| October 29, 2004 - Slower economic growth next year will hold average mortgage rates to 6.5 percent or lower throughout 2005, according to a mortgage trade group's forecast released Wednesday. Interest rates for 30-year fixed-rate mortgages will finish this year at 5.9 percent on average, then climb gradually to 6.5 percent by the fourth quarter of 2005, said Doug Duncan, chief economist for the Mortgage Bankers Association. October 30, 2004 - What will make homebuyers happy? It -- no surprise -- depends on the homebuyer. But a survey released yesterday by the National Association of Realtors (NAR), the 2004 National Association of Realtors Profile of Buyer's Home Feature Preferences, narrows down the wish list for different demographic groups. Younger buyers, for example, care most about a home's proximity to schools, parks and playgrounds; older buyers, meanwhile, prefer first-floor bedrooms and single-story houses. October 31, 2005 - There are several provisions of interest to homeowners in the tax overhaul bill (H.R. 4520, the American Jobs Creation Act of 2004), recently signed by President Bush. A long-sought rule to allow owners to amortize the cost of improvements made for tenants in commercial properties from 39 years to 15 years. Though this provision expires in December 2005, NAR says the fact that the 15-year cost recovery period is established in statute sets an important precedent for future Congresses. Another aspect of this act is it makes it more difficult for housing investors to avoid a capital gains tax. A tax loophole allowed investors to purchase a rental property through a 1031 exchange, which shielded them from capital gains taxes. The investor could then move into the home for two years and shield the capital gains by claiming the personal capital gains tax exemption of $250,000 ($500,000 for a couple) on the sale of their principle place of residence. Now, however, this type of investor must live in the home a full five years before being eligible for the capital gains exclusion. November 7, 2005 - The prospect of lengthening commutes is leading more Americans to seek walkable neighborhoods in close-in suburbs and cities, according to the 2004 American Community Survey sponsored by the National Association of Realtors and Smart Growth America. A commute time of 45 minutes or less is the top priority in deciding where to live for 79 percent of Americans. Other top priorities include easy access to highways (75 percent) and having sidewalks and places to walk (72 percent). Having a large house on more than one acre of land is important to 57 percent of Americans. November 17, 2004 - With is a steady flow of some 900 people a day to Florida will soon increase as the bulge of baby boomers starts to retire. In the third quarter of 2004, builders moved more people into houses in the Tampa Bay area than ever before. The median sales price of a single family unit in Pinellas County during October, 2004 reached $219,300 a 15.9% increase from October, 2003. With a low local unemployment rate and strong demand for real estate there is no "real estate bubble" forming in Pinellas County. November 21,2005 - Starting next month, all U.S. residents will be permitted a single free credit report under the Fair and Accurate Credit Transactions Act. Also known as the FACT Act, the measure phases in the one free report per year across the country, starting on Dec. 1 in 13 mostly Western states and spreading to the rest of the nation by Sept. 1, 2005. November 23, 2005 -It's almost Thanksgiving, and if you wish to give thanks for all the tax money you saved by itemizing your deductions in 2004, it's time to sit down and look through receipts. Thanks to a change that allows Floridians to deduct sales taxes and a limited deductibility for damage from storms, some residents who never itemized their tax deductions before will benefit by doing so this year. January 4, 2005 -Florida's housing market picked up the pace in November - In the Tampa-St. Petersburg- Clearwater area, 3,276 homes changed hands for a 4 percent increase. The median sales price also rose 20 percent in the Tampa Bay markets reaching $167,100 in Tampa-St. Petersburg-Clearwater. January 7, 2005 - Besides favorable market fundamentals, buyers are acquiring a third piece of real estate in order to retire in multiple destinations or to be closer to relatives. Additionally, some third-home buyers are motivated strictly by the potential for profit, as the surge in housing prices over the last few years has powered the belief that real estate is a fairly safe haven for investors January 12, 2005 -Real estate mogul Donald Trump will put his name on the Tampa skyline, announcing the construction of a $220-million luxury high-rise which will be Florida's tallest residential building on the Gulf Coast. The ritzy 52-story Trump Tower Tampa will be built on a now vacant lot on the Hillsborough