Friday, June 22, 2007

Beach Blog

There are a couple of things that I’ve been noticing about the real estate market that I wish to relay to you. But, before I get to that there are some miscellaneous meanderings that I wish to write about.

The many of you that know me, are aware of the fact that I try not to be a braggart. Yes, we all tend to do it at some time or another in our life. This is only human nature. I try to make it a point to not do so for the simple fact that I do not wish to put others ill at ease. So with that said…

Here I am where it all started – that is my blogging. I’m on a vacation of sorts in Ft. Lauderdale. Actually right now, I’m sitting on the veranda of the Atlantic Hotel, right across from the beach, drinking a Pina Colada. Yummy, it is!!

It always amazes me at what life throws at us. Or, maybe, I should say at what paths our lives take us. I’ve said this before, and must reiterate that I consider myself a very lucky and fortunate person. Yes, I’ve had my ups and downs just like the rest of us. I doubt if there is anyone that can say otherwise about themselves. The degrees to which vary and we may not be able to see that from our standpoint, but that is just it – it’s from our standpoint and perspective.

I’ve been planning on coming down to Fort Lauderdale for many weeks. This week before I came down I took my little girl, Nicci (Chihuahua) to the vet. Unfortunately, she came home with me, but I had to bury her. To say that this has upset me is an understatement. But, I have to remember that she had almost 14 good years and she was such a good girl & companion. She was my baby!

But getting back to what I was saying earlier, things occur & sometimes you have to wonder. Maybe there’s a connection and maybe there isn’t, but since that fateful day with Nicci, my phone has basically been ringing off of the hook with buyers & sellers.

The reason that I mention this is because there were a couple of items in the newspaper today that I will get to shortly. Additionally, I was talking with an associate of mine & she said the same thing about the buyers all of a sudden coming out of the woodwork.

Now, don’t get me wrong, the market is going to take quite a while to readjust itself. There is no doubt about this. But this obviously bodes well with somewhat a shift in the climate.

I received an email today from ORRA, the local realtor association, stating that the median price homes in the local market went up in May. Thirty year mortgages dropped slightly this week from an eleven month high of last week. But they are still under 7%. The Florida legislature has finalized what they are planning to do with property taxes & I think that the governor is signing such. There was also an Associated Press article stating that “The U. S. economy should expand modestly in coming months as a healthy job market continues to trump weakness in housing prices…”

Again, I must reiterate, it will take quite a while for the market to even out, but it does seem as if there are finally some changes in sight. We can only hope so.

Until next time – Marc It Sold!

Wednesday, June 13, 2007

Property Insurance and a Little Bit about Taxes

Well, the Legislature has reconvened for a special session & as I may have stated previously, I’m very concerned that we will not see anything good come out of this. There are many reasons why I state this. Firstly, the proposed plan, which is somewhat different from what I’ve previously blogged about, is still inadequate. And there is obviously quite a bit of legislators that feel this way as well. Many of the legislators, including some Republicans, are quite miffed that this currently proposed plan was worked out basically behind closed doors. Marco Rubio, the House Speaker from Miami, stated basically that they have a choice of the proposed plan or no change to the current system. As I’ve stated before, it just seems that he looking to make a name for himself. He’s already proposed a couple of plans which did not merit anything more than a cursory notice.

It’s quite sad because the only victims here are the people of the State of Florida. This is true with the tax situation and what we’ll soon talk about, property insurance. But, before I go there, there is one major note that should be brought to your attention. The current proposed property tax seems to be only affording most of us a mediocre savings that would basically be obliterated within four to five years time. And as I’ve stated before, I have a major issue with our legislators just replacing one flawed system with an equally flawed system. What’s the purpose except for them to say “Look at what we’ve done for you!” and most likely not be in office when we have to repair that system. Go figure!

Anyway to Property Insurance and Citizens Property Insurance Corp, in particular. The long and short of this, and you may have read this in a previous blog of mine, Citizens was created by the Florida legislature basically to protect Floridians and offer policies to homeowners who could not buy property insurance elsewhere on the open market. Many insurers have left the state, especially in writing policies on property.

The problem here is that Citizens has been allowed to grow, recently, way beyond its proposed structure. Firstly, it was underfunded at the beginning and we’ve found ourselves having to bail it out twice already. We pay for this everytime we pay our insurance whether it be to Citizens or another carrier. At present, Citizens is being told that it has to rollback it’s rates to that of 2006. Sounds great to the consumer, but what happens if there is an unfortunate catastrophe in the State of Florida. Hum, let’s think! Oh, I know, we’ll be bailing Citizens out again. This has to stop! It is not fair to the people of this state to consistently bail this company out of bankruptcy.

Additionally, as I was previously alluding to, Citizens has been allowed to go way beyond it’s scope. They offer cheap insurance to basically irresponsible coastal developers. They build these large high-rise condos on the beach in areas that are prone to disasters. Does this make good business sense to anyone? Please let me know. Let me also mention, most carriers would not insure a project like this or, at the very least, at the rates that Citizens is charging these developers.

