Saturday, June 21, 2008

That's funny!

Or is it?

Divorcing Couples Stay Under Same Roof

Some divorcing couples who are looking to part ways are realizing they can’t afford to live apart until they sell their home.

"Unless you have lots of equity or really good credit, it's tough," says Robert Loss, the owner of Comprehensive Mortgage Co., a Boston-area firm that handles referrals from divorce mediators. "Some people are just forced to financially stay where they are. Some people are not able to do anything."

Kathryn O'Brien, an associate with RE/MAX Country Crossroads on Boston’s North Shore, who specializes in divorce situations, finds herself in the middle of these acrimonious situations frequently these days. She says the appearance of co-habitation can actually be a big advantage, even if it is painful for those involved.

Buyers sniff around for signs of a seller in distress, with divorce being a big red flag, and "if they feel that the seller is in trouble, they'll come in with a low offer," O'Brien says. "Buyers are so savvy now — they will go into the closet and see if the husband's clothes are in there. I've seen it over and over again."

Source: The Boston Globe, Lisa Prevost (06/20/08)

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,

Thursday, June 19, 2008

3000 Florida Homes powered by solar energy

I started reading this article and at the third paragraph, I was mentally calculating that a home would typically need a half acre of land to solar-power it.

Florida total area is 53,927 square miles and that converts to: 34,513,280 acres.

The US Census Bureau estimates the number of Florida housing units at 8.5 million

That means that we would need about 4,250,000 acres of land to power them all.

Roughly one in every eight acres available would have to be dedicated to power our homes.

Too much, definitely. Or perhaps there is some flaw in my calculation.

Anyway, it seems that we would have to combine wind and solar power and improve the efficiency of our solar plants, if we ever want to altogether eliminate standard energy sources such as oil and nuclear.

Oops… part of the solar panels could be placed on the roofs of our homes. But that won't make such a big difference after all.

I guess we should better start getting serious about this whole subject. Energy for our homes, our cars, our factories, our agriculture, will affect the future of humanity far more than we would like to imagine. What's going on with price of petroleum is just a warning on the events that will sooner or later, inevitably, determine our survival on this planet.

Usage of renewable resources, conservation of our oceans and our forests, growth management, and population control, must be the vision of our leaders from now on.

Now read the article:

Sarasota Herald Tribune June 19, 2008 By Zac Anderson

DESOTO COUNTY — The county that hosts Florida's oldest rodeo may soon harness the sun's rays and gain world renown in the process.

More than 3,000 Florida homes could begin using clean energy by the end of 2009 if Florida Power & Light receives permission to build a solar power plant in DeSoto County, north of Arcadia.

The proposed solar array, on 1,525 of 13,500 acres the company owns near the Hardee County line, would be the largest photovoltaic power plant in the world at 25 megawatts, according to FPL filings with the Florida Public Service Commission.

The DeSoto County plant would be 100 times larger than FPL's photovoltaic demonstration project at Rothenbach Park on Bee Ridge Road in Sarasota County.

"We're thrilled to have something like that locate here," said Matt Holloman, a spokesman for DeSoto County. "It's a clean industry. It's exciting to be on the forefront of that kind of technology."

The DeSoto project is part of an aggressive push by FPL to expand its renewable energy portfolio in the face of increasing public pressure to curb greenhouse gas emissions that cause global warming.

The company is proposing three solar power plants totaling 110 megawatts, which combined would make Florida a leader in utility-scale solar energy nationwide.

The other two proposed solar plants would be in Martin County and at the Kennedy Space Center. The proposed Martin County plant would be the largest, at 75 megawatts, and would use a different kind of solar technology that heats up water to produce steam that powers turbines.

State legislators approved an energy bill this year that begins the process of creating renewable energy benchmarks that utilities must meet.

The legislative action follows Gov. Charlie Crist's executive order last year, in which he set a goal that 20 percent of the state's energy come from renewable sources by 2020, with an emphasis on wind and solar energy.

The renewable push comes with a price.

