Real Estate and Capital Gains Tax Rates

I’ve been involved recently with a couple of sellers who are trying to determine whether or not they should go ahead and sell now, in a market that is 15-20% off in their respective neighborhoods, or wait it out and sell in a few years.  I know this is an issue that many sellers (with investment property) are currently dealing with so I figured we could look together at the pros and cons of selling now.

Currently long term capital gains rates are at 15% (5% for lower tax brackets but that probably excludes the vast majority of people owning investment real estate).  This is not a politically driven blog at all, but depending upon who’s in office come January ‘09 we could see capital gains rates increase drastically.  Capital gains rates are scheduled to go up after 2010, as I understand it, anyway unless legislation is passed to prevent the scheduled increases.

So, the decision is between selling now and missing out on future appreciation or waiting and risking paying a much higher rate on the gain due to increased capital gains taxes…

Obviously there is not a “one size fits all” answer to this equation.  It would depend upon a sellers financial situation, personal goals and interest in holding real estate long term.  However, that being said, my advice would in most cases be to go ahead and sell if you have a good place to park the $$ and receive a healthy return.

Thoughts, questions and comments, as always, are welcomed!

For another article on the subject matter click here and then click on the link for Capital Gains and Dividends at the bottom left.

Doppler Radar for Jacksonville

A cool site that I came accross that allows you to see live doppler radar for Jacksonville.  With Fay right on top of us it’s good to check the site occassionally for updates…

A Great Tool for Those Searching for a Home

If you are looking for a home in Jacksonville, FL and want the ability to customize your search by area of town, type of property, size, price range, etc…   This is the tool for you!  Click here for access

Again, homes for sale in Jacksonville have never been more accessible. Unlike most other sites, this will keep you up to date on new properties that have come on the market and fit your criteria.  Additionally, you can change what you are looking for at any time.

Feel free to call or email me with questions…  Thanks!

Real Estate: Florida still on top for International Buyers

This article is a case and point for why you need a strong internet presence when selling your property…  In addition to that, motivating the agents working with these foreign buyers by offering additional incentives is always a good idea as well.

REAL ESTATE
Foreign buyers put Florida 1st
Like their domestic counterparts, foreign buyers have retreated from the U.S. housing market, although Florida remains their No. 1 pick.

Posted on Fri, Aug. 08, 2008

By MARTHA BRANNIGAN
mbrannigan@MiamiHerald.com

Florida remains by far the most popular location for foreign buyers of real estate, accounting for 25.4 percent of all international purchases in the United States.

However, the number of foreign buyers nationwide declined over the past year, reflecting the deep U.S. housing slump, a new study released Thursday by the National Association of Realtors said.

The study, which covered the year ending in May, said 26 percent of Realtors surveyed had at least one foreign client, down from nearly one-third of the brokers queried in 2007.

The profile of international home buying activity said that “foreign buyers — like U.S. buyers — may be waiting for home prices to continue to decline in order to purchase a property at a lower price.”

Canadians, aided by a strong Canadian dollar, were the No. 1 group of international buyers, accounting for nearly a quarter of all foreign buyers in the year ended May 2008. That was nearly twice the share the Canadians represented a year earlier.

Florida was the choice for 33 percent of all Canadian purchases in the United States.

Mexicans, who were the No. 1 group of international buyers last year, dropped to third place, behind the British and Canadians. Forty-two percent of all British buyers chose Florida.

Rounding out the top six were: China, India, and Germany. Buyers from China favored California, which captured 25 percent of their U.S. purchases, but Florida was No. 2 with 11 percent. Fifty-four percent of German buyers picked the Sunshine State.

After Florida, other top states for foreign buyers are California, Arizona and Texas.

Despite the current downturn, 35.5 percent of Florida Realtors surveyed said their international business has grown in the past five years, the report said. Some 52.6 percent in Florida reported their foreign business remained about the same, and only 11.8 percent indicated foreign business had decreased.

Thirty-eight percent of the Realtors thought the weak dollar was having a significant impact on foreign buyers looking in the United States, the study said.

But there were also some factors putting the brakes on U.S. purchases. ‘While U.S. real estate is still considered a `safe haven’ for foreign funds, there are some perceived impediments to foreign purchases including cost of property, immigration laws, and property taxes,” the report said.

5 Best Deals

As a real estate agent I often hear from potential buyers, “I’m just looking for a good deal.” So, in an effort to try and connect buyers with some of these properties I will be publishing a list, bi-weekly, of the top 5 deals (in my opinion) in a particular area.

