Lee County Housing Price New High!

The median price of an existing home sold in Lee County hit an all-time high of $288,700 in September — up about 46 percent from a year earlier."Charley didn't do what people said it would do," said Roz Wegryn of Century 21 Sunbelt Realty, referring to fears that the Category 4 hurricane that struck Aug. 13, 2004, would depress prices.Will Wilma's legacy be different?No, said Wegryn. "After 30 years here, my gut feeling is you can take away Ford Motor from Detroit, but you can't take away our sunshine."In the long run, she said, prices will continue to rise here because the weather is generally good and state law holds down property taxes on the homes of people who live here six months a year or more.Ron Winer, an Akron, Ohio, certified public accountant who invests in homes in Southwest Florida, said he's more worried about the prospects of higher interest rates.Even after Charley, he said, "I didn't think hurricanes were going to be a problem because it's something people know exists. It's going to exist forever. I don't think that's what's going to help or hurt."If interest rates increase next year as some experts predict, he said, that "could cause people not to rush as much into this area, but rather wait and see what people do."In other data released Tuesday by the Florida Association of Realtors, the number of existing home sales in the county increased about 50 percent to 1,075.Data from August for Lee County wasn't available, but in July the median price in Lee County was $287,500.In Collier County, the median price increased about 40 percent to $472,300 from a year earlier. Still, that was off the record of $500,800 set in August.Charlotte County data for September wasn't available.Nationally, previously owned home sales were unchanged in September from a month earlier, matching the second-highest level on record and suggesting the recent rise in mortgage rates and waning consumer confidence have yet to slow demand.Existing home sales of 7.28 million at an annual rate were second only to a 7.35 million pace in June, the National Association of Realtors said Tuesday in Washington. The median price of a previously owned home rose 13.4 percent from the same month last year to $212,000.Sales last month were boosted in part by Gulf Coast residents displaced by Hurricane Katrina, who bought homes in areas surrounding the disaster zones, said David Lereah, chief economist at the Realtors. The supply of homes for sale rose to the highest level since record-keeping began in 1999, suggesting a slowing in the real estate market in coming months.

Signing a Contract is Serious Business....

When you sign a contract to buy or sell a home, you agree on the price, the closing date, and a myriad of other details. The contract may also specify that time is of the essence. If so, this means that you agree to perform on time.
For buyers, this means you'll remove contract contingencies on time, and do whatever is necessary to ensure a timely closing. For sellers, it means that you'll promptly provide whatever documents and reports the contract requires, you'll close on time and deliver possession of the property to the buyer on the date agreed to in the contract.
Without set dates for performance and an agreement to abide by them you could find yourself in the midst of a chaotic move. Moving is stressful enough without having to worry about whether or not the other guy will come through as promised.
Some contracts don't specify dates for performance on all contingencies. For instance, a financing contingency might remain in effect until the buyer's mortgage is funded. It's wise to counter such a clause to require that the contingency be removed by a certain date-ideally, at least one week before closing. To avoid confusion, contingencies should be removed in writing.
So that you don't end up bickering about when deadlines are due, it's best to agree in advance on which day will be used as day one. A common convention is to use the day after acceptance as day one. Acceptance, or ratification, occurs when the buyer and seller agree in writing to all the terms and conditions of the contract.
A good time to start working on meeting your deadlines is as soon as your contract is ratified. If you drag your feet, you could end up in a situation where a contingency is due and you're not prepared to remove it.
You should let your real estate agent or attorney know at the first indication that you won't be able to meet a deadline. Assuming that you want to proceed with the transaction, but just need more time to wrap up the details, you should request an extension of the time period. And, get it in writing. Otherwise, it's not binding.
HOUSE HUNTING TIP: Communication is vital to a successful closing. If you're going to be out of town when deadlines are due, set up a foolproof plan for removing them on time.
Fax signatures are OK if your contract says so. Or, you might want to give power of attorney to someone you trust to sign for you. Just make sure the power of attorney is in a format acceptable to your lender if you won't be able to sign your loan documents in person.
Your purchase contract should give a guideline for what happens if someone doesn't perform on time. If not, ask your real estate agent or attorney for an explanation.
In California, a purchase contract that's commonly used by Realtors includes a provision allowing the seller to give the buyer a 24-hour notice to perform if a deadline is over due. According to this provision, if a buyer who is served with a 24 hour notice doesn't perform, the seller can cancel the contract.
In a hot market, it's imperative that you strive to remove your contingencies on time. There could be a buyer in backup position who's waiting for any misstep that might give him a chance to move into primary position. A seller might not grant you an extension if he has a backup offer for a higher price.
THE CLOSING: Before you enter into contract, make sure you understand what the consequences are if you don't perform on time.

