Real estate experts are sounding off on the trends that will help shape the sector in the second half of 2013.
Check out this video by the Florida Association of Realtors on the impact Real Estate has on the economy.
FAR says, Realtors should be proud of the jobs created and the boost they give their community every time they sell a home.
Each home purchased pumps $60,000 into the economy through tremendous job creation… providing 2.5 million private sector jobs per year and even more once the home is sold.
Housing touches dozens of occupations. contributing over 15% to GDP.
Here are some highlights from the 2012 legislative session, which adjurned midnight Friday. The Realtor’s primary focus was on initiatives that could strengthen the real estate market and improve the business environment.
Real estate sales associates and broker associates exempt from local business taxes. HB 7125, a bill by the House Economic Affairs Committee and Rep. Ken Roberson (R-Port Charlotte) exempts real estate sales associates and broker associates from paying local business taxes (formerly known as occupational license fees) if required in their city or county. Under Florida law, these individuals must affiliate with a real estate broker who already pays local business taxes. Brokers will continue to pay the tax. Repeal of the tax will save real estate licensees $3.8 million annually. Effective date if signed by governor: Oct. 1, 2012.
Mandatory septic tank inspections out, optional inspections in. HB 1263 , an omnibus health care bill by Rep. Matt Hudson (R-Naples), was amended yesterday with Realtor-supported language originally provided in HB 999 by Rep. Chris Dorworth (R-Heathrow) and SB 820 by Sen. Charlie Dean (R-Inverness) to repeal the mandatory septic tank inspection law passed in 2010. It establishes an optional inspection program for the 19 counties with the 33 largest springs. However, other cities and counties may opt into the program as well. Also, septic tank inspections cannot be required as a condition of sale. Effective date if signed by governor: March 9, 2012.
A major step toward creating a competitive property insurance market. HB 1127 by Rep. Ben Albritton (R-Bartow) reduces the amount of money private insurers must give Citizens Property Insurance Corp. if the state insurer goes broke after a catastrophic storm. The first check a private insurer writes after a catastrophic storm should be to their policyholders, not Citizens. However, current law requires insurers to pay Citizens up to 18 percent of their premiums within 30 days of being assessed. They can later recoup these monies from their policyholders. It’s hoped that HB 1127 will attract new insurers to Florida and keep existing insurers here. Effective date if signed by governor: July 1, 2012.
Tax boost for businesses. HJR 1003 by Rep. Eric Eisnaugle (R-Orlando) creates a proposed constitutional amendment to increase the exemption for tangible personal property taxes. Under current law, an exemption applies to the first $25,000 in property taxes such as business equipment. If approved by 60 percent of voters in the November election, the exemption would expand to include the value of tangible personal property between $25,000 and $50,000.
Options for challenging Citizens replacement cost estimates. In January, following discussions with Florida Realtors and policyholders concerned about unreasonably high replacement cost estimates, Citizens Property Insurance Corp. agreed to consider valuation sources other than 360Value software. HB 1101 codifies three options into law, including valuations prepared by real estate appraisers licensed under Chapter 475, F.S. Effective date if signed by governor: July 1, 2012.
Broad range of economic development incentives. HB 7087 is a large omnibus tax bill that’s part of the budget deal agreed to between the House and Senate. Of particular interest to real estate companies is an increase in the corporate income tax exemption from $25,000 to $50,000. Effective date if signed by governor: July 1, 2012.
Reducing condo inventory and protecting an appraiser’s interests. The Department of Business and Professional Regulation (DBPR) pushed two bills this session that contain items of interest to the real estate industry. You may recall that the 2010 Legislature wanted to encourage investors to purchase blocks of condo units to reduce inventory levels. This was accomplished in part by amending condo laws to protect bulk buyers from some of the liabilities faced by condo developers. These protections were set to expire on July 1, 2012. HB 517 by Rep. James Grant (R-Tampa) extends the “bulk buyer” provision to July 1, 2015. Effective date if signed by governor: July 1, 2012.
The other DBPR bill, HB 887 by Rep. Clay Ingram (R-Pensacola), prohibits Appraisal Management Companies from requiring appraisers to sign hold harmless agreements as a condition of business. Effective date if signed by governor: Oct. 1, 2012.
Budget appropriations. Though the Legislature swept all monies collected for the Sadowski Affordable Housing Trust Fund into general revenue, it appropriated funds for economic development initiatives and tourism that could ultimately benefit the real estate market:
- $61 million for the State Economic Enhancement and Development (SEED) Fund and other economic development funds. These monies may be used to fund affordable housing programs and projects.
- $27.5 million for Visit Florida, the state’s marketing agency.
- $8.6 million for Enterprise Florida, a state economic development agency.
In addition, the Legislature set aside $285,000 to combat unlicensed activity, $30 million for Everglades restoration, $8.4 million for the Florida Forever land acquisition program and $1.5 million to study nitrogen reduction and develop possible new technology for passive septic systems.
via Florida Realtors® News
It is always a pleasure to come across an article by Tara-Nicholle Nelson… With 2012 nearly upon us, many of us will be spending this week reviewing the events of 2011 and setting resolutions, goals or visions for what we’d like to accomplish next year.
It will come as no surprise that the most common New Year’s resolutions fall into the categories of getting organized and getting fit — physically and financially.
