Tax credit extension would help short sale buyers

Frustrated home buyers trying to complete short sales or get flood insurance stand to benefit most from an extension, which has not yet passed Congress, but is being pushed by Senate Majority Leader Harry Reid, D-Nev.

Reid, who is up for re-election, said last week that buyers should have until the end of September to complete their deals because of delays beyond their control. As it is now, buyers who signed contracts by April 30 must close by the end of June to get the $8,000 first-time credit or the $6,500 credit for certain people who already own homes.

Only buyers who signed contracts by April 30 could take advantage of an extension. The Senate is expected to consider Reid's measure this week.

Short sales, in which sellers unload homes for less than they owe on their mortgages, often drag on for weeks or months while lenders consider whether to approve the deals. New federal guidelines introduced in April give lenders a 10-day window to respond to short sale offers, but some banks aren't complying, real estate agents and analysts say.

Reid's proposal would be a major benefit for buyers who need more time to let the process play out.

"I'm just twisting in the wind," said Smith. "I really hope this gets extended. It would take a lot of pressure off me."

His real estate agent, Ryan Love of Coldwell Banker, said they're waiting for a letter of approval from the lender.

"We keep getting the 'Oh, it's coming today or tomorrow' line," Love said.

Even people who aren't buying short sales are hoping for an extension.

Some deals are being delayed because buyers can't get flood insurance. Lawmakers let the National Flood Insurance Program expire three times this year. No new or renewal flood policies can be issued until Congress renews it.

Bill Mei, a loan officer for Element Funding in Pompano Beach, said the lack of flood insurance has killed one of his home sales and postponed two others. He's concerned about a few closings scheduled in the coming weeks.

"It's a big mess," he said.

The crush of buyers trying to complete sales by the end of June "is creating a clog in the system," said Walter Molony, a spokesman for the National Association of Realtors. "It's taking longer to close transactions."

The national Realtors' group estimates that 180,000 buyers are at risk of not closing in time to receive the credits.

Meanwhile, the pending expiration of the tax credits has home builders feeling less confident.

The National Association of Home Builders said Tuesday its index measuring member optimism dropped to 17 in June from 22 in May. The index had risen for two consecutive months.

Source: http://www.sun-sentinel.com/business/fl-homebuyer-credit-extended-20100615,0,7986336.story

Paul Owers can be reached at Powers@SunSentinel.com or 561-243-6529

Where America's Money Is Moving

Low taxes, warm sunshine and deep discounts on real estate. No wonder IRS data shows the wealthiest among us are headed south.

America's wealthy like warm weather and low taxes. That's the takeaway from IRS data, analyzed by Forbes, on moves between counties. We looked for counties that the rich are moving to in big numbers.

Topping the list: Collier County, Fla., which includes the city of Naples. Tax returns accounting for 15,150 people showed moves to Collier County from other parts of the country in 2008, the latest year for which IRS data is available. Their average reported income: $76,161 per person--equivalent to $304,644 for a family of four. Although slightly more taxpayers moved out of Collier County than into it, the departing residents' average income came out to just $26,128 per person.

Households that moved to Collier County principally came from other parts of Florida, with Lee, Miami Dade, Broward, Palm Beach and Orange counties leading the list. Big northern cities also sent lots of migrants: Cook County, Ill. (home to Chicago); Oakland County, Mich. (near Detroit); and Suffolk County, N.Y. (on Long Island) each sent more than 100 people to Collier County during 2008.

In second place is Greene County, Ga., with a population of just 15,743 at the Census Bureau's last estimate. The IRS data show that in 2008, 788 people moved to the county, about 75 miles east of Atlanta.

Rounding out the top five: Nassau County, Fla., near Jacksonville; Llano County, Texas, 70 miles northwest of Austin; and Walton County, Fla., 80 miles east of Pensacola.

