Real Miami Beach

The upside of Florida real estate: 15 market positives

madeleine.romanello@realmiamibeach.com (Madeleine) — Tue, 16 Jun 2009 09:30:39 PDT

Let’s take a look at some of the opportunities for today and the future of Florida’s real estate market.

1. Great prices. Statewide, the existing-home median sales price was $161,200 in the fourth quarter of 2008; a year earlier, it was $216,600 for a decrease of 26 percent.

2. The time is right. Home sales volumes are rising again – a clear signal that today’s “buyers market” may be changing soon. In fourth quarter 2008, statewide sales of existing single-family homes were up 13 percent compared to the same period last year, according to FAR statistics.

3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is still plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don’t wait too long.

4. Low mortgage rates. Mortgage rates are still at the lowest levels since the 1960s. Lower rates multiply a buyer’s financial power. Even half a percent can make a sizeable difference. For example, on a $200,000 home, half of 1 percent could save the homeowner about $815 a year. Buyers can get more home for the money, which is a perfect scenario for families looking to upsize.

5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The U.S. Housing and Economic Recovery Act of 2009 includes an $8,000 tax credit for first-time buyers. President Obama’s 2009 economic stimulus package also identifies and offers incentives to help home buyers with mortgages. Talk to a local mortgage lender about state and federal incentive programs.

How to get the $8,000 credit.
6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010 economists forecast that Florida will be the third-most-populated state in the country. Florida’s population is expected to swell about 75 percent by 2030. Florida has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.

7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida’s population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida’s Bureau of Economic and Business Research. That’s a lot of new buyers coming into the market.

8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State’s mild climate and outdoor amenities continue to make Florida a top retirement destination.

9. Business-friendly state. Florida has always been a business-friendly state – no state income taxes, plus incentives from local municipalities encourage businesses to set up shop here. Even with the current economic downturn nationwide, Florida leaders continue to keep business needs in the forefront of planning for the state's future. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its “Best Performing Cities Index 2008,” which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida’s business climate ranked fourth among executives and sixth overall on “Site Selection” magazine’s 2008 Top State Business Climate rankings.

10. Positive investment outlook. Every quarter, the University of Florida’s Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the third quarter 2008 survey, the investment outlook for various types of Florida properties remains steady. “People who have responded to our surveys have not lost their faith in Florida as a place to be and a place to invest,” said Dr. Wayne Archer, director. “We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in.”

11. Homeownership has value. Realtors believe – and research supports that belief – that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth, both for the individual homeowner and for homeowners as a group.

12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.

13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and more likely to graduate high school. They’re also shown to have a higher lifetime annual income.

14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.

15. An unsurpassed lifestyle. Finally, let’s not forget the things that brought people to Florida in the first place, and will continue to attract them – beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It’s no wonder that Florida’s combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put Florida in the top three of Harris Poll’s “Most Desirable Places to Live” survey.

The Two Latest Signs Housing Is Recovering

madeleine.romanello@realmiamibeach.com (Madeleine) — Sun, 07 Jun 2009 05:08:23 PDT

Here’s more evidence that the housing market is recovering.

Two major home builders, Toll Brothers Inc. and Hovnanian Enterprises Inc., say their losses were shrinking compared to last year because buyers are coming back to the market.

Other encouraging news came from HIS Global Insight, a research firm, which said home prices fell on average at an annual rate of 2.2 percent in the first quarter in 199 of 330 metropolitan areas. That compares with a 12.5 percent decline in the fourth quarter of 2008 in 312 metropolitan areas."While it's too early to see a bottom of this housing downturn," the report said, the latest data "may signal that the market is beginning to stabilize."

Source: The Wall Street Journal, James R. Hagerty and John Spence (06/04/2009)

Keeping You Current - May 2009

noreply@blogger.com (Jay) — Wed, 03 Jun 2009 20:53:35 PDT

HUD: Tax Credit Can Be Used on Closing Costs

madeleine.romanello@realmiamibeach.com (Madeleine) — Sun, 31 May 2009 10:21:47 PDT

FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released today.

Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.The loans can't be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.There remain many sources of assistance for buyers needing help with the 3.5 percent downpayment, including many state and local government instrumentalities and nonprofit lenders.

In addition, some state housing finance agencies have developed their own tax credit bridge loan programs, so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their downpayment. These programs are separate from what HUD announced today. The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.

Condo maintenance versus house maintenance

madeleine.romanello@realmiamibeach.com (Madeleine) — Sun, 31 May 2009 10:19:42 PDT

Many buyers perceive that the maintenance fees for a condo seem so high compared to the monthly costs of owning a house. This is really not always the case if you break it down. Typically condo maintenance for a medium range building is $ 0.50-0.70 per square foot to close to $ 1/SF for very high end building. Depending on the condo, this maintenance cost could include reserves for major repairs lessening the need for special assessments.

Here are the monthly costs of owning a mid range home:

$ 300/insurance ( approximately 0.75-1.5 % of home value depending on age of home,east or west of US1 and flood zone location)

$ 75 water ( will depend on city and if property is on sewer or septic)

$ 50-100 trash removal

$ 100 gardener

$ 30 basic cable

$ 30 alarm monitoring

$ 40 pest control

Total $ 625 so if the house is 1800 SF, we are at $ 0.35/SF.

But ....you have to figure roof replacement reserves about $ 1000/year plus painting outside $ 1000/ year, tree trimming $ 300/year, pruning and fertilizing $ 800/year, pool service $ 1000/year and other external maintenance you would not have in a condo adds another $ 0.20 per square foot monthly.

Maybe there is a small garden and no pool but sooner or later roofs need to be fixed, maintained or replaced: the exterior needs to be painted, pressure cleaned etc; trees need to be trimmed for hurricane season: plumbing and electric repairs are more extensive than in a condo.

So the condo maintenance does not seem so high anymore when you really compare monthly or yearly costs for the house. The condo can also offers security, pool, beach access, gym, tennis, gardens, concierge, management etc so you are getting more services for the money you pay.

The big question is will there be special assessments ? It is easy to find out from the association what major repairs have been made and what the condo still plans to assess for. Many buildings in South Florida have been going through their 40 recertification and have replaced almost all major systems in the building or are in the process of doing so.

