Real Estate, Community News & More from My Desk to Yours

Friday, January 9, 2015

Mortgage Rates Update

 Average U.S. mortgage rates started the year by dipping to new lows, with the benchmark 30-year rate marking its lowest level since May 2013.

The ongoing decline in mortgage rates would appear to be a boon for prospective home buyers. But it hasn't yet significantly enticed more buyers into the market. At the same time, there are fewer distressed properties and bargains coming onto the market that attract real estate investors.

This week the nationwide average rate on the 30-year loan fell to 3.73 percent from 3.87 percent last week, mortgage giant Freddie Mac reported. The average for a 15-year mortgage, a popular choice for people who are refinancing, slid to 3.05 percent from 3.15 percent last week.

A year ago, the 30-year mortgage stood at 4.51 percent and the 15-year mortgage at 3.56 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

The housing market has struggled to fully rebound since the recession ended more than five years ago. Many potential buyers lack the savings and strong credit history needed to afford a home, causing them to rent or remain in their existing houses instead of upgrading. Higher home prices and relatively stagnant incomes have also curtailed buying.

"The key issue for first-time buyers has not been mortgage rates," said Jonathan Smoke, chief economist for It's been concerns like not being able to qualify for a mortgage or to put together a downpayment, he noted.

Median household incomes have yet to completely recover and remain below their 2007 levels after adjusting for inflation. Limited income gains have cut into the cash flow and down payment savings needed to buy a home. Meanwhile, home prices have risen and lenders have kept standards tight for making mortgage loans.
And experts see a trend toward millennials putting off buying their first home.

The hesitation can be glimpsed in the number of Americans signing contracts to buy homes. It rose only modestly in November, according to the National Association of Realtors.

At the same time, the bulk of homeowners who could refinance appear to have already done so in recent years. With many home borrowers already carrying mortgages in the range of 3.5 percent to 4 percent, it may not be worth it for them to refinance at current rates. Refinancing carries its own costs and fees.
The picture could improve, though, as the effect of recent changes kicks in. Fannie Mae and Freddie Mac, which back the overwhelming majority of new mortgages, recently relaxed their standards for borrowers' credit scores to qualify.

And on Thursday, President Barack Obama announced a plan to reduce some mortgage insurance premiums, a move the White House says could save homeowners $900 a year and attract 250,000 first-time home buyers.
Under the plan, the Federal Housing Administration will reduce its annual insurance premiums for first-time buyers for mortgages it backs by 0.5 percentage point, to 0.85 percent.

The changes, together with an anticipated stronger economy and improved job market this year, are a "clear positive" for the housing market,'s Smoke said.

The decline in mortgage rates also has come as bond yields have hit record low levels. Mortgage rates often follow the yield on the 10-year Treasury note, which has fallen below 2 percent. Bond yields rise as prices fall.
Bond prices were an unexpected strong spot for the financial markets last year, reflecting concerns over global economic weakness.

The 10-year note traded at 1.97 percent Wednesday, down from 2.17 percent a week earlier. It recovered to trade at 2 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was 0.6 point, unchanged from last week. The fee for a 15-year mortgage declined to 0.5 point from 0.6 point.

The average rate on a five-year adjustable-rate mortgage fell to 2.98 percent from 3.01 percent. The fee was unchanged at 0.5 point.

For a one-year ARM, the average rate slipped to 2.39 percent from 2.40 percent. The fee held at 0.4 point.

Where is Miami in the current real estate cycle?

Miami is still experiencing an unprecedented real estate boom fueled by a robust pool of wealthy out-of-town buyers and projects built by experienced, well-financed developers, according to prominent real estate insiders. Yet, big drops in November condo sales and the weakening buying power of foreign investors could mean the boom is in for a slowdown in the coming year, some economists and real estate analysts say. Developer Richard LeFrak told The Real Deal last month that he doesn’t see Miami’s current cycle slowing down soon. “I’d be worried if interest rates go up and consumer confidence drops,” LeFrak said, speaking at a sales party for his 1 Hotels & Homes South Beach. “But the U.S. economy is doing well and the stock market is high.”