The dominance of the list by Florida and Texas--the former has eight of the top 20 counties, the latter four-- makes sense to Robert Shrum, manager of state affairs at the Tax Foundation in Washington, D.C., since neither state has an income tax. "If you're a high-income earner, then that, from a tax perspective, is going to be a driving decider if you're going to move to one of those two states," Shrum says.

After accounting for property taxes, Shrum's analysis shows that Texas has the fourth-lowest personal tax burden in the country, and Florida has the eighth lowest. Shrum also points to eight states that have targeted wealthy households with extra-high tax brackets: California, New Jersey, New York, Maryland, Hawaii, Oregon, Connecticut and Wisconsin. Six of the top 10 counties the rich are fleeing are located in those states.

Pitkin County, Colo., home to the pricey Aspen ski community, where home listings average more than $3.5 million, saw an exodus of rich people in 2008 as the economy began to contract. The 962 tax filers and dependents who left Pitkin had an average income of $71,473 per capita, while the equivalent figure for those moving to the county was $30,000 lower. Of those leaving Pitkin County, 224 moved to neighboring Garfield County where, according to real estate information service Trulia, homes list for 75% less than those in Pitkin County. IRS data also show movement from the resort area to cities like New York, Chicago and San Francisco.

Behind the NumbersTo find places the rich are moving, Forbes used IRS data on household moves broken down by county and income. We included counties where arriving households are richer than households that didn't move and departing households are poorer than households that didn't move. The final ranking orders counties by the difference in per-capita income between incoming households and those that didn't move.

Our ranking of places the rich are fleeing essentially reverses these criteria, looking for counties where departing households are wealthier than the population as a whole and where incoming households are poorer.

In order to find patterns among the wealthy, we restricted the lists to counties where departing or arriving households had per-capita incomes of $35,000 or more. That figure is equivalent to an annual income of $140,000 for a family of four--a very high income for any large subset of the American population (of 3,142 counties with IRS data, only 130 have average incomes above this level). And in order to avoid statistical anomalies, we only included counties with at least 500 people listed as arriving or departing.

This technique essentially finds new hot spots--places that aren't necessarily wealthy now but where wealthy people are moving. Some upscale places like Westchester County, N.Y., and Teton County, Wy., don't make the list because people moving into those counties aren't as rich as the people who already live there.

The IRS warns that these counts are only approximations; because they don't include households that don't file income tax returns, poor and elderly people are underrepresented. These counts also don't include returns filed after late-September 2009--a small fraction of total returns that tends to include some very rich people with complex returns who file for extensions.

Source: http://www.forbes.com/2010/06/14/where-the-rich-are-moving-business-beltway-rich-migration.html?boxes=businesschannelsections
By Jon Bruner, 06.14.10, 02:30 PM EDT

Asian firms to add jobs, set up hubs

Two Asian firms are setting up in Miami-Dade, creating 70 jobs and investing $2.4 million over three years.
It's unclear how many of those jobs will be filled locally and how many will be staffed from the companies' headquarters.
Crystal Mover Services Inc., a transportation operations and maintenance company from Japan, established its US headquarters here to support two automated trains at Miami International Airport. The first will be at the North Terminal and the second, the MIA Mover, will connect Miami International Airport with the new rental car center.
The company is to create 60 jobs and invest $1 million over three years.
Uni Logistics America LLC, a Chinese freight forwarder specializing in international air and sea transportation, has opened a Miami office that is to create 10 jobs and spur $1.4 million in investment.
The Beacon Council, the county's economic development partnership, helped both set up operations.
The council wasn't able to say how many Miamians may work for either company or the positions' average salary.
"I think Crystal Mover Services, as well as the Chinese company, will bring [in] some people [and] hire some locally," said Beacon Council CEO Frank Nero.
Neither company applied for the state's Qualified Target Industry Tax Refund, which offers a $3,000 refund for jobs created in high-growth sectors paying 115% of average wage.
Yet they could be an indicator of what's to come.
"We're working on a major project from China and we hope this is the first wave," Mr. Nero added. "We're seeing a lot more interest coming from Asia, not only China and Japan but also Taiwan."
The Beacon Council has been asked to visit Taiwan, Mr. Nero added, while 30 Taiwanese companies are due here in September.