River in downtown Tampa. Residence will range from $700,000 to $5.5 million, and will include such perks as valet services, exotic wood finishes and imported marble floors with inlaid onyx. The high-rise also will have restaurants and retail shops. Construction will begin in April, the building could be ready for occupancy near the end of 2007 February 15, 2005 One-Year Appreciation: 22.7% Median home prices here have more than doubled in five years, to $410,000, as foreign investors take advantage of a weak dollar and bidding wars are common. New condominium projects are pulling median prices up even more, with starting prices of around $700,000. March 12, 2005 A continuing tight supply of for-sale homes, low mortgage rates and high demand impacted Florida's housing market in June, pushing the statewide median price of existing single-family homes up 31 percent to $248,700; a year ago, it was $189,200, according to FAR. Statewide resales activity lowed slightly from the blistering pace of recent months, with a total of 25,455 omes sold, compared to 26,112 homes a year ago, for a 3 percent drop. September 2, 2005 David Lereah, chief economist of the National Association of Realtors had nothing but good things to same about real estate in Florida when he addressed members of the Pinellas Realtor Organization on September 1st. Mr. Lereah said, " This is a healthy marketplace. When I look at Florida, you know what I see? I see California 100 years ago." Lereah says the state's population will double by 2040 as people and their money continue to migrate to Sunbelt states from the Northeast and the Midwest. When home prices do start to fizzle, it will be more like a balloon slowly leaking air than a sudden burst, he said. The economist went on to say that he is putting money where his mouth is; he owns properties in Tampa and Fort Meyers. November 18, 2005 Despite incessant warnings that the bubble is about to burst, home prices continued upward in the summer and early fall. Double-digit rates of increase were recorded in the state and the nation, according to separate reports released. In Florida, the median sales price for existing, single-family homes in the third quarter rose 31 percent to $248,600, according to the Florida Association of Realtors. A year ago, the median was $189,900 in the July-September quarter. The Tampa Bay area ranked 15th out of 20 Florida markets for the quarter with a 29 percent price increase over last year. The median sales price was $216,100. The most expensive market in the state was Naples with a median price of $489,200. The least expensive was Ocala, with a median price of $151,600. December 1, 2005 Home prices across Among the state's larger markets, the December 29, 2005
In a letter to the editor Wednesday to The New York Times, NATIONAL ASSOCIATION OF REALTORS President Thomas M. Stevens reinforced the message that using a real estate professional to sell a home "more than makes up for the cost, not to mention the savings in time, effort, and hassle." The letter was in response to a Jan. 3 article in the Times about the success of a for-sale-by-owner Web site in Madison, Wis., operated by two women out of a spare bedroom. The article stated that the Web site and other models are successfully challenging the traditional real estate brokerage model. The article "failed to provide your readers an accurate picture of the advantages and disadvantages of going it alone when making the most important transaction of their lifetime," wrote Stevens, senior vice president of NRT Inc. in Vienna, Va. Citing NAR research statistics, Stevens wrote that the average home sold with the help of a real estate professional last year brought $230,000 while the average home sold directly by an owner went for 16 percent less at $198,200. "Its no wonder that the percentage of homes sold by owners actually declined last year despite the real estate boom in most areas of the country," Stevens wrote January 26, 2006 Real estate business booming in Florida The median price for existing single-family homes in Florida continued to rise in December and home sales in 2005 increased 2 percent over the previous years, according to the Florida Association of Realtors. The median price for existing single-family homes in Florida continued to rise in December, reaching $247,000 -- an increase of 27 percent compared to the statewide median price of $194,000 in December 2004, according to FAR. In December 2000, the statewide median sales price was $116,200, which is an increase of 112.5 percent over the five-year period, according to FAR records. The median is the midpoint, which is a typical market price where half of the homes sold for more and half for less. The national median sales price for existing single-family homes was $213,500 in November, which was 13.5 percent higher than November 2004, according to the National Association of Realtors.