 LeFrak cited the dramatic increase in the number of buyers from the northeastern U.S. over the past two years as evidence of a continually bullish Miami market. “These are the people paying the big prices in Miami Beach…They all like Miami because it’s an exciting place to have a home,” he told TRD.

Read more at:

Baby Boomers Could Be Next Wave Of New-Home Buyers

Retirement surge. Those words are real estate consultant John Burns' "big idea" for 2015.

More Americans were born in the 1950s — 41 million — than any other decade, he blogs. And they will be "dropping out of the workforce in droves" this year as they begin turning 65.

His advice: take advantage of the sizable surge, no matter what your business.

Lennar has, among designs seen as ideal for boomers, a NextGen "multigenerational" home with an extra suite.

For homebuilders, the seismic shift is an opportunity to throw down the welcome mat to a demographic that has better credit and more cash than younger buyers, especially those still largely missing first-timers.

"It's a pretty affluent group compared to prior generations of retirees," Burns told IBD.
Formidable Demographic

Those born in the 1950s are just part of the wave, though a big one, of the 78 million or so baby boomers born between 1946 and 1964.

Americans 55 and older are growing in absolute terms and as a share of the population, says Paul Emrath, vice president at the National Association of Home Builders.

According to the NAHB, households headed by someone 55 or older accounted for 43.3% of all households in 2014, up from 38.2% in 2007. It forecasts the number will reach 46.7% by 2020 — or nearly half of all U.S. households.

"It's the baby boom effect, basically," Emrath said. "It means that active-adult housing is likely to continue getting stronger going forward."

Read more at:

Tuesday, December 2, 2014

What’s the next big home feature buyers want?

Homeowners are showing a bigger appetite for smart home technology. Nearly half of consumers – 46% – say it's important their current home or the next home they purchase have smart home technology, according to a survey of nearly 2,500 consumers, conducted by ERA Real Estate and HGTV.

Survey respondents had recently participated in an HGTV national focus group on smart home technology. Homeowners and buyers say they see the value in smart home technology for comfort, safety, and cost savings, and 51% surveyed say they would consider installing smart home technology in their home to make their home more marketable to future home buyers.

The younger segment of the millennial generation is the most likely age group to spend money on smart home technology – 10 times more likely than the percentage of generation X members who say they'd consider adding smart home technology to their homes, the survey reported.

"While still a growing trend, smart home enhancements have the potential to increase savings, safety, and resale value," says Charlie Young, president and CEO of ERA Real Estate. "As we have seen through this survey and our one-on-one interactions with buyers and sellers, a smart home is one that is well positioned for the future and aligns with a growing reliance on mobile technology."

Miami One of Nation’s Top 10 Construction Markets

Through September of 2014, Miami had the No. 8 new construction market in the country.

According to fresh numbers from Dodge Data & Analytics, Miami’s construction starts for the first nine months of 2014 totaled $6 billion, an strong 19 percent increase over the same period in 2013.
Indeed, such numbers are consistent with what we constantly hear from real estate professionals.

As Claudio Stivelman, the CEO of S2 Development, explained to us, “Unlike 2007, this development cycle is being carefully guarded by the development industry. Builders and lenders alike have learned to avoid speculation by vetting projects and making sure they are financially sound and secure prior to breaking ground … the demand and strength of the domestic and foreign economies continue to allow Miami to become one of the most sought after markets in the country.”

Read more at Miami Agent magazine.

Tuesday, November 18, 2014

Join Us for a Discussion of Education Feform in Florida's Public Schools

 Join Us for a Discussion of Education Feform in Florida's Public Schools

What is Common Core? 
How about the Sunshine State Standards? 

Join the Good Government Initiative as we discuss the pros and cons of the latest attempt at education reform in Florida's public schools - the benefits, the politics, and what the future holds.