Many condos are also starting to have reserve funds so they collect from the owners each year the exact amount needed to repair or replace let's say the elevators in 15 years: paint in 5 years: roof in 20 years etc. This is a fair and responsible way to run a building as each condo owner pays into the fund whether they live there 2 years or 10 years.

The big difference is control. Buyers feel that owning a house gives them more control over the expenses and they are not at the mercy of a badly run condo association. The only solution to this is to get involved in the association which can be hard work, politics and very little gratitude from other condo owners.

Report: S. Fla. home inventory falling

madeleine.romanello@realmiamibeach.com (Madeleine) — Sun, 31 May 2009 09:00:35 PDT

Depressed home values are driving up sales in South Florida.

Residential resale inventory has fallen 21 percent, and pending sales have jumped nearly 66 percent in the last six months in Miami-Dade, Broward and Palm Beach counties.

On May 25, there were 84,962 single-family homes, townhomes and condo units on the market in the tri-county area, down from 107,527 in November.

There were 15,399 pending sales that week, compared with just 9,302 in November, according to the report.

"In the last six months, we have seen inventory decrease by between 1 percent and 2 percent on a week-over-week basis," said Peter Zalewski, a principal with the Bal Harbour-based real estate consultancy. "During the same period, pending sales have consistently increased by between 1 percent and 3.5 percent on a weekly basis since November. This trend suggests that summer – which historically is a quiet period – looks to be active."

Miami-Dade County has the most available residential resale properties, with 32,133, or 37.8 percent of the tri-county total. The inventory in Miami-Dade has fallen 21.6 percent in the last six months from 40,994 properties on Nov. 24, according to the report.

Broward County has the second largest share of properties for sale, with 27,669, or 32.6 percent of the regional total. In November, Broward had 36,926 residences for resale.

Palm Beach County has the fewest number of properties for sale, with 25,160, or 29.6 percent of the total. On Nov. 24, Palm Beach had 29,607 properties available for resale, according to the report.

Pending sales in Broward are up 80 percent in the last six months, to 5,934 contracts on May 25 from 3,295 deals on Nov. 24.

Pending sales in Miami-Dade are up 60 percent, to 6,789 deals on May 25 form 4,245 contracts six months ago.

Palm Beach County's pending sales are up 52 percent in the last six months, to 2,676 contracts on May 25 from 1,762 deals in November, according to the report

South Florida Business Journal

A return to basics: buy low, fix, rent

madeleine.romanello@realmiamibeach.com (Madeleine) — Mon, 04 May 2009 17:13:45 PDT

MANASSAS, Va. – May 4, 2009 – While it may seem crazy to bet on real estate for a steady retirement income these days, that is exactly what Edward and Olivia Green are doing.

With their golden years fast approaching – he is 64 and she is 60 – the husband and wife have snapped up five investment homes in the past three years. They hope to buy more as the struggling real estate market continues to produce cheap properties. Their portfolio includes a condominium apartment in Manassas; two houses in Prince William County; and two houses in Memphis, Tenn. Their goal is to buy cheap foreclosure properties, fix them up and rent them out.

The Greens said they prefer real estate to stocks and bonds because they can touch it, drive by it on a weekend and look at it – which gives them a level of comfort in the midst of a volatile economy.

Buyers such as the Greens seeking long-term cash flow from their holdings are emerging as the new investors of the bust. In many ways, they are reclaiming the term “investor” from the speculators who bought homes during the boom years with intentions to flip them for quick gains.

“At the peak of the bubble, you had a lot of people who called themselves investors but were really only buying a property with the hopes of selling it at a higher price to a greater fool later,” said Michael D. Larson, a real estate and interest rate analyst at Weiss Research in Florida. “The long-term way to invest in real estate is to buy cheap and buy at a level where it is profitable to rent; traditionally, anything you got from appreciation was icing on the cake, not the cake itself.”

In areas such as Prince William County, where sales of foreclosure properties have dragged down home prices but rents remain relatively strong, the Greens’ strategy has become particularly popular, local real estate agents said. Nevertheless, these are not easy times for those looking to profit from the bust. Lending standards have tightened, making mortgages for investors harder to come by. There is also no guarantee that home prices will end their free-fall. Buying a foreclosed-on home, fixing it up and then becoming a landlord requires patience, vigilance and capital, and success is not certain.

The Greens have had their stumbles. Their first investment property was a two-bedroom, two-bath condominium apartment not far from Interstate 66 in Manassas that they bought from their daughter in 2006 for $250,000. At the time, they anticipated that the housing market would take only a mild hit, and so they financed the property with a mortgage but rented it out for less than their costs. They expected to sell as home prices appreciated. That didn’t work out, so they’re taking a hit to their cash flow – a mistake they don’t intend to repeat with the other places they own.

Glenn Kelman, chief executive of Redfin.com, an online brokerage based in Seattle, said one of the first questions to consider as a potential investor is whether you want to become a hands-on landlord.

“If they don’t want to become a landlord, then they have to hire a property management professional, and that is going to cut into their investment,” Kelman said. “That is the fundamental decision that somebody has to make when going from a very liquid asset [such as stocks] to something that is not all that liquid – and will make their phone ring in the middle of the night when the toilet clogs up.

”While rental income ideally provides a steady stream of cash, a tenant’s finances can fall prey to the souring job market. With the recent wave of foreclosures, potential tenants may also have shoddy credit ratings, meaning landlords need to decide whether they’re worth the risk.

Kelman said the best investors are often the “fix-it” types who can quickly size up how much they need to spend on a property to make it rentable. They are also the ones who are willing to spend their weekends and evenings making those repairs and maintaining the homes over time.

“They are often wearing a tool belt on the weekend and doing it all themselves,” he said.

Last month, Michael McNally of Chantilly paid $53,000 for a three-bedroom, 2 1/2 -bath house in Dumfries. To make the purchase, he cashed in a $60,000 certificate of deposit that was earning interest at about 3 percent, he said.McNally initially estimated that he would need about $7,000 to get the property in shape. He now expects to come in about $1,500 over that by his self-imposed deadline of June 1. He has already redone some walls, added fresh paint, gutted and refurbished all three bathrooms, and put down new carpet.