FPL is seeking permission from the Public Service Commission to raise rates by about 83 cents a month for the average customer in the first year the power plants are operational, and about 31 cents a month each year after that through 2033 to pay for the $688 million investment.

If approved, the solar plants could begin generating power in 2009 and would be fully operational by 2010.

That is a much quicker turnaround than traditional power plants, which can take a decade to plan and build. But the solar facilities also will provide much less energy.

FPL's Turkey Point nuclear plant in Miami generates enough energy to power 450,000 homes. When the sun is at its peak, the three projects would serve 15,000 homes.

They provide other benefits, though, saving FPL $262 million in fuel costs over the life of the project and offsetting 3.5 million tons of greenhouse gas emissions. That is the equivalent of removing 25,000 cars from the road.

"We're committed to helping address the challenge of climate change," FPL spokesman Randy Clerihue said in an e-mail.

Aside from the environmental benefits, FPL is touting what the project would do for Florida by making the state the second-largest producer of utility-scale solar energy behind California.

"Operating solar resources on this large utility scale will provide a strong platform from which Florida can build in becoming a global leader in solar power," FPL wrote in the petition for a rate increase.

Only about 1.4 percent of FPL's energy comes from renewable sources.

Demand for solar energy among home and business owners rose after legislators increased the solar panel rebate program to $5 million this year, said Peter Marron, a consultant with Sarasota-based Sunbelt Solar Energy, which contracted with FPL to build the Rothenbach Park solar array.

"People want cleaner energy," Marron said. "It's nice to see FPL recognize that. We can't just keep building coal plants."

The DeSoto County Commission approved a special zoning exception in April to allow FPL to build a power plant on the land east of U.S. 17. The company still must submit a site development plan.

The Public Service Commission will rule on the FPL's proposed rate increase in August. The rate increase is separate from the 16 percent increase requested earlier this month by the company to address rising fuel costs.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,

Wednesday, June 18, 2008

Luxury Homes in trouble

Real Estate Slowdown

These are some very interesting comments I read today.

I have known about the situation for a while. These won't be the first nor the last higher-valued properties to go on foreclosure. The much larger quantity than usual is surprising.

When are we going to start reading better news? The time will come; trust me.

Not the usual suspects in foreclosure litigation

June 18, 2008 By: Polyana da Costa Daily Business Review

Miami Beach's Fisher Island, Fort Lauderdale's exclusive Harborage Island and pricey private enclaves throughout Palm Beach County aren't normally where you'd think to look for a home in foreclosure.

But the wealthy residents of these and other prestigious neighborhoods in South Florida aren't safe from the nation's foreclosure crisis as they fall behind on their mortgage payments. In some cases, they've

watched as lenders take over their multimillion homes.

In the last three months alone, more than 150 notices of pending litigation, or lis pendens — many of which were pre-foreclosure filings by lenders — were recorded on South Florida properties with an estimated value of more than $1 million, according to data provided by Default Research and analyzed by the Daily Business Review.

The majority of the homes are valued at between $1 million to $3million, according to the data.

RealtyTrac, which sells national foreclosure data, lists more than 500 residential properties in the three counties with loans of more than$1 million that are in some stage of foreclosure. The number also includes a few parcels of vacant land.

"Nobody is immune from the ripple effect of the whole credit crunch," said Al LaSorte, a real estate litigation attorney who represents wealthy homeowners facing foreclosure. "It reaches into every tier of

the real estate market." LaSorte, of the West Palm Beach office of Shutts & Bowen, recently

represented Veronica Hearst, the widow of newspaper heir Randolph Apperson Hearst, in the $40 million foreclosure of her former Manalapan estate.

"The super, high-end market, $20 [million], $30 million and up, to some degree has been less affected," LaSorte said. "Although there aren't that many buyers, most of the buyers for those properties can

pay cash. They don't have to borrow money." Hearst's case isn't the only headline-making foreclosure recently. Ed McMahon, the TV pitchman and longtime sidekick to late-night star Johnny Carson, has been hit with foreclosure on his multimillion dollar home in Beverly Hills, Calif. And a foreclosure auction has been scheduled for the 54,000-square-foot Atlanta home of formerheavyweight champion Evander Holyfield.

