is Global warming. The polar ice caps have been melting down in an alarming speed and there are forecasts that many coastal populated cities will be submerged under the sea by the year 2050. In 2007 we have experienced dramatic change in climate and there are more weather triggered disasters. It is expected such serious impact of Global warming will intensify in 2008. The pair of elements, yang earth sitting on the rat can be interpreted as the image of floating mass of ice on a big ocean. And this is an alarming sign that the melting of Arctic and Antarctic ice will become more and more alarming in 2008. If we examine the fateful moment of one of the biggest water disaster – the Titanic, we can see the Titanic collided with a floating iceberg at mid night of 14th April, 1912. And when we translate this fateful day and time into the Chinese calendar, we can see the mid night hour on this day is actually Yang earth over the Rat, with yang earth representing the floating iceberg. And this is identical to the elements of 2008. It is anticipated there will be more flooding and water disasters associate with climate change in 2008. Such alarming signal not only shows up in the Chinese calendar, it is also reflected in feng shui.

In 2008, the feng shui flying star number 1, symbolize water element, is in the center. This center number often reflects the focus of events prevailing in the year. Take for example, in 2005 we have Flying star 4 in the center and the number 4 symbolizes the chicken. So this the year the threat of avian flu began. In 2006 the star 3 in the center represents conflict and earthquakes, 2007 the number dominate the center is 2 which is sickness and it has brought the alarm of avian flu in focus again. So we have to assume the number 1 in the center in 2008 will bring more problems with flooding and water disaster. Global warming is an issue concerning the entire human race and every one of us has the duty to take up effective measures to preserve our environment and support the move to reduce CO2 emission.

Regarding the economy, fire element is often the driving force behind the stock market. In the year 2008 there is yang earth on the Heavenly stem with water underneath. The dominating element is water. As such, it is a year of cooling down after the heated economic atmosphere in 2006 and 2007. Fire is the symbol of the financial market and strong fire will stimulate optimism and speculative mentality. Without fire investors will play cool and conservative. However, the strong water element is the symbol of money to the earth industry. With strong water showing up, the real estate market is still active and profitable. Despite the absence of fire element in the year 2008, the spring and summer months still shows strong wood and fire influences bringing upward surge in the stock and real estate market. But investors will be more cautious and practical and there will not be dramatic fluctuations such as in the magnitude of yin fire year in 2007. In general 2008 is a year of cooling down with more stability and calmness in the stock market.

The strong water of the Rat year favors earth and metal industries, as earth conquers water, so the Rat is a symbol of money to the earth industry, which includes real estate, mining, hotel, chemicals and insurance. As for metal industries, metal gives birth to water, so the strong water element in the year indicates productivity and strong activity in metal industries – this include machinery, computer, high tech industries, skincare, health business. The Wood industries, which include textile, fashion, books, publications, paper, forestry, furniture is also into a profitable year as wood conquers earth, so the earth showing up in 2008 symbolize the money of wood industry. But the profit will only be superficial as the earth element is weak.

The less prosperous industries in 2008 will be businesses of water and fire elements. Water industries refer to shipping, communication, drinks, etc. The strong water appearing in the Rat year will bring stronger competition in the water areas and this will very much weaken the profitability. Fire industries refer to finance, stock market, energy, electricity, entertainment, and airline businesses. As fire conquers metal and produces Earth element, so to Fire industry, metal represents money and earth represents productivity. In 2008 metal element is absent and earth element is weak. That is why it is a relatively weak year for the industries related to the fire element.

The real estate market is symbolized by the earth element. This industry had stronger activities in the past years of monkey and rooster in 2004 and 2005 as the metal elements represent productivity of earth industries. There had been some slowdown in 2006, as the fire and earth year brought stronger competition and eroded profitability. However, in 2008, the water element of the rat will bring some money luck to the earth industry, despite there is no strong activities in the real estate market owing to absence of metal element.

With respect to the hi-tech industries sector, as represented by the NASDAQ, I have postulated that this industry is mainly represented by the metal element. As such, the prosperity of hi-tech industry requires the strong appearance of water and wood, which are symbols of productivity and money of the metal industry. In 2008 the water element, meaning activities to hi-tech industries is very strong. As such, it is anticipated that the year is favorable for hi-tech or Internet types of business. But the absence of wood in this year could mean there are more activities without real substantial money gains.

Florida's Existing-Home Sales Slows Down

noreply@blogger.com (Will) — Sat, 22 Dec 2007 05:32:00 +0000

Disruptions in the mortgage market and tightening credit continued to impact Florida's housing sector in the fourth quarter.

Statewide, sales of existing single-family homes totaled 9,165 last month, while 12,846 homes sold in October 2006 for a decrease of 29 percent in the year-to-year comparison, according to the Florida Association of Realtors.

While the latest market outlook from the National Association of Realtors expects conditions for the mortgage industry to improve in the coming months, it predicts that the impact of the credit crunch will continue to be felt through the end of this year, leaving home sales fairly flat. Keeping the current housing market in perspective, 2007 will be the fifth highest year on record for existing-home sales, according to NAR Senior Economist Lawrence Yun.

