Saint Cloud, FL

ANOTHER DISCLOSURE AFFECTING AN ALREADY DEVASTATED HOUSING MARKET IS BREWING A STORM OF CONTROVERSY IN THE FLORIDA LEGISLATURE- IF SUCCESSFUL IT COULD AFFECT MILLIONS OF HOMES IN THE WIND BORNE DEBRIS REGION WHICH IS THE ENTIRE STATE OF FLORIDA.

Following the aftermath of Hurricanes Charlie, Jeanne, and Francis almost every home in 2005 needed a new roof or roof repair. It was an epic series of hurricanes, which battered Central Florida.

The My Safe Florida Programwas initiated and was free to Florida Home Owners. It was promoted as a way to save money on Home Owners Insurance. Homeowners who signed up and had their homes inspected were given a list of seven recommendations they could do to improvements they could make to "Harden" their homes against future wind damage. There were grants which provided matching funds which expired on June 30th, 2009. The seven suggested

improvements included:

1) Adding or Lengthen roofing nails (used for shingle roofs with plywood sheets on trusses)

2) Creating a secondary water barrier to prevent intrusion

3) Bracing gable ends in roof framing(to prevent roof from collapsing under hurricane wind loads)

4) Upgrading to thicker "huricane-resistant" roof shingles

5) Installing metal tie downs straps that attach roof rafters to wall studs

6) Upgrading hurricane rated window shutters

7) replacing a standard garage door with a hurricane-rated door

Many Floridians took advantage of the this "Free" Inspections in hopes of reducing their Home Owners Insurance. Following the Inspection, a report could be filed with home insurance carriers directly, or given to the home owner with a list of findings, and recommendations and projected cost to make the improvements. A matching funds grant was established to assist home owners in financing the cost of the recommended improvements, although many were unaware of it.

Building codes were also revised. Work done following the three major storms had to be up to the new set of Hurricane standards, and wind rating assessments. Anyone who had remodeled following the storm, would have had the County Inspectors insuring the work performed was up to the New Code Standards.

FROM FREE WIND TO GOVERNMENT REGULATION

Effective January 1, 2011 purchasers of homes in the "Windborne debris region" (WHICH IS THE ENTIRE STATE OF FLORIDA) will require sellers to provide a wind disclosure for homes in the "wind-borne region

Upto 120 MPH along the coast, and between 100-110 miles in Osceola County, specifically my market of St. Cloud, Florida.

Under the new legislature, a buyer would receive the home's hurricane Resistance rating,three separate improvement plans that homeowner may use to so called "Harden" the home and an estimate of each plan (which averaged between $3000-$7000 at the end of the My Safe Florida Home Program) and information about insurance premium discounts.

REALTORS are deeply concerned that of the new legislature is not repealed it will stigmatize properties since most homes have not been hardened. (Homes built after the storms would not be affected) They fear it will add significant costs to each transaction or reduce the offering price as is the case with unsatisfactory home repairs.

Under normal market conditions that concern may be more valid. The loop hole in this legislation however, does not provide for bank owned properties which are sold "As-Is" with repairs deleted.

In 2008 when the Florida Legislature voted to enact this new law, the foreclosure rate was minimal compared to what it has become, just two short years later. Older homes would suffer to a greater extent than newer ones. Homes which were improved or remodeled after the storms likely will meet the new code regulations and the inspections should have little impact on them as well. Older homes which have not been updated will suffer to a greater extent, and insurance carriers will likely want to see those updates performed prior to committing to a policy.

As you know following the billions of dollars in claims made after the three Hurricanes of 2005, several insurance companies left the state, failed to renew, or canceled long standing customers policies to minimize future risk of claims.

However, since 2005 Florida has not been hit by a major wind damaging storm. The weather anamoly caused by the "El Nino Effect" on wind patterns which contributed to the voltile hurricane season of 2005 has failed to repeat its performance. The construction boom of 2005-2007 all meet current wind resistance standards. The real concern is that with funding gone, homeowners who are not in foreclosure could potentially be forced to cut prices to achieve a sale much like a poor home inspection has hindered sales int he past. However, with the market sagging so severely, it is more likely that "what you see is what you get" will prevail. Leaving the purchaser with the options of making the upgrades since homes are already at rock bottom prices.

Would a Poor Wind Rating on this new proposed Disclosure discourage a purchaser from making a sale?

IS PERCEPTION SKEWED BY WHAT THE MEDIA REPORTS?

The man on the street, is fed up hearing how bad things are. Granted the economic condition is of major concern to most Americans. Who among us remembers mortgage interest rates at 21%? Minimum wage back then was $2.90 an hour. Hard to fathom, but it happened in 1980.