For the first round of properties we have (drum roll please)…… 32224 (a.k.a. East of Kernan/West of IC and South of Beach Blvd)

In order to obtain this list please shoot me an email and I will be happy to pass along

Thanks!

Have we hit bottom?

Recently there was an article written in the Times Union discussing the positives of our current real estate market.  The one thing not mentioned was inventory levels for existing homes.  They talked quite a bit about new construction, but there was very little regarding existing homes.

So, a look at our july-inventory…

So we can see that we’ve come a long way since January but still have a ways to go to “get back to normal.”

What about mortgage rates?  Well, they’re still pretty good…  You can see that the average consumer is getting a 30 year fixed rate of about 6.5% with .7 pts.

What about Jacksonville just being a good place to live?

Well, I’d love to hear your thoughts on our current real estate market and as always am up for any questions you might have…

The New Communtiy on Philips Highway

I think this will be a great addition to the Jacksonville community and a step in the right direction for a more lively and active downtown atmosphere…  Your thoughts?

Planned community on Philips Highway to be ‘transit oriented’

Project for those wanting home near work, public transportation

By LIZ FLAISIG, The Times-Union

A blighted portion of Philips Highway will lose its historical ties to the automobile under plans for a new community focused on urban living near mass transit.

Jackson Square at San Marco is proposed for the 18 acres along Philips near Atlantic Boulevard that Jerry Hamm Chevrolet used to occupy.

The development will have 900 apartments ranging from $700 per month for a studio to $1,500 for the largest two-bedroom unit.

Young professionals and couples without children will be targeted because they are part of a growing group looking for homes close to work and public transportation, said Steve Cissel, partner in FirstStar Development Inc.

Plans for Jackson Square include restaurants and boutique shops in 150,000 square feet of retail space and 200,000 square feet of offices.

Cissel pitched the site to financial partners Cypress Real Estate Advisors of Austin, Texas, because of its proximity to the railroad and the road’s long history as a transportation corridor.

The group has also worked for the last 18 months with the Jacksonville Transportation Authority on developing the site as a transit-oriented development, or TOD.

The concept is part of “smart growth” principles that have gained popularity in recent years amid heightening environmental concerns in the real estate industry and interest in shorter commutes.

“This is about a lifestyle issue,” Cissel said. “These people are younger, working professionals and empty-nesters or waiting later in life to have children. They want smaller spaces to live in with all the amenities and five minutes to work so they don’t have to use a car.”

Walking, riding a bike or taking the bus will be options in about 36 months, when Cissel expects residents to move in.

And later down the line, JTA’s planned bus rapid transit system and light rail are expected to align with Jackson Square.

Though a spokesman was unavailable to comment, JTA has publicly discussed four other TODs, most prominently Kings Avenue Station with its hotels.

All the sites under way are different, but involve the same concept of furthering use of mass transit to ease congestion as Jacksonville grows.

For Paul Basham, president of Basham & Lucas Design Group Inc., the job of designing a TOD community on this spot makes sense.

“Being a TOD is another layer of mixed-use because you can live, shop and get to work and never use a car to do it,” Basham said.

Jackson Square has begun the permitting process and is expected to be under construction within the next 24 months.

It will cost an estimated $75 million to $100 million, Cissel said.

The New Housing Bill

Should you have any questions about the below article (or the bill itself) feel free to ask. I myself have mixed feelings about the bill. It’s a good thing to help homeowners who are in over their heads at no fault of their own. However, the bailing of Fannie & Freddie may just further complicate the recovery of the real estate market as a whole.

Email questions to –> Jeff.Riber@yahoo.com

For additional reading on the subject matter… http://finance.yahoo.com/loans/article/105473/The-Hidden-Tax-Traps-in-the-Housing-Rescue-Bill

WASHINGTON — President Bush on Wednesday signed a massive housing bill intended to provide mortgage relief for 400,000 struggling homeowners and stabilize financial markets. Bush signed the bill without any fanfare or signing ceremony, affixing his signature to the measure he once threatened to veto, in the Oval Office in the early morning hours. He was surrounded by top administration officials, including Treasury Secretary Henry Paulson and Housing Secretary Steve Preston. “We look forward to put in place new authorities to improve confidence and stability in markets,” White House spokesman Tony Fratto said. He said that the Federal Housing Administration would begin right away to implement new policies “intended to keep more deserving American families in their homes.”

The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes. It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac and tightens controls over the two government-sponsored businesses. The House passed the bill a week ago; the Senate voted Saturday to send it to the president.