Feds consider end to tax deductions for mortgages over $250,000 to $350,000

If a plan to slash the tax deduction for interest on mortgage loans became law, it would reach deep into the pockets of many South Florida homeowners."We look at the mortgage interest deduction as being the best benefit of home ownership," said Ann DeFries, president of the Realtor Association of Fort Lauderdale.Today, homeowners can deduct interest on mortgages of up to $1 million.But at a tax reform meeting Tuesday in Washington, D.C., panel members discussed limiting the break to loans in the $250,000 to $300,000 range, which is less than the median home sales price in much of South Florida."When you reduce that [deduction] cap, say from $1 million to $300,000, it becomes unfair to a high cost area such as ours," DeFries said.Realtors vowed to fight the proposal if the panel adopts the recommendation."I think it would have a serious impact on the South Florida real estate market because we have a large number of vacation homes and second homes. That's one of the announced targets," said John Mike of Prudential Florida WCI Realty in West Palm Beach and vice chairman of the Realtors Association of the Palm Beaches.Former Florida Sen. Connie Mack, who heads President Bush's Advisory Panel on Federal Tax Reform, said the group didn't select a specific dollar amount for its target, but he said in an interview Wednesday, "The notion is probably somewhere between $250,000 to $350,000."Mack noted the change is a long way from becoming law. The panel is working on a system that would allow the amount to vary by county, to reflect local home prices, he said.A prime reason for considering the change, Mack said, is that by offering a large mortgage interest deduction, the tax law today favors investments in real estate compared with other assets.That in turn has helped to heat up the real estate market. "With the present code I think it is fair to say it also encourages people to build larger and more expensive homes," he said."The way we would structure this is to encourage home ownership," he said. However, "If a person is going to build a $1 million or $2 million or $3 million home, they are not going to get the same tax treatment as they got in the past."Mack also cited fairness as an issue, saying that high-income taxpayers get most of the benefit from this deduction. A Treasury Department analysis of recent returns shows that 22 percent of the benefit of the mortgage interest deduction goes to 2.2 percent of all tax filers who have incomes of $200,000 or more.But locally, home prices are so high that any cut in the mortgage interest deduction would hurt plenty of future buyers. The panel has not decided how or when the new limit could be implemented and what would happen to existing mortgage holders above the limit.Only 39 percent or 501 of the single family homes sold in Palm Beach County in September out of a total of 1,282 were priced at less than $350,000, according to statistics from the Multiple Listing Service.In Broward County, the under-$350,000 category accounted for 46 percent of all sales in September.Nationally, the mortgage interest deduction is very widely used. For the average taxpayer, it is the largest itemized deduction that they take.More than 37 million taxpayers claimed a mortgage interest deduction on their returns in 2002, according to CCH Inc., a tax information and software firm. This is the most recent year for which tax return statistics are available.For a taxpayer in the $30,000 to $50,000 income range, CCH says the average mortgage interest deduction was $6,850. That's larger than the $4,994 average for medical expenses, $3,187 for taxes and $2,007 for contributions to charity in that income category.The tax panel has been charged with finding reforms that are revenue neutral, meaning they won't reduce the amount of money collected by the Treasury in taxes.That's been made more difficult by the panel's last major decision, which was to recommend getting rid of the Aternative Minimum Tax, or AMT, a part of the tax code designed to force wealthy taxpayers to pay at least some federal income tax. The AMT is widely despised on Capitol Hill by the National Taxpayer Advocate and consumer groups. It's expected to hit nearly 20 million taxpayers this year, up from 3.6 million last year."When we recommended in July the full repeal of the Alternative Minimum Tax every body cheered and jumped up and down. I don't think they every realized they have got to pay for it now," said Liz Ann Sonders, a panel member and the chief investment strategist for Charles Schwab. "You can't cut $1.2 trillion out of the government's revenue over the next ten years without finding offsets."The mortgage interest deduction is only one of those offsets under discussion.Another major tax reform proposal, in terms of revenue for the government, would be to tax health insurance as an employee benefit. Over a certain limit, possibly $11,000, Mack said the panel is looking at making the value of health insurance coverage to the employee taxable as ordinary income.If your employer provided you with a policy valued at $15,000 a year, then you would have an extra $4,000 in income on which taxes would be assessed.Sonders said some employees, in that scenario, might prefer a less expensive insurance policy and ask their employers to pay them the extra $4,000 as cash compensation.The amount of employer-provided health insurance that was excluded from taxes this year is estimated by the Treasury at $125.7 billion. Mortgage interest deductions in 2002 were valued at $336.6 billion.The tax reform panel meets again next Tuesday. Its report on suggested reforms is due Nov. 1.

Housing prices up!

Housing construction unexpectedly rose in September to the highest level in seven months, at least temporarily defying expectations of a slowdown in the booming housing market.
The Commerce Department reported Wednesday that construction of new homes and apartments rose by 3.4 percent last month to a seasonally adjusted annual rate of 2.11 million units, the fastest pace since last February.