McNally, an information technology manager for a government contracting firm, said he was inspired to get into real estate investment by his 85-year-old grandfather, who started buying properties as a side job in Pennsylvania in the 1970s. He now owns about 45 such homes that have been paid off, McNally said.“He just rakes in all kinds of money,” he said.Danielle Babb, a real estate investor and a co-author of the book “Finding Foreclosures,” said she has been approached in recent weeks by many people looking for such properties. Many are getting discouraged, she said, because banks are taking a long time to close on offers and finding financing has grown increasingly difficult.

Banks are turning down some would-be buyers, even those with pristine credit, if they have risky loans on their credit reports. Credit card debts are also causing problems at closing, with some banks asking buyers to pay off such accounts, she said.

The best way to close a deal quickly is to pay cash, Babb said. If you need financing, make sure you’re satisfied with the mortgages you have on the properties you already own – your residence and any vacation homes – because it will become difficult to refinance once you start borrowing for other properties, she said.The Greens bought their second property in 2007 using cash from a home-equity loan on the house where they live. The property is a three-bedroom townhouse in the Lake Ridge subdivision of Woodbridge that had gone into foreclosure.

Olivia, who is a real estate agent, had been showing the home to a military client who was interested in buying foreclosures.“We opened the door, and it was a disaster inside,” she recalled. “Even though she was looking for a foreclosure, she couldn’t see the potential in that one; she couldn’t see what could be done.”That evening, Olivia spoke with her husband, who runs a home repair business. They went together to view the property. They decided that with some work, the home could fetch a good rent, so they paid $235,000 in cash for it. Edward undertook about $16,000 worth of improvements – new paint, appliances, countertops, hardwood floors and more. Once the work was done, Green called her client and told her about the improvements. The buyer who originally balked agreed to rent it for $1,695 a month, Green said. That translates to a monthly profit.

In search of cheaper properties, the Greens researched other hard-hit parts of the country. They considered Detroit, looked into some communities in upstate New York and settled on Memphis. They hired a local real estate agent through a family friend. The agent e-mailed photographs and descriptions of homes.

During a week-long trip last year, the couple selected two houses. They bought one for $16,000; it needed another $16,000 in repairs. They paid $35,000 for the other; it needed just minor touch-ups. Given the distance, they hired a property manager to rent those homes.Their latest purchase was a three-bedroom, 2 1/2 -bathroom townhouse in Dumfries they bought out of foreclosure for $60,000. They are making some repairs and hope to rent it this month.

“We are baby boomers, and we are looking for another way to have income,” Edward Green said. “It provides good cash flow if you have income coming in from rent, and with what is out there now, this is probably our best bet.”Copyright washingtonpost.com

Keeping You Current: April 2009

noreply@blogger.com (Jay) — Mon, 27 Apr 2009 19:48:36 PDT

Keeping You Current April 2009

Publish at Scribd or explore others: Real Estate Business & Law mortgage real estate

Realtytrac is ahead of the curve

madeleine.romanello@realmiamibeach.com (Madeleine) — Sun, 12 Apr 2009 15:22:08 PDT

or maybe just a tad behind. Nevertheless a great idea: for $ 25 a year renters can monitor their address to see if their landlord goes into foreclosure. Read more...

Foreclosure on world famous Ocean Drive, South Beach !

madeleine.romanello@realmiamibeach.com (Madeleine) — Mon, 06 Apr 2009 08:35:00 PDT

1330 Ocean Drive !

I think this is a great deal ! Buy for 50% off now: Foreclosure on world famous Ocean Drive, South Beach ! Two story condo in landmark Netherland building with direct ocean views. 2 bedrooms 2 bath 1330 sf with parking. You can walk to shops, restaurants, steps to the ocean and Lincoln Road.. Amazing price $ 559,000 previous sale was 1.2 million in 2006.

I have more photos and details.

Layoff insurance latest carrot for homebuyers

madeleine.romanello@realmiamibeach.com (Madeleine) — Fri, 03 Apr 2009 19:23:09 PDT

LOS ANGELES - Free granite countertops, swimming pools and landscaping aren't going to convince anyone who's afraid of losing a job to buy a home. But what about a promise to pay your mortgage if you get laid off?

With the unemployment rate at a 26-year high and home sales still in the dumps, a growing number of homebuilders and even some real estate agents are trying to coax buyers with a kind of mortgage unemployment insurance.

Major builders offering job loss mortgage payment plans include Lennar Corp., Pulte Homes Inc., The Ryland Group Inc. and Toll Brothers Inc

"We're literally adding at least one builder a day throughout the country," said Todd Ludlow, senior vice president of Rainy Day Foundation, a nonprofit organization that administers the programs for many builders.

Builders can pay anywhere from $450 to $900 per customer for the coverage. Some absorb the cost as they would any other sales promotion, while others pass it on to buyers, Ludlow said.
In January, Lennar unveiled a version of Rainy Day's program called "Piece of Mind Mortgage Payment Protection Plan." Lennar covers monthly mortgage payments between $1,800 and $2,500, depending on the market, for a maximum of six months. Buyers can take advantage of the program only if they lose their job within the first two years after purchasing the home.

Launched last month, Toll's mortgage protection program only covers homebuyers who finance their purchase through the company's mortgage lender. The plan covers a maximum of six monthly payments of up to $2,500 a month — including interest, taxes and insurance — if the homeowner loses his or her job within two years after closing on their home.

"It's for those who perhaps are not feeling themselves in imminent danger but just want that extra safety net," said Kira McCarron, chief marketing officer for luxury homebuilder Toll, which is based in Horsham, Pa.

One of the most generous programs in the industry comes from Cousins Properties Inc., which is marketing the effort with its 10 Terminus Place luxury condo tower in Atlanta.

Cousins is offering to refund to buyers all their mortgage payments should the appraised value of their condos fall below the sale price after three years. The company, Cousins will let a buyer walk away from their property if they lose their job or just can't make their mortgage payments anymore.

"You won't have a foreclosure, you won't have a credit issue and you won't have any future obligation," said Tom Bell, Cousins Properties' chief executive, adding such homeowners would sacrifice their 5 percent downpayment.

Some real estate firms also are getting into the act.
Keller Williams Realty Inc. began offering job loss protection through the Rainy Day Foundation a couple of weeks ago as a test program in South Florida with an eye to an eventual national rollout.