Many business owners, real estate developers and other professionals have been hurt by the sluggish economy and the turmoil in the real estate industry, said Cathy Pareto, a Coral Gables-based financial planner.

"There are almost two worlds of people that are impacted by this economic downturn: People with steady jobs and a paycheck, and people who have less latitude in their income stream, like those who own their own companies," Pareto said. "Think about a restaurateur," she said. "When the economy is hurt, people cut discretionary spending. Restaurants are taking a huge beating because people aren't eating out as much. Think about a dentist who does cosmetic dentistry. The luxurious type of expenditure will be impacted, and so will those professionals."

Although many of these distressed homeowners have accumulated wealth, much of it is tied up in real estate and other investments that can't easily be cashed in, she said.

"There are many individuals who are wealthy by everyone's standards, but a lot of their wealth is tied up in business and real estate investments," she said. "In this market, their assets cannot easily convert to cash; they are illiquid. It's like they are house rich but cash poor."

Homeowners who built their fortunes in real estate are among those who are hurting the most. Some of the most expensive South Florida houses in foreclosure belong to people in the real e state industry.

LaSorte is representing local entrepreneur and real estate developer William L. Knight, who has two Highland Beach houses in foreclosure — his primary residence, which he bought for $2.2 million in 2000, and one he built as a spec home several years ago that is still on the market with an asking price of nearly $19 million.

"It is difficult to carry on a mortgage for a spec house for that long," LaSorte said. Knight also owns Boca Raton commercial properties in foreclosure.

NextStore MarketPlace, a combination gas station, convenience store and gourmet take-out operation, is scheduled to be sold in a June 26 foreclosure auction, according to court records. The lender, investor Norman P. Rappaport, is asking for a payment of about $4.2 million to release Knight's two houses and the NextStore property from foreclosure, according to court documents.

Knight also owns a vacant lot next to the retail property. The lender on the land, Republic Federal Bank, claims in a foreclosure lawsuit that it is owed about $6 million. A sale date has been scheduled for July 28, according to court records. LaSorte said he is negotiating with the lenders and that Knight plans to open two NextStore franchises, one in Boca Raton and one in Jupiter, in the next month or so.

Knight said he is confident he will be able to work out a deal with the lenders by the auction date.

"Times are tough for everyone," he said, "particularly if you are in real estate. Now I'm also in a combination of the restaurant and the gas business. It's not an easy time for those industries."

Another Palm Beach County mansion in foreclosure is owned by William Nesbitt, president of North Miami-based The Nesbitt Company Realtors. In 2005, Nesbitt paid $9 million for the house in the Stone Creek

Ranch community in Delray Beach. American Home Mortgage Servicing, on behalf of lender American Home

Mortgage Acceptance, filed a lis pendens on the property in December,nd the foreclosure is pending, according to court records. The Nesbitt Company's phone number has been disconnected, and Nesbitt did not return a message left on a phone number listed on the Web site.

The 17,400-square-foot house at Hawks Lane is listed for sale at $9.8 million.

Too much too soon.

Many wealthy investors, eager to take advantage of the run up in values during the residential real estate boom, tapped into the equity in their homes to finance other real estate deals. That likely was the case with the owner of a Pinecrest house scheduled to be sold in a foreclosure auction on July 30.

Danu Dadlani, president of Miami-based PBD Realty, borrowed about $8 million from First National Bank of South Miami in 2006 to acquire and convert a building into office condo units. Dadlani pledged his 4,500 square-foot Pinecrest house as collateral for the loan, according to the loan documents. The completed condo project, Sunset at Galloway, is up for sale, according to the company's Web site. First National has filed to

foreclose on the project's unsold units as well as his Pinecrestshouse.

Dadlani did not return a phone message seeking comments. Not even owners of properties on exclusive Fisher Island, where buyers have to pay a mandatory $250,000 fee to join the golf club, have avoided foreclosure trouble.