Hurricanes don`t stop people from moving down!

Hurricanes, as Florida as sunshine.
Despite the storms, people still want to live near the water. Charley, Frances, Jean, Ivan, Dennis, Katrina, Rita. And now, maybe, Wilma.
All those hurricanes raining down on Florida, threatening to rip apart homes across Tampa Bay, should make the area undesirable, right?
Homeowners should be fleeing, potential buyers running for states to the north. Residents should be totally stressed out at the prospect of yet another hurricane, right?
Not quite.
Some people undoubtedly will pack up and leave because they're tired of the evacuations and the plywood, sick of the canned food and bottled water stockpiles, fed up with the anxiety that stretches from June 1 to Nov. 30.
But plenty of others, it seems, aren't going anywhere.
As Hurricane Wilma slogged her way toward the Gulf of Mexico on Tuesday, real estate agents, residents and business owners shrugged their shoulders at this latest storm.
With a mixture of fatigue and resignation, they chalked it up to life in Florida. They vowed to prepare for Wilma and hope for the best. They vowed to stick around.
"It's an acceptance more than fatigue," said Joyce Schauer, president of the South Harbour Island Neighborhood Association. "Last year with all those storms, we learned a lot about how to prepare. So it's kind of like, okay, well, let's get ready. I don't hear anyone going, "Oh, I'm going to move because I can't take this.' "
Gabe Kober and his wife of 68 years, Madeline, have lived for 32 years in a home on Snell Isle. They plan to leave the house to their oldest son.
"There's nothing to worry about," said Kober, 88. "It seems like they never get here. This is God's place right here in Snell Isle."
Six hurricanes have hit Florida since Charley plowed through Punta Gorda in August 2004, causing more than $20-billion in estimated damage and killing nearly 150 people in the state.
Hurricane Wilma is the 12th hurricane of this season, the 21st named storm.
Yet waterfront homes in evacuation zones continue to sell.
Sharon Simms, a St. Petersburg real estate agent who specializes in high-end waterfront properties, represents an out-of-state buyer who just plopped down $3.9-million in cash for a Snell Isle home listed by Mike Shelton, a Coldwell Banker real estate agent based in Tampa.
The buyer is from the West Coast of the United States, where residents worry about natural disasters of other sorts.
"It sold faster than anything else over there," Shelton said. "People see the 40 percent increase in appreciation for waterfront and are willing to take the risk.
"Mother Nature strikes everywhere."
Deadly rain and flooding in the Northeast. Tornadoes in the Midwest. Mudslides, earthquakes and wildfires in Southern California. Snowstorms like the one in Colorado that recently dumped 20 inches and resulted in at least three deaths.
"Take your pick," Shelton said. "Earthquakes, tornadoes, wildfires or hurricanes."
Still, Pat German, a longtime Dade City real estate agent, is hearing more and more from potential buyers nervous about living on the coast.
"With all the storms, they're thinking this is a good time to move inland," she said.
Dade City is nearly 40 miles from the Gulf Coast, but it got soaked twice last year by Hurricanes Frances and Jeanne. Nonetheless, distance from the beach suddenly seems a selling point.
"We are so far inland that by the time it gets here people feel safer here than they do near the beach," German said.
Three new clients are interested in moving from Florida's east coast, which historically takes more hits than the gulf side, she said. And some northern transplants seem to harbor a belief about this area's topography.
"They think they're safer where there are hills," German said.
Janis Riasanovsky, 68, and husband Alexander had to evacuate their South Tampa condominium twice last summer. The retirees both have back problems, and moving their valuables isn't easy. The hurricanes make Alexander Riasanovsky, 77, nervous.
So they have reached a compromise. They recently bought a condominium in Colorado, where they plan to spend their summers. That way, they can enjoy Tampa, and their grandchildren, during the months when ideal weather draws thousands of snowbirds.
"We figure we'll stay every summer and come back after Oct. 1," she said. "Although with Wilma, now we think maybe we should stay away longer."
As forecasters spent Tuesday tracking Wilma's path, the Riasanovskys enjoyed coffee at the Starbucks on S Howard Avenue.
There, patrons sat outside enjoying the kind of sunny day that makes Florida so desirable.

Shopping for property insurance.