"We're bringing it to our sellers as a marketing opportunity," said Greg Cook, spokesman for Keller Williams South Florida.

The firm also is offering it to buyers who enlist a Keller Williams agent to buy a home that's not being listed through the company, Cook said.

The plan pays up to $2,500 to cover the full mortgage payment, including taxes and insurance, for six months.
The insurance costs $650, which can be structured into the closing costs paid by the seller, or it can be paid by the lender or the agent, Cook said.
Any buyers who'd rather skip the job loss insurance will get the $650 applied to the cost of the home, Cook said.

That's a good idea, suggests J. Robert Hunter, director of insurance at the Consumer Federation of America.

Hunter said that homebuyers might be better off passing on the mortgage payment insurance plans — which he generally called "a gimmick" — and ask for a discount.
"If we're in for a two-year recession and I lose my job, I may not get it back for two years, and six months is still not going to save me," Hunter said. "I personally would want to find out how much money I could save buying the house without it."

Please be aware of loan modification scams

madeleine.romanello@realmiamibeach.com (Madeleine) — Sun, 22 Mar 2009 08:44:38 PDT

and use a trusted attorney or mortgage broker to assist you and your friends

See this video

First-time homebuyers: How to get the $8,000 tax credit

madeleine.romanello@realmiamibeach.com (Madeleine) — Fri, 20 Mar 2009 11:13:05 PDT

How does a first-time homebuyer take advantage of the $8,000 tax credit that President Obama is expected to sign into law tomorrow? It comes with a few rules.

According to the most recent analysis, the following rules will apply – though things could change as tax professionals weigh the details:
• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.
• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.
• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.
• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.
• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.
• The tax credit applies to homes purchased between Jan. 1, 2009, and Dec. 31, 2009.• The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.
• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.
• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.
• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.

The tax credit is not a down payment, but it could be used toward a down payment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund. By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a down payment. There is one caveat, however: Should they not buy a home in the qualifying period, they would still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.

Courtesy of

Todd H. La PentaSales ManagerPrivate Mortgage BankingWells Fargo Home Mortgage1111 Lincoln Road 4th FloorMiami Beach, FL 33139US +1 3055274741 Call TelUS +1 3053972978 Call eFaxTodd.LaPenta@wellsfargo.com http://www.toddlapenta.com

" If I had only followed CNBC's advice, I'd have a million dollars today ... provided I had started with $100 million dollars "

madeleine.romanello@realmiamibeach.com (Madeleine) — Mon, 16 Mar 2009 19:57:43 PDT

An expert from the "Daily Show" with Jon Stewart. My Dad accuses me of being the ultimate optimist but at least I have not put my foot so far into my mouth as many of these industry leaders ! I love the interview with Allen Stanford on being a billionaire ! Enjoy while you can...

http://www.thedailyshow.com/video/index.jhtml?videoId=220252&title=cnbc-gives-financial-advice

Keith Ginsburg, CFP® RAYMOND JAMES & ASSOC , sent this to me and I am glad he still has his sense of humour in today's market

Markets face ‘irrational pessimism’

madeleine.romanello@realmiamibeach.com (Madeleine) — Tue, 10 Mar 2009 07:09:28 PDT

I liked this article as it mirrors what we are seeing in real estate today. There are some really good deals out there but now buyers and investors want to squeeze every last penny of a deal and, in some cases, missing out on some really good buys on homes AKA a place where you live at least 5 years, raise your children, entertain your family and friends, your sanctuary.

“You can get to emotional extremes in both directions of the market,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. “Savvy investors think in those terms and they know how to get that to work in their favor.”

I think it is OK if you are buying an investment property to renovate or rent for income but if you are buying your home to live, some of the "irrational pessimism" must be set aside to buy the right property for your needs, renovating tolerance, school quality and lifestyle.

The Impact of Foreclosures on FICO Scores

madeleine.romanello@realmiamibeach.com (Madeleine) — Sat, 28 Feb 2009 07:47:45 PST

The Mortgage Banker Association recently estimated that 1 out of every 200 homes in the US will be foreclosed upon. With the increased number of foreclosures, come many questions about their impact on the FICO score.

There is no denying that a foreclosure is considered a very negative event by the FICO score. Many people believe that it is impossible to rebuild credit after such an event. However, if all other credit obligations remain in good standing, it is possible the FICO score could rebound in just 2 years. Just like any other negative item on the credit report, as time passes, the impact on the credit score will lessen.

Recently, several alternatives to foreclosures have become popular. Some of these include “short sales” and “deed-in-lieu of foreclosure”. It is important to know that as far as the FICO score is concerned, there is no difference between foreclosures and these other options. Each is considered and an account that was “not paid as agreed” will have the same negative impact on the score. However, the account status reported is ultimately the decision of the creditor.
It is important to remember that even though both foreclosure and bankruptcy are considered very negative items by the FICO score, a foreclosure can be isolated to a single account. Often bankruptcies involve multiple accounts that are classified as “not paid as agreed”, so the negative impact can be farther reaching. In most cases, it takes much longer to rebuild credit after a bankruptcy.

Source: www.myfico.com

This article was courtesy of Dennis Kleinman at Great Florida Bank dkleinman@GREATFLORIDABANK.COM

Home sales up in Florida, down nationwide

madeleine.romanello@realmiamibeach.com (Madeleine) — Thu, 26 Feb 2009 03:50:25 PST

Cheaper home prices and lower mortgage rates are luring more Floridians back into the housing market, but the same story isn’t playing out nationally.

Florida’s existing home sales rose 24 percent last month, the fifth consecutive month to show an increase in activity, according to the Florida Association of Realtors.
Nationwide, however, sales of existing homes fell 5.3 percent in January to their lowest levels in nearly 12 years.

In Florida 8,450 existing homes sold, up 24 percent from the 6,810 homes sold in January 2008, according to FAR.

“Many people are looking at today’s market and seeing opportunities to find the home or business they’ve always wanted,” FAR President Cynthia Shelton said.
What’s good news for buyers is bad for sellers, as foreclosures continue to depress home values.
The statewide median sales price for existing homes last month was $139,500, down 33 percent from last year, when the median sales price was $206,900.

