Consumers are more conscientious about healthy living than ever before and this awareness is making its way to the homebuilding industry, particularly in the custom home market, says Michael Lenahen who owns Ponte Vedra, Fla.-based Aurora Custom Homes.
“As more consumers begin to realize how much their home affects every aspect of their health, they are beginning to see the importance of improving its environmental quality with products to benefit their health and that of their family,” Lenahen said. “The new emphasis toward healthy living focuses around four main categories – air, water, odor/fumes and lighting.”
According to the U.S. Green Building Council, pollutants are often two to five times higher indoors than outdoors and this can significantly affect air in the home causing breathing problems and respiratory diseases. When it comes to the quality of the air, Lenahen said several products are available on the market that homeowners should incorporate into their home such as:
-Advanced allergy filters to control dust particles and pollutants
-Dehumidification devices to manage the humidity in the home
-Variable speed air handlers to maintain the circulation of air throughout the home and ventilation fans to introduce fresh air into the home while removing stale, humid air
Improving the water quality in a home is just as important as the air quality, Lenahen said. Several products are available to improve the quality and efficiency of a home’s water flow and usage, including:
-Carbon filter and reverse osmosis units to purify drinking water by removing particulate matter and harmful minerals
-Whole-house water softeners to remove calcium and other harmful minerals while providing added benefit to the home’s appliances and pluming fixtures. Water softeners also improve skin tone and texture by removing calcium, magnesium and iron from the water.
-Underground cisterns to collect rainwater from the gutter and downspouts to use for irrigating the lawn and landscapeHealthy home living is also improved by the use of low Volatile Organic Compound (VOC) materials, which emit lower levels of gasses into the home from everyday materials such as paints, sealants, cabinets and flooring materials. Lenahen said homeowners should use the lowest emitting VOC products for custom homebuilding and remodeling projects, thereby reducing the negative health impact the products may have on the occupants. Low VOC products will have labeling to help homeowners find the healthiest option.
Better lighting solutions can also foster healthier living. Traditional light fixtures typically include high wattage bulbs, which waste electricity while adding excessive heat into the home. Suggested improvements include:
-Decorative light fixtures with less wattage requirements and soft-light emitting globes
-Compact florescent light (CFL) bulbs or L.E.D. fixtures and bulbs for longer life usage
-Next generation skylights, such as Velux Sun Tunnel or Solatube, that bring natural light into the home, reducing the need for artificial light and energy consumption
“These are just some of the many changes that can be made to current homes or built into new homes that will greatly improve the quality of life and health of its occupants,” Lenahen said. “The more consumers become aware of the positive affects of healthy living within the home, the more products will enter the mainstream of standard building practices.”
About Aurora Custom Homes
Aurora Custom Homes was founded in 1997 by Michael Lenahen with a mission to build custom homes of uncompromised elegance. Driven by passion and purpose, Aurora Custom Homes provides its clients with a truly custom building experience where the customer becomes an integral part of the building team.
For more information, visit www.AuroraBuilders.com.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Read more: http://rismedia.com/2009-11-29/9-home-improvements-to-promote-healthy-living-in-your-home/#ixzz0YMdrUjWk
The Criscitos has been selling South Florida luxury and commercial real estate for over a decade and has sold over $1 billion dollars of property. They work as a multi-lingual team speaking english, Spanish, Italian and Portuguese. They carved out a niche as a leading boutique real estate company with two distinct divisions -residential and commercial- both personally overseeing by Marcela and Anthony Criscito.
Monday, November 30, 2009
Friday, November 27, 2009
Q&A clears the air about homebuyer tax credits
If you’re in the market for a home, the world is your oyster. Interest rates are at record lows. Housing prices in many parts of the country are still depressed. And you may be eligible for a generous tax break, even if the home you buy isn’t your first.
On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time homebuyers, scheduled to expire Nov. 30, until next spring.
A lot of people are interested in taking advantage of this tax break, but the expanded credit also has whipped up a lot of confusion. Here are some answers to frequently asked questions:
Q: How do I qualify for the $6,500 credit?
A: This credit is available for homebuyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time homebuyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn’t require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.
Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?
A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.
Q: Does the home I buy have to be more expensive than the one I own now?
A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there’s no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.
If you are planning to move up, keep in mind that you can’t claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn’t slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 – and that refers to the purchase price, not the assessed value or the amount of your mortgage – you are ineligible for the credit, period.
The $800,000 cap also applies to first-time homebuyers, but only those who purchase a home after Nov. 6. First-time homebuyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.
Q: I’m an existing homeowner, and would like to build a new home. Can I claim the credit?
A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn’t habitable by June 30, you won’t be able to claim the credit, he says.
Q: I bought a home in 2008 and claimed the old $7,500 first-time homebuyers credit, which must be repaid over 15 years. Did the new law change that rule?
A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.
The $8,000 first-time homebuyer credit, available for homes purchased after Dec. 31, 2008, doesn’t have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don’t have to repay that money, either, as long as they meet the three-year requirement.
Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time homebuyer credit?
A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between “related parties,” Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.
Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?
A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.
Copyright © 2009 USA TODAY. All rights reserved.
Source: http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=227710
On Nov. 6, President Obama signed legislation that provides a $6,500 tax credit for some current homeowners who buy another home. The law also extends the $8,000 tax credit for first-time homebuyers, scheduled to expire Nov. 30, until next spring.
A lot of people are interested in taking advantage of this tax break, but the expanded credit also has whipped up a lot of confusion. Here are some answers to frequently asked questions:
Q: How do I qualify for the $6,500 credit?
A: This credit is available for homebuyers who sign a binding contract on a new or existing home by April 30, 2010, and settle by July 1 (deadlines that also apply to the first-time homebuyer credit). You must have lived in your existing home for five consecutive years out of the last eight. The home you purchase must be your primary residence. However, the law doesn’t require you to sell your old home, says Bob Meighan, vice president at TurboTax, the tax software provider. You can use it as a second home or a rental and still claim the credit, he says.
Q: I sold a home I had lived in for more than five years and bought a new one in August. Do I qualify for a tax credit?
A: No. For existing homeowners, the $6,500 credit is limited to homes purchased after Nov. 6.
Q: Does the home I buy have to be more expensive than the one I own now?
A: No. While the real estate industry is hopeful that homeowners will use this credit to buy a nicer place, there’s no prohibition against using it to downsize, Meighan says. That makes this credit particularly useful for seniors who are interested in moving into a smaller home.
If you are planning to move up, keep in mind that you can’t claim the credit if the purchase price of the home exceeds $800,000. Unlike some other tax credits, this one doesn’t slowly phase out once you exceed the threshold, Meighan says. If you buy a home for more than $800,000 – and that refers to the purchase price, not the assessed value or the amount of your mortgage – you are ineligible for the credit, period.
The $800,000 cap also applies to first-time homebuyers, but only those who purchase a home after Nov. 6. First-time homebuyers who bought a home for more than $800,000 between Jan. 1 and Nov. 6 can still claim the credit, assuming they meet the other criteria, Meighan says.
Q: I’m an existing homeowner, and would like to build a new home. Can I claim the credit?
A: Yes, but make sure your builder is good at meeting deadlines. You can claim the credit as long as you have a binding contract in place by April 30 and close by July 1. In the case of a new home, the closing date is the day you move in, Meighan says. If your home isn’t habitable by June 30, you won’t be able to claim the credit, he says.
Q: I bought a home in 2008 and claimed the old $7,500 first-time homebuyers credit, which must be repaid over 15 years. Did the new law change that rule?
A: No. That credit, which was available for homes purchased between April 9, 2008, and Dec. 31, 2008, must still be repaid.
The $8,000 first-time homebuyer credit, available for homes purchased after Dec. 31, 2008, doesn’t have to be repaid as long as you remain in the home for at least three years. Existing homeowners who qualify for the $6,500 credit don’t have to repay that money, either, as long as they meet the three-year requirement.
Q: We have a rental home and would like to sell it to our son, who has never owned a home. Would he qualify for the first-time homebuyer credit?
A: No. The legislation specifically prohibits taxpayers from claiming the credit if the sale is between “related parties,” Meighan says. A home sale to a parent, grandparent, child or grandchild would fall into that category.
Q: I sold my home this year and have been renting since. If I buy a new home, do I qualify for the expanded credit?
A: Yes, as long as you meet all of the other requirements, says Mel Schwarz, partner with Grant Thornton in Washington, D.C. The eight-year period used to determine eligibility ends on the day you buy your new home, he says.
Copyright © 2009 USA TODAY. All rights reserved.
Source: http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=227710
Wednesday, November 25, 2009
The upside of Florida real estate: 15 market positives
1. Great prices. Statewide, home prices have fallen about 20 percent in the past year. Florida Association of Realtors® statistics show the existing-home median sales price was $185,400 in the third quarter of 2008, compared with $233,200 in third quarter 2007. By the way, those numbers are still significantly higher than in the early years of the decade. In 2003, the third-quarter sales price was $163,700, which reflects an increase of about 13.3 percent over the five-year period. (The median is a typical market price where half the homes sold for more, half for less.)
2. The time is right. Home sales volumes are rising again -- a signal that the market recovery may be underway. In third quarter 2008, statewide sales of existing single-family homes were up 5 percent compared to the same period last year, according to FAR statistics.
3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don't wait too long.
4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. Lower rates multiply a buyer's financial power. Even half a percent can make a sizeable difference. For example, on a $200,000 home, half of 1 percent could save the homeowner about $815 a year. Buyers can get more home for the money, which is a perfect scenario for families looking to upsize.
5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The American Recovery and Reinvestment Act has increased the First-Time Homebuyer Tax Credit from $7,500 to $8,000 for purchases on or after Jan. 1, 2009, and before Dec. 1, 2009. Talk to a local mortgage lender about state and federal incentive programs.
6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010, economists forecast that Florida will be the third-most-populated state in the country. Florida has been one of the 10-fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to Census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.
7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida's population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida's Bureau of Economic and Business Research. That's a lot of new buyers coming into the market.
