A new president . . . new programs for homeowners in trouble . . . clear, crisp and cool weather . . .
Let's be optimistic. We have reason to be.
New companies are building corporate headquarters on the Space Coast, new cruise ships are under construction and bound for Brevard County, and a standalone convention center is expected to open early next year at Port Canaveral.
The economy in Brevard County, although affected by the recession, is a pocket of fresh air when we look at other locations around the nation. This is not to minimize the fact that we all are still tightening our belts, unemployment is up and we all are feeling the hit of this significant economic downturn.
Still, we must count our blessings. As the snow begins to fall in the North, the real estate market begins to pick up in the South. Our snowbirds entertain thoughts of settling into Brevard County. Condominium prices are the lowest in many years. This market is tempting our seasonal residents to purchase instead of renting. And this is an intelligent decision for our Northerners. While the stock market continues to be volatile, the real estate market continues to show the signs of stabilizing.
Prices are not going up and will not for some time, however, the stability and consistency is shown in the increased activity each and every month in the volume of sales. The hot deals will not be here forever. Listing inventory continues to shrink and market activity continues to increase. Programs for easier financing are beginning to become available but many buyers are opting to pay cash for their purchase.
Cash from savings or liquidation of retirement funds are freeing up buyers to an easy purchase in this buyer's market. A clever alternative and a safer alternative, is the purchase of real estate as a home or investment property. For negotiations, cash buyers continue to have the leverage in today's market.
Where else can one purchase a home in the $60,000 to $100,000 range? Where else can one find an oceanfront condo for under $350,000? Brevard County is one of the most affordable areas for real estate. Combine this with the quality of life in our beautiful county. Meandering waterways, clean beaches, breathable clear air and wonderful friendly people, offer relocating families, the "best" of life.
Sunday, November 30, 2008
Sunday, November 23, 2008
Retire on real estate?
We are witnessing the "plunge" of the stock market. We have already witnessed the "plunge" of the real estate market. Where do we go from here?
The real estate market is reported to have "bottomed out" or is close, anyway. No one has a crystal ball that can assure us that this is true. Past cycles and current statistics all indicate that the real estate market is forecast to rise in the future. Current and consistent increased activity in sales indicate that this is true.
Real estate, for investment purposes, is a long term commitment. Now that we have weathered the worst stage of the real estate market, it would be logical to assume that real estate would now be a wise investment.
The stock market looks riskier these days.
For those of us close to retirement, we cannot accept this risk. Can we cautiously withdraw this retirement money and, with the expert advice of a financial counselor, invest our IRA in real estate? With the real estate market at a low and predicted to begin to increase over the next three to five years, this might be the time to purchase retirement property without selling our current home.
We buy the retirement property in a low market and wait to sell our current residence over the next three to five years and predictably, obtain an increase in the current residence. We will have capitalized on the current low market and we win on both ends.
The best bargains in real estate are still available in the condominium market. Current statistics and past stagnation in the vacant land sales indicate that this area, too, offers some good values. Cash buyers, using their retirement portfolios, have a tremendous edge in negotiations in this real estate market.
Cash offers are typically lower than offers with a mortgage contingency but these offers have an extremely high possibility of closing, whereas the offer with a mortgage contingency still has to have bank approval with excellent credit from the borrower along with validation of income and a current appraisal at or above contract price.
The key to buying in today's market is still "location, location, location"! As the snow begins to fall in the Northern states, oceanfront and riverfront condominiums here in Florida consistently attract buyers. This is a terrific time to switch your investments to real estate.
Be cautious, be careful and work with a professional.
The real estate market is reported to have "bottomed out" or is close, anyway. No one has a crystal ball that can assure us that this is true. Past cycles and current statistics all indicate that the real estate market is forecast to rise in the future. Current and consistent increased activity in sales indicate that this is true.
Real estate, for investment purposes, is a long term commitment. Now that we have weathered the worst stage of the real estate market, it would be logical to assume that real estate would now be a wise investment.
The stock market looks riskier these days.
For those of us close to retirement, we cannot accept this risk. Can we cautiously withdraw this retirement money and, with the expert advice of a financial counselor, invest our IRA in real estate? With the real estate market at a low and predicted to begin to increase over the next three to five years, this might be the time to purchase retirement property without selling our current home.