Bush didn’t like the version emerging from Congress, and initially said he would veto it, particularly over a provision containing $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers. But he withdrew that threat early last week, saying hurting homeowners could not wait — and even blaming the Democratic Congress’ delays in action for forcing an imperfect solution.

Meanwhile, many Republicans, particularly those from areas hit hardest by housing woes, were eager to get behind a housing rescue as they looked ahead to tough re-election contests. Paulson’s request for the emergency power to rescue Fannie Mae and Freddie Mac helped push through the measure. So did the creation of a regulator with stronger reins on the government-sponsored companies, as Republicans long have sought. Democrats won cherished priorities in the bargain: the aid for homeowners, a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.

The bill takes several approaches to curing the ailing housing market. It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration. The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan. Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.

The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure. They also could buy and back mortgages 15 percent higher than the median home price in certain areas. It goes far beyond addressing the current crisis, however. The legislation overhauls the Depression-era FHA. It requires lenders to show how high a borrower’s payment could get under the terms of his mortgage. It provides $180 million in pre-foreclosure counseling for struggling homeowners. The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new “consultative” role overseeing the companies. The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009. Democratic leaders, recognizing that the measure could be one of the last items to become law during what’s left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

Jacksonville Real Estate – Are things starting to pick up?

Inventory levels have improved for the last 5 months coming down from 19.12 in January to 13.19 in June.  What does this mean?  Well, the absorption rate is kind of like a golf score, lower is always better!  Basically, the absorption rate measures buyer activity.  It takes total available homes for sale and divides that # by the # of homes sold in the previous month.  This gives us a # (i.e. 19.12 or 13.19).  That # is only good if we have something to compare it to.  In June of 2006 the absorption rate was 7.97.  You can see why prices have come down over the past year…  There’s simply not as many people that want to buy houses as there are those who want to sell.  If you would like to calculate the absorption rate in a particular neighborhood feel free to shoot me an email or give me a call and I’ll walk you through the process.  This will enable you to gauge how quickly your home will sell if priced appropriately.  (Click the link below for the June absorption rate in NE FL).

June Absorption Rate

Being Prepared for Hurricane Season in Jacksonville, FL

I attended the Beaches Fine Arts Triathlon this morning at Micklers Landing, and was reminded of the small possibility that a hurricane may come our way in Jacksonville. The normally calm or small chop that describes the Jacksonville surf was replaced by 5′ sets rolling in and knocking swimmers back as they began their 400M swim. Our culprit, Bertha, the tropical storm (or almost tropical storm) that is just off the coast of Bermuda.

So, below you will find the items you need to have in case of an approaching storm.

Additionally, don’t forget… If you’re purchasing a home and a storm is in waiting. Bind the insuance policy as quickly as you can because it can be quite difficult to do once the storm gets close.

FEMA Encourages Personal Preparedness This Storm Season

Release Date: July 7, 2008
Release Number: FNF-08-060

While the federal government takes steps to prepare for this hurricane season, we encourage individuals to do the same. Personal preparedness can reduce the risk of storm dangers during and immediately after a storm. Here are a few preparedness tips that should be considered:

Have a disaster kit for your home: Stock up on non-perishable food and water to sustain you and your family for up to 72 hours or longer. Ensure you have important papers (e.g. insurance, identification), first aid kit, a supply of prescription medicines and other specialty items in your preparedness kit. In addition, plan to have an emergency kit for your car in case you need to evacuate. While creating a disaster kit, pet owners should remember to pack the necessary items for their pets.

You can find more information on preparing your disaster kit at: www.ready.gov/america/getakit/index.html

Create an emergency plan: Know what to do if you have to evacuate. Make sure you know how to contact members of your family and have an emergency contact number for someone out of state who knows where you are in the event of an emergency. Make sure your pet is included in your emergency plan. You may want to offer assistance to an elderly or disabled family member or neighbor that may be alone and may need your help during an emergency. Make your plans ahead of time and practice them.

Be informed: Know evacuation routes, and listen to local authorities when asked to evacuate. Everyone should know their risks. Whether you live in a coastal community or inland, speak with your insurance agent now about flood insurance and review your home owner’s policy. Every state and territory is at risk for flooding and homeowners insurance does not cover flood damage. Flood insurance is a cost-effective way to financially prepare for floods. To learn more about your risk and flood insurance, visit www.floodsmart.gov.

People should have disaster plans and be ready to vacate their residence when advised by local authorities.

To stay informed during a storm, keep a battery-powered radio for weather and evacuation information should you experience a power outage and have extra batteries on hand.

Last Modified: Monday, 07-Jul-2008 16:59:34