Condo hotels make up 3 percent of U.S. hotel room inventory. But they accounted for nearly 13 percent of the 100,452 hotel rooms under construction nationwide in December 2005, according to Smith Travel Research. Florida ranks behind only Nevada with nearly 25,000 rooms in condo hotels, most in Miami and Orlando. The Tampa Bay area has just more than 3,000 and hundreds more in the pipeline. Clearwater Beach is ground zero. Five major hotels are expected to open by 2008, all with rooms owned by individuals and amenities such as fine dining restaurants, room service, fitness centers and spas. The condo hotel label covers a variety of hybrids. They include older hotels rooms or condos that are refurbished and sold to investors. But the fastest growing type are new, fully furnished, high-end hotels in popular resort areas, like Clearwater Beach. Developers typically build suites for two different types of buyers within the same project. The biggest, most expensive units are for ultrarich customers who want a second home but don't need to rent it out. A prime five-bedroom, gulf front condo at the Hyatt hotel project tops out at $5.5-million. They want a vacation home they can use for a month or two each year and rent out the rest of the time. While owners are free to lease the suite themselves, most sign up with a management firm that markets, books and runs the hotel. Typically, the hotel management company takes 10 percent of room revenue and the rest is split between the unit owner and developer. Owners hope to recoup some of their expenses: real estate taxes, mortgage payments and monthly fees for running and maintaining "shared facilities" like the front desk, pool and hallways. The condo hotel boom is driven not just by what the buyers want but by what the banks demand. Selling rooms has become a critical piece of the economics of building high-end hotels. "Nearly all 4- and 5-star hotels being built today have "a considerable residential piece as part of the economics of the deal," says Daniel Peek, managing director of Regent Street, a hospitality investment consultancy in Tampa. It's not so clear if condo hotels are a good deal for buyers. How much money they make depends on how often their rooms are rented and at what rates. If travel takes a hit from a weak economy, hurricane or some other event, owners' income could plummet. After the Sept. 11 attacks, occupancy rates at Pinellas hotels fell for a year - as much as 10 percent in some months. Another uncertainty for buyers is resale value. With so little history on condo hotels, Peek wonders if owners will keep older and smaller units. "It's an unknown long-term if people will want a hotel room once the asset gets a little tired . . . and the walls start to close in on you," he says. Owners also need to keep an eye on what expenses are included in the monthly fee that developers charge, says Mark Lunt, a hospitality analyst with Ernst & Young in Miami. "What about the number of pencils at the front desk or the bellman's time - who pays?" he says. "You split so many expenses and how many accrue to all owners or just those in the (rental) program? It's like a Rubik's Cube." Condo hotels have taken off in recent years as baby boomers approaching 60 search for investments with better returns than stocks, he says. The hot real estate market, low interest rates and stronger hotel occupancy and rates fueled the boom. .Potential buyers should consult a real estate professional to help them do research on this new type of housing. Whether formally considering it an investment or not, they buy units without enough information to back up their expections, says Andrew Robins, an Boca Raton lawyer who represents hotel and resort owners. "The most important thing is you really do make a mistake if you are looking at these as investments," he says. "They were invented for people who want to use the unit and stick it in a rental program to offset some of their costs The Tampa Bay area ranked ninth in Inc. magazine's annual list of the "hottest large cities" to do business. Competing against 393 metro areas of all sizes, the bay area punched in at 64, based on 2.6 percent job growth representing about 40,000 new jobs the past year. The region is keeping plenty of Florida companies on the Inc. list. In the large-city category, Tampa lagged behind Fort Lauderdale, Orlando and West Palm-Boca Raton. "Affordable business and living costs, terrific weather, and plentiful jobs keep attracting people to Tampa Bay," the magazine said in the current issue's '06 Boom Towns story. If you thought the new jobs were all in construction, guess again. Construction accounted for 10 percent of the growth, dwarfed by the 40 percent of new jobs in business and professional services, a category that includes Realtors, mortgage officers and accountants. Education and health services (think teachers, nurses, medical technicians) generated a further 10 percent of the jobs gain. While cheering its ranking on the boom town list, area business leaders continue to grouse about wages averaging, depending on the survey, from $33,000 to 37,000. It's become a familiar refrain: Combined with escalating housing prices, such relatively low pay threatens future competitiveness. "Every survey that's come out, we continue to keep growing in jobs," said Betty Carlin of the Tampa Bay Partnership, the jobs recruitment arm for the seven-county region centered in Tampa. "But we're looking at the bigger picture and saying, "How are we growing higher wage jobs?' As far as higher wages are concerned, we still have a way to go." The theme of Inc.'s story this year was "The Revenge of the Boondocks." Small and midsize cities racked up some of the biggest gains both nationally and in Florida.
