Entries from February 2006 ↓

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In another interesting and weird twist down in New Orleans and Louisiana politics, Governor Kathleen Blanco is concerned over the package for the 4.2 billion dollar rebuilding package proposed by President Bush. In typical Blanco form, it was the package that she and the Louisiana Recovery Board approved and applauded earlier. Now it is not enough or too restricting.

In Washington for the National Governor’s Association meeting, Blanco said she is worried that the restricting the housing money to “mitigation” uses could turn the worst flood-damaged sections of the city into green space, off limits to residential or commercial development.
“If (the proposal) stays like it is, it will be New Orleans National Park,” Blanco said. “It will be a problem for us unless they change the language.”
The housing money, included in a $19.8 billion supplemental spending package unveiled by the Bush administration two weeks ago, specifies that the money be subject to section 404 of the Robert Stafford Disaster Relief and Emergency Assistance Act.
Under the act, the state could spend the money to raise homes or fortify them against future flooding. The homes also could be purchased outright. But if they are, they cannot be placed back into commerce, only used as green space or wetlands.
The Bush proposal was originally hailed by Blanco and her Louisiana Recovery Authority, which helped negotiate the deal. It appeared to break an impasse over how Louisiana would cope with its post-Katrina housing shortage as it attempts to draw residents back to the region. via The Times Picayune.

Living in the San Francisco Bay Area has many wonderful characteristics, but concerns over housing costs and transportation has forced 40 percent of the residents in the region to consider moving. The tremendously high cost of housing has put pressure on residents and can degrade the quality of life if you are spending such a high percentage of income on housing expenses.

Of those thinking of a move in the survey of 600 residents, 70 percent said high housing costs are a major factor driving them.
Housing is the second most important issue facing the region, behind only transportation, according to results of the Council Poll released earlier.
The council also said it found strong support for an infrastructure bond proposal that is headed for a possible statewide vote.
Seventy-four percent of those taking the poll said they are inclined to vote yes on some or all of the bond proposals.
Support was largely bi-partisan, with 70 percent of Bay Area Democrats saying they would vote yes on all or some of the bonds, and 77 percent of Republicans would support them. Via Silicon Valley/San Jose Business Journal.

I decided today to put together a wrap up of good articles posted recently on some of the real estate blogs and a couple of other business blogs.

• State of Michigan gets tough on Mortgage Lenders not following the rules – Pacesetter Mortgage Blog – It looks like the state of Michigan is enforcing the laws on mortgage brokers in the state, and publicizing it. Good for you Michigan! (Go Blue!)
• An Obvious Observation – Prices are all Over the Place – The Jersey Shore Bubble Blogger – Talks about the price discrepancy in local housing and how that may signify the top of the market.
• Escalation Clauses - Downtown Kirkland Condo Market – Seattle Rain City Real Estate Guide – An excellent example of how an escalation clause works.
• Aerial Mapping Article – The Bubble Meter –  A humorous take, and very accurate, take on aerial mapping and how it is empowering the  customer.

And here are the Business Blogs that have changed my perception on the .

• Washington (G.) in Winter – Tom Peters Weblog – This site by famed speaker and MOTIVATOR Tom Peters is full of great information. Whether you are a blogger, business person, student, or just breathe, there are lessons on this site that  can change your life if you will implement them. Oh, and the book 1776 is a great read.
• The Culture of Dissatisfaction – Seth Godin – Seth is another favorite, one of the top marketing authors and best thinkers I have read. This post is on target on our society, we have to push everyday to be successful.

