Headlines: Volume 13 Issue 1

Market watch

At last week's Real Estate Connect New York City, there was plenty of talk about the state of the industry and where it's headed. For all the naysayers, though, there are plenty of industry professionals—Realtors, financial market analysts and economists, to name a few—who see hope.

Been there, done that. Listen to the Realtors who have been in the business for a while, particularly the 1980s, when 30-year fixed-rate mortgages exceeded 17%. They'll tell you to get back to the basics—networking, providing exemplary service, following through on leads—and things will work out. ''No one knows if the market has bottomed out or not. So I tell my customers to buy now. Things will straighten out, ''says Dottie Herman, president and CEO of Prudential Douglas Elliman, a New York firm with listings in South Florida. ''But not all buyers are willing to pay the inflated prices sellers in some markets are holding out for. Housing sales have gone down the most in markets where prices appreciated the most.'' Message to sellers: Get real on price.

Stranger things have happened. Dr. Mark Fleming, chief economist of First American CoreLogic, a source of extensive data about residential and commercial real estate transactions and activities, describes the effects of the housing price run up of 2002 to 2004. ''The market has a hangover from the ‘good' times. We've forgotten what normal looks like,'' he says. ''The good news is that prices won't go down as much as they went up. There are a lot of fundamentals that will keep prices up, such as strong housing demand from immigrants. And house price depreciation will make homes more affordable and bring buyers into the market.'' David Michonski, CEO of Coldwell Banker Hunt Kennedy, New York City, offered another perspective on housing price adjustments. ''There's a huge myth in the media that prices will hit rock bottom. That's not possible. A house isn't a single commodity but a grouping of commodities—building supplies, fixtures, land and so on—and these values have increased over time, too.''

Euro

Foreign assets. Don't underestimate the role of the foreign investor in today's market. Flush with cash and enjoying immense buying power due to a weak dollar—which will only get weaker if the Federal Reserve continues to lower rates—U.S. housing has become a hot commodity for European investors. "I happen to believe that the international markets will demonstrate a confidence in the U.S. that the U.S. isn't showing itself," says Michonski of Coldwell Banker Hunt Kennedy. "Miami, Fort Lauderdale...people want to live near some of the world's best beaches and fun spots in the world. We're going to see a lot of foreign buying and it's only going to continue." A survey of Florida Realtors conducted in 2007 found that foreign buyers accounted for 7.3% of all homes sales in the state—a conservative estimate, say many industry watchdogs. On the commercial side, Real Capital Analytics, Inc., which provides market data to the commercial real estate industry, says foreign investment in Florida commercial real estate has increased steadily, from just less than $948 million in 2004 to more than $1.43 billion in 2007.

Vote Yes on 1

In two weeks Florida voters will have the opportunity to jump start the Florida economy by approving property tax reform measures included in Amendment 1. The Florida Association of Realtors urges you to vote YES for the amendment and encourage everyone you know to do the same. Need to learn more about the amendment? Visit http://www.Yeson1Florida.com and http://floridarealtors.org.

Truth or consequences

February 4 will be a day of reckoning for property insurance executives. That's when they'll appear before a special Senate committee and explain why actions taken by the Florida Legislature to control costs for insurers haven't resulted in lower premiums. Lying under oath could lead to perjury charges and even jail terms, Senators said last week. ''We're going to get to the bottom of it,'' said Sen. Jeff Atwater, R-North Palm Beach. ''It is in law that the savings we offered would be passed through directly to the customer ... so it is now time for the insurance executives who did not comply to tell us why they aren't doing it.'' It's not yet known which insurance companies will go before the Select Committee on Property Insurance Accountability.

Let's go to commercial

NAR kicks off its 2008 Public Awareness Campaign today with TV and radio ads, electronic and print resources for Realtors to use in their promotions, a microsite to educate consumers about the value of real estate as an investment and a Spanish language advertising program. The goal of the campaign is to ''give consumers the facts about the long-term value of real estate and current market conditions to balance the sometimes incomplete and sensational information presented in the national media,'' says NAR President Dick Gaylord. Included are two new buyer-focused advertisements:

''Building Wealth'' emphasizes the importance of homeownership in creating long-term wealth. Using data from third-party sources, the materials demonstrate the effect that homeownership has on household wealth.
''Home Values'' demonstrates the long-term value of housing as an investment, using NAR housing data that shows home values nearly double every 10 years.