Several Fisher Island condos are in some stage of foreclosure, including one that belongs to renowned architect Moshe Cosicher, who designed the Grandview, a condo building in Miami Beach. He paid $1.75 million for the Fisher Island condo in 2006, according to property records. Washington Mutual filed a notice of pending foreclosure action on the property in April. The filing does not indicate how much Washington Mutual is seeking.

Cosicher could not be reached for comment.

Before the current credit crunch, cash-strapped homeowners were confident they could raise money by refinancing the property. That is no longer the case, LaSorte said. "They can't fold the interest into the loan," he said. "That makes the principal too high because the appraisal doesn't support it."

Many of the high-end homes were also bought on speculation," he added. "Some people bought houses for $8 million, thinking they would sell for $14 million, and now the house isn't even worth what they borrowed to pay for it." Some rich homeowners may end up in foreclosure because they stubbornly refuse to confront their troubles.

Pareto, the financial planner, says even the wealthiest need to know when it's time to "swallow the pride" and cut back."And if that means you have to stop going to the country club to play golf to reduce your expenses, do it."

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,

Thursday, June 12, 2008

More of the same - Cities cutting on expenses

And this is the second article I read in the Sun Sentinel today. It is evident that cities can find they way to keep and improve their services while reducing their budget. We just have to ask for it.

Facing budget gaps, Hollywood and Hallandale Beach consider joint services

By Ihosvani Rodriguez South Florida Sun-Sentinel June 12, 2008

HALLANDALE BEACH - The idea of having a Hollywood sanitation worker picking up trash in Hallandale Beach is not far-fetched considering the dramatic budget crisis the two cities are facing, officials from both cities agreed Wednesday.

The Hollywood and Hallandale Beach officials reached out to each other as neighbors-in-need during an unusual joint meeting to discuss common woes and the bleak financial future caused by tax reforms and a struggling South Florida housing market.

"We have some very tough times ahead, and we need to put our heads together to come up with resources we could each bring to the table," said Hallandale Beach Mayor Joy Cooper.

The officials weighed the prospect of sharing non-contract employees, holding joint celebrations of such holidays as the Fourth of July and creating a "mini-transit system" between Aventura and Hollywood.

Other topics included the region's water supply, disposal of wastewater and taxes.

Nothing was decided during the meeting at the Hallandale Beach Community Center, but the two commissions voted to support exploring a long list of ideas.

High on everyone's list was how to maintain city services despite dramatic budget cuts next fiscal year.

Hollywood City Manager Cameron Benson said earlier this month that there might be major layoffs in Hollywood because of a potential $14 million deficit.

Hallandale Beach City Manager Mike Good said his city is facing a $6 million shortfall.

Good has proposed having Hollywood employees provide some of the services Hallandale Beach outsources, such as engineering, planning and building inspections.

Another widely accepted idea was applying together for state and federal grants to start a transit system between Aventura and Hollywood in the hopes of bringing more visitors to the area and alleviating traffic congestion. Good envisions four or five trolleys ferrying passengers among Aventura Mall, Hallandale Beach's casinos and Hollywood's Young Circle.

"If we don't take action on this, we are going to get to a point where both cities are going to hit gridlock," Good said.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,

Budget savings in Miramar

This is what I was talking about in my previous posting. Good news indeed.

Miramar ends retiree health benefits for new hires

Decision expected to save $1.5 million over five years

By Jennifer Gollan | South Florida Sun-Sentinel June 12, 2008

MIRAMAR - Responding to the burgeoning cost of retiree health benefits for municipal workers, Miramar on Wednesday joined a growing list of cities no longer offering the perk to new hires.

"It is something that we are more or less forced to do," Commissioner Troy Samuels said after Tuesday night's vote. "Eventually, all other cities in the county are going to have to follow similar measures as they react to property tax reform."

The policy change follows a South Florida Sun-Sentinel analysis of the ballooning cost of retiree health benefits. In Broward County, as of six weeks ago, 19 municipalities offered those benefits to new hires or officials, or both, at a cost of more than $11 million this fiscal year.