Condos also are selling, with FAR reporting a 13 percent statewide gain to 2,556 units sold, up nearly 13 percent from 2,266 sold in January 2008. The existing condo median sales price last month was $113,400, down 40 percent from last January, when it was $190,200.

Fort Lauderdale saw home sales soar 52 percent in January, to 467 from 307 a year ago. Values continue their downward spiral, with the median price at $191,000, down 39 percent from last January’s median price of $314,200.

Condo sales in Fort Lauderdale were up 29 percent, to 531 units from 411, but median prices were nearly halved to $85,000 from $153,000 a year ago.

Miami reported a 47 percent hike in the number of existing home sales, to 407 from 276. The median price, however, fell 38 percent, to $208,100 from $336,800.

Miami condo sales were up 27 percent, to 379 units from 298. The median price fell 48 percent, to $149,100 from $284,000.

Activity wasn’t as upbeat in West Palm Beach, where January sales were up just 11 percent to 408 homes sold from 369 a year ago. Median prices were down 32 percent, to $232,100 from $343,200.

Condo sales were up 24 percent, to 375 units from 303. The median sales price was down 31 percent, to $108,900 from $157,700.

The national median sales price for existing single-family homes in December 2008 was $174,700, down 14.8 percent from a year earlier, according to National Association of Realtors.
“It appears some buyers are taking advantage of much lower home prices,” NAR Chief Economist Lawrence Yun said. “The higher monthly sales gain and falling inventory are steps in the right direction, but buyers will continue to have an edge over sellers for the foreseeable future.”

A client of mine got interviewed by the Miami Herald !

madeleine.romanello@realmiamibeach.com (Madeleine) — Fri, 13 Feb 2009 07:42:41 PST

South Florida housing prices becoming affordable again

BY MONICA HATCHER
mhatcher@MiamiHerald.com

It's a spacious 2,500-square-foot stone-and-brick-facade home with four bedrooms, a walled-in yard and an efficiency apartment in the back.

Three years ago, someone paid $240,000 for it. But in about 45 days, Carline Jeudy, a single mother of four and a renter until now, expects to close on her purchase of the bank-owned foreclosure in Opa-locka for just $90,000.

For many South Floridians, there is an upside to the otherwise brutal downturn in real estate, with its flurry of foreclosures, personal bankruptcies and spreading economic pain.
Housing is suddenly affordable to those with average income -- without risky teaser rates or subprime mortgages or cooking the numbers to qualify.

''I never thought I would be a homeowner because of the money I'm making,'' said Jeudy, 33, a buffet attendant at the Hyatt Regency in downtown Miami, whose take-home pay is about $22,000 a year. ``I never thought I could afford it by myself.''

Dirt-cheap foreclosures and a sluggish market have pushed prices down by much as 43 percent since they peaked in 2006 and 2007. For the first time in a long while, thousands of homes are listed for less than $150,000 -- even less than $100,000 -- putting them snugly within the affordability range of police officers, teachers and others long priced out of the South Florida market.

At the peak of the market, affordable housing was so scarce that companies had difficulty recruiting workers from outside the region.

While the pickings are more plentiful now, borrowing hurdles are daunting, often including demands for 20 percent down payments and stellar credit scores. Buyers are also being held back by fears that housing prices will sink even more and by concerns that they could lose their jobs in the deepening recession.

DOWN PAYMENT

''I need a few more weeks to get to 20 percent,'' said Thomas Krusin, a sea-freight broker for an international transportation company. Krusin, 30, has ridden his bike through Surfside, admiring houses that two years ago were selling for twice as much as he hopes to pay -- about $350,000. And that's for a place close enough to the beach that he can walk to it.
''I am looking now because real-estate prices are dropping and the interest rates are so low, it's a good combination,'' he said.

For home buyers with more modest savings and means, FHA loans are filling in the financing gap with down payments of only 3.5 percent of the purchase price and a little more lenient credit standards.

Jeudy qualified for a 30-year FHA loan at 6 percent interest, and said she plans to use her tax refund to make the down payment. Her estimated monthly payment -- including taxes and insurance -- is $880, $130 more than she is spending on rent in a crime-ridden apartment complex nearby, Jeudy said. She'll qualify for a $7,500 tax credit for first-time home buyers.
For those who don't need a loan and can pay cash, there's a gold rush of sorts going on -- especially for Miami-Dade County houses in the sub-$100,000 category, according to Miami real-estate agent Dee Castillo.

There are a ''bunch of investors running around town with cash,'' she said.
Eduardo Fernandez, a small-business owner in Little Havana, proudly showed off the four-bedroom Florida City home he has under contract for $47,500 cash. It needs work and will cost an estimated $20,000 to repair vandalism inflicted by the former occupants. A trashed home is often the byproduct of a foreclosure.

''This is the only opportunity, I think, for the next 30 years,'' Fernandez said. ''There won't be another opportunity.'' He added that he was also bidding on a second property in the area. Fernandez plans to rent the homes and sell them down the road when prices go back up.
The latest Realtor association statistics reflect the renewed interest from buyers. Although there is still a huge inventory of unsold homes, sales in Miami-Dade and Broward counties were up by a combined 51 percent for single-family homes and 37 percent for condos in the last quarter, compared to 2007. Those sales figures reflect home prices dropping to earthly levels.
Historically, under normal market conditions, real-estate prices have tended to hover at about 3 to 3 ½ times a region's median household income. In South Florida, the ratio was normally a bit higher: 3 ½ to 4 times the average household income.

During the height of the housing boom, the ratio went haywire, with prices spiking to more than nine times median household income in Miami-Dade and nearly eight times in Broward.
Those who owned homes and bought before the spike felt rich. Those who didn't own homes felt left out.

AFFORDABILITY RATIO
Census figures for median household income last year have not yet been released, but Bruce Nissen, director of the Research Institute on Social and Economic Policy at FIU, estimated that it fell to $43,432 in Miami-Dade and $52,407 in Broward.

Crunch the numbers and it means that the affordability ratio fell to 4.4 in Miami-Dade and 2.9 in Broward.

What type of home do you get for less than $150,000?

Ron Shuffield, a local real-estate analyst and president of Esslinger Wooten Maxwell realty in Coral Gables, said 64 percent of the 20,500 houses and condos available at that level last year had two or more bedrooms. Many, though, were in less than perfect condition.
''I have a 2/1 in east Hollywood on Funston Street with just a little damage that's in the $120,000 range,'' said Charles Schneider, a Fort Lauderdale real-estate agent. The home, he said, also has a separate efficiency apartment in the back.

