A recent International Builders Show in Orlando, Florida indicates a strong demand for energy-efficient, customizable and hurricane-resistant homes from homeowners who can afford the best and who hope to set themselves apart from their neighbors. Home suppliers did showcase new products including leather-accented bathroom fixtures, a hearth-waterfall, a rotating bookcase that allows homeowners to conceal their televisions, a copper garage door and solar-powered blinds. Many of these new top-of-the-line products, both functional and decorative, come with a hefty price tag. Nevertheless, the Energy Policy Act of 2005, signed into law by President Bush on August 8, 2005 will provide tax credit for homeowners installing solar heating equipment in their homes. The tax credit is worth 30% of the cost of installing solar heating or photovoltaic equipment, up to a maximum tax credit of $2,000. The bulk of the tax benefits will go to energy-related businesses and commercial users of energy who purchase energy-efficient cars, trucks, and sport utility vehicles and who may qualify for two new credits, a $1,600 tax credit for energy-efficient vehicles and an additional "conservation credit" of up to $1,000. The credits won't be available until 2006. For more information, visit Federal Energy Regulatory Commission at www.fdrc.gov.

Florida homeowners, already cash-strapped by expensive home insurance, now face the strong possibility of having to patch a hole in the state's hurricane catastrophe (CAT) fund. The senior officer of the Florida Hurricane Catastrophe Fund announced that insurers will take about $6.9 billion from the fund, leaving it empty and "starting off 2006 at zero." It is the first time the catastrophe fund's cash has dwindled this low since the fund was created more than a decade ago after Hurricane Andrew in 1992. The state fund provides affordable reinsurance coverage—insurance for insurance companies—to reduce the amount they pay in property damage claims after big storms. Insurance firms pay into the fund annually and in turn can take money out when a company's storm losses exceed $4.5 billion. Insurers didn't tap significant amounts from the fund until the 2004 storm season, allowing time to build a cash cushion. Insurance experts and observers have been expecting the fund to be drained since Hurricane Wilma hit Florida in October. Now the fund must be replenished, and one way or another Floridians will end up footing the bill. The fund's board can 1) make everyone with auto, home and business policies pay 6 percent interest of annual premiums, or $60 per $1,000 of premiums paid up to $15 billion in bonds sold for the fund, 2) make insurance companies pay more money into the fund this year, then pass the extra costs on to customers. Either action would require approval from the State Board of Administration, which is the governor, and the state's chief financial officer and attorney general.

With high rising home prices in the United States, many immigrants turn to their homelands for cheaper investments and a chance to ride the Asian boom. Investments by Asian-Americans are helping fuel hot real estate markets in China, India, Thailand, the Philippines and Vietnam. Foreign developers are accelerating that trend by marketing directly to eager buyers through mortgage brokers in the U.S. Once the domain of deep-pocket institutional investors, international real estate markets have opened to small investors as globalization provides opportunities for people and money. Experts say the potential for profits is huge, but so are the risks. For one, overseas investors can easily be duped or cheated in Asia's hot economies, and often have few remedies. For example, in China where all land is state-owned and leased to buyers, even if a wronged investor spends the time and money to take a developer to court and wins, collecting on the judgment is unlikely because most Chinese developers are small-scale operators. However, those risks don't stop investors, many of whom are attracted to Asia because of family ties.

Monthly payments on a substantial number of adjustable-rate mortgages (ARM) are projected to increase significantly in 2006—the first time since the ARM boom started—that the payments are expected to jump. The trend will give the nation’s lenders a plethora of refinancing opportunities, but it also means that lenders are likely to experience more than their share of credit-quality concerns. Financing experts say that most borrowers will be able to pay off loans they can no longer afford either by selling their homes or by refinancing to a fixed-rate mortgage or a new ARM.

National Association of REALTORS released its annual survey of homebuyers and home sellers, noting that technology has transformed the way Americans buy homes, but not in the ways pundits first predicted. While 77 percent of consumers rely on the Internet for buying or selling help, 90 percent also still work with a real estate associate. In addition, the median home price for sellers who use an associate is 16 percent higher than a FSBO home sale.

Technology is transforming how Americans buy and sell homes in unexpected ways, including how they work with real estate agents and brokers, according to one of the largest surveys of real estate consumers ever conducted. The study was released by the National Association of Realtors®.

Nine out of 10 home buyers use a real estate agent in the search process, but use of the Internet to search for a home has risen dramatically over time, increasing from only 2% of buyers in 1995 to 77% in 2005; it was 74% in 2004. The next largest source of information for buyers is a yard sign, mentioned by 71% of buyers.