8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State's mild climate and outdoor amenities continue to make Florida a favorite retirement destination.
9. A diverse economy. Florida's economy, like the rest of the nation, is impacted by the recession. Some business sectors, though, appear promising for the Florida economy. The healthcare and technology sectors are quickly becoming an important economic force in South and Central Florida. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its "Best Performing Cities Index 2008," which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida's business climate ranked fourth among executives and sixth overall on Site Selection magazine's 2008 Top State Business Climate rankings.
10. Investment outlook. Every quarter, the University of Florida's Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the fourth quarter 2008 survey, the investment outlook for various types of Florida properties declined from the third quarter of 2008, although it is noted that the investment outlook remains higher than it was at times in 2006 and 2007. "We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in," says Director Dr. Wayne Archer, when referencing the 2008 third quarter results.
11. Homeownership has value. Realtors® believe -- and research supports the belief -- that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth.
12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal self-esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.
13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and graduate high school. They're also shown to have a higher lifetime annual income.
14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.
15. An unsurpassed lifestyle. Finally, let's not forget the things that brought people to Florida in the first place, and will continue to attract them -- beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It's no wonder that Florida's combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put the Sunshine State in the top three of Harris Poll's "Most Desirable Places to Live" survey
Source: http://www.orlandosentinel.com/classified/realestate/foreclosure/orl-foreclosures-upside-realestate-story,0,7584976.story
2. The time is right. Home sales volumes are rising again -- a signal that the market recovery may be underway. In third quarter 2008, statewide sales of existing single-family homes were up 5 percent compared to the same period last year, according to FAR statistics.
3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don't wait too long.
4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. Lower rates multiply a buyer's financial power. Even half a percent can make a sizeable difference. For example, on a $200,000 home, half of 1 percent could save the homeowner about $815 a year. Buyers can get more home for the money, which is a perfect scenario for families looking to upsize.
5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The American Recovery and Reinvestment Act has increased the First-Time Homebuyer Tax Credit from $7,500 to $8,000 for purchases on or after Jan. 1, 2009, and before Dec. 1, 2009. Talk to a local mortgage lender about state and federal incentive programs.
6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010, economists forecast that Florida will be the third-most-populated state in the country. Florida has been one of the 10-fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to Census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.
7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida's population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida's Bureau of Economic and Business Research. That's a lot of new buyers coming into the market.
8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State's mild climate and outdoor amenities continue to make Florida a favorite retirement destination.
9. A diverse economy. Florida's economy, like the rest of the nation, is impacted by the recession. Some business sectors, though, appear promising for the Florida economy. The healthcare and technology sectors are quickly becoming an important economic force in South and Central Florida. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its "Best Performing Cities Index 2008," which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida's business climate ranked fourth among executives and sixth overall on Site Selection magazine's 2008 Top State Business Climate rankings.
10. Investment outlook. Every quarter, the University of Florida's Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the fourth quarter 2008 survey, the investment outlook for various types of Florida properties declined from the third quarter of 2008, although it is noted that the investment outlook remains higher than it was at times in 2006 and 2007. "We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in," says Director Dr. Wayne Archer, when referencing the 2008 third quarter results.
11. Homeownership has value. Realtors® believe -- and research supports the belief -- that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth.
12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal self-esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.
13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and graduate high school. They're also shown to have a higher lifetime annual income.
14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.
15. An unsurpassed lifestyle. Finally, let's not forget the things that brought people to Florida in the first place, and will continue to attract them -- beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It's no wonder that Florida's combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put the Sunshine State in the top three of Harris Poll's "Most Desirable Places to Live" survey
Source: http://www.orlandosentinel.com/classified/realestate/foreclosure/orl-foreclosures-upside-realestate-story,0,7584976.story
Monday, November 23, 2009
Preparations Prior To Miami Real Estate Home Selling
Selling a home need a lot of preparation and plan, there are many factors that are need to be considered if you want to have a quick sell. In Miami real estate market, there are lots of homes that are for sale which you need to learn about before giving out your asking price.
Considering other people who are selling their home in the area, you need to prepare your home. Take time to tour around the area and see those homes for sale so you can have an idea on how you will be planning the
Most of the time home sellers focus on the physical appearance of their home that is why they do home improvement to make their home look appealing and attract prospect buyer. Maintaining cleanliness and fixing things inside your home is really needed to give buyer good impression on your home. And the best way to do it is to repaint your home with different color combination or use two colors that can blend each other.
Fix broken fixtures inside your home make sure that all faucets are all in a good working condition. If there are leaks, you may need to replace defective faucet. Check all door knobs if are working, faded wall paint must be repainted. In short make sure that all things inside your home are well maintain and in good condition. You should also clean your backyard, cut those tall grasses and remove unnecessary things around your home. If you have a garden, make sure that plants are well cared because it can help in giving a beautiful impression on your home.
In doing these home improvement, make sure that your home will stand out with other homes that are also for sale in the area. You can also ask some assistance on a real estate agent in looking for a buyer. Miami real estate is a place where real estate competition is really tight, preparing and planning for your home selling is really a must, and you have to study every aspect that can affect your Miami real estate home selling.
And before selling or accepting offer from a buyer make sure that you have considered the expenses you have done with home improvement. But in making home improvement make sure that the expenses you will incur is reasonable enough in making your Miami real estate home look beautiful.
Source: Allison Ayson Miami Real Estate http://luxurylivingrealty.net/
Considering other people who are selling their home in the area, you need to prepare your home. Take time to tour around the area and see those homes for sale so you can have an idea on how you will be planning the
Most of the time home sellers focus on the physical appearance of their home that is why they do home improvement to make their home look appealing and attract prospect buyer. Maintaining cleanliness and fixing things inside your home is really needed to give buyer good impression on your home. And the best way to do it is to repaint your home with different color combination or use two colors that can blend each other.
Fix broken fixtures inside your home make sure that all faucets are all in a good working condition. If there are leaks, you may need to replace defective faucet. Check all door knobs if are working, faded wall paint must be repainted. In short make sure that all things inside your home are well maintain and in good condition. You should also clean your backyard, cut those tall grasses and remove unnecessary things around your home. If you have a garden, make sure that plants are well cared because it can help in giving a beautiful impression on your home.
In doing these home improvement, make sure that your home will stand out with other homes that are also for sale in the area. You can also ask some assistance on a real estate agent in looking for a buyer. Miami real estate is a place where real estate competition is really tight, preparing and planning for your home selling is really a must, and you have to study every aspect that can affect your Miami real estate home selling.
And before selling or accepting offer from a buyer make sure that you have considered the expenses you have done with home improvement. But in making home improvement make sure that the expenses you will incur is reasonable enough in making your Miami real estate home look beautiful.
Source: Allison Ayson Miami Real Estate http://luxurylivingrealty.net/
Wednesday, November 18, 2009
Homeowners feel abandoned by builders who used Chinese drywall
Builders abandon them, customers say, but firms say it is more complicated.
About 10 families in The Oaks development west of Boca Raton gathered at a neighbor's house last week to commiserate about the tainted Chinese drywall contained in most of their homes.
The homeowners have contacted their builder, Albanese-Popkin Group, hoping the company would pay to fix their properties or find them rental housing. But they say the builder has abandoned them – while at the same time marketing deeply discounted homes for sale in the upscale community along Clint Moore Road.
Albanese-Popkin says it is pursuing legal action against subcontractors and suppliers and seeking coverage from insurance carriers. The company also notes that federal agencies have not yet established a protocol for repairing homes with Chinese drywall.
The stalemate over the problem drywall is common across Florida, where as many as 36,000 homes could be affected. Homeowners want answers and are filing lawsuits, while builders insist their hands are tied as state and federal officials determine how to fix the homes and whether the drywall poses any health risk.
"There are thousands of people out there begging their builders to help them," said Allison Grant, a Boca Raton attorney who is representing three homeowners in The Oaks and more than 200 statewide.
If builders aren't yet able to fix the homes, they should pay for temporary housing or allow homeowners to live in unsold units, she said. They also can help residents obtain mortgage relief on loans the builders originated.
"Just do something," Grant said.
Kevin Rosen and his wife and two small children moved out of their house at The Oaks this summer, shortly after discovering it had the defective wallboard.
Rosen continues to pay his mortgage and maintenance fees, and he says Albanese-Popkin has not responded to his requests for help. He filed a lawsuit seeking compensation for fixing the four-bedroom house he bought for more than $1 million in 2006.
"Where's the good faith?" said Rosen, 39. "They didn't even organize a meeting in the neighborhood. They have not taken the initiative to help homeowners resolve the problem. The people here are basically on their own."
Albanese-Popkin, a partnership of Leonard Albanese and Edward Popkin, says it has spent three decades building custom estate homes in South Florida and Colorado. In response to The Oaks residents, the company issued a statement, which said, "This is a terrible situation for everyone who is caught up in it. We wish we could do more and had the answers that homeowners want. Given the circumstances, we are taking all the steps we can."
Some industry observers worry that builders agreeing to fix homes with problem drywall immediately could be held liable if the repairs don't work or if they aren't consistent with government guidelines that may come out.
But homeowners say builders are using the lack of government guidelines as an excuse to get out of having to pay millions of dollars for repairs.
Sunrise-based GL Homes and Lennar Corp. of Miami have agreed to fix homes at no cost to the homeowners. The builders are ripping out the drywall and rebuilding homes from the studs out – a method endorsed by scientists who spoke at a state Chinese drywall symposium in Tampa last week.
"We just can't wait" for the government to issue a protocol, said Heather Keith, a lawyer for GL who attended the symposium.
Large volume builders have the resources to more easily help homeowners, said Edie Ousley, spokeswoman for the Florida Home Builders Association.
Lennar, for instance, told federal regulators this summer it set aside roughly $40 million to repair 400 homes with Chinese drywall. That works out to about $100,000 per home.
Ousley said many smaller builders don't have that kind of money and would be forced out of business if they had to fix homes.