Featuring: Miami-Dade County Public Schools Superintendent
Alberto Carvalho, Miami-Dade County Public Schools teacher and Florida State Senator Dwight Bullard, Miami-Dade Public Schools Board Member Raquel Regalado, and University of Miami's School of Education and Human Development Senior Associate Dean Walter Secada. Moderated by President and CEO of the Good Government Initiative Katy Sorenson.
11:30 am registration, 12 noon lunch and 12:30 pm conversation
Register Now!
$35 Individual Ticket
$50 GGI Contributor
$20 ECOB (Engaged Citizen on a Budget)
$10 Student (with valid I.D.)

Monday November 24, 2014 from 11:30 AM to 1:30 PM EST

BankUnited Center, Hurricane 100 Room
1245 Dauer Drive
Coral Gables, FL 33146

Thursday, November 6, 2014

Florida leads the nation in all-cash sales

Florida had more cash sales in the third quarter of 2014 than any other U.S. state, and a closer look at metro areas finds five Florida cities in the top five – and eight in the top 10. The data includes both single-family homes and condos.

According to RealtyTrac'sQ3 2014 U.S. Institutional Investor & Cash Sales Report, the state also has four of the top 10 cities for cash sales by institutional investors – buyers who purchase 10 or more homes per year.

In the third quarter (July-September), over half of all Florida sales (53.5 percent) were all-cash. Only Maine came close with 50.0 percent, followed by Alabama with 42.2 percent. Still, the percentage of all-cash Florida sales has declined over time. In the second quarter it was 57.6 percent; a year earlier, it was 56.2 percent.

Drilling down by metro area, Florida is also home to the U.S. leader: In Miami-Fort Lauderdale-Pompano Beach, two out of three sales are all-cash (59.1 percent), though in both the quarter and a year earlier, the percentage was above 63 percent. The following Florida cities round out RealtyTrac's top five for all-cash sales:
  • Cape Coral-Fort Myers (55.8%)
  • Sarasota-Bradenton-Venice (54.5%)
  • Tampa-St. Petersburg-Clearwater (51.1%)
  • Palm Bay-Melbourne-Titusville (50.9%)
Two other Florida metro areas are added if looking at the top 10 all-cash list: Orlando-Kissimmee (47.6 percent) at No. 7 and Jacksonville (47.1 percent) and No. 9.

RealtyTrac also broke down the all-cash sales for a look at institutional investors. While national cities landed the top four spots, Florida metro areas ranked for the next four spots – five through eight. Cities and percent of institutional investor activity include:
  • No. 5 Orlando-Kissimmee (11.0% in 3Q, up from 9.4% year-to-year)
  • No. 6 Jacksonville (10.9%, down from 12.6% year-to-year)
  • No. 7 Miami-Fort Lauderdale-Pompano Beach (8.6%, up from 6.3% year-to-year)
  • No. 8 Tampa-St. Petersburg-Clearwater (8.6%, up from 7.5% year-to-year)
National all-cash sales
In the U.S., all-cash sales accounted for 33.9 percent of all single-family and condo sales in the third quarter, down from 36.9 percent in the second quarter. It's unchanged from a year ago.

Cash sales helped "drive up U.S. median home prices 38 percent over the last two and half years," says Daren Blomquist, vice president at RealtyTrac. "As institutional investors and other cash buyers slow down their purchasing … more traditional buyers – including first-time homebuyers and move-up buyers – will need to increasingly fill in the missing puzzle pieces to maintain the momentum of the housing recovery.

"Institutional investors are still actively purchasing single family rentals, but continue to gravitate toward markets where lower-end inventory is still available," Blomquist adds.

The share of institutional investor sales increased from a year ago in eight states, including Florida. The share of cash sales increased from a year ago in 22 states. Cash sales represented 54.6 percent of distressed sales in the foreclosure process or bank-owned.

Source: Florida Realtors®

Thursday, October 23, 2014

Florida Population Surging Again

People from other countries and other states are pouring into Florida again, a sign of the state's recovery from a long period of economic doldrums and slow growth.