Financial fitness includes getting your real estate business in order. But you can’t set up your real estate plans for the year in a vacuum. They must be done in context of what’s going on in the market. Here are four predictions about what that market context will look like in the coming year:
1. Even more foreclosures
While I’d like to claim crystal-ball credit for this one, it doesn’t take heightened powers of prediction to foresee an uptick in the rate of home repossessions in 2012. Last fall’s robo-signing debacle and the ongoing legal fallout from it created a massive backlog in the foreclosure pipeline, meaning that banks are taking many months, even years, to actually foreclose on mortgages in default.
Earlier this year, the New York Times reported that the additional hurdles New York state courts are requiring banks to leap in the wake of the robo-signing revelations, like additional settlement meetings with the homeowner to see if a modification can be brokered, have created a backlog of foreclosures that it would take 62 years to clear, at the current rate of foreclosure.
It’s pretty clear that in 2012 and beyond, the banks will work through those backlogs. The inevitable result will be an increase in foreclosures.
2. REOs and short sales will become the new normal
If you even know anyone who has house-hunted in the past couple of years, you’ve likely heard tales of the high-drama high jinks — super-long escrows, first-time buyers being bested by investors’ cash offers, banks resistant to negotiating for repairs — that take place in the course of a distressed property sale.
In the coming year, distressed home sales will continue to represent an increasing share of homes on the market. So, buyers will shift from considering whether to buy a short sale to understanding that they must be educated and prepared to do a deal with a seller, a bank (to buy an REO) or a hybrid of the two (to buy a short sale) to access the full selection of homes on the market.
This, in turn, will empower buyers to make smart decisions about what to offer and what to expect on any listing they like, as well as to set smart priorities and make realistic comparisons between listings based on their own personal priorities around timing, certainty and seller flexibility.
3. So-called ‘smart cities’ will do well
This year, a number of housing markets saw double- or even triple-dips in home values. In others, pricing stayed relatively flat. However, in areas where technology powers the economy, home values prospered along with the industry. Silicon Valley real estate, for instance, saw fierce competition among buyers as the young employees of companies that went public like used their newly stocked bank accounts to buy their first homes.
I recently talked with Jed Kolko, chief economist for real estate search site Trulia, and his 2012 forecast was that so-called “smart cities” will continue to have hot real estate markets next year. But Kolko defined smart cities much more broadly than the California tech hubs. Other tech centers like Austin, Texas, and the Massachusetts suburbs of Cambridge, Newton and Framingham all made Kolko’s list, as did Rochester, N.Y. (a town known for its highly educated, highly skilled work force).
4. Consumers will get ‘hopeless’
I mean hopeless in the best of all possible ways. For years, buyers and sellers have been waiting for that singular event to occur that would cause a quick market recovery. But 2012 will mark the fifth or sixth year of the real estate recession, depending on who you talk to. I predict that those consumers who have not already done so will drop unrealistic hopes for a fast return to the heady real estate fortunes of the subprime era. Instead, people will make their real estate plans based on:
- today’s low home prices, rather than the fantasy of what could happen if the market miraculously came back;
- assumptions of very low, or no, appreciation in home values for years to come; and
- very conservative estimates of their own finances and how they will grow.
As a result, buyers won’t break their necks to hurry and buy before prices uptick; rather, they’ll save and plan to buy when it makes the most sense for their finances. Homeowners will do the same; they will either refi, remodel and be content where they are for the long haul, or decide their homes no longer fit their lifestyles and their finances, divest of them and move on. But the good news is, people will make these decisions based on what is or is not sustainable for their lives and their finances, and not based on inflated hopes about what the market will or will not do.
Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com.
via Metrostudy Report
It seems odd to talk about replacing developed lots in the midst of the worst housing downturn since the Great Depression. But we are at a point in the market where builders and developers are beginning to do exactly that. As of the end of the third quarter of 2011, Tampa had 2,840 annual starts in 593 “active” detached single-family subdivisions spread between Hillsborough, Pinellas, Pasco and Hernando Counties. The activity over the last twelve months was divided as follows:
- 39 subdivisions starting more than 24 homes
- 42 subdivisions starting between 13 and 23 new homes
- 43 subdivisions starting between 7 and 12 new homes
- 96 subdivisions starting between 1 and 6 new homes
- 373 subdivisions without a new home start over the last twelve months
The most active tier produced 1,422 new starts or 50.1% of all single family detached starts in the Tampa MSA. That is 6.6% of the subdivisions providing half of Tampa new housing production. This tier had 2,295 vacant developed lots remaining at the end of 3Q 2011. Representing just a 19.4 month supply, the market equilibrium for Tampa is between an 18 to 24 months supply of developed lots. The good news is there are another 1,215 future lots within these subdivisions in the form of future phases. Builders in these top tier projects will be reliant upon these future phases within the next year and a half, or they will be looking for new subdivisions or repositioned existing lots upon which to build. This timeline grows shorter as the housing market continues to rebound, as these measures of supply are a by-product of near record low level of housing starts. Every 10% increase in starts reduces the SF months of supply of lots by nearly 2 months within these most active subdivisions.
The second most active tier produced 742 new starts or 26.1% of all SF detached starts over the last twelve months. Combined with tier 1, you have 13.7% of the subdivisions producing 76.2% of all new starts. This second tier does have 1,805 developed lots but carries no real future lots. So as tier one nears build-out on the existing lots you may see this tier gain market share just from the mere fact of available lots.
The wildcard is the zombie subdivisions that have not started a new home over the last twelve months and are continuing to reduce there standing inventory of homes built during the boom. A successful repositioning and marketing campaign could prove a valuable source of developed lots to the building industry. If these zombies remain in a coma, builders may be hard pressed to find a quality supply of lots by the end of 2013.
Posted on 10-28-2011 by Tony Polito