We buy the retirement property in a low market and wait to sell our current residence over the next three to five years and predictably, obtain an increase in the current residence. We will have capitalized on the current low market and we win on both ends.
The best bargains in real estate are still available in the condominium market. Current statistics and past stagnation in the vacant land sales indicate that this area, too, offers some good values. Cash buyers, using their retirement portfolios, have a tremendous edge in negotiations in this real estate market.
Cash offers are typically lower than offers with a mortgage contingency but these offers have an extremely high possibility of closing, whereas the offer with a mortgage contingency still has to have bank approval with excellent credit from the borrower along with validation of income and a current appraisal at or above contract price.
The key to buying in today's market is still "location, location, location"! As the snow begins to fall in the Northern states, oceanfront and riverfront condominiums here in Florida consistently attract buyers. This is a terrific time to switch your investments to real estate.
Be cautious, be careful and work with a professional.
Sunday, November 16, 2008
It's up to us to help.
Two important issues can assist many in today's economy. Two important issues can assist home buyers and home sellers.
The first issue is that of overpriced properties on the market.
A story late last week in FLORIDA TODAY headlined "Realty's Reality hits home" really stuck me as serious.
I have always given sellers, when I am representing them, the opportunity to begin a listing with a higher price than I have recommended. I tell them the truth, as I see the market, but I want to give the seller the benefit of the doubt on price because reducing a price is much easier than raising it. Realtors give an opinion of value, but we always hope that the home will sell for that which the seller wants so that the seller is happy.
On the other hand, when working with a buyer, we want the best deal possible so the buyer is happy. In spite of its beauty, extras, condition and original price, the home must be priced sensibly. Let's all stop dreaming and get to the truth in this market. Let's reduce the overpriced properties.
The second issue is truly paramount in Florida and throughout the United States. This issue is the "The new home-loan aid." As I read and study this plan, I am astounded at how few people will be helped.
How can we say that we are assisting homeowners in trouble with mortgages they cannot pay if fewer than 2 percent of the troubled homeowners will be helped? Yes, according to my interpretation, government officials "had no estimate of how many homeowners would qualify but these are their guidelines:
--- borrowers would have to be at least three months behind on their home loans.
--- borrowers would have to owe 90 percent or more of their homes' values.
--- Investors are excluded.
--- borrowers who have filed for bankruptcy are excluded.
Qualified borrowers would get an interest-rate reduction so the borrower would not pay more than 38% of their gross income. Loans could be extended to 40 years, and some principal could be deferred interest free. This is a very weak. Is there a better way?
The first step if you are in trouble or going into trouble: Ask your lender for a rate reduction, an extended plan for payment, forgiveness for one or two payments. Do not stop asking.
The National Association of Realtors is recommending that the $7,500 first-time homebuyer tax credit be made available to all buyers and eliminate repayment. NAR also recommends "Getting the Treasury relief program back on track and targeting more funds to mortgage relief."
If you agree, call and write your legislators to become involved and back programs that help many people, not just a small percentage of those in trouble.
The first issue is that of overpriced properties on the market.
A story late last week in FLORIDA TODAY headlined "Realty's Reality hits home" really stuck me as serious.
I have always given sellers, when I am representing them, the opportunity to begin a listing with a higher price than I have recommended. I tell them the truth, as I see the market, but I want to give the seller the benefit of the doubt on price because reducing a price is much easier than raising it. Realtors give an opinion of value, but we always hope that the home will sell for that which the seller wants so that the seller is happy.
On the other hand, when working with a buyer, we want the best deal possible so the buyer is happy. In spite of its beauty, extras, condition and original price, the home must be priced sensibly. Let's all stop dreaming and get to the truth in this market. Let's reduce the overpriced properties.
The second issue is truly paramount in Florida and throughout the United States. This issue is the "The new home-loan aid." As I read and study this plan, I am astounded at how few people will be helped.
How can we say that we are assisting homeowners in trouble with mortgages they cannot pay if fewer than 2 percent of the troubled homeowners will be helped? Yes, according to my interpretation, government officials "had no estimate of how many homeowners would qualify but these are their guidelines:
--- borrowers would have to be at least three months behind on their home loans.