Pembroke Pines and Dania Beach have stopped offering the retiree benefits to some or all new hires. Plantation suspended benefits for elected officials retiring after December 1995.

Now Coconut Creek, Sunrise and Hollywood are considering following suit.

"We have asked for concessions from the unions for existing employees and for new hires," said Raelin Storey, a Hollywood spokeswoman.

Sunrise Deputy Mayor Roger Wishner said he will request a thorough review of employee perks this month.

"It is a long-term burden. Based on the long-term decreases in revenue, we have to look at every penny we can save," he said. "The days of giving money away through these agreements are over."

Sagging property values and voter-mandated tax reform are forcing all cities to scrutinize their budgets, looking for ways to trim.

In Miramar's case, the 2008-09 spending plan will be 9 percent leaner than this year's $102 million general fund budget. It faces a $7 million hit from tax reform and declines in property tax revenue.

The city's decision to cut benefits, approved unanimously by the commission, is expected to save about $1.5 million over five years, Samuels said. In addition to not offering retiree health insurance benefits to new hires, the city decided current employees no longer will accumulate credit for retiree health benefits. Government watchdogs lauded the benefit cutbacks.

"It is long overdue," said Dominic Calabro, president of Florida TaxWatch, a nonprofit government watchdog based in Tallahassee that supports slicing the benefits. "Because we have had substantial liabilities in these cities, levels of services had to be compromised to pay these excessive employee benefits."

Broward municipalities that have no plans to eliminate the benefits for new hires include Cooper City, Coral Springs, Hillsboro Beach, Lauderdale-by-the-Sea, Lighthouse Point, Margate, North Lauderdale, Pompano Beach, West Park and Weston.

Some officials argue that retiree benefits attract more-qualified workers.

"Our city has some of the best department heads and employees in the state, and I believe these benefits help attract them," Coconut Creek Mayor Becky Tooley said. "Can we keep it up forever? I don't know, but I would like to try as long as we can."

Miramar will spend about $275,585 this fiscal year to provide 51 retirees with health benefits. But city commissioners said it would be too costly in the future, given longer life expectancies, escalating health insurance premiums and a new accounting rule requiring local governments to disclose the value of health benefits for active employees and retirees.

As part of the cost-cutting package, commissioners also voted to require employees with take-home vehicles to reimburse the city for the gas they use for personal trips. Police and fire employees are exempted. The measure is expected to save the city as much as $60,000 annually.

"This was just one of the many painful cuts in the crisis that we are finding ourselves in," Commissioner Carl Lanke said.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,

Budget Savings in Florida Local Governments

A couple of articles I read in the papers today confirm my ongoing campaign to promote efficiency in the management of their recourses by counties and cities, as the only effective solution to bulging property tax bills.

I read that Hollywood and Hallandale Beach will discuss sharing some of their recourses and employees, combine 4th of July celebrations, establish new combined public transportation, and explore more of this kind of measures to save and compensate for budget shortfalls.

That is music to my ears. It means that, confronted with citizens' determination to cut down on unnecessary expenses, our local governments will find solutions which will not only help their finances, but might even result in environmental and energy-savings accomplishments.

Some modest rollbacks were recently mandated by recent citizens' and legislature's actions. Local governments screamed and yelled and threatened with chaos and disarray, but the facts are clear. They need to clean up their act because tax relief is essential and high property taxes are deeply hurting our population and our state.

The second announcement was that Miramar is ending retiree health benefits for new hires.

While I cannot acclaim cutting essential benefits to some employees and promoting inequality, I would suggest that cities could better cut back their budget by reducing their personnel through attrition, i.e. not hiring until their personnel budget is reduced by for example 10%.

In all cases, these are good signs, and it is my hope that it will only be the beginning.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,

Sunday, June 08, 2008

Explaining Short Sales, Foreclosures, Preforeclosures

Defining a Short-Sale:

The sale, at a loss for the lender, of a property which total of outstanding mortgage loans, outstanding liens, and tax liabilities is larger than its market value.

