Bubble Trouble Rubbish

NEW YORK -- Sept. 6, 2006 -- What if the housing market not only isn't going into a death spiral, what if the U.S. economy is less dependent on housing than we were led to believe?

Ray Dalio and Bridgewater Associates, the second biggest manager of hedge fund assets in the world, with more than $140 billion in assets asked that question.

Bridgewater believes that the housing market will likely enjoy a so-called soft landing, with prices dropping on average by only 7 percent -- the amount it says is likely needed to bring home prices back to average levels of affordability.

If that's the case, they say, the impact on GDP (gross domestic product) will be noticeable, but not too painful.

As for U.S. consumer spending, here too Bridgewater is betting that the indirect impact of rising home prices may have been overblown.

Although it is widely known that homeowners last year took out $530 billion in home equity and other home-related loans, Bridgewater believes with interest rates still relatively low, creative consumers are finding ways to replace that home piggybank with other types of financing from credit card companies and the like.

"The notion that a slowdown in housing leads to a slowdown in the economy is often true, but not because the housing market causes the slowdown," the Bridgewater report concludes. "Rather, interest rates generally are raised to a level that chokes off all activity and housing gets hit first. Our measures suggest rates are still too low to choke off the overall economy."

Internet Buyers Paying Thousands for Unbuildable Lots

Internet users visiting sites such as E-bay, are buying land that's miles from civilization, has no roads or utilities and sometimes is underwater.

Known as "paper subdivisions," these undeveloped tracts are the remnants of developers' unfulfilled dreams -- if not outright scams -- particularly in Florida's Osceola, Polk, Volusia and Brevard counties. Buyers are paying thousands of dollars over assessed value for a lot that can't be built on in a subdivision that does not officially exist.

An acre-and-a-quarter lot -- usually assessed at $600 to $1,200 -- fetches 10 times that or more from unsuspecting buyers in Internet auctions. Florida officials estimate there are millions of these unbuildable lots in every part of the state.

Now, some buyers who say they were swindled are speaking up -- and getting results.

The state is responding to complaints from disgruntled buyers by forcing some sellers to offer to buy back the property, citing their failure to follow the state law regulating the sale of subdivided land. Violations can include a seller failing to register land with the state for sale.

According to one of the complaints, the investigation centers on the "alleged sale of undevelopable 'swampland' to buyers over eBay without full disclosure of all material facts relating to condition of land."

The land-sales division does not go looking for unlawful transactions on eBay, said Thomas Butler, deputy press secretary for the Department of Business and Professional Regulation. However, "We do investigate complaints from the public that may involve its use."

Deceptive land-sales practices are not new in Florida. For instance, in the 1960s, the Gulf American Land Co. sold thousands of lots in River Ranch Acres to unsuspecting buyers nationwide before going bankrupt.

Land throughout Florida was often sold in the 1960s and 1970s from telephone boiler rooms or through high-pressure sales meetings as retirement investments. The sales pitches, which often included a free dinner and a movie, would allow buyers to purchase land for a couple of hundred dollars down and interest-free payment of $50 a month. The developers, which often later declared bankruptcy, took cash and never filed the necessary paperwork with local governments or built roads and infrastructure.

Richard Lawrence said the current speculation is destroying the recreational uses of Osceola's Suburban Estates, where he has owned land for several years.

Like similar tracts in Polk and Volusia counties, the 10,449 acres in east Osceola has become a haven for those like Lawrence who enjoy the outdoors.

Suburban Estates is a mixture of cypress swamp, palmetto brush and scrub pine. Sandy roads wind through the property that has through the years turned into a secluded refuge for owners who like to hunt and drive vehicles through the challenging country. The area is gated, and keys are issued to only deed holders by an owners-group calling itself the Suburban Estates Preservation Association.

Osceola County does not issue construction permits in Suburban Estates. Once, it permitted hunting camps, but the lack of utilities and roads made even those problematic, a county zoning official said.

But many investors don't know this, nor do they realize that land values in Suburban Estates have been stagnant for years.

Records show there are thousands of owners, which would make it almost impossible for any developer to buy up enough property to develop Suburban Estates. The same holds true for other areas.

Florida Hospital Association

TALLAHASSEE, Fla. -- Sept. 1, 2006 -- The Florida Hospital Association (FHA) launched today a new consumer Web site to assist the public in researching and managing their healthcare information.

The Web site, www.floridainformedpatient.com, is designed to put a variety of healthcare information resources on the desktops of patients and consumers.

Patients can search for a hospital based on the types of services it provides and its location. The Web site also allows surfers to navigate directly to a hospital's Internet site.

The site provides checklists for patients to use when selecting a hospital, a physician, or a health plan and gives quick links to a variety of healthcare sites providing quality and pricing information.

The site serves as a pathway to a number of recognized Web sites providing information on physicians, health insurance companies, prescription drugs and general health information.

Information in choosing a hospital, understanding hospital bills, checking physician credentials, links to HMO pricing and quality, comparing drug pricing, and how to avoid medication errors also can be found on the site, which will be updated as new resources become available.

The Florida Hospital Association is a statewide advocacy and trade association representing 176 hospitals across the state.

My Safe Florida Home

The My Safe Florida Home Program is now open for business and accepting applications from Floridians around the state for free home inspections.

Their mission is to help you learn what specific home improvements can be made to better protect you and your family against hurricanes and to help provide you with the information and resources necessary to make your home stronger and safer from storms. In fact, if you receive a free home inspection and decide to take steps to strengthen your home, you may be eligible to match your money through this program up to $5,000.