"They're just financially unable to do so," she said.
But Rosen's Coral Gables lawyer, Ervin A. Gonzalez, doesn't buy it.
Generally speaking, he said, smaller builders typically set up and fund corporations to build houses. They take the profits as salaries and give bonuses to shareholders, ultimately depleting the corporations of any money that could go to help homeowners repair defective homes.
"It's not illegal," Gonzalez said, "but it sure smells to high heaven."
Source: Paul Owers can be reached at Powers@Sunsentinel.com or 561-243-6529.
http://www.blogger.com/post-create.g?blogID=7446482950087130567
About 10 families in The Oaks development west of Boca Raton gathered at a neighbor's house last week to commiserate about the tainted Chinese drywall contained in most of their homes.
The homeowners have contacted their builder, Albanese-Popkin Group, hoping the company would pay to fix their properties or find them rental housing. But they say the builder has abandoned them – while at the same time marketing deeply discounted homes for sale in the upscale community along Clint Moore Road.
Albanese-Popkin says it is pursuing legal action against subcontractors and suppliers and seeking coverage from insurance carriers. The company also notes that federal agencies have not yet established a protocol for repairing homes with Chinese drywall.
The stalemate over the problem drywall is common across Florida, where as many as 36,000 homes could be affected. Homeowners want answers and are filing lawsuits, while builders insist their hands are tied as state and federal officials determine how to fix the homes and whether the drywall poses any health risk.
"There are thousands of people out there begging their builders to help them," said Allison Grant, a Boca Raton attorney who is representing three homeowners in The Oaks and more than 200 statewide.
If builders aren't yet able to fix the homes, they should pay for temporary housing or allow homeowners to live in unsold units, she said. They also can help residents obtain mortgage relief on loans the builders originated.
"Just do something," Grant said.
Kevin Rosen and his wife and two small children moved out of their house at The Oaks this summer, shortly after discovering it had the defective wallboard.
Rosen continues to pay his mortgage and maintenance fees, and he says Albanese-Popkin has not responded to his requests for help. He filed a lawsuit seeking compensation for fixing the four-bedroom house he bought for more than $1 million in 2006.
"Where's the good faith?" said Rosen, 39. "They didn't even organize a meeting in the neighborhood. They have not taken the initiative to help homeowners resolve the problem. The people here are basically on their own."
Albanese-Popkin, a partnership of Leonard Albanese and Edward Popkin, says it has spent three decades building custom estate homes in South Florida and Colorado. In response to The Oaks residents, the company issued a statement, which said, "This is a terrible situation for everyone who is caught up in it. We wish we could do more and had the answers that homeowners want. Given the circumstances, we are taking all the steps we can."
Some industry observers worry that builders agreeing to fix homes with problem drywall immediately could be held liable if the repairs don't work or if they aren't consistent with government guidelines that may come out.
But homeowners say builders are using the lack of government guidelines as an excuse to get out of having to pay millions of dollars for repairs.
Sunrise-based GL Homes and Lennar Corp. of Miami have agreed to fix homes at no cost to the homeowners. The builders are ripping out the drywall and rebuilding homes from the studs out – a method endorsed by scientists who spoke at a state Chinese drywall symposium in Tampa last week.
"We just can't wait" for the government to issue a protocol, said Heather Keith, a lawyer for GL who attended the symposium.
Large volume builders have the resources to more easily help homeowners, said Edie Ousley, spokeswoman for the Florida Home Builders Association.
Lennar, for instance, told federal regulators this summer it set aside roughly $40 million to repair 400 homes with Chinese drywall. That works out to about $100,000 per home.
Ousley said many smaller builders don't have that kind of money and would be forced out of business if they had to fix homes.
"They're just financially unable to do so," she said.
But Rosen's Coral Gables lawyer, Ervin A. Gonzalez, doesn't buy it.
Generally speaking, he said, smaller builders typically set up and fund corporations to build houses. They take the profits as salaries and give bonuses to shareholders, ultimately depleting the corporations of any money that could go to help homeowners repair defective homes.
"It's not illegal," Gonzalez said, "but it sure smells to high heaven."
Source: Paul Owers can be reached at Powers@Sunsentinel.com or 561-243-6529.
http://www.blogger.com/post-create.g?blogID=7446482950087130567
Monday, November 16, 2009
Housing Market - Survey shows spike in 1st-time homebuyers
The housing market welcomed a bigger share of first-time buyers and single women this past year, while a majority of sellers resorted to dialing down prices to get their homes sold, a new homebuyer survey shows.
First-time buyers accounted for a record 47 percent of home sales between July 2008 and June this year, up from 41 percent in the prior-year period, according to the survey conducted by the National Association of Realtors.
The annual survey gleans details on everything from how buyers came up with down payments to how long it took sellers to unload their homes. The latest results were derived from more than 9,000 responses, the trade association said.
Home sales and prices have shown some signs of stabilizing this year, and the survey results affirm the market continued to favor buyers, particularly first-timers.
“Tax incentives, record high affordability conditions and a pent-up demand brought a record share of first-time home buyers into the market,” said Paul Bishop, the trade association’s vice president of research.
First-time homebuyers this year have been able to take advantage of a tax credit of up to $8,000 meant to entice new homebuyers to enter the market.
Congress extended the tax incentive through next June, as long as the buyer signs a binding contract by the end of April. The program also was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
First-time buyers had a median age of 30 and reported a median income of $61,600, the survey shows. The typical first-time buyer paid $156,000 for their home, about $9,000 less than in the Realtors’ 2008 survey.
Repeat buyers were typically a few years older, 48, and earned a bit more than first-timers: $88,100. They also said they planned to stay in the home for 12 years.
Buyers generally took 12 weeks to search for a home, two weeks longer than last year. They also generally looked at 12 homes, up from 10.
Single women made up a slightly bigger share of homebuyers, accounting for 21 percent of buyers. That’s a 1 percent increase from the prior-year survey. Single men accounted for 10 percent of buyers. But married couples continued to make up the majority of buyers at 60 percent, the survey showed.
Whites continued to dominate among homebuyers, representing 85 percent of buyers. That trend was slightly higher than in the 2008 survey.
The median down payment homebuyers made was 8 percent.
More than 61 percent of buyers tapped their savings to come up with the down payment, while 22 percent received a gift from a friend or relative.
Sellers had to go the extra mile to sell their homes, with 52 percent offering incentives like paying for closing costs. They also lowered prices.
The typical home sold for 95 percent of the original listing price, the survey shows.
Still, many sellers came out ahead. The median amount over the price sellers originally paid for their home was $36,000.
Source: http://www.dailybusinessreview.com/news.html?news_id=58659
First-time buyers accounted for a record 47 percent of home sales between July 2008 and June this year, up from 41 percent in the prior-year period, according to the survey conducted by the National Association of Realtors.
The annual survey gleans details on everything from how buyers came up with down payments to how long it took sellers to unload their homes. The latest results were derived from more than 9,000 responses, the trade association said.
Home sales and prices have shown some signs of stabilizing this year, and the survey results affirm the market continued to favor buyers, particularly first-timers.
“Tax incentives, record high affordability conditions and a pent-up demand brought a record share of first-time home buyers into the market,” said Paul Bishop, the trade association’s vice president of research.
First-time homebuyers this year have been able to take advantage of a tax credit of up to $8,000 meant to entice new homebuyers to enter the market.
Congress extended the tax incentive through next June, as long as the buyer signs a binding contract by the end of April. The program also was expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
First-time buyers had a median age of 30 and reported a median income of $61,600, the survey shows. The typical first-time buyer paid $156,000 for their home, about $9,000 less than in the Realtors’ 2008 survey.
Repeat buyers were typically a few years older, 48, and earned a bit more than first-timers: $88,100. They also said they planned to stay in the home for 12 years.
Buyers generally took 12 weeks to search for a home, two weeks longer than last year. They also generally looked at 12 homes, up from 10.
Single women made up a slightly bigger share of homebuyers, accounting for 21 percent of buyers. That’s a 1 percent increase from the prior-year survey. Single men accounted for 10 percent of buyers. But married couples continued to make up the majority of buyers at 60 percent, the survey showed.
Whites continued to dominate among homebuyers, representing 85 percent of buyers. That trend was slightly higher than in the 2008 survey.
The median down payment homebuyers made was 8 percent.
More than 61 percent of buyers tapped their savings to come up with the down payment, while 22 percent received a gift from a friend or relative.
Sellers had to go the extra mile to sell their homes, with 52 percent offering incentives like paying for closing costs. They also lowered prices.
The typical home sold for 95 percent of the original listing price, the survey shows.
Still, many sellers came out ahead. The median amount over the price sellers originally paid for their home was $36,000.
Source: http://www.dailybusinessreview.com/news.html?news_id=58659
Friday, November 13, 2009
You may qualify for a home-buyer tax credit
Millions of additional people may be able to take advantage of the new and improved first-time home-buyer tax credit now, and it's not just for first-time home buyers anymore. You may qualify.
President Obama signed legislation Friday to extend unemployment benefits to American workers. The law also includes provisions that vastly expand the number of people eligible for home-buyer credits by boosting the income eligibility limits, giving buyers more time, creating a $6,500 credit for longtime homeowners and launching more-accommodating rules for members of the military. Here are the details.
The $8,000 credit
If you were locked out of the first-time home-buyer credit in the past simply because you earned too much, there's good news.
Now you can qualify for the full $8,000 first-time home-buyer credit with a single income of up to $125,000 and married income of up to $225,000. Those who earn more will be phased out.
The credit ends completely once single income exceeds $145,000 and married income exceeds $245,000. Still, that's a big boost from the previous law that shut off the credit for singles earning more than $95,000 and married couples who earned more than $170,000. Other eligibility rules
* You must not have owned another home for at least the previous three years.
* You must buy a home (or have a binding contract to buy) by April 30, 2010. Under the new law, if the sale doesn't close on time, you can still get the credit as long as you've got a binding contract on the ending date, said Jackie Perlman, tax analyst with the Tax Institute at H&R Block in Kansas City.