Finding your way out of the storm.
If you're shopping for insurance, these tips will help protect your property and your wallet.N'TS
1. Don't panic. Your insurance company has to give you 90 days' notice.2. Make sure you get coverage. Get full replacement value for home and contents; full reimbursement for living expenses.3. Beware of "cheap" policies. Watch out for inferior coverage, including unusual limits on replacement value.4. Talk to more than one agent. This is especiallyimportant if you're told only Citizens Insurance will cover you. This insurer of last resort is the most costly.SOURCE: When prices skyrocket -- whether it's for gasoline or groceries -- people often hunt for a better deal.But when the cost of homeowners insurance soars, shopping for a new policy can be a daunting task.First, there's fear of going from the familiar to the unknown. Then, there's doubt that the energy invested will be worth it.So many homeowners take the hit and pay the higher toll.But a growing number of Floridians -- about 300,000 and counting -- are in the insurance marketplace, unwillingly.They are customers of Allstate and Nationwide, insurers shedding tens of thousands of policies, or other companies such as Clarendon and Safeco, players leaving the state.After the shock of a nonrenewal notice, homeowners have just a few places to turn. Typically, there are two strategies:1. Go with what you know. Many homeowners may turn to their longtime insurance agents to help find new coverage.2. Play the field. This is the scarier prospect, requiring a lot of homework. But it could pay off in big savings.It's not just canceled policyholders who are caught up in the insurance storm.With many companies raising premiums for existing customers at double-digit rates in the wake of last year's hurricanes, other homeowners may go price hunting for a better deal.Most start checking out the majors. But Nationwide and Allstate are not writing new windstorm policies. And State Farm won't write in many coastal areas, including South Florida and the Tampa area.Homeowners may want to look at firms that are new to Florida -- at least a half dozen insurers entered the market in the past year."I know more are coming into the state than are leaving," said Sam Miller, executive vice president of the Florida Insurance Council. "Despite the storms of last year, the state's insurance market is in remarkably good shape."Although they're dropping some customers, Nationwide and Allstate are offering to help policyholders find new coverage. In some cases, however, there are limits.Allstate, for example, is steering people to Universal Insurance Co. of North America, which has agreed to cover them. Allstate, in turn, would receive some compensation per policy as part of its deal with Universal.Allstate agents are also supposed to help if customers want to shop around. But the agents can only check with a handful of insurers, all of whom have deals with Allstate. State Farm and other major competitors are not on the list.Homeowners may get better results by playing the field, experts say.They can look for an independent agent one not affiliated with a single insurer. That could take some networking, such as asking for referrals from friends or associates.Homeowners should beware that some agents won't offer the full picture. Here's how it could happen: Agents typically have a quota of policies they can sell from each insurer they represent, experts say. Sometimes, if an agent has reached that quota, he may try to steer a customer to the Citizens Property Insurance Corp., the state-run safety net, although coverage may be available elsewhere with a conventional insurer."If one agent tells you nothing's available, move on the next one," said Ron Livingstone, president of Insurance Recovery International, a public adjusting firm in Maitland. "Shopping for insurance agents is as important as shopping for the insurance itself."But for some homeowners, especially in the coastal areas and those in a flood plain, the shopping trip may be a brief one. Citizens really may be the only option. By law, prices for the state's insurer of last resort are the highest in Florida.Even in such cases, however, homeowners can still shop with the "surplus lines" firms, high-end insurers such as Lloyd's of London. The premiums may or may not be more costly than Citizens, but you get what you pay for, in terms of service and value.Overall, when homeowners have a quote from an insurer, especially an unfamiliar one, experts advise checking out that company's reputation, track record and financial standing. A.M. Best Inc., the research firm, provides financial analysis on its Web site: www.ambest.com.The Florida Department of Financial Services, which regulates insurers, has extensive information on insurers. Go to www.fldfs.com."You could make this an opportunity to put yourself in a better situation," said Steve Burgess, the state of Florida's insurance consumer advocate. "Certainly there are no guarantees, but there may be a lot of money at stake. The more active you are willing to be, the better chance you have of making it worth your while."

Market Slowing down?