Recently released U.S. Census numbers show that Florida's foreign-born population increased by 140,000 from 2010 through last year. And movement within the United States left Florida with a net gain of 105,000 residents last year and 109,000 in 2012 — 84% more than in the previous two years.

The population surge has accelerated this year, according to state estimates, growing at a rate of about 700 new residents a day. That's a healthy increase, though still less than the big migrations during the Sunbelt boom of past decades.

For many job seekers, South Florida has become a hip beachside destination with a nexus of entrepreneurs, investors, a big consumer market and a gateway to Latin America.


Wednesday, October 1, 2014

Home Sales BOOM on Horizon?

With 8,000 baby boomers expected to retire daily for the next several years in the U.S., Southwest Florida stands to benefit from a massive influx of home buyers, the chief economist of the National Association of Realtors believes.

Lawrence Yun said the baby boom influx will not be just from the U.S. states, because the phenomenon was not limited to America.

"After the war, servicemen came home and started having babies," Yun told an audience of 200 Wednesday at the annual Sarasota International Real Estate Conference.

"The same thing happened all over the world."

Already, half of all foreigners who buy real estate in Florida are retired.

In all, foreign buyers make up about 10% of the state's buyers, Yun noted, though locally that figure may be higher.

While German buyers tend to acquire property in Naples—partly because there's a direct flight from Dusseldorf to Southwest Florida International Airport outside Fort Myers—Sarasota attracts a more diverse international buyer, led by Canadians and residents from Great Britain, Yun said.

Chinese buyers may become a greater presence here, too, because that country's economy continues to "turn out millionaires right and left," Yun said. Economic growth there is roughly 8 to 9%annually, on par with America's growth in the 1950s.

"We have seen a surge of Chinese buyers coming into the U.S., primarily on the West Coast," Yun told the conference, which was sponsored by the Sarasota Association of Realtors' Global Business Council. "But they will begin to see that other parts of the country are attractive."

Yun said he expects interest rates to rise to 5% in 2015, but that the rate hike will likely have little effect on foreign buyers, because 80% pay cash for Florida homes.

Although the national real estate market has cooled after two years of recovery—the result of rising interest rates and low inventory—the Sarasota region remains strong.

Yun expects increases in the number of homes sold and the prices for which they sell, in part because a long period of "pent-up demand" has not yet been satisfied by home construction.

The market's "solid fundamentals," Yun said, will make this a multi-year recovery. Those fundamentals include a large number of cash purchases, larger down payments, better credit scores among buyers and an improving employment picture.

"Four of the next five years will be strong because of solid fundamentals," Yun said.

"The factors that support growth are evident in the Sarasota region, while the international market is always a wild card," he added. "There could be a sudden surge, there could be a steady trickle—it depends on situations globally with visas and what is happening in foreign economies. The economies are strong in Germany and the U.K.; people there have the cash necessary to come over here."

Source:  Herald-Tribune

New Hours for Coral Gables Public Library

Starting October 5th, the Coral Gables branch of Miami-Dade County Public Libraries will be open: Monday-Friday, and Sunday 10 a.m. - 6 p.m.
Tuesday and Wednesday 12:00 noon - 8 p.m.
Closed on Thursdays

3443 Segovia Street
Coral Gables, FL
305 442 8706

Housing Market Starts to Soften

Although sales and inventory are up in the state of Florida, nationally home sales are down, 1.8%, and investors have retreated because inventory of distressed properties has gone down. From The Washington Post article:  "Cash buyers retreat from housing market, cooling home sales":

Sales of previously built homes dropped last month in part because investors paying all cash to buy foreclosures retreated once the supply of distressed properties shrank, a real estate industry group reported Monday.

The National Association of Realtors said that existing-home sales fell 1.8% in August from the previous month to a seasonally adjusted annual rate of 5.05 million. The performance — which captures sales completed last month — is also down 5.3% from a year earlier.