* You must be older than 18 and not claimed as a dependent by any other taxpayer.
* The property you purchase cannot have been acquired from a relative.
* You must attach a copy of your settlement statement with your tax return to claim the credit.
* Most buyers also must continue to own this new home for at least three years. If they sell in less time, the government will demand that they pay the credit back, said Clint Stretch, director of tax policy with Deloitte Tax.
Special rules for military
The government will not require repayment of the credit if you are a member of the military and had to sell or stop using the home as a residence because of extended duty, however.
In addition, those serving outside of the U.S. during any part of 2009 or early 2010 will get an additional year to claim the credit. In other words, the credit ends for most people on April 30, 2010, but it lasts until April 30, 2011, for active-duty service members working overseas.
The $6,500 credit
The new law carves out an additional credit for current homeowners.
If you have owned and lived in a home for at least five consecutive years of the last eight years, you could qualify for a $6,500 tax credit, if you buy a new home between now and April 30.
The "five-of-eight" requirement means that this credit could accommodate people who lost their homes in the last year or two to foreclosure or even sold a house and didn't immediately replace it, said John. W. Roth, senior tax analyst with CCH Inc., a Riverwoods, Ill., publisher of tax information.
Would you have to sell your residence for it to qualify for the $6,500 credit, if you wanted to buy a new one? Not necessarily, Roth said. The home you purchase must become your principal residence, so you would have to move there. But nothing in the law says you cannot keep your existing residence as a second home or rental, he said.
If you do choose to sell your existing residence, you need to pay close attention to how much you earn on that sale, Stretch said. That's because taxable profits from the sale of your residence will be added to your other earnings to determine whether your adjusted gross income exceeds the allowable thresholds.
This credit also phases out for singles earning more than $125,000 and married couples earning more than $225,000.
On the bright side, some profits from the sale of a personal residence don't count. That's because taxpayers are allowed to exclude up to $250,000 per person or $500,000 per couple in profits on the sale of their personal residence from tax, if they lived in that home for two of the last five years, Stretch said. Only profits exceeding those excluded amounts would be included in income, he noted.
Getting muddled? Let's look at an example to clarify.
John and Sue Smith own a home that they bought for $100,000 in 1965. They're now retired and want to scale back, selling that home, which is now worth $750,000, and buying a smaller home with the help of the new $6,500 credit.
Their net profit on this sale would be $650,000, but they can exclude $500,000 of that gain from tax, based on existing law. They will have to add the remaining $150,000 capital gain to their adjusted gross income to determine whether they can qualify for the new credit.
If all of their other income adds up to less than $75,000, they have no worries because the $150,000 and $75,000 add up to $225,000 -- the beginning of the credit's phase-out range for married couples. If they earn more, however, they begin to lose their ability to take the credit.
There are other arcane rules relating to profits earned on the sale of a home, so those with substantial profits may want to consult a tax professional before banking on the credit.
"It's really confusing," Roth allowed. "It's as if they took the old law and threw it in a Mixmaster. Some things still apply; others don't. The time frames are all new. This is going to keep a lot of tax accountants in business for a long time."
Source: http://www.sun-sentinel.com/business/realestate/sfl-first-time-credit-110909,0,177297.column
President Obama signed legislation Friday to extend unemployment benefits to American workers. The law also includes provisions that vastly expand the number of people eligible for home-buyer credits by boosting the income eligibility limits, giving buyers more time, creating a $6,500 credit for longtime homeowners and launching more-accommodating rules for members of the military. Here are the details.
The $8,000 credit
If you were locked out of the first-time home-buyer credit in the past simply because you earned too much, there's good news.
Now you can qualify for the full $8,000 first-time home-buyer credit with a single income of up to $125,000 and married income of up to $225,000. Those who earn more will be phased out.
The credit ends completely once single income exceeds $145,000 and married income exceeds $245,000. Still, that's a big boost from the previous law that shut off the credit for singles earning more than $95,000 and married couples who earned more than $170,000. Other eligibility rules
* You must not have owned another home for at least the previous three years.
* You must buy a home (or have a binding contract to buy) by April 30, 2010. Under the new law, if the sale doesn't close on time, you can still get the credit as long as you've got a binding contract on the ending date, said Jackie Perlman, tax analyst with the Tax Institute at H&R Block in Kansas City.
* You must be older than 18 and not claimed as a dependent by any other taxpayer.
* The property you purchase cannot have been acquired from a relative.
* You must attach a copy of your settlement statement with your tax return to claim the credit.
* Most buyers also must continue to own this new home for at least three years. If they sell in less time, the government will demand that they pay the credit back, said Clint Stretch, director of tax policy with Deloitte Tax.
Special rules for military
The government will not require repayment of the credit if you are a member of the military and had to sell or stop using the home as a residence because of extended duty, however.
In addition, those serving outside of the U.S. during any part of 2009 or early 2010 will get an additional year to claim the credit. In other words, the credit ends for most people on April 30, 2010, but it lasts until April 30, 2011, for active-duty service members working overseas.
The $6,500 credit
The new law carves out an additional credit for current homeowners.
If you have owned and lived in a home for at least five consecutive years of the last eight years, you could qualify for a $6,500 tax credit, if you buy a new home between now and April 30.
The "five-of-eight" requirement means that this credit could accommodate people who lost their homes in the last year or two to foreclosure or even sold a house and didn't immediately replace it, said John. W. Roth, senior tax analyst with CCH Inc., a Riverwoods, Ill., publisher of tax information.
Would you have to sell your residence for it to qualify for the $6,500 credit, if you wanted to buy a new one? Not necessarily, Roth said. The home you purchase must become your principal residence, so you would have to move there. But nothing in the law says you cannot keep your existing residence as a second home or rental, he said.
If you do choose to sell your existing residence, you need to pay close attention to how much you earn on that sale, Stretch said. That's because taxable profits from the sale of your residence will be added to your other earnings to determine whether your adjusted gross income exceeds the allowable thresholds.
This credit also phases out for singles earning more than $125,000 and married couples earning more than $225,000.
On the bright side, some profits from the sale of a personal residence don't count. That's because taxpayers are allowed to exclude up to $250,000 per person or $500,000 per couple in profits on the sale of their personal residence from tax, if they lived in that home for two of the last five years, Stretch said. Only profits exceeding those excluded amounts would be included in income, he noted.
Getting muddled? Let's look at an example to clarify.
John and Sue Smith own a home that they bought for $100,000 in 1965. They're now retired and want to scale back, selling that home, which is now worth $750,000, and buying a smaller home with the help of the new $6,500 credit.
Their net profit on this sale would be $650,000, but they can exclude $500,000 of that gain from tax, based on existing law. They will have to add the remaining $150,000 capital gain to their adjusted gross income to determine whether they can qualify for the new credit.
If all of their other income adds up to less than $75,000, they have no worries because the $150,000 and $75,000 add up to $225,000 -- the beginning of the credit's phase-out range for married couples. If they earn more, however, they begin to lose their ability to take the credit.
There are other arcane rules relating to profits earned on the sale of a home, so those with substantial profits may want to consult a tax professional before banking on the credit.
"It's really confusing," Roth allowed. "It's as if they took the old law and threw it in a Mixmaster. Some things still apply; others don't. The time frames are all new. This is going to keep a lot of tax accountants in business for a long time."
Source: http://www.sun-sentinel.com/business/realestate/sfl-first-time-credit-110909,0,177297.column
Thursday, November 12, 2009
Foreclosures dip 3 pct. in October from September
The number of homeowners on the brink of losing their homes dipped in October, the third straight monthly decline, as foreclosure prevention programs helped more borrowers.
But foreclosure filings are still up 19 percent from a year ago, RealtyTrac Inc. said Thursday, and rising job losses continue to threaten the stabilizing trend.
More than 332,000 households, or one in every 385 homes, received a foreclosure-related notice in October, such as a notice of default or trustee's sale. That's down 3 percent from September.
Banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.
New state programs, like one launched in Nevada in July, that require mediation before banks can seize a property have helped stem foreclosure activity, said Rick Sharga, senior vice president at RealtyTrac.
Also, anecdotally, lenders are delaying foreclosure as they evaluate which borrowers might qualify for the federal loan modification program, he said.
"That's the reason there's been a buildup of homes that are seriously delinquent but not foreclosed," he said.
Despite Nevada's legislative efforts to slow foreclosures, the state still clocked in the nation's highest foreclosure rate for the 34th month in a row, followed by California, Florida, Arizona and Idaho. Rounding out the top 10 were Illinois, Michigan, Georgia, Maryland and Utah.
Among cities, Las Vegas had the highest rate, the report showed. One in 68 homes there received a foreclosure filing in October, more than five times the national average. Seven of the top ten metros were in California, led by Vallejo and Modesto at No. 2 and 3.
After three years of declines, home prices reversed course in June and have been rapidly climbing month-over-month. This will rebuild home equity and reduce the number of borrowers that owe more than their homes are worth.
Still, foreclosures remain near record highs and the mortgage industry is still struggling to manage the onslaught. The government has had to push many lenders to participate in the Obama administration's loan modification plan.
The Treasury Department said Tuesday that more than 650,000 borrowers, or 20 percent of those eligible, had signed up for temporary trial plans lasting up to five months. But since the beginning of September, only about 1,700 modifications had been made permanent. The Treasury Department expects to release updated data later this month.
Congress last week also extended and expanded a key federal tax credit for homebuyers that has been credited for boosting home sales recently.
Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
"Anything that stimulates buying activity," Sharga said, "will go a long way to mediate the foreclosure problem."
Source: http://www.dailybusinessreview.com/news.html?news_id=58589
But foreclosure filings are still up 19 percent from a year ago, RealtyTrac Inc. said Thursday, and rising job losses continue to threaten the stabilizing trend.
More than 332,000 households, or one in every 385 homes, received a foreclosure-related notice in October, such as a notice of default or trustee's sale. That's down 3 percent from September.
Banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.