The Orlando Sentinel has a great wrap up of the significant real estate revenue for the major companies doing business in Orlando. Here are some excerpts:

• Realty Capital of Orlando posted $109 million in deals last year, up from $80.5 million in 2004. Sales, leasing and management activity all soared in double digits.
• Signature GMAC Real Estate posted $400 million in sales last year and a record $12.5 million in gross commission income, according to general manager Lisa Gould.
• D.R. Horton Homes sold 2,412 houses last year in the Orlando area with the average sale at $240,000.
• Nicholson Homes had more than $100 million in sales last year in six area communities.
• Royal Palm Homes sold more than $88 million in homes, lots, condos and town homes in 2005.
• The condominium sales division of Signature GMAC Real Estate posted more than $11 million in pre-construction sales at Urbana, a 236-unit condo at Hunter’s Creek in south Orange County.
• Lake Forest Realty in north Seminole County had more than $90 million in sales last year, up more than 20 percent from 2004. via OrlandoSentinel.com

It will be interesting to see the numbers for 2006 and see how they line up. If the Bubble Bloggers are correct, there should be significant downward pressure on these numbers.

Real Estate agents treat the 6 percent commission as doctrine when talking to clients, you can not change it no matter what. But in reality, new studies are showing that average commission paid has dropped to 5.1 percent and looks to go down near 4 percent in the next 5 years.

This trend is being fought desperately by the old line agencies, but newer firms are already implementing some of the changes and are doing very well. With internet tools being used more often and now being more effective then ever before, the exclusivity that real estate agents possessed is quickly eroding.

Real Trends, a real estate research and publishing company, has reported that the average commission rate among the nation’s top brokerage dropped to about 5.4 percent in 2001 and now averages 5.1 percent. That will fall to about 4 percent in the next five years, said Dave Linder, chairman of national real estate brokerage Re/Max.

For brokers, that means the end of the era of nearly guaranteed sales margins, and the start of a new line of price competition. For consumers, it means an increasing array of price and service options in home selling and shopping.

Some new brokers advertise full service at reduced rates — generally 3.9 percent to 4.5 percent.  via blackenterprise.com

This transition will change the industry, and it may be for the better. Presently there is a glut of agents as people get into real estate thinking it is easy money. When the fees shrink, it will chase away many of the pretenders, and provide more room for the true professionals to operate.

So in a way, lower commissions will clear the way for the true professionals and develop a better and more efficient marketplace.

“Aging in Place” is one of the trends to watch in the coming decade for the housing industry. There are 76 million baby boomers that are going to be facing retirement, and many of them do not want to go to the retirement home. Because of this, many of the homes that they love and want to finish out their final days in are not suited for senior living.

Modifying your home for aging in place can take many forms. Senior Resource.com has an excellent primer on many of the modifications that can be made for your house to allow you to age in place happily. This list is very comprehensive and the expectations are not that all of the steps be performed, but it does provide a good reference point.

Here are some examples of general modification to a home for aging in place:

Adapt lower floor of home for possible one level living

Increased incandescent general and specific task lighting

Easy garage or parking access

At least one entry is without steps

Doorways 36″ wide with off-set hinges on doors

Levered door handles instead of knobs

Electrical outlets at 18 inches instead of 12

Easy to open or lock patio doors and screens

Light switches at 42″ instead of 48

Adjustable controls on light switches

Luminous switches in bedrooms, baths and hallways

There are many other factors that go into providing for seniors who want to age in place. Finding personal care assistants, providing transportation, and creating social opportunities are all important factors that should be addressed in the process.

If you are looking to have your home remodeled to allow aging in place, the National Association of Home Builders has a certification available. It is an interesting read as it shows what criteria is needed to be certified.

To find a Certified Age in Place Specialist, click here for the directory.

The  legislature in Tennessee is hearing a consistent refrain from their constituents, “Do not take my property and give it to another”. In response, 59 separate eminent domain bills have been introduced in this legislative session and it looks like they will get something passed in the near term. These laws have been put forward by both Democrats and Republicans as this is the hot button issue for the year.

Lawmakers say the issue is one of the first things their constituents want to talk about, and there’s broad support for the idea across parties and interest groups.