Let’s take this one step further, so they build a coastal high-rise. They sell these units and now the unit owners and the condo association need insurance. Since other carriers would probably not be interested in insuring this property in the first place, where do you think most of these people will wind up purchasing a policy from? You got it – Citizens. Do you possibly see a problem here?

The other problem is that people in the state’s interior will be paying for this mess and they do not deserve that responsibility. Our legislators need to take action and do it now! They need to be more responsible about the development of our coastlines. They need to be fiscally responsible to the people, not big business.

Please do not get me wrong. I am not a radical or subversive or whatever may come to mind in that respect. But, I do firmly believe if you have a problem or a broken system it needs to be repaired. Just as if you had a broken tooth, you’d go to the dentist. You just wouldn’t let it remain open and possibly abscess.

This brings me to another insurance matter that is being handled incorrectly also. It seems that the Legislature is planning on allowing our No-fault insurance for automobiles lapse when it becomes due in October. The reason behind this supposedly is that there is too much corruption in the fact of people abusing the system. Under the current system, you must carry at least $10K of Personal Injury Protection (PIP) coverage. Basically, the elimination of this will allow people to drive uninsured. This will only create a greater strain on us & also our hospitals. Yes, again the system needs to be fixed. It is definitely flawed and rank with fraud, but the elimination of it is not the correct answer. Deal with the fraud. Eliminate that, but not the whole concept.

Again, thank you for reading my rantings and ravings.

Until next time – Marc It Sold!

Wednesday, June 6, 2007

Property Taxes – The Saga Continues

I’ve been very concerned about where we are going with the property tax reform, as I am sure most of you in Florida are as well. Last evening there was a Town Hall Meeting in Apopka with Rep. Bryan Nelson. The plan that was revealed was interesting, but I am still very skeptical.

My first order of skeptism has to do with the implementation date. Previously it had been talked about by members of the Florida legislature that they would ask for a special election in August of this year. Both Mr. Nelson and an article in the Orlando Sentinel have stated that we will not vote on this until January 29, 2008, the same time that we vote for the Presidential Primary. Now here is one place where it gets a little conflicting. Rep. Nelson stated that we would not see any property tax abatement until they become due in November ’08, yet the Sentinel stated that it is understood that we will see immediate cuts this year.

Well, if we are going to vote until January, they are not going to institute this tax reform retroactively. Can you imagine the mess that this will make?

Anyway, it gets even more interesting. OK, so we know and understand that Save Our Homes, albeit even though it was full of good intentions, is a flawed system that needs to be changed. Well, this is what they are planning on doing. Presently, we take the assessed value of our home, subtract the exempt value to give you the taxable value and multiply that times the millage rate that is set by the city and county commissioners.

Under the new plan, without SOH, you would take the Just Market Value (not sales price or market value as determined on the open market) and multiply that by 20% to get to your taxable value for homes of under $300K. Therefore, you would be receiving an 80% exemption. For homes valued from $300K – 1M, the exemption would be 70%. Personally, I think that this is too high going up to $1M. Unfortunately, we know that they will be appeasing a lot of well-to-do people with special interests, but we’ll get to that later.

Now, there is another twist, this will not pertain to the education tax that we currently pay. That will still be worked under the current program because they do not want education to be affected. While I understand this, that only makes the system convoluted, so now we are going to have two taxing systems.

Additionally, if you have greater savings under the current plan, than you will be allowed to stay with the Save Our Homes, but the rate would be increased from the current ceiling of 3% to 5-7%.

Are you confused yet? It just seems that we are taking one flawed system and replacing with another flawed system. The Orange County Property Appraiser was at the meeting, I had wanted to ask him what the cost would be for his department to implement this new system.

The property appraiser stated that the loss in revenue to Orange County would amount to approximately $73M. Yet, the Orlando Sentinel stated today that we are talking twice that figure. This is very disconcerting. Were we just being fed information that might appease us? How can there be so much disparity?

They did show where the cuts would come from in general terms. There was, of course, some from fire & police, but the major portion was just lumped in a general category for programs. Unfortunately, this means that the programs that are really needed are going to be cut or totally eliminated. According to the Sentinel, it appears that the cuts will come from health care, after school programs, etc.

Being on the Board of a not-for-profit health care, I am very concerned that we are going to further push an already stretched segment of the health care industry. There have already been cuts on the federal and state levels as to reimbursement, etc. Health care clinics serve all, but are a main source for the working poor and those with no insurance. A further cut in funding will only force these centers to eliminate some services, cut hours or even worse close much needed centers. This will only put a greater burden on our hospital emergency rooms which is where these people would be forced to go for medical care.

Let’s get real, the special interests need to be taken care of! So, again the people that are in the most need will be the ones that will have the least benefit & relief.

When you really come down to the numbers, it’s again the ones that have are going to get more of a benefit than the have-nots. This is definitely a shame.

There are too many topics that come to mind that I would like to touch on, but don’t’ want to be any more long-winded than I’m presently. So, hopefully, within in the next week, I’ll be writing a little more about Property Insurance and they way our Government works. It is time for some changes to be made. The system is broken and needs to be fixed – not mended. And the reality of all this, is that we are the victims, we are paying for it all.

Until next time – Marc It Sold!