When asked where they first learned about the home purchased, 24% of buyers identified the Internet, up strongly from 15% in 2004 and only 2% in 1997. Although most buyers use an agent to complete the transaction, 36 first learn about the home they buy from a real estate agent and 15% from yard signs; five other categories were 7% or less.

The 2005 National Association of Realtors® Profile of Home Buyers and Sellers, based on more than 7,800 responses to a questionnaire mailed to a large national sample of consumers located through county deed records, is the latest in a series of surveys evaluating demographics, marketing and other characteristics of home buyers and sellers.

NAR President Thomas M. Stevens from Vienna, Va., said the findings underscore the complexity of the home-buying process. “Buyers who use the Internet in searching for a home are more likely to use a real estate agent than non-Internet users, and consumers rely on professionals to provide context, negotiate the transaction and help with the paperwork,” said Stevens, senior vice president of NRT Inc.

“The real estate industry today bears little resemblance to the way we did business 10 years ago. It is hard to find another industry that has adopted technology so readily to its customers,” Stevens said. “Realtors® have invested a lot of time and money in building information technology, and because of these efforts, more consumers than ever are using the Internet in their home search.”

The survey shows 81% of buyers who use the Internet to search for a home purchase through a real estate agent, while 63% of non-Internet users buy through an agent; non-Internet users are more likely to purchase directly from a builder or an owner they knew in advance of the transaction.

“We find that the level of for-sale-by-owners is on a sustained decline and is now at a record low. In addition, a growing share of FSBO properties are not placed on the open market – they’re private transactions,” Stevens said.

A clear downtrend in FSBOs has been seen since that market share experienced a cyclical peak of 18% in 1997. Only 13% of sellers conducted transactions without the assistance of a real estate professional in 2005, and 39% of those FSBO transactions were “closely held” between parties who knew each other in advance, up from 32% in 2004. The FSBO market share was at 14% in both 2003 and 2004. NAR began tracking the FSBO market in 1981; the record was 20% in 1987.

“In reality, the term ‘FSBO’ is a misnomer when used to broadly describe homes sold directly by owners. Since two out of five of these transactions are between related parties, and those properties are not placed on the open market, we believe that ‘unrepresented sellers’ would be a much more accurate term to describe this segment,” Stevens said.

The median home price for sellers who use an agent is 16.0% higher than a home sold directly by an owner; $230,000 vs. $198,200; there were no significant differences between the types of homes sold. “While many unrepresented sellers are motivated to save on paying a commission, we think the price difference speaks for itself,” Stevens said. “Owners without professional assistance also have problems in understanding and completing paperwork, prepping the home for sale, getting the right price and selling within the time planned.”

Survey data don’t explain the price difference, but Stevens offered some context. “Agents know best how to prepare a home and maximize value, agents provide broader exposure to the market and are more likely to generate multiple bids, and the portion of sales that are between private parties are likely to be at a lower price than those on the open market.”

“The housing market today contrasts sharply with predictions a decade ago that the Internet would ‘disintermediate’ real estate agents, including speculation that NAR membership would fall in half. In reality, it’s grown dramatically – selling real estate is not like selling a book or buying an airline ticket,” he said.

Realtor.com was the most popular Internet resource, used by 54% of buyers, followed by multiple listing service (MLS) Web sites, 50%, real estate company sites, 38%, real estate agent Web sites, 31%, and local newspaper sites, 15%; other categories were smaller.

Married couples make up the largest share of the housing market, accounting for 61% of transactions. Single women purchase 21% of homes while single men account for 9%. Unmarried couples were 7% of the market, and 2% were listed as other. In 2004, single women were 18% of buyers and single men were 8%.

The typical buyer walked through nine properties, searched eight weeks to buy a home and moved 12 miles from their previous residence. The typical seller placed their home on the market for four weeks, had lived in it for six years, moved 15 miles to their new residence and previously owned three homes, including the one just sold.

NAR’s senior economist Paul Bishop said both buyers and sellers use traditional methods to choose a real estate agent. “Word-of-mouth recommendation is the most common way to learn about real estate professionals,” Bishop said. “The most important criteria, whether you’re buying or selling, are the individual agent’s reputation and their knowledge of the local market.”