“In Tennessee, property rights almost rise to the level of being sacred,” said Rep. Joe Fowlkes, D-Cornersville, vice chairman of a joint committee studying eminent domain. “When people think that their private property might be taken from them and given to another person, it stirs them up.” via the Southern Standard.

Real Estate has been a very interesting story  to cover in the past year. Some markets in the country are going to be in serious trouble while most of the country will continue to see steady and modest appreciation. The same can be said for homeowners.

Ten percent of the homeowners in the country are in a position of negative or minimal equity in their homes and are in a very fragile position. Through either poor timing or poor decision making they have very little equity in their homes. Any bad economic circumstances could put them in a position that could have dire effects on their future.

Meanwhile, the news that will get overlooked is that private ownership of homes accounts for 11 trillion in wealth of the country. That is double what it was 5 years ago.

So what we have is classic capitalism. The majority do very very well in a market, and a few do very poorly. No one was forced to buy at the top of the market. And most of the people who have will ride it out and gain equity in the coming years. And some will be wiped out.

Source: Detroit Free Press

Correction: The original post had 111 trillion as the total private property value, and error that has been corrected. Thanks to Robert Cote for pointing it out.

Val Kilmer, one of Hollywood’s top stars, is selling part of his Santa Fe Ranch as he has two major films back to back and is not using the property as much as he would like. While only selling 1,800 of the 6,000 acres, the property comprises most of the developed part of the ranch.

Kilmer has put part of his 6,000-acre Pecos River Ranch near Santa Fe, N.M., on the market. The actor, a native of L.A., has listed about 1,800 acres at $18 million because he will soon star in two films shooting back to back and “won’t be able to spend as much time on the ranch as he would like,” said his publicist Christina Papadopoulos.

The ranch, once owned by actress Greer Garson and her husband, Buddy Fogelson, is in high-desert canyon country and looks as if it’s straight out of the Old West. The Santa Fe Trail runs through it, and there are four miles of trout-filled river as well as fields of wildflowers and ponderosa-lined limestone cliffs. There is wildlife — deer, turkeys, black bears, cougars, beavers, eagles and falcons. 

The part of the ranch Kilmer is selling has a log-and-stucco ranch house with four bedrooms and four bathrooms in 5,600 square feet and two guest cottages. Each cottage is about 1,000 square feet and has one bedroom and one bathroom.

There are extensive staff quarters, heated stables, foaling barns and corrals. Kilmer said that he grew up riding horses in Chatsworth and has several on the ranch, which feeds more than 100 animals, among them buffalo and llamas that roam the property. via Los Angeles Times.

If it were any other state in the country other than New Jersey, I may take the committee to study the impact of eminent domain on the state as a good sign. But with the promise of months of hearings on the topic, and the history of corruption by elected officials in the state, I can not bet help thinking that we are going to see a historic white wash with the outcome of new eminent domain legislation that  will hurt the homeowners and taxpayers and benefit the developers and politicians.

C’mon, it is New Jersey. You can’t expect a miracle  

Assemblyman Guy Gregg, R-Morris, said the public has a deep interest in the issue.
“Whenever I bring up the term “eminent domain,’ it is electric, wherever it is,” said Gregg, who wants the state constitution amended to bar condemnation for economic development.
In a two-hour hearing Thursday, the Assembly Commerce and Economic Development Committee heard from invited guests about the legal framework for eminent domain use in New Jersey.
“If we’re going to change something, we should understand what it is that we’re considering changing,” said Assemblyman John Burzichelli, D-Gloucester, the panel chairman.
Last year, in the landmark New London, Conn., case, the U.S. Supreme Court ruled in favor of government’s power to seize property for private economic development projects but invited states with concerns about that practice to adopt laws limiting it.
The controversy over that use of eminent domain has been raised in Long Branch, where the city has filed condemnation orders against 23 properties in the Beachfront North Phase II section, proposed for Marine and Ocean terraces and Seaview Avenue. via the  Asbury Park Press Online.