The Tampa Bay area's home price boom has been mostly a land price boom. Land accounts for nearly half of an average home's value in Tampa-St. Petersburg-Clearwater, up from about a third of a home's value in 1998 and a quarter of a home's value in 1984. Waterfront lots have appreciated the most, but the trend played out across most of the region, even in monster suburban subdivisions built on former cow pastures. At a time when builders can replicate homes by the thousands, it's increasingly land that sets a home's value, said University of Wisconsin economist Morris Davis, who drew up the findings in a recent report released with Federal Reserve economist Michael Palumbo. "When house prices grow faster than construction costs, it's arithmetically impossible to be anything but land prices," Davis said. In Pinellas County neighborhoods such as Yacht Club Estates, Kenwood, Redington Beach and Snell Isle: Land is so valuable that some homes have become almost disposable. "Land prices are magnified greatly when you're on the water. If you can smell water, view it, spit in it, that property has taken off," said Warren Weathers, Hillsborough County's assistant property appraiser. Economists were surprised to learn bay area land had appreciated so much, Davis said. Local land prices still haven't reached Miami's, where 71 percent of an average home's value is the lot, but since 1998 Tampa has bested Miami in the rate of growth. We don't know what's going to happen in future, but if the future looks like the past, housing prices will grow faster and grow more volatile," Davis said.
The housing market downturn looks rougher than the soft landing housing analysts had been expecting, but some economists are saying the downswing will unlikely lead the economy into recession. NAHB Chief Economist David Seiders said that he is forecasting an 11.5 percent decline in housing starts this year, followed by another 11.7 percent drop in 2007. Housing should hit bottom by the middle of next year, and will be approaching a demographically based trend production level of about 2 million units in 2008 (including manufactured homes). Following an unsustainable boom in housing starts, sales and price appreciation in 2004 and 2005, "we need a period of below-trend performance to work off excess inventory and improve housing affordability," said Seiders. "Mortgage rates are dropping; builders and sellers are offering all sorts of incentives and upgrades, energy costs are retreating and the national economy is moving ahead, making it a very good time to buy a home." Seiders said he is assuming that rates on 30-year mortgages will average about 6.5 percent for some time, pointing out that long-term interest rates have been "performing beautifully" since mid-year. He expects the Federal Reserve to hold the federal funds rate at the current 5.25 percent into the first half of next year, and likely move it down to 5 percent by mid-2007. Noting that housing is now a major source of weakness for the economy, Nariman Behravesh, chief economist for Global Insight, said that the "good news is that other sectors are doing reasonably well and will continue" to do so. Corporate cash flow is at record levels, and that capital will be used to invest in equipment and structures and create some new jobs, he said. Although a soft landing is "no longer in the cards" for housing, Behravesh said that type of outcome most likely awaits the U.S. economy, with the gross domestic product growing 3.4 percent for this year, 2.2 percent next year and possibly slipping below 2 percent for a few quarters ahead. He agreed with other teleconference participants that a slowdown, or even a decline, in home price appreciation will reduce the wealth effects from home equity, but the impact on consumer spending and the spillover to the rest of the economy should be relatively modest. During the recent boom, inflation-adjusted housing prices rose to record levels, and the market is paying the price for that rapid ascent now, with "prices coming down off their own weight," Behravesh said. The current housing downturn "was not triggered by a substantial increase in mortgage rates, which didn't go up that much and are down now and low by historic standards, putting a floor on the housing market." Looking at fundamentals such as demographics and income growth, housing prices in 70 of the 300 metro areas that his company and National City Bank survey quarterly are overvalued, Behravesh said, by an average of 30 to 35 percent. Located primarily in the Northeast, Florida and California, these markets can expect to see some downward price adjustments. In Boston, for example, prices could drop 15 percent over the next year or two. At the same time, such cities as Chicago or Houston, where the large run-up in home prices didn't occur, might see continued appreciation at low levels. Behravesh predicted that prices could drop 5 percent nationally over the next year. "To bring the markets back into equilibrium," he said, "we need sluggish growth in prices for three, four, five years. We have to have home prices rising less than the rate of inflation to get things back into equilibrium. In the last boom and bust, overvalued markets generally were in the same place and it took them the better part of the decade of the 1990s to see real prices get back to levels that preceded the boom years." Behravesh said that housing starts will fall into the 1.5 to 1.6 million-unit range as the downturn progresses, "but nothing worse than that." Seiders is looking for a bottom of 1.6 million in mid-2007. Jim Glassman, managing director for JPMorgan Chase, said that the current housing downswing could proceed faster than expected, and "things could bottom out faster than you see in the numbers. A rapid adjustment in prices and the rapid adjustment builders are making in production" could reverse the speculative excesses of the boom market. Annual "housing starts shouldn't go below 1.75 million for long," he said, "and the long-run trend for housing production is about 2 million units per year." Strong global economies, record levels of corporate profits in the U.S., a healthy stock market, unraveling energy prices, and falling interest rates are among the "safety nets" for housing during the adjustment period, he said. "Don´t be surprised if 30-year mortgages fall back to the 5.75 percent level," he added. "Most of us will be grateful if housing prices flatten out for a couple of years. ... This is not your classic interest-rate story, so it won't be long before we work though this, recognizing that we are in a transition now." Mike Moran, chief economist for Daiwa Securities America, complained about how the news media are portraying housing market conditions as the industry is "going through a correction that's badly needed. The key issue is whether the correction is orderly or disorderly, and the correction looks orderly even though it's portrayed as a catastrophe in the press." New-home sales are "right in line with where we were in 2003, which was then a record year for housing," he said, "and we have squeezed out the exuberance that was in place in 2004 and 2005." Taking a look at single-family housing starts compared to new-home sales, Moran pointed out that the former are slowing more sharply than the latter, another indication that the industry will adjust fairly quickly. "We are in line with the 2003 average for sales, but far below that average for starts," he said, "showing that builders are taking the steps they need to take in order to get inventories under control." Last week, a new report said the cost of owning a home in Florida rose at nearly twice the national rate over the past five years, consuming an ever larger share of homeowners' incomes. The Census Bureau said Floridians last year spent 22 cents of every $1 of income on housing up from 19.6 cents per dollar in 2000. What didn't show up in the dated Census figures are the run-away costs in Florida of property insurance, real estate taxes and utilities within the past year. A lot more Floridians now find the formula - housing costs + mortgage + taxes + insurance - pushes them well over the 30% comfort zone of income devoted to a home. Florida's economy is far better than the nation's - it is strong and the population is growing. This should allow the state to bounce back more quickly than many other parts of the country. Southwest Florida, from Sarasota south to Naples, is especially vulnerable to a "crash" - defined as more than a 10% drop - in housing prices. The Tampa Bay market, which suffered less speculative price hikes in recent years, should fare better than some of its metro neighbors to the south. October 27, 2006 The National Association of Realtors reported Wednesday that U.S. sales prices of existing homes slipped 2.5% in September, the biggest year-over -year decline in nearly four decades. The Tampa-St. Petersburg-Clearwater market however registered a 6% rise in the median single family home price to $227,400 last month, versus $215,200 a year ago. The pace of selling Tampa Bay area homes has plunged 42% lower from a year ago. The inventory of homes for sale is up 188%. Local home prices are not still going up. Prices continued to rise last fall and into the winter, but have retreated the past 5 months. Pinellas County appears to be taking the biggest hit - Hillsborough and Pasco counties have held steadier, depending on the neighborhood. Across Florida, the volune of sales is off 34%. Statewide the medium home price dropped 1%. High property insurance is one of the main problems. Sarasota-Bradenton decreased the most - 16%. Nearby states which are competitors in the home relocation industry are doing better. Sales are off just 4% in North Carolina and 12% in South Carolina. The inventory of unsold homes in Pinellas, Pasco and Hillsborough Counties has nearly tripled from last year. Condos in the St. Petersburg and Tampa area are even in worse shape - sales are off 46% from last year. David Lereah, economist for the National Association of Realtors, thinks we have bottomed out in terms of this decline in sales while other housing experts predict sales will pick up in the spring. Many buyers are waiting and watching to see if prices will drop further November 15, 2006 Riverside-San Bernardino, Calif., -51 percent The housing market continues to stabilize, evidenced by the downward trends in home sales and the high volume of homes available for sale. October annual existing-home sales fell to 6.2 million, which is down 14 percent from one year ago. The U.S. volume of existing homes available is down from last month, but at over 3.7 million listings, it is still at near record levels.
WEB JOURNAL WEB JOURNAL Sales and median prices of single family homes tumbled year over year in Florida and the Tampa Bay area: Fast Facts: Tampa-St. Petersburg-Clearwater Feburary 2006: 2,957 Feburary 2007: 2,001 Decline of 32 percent Florida February 2006: 14,080 February 2007: 10,779 Decline of 23 percent Prices Tampa-St. Petersburg-Clearwater Feburary 2006: $216,700 Feburary 2007: $213,300 Decline of 1.6 percent Florida foreclosure activity spiked more than 63 percent from the previous month, giving it the nation's third-highest state foreclosure rate in February -- one foreclosure filing for every 382 households. The state reported 19,144 foreclosure filings during the month, the most of any state.