The mortgage lender will accept the repayment of its outstanding loan at a discount, in order to avoid foreclosure, absorbing a net loss. It is performed through co-operation between the lender, the owner and eventually a real estate broker.

This term is becoming very popular in the present market situation. Banks are abnormally loaded with bad loans; many properties have sustained huge devaluations of their market value; added to increasingly strict appraisal and lending criteria, it leads many borrowers with high adjustable-rate loans or sudden loss of income, to the impossibility of refinancing their existing loans, or the possibility of selling their home to at least repay their debt.

In this case they have the option of either waiting for the inevitable foreclosure, try to renegotiate with their lender the terms of their loan, or intent the sale of their property for as high a price as possible and pay as much debt as possible. That last option is in essence the short sale. It is one way for a homeowner who cannot pay his mortgage to walk away from the problem and the property with a lesser blemish on his credit than a foreclosure or having to declare bankruptcy.

It can be a better alternative for lenders confronted with high foreclosure and auction expenses, a very slow market that would have them take possession of a home with a dwindling value, pay all subsequent taxes and homeowners' association fees, general maintenance, payment of brokers' commissions to re-sell the property, or auction costs.

Of course, they will try to perform the short sale with the minimum possible loss. Thence the long delays in answering the buyers' offers, hesitations and doubts, and more issues that most realtors would like handle. Banks are not always bound by realtors' protocols, norms and usages. Employees and decision-makers can change frequently and sometimes the process resembles more a bidding than a regular sale. As frequently as some patient buyers could be rewarded by excellent deals, many others just walk away after months of waiting and disappointments.

The short sale procedure can be initiated by the homeowner, a prospective buyer, an attorney or a person representing the buyer.
Usually the lender would have a "short-sale package".
Usually the lender requests a "hardship" letter, explaining why the mortgage payments haven't been made. Typically they will also ask for bank statements, pay-stubs, proofs of income. They could also require a contract for sale. A next step for the bank would be to ask for a "Broker Price Opinion" (BPO). The lowest this report would assess the property, the best chances that the lender will be more open to negotiations.
Sometimes the foreclosure process has been initiated and in these cases, it would be necessary to request the lender to postpone their legal actions and auction.

I would recommend to always seek advice from an attorney and an accountant in order to initiate a short sale. Bear in mind that there are tax implications in a short sale. I understand that US congress passed and President Bush signed into law a temporary change to the tax code. For the period Jan. 1, 2007, through Dec. 31, 2009, homeowners will not have to pay tax on any debt on primary residences that is cancelled. The present information is only an outline of the process and is not substitute for legal, accounting and other expert advice.

It is common for the bank to consider higher discounts on properties in fair condition, or in need of repairs. These are the best opportunities, since they will usually yield fewer offers and are tougher to sell. Homes with high values can also be better candidates for larger percentage discounts from the lenders. Some of the best opportunities will arise when the property is burdened by 2nd and 3rd mortgages. In effect, lenders in these 2nd and 3rd positions are expected to lose the totality of their investment in the case of a foreclosure and will therefore accept the payment of only a very small portion of their loan.
As you can imagine, this could be an extenuating process, but well worth the effort.


The term pre-foreclosure is being used to refer to the status of a property which mortgage payments have not been performed for more than three months, and which lender has recorded a notice of default. This is the state when a short sale becomes a strong possibility since the lender would strongly consider whatever action can be done in order to avoid another foreclosure on their books. Of course that not all banks have the same amount of exposure to bad loans and it will influence their willingness to negotiate.

We, at will accept in specific situations to deal in South Florida Short Sales. We have included in this website a section which lists most of Aventura Short Sales, Brickell Short Sales, Bal Harbour Short Sales, Hallandale Short Sales, Hollywood Short Sales, Surfside Short Sales, Sunny Isles Short Sales, Miami Short Sales, Fort Lauderdale Short Sales, Miami Beach Short Sales, North Bay Village Short Sales.

