Lakewood Ranch, FL Blog

So, it was that time of the year again...time to renew my homeowners insurance policy.  I'll admit that normally I don't give a great deal of thought to such things but, this year, the price increase of about 30% got my attention.  I called my agent and suggested it was time to shop around for a new insurer.  She came up with one that I had never heard of but the price was right so I said OK.  However, as I read the material, I discovered that they wouldn't cover a property if there was a breed of dog found on the "bad dog" list.  Just my luck, my sheepish German Shepherd (who fears her own shadow) disqualified me from the new company so, again, my agent searched around and found a new company that was, apparently, less concerned with my dog and so, I signed.  Even better, the price was lower than the first replacement company!   What could be better?

A few days later, the Sarasota Herald Tribune reported that Florida has a number of smallish insurance companies which technically meet the legal requirements the state demands but, in the case of a major disaster (like, I dunno, a hurricane?), would be incapable of covering all of their claims!  Naturally, they had a lineup of the 6 or 8 worst of the worst companies and, wouldn't you know it, there was my bright, shiny, new insurance company listed among the weaklings.  Although they are A-rated by Demotech, a company that specializes in that sort of thing, the researchers at the newspaper were able to determine that these companies would not be able to handle a widespread disaster. 

Sound familiar?  Doesn't that sound just like the mess we've been going through in this country for the past few years because the people responsible for making sure that the banking system was sound were, in fact, asleep at the wheel?  Are we about to have yet another fianancial shoe drop here in Florida?  It sure sounds possible.

To her credit, I read that Alex Sink, Florida's Chief Financial Officer, has called upon the State Insurance Commish Kevin McCarty to get to the bottom of this potentially horrific situation before the 2 million families covered by these companies find themselves at a complete loss.  Another positive sign...the Florida Senate Insurance Committee is supporting legislation to raise the minimum capital contribution requirement for Florida insurers from $4 million to $15 million.  That will help assure that insurers are stronger and better equipped to handle major claims but I have a feeling much more will be needed before we are really safe.  Remember, even if you are not insured by one of these weak companies, you are still facing major losses to your net worth if your property is surrounded by homes that won't be fixed following a hurricane because your neighbor's insurance company can't cover their insured's losses.

It seems every time there's a new article in the online version of the Bradenton Herald regarding new construction or a proposed new development, the "boo birds" come out en force, decrying the negative impact of new homes on the market, additional traffic, etc.  They have a point, of course, but I suspect the same complaints have been around since the first settlers showed up here.  No matter where you live or when your house was built, I'll bet there was someone who didn't like the fact that more people were coming.

Amendment 4 seeks to change the state constitution by placing approval of new development plans (or changes to existing plans) in the hands of the voters rather than leaving the decision up to public officials.  To see what appears to be a neutral website on the amendment, CLICK HERE.

My personal take on Amendment 4 is that it is an interesting idea that will not work in real life.  First, the reason we have representative government in our country is that a true democracy where we vote on everything is too unwieldy.  I expect that the need to place these decisions up for a vote will occur too often (or, conversely, will encumber the process so much that nothing will get done) and that these elections will result in increased election costs at a time when we need to be cutting the cost of government, not increasing it.  Our representatives are elected to protect our interests to the best of their judgement.  If a majority of voters believes that they have not faithfully done so, these representatives should be voted out of office.

I also believe that this movement was started by well-meaning conservation-minded people but, let's be honest, these people can often be zealous to the point of absurdity.  Truth be told, they want to stop all new construction and, since only highly motivated voters actually vote, they are probably likely to get their way even though they probably hold a minority opinion.  That's not good either. 

On the other hand, I'm not sure I buy the argument that we should vote no to 4 because we need jobs to get out of the economic funk we are in.  We do need the jobs but we should never let that be the sole reason for changing or not changing our constitution.

I think the need for responsible development is obvious but there must be a better way than leaving the decision-making up to activist voters.  Voting for amendment 4 would also require every county and/or municipality to conform to this approach, even if there is no need or call for it.  That's one of the downsides of using constitutional amendments to advance an agenda.

What do you think?

I suppose it's something of a Christmas Miracle...mortgage finance companies Fannie Mae and Freddie Mac are suspending foreclosures and evictions for about two weeks in a temporary break for borrowers during the holiday season.

It's a shame that this is even noteworthy but I guess it took an executive decision to not throw families out on the street during the holidays.  The suspension, announced Thursday by the government-controlled companies, runs from this Saturday through Jan. 3. “No family should have to face the prospect of being evicted during the holiday season,” Michael Williams, Fannie Mae's chief executive, said in a statement.  I'd say that no family living in their principle homestead property should be evicted in this economy when there are so many other possible alternatives.  I don't advocate a something for nothing or a giveaway approach but why not refinance all of these loans using today's current low rate and extend the period of the loan or create a balloon--something that gets the monthly payment under control.  It is better for everyone to keep these properties occupied than it is to have them go to foreclosure.

I just completed training to become certified as a "SFR" or Short Sale and Foreclosure Resource and while much of the program focused on assisting buyers and sellers of short sale and foreclosure properties, there was also an emphasis on helping borrowers avoid foreclosure, too.

We hear everyday from folks who are facing or have already been thru foreclosure.  There are programs and initiatives to help but they are still limited as to who can use them and I've read that many banks are not exactly helpful when it comes to implementing these programs.  A new program promises to assist with loans outside of Freddie and Fannie but we'll see how effective that program will be.  Lenders aren't required to live by it until April.

Fannie and Freddie are only part of the picture but at least they are willing to suspend the foreclosure and eviction process for a little while.  It's not enough but it is a start.  Let's hope that things get better next year.

Merry Christmas, Happy Hannukah and here's to a Happy 2010!

I write a market news update each month and in my last couple of entries I mentioned that I expected prices to level out this year.  To be sure, there have been (and still are) good deals for almost every buyer but this activity has also heated up the market as courageous buyers have snapped up the lowest priced properties.  This activity is statewide and has not escaped the attention of Hoffman Development Group, the developer who took over the Miramar Condominium project in Lakewood Ranch.

Yesterday, HDG announced that they were raising prices on their remaining inventory of Miramar townhouses and single level condos.  Charlie Brasington, President and CEO of HDG, said he is "now certain that the market is turning and prospects realize the time to buy is now.  Everywhere I go, I’m seeing sales at pretty darn good prices, pretty good pace." 

HDG has had overwhelming success in selling Miramar at aggressively low prices, and Brasington concluded the market could support higher prices.

Here's the thing:  nothing happens unto itself.  If HDG sees it is possible to raise prices and keep sales going, other companies will follow suit.  Once new product prices rise, resales are likely to follow. 

The Federal Reserve decided yesterday to pump a trillion dollars into the economy, including $300 billion into government bonds and $750 billion into mortgage backed securities.  These moves could result in 4% mortgage rates as early as today.  That is an incredible rate and many analysts are suggesting that this move may actually turn the housing decline around.

Expect banks to be swamped by mortgage applications.  There is a website:

http://www.makinghomeaffordable.gov where you can determine your eligibility for government help.

There hasn't been much good news in the housing market lately but for first time homebuyers and those who have not owned a principal residence in the past three years, the government is now providing a $8000 tax credit for purchases made in 2009.  It is easy to get, doesn't need to be repaid, and is a true tax credit.  For example, if you would normally owe $9000 in income tax for 2009, you'd pay $1000.  If you'd owe $5000 in tax, you'd get a check back for $3000!  There are some rules, of course, but it appears to be a pretty good deal with not alot of strings attached.

For complete information go to: http://www.federalhousingtaxcredit.com/2009/home2.html