"It appears raw inventories are stabilizing, but the housing supply is a bit inflated now because the sales pace does not reflect underlying market conditions. Sales were dampened by the mortgage cancellations," Yun said.

Florida's median sales price for existing single-family homes last month was $222,100; a year ago, it was $242,700 for an 8 percent decrease. The median is the midpoint; half the homes sold for more, half for less. In October 2002, the statewide median sales price for single-family homes was $140,900, for an increase of 57.6 percent over the five-year-period, according to FAR records.

The national median sales price for existing single-family homes in September 2007 was $210,200, down 4.9 percent from a year ago. In California, the statewide median resales price was $530,830 in September; in Massachusetts, it was $340,000; in Maryland, it was $295,121; and in New York, it was $213,600.

Sales of existing condominiums in Florida also decreased last month, with a total of 2,819 condos sold statewide compared to 3,508 in October 2006 for a 20 percent decline, according to FAR. The statewide median sales price for condos last month was $192,400, down 8 percent from October's 2006's condo median price of $209,500. NAR reported the national median existing-condo price was $221,700 in September 200.

Last month, interest rates for a 30-year fixed-rate mortgage averaged 6.38 percent, according to Freddie Mac, which is just slightly higher than the average rate of 6.36 percent in October 2006. FAR's sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Source: The Florida Times-Union

Happy Thanksgiving

noreply@blogger.com (Will) — Wed, 21 Nov 2007 13:47:00 +0000

Thanksgiving is a perfect time to count our blessings. Wishing you all a Happy Thanksgiving and many relaxing days with plenty of Turkey! Here are some facts about Thanskgiving:

Thanksgiving was a centuries-old tradition held by most cultures around the world. After the autumn harvest, communities held 3-day-long feasts, sharing meat, bread and drinks. Today, Thanksgiving is known best as a U.S. public holiday.

The first U.S. Thanksgiving was held between September 21 and November 11, 1621 in Massachusetts by 50 Plymouth Pilgrims and their 90 Wampanoag neighbors. After that, Thanksgiving was held fairly randomly. Thanksgiving days were proclaimed annually by the U.S. Congress from 1777 to 1783 which, except for 1782, were all celebrated in December. George Washington declared Thanksgiving in 1789 and 1795, and John Adams in 1798 and 1799. James Madison declared Thanksgiving twice in 1815. None of these were celebrated in the autumn.

The next national Thanksgiving was declared only in April 1862, by Abraham Lincoln. In 1863, he declared Thanksgiving for August 6th, and for the last Thursday in November. He went on to declare a similar Thanksgiving observance in 1864, establishing a precedent that was followed by Andrew Johnson in 1865 and by every subsequent president.

After a few deviations of the day of celebration - Thanksgiving was held on December 7th in 1865, and November 18 in 1869 - the last Thursday in November was proclaimed as the national Thanksgiving day, but still not a officially holiday. Thanksgiving remained a custom unsanctified by law until President Roosevelt signed a bill on November 26, 1941 that established the fourth Thursday in November as the national Thanksgiving public holiday.

Turkey is the traditional dish for the Thanksgiving feast. In the U.S., about 280 million turkeys are sold for the Thanksgiving celebrations. There is no official reason or declaration for the use of turkey. They just happened to be the most plentiful meat available at the time of the first Thanksgiving in 1621, starting the tradition.

Foreclosures Dragging Down Home Value

noreply@blogger.com (Will) — Thu, 15 Nov 2007 04:05:00 +0000

Homeowners in Northeast Florida will lose about $2,000 of value in their homes because of foreclosures on subprime borrowers, according to a report by the Center for Responsible Lending.

The center estimates that there will be 6,300 foreclosures in the five-county area on homes financed by subprime loans and that the value of homes will drop an average of $2,063.

Duval County will have most of the foreclosures -- about three-quarters, according to the study -- but the biggest average drop in value will be in St. Johns County, where values are projected to drop by nearly $2,700.

The center also says the area will lose about $450 million in its tax base over the next several years because of subprime foreclosures.

The state of Florida could lose $23.5 billion from its tax base, the fallout of an expected 98,000 foreclosures coming from subprime mortgages made in 2005 and 2006.

Nationwide, the center says the subprime foreclosures will cause 44.5 million homes to lose $223 billion in wealth over the next few years, most of it in 2008 and 2009 and with the most severe impact in minority communities.

The $223 billion loss affects many cities and communities, as lower property values translate into less revenue to fund schools, hospitals and other government-funded programs. The center said that, as a result of subprime foreclosures, 42 counties and about half the states will lose more than $1 billion each in reduced property values.

"These losses are particularly tragic when you consider that most subprime foreclosures never should have happened," said Martin Eakes, the center's CEO and head of Self Help, a credit union and nonprofit lending fund, in a release. "The subprime industry became intoxicated with large fees from dangerous loan products. Unfortunately, lenders and Wall Street aren't the only ones suffering through the hangover; 44.5 million innocent bystanders are feeling the pain, too."

Source: Jacksonville Business Journal