--- borrowers would have to owe 90 percent or more of their homes' values.
--- Investors are excluded.
--- borrowers who have filed for bankruptcy are excluded.
Qualified borrowers would get an interest-rate reduction so the borrower would not pay more than 38% of their gross income. Loans could be extended to 40 years, and some principal could be deferred interest free. This is a very weak. Is there a better way?
The first step if you are in trouble or going into trouble: Ask your lender for a rate reduction, an extended plan for payment, forgiveness for one or two payments. Do not stop asking.
The National Association of Realtors is recommending that the $7,500 first-time homebuyer tax credit be made available to all buyers and eliminate repayment. NAR also recommends "Getting the Treasury relief program back on track and targeting more funds to mortgage relief."
If you agree, call and write your legislators to become involved and back programs that help many people, not just a small percentage of those in trouble.
Sunday, November 9, 2008
Rental investing is back.
A new president will bring a new market . . . change fosters change.
Speaking with several appraisers this past week, the biggest change in the real estate market may indicate that investment in rental properties may begin to be cost-effective. For so long, the purchase price, amount financed and the cash flow on rental income could not justify an investment purchase of rental property.
Now we are close: Investors may be able to break even buying a property with a 25 percent to 30 percent down payment, financing the balance at the current low interest rates and renting at a competitive rate. This is a sign that more investors, conservative investors, may begin to enter the market.
Investors in today's market are conservative and financially sound. Many people are pulling out of the stock market and looking at real estate as the diversification needed in their portfolio. If you are just beginning to look at real estate as an investment, some guidelines for landlords are necessary.
--- Conservative should be the key word. "Cautious and careful" should be the investor motto.
--- Select a property for its location as land appreciates and buildings depreciate. Scarcity creates demand and demand brings a higher chance of future market appreciation. The property you select should be rentable.
In keeping with a conservative approach, an investor should buy properties that he or she can afford to have vacant for at least one year.
--- Properties that are in an excellent location with a good floor plan, freshly painted in neutral colors, and meticulous in condition and cleanliness will rent well and within a reasonable period of time.
--- The rent you receive is second to the quality of your tenant. That is, having a tenant who pays the rent on time and maintains the property should be a priority for an investor. Not all good tenants have excellent credit, but a good tenant can honestly justify a credit problem caused by health issues or job loss.
--- Long-term tenants bring consistent income. Tenants who report problems with the property are helpful to a landlord who takes pride in his/her property.
--- Maintaining your investment in rental property will bring a return when you sell. A real estate investor should look at the investment as long term.
In my opinion, a five-year minimum on holding the investment property is necessary for the return on the investment. Tax advantages are still a part of being a landlord. Your accountant can review with you the depreciation and appropriate write-offs on your taxes. A 1031 or Starker exchange are still viable alternatives when selling in the future and deferring taxes on the return of your investment. A good Realtor can assist you with the guidelines.
Speaking with several appraisers this past week, the biggest change in the real estate market may indicate that investment in rental properties may begin to be cost-effective. For so long, the purchase price, amount financed and the cash flow on rental income could not justify an investment purchase of rental property.
Now we are close: Investors may be able to break even buying a property with a 25 percent to 30 percent down payment, financing the balance at the current low interest rates and renting at a competitive rate. This is a sign that more investors, conservative investors, may begin to enter the market.
Investors in today's market are conservative and financially sound. Many people are pulling out of the stock market and looking at real estate as the diversification needed in their portfolio. If you are just beginning to look at real estate as an investment, some guidelines for landlords are necessary.
--- Conservative should be the key word. "Cautious and careful" should be the investor motto.
--- Select a property for its location as land appreciates and buildings depreciate. Scarcity creates demand and demand brings a higher chance of future market appreciation. The property you select should be rentable.
In keeping with a conservative approach, an investor should buy properties that he or she can afford to have vacant for at least one year.
--- Properties that are in an excellent location with a good floor plan, freshly painted in neutral colors, and meticulous in condition and cleanliness will rent well and within a reasonable period of time.