2. Real estate is tax-advantaged. Any interest incurred for the financing of a second home is deductible from ordinary income for tax purposes. If your second home becomes an investment property, tax can be deferred and sometimes eliminated. You still pay capital gains tax on stock and you can't deduct the interest on any debt incurred for the purchase of financial assets. 3. And finally, here's the only return that drives the Jones camp: you can live in real estate. Stock certificates are pretty, with great colors, cool writing and embossed letters. Unfortunately, you can't go to sleep in them or stand on them to watch the sunset over the lake, or hold a party for your friends and family in them. They just (hopefully) make you money. Real estate provides many different kinds of satisfaction that money can't.
Real estate market corrections follow three basic recovery patterns: a V-shaped recovery where a real estate market experiences a sharp, fast decline but comes out strong once it hits bottom; a U-shaped recovery, where prices decline gradually and recover slowly; and an L-shaped pattern, a hard, fast fall with a paltry price bounce-back after the market trough. The differences between a V-shaped real estate market and a U-shaped one have to do with barriers to growth. High vacancy rates and high investor share can hurt a real estate market, but if the local economy remains strong and housing stock affordable, it's only a matter of how long it takes to absorb the excess inventory. Tampa, Florida, is a perfect candidate for a V-shaped recovery, according to research from Moody's Economy.com, an economic analysis, forecasting and credit risk firm in "As investors exit, the real estate market revives," says Mark Zandi, chief economist at Moody's Economy.com, as fewer speculative buyers result in a more stable real estate market. "Tampa's a pretty affordable real estate market, and first-time buyers can come in once prices fall." Based on Moody's Economy projections, These projections take into account housing affordability, vacancy rates, the strength of the local economy and job market, investor share in 2005 and the share of subprime mortgages. Data are from Moody's, the Bureau of Labor Statistics and the Federal Reserve. Predicting the bottom of any asset market, especially real estate, is a difficult thing. While these projections are based on sound data and advanced modeling by Moody's, no one can predict future real estate markets with absolute certainty. After five hours of deliberation, the state House just passed the joint resolution given to it by the Senate earlier today. House members said the bill, which would give the average homeowner statewide a little over $300 of relief, was inadequate. They also were concerned about the additional millions the plan would cut from schools. At the same time, many members of the House argued that some relief was better than no relief. Voters will vote on the constitutional amendment on Jan. 29. If approved, the homestead exemption would be doubled from $25,000 to $50,000. Since school districts are exempt from this benefit, the discount in value is effectively closer to an additional $15,000. Additionally, homeowners would be able to transfer their Save Our Homes benefit of up to $500,000 to a new homestead. In the case of moving to a more expensive home, the entire benefit transfers; if downsizing, the same proportion of value is transferred. The provision is retroactive to include 2007 homebuyers. Absent from the bill is a discount for first-time home buyers and breaks for low-income seniors. The bill would also: •• Allow businesses may exempt up to $25,000 worth of tangible personal property-equipment such as computers and furniture. •• Annual valuation increases on non-homesteaded properties are capped at 10 percent, similar to the 3 percent Save Our Homes valuation cap for homesteads. This provision expires after 10 years, when voters will be asked to re-approve. January home sales in Pinellas, Pasco and Hillsborough counties fell by 24 percent from a year earlier. Prices slid 15 percent in the same interval. The good news? The regional plunge to the bottom may be nearly over. Home sales totaled 1,235 last month in the three counties, the Florida Association of Realtors said. That's 24 percent below the 1,627 homes that sold in January 2007 and 59 percent below peak January sales of 2,995 in 2005. Reflecting a glut of more than 40,000 houses and condos for sale on the market, median home sales prices declined from $220,100 to $187,100 the past year. The Tampa Bay housing market didn't take the worst beating in January. Miami, Orlando, Daytona Beach and Jacksonville all had steeper sales declines. And evidence from the housing market to our south suggests our home sales descent could cease this year. Sarasota-Bradenton home sales rose 4 percent from January 2007 to January 2008, stopping what had been a half-year slide in year-to-year sales. Sarasota's housing downturn started in the first half of 2005, at least six months before the bubble burst in Tampa. Amendment 1 delivers record plunge in Pinellas taxable property valuesPreliminary figures released by the Property Appraiser's Office show the value of taxable property