The results signal yet another stumble in the housing market’s stilted housing recovery, though Realtors tried to put a positive spin on the development. The group said that having investors retreat from the market opens up opportunities for the all-important first-time home buyers, who often lost out to all-cash offers from deep-pocketed investors when bidding on foreclosures and other troubled properties.

All-cash sales made up 23% of transactions in August, down from 29% in July and the lowest overall share since December 2009. But it’s unclear if  first-time buyers will step in to fill the void. After all,  home prices are still high and access to credit remains tight for all but the most pristine of borrowers.

The median price for all previously-built homes – including single-family homes, townhomes, condominiums and co-ops – was $219,800 in August. That’s 4.8% above the year ago, and marks the 30th month in a row of year-over year price gains, the Realtor group said. Many experts who track home values say price gains have been moderating, but in many areas they remain above year-ago levels.

Meanwhile, the younger adults who tend to make up the lion’s share of first-time buyers have several factors working against them. Many are struggling to cope with a tight job market and juggling student loan debt at a time when lenders are shying away from extending mortgages to people without top-notch credit.  In the aftermath of the housing crisis, lenders got hit with record financial penalties and lawsuits. They responded by demanding higher credit scores and pristine credit profiles from potential borrowers seeking government-backed mortgages – exceeding the standards set by the government itself.

Read more . . .

Florida Sales up 4.2% year-to-year, prices up 3.4% in August

Florida's housing market saw higher median prices and a rising inventory in August, according to the latest housing data released by Florida Realtors®.

Closed Sales of single-family homes statewide totaled 21,742 last month, up 4.9% over the August 2013 figure.

"For several months now, stability and consistency are key trends we're seeing in Florida's housing market, as the state's jobs outlook remains steady and the economy continues to grow," says 2014 Florida Realtors President Sherri Meadows, CEO (and team leader, Keller Williams, with market centers in Gainesville, Ocala and The Villages). "The statewide inventory (active listings) for single-family homes last month rose 13% year-over-year, while the townhouse-condo inventory of active listings rose 8.9%."


Tuesday, September 23, 2014

Home Sales Fall in August

Fewer Americans bought homes in August, as investors retreated from real estate and first-time buyers remained scarce. Sales of existing homes (as opposed to new construction) fell 1.8% to a seasonally adjusted annual rate of 5.05 million, the National Association of Realtors said Monday. That snapped a four-month streak of gains. August sales were down from a July rate of 5.14 million, a figure that was also revised slightly downward.
Much of the decline came from the exodus of investors, who had been buying properties in the aftermath of the housing bust and recession. Investors accounted for just 12% of August purchases, compared to 17% a year earlier.
Overall, the pace of home sales has dropped 5.3% year-over-year.
The August figures show that real estate recovery has depended largely on investors and all-cash sales, instead of families looking to purchasing a house.  "It is apparent that much of the juice in the existing-home sales market remains centered in all-cash purchases by speculative buyers," said Joshua Shapiro, chief U.S. economist at the consulting firm MFR.
The rebound from the housing bust that triggered the recession has been painfully slow. The share of Americans who own homes has trended downward over the course of the five-year recovery, as more Americans are becoming renters. The ownership rate fell to 64.7% through the middle of this year, down from a peak of 69.2% toward the end of 2004, according to the Census Bureau.
Sales were curbed by winter storms earlier in the year, but began to accelerate through the summer as mortgage rates eased back from 52-week highs. However, the combination of rising home prices last year and sluggish wage growth has limited sales.
Rising prices through much of 2013 and weak income growth priced out many would-be buyers. Only 29% of purchases in August came from first-time buyers, well below the historical average of 40%.
The median sales price has risen 4.8% over the past 12 months to $219,800, but it slipped slightly in August compared to prices in July and June.
Sales of existing homes continue to lag last year's pace of 5.1 million. Annual sales of 5.5 million are consistent with a healthy housing market, according to analysts.
There is a 5.5 month supply of homes listed for sale. The supply has increased over the past year, yet it remains below the standard level of six months.
Sales tumbled 5.1% in the West and 4.2% in the South last month compared to July. Part of that decline was offset by rising sales in the Northeast and Midwest.
Many consider home sales to be the missing link in a solid economic recovery. Federal Reserve Chair Janet Yellen recently told Congress that housing has proven to be disappointing this year.
Indicators heading into the fall and winter are mixed for real estate, however.New home construction plunged 14.4% in August compared with the prior month, the Commerce Department said Thursday. Much of that decline was due to a drop-off in building apartment complexes, but single-family-home construction also fell 2.4%.
Via FLORIDA TREND and AP read more here.