Homes don't sell as quicklyLocal market slows as buyers get The number of houses for sale in Brevard County has more than doubled in the last year, real estate officials say.
And that may be a sign the market is starting to cool off, since it's taking a little longer to sell a home now than it did a year ago, possibly because buyers are balking at unreasonable asking prices.
In addition, the president of the National Association of Realtors on Wednesday predicted that the national real estate market would cool off a bit next year because of rising mortgage interest rates.
There were 5,795 single-family homes and condos listed for sale in Brevard at the end of September, up from 2,205 a year ago, according to data compiled by the Space Coast Association of Realtors.
The association reports that 59 percent of the housing units sold in September took more than 60 days to sell, up from 51 percent in September 2004.
"I personally think it's taking longer to sell homes now," said Kathy Starkey, a real estate agent and president of the Space Coast Association of Realtors.
"Brevard has been discovered," said Richard Scuoteguazza, president of the Melbourne Area Association of Realtors. "We are no longer an undervalued market."
Still, he said he doesn't think the local housing market has run out of steam.
"It's still a sellers' market," Scuoteguazza said.
Some home sellers, though, are concerned.
Roy and Margaret Epling of Palm Bay recently put their approximately 1,000-square-foot pool home on the market for $173,000.
Margaret Epling said she would have been justified asking for $177,000 or more, but she was concerned about selling it quickly.
"Everyone is saying the market is slowing down," she said. "I want to make sure it sold."
Christine Vinson, president/broker at Diamond Realty Management Inc. in Rockledge, said she senses a slowing of the market but nothing to indicate a "bottoming out."
"I'd say there's a bit of a 'buyers' rebellion,' " Vinson said. That is, people are not rushing to pay more than the asking price on a home.
On two recent occasions, Vinson said, clients were pre-approved for $400,000 mortgages, yet they insisted on not paying more than $325,000 for homes they were considering buying.
"There's more of a cautiousness," Vinson said. "People are saying: 'Let me get more for my money.' "
The Florida Association of Realtors reported last month that the median resale price for a single-family home in Brevard County reached $248,700 in August, topping the statewide median for the first time.
Five years ago, the local median price was $91,800. At the median, half the homes sell for more and half for less.
In a statement released Wednesday by the National Association of Realtors, the organization's president, Al Mansell, predicts some "easing in home sales" next year.
"The rise in mortgage interest rates is likely to have a slight braking action on the housing market, and the upside of that is it would help to bring the market closer to balance between home buyers and sellers," Mansell said.

Gulf Coast Housing Frenzy!

BILOXI — Erin Hollis handed Carrie Adams a $5,000 check just moments after looking at Adams' north Biloxi house last month.Hollis knew two other people wanted to look at the one-story house off Popps Ferry Road listed for $290,000. She didn't want to take a chance on losing the house while waiting for her husband, Dix, who was stuck in traffic.Residential real estate — at least undamaged property — has been at a premium on the Mississippi Gulf Coast since Hurricane Katrina struck Aug. 29.
Katrina knocked the Hollises' beach home, which had been in the family since 1937, off its foundation. The couple and their two sons barely escaped the storm surge and have been living at their Perry County hunting camp since.After "I handed Carrie the check, she said, 'Welcome home.' I started crying. She started crying. The Realtor started crying," Erin Hollis said.
Real estate agent Carolyn Handler said she was overrun with clients since Katrina. "In two weeks, I sold $1 million in real estate," she said. "Typically, I maybe sell an average of $150,000 to $200,000 a month. There was a frenzy right after the storm."Real estate already had en hot on the Coast before Katrina, real estate agents said. Houses would be under contract for sale within about 30 days and closed after about 90 days, Handler said.Now people are buying houses as quickly as they go on the market. Handler said one client bought a house in Biloxi's Ancient Oaks area hours after it had been listed and without even seeing it.
Joe Ellis/The Clarion-LedgerDix Hollis inspects a built-in gun cabinet in the den of a house he and his wife, Erin, are buying in Biloxi during their final walk-through on Friday. The Hollises and their two sons lost their home in Biloxi to Hurricane Katrina. "He had me fill out a contract with a contingency to do a visual," Handler said. "That neighborhood will build back and build back better."While the market is good for sellers, smart buyers still want to know how much property previously has sold for, Handler said.
"You have to justify the price," she said. "I sold a property eight weeks ago for $248,000. (The client) is trying to sell it for $92,000 more. It won't appraise for that."Handler's colleague, Bobbie Alley, said people who try to inflate prices haven't been successful."That's what's going on with one of my listings," Alley said. "It's not a stupid buyer's market."
Meanwhile, the metro-Jackson market also experienced a surge after Katrina, said Cheryl Bullock, executive director of the Jackson Association of Realtors.During the first two weeks of September, 247 houses were sold in the area for an average price of $169,000, she said. The year before, 193 houses were sold during the same time period for an average of $159,000.
Joe Ellis/The Clarion-LedgerErin and Dix Hollis carry bits of what remains of their personal belongings in their new house in Biloxi on Friday while doing a final walk-through before an afternoon closing. The Hollises lost their previous home in Biloxi when a wave pushed by Hurricane Katrina destroyed it on Aug. 29. "I think that increase will continue as people get more settled and make decisions about purchasing a home away from the Coast," Bullock said.Bullock believes people will make decisions after they settle with insurance companies or after they see how the Coast will be redeveloped.Kay Kell, city manager of Pascagoula, wants people — especially residents of her city — to stay and help rebuild the economy.
"Our problem right now is finding people a place to stay," she said. "Places build back better. Property values already are going up. I know people don't believe us."Kell urges property owners to think long term.
"People are still in shock," she said. "Don't make a major decision in this type of situation."Kevin Hindmarch, Jackson County's director of appraisal, predicts the market "will be in turmoil for some time."Before Katrina, he said he had a handle on the county's property reassessments that were to go into effect Jan. 1. Now, the county has asked the state for an extension so it can restart the process.
Hindmarch has to look at each piece of property again. He estimated at least 15,000 pieces of property countywide were affected, including the Hollis family home on Collins Street.Erin Hollis, who is assistant director of the geriatric/psychiatric unit at Biloxi Regional Medical Center, said she and her husband haven't decided whether they will rebuild.
"The only thing that's left is the front steps," she said. "We're going to let (the reconstruction debate) ride out. I'm in no hurry to sell."Erin Hollis said she and her husband, who is purchasing director for Blue Wave Logistics based in Hattiesburg, didn't think too hard before returning to Biloxi. "We were both born and raised here," she said. "We've lost co-workers who have left the state, but we love Biloxi, and we love the water. This is home."Meanwhile, Adams and her husband, Ed, intend to live at their Vancleave fish camp until they buy a home closer to Jackson. They had planned to sell their house before Katrina. Adams said she didn't take advantage of the storm to increase her asking price.
"I wasn't really paying attention to real estate," she said. "After the storm, I thought no one would want to live here again."Two other potential buyers arrived at Adams' house after Hollis left her check. One offered $30,000 more than Adams wanted. The other buyer offered $37,000 more.
But Adams stuck with the deal she made with Hollis.

