Real Estate Investing

For the first time in years, I took a vacation last week.  While I tried to tune it out, I sort of followed the news.  There was some good news last week in that mortgage rates dropped to 5.94 percent.  However, the stock market had tanked.  The politicians attacked, then retreated.  And there were other bad stories about fires, robberies, and the wars in Iraq and Afghanistan. It was definitely a great week to get away from it all! 

The news is better this week.  Today the stock market is working hard to rebound.  Fingers are crossed that my daughter’s college savings comes back before she heads to college in the Fall. 

I read that former Federal Reserve chairman Alan Greenspan has weighed in on the housing market and is predicting the recovery to begin in early 2009. 

Greenspan wrote that the recent slowing in the rate of decline in U.S. home prices is the first positive note in the year-long trauma and that eventually, frozen credit markets will thaw “as frightened investors take tentative steps toward reengagement with risk.”

“More conclusive signs of pending home price stability are likely to become visible in the first half of 2009,” he wrote.

Three cheers for that diagnosis!

Meanwhile the Florida housing market seems extremely affordable right now.  I watched a lot of the real estate shows and there are some VERY nice homes in the Emerald Coast area. 

Here are four homes priced under $200,000.

$189,000

$172,000

$149,000

And for a mere $99,900 …

A few moments away from this mobile home is why people have paid the big bucks in the Florida market.

With Hurricane Gustav watering down Louisiana and Texas, Hurricane Hannah gearing up to pour on the East coast, and Tropical Storm Ike threatening to join the party, this may be the perfect time if you live in the Southeast quadrant of the United States to invest in some flood insurance.  No one likes to pay for flood insurance, but according to the Federal Citizen Information Center the cost averages just $370 per year… how can you NOT afford it?  Floodsmart.com says there are flood insurance programs that start as low as $119 per year.

Jackie Colson-Miller of the Tampa Real Estate Sizzle site tells us that a car can be swept away by just 2 feet of water!  She offers other sobering statistics that encourage homeowners (and renters!) to invest in some flood insurance.  In addition to flooded streets due to pounding, torrential rain, storm surge is a huge problem for coastal areas,

For most of us in the Tampa area, we are used to the yearly purchases of batteries, water, canned goods, etc., to prepare for the possibility of a storm. For homeowners who live close to the bay, the greatest threat from a hurricane in Tampa, is what is know as, “Storm Surge”. Storm surge is a threat to any coastal areas, which are often less than 10 feet above sea level. The surge is water that is pushed ashore by the force of a storm. The combination of a tropical storm, or a hurricane, along with high tides, can bring a wall of water up to 20 feet high.

Of course, when Hurricane Gustav approached the coast of Louisiana, we hoped that Hurricane Katrina would’ve taught the valuable lesson of evacuation.  Thankfully, the levees (at this point) seemed to hold, so the devastating damage from the flood waters was limited.  However, other economic concerns are on the horizon as pointed out in a report by To the Center.com.

Economists agree that a major natural disaster may help lift economic activity because of insurance payments and federal aid, however, in the short term, the destruction can be a major hit to the economy.

The company EQECAT, which estimates losses for insurance companies, says Hurricane Gustav will cause between $6 billion and $10 billion in insured losses. This amount is only a fraction of what was caused by Katrina: a whopping $41 billion in insured losses. Even so, Gustav will make the record books as one of the top 10 most expensive storms in U.S. history.

The impact which Gustav has on the economy is important. Going into the storm, the U.S. economy suffers from a housing downturn, credit crisis, and skyrocketing unemployment rates.

I’ll be closely following the news as people get back to their homes to see the extent of the damage - and hoping that it will be minimal.

Photo from the Huffington Post.

One lucky buyer in Florida describes how lucky he was to find a buyer for his house, 

At least I managed to attract a buyer for my house, someone who was willing to crush my spirit, flatten my soul and drag the remnants of my battered hopes and dreams through a heaping mound of irate fire ants before forking over what I considered a rather paltry sum for my family’s beloved hearth and home. 

Daryl Lease,  columnist and editorial writer for the Virginian-Pilot, had me laughing my head off as he described Realtors who seem perpetually lost (that’s why I now have a Tom-Tom), mortgage processors who want their mother’s sister’s nephew’s wife’s maiden name (or words to that affect), and the paltry sum of money he received when he did sell.  Yes he threw in some politics but no matter the party you’re supporting, read past it for the rest of his account about buying real estate.  It’s worth it!

In Michigan, the medical field is helping to keep real estate going through constant expansion and improvements.

“Due to the nature of the medical supply industry, we’re not as affected by the economy,” Bieker said. A medical supply distributor, MarketLab has seen a compounded annual growth rate of 50 percent year to year since the company’s founding in 1998. The company has recently completed its second expansion in three years.

Yet two states to the west, Minnesota’s banks are feeling the squeeze from commercial loans.

While soured home mortgages have gotten much of the public attention in the last several months, LaPierre and Otto told bankers that their focus these days is on faulty commercial loans — including debts tied to multifamily residential projects.They said that regulators are finding an industry more heavily involved in commercial real estate than ever, just as an economic slump has undermined the value of all manner of brick-and-mortar projects.

Tom Sawyer and Huck Finn would love Russian Architect Vladimir Plotkin who designed a floating home.  The raft has room for a bed, a bath, and the walls separate for socializing and barbequing.  What a great, lazy way to spend your summer!