Friday, September 19, 2014

Chopin FREE Concert Series Piano Recital by Ivan Moshchuk

Southern Wine and Spirits of America’s Chopin for All  FREE Concert Series presents a Piano Recital by Young American Pianist, Ivan Moshchuk

The Chopin Foundation of the U.S. opens the new season of Chopin for All FREE Concerts  on October 11 & 12, 2014, with young outstanding American pianist, Ivan Moshchuk, in an all-Chopin program.   Each concert in the Chopin for All series is presented twice:

On Saturday at Broward County Main Library in Fort Lauderdale,
and on the following Sunday at Granada Presbyterian Church in Coral Gables.

FREE ADMISSION No Tickets Required

Saturday, October 11, 2014 at 3:00 PM, Broward County Main Library, 100 S. Andrews Ave, Ft. Lauderdale

Sunday, October 12, 2014 at 3:00 PM, Granada Presbyterian Church, 950 University Drive, Coral Gables

Twenty-three-year-old Ivan Moshchuk is among the most promising young artists of his generation, aiming to redefine the limits of classical music in the context of the 21st century. When asked about the purpose of his art, he turns to the words of Robert Schumann - “to send light into the darkness of men's hearts - such is the duty of the artist.”

A recipient of the 2010 Gilmore Young Artist Award, 2011 Peabody Career Development Grant, and 2012 Rosamond P. Haeberle Memorial Piano Award, Mr. Moshchuk has been praised for possessing a “rare combination of breathtaking technique and genuine musicality” (Kalamazoo Gazette), leaving audiences stating that it was “impossible not to be impressed” (Baltimore Sun), and creating “a density that lets you feel the spiritual aspects of the music ... the best of the best” (Zofinger Zeitung).

Highlights from his past season included a debut with the Kharkiv Philharmonic in Ukraine, a debut with the Lublin Chamber Orchestra in Poland, as well as solo recitals in the USA, Italy, and France. In October of 2012, Mr. Moshchuk stepped in on short notice to perform with the Birmingham-Bloomfield Symphony Orchestra to a great critical acclaim.

Recent concerts include a five-concert solo tour of the Netherlands in May of 2014, including Mr. Moshchuk’s Concertgebouw debut in Amsterdam, as part of the International Holland Music Sessions New Masters on Tour. Additional performances include return engagements in the Ukraine, Poland, and France, his Slovak Philharmonic solo debut in Bratislava, and chamber music appearances with the Attacca Quartet for the American Music Festival and Chamber Music Wilmington in North Carolina.

Mr. Moshchuk’s live performances have been broadcast internationally on TV and radio, including NPR’s Performance Today. He has had solo and concerto appearances at the Gilmore Intl. Keyboard Festival (2010), Verbier Festival (2010), BANFF Intl. Music Festival (2011), and worked with leading artists such as Ivan Moravec, Mikhail Voskresensky, Klaus Helwig, Menahem Pressler, Sergei Babayan, Gábor Takács-Nagy, and John O’Conor.

Mr. Moshchuk also conducts independent research in music theory. In 2011, he was invited to present his theoretical work, “Episodic aspects of form in the music of Chopin and Rachmaninoff” at the 8th Intl. Scientific-Theoretical Symposium “Rachmaninoff: On the Break of Centuries,” as part of the 13th Intl. Rachmaninoff Festival in Kharkiv, Ukraine. His article has been published in the proceedings of the conference in 2012.