in Pinellas plunged 8 percent from 2007 to 2008. That's an unprecedented drop. The office's records only date back to 1989. From then until now, the lone countywide decrease in taxable values was a modest dip of 0.6 percent in 1992. For local governments, the drop means the same tax rate will bring in less money. Nearly the entire $6.3-billion difference can be traced to Amendment 1. The measure, approved by voters in January, did three things: • Created an additional homestead exemption of $25,000 for local but not school taxes. That stripped $5.1-billion from the county's taxable property rolls. • Made some benefits of the Save Our Homes cap portable, which swallowed another $115-million. • Struck many tangible personal property accounts from tax rolls, removing $200-million. But the estimates are preliminary. While the appraiser's office has revised values on all residential property in Pinellas, values for only half of commercial properties and 60 percent of condos are completed. So the figures may be adjusted over the next month. Despite the declining market, those who have enjoyed the Save Our Homes cap for several years will still see their taxable values rise. That's because the Save Our Homes cap allows a 3 percent increase in tax assessments, even if a home's market value falls. For example, consider a home with a market value of $300,000 and an assessed value of $200,000. If the market value of the home drops 5 percent, or $15,000, it then becomes worth $285,000. But the Save Our Homes cap allows taxing authorities to increase taxes until they reach market value. So the assessed value can increase by 3 percent, or $6,000, to $206,000. And even in a falling market, that's what you're going to pay taxes on. For those who don't have a homestead exemption, the drop in property values could mean a significant savings on next year's tax bill. Dropping property values Percentage changes in taxable property values for Pinellas County and its municipalities, 2007 to 2008, according to preliminary estimates from the Property Appraiser's Office. Belleair- 4.8 percent Countywide- 8 percent Trapped Sellers Undermining Florida Real Estate
St. Pete listed as "Best Walkable City" in Florida
Downtown St. Petersburg's Spa and North Shore Beaches2nd Avenue NE & Tampa Bay (at the Pier). In the heart of the bustling downtown of Florida's fourth largest city, St. Petersburg has two public beaches along its breathtaking waterfront. Spa Beach and North Shore Beach offer white sandy beaches on the shores of Tampa Bay. Spa Beach, located at the base of the St. Petersburg Pier, once housed a toboggan slide and solarium for early tourists and residents. Today, beach visitors can relax in the sun or rent paddleboats, jet skis and other watercrafts. It's also home to special events, such as the annual St. Anthony's Triathlon. Nearby, North Shore Beach includes a playground, an Olympic-caliber year round swimming pool, tennis courts, ample parking, and a beautiful palm arboretum for beachside picnics and afternoon strolls. The city of St. Petersburg continues to enhance its recreational lifestyle with the downtown connector of the Pinellas Trail nearing completion. According to Joe Kubicki, Director of Transportation and Parking and Cheryl Stacks, Bicycle Pedestrian Coordinator, there are many other improvements in the works including a new Trail overpass at 34th St. and new paths to Treasure Island, Clam Bayou and the Fishing Pier at the Skyway Bridge. Imagine being able to travel throughout most of the county to many unique destinations without vehicle traffic! Please access the following websites for more information or visit to pick up your official St. Petersburg Bike Map! www.pinellastrails.org or www.stpetecitytrails.org AMENDMENT 1 - PORTABILITY - A BOOM OR A BUST Governor Crist, governor of the state of Florida, promised realtors last summer, the summer of 2007, at the Florida Association of Realtors convention in Orlando, that when Amendment 1 was passed they should be ready for the upspring that the housing market will experience. Five months after the passage of Amendment 1, the realtors are still waiting. Homesteaded property owners will see a modest cut in their taxes due to the standard homesteading exemption being raised from $25,000 to $50,000. However the big part of Amendment 1 was the portability issue. Protability allows longtime homeowners to transfer tax savings from the Save Our Homes cap to a new property that they buy. This was supposed to open up the market for the people that felt that they were prisoners in their home because even though they might be downsizing they would still have to pay more in property taxes due to the Save Our Homes cap that they had experienced for many years on their current home. The Save Our Homes caps increases in assessment values for property taxes at 3% each year. However to fully benefit from the new portability they have to be able to sell their current home first. How much they will save varies, it is based on the differences between their old home's assessed value and its market value. In Pinellas County, on average, home swappers were able to take about $72,000 of their new home's market value, for a new assessed value that