But distressed homes, he said, often do not qualify for FHA financing, so buyers would have to come up with a heftier down payment.

Another caveat for would-be buyers: Most analysts agree that prices will continue to fall as the economy weakens and foreclosures continue to pour in.

At the end of January, the number of homes for sale fell by 4.6 percent -- a good sign, according to Shuffield -- but there were still 70,495 properties for sale in both counties, a vast oversupply, indicating that prices will likely fall further.

Buyers also need to proceed with caution when buying in new condominium buildings, said Lucas Lechuga, of Keller Williams Realty. ''It's extremely difficult to get financing in those buildings, and that's why prices will continue to go down,'' Lechuga said. ``If you have cash, though, you can name your own price.''

Market pressures have forced people such as Brian and Julia Simpkins to drop their asking price to barely-break-even numbers to attract buyers. The young couple listed their two-bedroom Sunrise town house, an investment property, two years ago for $205,000. Now, they hope to get $130,000.

''There are short sales and foreclosures for $60,000 out there, so the chance of people trying to buy my house at that price are pretty slim,'' Brian Simpkins, 36, said. Meantime, he has a renter in the property.
In short sales, lenders allow borrowers to sell for less than they owe on their mortgages.

THE DARK SIDE
Meanwhile, the dark side of the housing bust continues to claim thousands of South Florida homeowners. Unable to sell their property for enough to cover their mortgage or refinance into a loan with affordable terms, many are still losing homes. For those still hanging on, each month's report of falling real-estate values pushes them deeper under water.

By the end of 2008, nearly 28 percent of all homeowners in Miami-Dade and Broward owed more than their homes were worth, according to Web-based real-estate services firm Zillow.com. More than a third of the home sales in the last three months of the year resulted in a loss for their owners.

But the news was decidedly better for Jeudy's family. And especially for 9-year-old Louis, who is tired of sharing quarters with his big sisters.
''I might get my own room,'' he said.

SENATE PASSES ECONOMIC STIMULUS BILL AMENDMENT

madeleine.romanello@realmiamibeach.com (Madeleine) — Fri, 13 Feb 2009 07:33:33 PST

The Senate passed their amendment of the tax credit for home buyers on Feb4th.

(NOTE--THE AMENDMENT IS NOT FINAL UNTIL IT IS PASSED BY THE HOUSE AND SIGNED BY THE PRESIDENT)

The REALTOR® supported amendment to the pending economic stimulus bill would provide a direct tax credit to any home buyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less and according to research conducted by the National Association of Home Builders (NAHB), will result in nearly 500,000 additional home sales and create 255,000 new jobs in the year ahead.

The good news:
(a) the amendment makes the credit $15000, instead of $7500
(b) the amendment makes the credit for all buyers, not just first time buyers
(c) the amendment eliminates income limits
(d) the amendment makes the credit extends the deadline for buying the home out one year from the date the bill passes.

Fannie Mae finally coming to their senses on investor loans

madeleine.romanello@realmiamibeach.com (Madeleine) — Fri, 13 Feb 2009 04:15:13 PST

Some sensible news from Fannie Mae .....starting March first, Fannie Mae will abandon its controversial policy of refusing to finance investor mortgages where the borrower already owns more than three other income properties that have mortgages on them.

The National Association of Realtors complained about the four-unit limit last year -- and it looks like Fannie's top executives finally got the message: That prudent investors can play a big role in buying up some of the wreckage left after the boom - the excess inventory of foreclosures and bank R-E-O - BUT they've got to have financing to do so.

Under the new rules, investors will be able to own a total of five to ten financed properties "if they meet … (Fannie's) eligibility and underwriting standards," according to a bulletin the company just sent out to lenders.

Loan- to-value ratios on Fannie Mae-financed investor purchases will now go as high as 75 percent for single unit acquisitions and as high as 70 percent for projects with two to four units, provided the applicant has a minimum FICO credit score of 720.

Borrowers will also have to pass a series of other tests including the following:
First, they cannot have filed for bankruptcy or been foreclosed upon at any time during the past seven years, and they've got to have a spotless record on their other mortgages -- no late payments of 30 days or more -- during the previous 12 months.

Second, they've got to fully document rental income for any new acquisition, along with their revenues on all other investment properties, backed with two years worth of federal income tax returns.

Third, applicants owning no more than four units will need to show six months of bank reserves to support the new investment purchase, plus two months of reserves for every other investment property they own. Borrowers who own five to ten properties will need to show that they've got six months of reserves on hand for every property.

There's no question here that Fannie is looking to deal ONLY with the most financially stable multi-unit investors -- to skim the cream off the top of the investor market, and reject everybody else who can't come up with the heavy reserves.

But if you fit the requirements on cash and credit, and can make the big downpayments, Fannie's policy change just might open the door to some very attractively priced long-term fixed rate financing - especially in comparison with hard money lenders who want your arm and a leg.

The average homeowner is worth 35 times more than the average renter

madeleine.romanello@realmiamibeach.com (Madeleine) — Fri, 13 Feb 2009 04:09:38 PST

says bestselling author David Bach. This is why you should buy a home now.

He advises renters to take action immediately and start saving part of their paycheck every month to help accumulate a down payment. He also encourages renters to borrow 10-20 percent less than what the bank is willing to lend; that way they're only buying as much home as they can afford.

The longer you rent, the longer it may take you to eventually get into home ownership. If the market conditions have scared you, perhaps you're not looking at the other side of the coin. Owning a home becomes part of your investment portfolio, provides tax benefits, allows you to build equity (it still exists), and, if you buy now, you may get an excellent deal.

According to a Market Watch news article, buying a home now can provide some real negotiating power to request improvements, price reductions, help with closing costs, and more. "People can get a lot of what they need and almost all of what they want today," said Jay Papasan, one of the authors of "Your First Home".

While poor market conditions have created a troubling situation for some homeowners, the downturn has made the buying market ripe for others. The affordability of homes is better than ever. The National Association of Realtors' housing affordability index concluded that homes in December of 2008 were more affordable than at any other point since 1970 (the start of the index). And with numerous foreclosures on the market and prices dropping in many areas, now is a good time to buy. But in order to make your purchase profitable, here are some things you should consider.