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Property Appraisers having a difficult time!

With the dizzying increase in Florida real estate prices, appraisers are having a hard time coming up with what a property is actually worth."Our job is exceedingly difficult, with value changing, it seems, almost weekly," said Mike Maxwell of Maxwell & Hendry Valuation Services in Fort Myers. "We're finishing assignments and the next thing you know you'll find a series of contracts come through that already proved you wrong" because they're at higher prices.The median price of a single-family home in Lee County was up 44 percent from $200,000 to $287,500 in the year ending in July, according to the Florida Association of Realtors.
Banks are getting wary of making loans in the frothy environment, said Brad Cozza, a real estate agent with Keller Williams World Class Realtors."My business consists of a lot of construction loans in Lehigh Acres, Cape Coral and North Port," he said. "Banks are getting a little bit skeptical about the market: 'Are these houses really going to sell? Are these fake comps (comparative recent sales that determine a property's likely value)? ' "
Some banks are only making loans for 80 percent of a home's likely value, instead of 90 percent, he said. "We just basically have to stay on top of it and find the banks that are funding the projects we're depending on."Laurie Yeager, Southwest Florida manager of Wells Fargo Home Mortgage, said that with the surge in construction, it's sometimes difficult to use conventional methods of determining value. "We're having to comp these things to other projects, other sales that have not closed yet, which is difficult for appraisers because typically you only go with closed sales."A lender has to exercise caution, she said, "and there's certain things we don't stretch. I think it's difficult for all parties concerned: for the banks, the appraisers and all of us."
Yeager hasn't started to tighten up on the amount Wells Fargo will lend on new construction, but "I'm not saying that at some point in time we won't tighten up on that."Jeff Tumbarello of Allied Mortgage & Trust in Fort Myers said he's been seeing some skepticism among lenders for certain properties, "particularly stuff that has transferred a lot. You've got somebody who sells for $100,000 and then it sells for $120,000 and then somebody is trying to buy it for $200,000," all in a short period of time.Banks prefer to have a more gradual increase of prices, he said. "They refer to it as 'seasoning of title.' "
Meanwhile, Maxwell said he's seen a softening of the market recently, with prices going up at a slower pace. That may ease some of the difficulties, he said.But he warned that under any circumstances, an appraisal isn't a prediction of the future, just an assessment of current value.
There's no way to scientifically predict future prices, Maxwell said. "We're not fortune tellers."

Orlando: Housing Market very strong!

Realtors: No sign of price bubble here Central Florida's growing economy will continue to pump up housing prices, thetrade groups said.A solid, growing economy will keep Orlando-area home prices rising atabove-normal rates, the Orlando Regional Realtor Association said Wednesday,citing a study by its national organization.The local housing market is in "very little danger" of a price bubble, the localgroup said, citing a study of fast-growth U.S. markets by the NationalAssociation of Realtors.Historically, home prices have tended to rise about 4 percent to 6 percentannually. In Metro Orlando, prices have risen 73 percent in just the past threeyears."The local market is likely to appreciate at an above-normal rate because of thestrong job growth and the steadily rising number of retirees and foreign homebuyers expected to purchase homes in Orlando in the coming years," said LydiaPisano, president of the Orlando association and an agent with Keller WilliamsHomestead Realty."And the good news for buyers is that Orlando's impossibly hot market isactually slowing down a bit to a palatable level," she said, "with an increasein inventory and a median price that has remained stable for the past fewmonths."The median existing-home price was $245,000 in July and remained there inAugust. And the inventory of existing homes on the market in August was at itshighest level in more than a year.While population and job growth have been strong, mortgage rates have remainedat near historic low levels, Pisano noted.The national Realtors' analysis of the Orlando home market concluded that aprice decline of 5 percent would occur only if mortgage rates shot up 10.5percent and the area sustained the loss of 64,000 jobs.The average national rate for 30-year home loans continues to hover at justbelow 6 percent. And the Orlando area is projected to gain at least 60,000 jobsover the next 24 months.