Source: http://miamitodaynews.com/news/100610/story2.shtml
By Zachary S. Fagenson

Fort One completes Miami Beach real estate transactions

Fort One Real Estate Investments, an investment fund with roots in Miami and Washington, D.C., said it has completed transactions in Miami Beach totaling $52 million.

In a news release, Fort One said it has closed on the purchase of the 48 remaining unsold condominium units at the Capri South Beach Condominium ($31 million); the acquisition of the ``Pelican'' parking garage in South Beach ($11 million), plus the two commercial/retail units at The Strand in South Beach ($10 million).

The fund was represented by Adams Gallinar, whose founding partners are Bob Adams and Mike Gallinar. The transaction was structured as a short sale, with I-Star Financial being the successor to the original lender, Fremont.

I-Star Financial provided mortgage financing on the Capri project, and Sabadell United provided mortgages on the Pelican and Strand properties. I-star was represented by the Washington, D.C., firm of Katten Muchen, and Sabadell United was represented by the Miami office of Bilzen Sumberg.

Source: http://www.miamiherald.com/2010/06/10/1672971/fort-one-completes-miami-beach.html
Miami Herald Staff Report

Miami Home Resales Reach Four-Year High

Miami-area home sales in April dipped from March and remained well below average, but they shot up over the unusually low year-ago level for the 14th consecutive month as investors, first-time buyers and vacation-home buyers targeted lower-cost condos and other abodes. The median sale price fell slightly from March and was 9.1 percent lower than in April 2009, marking the smallest annual decline in almost two years, a real estate information service reported.

In April 8,257 new and resale houses and condos closed escrow in the metro area encompassing Miami-Dade, Palm Beach and Broward counties. That was down 4.6 percent from March but up 30.5 percent from April 2009, according to MDA DataQuick of San Diego, Calif. The firm tracks real estate trends nationally via public property records.

Total escrow closings were the highest for an April since 2007, but they fell 30.0 percent short of the average for that month since 1997, when DataQuick's complete Miami-area stats begin. On average, sales have increased 0.1 percent between March and April.

Although the federal home buyer tax credit didn't appear to have had a huge impact on April sales, it's difficult to know how much weaker sales might have been without that incentive. Most buyers who rushed last month to meet the April 30 federal tax credit deadline to sign a sales contract wouldn't close escrow until May or June.

Last month's resales (excludes new homes) of single-family detached houses and condos combined were the highest in four years. Resales have risen year-over-year for 17 consecutive months. New-home sales in April were higher than a year ago for the second consecutive month, but they were still the second-lowest for an April since at least 1997.

New-home sales have suffered as builders struggle to compete with distressed sales. New homes made up 6.6 percent of total April sales, far below the decade average of 20 percent of monthly sales.

The 3,979 condos that resold in April marked a 7.7 percent decline from March but a 39.8 percent gain from April 2009. It was the highest number of condo resales for that month since April 2006, when 4,060 condos resold. Condo resales made up 48.2 percent of total Miami-area home sales in April, compared with 45.0 percent a year earlier and a monthly average of 32.6 percent over the past decade.

In the Miami market's high end, the number of houses and condos that sold for $1 million or more dipped to 206 in April, down 6.8 percent from 221 in March but up 56.1 percent percent from 132 in April 2009. Forty percent of the $1 million-plus transactions were for resale condos. The figures are based on an analysis of public property records, where there was a purchase price or loan of $1 million or more. The peak month for $1 million-plus home sales was in June 2005, when 583 sold in the Miami area.