Mr. Moshchuk holds a Bachelor of Music in piano performance from the Peabody Institute of Johns Hopkins University. He currently divides his time between his home in Grosse Pointe, Michigan, and Paris, as a resident of the Cité Internationale des Arts, where he is researching the concept of “image” and the genre of l’imaginaire as it relates to the aesthetic, formal, and performance-related issues that connect musical expression with the domain of the visual.

For more information, contact:

Jadwiga Viga Gewert, Executive Director
Chopin Foundation of the U.S.
1440 79th Street Cswy, Suite 117
Miami, FL 33141
ph. 305/868-0624 fax 305/865-5150

Stock Gains Lift U.S. Household Wealth of Top 10% to a Record High

Strong stock market gains and higher home prices boosted Americans' net worth in the 2014 April-June quarter to a record high, a trend that could encourage more spending.

U.S. households also took on the most new debt in five years, driven mostly by student and auto loans. More borrowing can be a sign of confidence, although greater student debt can pose a burden for younger households.

The Federal Reserve said Thursday that household wealth rose 1.7% in the second quarter of 2014 to $81.5 trillion. Americans' stock and mutual fund portfolios gained $1 trillion. The value of their homes increased $230 billion.

Greater wealth can make people feel more financially secure and encourage them to spend more. This "wealth effect" could boost the economy, although analysts note that it may not produce as much benefit as it did before the Great Recession. That's because most of the wealth gains over the past five years have occurred in the stock market, rather than in home values. Financial wealth is more volatile and doesn't spark as much spending as housing wealth typically does, research shows.

The Fed's figures aren't adjusted for population growth or inflation. Household wealth, or net worth, reflects the value of homes, stocks, and other assets minus mortgages, credit cards, and other debts.
U.S. net worth has rebounded dramatically since the depths of the recession. During the first quarter of 2009, as the stock market's losses deepened, net worth fell as low as $55.6 trillion — 19% below its pre-recession peak of $68.8 trillion.

But the wealth gains are flowing mainly to affluent Americans. Broad stock market averages have jumped more than 150% from their trough in the spring of 2009. But roughly 10% of households own about 80% of stocks.

Middle-income Americans rely mainly on home equity to build wealth, and housing prices nationwide are still below their 2006 peak.

A separate Fed report released last week illustrates the gap: Median household net worth at the end of last year was $81,200, a drop of 2% from 2010. The median is the halfway point between the highest and lowest figure.

But average net worth, which is inflated by extremely large fortunes at the top, was $534,600 in 2013, roughly the same as in 2010. Those figures are drawn from the Fed's Survey of Consumer Finances, which is done every three years.

Average net worth for the top 10% of households by income was $3.3 million in 2013, the survey found. That's more than five times the average wealth of the next 10% of households: $631,400.
Fed Chair Janet Yellen highlighted the dearth of assets for lower- and middle-income families in a speech Thursday. She noted that the bottom fifth (20%) of American households had a median net worth of just $6,400 in 2013. Many had no or negative net worth. The next 20% had a median net worth of just $27,900.

"The financial crisis and the Great Recession demonstrated, in a dramatic and unmistakable manner, how extraordinarily vulnerable are the large share of American families with few assets to fall back on," Yellen said.

The Fed's report Thursday included some other signs that Americans are still slowly repairing their finances. The ratio of household debt to income dipped to 107% from 108% in the previous quarter. That figure is down from 135% in 2007, just before the Great Recession began. The ratio of household debt to income was below 100% in the 1990s, before the housing bubble began in the next decade.

SOURCE:  Associated Press

Tuesday, September 16, 2014

Florida remains cruise capital of the world

The number of people boarding cruise ships within the nation dropped last year for the first time since the recession, but passenger counts increased globally and in Florida, according to a new report from the Cruise Lines International Association.