Explaining Foreclosure.

Foreclosure is the legal proceeding in which a mortgagee, usually a lender, obtains a court ordered termination of a mortgagor's equitable right of redemption.
This is the exercise of the lender's right to redeem a mortgaged property. It will terminate the rights of the owner and transfer the property to the lender.
The most common reasons are economic hardships, such as medical and health issues, unemployment, divorce, death, higher payments triggered by adjustable loans.

A not so traditional situation is occurring now: Many buyers are walking away from properties where the total amount owned on their mortgages is higher than the actual value of the property. This is especially true of properties bought in the last half of the real estate "boom" of 2001-2005, some of which have seen their real value reduced in an unbelievable percentage.

The first step will occur after three months delinquency on mortgage payment. A Notice of Default (NOD) will be recorded by the lender.

Foreclosure will then involve the sale of the mortgaged property under the supervision of a court, with the proceeds going first to satisfy the mortgage; then other lien holders; and, finally, the mortgagor/borrower if any proceeds are left.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,

New Foreclosures and Short Sales Pages

It's been a rather long wait. But we have finally set up the promised new section of our website, to announce and list opportunities and short sales.

We hardly get any phone or email inquiry that doesn't request a "good deal", a "steal", a "foreclosure", a "short sale". Everybody knows that the time is good for a buyer with some cash
to grab the best of Florida at bargain prices. And these investors, vulture funds, or whatever you would like to call them, represent a major part in the activity that we realtors are spotting at the present time.

My opinion is that good opportunities can be found as well with very motivated sellers and investors willing to unload their real estate assets.

However we cannot ignore the hundreds and even thousands of condos and homes that most lenders are gradually forced to put on the market because of non-performing loans.

These new pages will display most but not all of the short-sales, and bank foreclosures or bank-owned properties. At the same time, some good opportunities are included when they are not actually bank-related sales, but represent comparable low listed prices.

I am glad that it finally happened.

The link is:

Enjoy your search!

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,

Sunday, June 01, 2008

Florida Real Estate and Inflation

A constant motto in my conversations with potential customers is that inflation is a key factor in Real Estate investment.
My personal feelings have always been that inflation indexes and calculation have historically been somehow skewed and distorted and that they don't accurately reflect the reality of our currency devaluation throughout the last two decades.
A quick trip to supermarkets and gas stations and a quick look at your property taxes, property insurance bills, the price a new home, will quickly put in doubt the touted 2% or 2,5% annual inflation rates included in official economic data.

All signs are that we are heading into a period of high inflation, fed by enormous hikes in oil and food prices.

Real estate is a unique, valuable and tangible asset, which is not always the case with stock market shares, bonds, and other paper investments. World's population is constantly growing; the amount of available land and available natural resources is not. Unlike a dollar in the bank, real estate actual value will not shrink with inflation. Real estate will always be needed for residence, commercial, farming and industrial use.

My opinion has always been that, if we follow certain criteria and reasonable principles when acquiring real estate, it will always be, on the long term, the best investment we've ever made. In Florida, this is especially true, since we are one of the fastest growing states in the US, and we are due for a continued migration from of baby boomers from Northern states, Latin Americans, and Europeans.
The very high inventory of condos and homes available will be eventually absorbed – and faster than most of us realize. After all, a couple of years of low construction would be enough.

That's what, sooner than most believe, real estate is due for a strong comeback. And you better not be too late!
Here is an article on the subject that I read in a Realtors' publication.
I do not agree 100%, but it has an interesting twist on the subject.

Inflation: Winners and Losers

by Lawrence Yun, Chief Economist, NAR Research

An article from Real Estate Insights, a Web based publication of the National Association of Realtors.


Recent news on inflation is not good. In the first quarter of this year, the Consumer Price Index posted its highest level in years. A story in The Wall Street Journal last month carried the headline: "Inflation, Spanning Globe, is Set to Reach Decade High." We've all felt the effects in higher costs for food, energy, and other consumer goods.