The median price paid for all new and resale houses and condos sold in April was $140,000, down 1.4 percent from $142,000 in March and down 9.1 percent from $154,000 in April 2009. April's median brought the region back to its post-housing-boom low point of $140,000 - the same as in January this year. However, April's 9.1 percent year-over-year decline was the smallest since the median fell 6.8 percent, to $260,000, in May 2008.

The March-to-April decline in the median was in part the result of a shift toward a greater percentage of homes selling below $200,000. In April, 65.1 percent of all sales were under $200,000, compared with 63.8 percent in March.

April's overall median sale price stood 51.7 percent below the peak $290,000 median in June 2007. The Miami area's median price has fallen on a year-over-year basis for 31 consecutive months.

The median price paid for resale condos in April slipped to $91,000, down from $95,000 in March and $103,000 a year ago. April's level was the lowest since the resale condo median was $87,500 in January 2002. Last month the resale condo median stood 58.4 percent below its $219,000 peak in July 2006.

The median paid for resale single-family detached houses fell in April to $180,000, down 1.4 percent from March, down 2.7 percent from a year ago and down 47.1 percent from a June 2007 peak of $340,000. However, it was the lowest year-over-year decline for the resale detached house median since November 2007.

Another price gauge analysts watch, the median paid per square foot for resale single-family detached houses, fell to $104 in April, down from $106 in March and down 1.0 percent from April 2009. It was the smallest annual decline since October 2006. Last month's figure was 50.7 percent below the region's $211 peak in summer 2006. The measure has fallen year-over-year for 43 straight months.

A popular form of financing used by first-time home buyers - government-insured FHA loans - accounted for 47.1 percent of all home purchase loans in April, up from 45.9 percent in March and 41.5 percent a year ago. Two years ago it was 12.6 percent.

Absentee buyers purchased 34.0 percent of all homes sold in the Miami area in April, essentially flat compared with March and up from 31.6 percent a year ago, according to public property records. In April absentee buyers paid a median of $98,000, down from $100,000 in March and down from $116,000 a year earlier. Absentee buyers are often investors, but could include second-home buyers and others who indicated at the time of sale that their property tax bill would be sent to a different address.

About 2.6 percent of the homes sold in April had been "flipped" within a three-week to six-month period, meaning they had been bought on the open market and then re- sold within that window. That was down slightly from a flipping rate of 2.6 percent of all sales in March and up from 2.1 percent a year earlier. Flipping rates were higher before the housing market correction: In April 2005, for example, the Miami-area flipping rate was 5.4 percent.

Source: http://www.nuwireinvestor.com/articles/miami-home-resales-reach-four-year-high-55368.aspx

Published on: Tuesday, June 08, 2010
Written by: DQNews
This article has been republished from DQNews. You can also view this article at DQNews, a real estate research and news site.

Condo Relief Act Shields Bulk Buyers from Liability

MIAMI- On Tuesday, the governor of Florida, Charlie Crist, signed into law the Distressed Condominium Relief Act, which is designed to give assurance to bulk condominium buyers that they won’t be liable for the flaws in a building they did not develop. Theoretically, as bulk buyers are spared this liability, they will buy up more of the excess units built during the boom years. The law will goes into effect on July 1, 2010.

Because the new law takes the element of liability off the table, says Warren Weiser, chairman of Continental Real Estate Companies in Coral Gables, bulk buyers will no longer have to budget for possible litigation.

The new condominium law was written two years ago at the beginning of the real estate crisis, at a time when there were few bulk condominium purchases. But in the last couple of years, the number of these purchases has grown tremendously. According to Condo Vultures, LLC, a real estate brokerage and consulting firm in Miami, in the period from July 1, 2008 to April 30, 2010, there were $976 Million worth of bulk condo sales in South Florida, most of which occurred in 2009, when there were $863 Million worth of these sales.

While there have been a lot of bulk condominium sales in the last year, still, proponents of the new law argue that prices for these units would be higher, if bulk buyers were not worried about being made to pay for the sins of earlier developers.