Last year, 9.96 million people embarked on cruises from U.S. ports, a 1.3% drop compared to 2012. Though, globally, the number of passengers taking cruises on North American cruise lines increased nearly 4% to 17.6 million, according to the Miami Herald.

Florida remains a cruise industry powerhouse, with the number of embarking passengers increasing 1.3% to 6.15 million in 2013. Miami led the growth with more than 2 million passengers boarding ships, a 6.8% increase; Port Everglades in Fort Lauderdale saw a 2.7% increase to more than 1.8 million embarking passengers.

Read more here.

Tuesday, September 2, 2014

How the Recession Beefed Up Sister City Relationships

U.S. cities traditionally develop relationships with foreign cities for diplomatic, cultural or educational purposes. But more and more are looking to them for economic development.

 Sister Cities International reports that in the past several years more and more cities have been approaching the organization asking for help to expand their existing partnership toward economic development. 

The shift began following the Great Recession, when many local governments began an earnest push to expand economic development and business opportunities beyond not just their immediate borders, but across international borders, said Adam Kaplan, membership director at Sister Cities International. Cities that already had sister city relationships began asking if those relationships could be used to stimulate trade and whether they could do so on their own, without the federal government’s help.) 

Read the full article at . . .

Florida's revenue collections could surpass pre-recession high

When the 2015 Legislature convenes in Tallahassee, it is expected to have nearly $30 billion in General Revenue to create the state budget for FY 2015-16, according to a Budget Watch from Florida TaxWatch, the privately supported think tank examining government spending. However, after this month's GR Estimating Conference, the new General Revenue projection is $141.6 million less than previously thought.

The state's estimators attribute the scaled back projections to normal fluctuations, not any underlying weaknesses in the economy. The final estimate for next year's budget won't be announced until March.

For the fiscal year ending June 30, 2014, actual GR collections fell short of projections made last March by $106 million. The revenue collection estimates for the current fiscal year (2014-15) were increased by $49.2 million, but the estimates for the next year (2015-16) were lowered by $84.1 million.

Estimates for the sales tax, the largest source of General Revenue, were increased. However, the estimates for corporate income taxes and real estate taxes (documentary stamp and intangibles taxes) were all revised lower.

"Florida is now in the middle of its largest ever state budget, which is expected to grow even larger next year," said Dominic M. Calabro, President and CEO of Florida TaxWatch, the independent, nonpartisan, nonprofit taxpayer research institute. "Florida is experiencing steady recovery and growth and our revenues have finally recovered from the recession."

Read More at Florida Trend . . .

This Florida TaxWatch report is available in PDF format:  "Budget Watch: Total Collections Expected to Surpass Pre-Recession High"

Monday, August 25, 2014

Existing condos challenged by new condo competition

MIAMI – Aug. 25, 2014  Three years into South Florida's impressive housing recovery, demand for existing condos is showing signs of sputtering, even as single-family home sales chalk up new highs.
Blame the condo headwinds on stiff competition from a wave of glittering new-condo construction that is remaking the skyline and cementing South Florida's place as a magnet for foreign money.

Meanwhile, prices on existing condos have skyrocketed, making them less attractive to investors. And traditional home hunters face tough mortgage guidelines even more stringent for condos than for houses.

In Miami-Dade County, the volume of existing condo sales fell 8.8 percent in July to 1,403 units from 1,538 a year earlier; and they were down 2.8 percent from June, the Miami Association of Realtors said.

Year-over-year sales of existing condos in Miami-Dade have declined every month since February, though sometimes by small amounts.

Read more

Tuesday, August 12, 2014

First-Time Buyers Shut Out of Expanding U.S. Home Supply

An inventory crunch for entry-level houses has only worsened during the past year as discounted foreclosures become scarce and cash-paying investors snap up affordable listings to convert to rentals. Properties at the lower end of the market are also the most likely to have underwater mortgages, keeping would-be sellers from moving.

Read more at Bloomberg.