New state programs, like one launched in Nevada in July, that require mediation before banks can seize a property have helped stem foreclosure activity, said Rick Sharga, senior vice president at RealtyTrac.
Also, anecdotally, lenders are delaying foreclosure as they evaluate which borrowers might qualify for the federal loan modification program, he said.
"That's the reason there's been a buildup of homes that are seriously delinquent but not foreclosed," he said.
Despite Nevada's legislative efforts to slow foreclosures, the state still clocked in the nation's highest foreclosure rate for the 34th month in a row, followed by California, Florida, Arizona and Idaho. Rounding out the top 10 were Illinois, Michigan, Georgia, Maryland and Utah.
Among cities, Las Vegas had the highest rate, the report showed. One in 68 homes there received a foreclosure filing in October, more than five times the national average. Seven of the top ten metros were in California, led by Vallejo and Modesto at No. 2 and 3.
After three years of declines, home prices reversed course in June and have been rapidly climbing month-over-month. This will rebuild home equity and reduce the number of borrowers that owe more than their homes are worth.
Still, foreclosures remain near record highs and the mortgage industry is still struggling to manage the onslaught. The government has had to push many lenders to participate in the Obama administration's loan modification plan.
The Treasury Department said Tuesday that more than 650,000 borrowers, or 20 percent of those eligible, had signed up for temporary trial plans lasting up to five months. But since the beginning of September, only about 1,700 modifications had been made permanent. The Treasury Department expects to release updated data later this month.
Congress last week also extended and expanded a key federal tax credit for homebuyers that has been credited for boosting home sales recently.
Buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
"Anything that stimulates buying activity," Sharga said, "will go a long way to mediate the foreclosure problem."
Source: http://www.dailybusinessreview.com/news.html?news_id=58589
Wednesday, November 11, 2009
5 pct. of Americans plan to buy a home next year
Just one in 20 Americans say they plan to buy a home within the next year, and they’re most likely to be 34 years old or younger and living in the South or West, according to a survey released Wednesday.
Roughly a quarter of potential buyers said the No. 1 reason they would buy now is because prices appear to have bottomed out. That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes.
The survey, conducted for Move.com, a real estate listings site, reveals how Americans are responding to a nascent and fragile housing recovery after three years of staggering price declines. The percentage of buyers thinking of jumping into the market was down slightly from a March survey, but up about 1 point from a poll in June.
Home prices rebounded this summer at an annualized pace of almost 7 percent, according to the Standard & Poor’s/Case-Shiller home price index. But with high unemployment and foreclosures clouding the picture, economists debate whether prices will dip again.
Recent housing figures and homebuilder earnings support a stabilizing housing market, and concerns about the expiration of federal homebuyer tax credit are moot after Congress last week extended and expanded the credit
Buyers who have owned in their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn’t owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
The survey was conducted before the credit extension.
Those surveyed widely favored federal policies that kept interest rates low and helped troubled homeowners avoid foreclosure over those that helped first-time homebuyers purchase a home. And, overall, 48 percent of those polled didn’t think the government was doing enough to stabilize the housing market, whereas 42 percent thought it was.
Forty-five percent of Americans worry that they or someone they know will face foreclosure in the next year. And almost 30 percent of those with a mortgage have contacted their lender in the past year to reduce their payments.
One of the survey participants, Joe Handley of Harrington, Del., called his lender last December to consolidate a second mortgage and cut his interest rate from 6.75 percent to 5.25 percent.
“We wanted to build up our savings for emergencies,” the 37-year-old said.
His timing was prescient. In July, Handley, who works in the information technology department for the State of Delaware, took a pay cut and the $400 monthly savings from the new loan has helped cushion the blow.
Almost a quarter of Americans who refinanced their mortgages have used the savings for living expenses or paying down debt, the survey found. Less than 9 percent are putting the savings toward investment or retirement.
The telephone poll, which included about two-thirds homeowners and one-third renters, was conducted in October by market research firm GfK. It had a margin of error of plus or minus 3 percentage points
Source: http://www.dailybusinessreview.com/news.html?news_id=58575
Roughly a quarter of potential buyers said the No. 1 reason they would buy now is because prices appear to have bottomed out. That reason topped bargain-priced foreclosures, worries about rising interest rates and a wide selection of homes.
The survey, conducted for Move.com, a real estate listings site, reveals how Americans are responding to a nascent and fragile housing recovery after three years of staggering price declines. The percentage of buyers thinking of jumping into the market was down slightly from a March survey, but up about 1 point from a poll in June.
Home prices rebounded this summer at an annualized pace of almost 7 percent, according to the Standard & Poor’s/Case-Shiller home price index. But with high unemployment and foreclosures clouding the picture, economists debate whether prices will dip again.
Recent housing figures and homebuilder earnings support a stabilizing housing market, and concerns about the expiration of federal homebuyer tax credit are moot after Congress last week extended and expanded the credit
Buyers who have owned in their current homes for at least five years are eligible for tax credits of up to $6,500, while first-time homebuyers — or anyone who hasn’t owned a home in the last three years — would still get up to $8,000. To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.
The survey was conducted before the credit extension.
Those surveyed widely favored federal policies that kept interest rates low and helped troubled homeowners avoid foreclosure over those that helped first-time homebuyers purchase a home. And, overall, 48 percent of those polled didn’t think the government was doing enough to stabilize the housing market, whereas 42 percent thought it was.
Forty-five percent of Americans worry that they or someone they know will face foreclosure in the next year. And almost 30 percent of those with a mortgage have contacted their lender in the past year to reduce their payments.
One of the survey participants, Joe Handley of Harrington, Del., called his lender last December to consolidate a second mortgage and cut his interest rate from 6.75 percent to 5.25 percent.
“We wanted to build up our savings for emergencies,” the 37-year-old said.
His timing was prescient. In July, Handley, who works in the information technology department for the State of Delaware, took a pay cut and the $400 monthly savings from the new loan has helped cushion the blow.
Almost a quarter of Americans who refinanced their mortgages have used the savings for living expenses or paying down debt, the survey found. Less than 9 percent are putting the savings toward investment or retirement.
The telephone poll, which included about two-thirds homeowners and one-third renters, was conducted in October by market research firm GfK. It had a margin of error of plus or minus 3 percentage points
Source: http://www.dailybusinessreview.com/news.html?news_id=58575
Thursday, November 5, 2009
Town hall draws crowd, questions about condos, HOAs
For more information go to www.BuyMiami.net
Here is what is most clear after last week's Sun Sentinel Town Hall Meeting on Condos & HOAs: Many owners and board members from community associations across South Florida are frustrated and fearful about finances, foreclosures and other festering issues.
And there is no denying that there is a need for solutions, and for help from lawmakers.
Approximately 250 people from Broward, Palm Beach and Miami-Dade counties attended the Oct. 29 event sponsored by the Sun Sentinel and hosted by Nova Southeastern University in Davie. On. 27, the newspaper also held a Condos & HOAs online chat, which drew nearly 300 participants who posted about 180 questions.
Several key questions emerged over and over again. Many who participated in the chat and town hall wanted to know what potential reforms lawmakers plan to consider when they reconvene next year.
"We are caught in a terrible situation," said Diana Correll, of Deerfield Beach, whose sentiments were typical of many with foreclosure concerns. "A large number of properties in condo and homeowners associations have been taken over by banks, residents are just picking up and leaving their properties along with their commitments, and [there is the] added problem of people who continue to live in their properties while not paying maintenance fees.
"For answers, we turned to a panel of local experts: Jan Bergemann, president of Cyber Citizens for Justice; Donna D. Berger, executive director of Community Advocacy Network (CAN) and managing partner at Katzman Garfinkel Rosenbaum; Gary A. Poliakoff, attorney with Becker & Poliakoff P.A. and professor at Nova Southeastern University's law school; William Raphan, supervisor of the state Office of the Condominium Ombudsman in Fort Lauderdale; and State Rep. Julio Robaina, R-Miami.
What are the insurance requirements for condo owners?
Many voiced concerns about complex and confusing condo and HOA laws and insurance requirements.
Here is what you need to know, says Raphan: Unit owners are required to carry homeowners insurance with property loss assessment coverage of no less than $2,000 per occurrence, and the association must have an additional named insured and loss payee. The association requires proof of a currently effective hazard and liability policy from each owner, and may purchase a policy on behalf of the owner if he or she does not provide a valid certificate of insurance.
Unfortunately, the statutes suggest associations may purchase an insurance policy on behalf of a noncompliant owner, but do not say they must do so, leaving association boards -- and their attorneys -- to figure out what to do for themselves.
Who will fix foreclosure banking flaws?
Robaina promised, along with other lawmakers in the audience, to clean up this statute problem and others, including laws related to foreclosure processes. Many condo owners and homeowners complain that banks are allowed to forestall foreclosures and skip paying their share of maintenance fees.
Robaina said lawmakers are aware of widespread problems, and they are among potential reforms to look out for next legislative session. No details yet of what can be done, but possibilities include requiring banks to pay fees sooner than the 12 to 18 months it typically takes now to complete a foreclosure.
Source: http://www.sun-sentinel.com/business/realestate/condos/sfl-town-hall-condocol-110409,0,5747753.column
Daniel Vasquez can be reached at condocolumn@SunSentinel.com, 954-356-4219 or 561-243-6686. His condo column runs every Wednesday in the Local section and at SunSentinel.com/condos. Check out Daniel's Condos & HOAs blog for news, information and tips related to life in community associations at SunSentinel.com/condoblog. You can also read his consumer column every Monday in Your Money and at SunSentinel.com/vasquez.
Here is what is most clear after last week's Sun Sentinel Town Hall Meeting on Condos & HOAs: Many owners and board members from community associations across South Florida are frustrated and fearful about finances, foreclosures and other festering issues.
And there is no denying that there is a need for solutions, and for help from lawmakers.
Approximately 250 people from Broward, Palm Beach and Miami-Dade counties attended the Oct. 29 event sponsored by the Sun Sentinel and hosted by Nova Southeastern University in Davie. On. 27, the newspaper also held a Condos & HOAs online chat, which drew nearly 300 participants who posted about 180 questions.