How long will you be in the home? Some experts advise that if you are planning to move within a year, buying may not be the best option because of the expenses associated with moving. However, if you're searching for a place to live for, at least, several years, buying now could be a good choice for you.

How much you can afford. Don't let tighter lending regulations scare you off from making a purchase. Instead, understand what you truly can afford. Don't get caught up in buying too much home. In fact, these days, the trend is moving toward smaller homes -- simpler living.
Mortgage rates drop to historical low. How much home you can afford is affected by mortgage interest rates that, right now, are highly appealing. Good credit, documenting your income, and a substantial down payment will make you a better candidate for the better mortgage rates.
Freedom to choose. Now, unlike several years ago, the market has a large inventory in many areas. The market time to sell a home has increased which creates a large inventory of homes, everything including new, existing, and foreclosures. Buyers can peruse the market and have the freedom to select the home they really want. If you're interest is in a new home, know that many developers are getting more competitive with their pricing because they also have taken a hit by the ailing economy.

Quality of life. Buying a home can create a higher quality of life, giving you pride of home ownership, and something to enjoy improving and developing over the years.
Tax credit benefit. Last summer, the federal government started providing up to a $7,500 tax credit to buyers who have not owned a home in at least three years; the tax credit must be repaid within 15 years. But that figure may increase. The National Home Builders Association and National Association of Realtors are pushing for more significant help for all home buyers -- not just those who are buying for the first time. The Senate, as part of a stimulus package, this month approved a temporary new tax credit to be applied to home buyers' tax bills. The credit would give buyers 10 percent of the purchase price of any home, up to $15,000. Alan Zibel of the Associated Press writes, "Anyone who buys a home within a year of the bill's signature would qualify. To deter speculators, buyers must occupy the house as their main residence for at least two years." At the time of this writing, the stimulus package had not yet gone to the White House.

by Phoebe Chongchua

Florida home sales up in December, down for 2008

madeleine.romanello@realmiamibeach.com (Madeleine) — Mon, 26 Jan 2009 15:55:22 PST

Florida’s existing home sales rose in December for the fourth consecutive month, according to the latest housing data released by the Florida Association of Realtors. However, for all of 2008, home sales fell 4 percent, with 124,215 homes sold statewide, down from 129,855 in 2007.
Existing home sales rose 27 percent in December, with 11,053 homes sold, up from 8,712 homes December 2007. Between November and December, statewide existing home sales rose 28.9 percent.

Existing home sales in Miami for December reached 431, up 28 percent from 336 in December 2007. The median sales price was down 41 percent, to $215,500 from $362,500 in December 2007.

Condo sales in Miami were up 48 percent in December, to 456 from 308 in December 2007. The Median sales price was down 33 percent, to $176,600 from $263,500.

In Miami, sales of existing single-family homes were down 17 percent, to 4,379 from 5,289 in 2007. Median prices dropped to $276,600 from $380,100, a 27 percent decline.

Condo sales in Miami dropped to 4,580 from 5,772, a 21 percent decline. Median sales prices for condos were down 12 percent, to $239,400 from $272,000.

Sales of existing condos statewide rose 12 percent in December, to 3,138 from 2,814 sold in December 2007. Statewide existing condo sales last month increased 37.7 percent over the total units sold in November.

The median sales price last month was $130,600, down 32 percent from December 2007, when the median price was $192,600.

For all of 2008, the median sales price for existing homes dipped 20 percent, to $187,800 from $234,300 in 2007.

Buyers beware - new administration may stop foreclosures

madeleine.romanello@realmiamibeach.com (Madeleine) — Tue, 20 Jan 2009 14:44:06 PST

...and some buyers may miss out on the last of the good deals.

I have written about 6 offers with buyers since January 2nd and all of them have been rejected as they were too low. Gross generalizations about the real estate market, the fabled flood of new foreclosures and general economic conditions by the media are GROSS generalizations and have misled buyers as to where property values are at.

Miami is 3 years into the pricing correction and values have already dropped 30-50% in most neighborhoods. I do not see us going below 2004 pricing levels and many agents I have talked to agree. Why: houses are simply selling at those 2004 prices as buyers are perceiving the prices as fair.

The bank owned and short sale listings in the highly desirable neighborhoods are few and far between and usually need $ 100,000 + in repairs and upgrades. There were substantially more distressed properties for sale last summer but they have sold and I have not seen many at all come on the market since September. I was expecting more distressed inventory early January but it has not materialized. I will stick my neck out and say it: I think we bottomed last summer for single family homes in the Upper East Side, Belle Meade, Miami Shores, Coral Gables, Miami Beach and Coconut Grove. The cheap properties sitting on the market in those areas need tremendous amounts of repairs to the level they will be snapped up by professional rehab investors.

Even for condos in South Beach, there are only 108 bank owned condos out of 2000+ units for sale and maybe only 15% of all the listings are short sales. If you want distressed properties galore, some of the new builidngs downtown will fit the bill but most have to be bought cash as no lender will touch them.

Here are some excerpts from an article by Kenneth R. Harney for Realty Times:

" ... the outlines of the Obama administration's and Congress's plans to turn around the housing markets just became clearer. Tops on their list: Ending the foreclosure epidemics in some parts of the country through ambitious new programs designed to rework the terms of hundreds of thousands of mortgages that are now unaffordable.

The Obama administration is also likely to institute an immediate ban on all foreclosure actions, possibly for three months, and is certain to enact bankruptcy reform legislation allowing judges to modify mortgage terms to forestall foreclosures.

Why's this important for anyone involved in real estate? The key to stabilizing local markets, say most economists, is reducing the numbers of new foreclosures and other distressed-price transactions.

Foreclosures lower property values in surrounding neighborhoods, wherever they occur. That discourages potential buyers -- who don't want to plunge in as long as prices are still declining.
If the new administration and Congress can successfully reduce the numbers of new foreclosures, there's an excellent chance that the current combination of low prices and record low mortgage rates can have the effect they should be having: Spurring new sales. "

"Emerging Trends in Real Estate® 2009" report, released by the Urban Land Institute

madeleine.romanello@realmiamibeach.com (Madeleine) — Tue, 13 Jan 2009 04:40:35 PST

Some top advice on what to focus on in 2009 !