In finding a real estate professional, 44% of buyers were referred by a friend, neighbor or relative, 11% used an agent from a previous transaction, 7% found an agent on the Internet, 7% met at an open house and 6% saw contact information on a “for sale” sign. Six other categories accounted for smaller shares each.

The most important factor in choosing an agent was reputation, according to 41% of home buyers, followed by an agent’s knowledge of the neighborhood, 24%. In terms of desired qualities in an agent, three categories were rated as very important by more than nine out of 10 buyers: knowledge of the purchase process, responsiveness and knowledge of the market. Of buyers who use an agent, 63% choose a buyer representative. Satisfaction with real estate agents is very high, with 85% of buyers saying they were likely to use the agent again.

Seller responses are comparable: 43% chose agents based on a referral by a friend, neighbor or relative, and 28% used their agent previously; 10 other categories were 5% or less. Fifty-seven percent of sellers said reputation was the most important factor in selecting an agent, followed by their knowledge of the neighborhood, 17%. Eighty-two percent said they were likely to use the same agent again or recommend to others.

Four out of 10 respondents are first-time buyers, a finding that is consistent for more than a decade. The median age of entry-level buyers is 32 years, also typical over time, and the household income was $57,200. They made a downpayment of 2% on a home costing $150,000, but 43% purchased with no money down. Of first-time buyers who made a downpayment, 23% received a gift from a friend or relative.

The typical repeat buyer is 46 years old and had a household income of $83,200. They placed a downpayment of 21% on a home costing $235,000, but 11% of repeat buyers paid cash for their home. In all, 94% of buyers and sellers believe their home purchase is a good financial investment.

“To underscore the value of housing as an investment, all you have to do is look at the difference in how repeat buyers purchase their next home – the wealth effect of homeownership provides the greatest source for their downpayment, which is significantly larger,” Bishop said. Aside from sellers who pay cash for their new home, 66 use the equity from their previous home for a downpayment.

The most important factors in choosing a location to purchase a home are neighborhood quality, cited by 68%, close to a job or school, 43%, close to family or friends, 36%, and the school district itself, 23%; seven other categories were under 20%.

NAR mailed an eight-page questionnaire to a national sample of 145,000 home buyers and sellers, based on county records, who purchased their homes between August 2004 and July 2005. It generated 7,813 usable responses; the response rate was 5.4%.

The 2005 National Association of Realtors® Profile of Home Buyers and Sellers can be ordered by calling 800/874-6500. The cost is $50 for NAR members and $125 for non-members.

Source: National Association of Realtors®

America's 2006 economy will be markedly better than 2005, despite a softening housing market, according to a panel of real estate trade group economists. NAR Chief Economist David Lereah predicts that housing resales activity will slow about 4 percent to 5 percent this year, but adds that the market may only be taking a one-year breather.

Two housing bright spots: Manufactured home sales will surge, courtesy of rebuilding efforts in Gulf Coast areas damaged by 2005 hurricanes, and consumers will continue to spend freely on remodeling.

Among the scenarios the economists believe could trip up the economy: a sudden end to heavy foreign investments here; another major increase in oil prices; a sudden Federal Reserve shutoff of borrowing ability.

Source: Florida Association of Realtors®

Gov. Jeb Bush signed H.B. 15 (B) into law on December 14, 2005, and counties declared a major disaster area in 2005 may now extend the discount period for early payment of property taxes.

The bill does not automatically extend the window for homeowners in counties declared major disaster areas to pay their property taxes at a discount. Instead, it authorizes these counties to adopt a rule change that allows taxpayers a longer period of time to pay while still getting an early-payment discount. Counties may adopt extensions in whole or in part by issuing an emergency ordinance. The extension does not apply to mortgages, lien holders or vendees that make tax payments on behalf of the property owner; and the county tax collector is responsible for implementing the discount period.

The bill allows counties to extend the following early-payment of property taxes discount periods:

• the 4 percent discount period from Nov. 30, 2006 to Jan. 31, 2006
• the 3 percent discount period from Dec. 31, 2005 to Feb. 28, 2006
• the 2 percent discount period from Jan. 31, 2006 to March 31, 2006

The bill is effective immediately and will expire April 1, 2006.

Source: FLORIDA ASSOCIATION OF REALTORS

More parents are viewing their children's college experience as a way to get on the property ladder. As the real-estate market has taken off, so have parents' interest in off-campus housing. And while most wait to buy until the child's sophomore year, some parents figure the earlier, the better.