Inflation is rather like a "stealth" tax: you have less purchasing power when it is high. However, if someone is paying higher prices, then someone on the other side must be receiving higher revenues. Many salary adjustments are based on the consumer price index, and entrepreneurs and businesses receive higher revenue. Mentally, though, people believe a rise in income is the reward for hard work, and feel the rise in consumer prices just eats into that hard-earned income. So, of course, inflation is awful.

But economists do not like inflation for other reasons. Large movements in prices distort price signals and lead to less efficient allocation of resources. Lower productivity growth holds back the country's economic potential and standard of living.

In the real estate sector, however, inflation produces distinct winners and losers. Let's take a look at both sides.

Homeowners Win

Rising inflation - other things being equal - raises people's income and their home prices. Usually, the increases would be nominal in terms of what you actually receive in paychecks and the listing price you would set to sell your home. Of course, we are not in normal times. Along with very high housing inventory, we have CPI inflation and income rising by 3 to 4 percent while home prices are falling in many local markets. But if inflation were to really get out of hand and rise by 10 percent, then the higher associated rise in income would help home prices recover in nominal terms - though not necessarily in real inflation adjusted terms.

Improving home prices from rising CPI inflation will in general protect homeowners' housing equity, and interestingly inflation can help reduce the mortgage burden. Fixed-rate mortgages are most prevalent in the marketplace. That means, the vast number of homeowners have fixed mortgage monthly payments. Higher income with fixed mortgage payments is a winning combination for homeowners.

Consider a typical U.S. homeowner in 1970 - when inflation was just picking up. She would have purchased a typical home for $23,000 (this is not a misprint). By 1980, the typical home price reached $62,200. Family income grew from $9,800 (also not a misprint) in 1970 to $21,000 by 1980.

So, while home prices and income grew, the monthly mortgage payment would have been fixed at $160 per month (assuming $23,000 mortgage at 7.5 percent interest rate). While the homeowner was undoubtedly angry about rising food , energy , and other prices back in the 1970s, she was not complaining about the mortgage payment.

Homebuyers Lose

As the homeowner was paying relatively low mortgage payments, banks and lenders must have been maddeningly frustrated. But what could the lenders do? Contracts are contracts and both parties agreed to the mortgage terms.

Not to be burned again, the lenders will rightly want to compensate for inflation before lending again. Mortgage rates - no surprise here - rose and rose. The average 30-year fixed mortgage rate rose from 7 percent in 1970 to 14 percent by 1980. It increased further, hitting a peak at 18.5 percent in October 1981. At such a rate, it would have taken 18 years to lower the principal balance by just 10 percent.

At such high interest rates, who would want to buy a home? Home sales, not surprisingly, fell big time. Home sales activity was essentially cut in half.

Yes, the current inflation rate is uncomfortable. But actually it is not very high. CPI has been rising at better than 4 percent over the past 12 months. That is well above the Fed's comfort zone of about 2.0 to 2.5 percent preferred inflation rate. The current economic weakness will likely help moderate inflation going forward. But the weak dollar, high commodity prices, and elevated gold prices all signal inflationary concerns. Once out of the box, inflation is hard to put back other than by sharply raising
interest rates purposely. That could cause a true economic recession, as happened in the early 1980s.

Fortunately, that is unlikely to occur. The Federal Reserve has already cut the Fed funds rate deeply. The 30-year mortgage rates have barely budged, however, given the lenders' concern over inflation. It is also quite possible for mortgage rates to rise even if the Fed cuts its Fed fund rate further and the lenders want to compensate for inflationary risk.

But I believe there are plenty of monetary stimuli already in the system to forestall any major concerns. As I have suggested before, what is really needed to lift the housing market is fiscal stimulus. The temporary homebuyer tax credit being debated in the House of Representative to purchase any homes (and not just foreclosed homes as is in the Senate proposal) is the appropriate medicine at this time - not only to the housing market, but for the broader economy. A housing recovery will help spur a true economic recovery. That will certainly help wash away any bad taste from our current inflation levels.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website:
where you can search for Aventura Condos, Florida Condos,