--- The rent you receive is second to the quality of your tenant. That is, having a tenant who pays the rent on time and maintains the property should be a priority for an investor. Not all good tenants have excellent credit, but a good tenant can honestly justify a credit problem caused by health issues or job loss.
--- Long-term tenants bring consistent income. Tenants who report problems with the property are helpful to a landlord who takes pride in his/her property.
--- Maintaining your investment in rental property will bring a return when you sell. A real estate investor should look at the investment as long term.
In my opinion, a five-year minimum on holding the investment property is necessary for the return on the investment. Tax advantages are still a part of being a landlord. Your accountant can review with you the depreciation and appropriate write-offs on your taxes. A 1031 or Starker exchange are still viable alternatives when selling in the future and deferring taxes on the return of your investment. A good Realtor can assist you with the guidelines.
Sunday, November 2, 2008
Brevard a bright spot in economy.
People across the nation have lost their homes and many have lost their jobs. The stock market has shown unprecedented volatility that will leave its mark in the history books. Real estate has dropped to its lowest point in years. The year 2008 is negative in most respects.
Yes, we have tightened our belts, learning to conserve where we can. We have prepared our children and grandchildren for the need to spend less and save more. Some of us have had to acclimate to substantial losses in our retirement portfolios.
We look conservatively at future purchases. We have watched as many have struggled to keep their homes and we have waited for the banks to begin positive communication to assist our neighbors.
In Brevard County, in these respects, we are not so different than the rest of the communities in our country that are struggling and attempting to tackle the same problems. Help for those in need is beginning to emerge. Banks are communicating and assisting those homeowners to find ways to save their homes from foreclosure or short sales. The federal government is lowering rates again to help spur the economy. Programs are available for qualified buyers to purchase in today's market. The stock market is still volatile but showing a glimmer of positive signs. The price of gas is going down each day.
Specifically speaking, in Brevard County, we are more fortunate than the rest of the United States and even more fortunate than surrounding counties. We can still boast that we have "affordable housing." Offering a wide variety of types of housing is still luring people to our area. Oceanfront and riverfront condominiums and townhouses are available at reasonable prices. Golf course homes, large country lots, cottages and castles . . . simply spectacular, this place we call home.
Our large businesses are showing positive results of their soon to be year-end numbers. Our housing industry is showing continued increase in the volume of sales.
The weather is beautiful, the grass is green. We will retain our clean beaches and rivers . . . we will continue to see spectacular sunsets amidst the clear clean air and Brevard will march onward and upwards to a better standard of life and with more awareness of how life changes in minutes so we must treasure this life.
We have come full circle in prices of housing in our county and now is the most perfect time to buy.
Yes, we have tightened our belts, learning to conserve where we can. We have prepared our children and grandchildren for the need to spend less and save more. Some of us have had to acclimate to substantial losses in our retirement portfolios.
We look conservatively at future purchases. We have watched as many have struggled to keep their homes and we have waited for the banks to begin positive communication to assist our neighbors.
In Brevard County, in these respects, we are not so different than the rest of the communities in our country that are struggling and attempting to tackle the same problems. Help for those in need is beginning to emerge. Banks are communicating and assisting those homeowners to find ways to save their homes from foreclosure or short sales. The federal government is lowering rates again to help spur the economy. Programs are available for qualified buyers to purchase in today's market. The stock market is still volatile but showing a glimmer of positive signs. The price of gas is going down each day.
Specifically speaking, in Brevard County, we are more fortunate than the rest of the United States and even more fortunate than surrounding counties. We can still boast that we have "affordable housing." Offering a wide variety of types of housing is still luring people to our area. Oceanfront and riverfront condominiums and townhouses are available at reasonable prices. Golf course homes, large country lots, cottages and castles . . . simply spectacular, this place we call home.
Our large businesses are showing positive results of their soon to be year-end numbers. Our housing industry is showing continued increase in the volume of sales.
The weather is beautiful, the grass is green. We will retain our clean beaches and rivers . . . we will continue to see spectacular sunsets amidst the clear clean air and Brevard will march onward and upwards to a better standard of life and with more awareness of how life changes in minutes so we must treasure this life.
We have come full circle in prices of housing in our county and now is the most perfect time to buy.
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