Several key questions emerged over and over again. Many who participated in the chat and town hall wanted to know what potential reforms lawmakers plan to consider when they reconvene next year.
"We are caught in a terrible situation," said Diana Correll, of Deerfield Beach, whose sentiments were typical of many with foreclosure concerns. "A large number of properties in condo and homeowners associations have been taken over by banks, residents are just picking up and leaving their properties along with their commitments, and [there is the] added problem of people who continue to live in their properties while not paying maintenance fees.
"For answers, we turned to a panel of local experts: Jan Bergemann, president of Cyber Citizens for Justice; Donna D. Berger, executive director of Community Advocacy Network (CAN) and managing partner at Katzman Garfinkel Rosenbaum; Gary A. Poliakoff, attorney with Becker & Poliakoff P.A. and professor at Nova Southeastern University's law school; William Raphan, supervisor of the state Office of the Condominium Ombudsman in Fort Lauderdale; and State Rep. Julio Robaina, R-Miami.
What are the insurance requirements for condo owners?
Many voiced concerns about complex and confusing condo and HOA laws and insurance requirements.
Here is what you need to know, says Raphan: Unit owners are required to carry homeowners insurance with property loss assessment coverage of no less than $2,000 per occurrence, and the association must have an additional named insured and loss payee. The association requires proof of a currently effective hazard and liability policy from each owner, and may purchase a policy on behalf of the owner if he or she does not provide a valid certificate of insurance.
Unfortunately, the statutes suggest associations may purchase an insurance policy on behalf of a noncompliant owner, but do not say they must do so, leaving association boards -- and their attorneys -- to figure out what to do for themselves.
Who will fix foreclosure banking flaws?
Robaina promised, along with other lawmakers in the audience, to clean up this statute problem and others, including laws related to foreclosure processes. Many condo owners and homeowners complain that banks are allowed to forestall foreclosures and skip paying their share of maintenance fees.
Robaina said lawmakers are aware of widespread problems, and they are among potential reforms to look out for next legislative session. No details yet of what can be done, but possibilities include requiring banks to pay fees sooner than the 12 to 18 months it typically takes now to complete a foreclosure.
Source: http://www.sun-sentinel.com/business/realestate/condos/sfl-town-hall-condocol-110409,0,5747753.column
Daniel Vasquez can be reached at condocolumn@SunSentinel.com, 954-356-4219 or 561-243-6686. His condo column runs every Wednesday in the Local section and at SunSentinel.com/condos. Check out Daniel's Condos & HOAs blog for news, information and tips related to life in community associations at SunSentinel.com/condoblog. You can also read his consumer column every Monday in Your Money and at SunSentinel.com/vasquez.
Wednesday, November 4, 2009
Real Estate's Biggest Deals: Commercial Market
With values dropping, sales declining and credit scarce, it was not a good year to sell commercial real estate in South Florida.
Deals were getting done, but nowhere near the level of five or six years ago when buyers were plentiful and prices steadily climbed.
And things are likely to get worse as the economic crisis deepens.
Unemployment is growing, retailers are facing the worst holiday season in years, and the credit market remains a mess. With billions in short-term loans coming due, numerous commercial property owners across South Florida could be facing foreclosure.
Yet a wave of foreclosure could ultimately be the salvation of the industry as cut-rate properties valued on their income — rather than on investors’ optimistic expectations — hit the market.
“You are starting to see [commercial loans go in default] because owners cannot pay their loans,” said Steven Beauchamp, president of Mangrove Advisory Group.
“The first half of 2009 will be similar to the last half of 2008, with very little activity in commercial real estate,” said Gabriel Navarro, a principal with MMG Equity Partners in Miami. Navarro, along with partners Marcel Navarro and Martin Pico, buys, manages and develops commercial properties throughout South Florida.
“There is still a gap between sellers’ expectations of value and what buyers are willing to pay. The gap may be increasing, as many buyers are of the opinion that what you buy today will be less tomorrow.”
Sales of South Florida commercial properties plummeted in the first nine months of the year.
In Miami-Dade County, sales declined 62 percent to $1.68 billion during the period from January to September, compared with the same period a year ago, according to Real Capital Analytics.
Commercial sales in Broward County fell 80 percent to $747 million, and in Palm Beach County, they declined 53 percent to $932 million.
Cash deals
Unlike in the past, most recent large acquisitions didn’t include financing but were cash deals. Most of the buying was done by institutional investors with deep pockets such as pension funds and life insurers.
During the hot real estate market of the early- and mid-decade, many buyers were non-institutional investor groups that often borrowed as much as 95 percent of the property’s value.
Real estate experts said there are plenty of private equity funds with money to invest, but the potential buyers don’t like the prices.
Those short-term buyers want to earn at least a 20 percent profit when they sell in a few years, and to achieve that target, they need to buy low, said Stephen Nostrand, executive vice president in the investment sales division of Colliers Abood Wood-Fay in Coral Gables.
Beauchamp said investors are waiting on the sidelines for lenders to take title to distressed commercial properties.
They speculate that lenders — and possibly government agencies — will offer greater discounts because they will be more eager to unload the troubled assets.
That theory could prove true.
In 1989, Congress created the Resolution Trust Corp. to auction shopping centers, offices and condos taken back by savings and loans that later became insolvent.
Many of those assets were bundled and sold to investors at large discounts. The total bill to taxpayers was $87 billion, according to former Federal Reserve Chairman Alan Greenspan. Many deals in 2009 will involve private owners of struggling shopping centers, office buildings and warehouses with rising vacancy rates and shrinking income, predicted real estate broker Neil Merin, with NAI/Merin Hunter Codman in West Palm Beach.
“In the next three to six months, we will see a lot of foreclosure sales,” he said. “But it won’t be like during the savings and loans crisis in the 1980s and 1990s, when 100 percent of the sales were foreclosures.”
Michael Stein, managing director of the Aztec Group in Coconut Grove, said lenders are increasingly seeking advice from his firm on how best to dispose of poorly performing properties with delinquent mortgages or loans that are worth a lot more than the depreciating collateral.
“We went to them looking for business a year ago, but they told us they didn’t have any nonperforming loans,” he said. “Now, we are getting calls from them requesting our services.”
J. Kingsley Greenland, president and chief executive officer of The Debt Exchange based in Boston, said lenders in South Florida are quietly selling loans — some that are current, others that are nonperforming — to investors.
Greenland, whose firm specializes in finding buyers for bad loans, said most of the troubled loans in South Florida are backed by properties whose owners loaded them up with debt during the run-up in prices over the last five years. He said some non-performing loans that have land as collateral are selling for 40 cents on the dollar.
“Banks are trying to get the problem behind them to go back to lending,” said Greenland, who declined to name lenders using his services to sell non-performing notes.
Some of the most prominent sales in 2009 are expected to involve properties whose owners have loans about to come due. Their options will be limited. In many cases the value of their properties have declined, and lenders willing to make loans are demanding that owners increase their equity in the building and boost their cash reserves.
Some real estate experts say it’s too early to forecast the direction the commercial real estate market will take next year. When President-elect Barack Obama takes office in January, he could launch policy changes that might significantly impact the market, said real estate broker Richard Matricaria, vice president of investments at Marcus & Millichap in Fort Lauderdale.
For example, Obama is proposing to boost taxes on capital gains — the profit earned when an asset is sold — from 15 percent to at least 20 percent. Hoping to cash in before the tax rate increases, long-term owners might be motivated to sell properties that have appreciated significantly.
“If the capital gains tax is to go into effect in 2010, sellers may be looking to cash out next year,” Matricaria said.
Obama is also proposing an additional stimulus package that could inject billions of additional dollars into the economy.
If the strategy is successful, retailers, restaurants and distribution companies might need more space. That would boost demand for shopping centers, warehouses and other commercial properties and help increase sales of those properties.
Falling values
For now, however, rising vacancies and falling rent rates are depressing the value of income-producing properties in South Florida.
Values could fall between 5 percent and 20 percent in the next 18 months, according to William Hemingway, co-managing director of real estate consultancy Integra Realty Resources in Miami.
Nationally, the Moody’s/REAL Commercial Property Price Indices reported that commercial properties lost 11.2 percent in value in August compared with the same month in 2007.
Capitalization rates — a key valuation measure based on the ratio between cash flow and a rental property’s market value — are on the rise. The higher the cap rate, the lower the price of the property.
But because properties are generating less revenue, cap rates are increasing from 0.5 percent to 2 percent, reaching at least 7 percent in some Class A properties and more than 8 percent in less stellar properties, Hemingway said.
Values are likely to continue to drop as the region’s economy shrinks and unemployment rises. In Miami-Dade County, unemployment increased to 6.1 percent in September, up from 3.9 percent in September 2007. The jobless rate in Broward County hit 6 percent, up from 4.1 percent the year before. And in Palm Beach County, it rose to 7.3 percent, up from 5 percent, according to the Florida Agency for Workforce Innovation.
As consumers cut back on spending, retailers and service providers are downsizing or closing shop.
As a result, office space vacancies in South Florida reached 11.4 percent in the third quarter of 2008, up from 10.4 percent in the first quarter of 2008, according to CoStar Group, a real estate research firm.
Retail vacancies jumped to 4.7 percent, up from 4.2 percent. Industrial vacancies jumped to 7.4 percent, up from 6.1 percent.
With rental rates flat, landlords are increasingly having to dangle upgrades or offer one or two months of free rent to attract or retain tenants.
Those expenses eat into operating income, said Doron Valero, managing partner of Global Fund Investments in Miami Beach.
“Why would you want to buy a property when it requires a lot of cash at a time when rents are not growing but going the other way?” he asked.
Lenders know rents are soft and take that into account when underwriting commercial loans, he said.
Until recently, lenders would look at the rent rates charged by a landlord and lend money based on the net operating income. Now, lenders compared a building’s rental rates with the prevailing rates.