One would ponder, who in their right mind would have purchased a home with interest rates that high and minimum wage so low? But people did. A new home back then could be purchased for $50,000 WITH A 3% down payment. The economic condition back then, was far from ideal. But homes did sell and people eventually gained equity in the homes they purchased, when interest rates were through the roof, eventually the market rallied people made money on their homes. That same home in 1988 which was $50,000 when new was selling for $188,000. Mortgage interest rates were 7%. Fast forward, to 1994 and that same home was worth $140,000. (following the dot com crash) The quiet before the storm came in 2002.

Value is certainly influenced by economic conditions. Fast forward to 2005 and the age of home value hyperinflation. Remember 125% financing? Homes were more like ATM machines than shelter. Yet the media influenced many consumers to jump on the bandwagon and buy. Even the ones who really could not afford to do so. The media now reports that 15 million home owners now owe more than their home is worth. These sales occurred mostly during the hype between 2005-2006 and are now being defaulted at record numbers. The so called walk away owners, who are damaging their credit for 7 years and choosing to walk away from their mortgages. What the media is not reporting is that in Osceola County 87% of residents are employed.

Home sales in St. Cloud are averaging at $131,305. More importantly more than a home a day is selling. Sales in St. Cloud for the month of January (1-27) had 34 closed sales. The purchase prices ranged between $24,000-$224,000 One year ago during the same period only 24 homes sold. The median sales price was $157,500. While the number of short sale, and foreclosed properties is predictably on the rise, the savings to buyers entering the housing market today is significant.

There is a rare opportunity albeit muted by the media for regular people to be able to get in on the ground floor once again. Negativity does influence consumer spending. But what about some of the success stories? Short sales for instance are the middle ground between a regular sale, and a foreclosure. It allows the property owner to negotiate with a lender, and due to recent changes many homeowners may have the option of mediation which will help facilitate a settlement between the distressed homeowner and the lender, thereby saving the homeowner from further damaging their credit.

There has been increased demand both from Real Estate professionals and the public for a more efficient process to Short Sales, and expeditious answers to offers which would speed the process from as long as 6 months to 90 days. If that were occur, more homes would transition from pending status to actual sales.

The truth is, people do want to buy. Homes prices have adjusted to levels that make purchases possible. While lending practices have tightened, they are no more stringent than they were back in the 1980's and 1990's before the existence of "creative financing".

Is the Tax Credit Incentive working? It is helping more than hindering. However, the market is still price driven. Looking at the home prices today, and the proportionate rise in existing home sales, what is becoming apparent is that buying when the market is down and being prepared to hold that property long term may be a smart move in turbulent times.

Is flipping making a come back? The new changes to FHA financing allowing a transfer to occur after 90 days, may be just the boost the dismal economy needs. In my market of St. Cloud, Florida, bank owned properties are selling. Most of them are smaller homes, former rental properties or inventory acquired by banks as a result of loan defaults. and are priced at liquidation levels to achieve fast sales. Many of them were purchased at or near the peak of the market.

MAKING A PROFIT-MEANS GETTING IN AHEAD OF THE CURVE

Sales may have been brisker, with mortgage interest rates at historic lows of less than five percent (5%) and even though they are inching up, it will not be enough to discourage buyers from jumping in before the prices continue to rise. IF, the are determined be ahead of the curve.

90 DAY RULE

The economic conditions are ripe for buyers to accumulate equity after a three year long decline. It will be slow and gradual but it will happen. The new FHA revised guidelines now include a borrowers ability to transfer the property after a 90 day grace period.

This opening, will allow saavy buyers to seek out low cost housing, make the improvements necessary for resale and turn a profit IF (and here the key) they keep the profit marginal.

IF I TOLD YOU THERE WAS A STOCK PAYING A 20% RETURN YOU'D BE ALL OVER IT.

If you are looking to double or triple your investment, in most cases you not succeed. Making money, is not an overnight process. If you are looking for a 20-30% gain, this may be the right investment for you.

The tax credit has provided incentive for many first time and now repeat home buyers to jump back into the Real Estate Market. In St. Cloud/Kissimmee Florida we see an upswing in sales occurring on a monthly basis. Prices are not likely to ever spike again they way they did in 2006-2007, as the price hike was a result of a shortage of inventory, and liberal financing, both of which are no longer the case. However, sales will continue at moderate prices and with the additional incentives there seems to a return to Real Estate occurring albeit a quiet one.