saved them roughly $1,440 in annual taxes. So far, just over 500 people have applied for porrtability for the coming year in Hillsborough, Pinellas, Pasco and Hernando counties combined. Until many of the homeowners that would like to take advantage of the portability part of Amendment 1 can sell their present home the state will not see any increase in the market. According to David Denslow, an economist at the University of Florida, many feel that portability will not be as big a factor as many think. Mr. Denslow estimated it would increase sales by 10% in a normal market. That's what California saw under a similar law for homeowners 55 and old. Florida leads nation in international buyersFrom the United Kingdom to Canada, Mexico and Argentina, foreign buyers love Florida real estate. And by purchasing luxury vacation homes, mid-priced primary residences and commercial properties, they provide a strong, steady flow of investment throughout the state. "Foreign buyers like our state´s location as a convenient point of entry to the U.S. from Europe and South America," said Alicia Cervera, chairman and CEO, Related Cervera Real Estate Services in Miami. "Our warm weather, recreational and cultural offerings are also very compelling. This is a very welcoming state to everyone, regardless of background." A mid-2007 survey by the National Association of Realtors® (NAR) found that Florida led the nation in foreign home buying, accounting for 26 percent of all international purchasers. California was next at 16 percent, followed by Texas at 10 percent. The 2007 NAR Profile of International Home Buying Activity, which covered buying patterns from April 2006 to April 2007, noted that U.S. real estate is still considered a prime investment opportunity for foreign buyers and a "safe haven" for their money. "Whether they use their U.S. home as rental/investment property, as a vacation home or both, non-U.S. residents account for a significant share of home buying activity," the report said. "It is likely they will continue to do so." One of the key reasons is a weaker U.S. dollar against major foreign currencies, including the euro and the British pound. That gives foreign buyers more purchasing power in the Florida market. "Compared to home prices in other countries such as Spain, the United Kingdom and Ireland, real estate in Florida remains highly affordable," noted Vani Ungapen, director of international operations and research, Florida Association of Realtors® (FAR), in Tallahassee. Florida is also one of the most international U.S. states with easy accessibility, thanks to 31 major airports and 14 deepwater seaports, she added. That supports international tourism, as more than 4 million visitors from 100-plus countries visit Florida in a year according to the U.S. Census Bureau. A 2005 FAR survey found clear patterns among international buyers, who accounted for 15 percent of total home sales in the state in the prior year. British homebuyers ? the largest single component of the international buyers´ market in 2005 ? strongly favored the Orlando market, followed by Naples-Fort Myers and Tampa-St. Petersburg. About one-third of foreign buyers that year were from Latin America. Miami-Fort Lauderdale was the favored destination for buyers from Venezuela ? the largest Latin market ? followed by Orlando and West Palm Beach. "In South Florida, we´ve assisted many high-end purchasers from Venezuela, Mexico and Argentina," said Cervera. "We see Europe as an increasing player in the statewide market." A GREAT TIME TO BUY
Mortgage rates are on the rise and are now above 5%. The jump in Treasure notes which is a benchmark for mortgage rates jumped last week to a six month high of 3.75%. These increases are disturbing to many because this may stop the housing market recovery. If buyers are able to borrow less money this will not help the housing recovery because many buyers may decide ot hold off on their purchases. Mortgage applications fell 35% last week from a week earlier. This problem with the already higher priced homes not moving due to the high interest rates on jumbo loans will not help the housing market. Last week NAR 's chief economist spoke and said that the higher priced homes across the country are stagnant due to the higher interest rates that exist above the conventional loan amount of $417,000. Many buyers trying to purchase at the higher level cannot even get financing if they are trying to buy investment property. Many of the higher priced properties that are selling are being bought for cash. All of these factors contribute to the fact that the multi-million dollar homes are just sitting on the market and not moving. In the Tampa Bay area a search of the entire MLS system showed that sales of properties above 3 million dollar going back to September of 2008 totaled only 8. This search includes 3 counties, Pinellas, Hillsborough and Pasco. Unless something is done to lower the interest rate for jumbo loans I do not see an improvement in sales for the higher end properties. A further search only shows one property that is a pending sale that is listed above the $3,000,000.00 price. Meanwhile on the multiple listings there are 138 properties for sale over $3,000,000.00. |