Distress in the housing market is benefiting the apartment market, which the report lists as the number-one "buy." Moderate-income apartments in core urban markets near mass transit offer the best buy, a trend that carried over from the previous year.

Focus on global pathway markets - 24-hour coastal cities ( like Miami )

Buy or hold multi-family; hold office; hold hotels; buy residential building lots, but be prepared to hold.

Purchase distressed condos in urban areas near transit.

According to the "Emerging Trends in Real Estate® 2009" report, released by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP, real estate industry experts expect financial and real estate markets in the United States to bottom in 2009 and then flounder for much of 2010, with ongoing drops in property values, more foreclosures and delinquencies, and a limping economy that will continue to crimp property cash flows,

"Commercial real estate faces its worst year since the wrenching 1991-1992 industry depression," conclude industry experts interviewed for the report, which projects losses of 15 percent to 20 percent in real estate values from the mid-2007 peak. "Only when property financing gets restructured will pricing recorrect so we can find the floor; and this transition could wipe out companies and people," said one respondent interviewed for the report

In general, interviewees believe that financial institutions will continue to be pressured into moving bad loans off balance sheets, using auctions to speed up the process. Investors will be discouraged until the "bloodletting' is over, states the report. When that occurs, cash and low-leverage buyers will be "king;" surviving banks will impose strict lending guidelines; commercial mortgage-backed securities will revive, but in a more regulated form; and opportunity funds will need new investment models.

"The cyclical real estate markets always comes back, and they will this time too, but not anytime soon," said Tim Conlon, partner and U.S. real estate sector leader for PricewaterhouseCoopers.

"Commercial real estate was the last to leave the party, will feel the pain in 2009, and may be the last to recover. In the meantime, smart investors are going to hunker down and manage through these tough times. We expect to see patient, disciplined, long-term investors rewarded, and return to a back to basics approach to property management, underwriting and deal structure."

The report acknowledges that commercial markets will recover more quickly than most housing markets, and homebuilders may have to sell land tracts for "cents on the dollar" or face foreclosure on their holdings, adding to the already high rate of mortgage defaults and foreclosures.

One silver lining: Interviewees agreed that eventually, savvy investors will be able to cash in on the inevitable recovery, which some see occurring as early as 2010. "Money will be made on riding markets back to recovery and releasing properties, not on…financing structures," finds the report.

Before a rebound, Emerging Trends says the following needs to happen:

Private real estate markets need to correct - lenders must force distressed owners to become motivated sellers.

Debt capital needs to flow - lenders will need to learn to deal in a more stringent regulatory landscape. The commercial mortgage-backed securities (CMBS) market must "reformulate."

Regulators need to restore confidence in the securities market. The government will insert itself into overseeing mortgage securitization markets. Systemic overhaul promises more measured debt flow.

The economy needs to improve. Falling demand for space won't affect real estate markets severely until 2009.

The Report also offered these tips for what to do in 2009:

Recap distressed borrowers - invest in maturity defaults, construction loans/bridge loans, or take mezzanine positions and equity stakes in properties.

Staff up asset managers, leasing pros and workout specialists. Separate good assets from bad.

Retrench on development and reorient to mixed-use and infill. Higher-density residential with retail will gain favor in next round of building.

Go green - cutting energy expenses is likely to be a priority.

Lastly, the Report listed a number of markets to watch in 2009. Here's a look at the Report's Top 5 Markets:

Seattle boasts its "corporate giants," but the market braces for rising downtown office vacancies; now at 10 percent. Tepid job growth will flatten rental rates. Housing demand drops and prices will slip, but stay above national averages. Interviewees rate the market a strong "buy" for apartments, and the "number-one buy" among industrials is the Puget Sound ports.

San Francisco offers a Pacific gateway and a high quality of life with a well-diversified economy. The city ranks first for development and homebuilding, and is a leading "buy" city for apartments and office. Even though housing prices are expected to decline, foreclosures should remain in check, the report notes.

Washington is the "ultimate hold market when the economy struggles." Downtown office vacancies should remain below 10 percent, and apartments lease "no matter what." The above-average employment outlook offers promise for the retail sector, the report says. Still, office vacancies continue to soar in northern Virginia, and further declines in condominium and home prices can be expected.

New York takes a beating with the Wall Street "implosion" creating job losses and office vacancies. Hotels should continue to draw tourists with the weak dollar. Retail frenzy ends, but the wealthy keep Madison Avenue boutiques alive. With the condo/coop market at a "crest," developers "should worry about flagging buyer demand," the report notes.

Los Angeles downtown benefits from condo/apartment projects. "It's almost impossible to lose money on apartment investments if you have a five- or 10-year investment horizon," notes one respondent. Hotels benefit from global pathway location. One downside -- homebuilders in San Bernardino and Riverside continue to grapple with the housing collapse.

Rounding out the top ten markets to watch:

Houston. Stays relatively strong as long as energy stays hot. It makes the top ten for the first time since 1995. Office vacancies drop to 10 percent, "a good buy opportunity," but apartments soften. Cheap land results in cheap housing, and prices have not gone up dramatically.

Boston. Job outlook is more favorable than most cities, with office space "tight" in the Financial District and the Back Bay area. New "harborside hotels threaten older product."

Denver. The state capital has a major federal government presence, which should buffer job losses. Steady population growth and broadening diversification of the industry keeps the housing market stable. Mass transit should pay future dividends.

Dallas. Compares favorably to other "hot-growth" markets. Although office vacancies downtown are 20 percent or higher, apartments do well and developers keep building single-family homes.

Chicago. Apartments do well, but condos weaken as speculators leave the market. Office vacancies are in the low teens, and O'Hare International Airport keeps industrial space in the "global pathway."

I got quoted in the New York Times !

madeleine.romanello@realmiamibeach.com (Madeleine) — Tue, 06 Jan 2009 04:24:51 PST

Prices in Miami fell by 29 percent. There, homeowners who tried to wait out the market are paying a price, said Madeline Romanello, a real estate agent with Douglas Elliman. Sellers who turned down offers of $700,000 for a house they had listed for $900,000 are now scrambling to sell for $550,000, she said. Read the whole article