“If the rent at your shopping center is $30 per square foot but the retail center across the street charges $25 per square foot, banks will go with the lower rent because they know you will have to lower your rent to attract new tenants when your current tenants move out,” he said.
As a result, lenders are willing to finance between 50 percent to 65 percent of the market value of a commercial property, down from 85 percent more than a year ago.
Dealmaking will remain slow until financing loosens up.
“There is not much trading of Class B and C properties because it is very hard to get financing,” said real estate broker Jay Caplin, who leads Cushman & Wakefield’s Capital Markets Group in Miami. “Lenders are being selective and lending to better quality properties.”
Navarro, whose family owns Navarro Pharmacies, said he had a hard time securing financing to buy a Class B shopping center for $22.5 million last month. Navarro obtained a short-term, $10 million loan to acquire a 94,816-square-foot shopping center in western Miami-Dade County, he said.
“Securing financing was difficult, to say the least, and securing attractive financing was nearly impossible,” he said. “We [ended up] securing a short-term bridge loan with Wachovia for a portion of the purchase price to close and will work on placing longer-term debt on the property in the next 30 to 60 days.”
Navarro is confident he will be able to refinance the shopping center with a long-term loan, because he already has 50 percent equity on the property.
Source: http://www.dailybusinessreview.com/news.html?news_id=51726
Paola Iuspa-Abbott can be reached at (305) 347-6657.
Monday, November 2, 2009
Foreign investors dominate in South Florida real estate purchases
In order to help his clients close on units at the luxury St. Tropez condominium in Sunny Isles Beach, developer Joe Milton recently put up $100 million of his company's cash to set up a mortgage company to fund loans.
That's because foreign buyers -- a key factor in the recent surge in home sales in South Florida -- are often locked out of the market if they don't have cash in hand.
``Sixty percent of our buyers are foreign,'' yet there are no loans being made to foreign nationals, said Milton, president and chief executive of J. Milton & Associates in Coral Gables.
While foreign cash buyers have certainly boosted sales, Milton wants to make sure financing isn't the issue keeping even more from owning a home in South Florida.
``International buyers are activating this market and reactivating sales,'' said Jenny Huertas, the international sales director for Condo Vultures, a Bal Harbour-based brokerage and consultancy.
Huertas returned two weeks ago from Bogotá where she conducted an investment seminar for about 50 people at Gran Estación, one of the city's largest shopping complexes. She's part of a growing caravan of real estate professionals trekking to Latin American and elsewhere to recruit new investors.
The spectacular meltdown of the region's once white-hot housing scene has caught the attention of global buyers who may have once considered U.S. real estate out of reach.
A weak dollar is also giving them an edge. In many areas, residential real estate is selling for 50 percent less -- and even lower -- compared to peak prices. On Friday, the euro closed at $1.473, a penny away from a 14-month high against the dollar.
``The Swiss, Spanish, groups from Italy and England who already own some stuff down here are seeing it as a good time to buy, leveraging the economy and the currency effect,'' said Mike Lapointe, vice president of Baybridge Capital Advisors in Miami.
The Florida Association of Realtors reported recently that the median home price in Miami-Dade fell to $190,900 in September, down 30 percent compared to a year ago. The median condo price fell to $132,900, a drop of 37 percent.
In Broward County, the median single-family home price fell to $200,000 from $259,300, a fall of 23 percent. The median condo price dropped to $78,000 from $129,000 last year, a 40 percent decline.
It adds up to a handsome opportunity for thousands of global buyers. ``Investors are aware that assets have never before been so depreciated in a country like America,'' said Gabriela Guimaraes, a partner with Integra Solutions, a Miami real estate consultancy that advises mostly Brazilian nationals.
Walter Defortuna, chairman of Fortune International Realty, said that for the first time in his 30-year career it's cheaper to buy an apartment in Miami than in major Latin American cities, such as Buenos Aires, Mexico City and large cities in Brazil.
The average price per square foot of a newly built condo in the stylish Recoleta neighborhood of Buenos Aires is about $236, according to Ariel Szeinbaum, general manager of 4RentArgentina.com, which specializes in short-term apartment rentals and sales.
In Miami's Brickell area, new construction is selling for between $200 and $250 per square foot, although in other parts of South Florida the prices drop off significantly, especially on foreclosures and short-sales where lenders allow units to be sold for less than the mortgages owed against them.
``We were always two to three times more expensive than them, and today we are cheaper. They perceive that, no question,'' Defortuna said
Throughout the boom, foreign investors were wooed by developers and brokers seeking deposits and high sales commissions. They responded, and their presence helped drive development and prices to historic highs.
But this new wave is different, said Defortuna. They are buying for the long-term. ``There is no speculating for the short-term,'' he said.
Because the recession is global, brokers say the ranks of foreign buyers have been thinned, even though foreign sales still outpace the activity of U.S. buyers.
U.S. STOCK LOSSES
``The question is whether or not those buyers were hurt by the international economy or the economy in their particular country,'' said Jack Winston, a real estate analyst with Miami-based Goodkin Consulting. ``Even those foreign investors who are very sophisticated still had a lot of money in American securities, and they may have lost as much money in the stock market as a lot of Americans have.''
South Florida's appeal remains strong among foreign jet setters, who are drawn to the beachfront metropolis as much for its palm trees and fine weather as its United Nations-like cultural inclusivity. There's also a sense that the market may only get marginally worse before bottoming and mending
Almost one in four foreign sales in Florida this year have taken place in the Miami-Fort Lauderdale-Miami Beach area, according to a July survey conducted for the Florida Association of Realtors.
South Florida was the most popular Florida market for Canadians, Latin Americans and Western Europeans, excluding Brits, who tend to prefer the Orlando-Kissimmee area, according to the survey.
LATIN AMERICANS TOP LIST
Latin Americans, not surprisingly, made up 52 percent of foreign buyers, with the next highest category being Europeans, who comprised 26 percent. The top countries of origin among South Florida's foreign buyers are Venezuela, Argentina and Canada.
More than half of these buyers are paying all cash, with European and Canadian buyers most likely to eschew financing. The loan programs that are available to them often come with terms deemed unacceptable.
Bernardo Manrique, a Venezuelan expatriate who owns Miami Realty Partners in Doral, says South Florida tends to benefit whether its closest neighboring nations are doing well or poorly economically and politically.
``Miami is a place that all people from Latin American find really nice. If Latin America is getting worse because of the economic conditions, Miami is the option. If Latin America is getting better and people are making money and economies are good, then Miami is an option,'' Manrique said.
A strong Brazilian economy, for instance, is piquing Brazilians' interest in residential and commercial properties for long-term investments, said Paulo de Melo, a partner at Integra Solutions, a full service real estate advisory firm that caters primarily to Brazilians.
``Brazilians are becoming much more sophisticated investors,'' de Melo said. ``They know they have to diversify investments and diversify their exposure out of Brazil a bit. They feel the growth is sustainable, but they know they have to hedge their bets.''
Venezuelans, on the other hand, are concerned with political instability and safety issues in the capital Caracas, said Manrique.
That's partly why Jorge Gomariz, a telecommunications professional who lives in Caracas, said he was looking to buy a second home in Coconut Grove or Key Biscayne in the next couple of months. The other reason, of course, are the steals.
``In some cases you can find [Class A] properties at very, very good prices. It's a great time to invest,'' Gomariz said. He said he plans to travel to Miami soon to choose a condo.
SEEKING INCOME ABROAD
In Israel and Spain, high real estate prices are driving investors to hunt for bargains for income-producing commercial and residential properties.
Dizengoff Trading Group, an Israeli real estate development and commodities firm, recently expanded to South Florida for that reason. It plans to target shopping centers and half-sold condo communities. In all, the firm plans to invest $100 million.
``We feel it is the right time to start building a portfolio. We might even see a little more deterioration, but I am quite positive that if we're looking on the curve of prices, we are closer to the bottom, especially on the residential side,'' said Ronen Saban, Dizengoff's U.S. region manager who is based in Boca Raton. Property in Israel is also extremely expensive as it is in other countries such as the Czech Republic, Austria and Romania, which are popular among Israeli second-home buyers, according to Ronen Rubin, the broker-owner of Rubin Group Real Estate.
THE 2-10 ADVANTAGE
``It's like 10 years [of] salary to achieve buying a condo there, but here today, with the prices so low, it's about two years of salary, which is very good,'' Rubin said.
Rubin, who primarily handles commercial real estate sales for mostly Israeli investors, said he recently had to hire a Hebrew-speaking real estate agent to deal with a new swell of Israeli residential buyers.
``There are not too many places in Israel where you can buy a nice condo at $60 a square foot. They have to pay $300 a square foot,'' Rubin said.
Tapping global markets, however, still requires connections and established relationships in countries where potential buyers abound.
Huertas, from Colombia, said she used to work for the former president of Fedelonjas, Colombia's equivalent of the National Association of Realtors and the group that helped coordinate the seminar two weeks ago.
Manrique's father owns one of the largest brokerages in Venezuela and that has been a pipeline to potential customers, Manrique said.
Defortuna also has long-established relationships with brokerages throughout Latin America. He rallied those resources recently to close out 1060 Brickell Avenue, a condominium that had been struggling with sales. Defortuna said at least 80 percent of the new unit buyers were foreign and 98 percent of all buyers paid cash.
INVESTOR'S GREEN CARD
Foreign buyers these days are also looking for an added return on their investments. Developers are taking advantage of a little-before-used visa program that makes it easier for them to get green cards when they invest between $500,000 and $1 million in projects that create jobs for U.S. workers.
Manrique is working with Sergio Pino's Century Homebuilders, which has launched an investor visa program to finish developing 350 acres at its Century Grand community in Doral. He was in Venezuela last month speaking to interested buyers.
``For them, to stay here legally and work legally, they have to have a visa, that's why the program is of huge interest to them. If you have the option to buy a house, but you don't have papers to live and work here, you start wondering what you're doing,'' Manrique said.