INFLATION WILL BE YOUR FRIEND AS A PROPERTY OWNER- why?

Inflation is coming. As the dollar declines in value (against its counterparts) it will take more of them to buy items. This includes homes. We have seen this happen before. In 1988, 1991, and 1998. Getting into the housing market now, is an excellent hedge against inflation.

READY TO TAKE THE PLUNGE? Contact me,

ST. CLOUD, FLORIDA- BUSINESS OWNERS- Should you sell, hold or fold? The economy is dragging many small business owners into making tough decisions. Struggling to make ends meet, is never easy, especially when you are an employer. As consumers tighten their wallets, service businesses are being impacted at a greater rate than the chain stores. The Mom & Pop establishments which used to dot the state street along Hwy 192, are mostly all gone, be it progress or as a byproduct of the economic condition.

Your business may have greater value to a foreign investor than having a 50% off fire sale and closing your doors permanently. Most business owners will try to sell before closing the doors forever, however, what they think the business is worth and what they gain in the end-seem to be in complete opposition.

PRICING YOUR BUSINESS to attract a foreign investor must meet a few criteria to satisfy VISA requirements. A business must have records. Tax returns for the past three years, and profit and loss statements.

In addition you must employ at least two American workers.

A valid inventory. Most business entrepreneurs do not have a valid inventory of goods, equipment, and a current appraisal of their value. Price should not be set in stone.

A while back I was working with a Brittish gentlemen who came here with the express purpose of buying a business which would meet E-2 VISA requirements. We spoke to several business owners, whose eyes became bright with excitement of this prospect- they lacked however all of the documentation necessary to meet this specific needs.

What they saw were dollar signs but not the writing on the wall. Most of the businesses were in trouble. As the economy continued to worsen, many consumers cut back on unnecessary expenses. Among the things they were cutting back were service industry related. Restaurants took hard hits, until running discount specials to attract and maintain their customers showed the public would respond with incentives.

Recently, a local dry cleaners announced they were closing at the end of the month. Sadly, the owner turned down a cash offer at full asking price a year ago from a foreign investor. Thinking at the time, the business was worth more than they originally thought. By a year can be a long time especially in an economy that is putting a strangle hold on the locals.

So should you as a business owner stay, hold or fold? Why not get your business evaluated? Call me.

REO PROPERTIES DESERVE AS MUCH EXPOSURE AS A CONVENTIONAL LISTING. THE PROBLEM IS SOME REO AGENTS OFTEN GIVE A LOT LESS THAN THEIR EMPLOYER REALIZES.

"Please send me photos, virtual tours, and all information for this listing..." sound familiar? So being a dutyful agent that you are, you pull up the info only to discover there is one maybe two photos (most often the same photo entered twice) In this age of digital photography where there are no development costs, and uploading is as easy and a click of the mouse, one must wonder why agents are so remiss in providing the basic ten photos MLS (here) will allow.

A photo as in a singular only lonely, is NOT worth a thousands words, usually it generates only a one word response from the the buyer. PASS.

With over 80% of Internet usage among home buyers as the first step to acquiring a property, it seems somewhat shortsighted for these agents not to fully utilize photos, it is maddening that there is no cost to them in uploading more than one. Now, in all fairness, many agents do, and some are truly outstanding- this phenomenon appears to be most common, in REO listings. More so with the agents who feel they have a "lock" with the listing bank. They have become complacent? Are there agents out there willing and able to do a better job? Of course there are. But the "system" is NOT quality, oriented it works in a clearing house format. Real Estate Marketing is a combination of skills. Photography, writing, and ability to convey information.

A solitary exterior photo is required by our local MLS and I would imagine with others as well. However, that is where the requirement ends. Are these lazy agents so convinced that price alone will sell a property, that they feel it is an unneccessary waste of their time to provide GOOD AND FAIR representation?

Not I am not saying these shoddy listing practices are universal, and if you are one of the agents who are actually doing the job you were hired to do this does not apply to you. But if you aren't you may want to make a little effort.

I find myself more times than not going to the property to photograph it for my out of area buyers which makes up 99.7% of my buyer base.

Being a Florida Realtor, the majority of my buyers and a good percentage of my sellers are NOT local. I end up doing their job, because they are not doing it well.

POOR PHOTOS ARE THE BANE OF OUR EXISTANCE-

It cost one agent his job- when a better agent came along actually willing to work harder and better. It was for a builder who had no idea how poorly his inventory homes were being advertised. The point being, price will attract a buyer, but a good information and photos will make the sale.

Have you lost a listing due to lack of effort? Have you passed on a property because of lack of imagery?