As the law stands now, says Mark Grant, attorney with Ruden McClosky in Ft. Lauderdale, who helped write the legislation, the way the Division of Florida Condominiums interprets the law, anybody who sells--or leases for five years--more than seven units in a condominium development during a 12-month period, is considered a developer.

The current Florida condominium law hasn’t made a distinction between a “creating developer” and a “successor developer,” even though the Division of Florida Condominium’s regulations do make that distinction, says Grant. “But the courts are not bound to follow the regulations, which are the interpretations of the law by the condominium division,” he says.

Although the law says that developers must give warranties on a building they build, the creating developer doesn’t exist anymore and the bulk buyer is the successor to the developer. Therein lies the rub, and the reason for the new law.

Now that the law has been signed, condominium prices should rise, says Grant, because bulk buyers will no longer insist on a discount for taking on another developer’s risks. Higher prices serve several purposes, he says. First and foremost, they help protect the investments of those who bought into a condominium early, because they are the ones who paid the highest prices, says Grant.

Currently, says Grant, most of the bulk condominium buyers are foreigners who don’t need financing. This new law will, theoretically, have the effect of encouraging more sales and, as more units are sold, that makes the remaining units financeable by Fannie Mae, because the agency won’t approve loans in buildings where more than 15% of the units are in default and not paying assessments. In order words, this new law could end up encouraging more Americans, who might be eligible for loans backed by Fannie Mae, to buy condominiums.

There are a lot of benefits in this law for the residents/owners of the condominium, not just the bulk buyer. If there is an absentee owner collecting rent and not paying assessments, this new law allows the association to collect the rent directly from the tenant or tell the tenant to pay the rent to the association, rather than the landlord, says Weiser.

Before this bill passed, says Grant, lenders who foreclosed on units only had to pay the last six months of assessments before they took title. “If it takes two years to foreclosure, those lenders had to pay only for six months, but the new law will expand that period to 12 months,” says Grant.

The way things stand now, says Grant, many people who are living in the condominium are paying their assessments. But developers who have gone bust aren’t paying assessments for the units they still own. Additionally, the banks which have started to foreclose, but have not taken title to condominiums yet, are not paying, so the building suffers. The new law will help make it easier for condominium associations to collect what they are owed. In short, this law may help to heal once-fractured condominiums.

Source: http://www.globest.com/news/1675_1675/florida/300125-1.html

By Hortense Leon

South Florida pending home sales up dramatically from last year

Providing further evidence of a strengthening market, South Florida home buyers signed contracts at a fast clip in May, catapulting the number of pending home sales up 54 percent in Miami-Dade and 51 percent in Broward, compared to the same month last year.

The figures reflect the surge of international buyers taking advantage of low real estate prices and favorable exchange rates, as well as first-time and existing buyers benefiting from record-setting affordability conditions.

Total pending home sales -- including single-family and condominiums -- in Miami-Dade increased to 10,456 in May, up 0.62 percent from April, according to figures released Wednesday by the Realtor Association of Greater Miami and the Beaches and the Southeast Florida Multiple Listing Service. April figures included a last-minute surge by home buyers taking advantage of a federal tax credit that expired on April 20.

``Current South Florida real estate market statistics are positive signs of a resurgent market,'' Terri Bersach, chairman of the Realtor Association of Greater Miami, said in a statement. ``Pending sales are considerably higher than they were a year ago when the market was already strengthening, and home median prices have begun to increase, while average home prices have been increasing for some time. These figures validate the demand for local residential properties and confirm the local market's recovery.''

In Broward County, pending home sales fell 3.23 percent to 3,719, in May, compared to April, due to the impact of the expiring tax credit.

Source: http://www.miamiherald.com/2010/06/02/1659819/south-florida-pending-home-sales.html

BY INA PAIVA CORDLE
icordle@MiamiHerald.com