Inspection Question.

This was emailed to me last night. I thought many of our readers would be interested in this email:


Dear Scott,
We sold our home 13 months ago. We were contacted by the Buyers Agent this week that we now have disclosure problems.The issue involves the swimming pool in which the buyer now claims it`s got a "BAD" leak.The buyers' home inspector failed to notice the leak when they originally did the inspection.The buyer is reselling the property and the new inspection just revealed the pool leak. As a result, the people who purchased the property from us are demanding payment for repairs. We believe their home inspector should have discovered the problem ,just as the recent home inspector did. Don't you think their inspector should have told them if they were really concerned about the pool it would be better to hire a pool company to complete that part of the inspection? We feel that we shouldn`t be involved in this problem due to the length of time that has elapsed. What is your opinion? – Joan W.
Dear Joan,
A home inspector's responsibility is to discover all pertinent conditions that are visibly discernible. If the recent home inspection revealed the pool leak now, it`s very possible that when you owned the home there wasn`t a leak at the time. After all 13 months have passed and problems with a home arise everyday! However, this does not absolve you, the seller, from your legal obligation to provide full disclosure to buyers.
Your duty to the buyers was to disclose whatever conditions you were aware of at the time of the transaction. You may not have known about damages to the pool.I`m sure you could tell if your pool actually did leak.Of course, you could only be expected to mention this to the inspector if you knew he had overlooked it. You may have been totally unaware of his omission, in which case you would bear no responsibility for the lack of disclosure. However, if you were aware of his error, then the matter should have been brought to his attention.
It is not the job of home inspectors, as some mistakenly believe, to compensate for disclosures deliberately withheld by sellers or to indemnify sellers for the financial consequences of their willful silence. To envision home inspectors, as some apparently do, as undeclared underwriters, providing disclosure insurance, as it were, for misguided sellers, is a far-reaching infringement, breaching the legal boundaries that define the requirements for seller disclosure.
An honest and forthcoming posture for sellers includes a willingness to inform home inspectors of conditions that might concern a buyer or that might aid the inspector in the performance of his discovery. From that perspective, only you can say whether the current complaint arises from an unintended error or a deliberate withholding of information.
At this stage, it would be advisable for you to contact your attorney to further discuss this issue.

Lee County Developers not worried....

Developers of high-rise condominiums elsewhere in Lee County say they aren't worried about a possible glut in high-rise development."I don't have the crystal ball that everyone wants, but in the greater marketplace it just seems the number of high-rises is extremely small," said Joe Armenia of the Armenia Group, developer of the Riva Del Lago condominium nearing completion near Lakes Park in south Fort Myers. "Even though you have 12, 15 high-rises coming on, these are a couple hundred units each compared to the master-planned communities, which in some cases have a thousand units."Also, he said, the increasing numbers of high-rises is gaining acceptance among consumers for a relatively new type of construction: non-beachfront high-rises. The first projects — Beau Rivage, Riva Del Lago and Mastique off Summerlin Road near Sanibel — have helped make people more comfortable with a high-rise trend that didn't exist a couple years ago.
In Cape Coral, the three 14-story Tarpon Landings towers are sold out at prices up to $2.7 million — the third tower's 70 units sold out in a single day, March 23.Ken Plonski, spokesman for WCI Communities Inc., a Bonita Springs-based builder of upscale high-rises and single-family homes, said he sees the downtown Fort Myers market as distinct from the more established sector of condominiums along the coast.
WCI's latest tower in Bonita Springs, Florencia in the Colony in Pelican Landing, is under construction and drawing "healthy interest" at pre-construction prices of about $1.1 million for a three-bedroom, two-bath, 2,100-square-foot condo, he said.WCI is negotiating with Fort Myers right now to build a mixed residential and commercial downtown high-rise, he said, but investors hoping for a quick profit should be cautious."You're probably going to see a rather cyclical direction," he said. "There are probably a fair amount of real estate speculators there in that market, looking for a chance to flip the property quickly. There will be some people who will be rewarded for their efforts and others who will find investing in real estate a lot harder than they thought."

Bubble heading for a soft landing!