Historically low rates and flexible financing have driven the trend in recent years. The National Association of Realtors found last year that 6 percent of investment buyers purchased a second home for use by a child attending school, a figure that equates to about 169,000 properties. The association hadn't asked the question before, so a year-to-year comparison isn't available.

Many parents would rather buy a condominium or house rather than spend the money on campus housing, which has steadily risen. For 2004-2005, room and board amounted to $7,434 at four-year private colleges and $6,222 at four-year public colleges, according to the College Board.

The real impetus, though, is diversification of the portfolio, financial planners say. Amid bubble concerns, the college market is perceived as more secure because of the steady flow of incoming students.

Parents can write off mortgage interest and property taxes, and either sell the place at graduation or keep it as a rental property.

Parents of college-bound kids are jumping on the opportunity early, often when their child has just sent in applications. A popular purchase for parents is a two-bedroom, two-bath condo.

Nevertheless, parents should factor in a long holding time in the event of a market dip. Taxes and mortgage interest, while a write-off, may cause a cash-flow crunch.

While renting is an option, some parents might be ill-prepared to be landlords.

Parents might need to hire an agent to manage the property, especially if the condo or house is out of state. Parents also should consult a tax adviser about the differences between treating the property as a second home versus an investment property.

Source: Associated Press

What happens when a seller leaves things behind after they move out? In most cases, buyers can expect permanent fixtures or those that cannot be removed without causing damage to convey when a residential property switches hands. Additionally, custom-made items such as window treatments may remain. But buyers also can find themselves saddled with other items -- from old furniture and appliances to storage sheds -- that are not normally conveyed and can become a nuisance. In order to avoid these situations, practitioners typically note conveyable items in the sales contract, using a check-off list or standard form. Buyers should also do a thorough walk-through of the home a day before closing and note any unwanted items that the seller may be trying to convey. In the current seller's market, buyers may have a more difficult time negotiating conveyable items, but experts say they should try anyway. To avoid the expense of removing unwanted items discovered just before closing, buyers could arrange for an escrow account to cover removal expenses or negotiate a cash payment plan with the seller.

Source: Washington Times

The concept of a luxury hotel that sells some of its units as condominiums has become one of the most popular trends in the real estate industry in recent years. Condo-hotels have expanded into destinations such as Orlando. Hotel developers like them because they spread their financial risk among the future condo unit-owners. Individual condo owners like them for the resort-style luxuries, and in many cases the hotel rents out their units when they're away.

Condo-hotels in the past two or three years have expanded beyond traditional markets in ski resorts or Hawaii and into other tourist destinations such as Orlando and Las Vegas. Projects also are under construction in urban centers like Atlanta, Chicago and New York, where the Plaza Hotel is being converted.

The condo-hotel units that are rented are not the same as traditional timeshares. A condo-hotel unit is purchased by its owner outright while someone who invests in a timeshare is only entitled to the time that he or she occupies a unit.

Nowhere is the concept hotter than in Florida, where the Orlando and Miami-Fort Lauderdale area each could have as many as 10,000 units in the next few years, up from less than 1,000 units five years ago.

Several factors have led to the nationwide boom - the improving performance of hotel companies, the recent investment appeal of real estate over the stock market, low interest rates and baby boomers approaching retirement who want to invest in a second home.

Hotel occupancy rates dropped after the 2001 terrorist attacks, limiting the amount of Wall Street money available for building new hotels, so developers went looking for another way to finance their projects. A developer typically has to come up with around 40 percent of the equity for a traditional hotel; a condo-hotel development requires much less investment.

But the concept has risks for both the developer and the condo buyer.

The Securities and Exchange Commission considers the condo offering a security if income and expenses from the rental units are pooled and if a condo unit is sold with the explicit expectation the buyer will earn money or derive tax benefits from it. If the development is structured as a security, it can only be sold by a securities broker and it is easier for an investor to sue the developer under the SEC's anti-fraud rules.

Most developers choose not to sell their projects as securities to avoid the SEC complications, so they are prohibited from discussing the economic or tax benefits from a rental arrangement or project on how much a condo unit can earn in rental income. Many buyers make decisions without all the facts.

Source: PlanetRealtor.com

Terra Sol is poised to be the newest multi-family community in Southside area. Due to a tremendous success of Il Villgio community, the developer has planed to open Terra Sol, a gated community in one of the most sought after residential areas in town. Conveniently located near Tinseltown and St. Johns Town Center, the community will offer affordable housing starting from the $180's to $300's.

Opening in 2nd quarter of 2006. Call (904) 307-8998 for more information.