During the boom, real estate agent Evelina Dobyshava said Russians were snapping up condos in Sunny Isles Beach. When immigration plans fell through, she would simply sell for them. Now, she said, fear of not being able to land a green card is keeping many Russians from buying.
``They would rather come and rent something for $10,000 or $12,000 a month because still it will be much less money. Before it made sense because property was growing in price,'' she said.
A Russian developer, however, is hoping to launch its own investor visa program to raise money to finish the 50-story Solis Resort Spa & Residences project in Sunny Isles Beach. So far, 11 stories have been finished.
Dobyshava said she's confident Russian buyers will return. ``If they only have to invest half a million dollars,'' she said, ``I feel like I could sell those apartments in three days.''
Source: http://www.miamiherald.com/business/business-monday/story/1310794.html
BY MONICA HATCHER
mhatcher@MiamiHerald.com
That's because foreign buyers -- a key factor in the recent surge in home sales in South Florida -- are often locked out of the market if they don't have cash in hand.
``Sixty percent of our buyers are foreign,'' yet there are no loans being made to foreign nationals, said Milton, president and chief executive of J. Milton & Associates in Coral Gables.
While foreign cash buyers have certainly boosted sales, Milton wants to make sure financing isn't the issue keeping even more from owning a home in South Florida.
``International buyers are activating this market and reactivating sales,'' said Jenny Huertas, the international sales director for Condo Vultures, a Bal Harbour-based brokerage and consultancy.
Huertas returned two weeks ago from Bogotá where she conducted an investment seminar for about 50 people at Gran Estación, one of the city's largest shopping complexes. She's part of a growing caravan of real estate professionals trekking to Latin American and elsewhere to recruit new investors.
The spectacular meltdown of the region's once white-hot housing scene has caught the attention of global buyers who may have once considered U.S. real estate out of reach.
A weak dollar is also giving them an edge. In many areas, residential real estate is selling for 50 percent less -- and even lower -- compared to peak prices. On Friday, the euro closed at $1.473, a penny away from a 14-month high against the dollar.
``The Swiss, Spanish, groups from Italy and England who already own some stuff down here are seeing it as a good time to buy, leveraging the economy and the currency effect,'' said Mike Lapointe, vice president of Baybridge Capital Advisors in Miami.
The Florida Association of Realtors reported recently that the median home price in Miami-Dade fell to $190,900 in September, down 30 percent compared to a year ago. The median condo price fell to $132,900, a drop of 37 percent.
In Broward County, the median single-family home price fell to $200,000 from $259,300, a fall of 23 percent. The median condo price dropped to $78,000 from $129,000 last year, a 40 percent decline.
It adds up to a handsome opportunity for thousands of global buyers. ``Investors are aware that assets have never before been so depreciated in a country like America,'' said Gabriela Guimaraes, a partner with Integra Solutions, a Miami real estate consultancy that advises mostly Brazilian nationals.
Walter Defortuna, chairman of Fortune International Realty, said that for the first time in his 30-year career it's cheaper to buy an apartment in Miami than in major Latin American cities, such as Buenos Aires, Mexico City and large cities in Brazil.
The average price per square foot of a newly built condo in the stylish Recoleta neighborhood of Buenos Aires is about $236, according to Ariel Szeinbaum, general manager of 4RentArgentina.com, which specializes in short-term apartment rentals and sales.
In Miami's Brickell area, new construction is selling for between $200 and $250 per square foot, although in other parts of South Florida the prices drop off significantly, especially on foreclosures and short-sales where lenders allow units to be sold for less than the mortgages owed against them.
``We were always two to three times more expensive than them, and today we are cheaper. They perceive that, no question,'' Defortuna said
Throughout the boom, foreign investors were wooed by developers and brokers seeking deposits and high sales commissions. They responded, and their presence helped drive development and prices to historic highs.
But this new wave is different, said Defortuna. They are buying for the long-term. ``There is no speculating for the short-term,'' he said.
Because the recession is global, brokers say the ranks of foreign buyers have been thinned, even though foreign sales still outpace the activity of U.S. buyers.
U.S. STOCK LOSSES
``The question is whether or not those buyers were hurt by the international economy or the economy in their particular country,'' said Jack Winston, a real estate analyst with Miami-based Goodkin Consulting. ``Even those foreign investors who are very sophisticated still had a lot of money in American securities, and they may have lost as much money in the stock market as a lot of Americans have.''
South Florida's appeal remains strong among foreign jet setters, who are drawn to the beachfront metropolis as much for its palm trees and fine weather as its United Nations-like cultural inclusivity. There's also a sense that the market may only get marginally worse before bottoming and mending
Almost one in four foreign sales in Florida this year have taken place in the Miami-Fort Lauderdale-Miami Beach area, according to a July survey conducted for the Florida Association of Realtors.
South Florida was the most popular Florida market for Canadians, Latin Americans and Western Europeans, excluding Brits, who tend to prefer the Orlando-Kissimmee area, according to the survey.
LATIN AMERICANS TOP LIST
Latin Americans, not surprisingly, made up 52 percent of foreign buyers, with the next highest category being Europeans, who comprised 26 percent. The top countries of origin among South Florida's foreign buyers are Venezuela, Argentina and Canada.
More than half of these buyers are paying all cash, with European and Canadian buyers most likely to eschew financing. The loan programs that are available to them often come with terms deemed unacceptable.
Bernardo Manrique, a Venezuelan expatriate who owns Miami Realty Partners in Doral, says South Florida tends to benefit whether its closest neighboring nations are doing well or poorly economically and politically.
``Miami is a place that all people from Latin American find really nice. If Latin America is getting worse because of the economic conditions, Miami is the option. If Latin America is getting better and people are making money and economies are good, then Miami is an option,'' Manrique said.
A strong Brazilian economy, for instance, is piquing Brazilians' interest in residential and commercial properties for long-term investments, said Paulo de Melo, a partner at Integra Solutions, a full service real estate advisory firm that caters primarily to Brazilians.
``Brazilians are becoming much more sophisticated investors,'' de Melo said. ``They know they have to diversify investments and diversify their exposure out of Brazil a bit. They feel the growth is sustainable, but they know they have to hedge their bets.''
Venezuelans, on the other hand, are concerned with political instability and safety issues in the capital Caracas, said Manrique.
That's partly why Jorge Gomariz, a telecommunications professional who lives in Caracas, said he was looking to buy a second home in Coconut Grove or Key Biscayne in the next couple of months. The other reason, of course, are the steals.
``In some cases you can find [Class A] properties at very, very good prices. It's a great time to invest,'' Gomariz said. He said he plans to travel to Miami soon to choose a condo.
SEEKING INCOME ABROAD
In Israel and Spain, high real estate prices are driving investors to hunt for bargains for income-producing commercial and residential properties.
Dizengoff Trading Group, an Israeli real estate development and commodities firm, recently expanded to South Florida for that reason. It plans to target shopping centers and half-sold condo communities. In all, the firm plans to invest $100 million.
``We feel it is the right time to start building a portfolio. We might even see a little more deterioration, but I am quite positive that if we're looking on the curve of prices, we are closer to the bottom, especially on the residential side,'' said Ronen Saban, Dizengoff's U.S. region manager who is based in Boca Raton. Property in Israel is also extremely expensive as it is in other countries such as the Czech Republic, Austria and Romania, which are popular among Israeli second-home buyers, according to Ronen Rubin, the broker-owner of Rubin Group Real Estate.
THE 2-10 ADVANTAGE
``It's like 10 years [of] salary to achieve buying a condo there, but here today, with the prices so low, it's about two years of salary, which is very good,'' Rubin said.
Rubin, who primarily handles commercial real estate sales for mostly Israeli investors, said he recently had to hire a Hebrew-speaking real estate agent to deal with a new swell of Israeli residential buyers.
``There are not too many places in Israel where you can buy a nice condo at $60 a square foot. They have to pay $300 a square foot,'' Rubin said.
Tapping global markets, however, still requires connections and established relationships in countries where potential buyers abound.
Huertas, from Colombia, said she used to work for the former president of Fedelonjas, Colombia's equivalent of the National Association of Realtors and the group that helped coordinate the seminar two weeks ago.
Manrique's father owns one of the largest brokerages in Venezuela and that has been a pipeline to potential customers, Manrique said.
Defortuna also has long-established relationships with brokerages throughout Latin America. He rallied those resources recently to close out 1060 Brickell Avenue, a condominium that had been struggling with sales. Defortuna said at least 80 percent of the new unit buyers were foreign and 98 percent of all buyers paid cash.
INVESTOR'S GREEN CARD
Foreign buyers these days are also looking for an added return on their investments. Developers are taking advantage of a little-before-used visa program that makes it easier for them to get green cards when they invest between $500,000 and $1 million in projects that create jobs for U.S. workers.
Manrique is working with Sergio Pino's Century Homebuilders, which has launched an investor visa program to finish developing 350 acres at its Century Grand community in Doral. He was in Venezuela last month speaking to interested buyers.
``For them, to stay here legally and work legally, they have to have a visa, that's why the program is of huge interest to them. If you have the option to buy a house, but you don't have papers to live and work here, you start wondering what you're doing,'' Manrique said.
During the boom, real estate agent Evelina Dobyshava said Russians were snapping up condos in Sunny Isles Beach. When immigration plans fell through, she would simply sell for them. Now, she said, fear of not being able to land a green card is keeping many Russians from buying.
``They would rather come and rent something for $10,000 or $12,000 a month because still it will be much less money. Before it made sense because property was growing in price,'' she said.
A Russian developer, however, is hoping to launch its own investor visa program to raise money to finish the 50-story Solis Resort Spa & Residences project in Sunny Isles Beach. So far, 11 stories have been finished.
Dobyshava said she's confident Russian buyers will return. ``If they only have to invest half a million dollars,'' she said, ``I feel like I could sell those apartments in three days.''
Source: http://www.miamiherald.com/business/business-monday/story/1310794.html
BY MONICA HATCHER
mhatcher@MiamiHerald.com
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