The popping of the red-hot U.S. housing market will likely play out as a steady deceleration of prices followed by stabilization, rather than a dramatic national downturn, Standard & Poor's said Monday.
"The bubble should end with a fizzle, not a bang," said S&P Chief Economist David Wyss in a conference call Monday, adding that it's difficult to nail down exactly when the market might weaken, and what the implications might be for the overall economy.
Still, Wyss indicated that rocketing home prices in several parts of the country are unsustainable and cannot go on forever. Looming interest-rate increases are another potential problem that may affect two sectors linked to the housing market: home-builder stocks and real-estate investment trusts.
Credit rating and investment-research agency S&P unveiled multiple reports on the global housing market Monday.
Currently, the average U.S. home price is roughly 3.1 times the average household income, the highest in history and up from an average of 2.6 times since 1960, according to S&P. Driven by low mortgage rates and looser lending standards, home-ownership levels of 69.4% are also at an all-time high.
Yet most of the price appreciation is concentrated in sizzling markets in California, Florida and the Northeast. For example, on both coasts, housing costs have risen at least 30% above the normal home price-to-income ratio, S&P calculated.
Despite regional dangers, S&P estimates it would take a 30% decline in national home prices, combined with a 50% drop-off in new-home starts, to drive the economy into even a slight recession, Wyss wrote in a recent report.
"We think such a scenario is unlikely," he said.
Tiny bubbles for home-builders
U.S. home-builders have been one of the most volatile and closely watched stock sectors in recent months, with heated debate devoted to the existence of a housing bubble. Over the past year, the Dow Jones U.S. Construction Index has gained 48.4%.
Part of the reason the sector's stocks have been on investors' radar screens is that many of the largest builders do significant business in the country's hottest markets.
The 19 home-builders rated by S&P accounted for about 25% of the 1.6 million new single-family homes purchased in 2004, said S&P credit analyst James Fielding. They operate in only 25 states and approximately half of their revenue comes from California, Florida and Texas.
Therefore, home-builder earnings could take a hit if there is a cooling in the hottest, most profitable housing markets.
In the most likely scenario, Fielding sees rising long-term interest rates making homes less affordable in the important coastal markets. This could lead to a leveling-off of prices and higher cancellations in the speculative markets, with builders "slow or unable to quickly adjust production and overhead to lower demand," he wrote in a report.
"As a consequence, profitability weakens bur remains above historical averages, resulting in a deceleration of positive ratings momentum," Fielding concluded.
Mixed outlook for REITs
Historically low home-mortgage rates and a lack of rental demand have weakened fundamentals in the REIT market, according to S&P equity analyst Raymond Mathis.
However, REITs have managed to outpace the broad market so far this year. An exchange-traded fund tracking real-estate stocks, StreetTracks Wilshire REIT Fund, is up 9.9% year to date, 6.4 percentage points higher than the S&P 500 Index over the same period, according to investment research firm Morningstar Inc.
"The stocks are not tracking fundamentals, but responding to the housing bubble," Mathis said in the conference call Monday.
In particular, he sees a bubble in the valuation of multifamily residential REIT stocks, which he believes are overvalued by about 13.6%.
Yet rising interest rates and falling home prices could be a good thing for REITs as "new households and even some existing homeowners gravitate toward rental housing," S&P said.

More interesting Real Estate Questions.

Interesting questions about our hot real estate market continue to pour into my e-mail. The following is one of the most direct.
Q: Mr. Daniels,I heard you the other day on the radio. You are a big advocate of using real estate as an investment vehicle to create wealth. Do you, in fact, practice what you preach, and how much are you worth?
A: I believe real estate, if held for the long-term, is one of the most forgiving and rewarding investments available in the marketplace. I use the term forgiving because some investors have overpaid for real estate, but, thanks to inflation and the dwindling supply of land, the market has appreciated enough to offer a profit to unknowledgeable investors who were once upside down in their investments.
Real estate investments offer great rewards measured with the risk. When you compare real estate to other investments, it has many advantages when looking at reward versus risk investment return. Depending on the type of real estate, returns come in several ways; price appreciation, cash flow, mortgage amortization, IRS depreciation, leverage and most importantly, the ability to control your own destiny by doing due diligence prior to buying and thorough and creative management of the asset during ownership.
My personal portfolio is comprised of two asset types. The largest allocation in my portfolio is real estate, (I sold my stock portfolio years ago!) which is composed of preconstruction owned properties and condo conversions. Both tend to appreciate at a higher rate, while condo conversions offers immediate return on your investment in most cases. It is my belief a position in both types offers the best overall return over long periods of time.
I`m also a firm believer in keeping Cash handy which i include in my portfolio.
I`ve always told our investors that "cash is king", which I believe holds true!
Cash allows you to obtain bank financing easier, move quickly on good investment opportunities and, most importantly, cash offers a cushion against unfavorable business climates, thus allowing you to not only prosper but sleep at night.
Because the second part of your question about my net worth is personal and confidential. I will not answer directly. However, I will tell you that my portfolio has not only provided well for my family, but, it also gives me the peace of mind that I can retire at any time. Knowing that gives me an edge in the market.