They are partnering with local governments and non-profit organizations to provide inspections and grants in 22 counties, and with the Legislature’s continued funding support, they hope to soon be able to provide inspections and grants in all 67 counties.

The open enrollment period for accepting applications will continue through November 15, 2006. To get started go to www.mysafefloridahome.com where you can find more information and apply for your free home inspection on-line.

Hurricane Preparedness in the Country

Most of the normal preparations that you can find listed in a lot of places apply if you are living in the country.

Know where your closest shelter and evacuation routes are and remember that animals can not be taken to a shelter. If you are going to evacuate, book a hotel early, even if it is as far away as Atlanta GA. Fill up your vehicle with gas and keep a couple of containers full of gas too. Make certain you have a couple of flashlights and extra batteries.

The great thing about living out in the country if you are hit by a hurricane and your house is okay, as long as you have a generator, you will still have water, whereas in most cities, the water supply gets shut off. (This is one of the reasons you need to keep gasoline handy.) My personal opinion is that a generator is a must if you live anywhere where natural disasters could impact you. With a generator you can still have water if you have a well, you can save all the food in your refrigerator when the power goes out, and you may even still be able to have a hot shower. I even know people who were still able to get TV in the midst of a hurricane. Ideally, you need to have your home wired so that all you have to do is flip off the mains switch and plug the generator in, and it will run everything in your home if it is strong enough. (You would have to ask the dealer how strong it should be when you buy it.)

Another thing that happens in the cities if they get flooded, the sewers back up. Out in the country, as long as your septic system doesn't have water pooling over it, you should be okay. Just do remember that with the ground being soaked, the drain field will not work as efficiently as it should, so use water sparingly.

It is always a good idea to keep a couple of big bottles of drinking water just in case the well gets contaminated with all the flooding that may occur. In fact, you should probably not drink the water from your well for at least a week after a hurricane. Some canned food and dry food stocks are also a good idea.

If your home is low lying, you'll thank yourself for digging drainage ditches to channel the water away.

If you take life preserving medications, make sure you have all your prescriptions filled before a hurricane hits. A first aid kit is very important - they can be purchased in a lot of places, including Walmart and the basic ones don't cost a lot. You might want to make one up for your animals, too.

Please make certain your animals are catered for. They won't understand what's happening, so keep your dogs and cats indoors in a safe place. Horses, cows, sheep, goats, pigs, etc. pretty much have to fend for themselves but don't leave them in a small pen where they could get flooded out. If it's possible to give them some shelter I'm sure they will appreciate it.

Oh, and buy some OSB board before there is a hurricane threatening - you don't want to be standing in one of those long lines!! Here's hoping for a mild season.

FLOOD INSURANCE: DECIDE NOW

With hurricane season only a few weeks away, it's time for homeowners
to assess their risk and consider whether they should get flood
insurance. To learn whether a homeowner needs flood insurance, start
by finding out whether the property is in an area designated by the
Federal Emergency Management Agency as a high flood risk. Simply
enter the property’s address on FEMA's Flood Smart Web site
(http://www.floodsmart.gov). If the Web site says the area is high risk,
it’s smart -- and probably required by mortgage lenders -- to have
insurance. But even if the Web site indicates that the property has a low
to moderate risk of flooding, it is worth consulting neighbors and the
local planning agency about past floods in the area. The government
sets rates so premiums are the same no matter where the insurance is
purchased. Policies are restricted to $250,000 on the structure and
$100,000 on contents -- sold separately with a discount for buying both.

Halcyon Days Over for FSBO’s?

The days when you can just put a sign in your yard, a directional sign on a busy corner and a classified ad in the local newspaper are no longer.

The market is changing, and with each quarter percentage rise in interest rates a huge number of buyers may no longer be able to afford the monthly payments on your property.

Now more than ever, Price and Marketing are of the utmost importance.

With every thousand dollars over market price you could be eliminating a hundred more potential purchasers. It is imperative that you have a Competitive Market Analysis (CMA) done to determine a marketable price for your property cognizant with supply and demand. Calculating the saturation rate in your local area will give you a good idea of how long you can expect it to take before you will find a ready, willing and able buyer.

Marketing is imperative – you need to get the word out to as many buyer prospects as possible. Selling your home yourself means you do not have access to the local MLS. This is the marketplace, where all local real estate professionals go to search for properties for their buyer customers and clients.

In this Information Age, buyers also do their own research. If your home is listed on any local MLS, it will automatically be displayed on realtor.com – arguably the largest real estate database in the world. This is where, according to the National Association of Realtors, more than 75% of all online property searches are performed.

Only REALTORS®, real estate licensees who have elected to join the National Association of REALTORS®, subscribe to a real estate association and local MLS. They are the only ones whose listings are displayed on realtor.com. They pay a fee to belong to these organizations.

Real estate professionals also pay to market your home in a variety of other media – newspapers, real estate magazines and publications. Some advertise on local radio or TV stations. Many have their own personal websites, and if they understand the principles of SEO (Search Engine Optimization), their sites will be in the forefront when buyers use certain key search phrases.

The big real estate companies are also an important source of marketing – RE/MAX.com now features all properties on every MLS in the nation, and Prudential has joined forces with Yahoo.com.

If you are thinking of selling your property yourself to avoid paying a brokerage fee, maybe you should ask yourself this - if time is money, how much will you save by selling your home quicker and moving forward with your new plans?