Notes From All Over

36% of residential sales transactions in 2005 were marred by title problems, up from 25% on 2004. Recording errors and payoff of liens caused most of the problems. Twelve US cities, recognized for maintaining the original look of their communities, were added to the National Trust for Historic Preservation this year. Info go to www.nationaltrust.org
Bills proposed for consideration of the NJ legislative session include exemptions from realty transfer fees for military families.

Notes From All Over

The proposed NJ “water tax” bill was shelved indefinitely from the pending state budget. Zoning regulations in question on waste-to-ethanol plant proposed on Route 9, Dover. For more info, go www.nuclearsolutions.com . Mortgage rates peaked at about 7% by fall of 2006. Warehouse construction, fueled by increased international trade, was up with rent up 5% thru the year. Proposed FHA reforms include 40 year Fed backed loans and elimination of the required 3% down payment.

Notes From All Over

Nationally, the backlog of unsold homes rose by 2.4% to a new record of 565,000 homes for sale at the end of April 2006. At the April sales pace, this represented a 5.8 month inventory. Unpaid traffic fines and unreturned library books can lower your credit score if they are turned over to a collection agency and reported to a credit bureau. Remodel or move? See www.remodelormove.com for resources and calculator for making the best decision.

Notes From All Over

Residents of local school districts across NJ turned down 47% of the budgets proposed. Just 53% of the budgets were approved in 2006, compared to 71% in 2005. Expect more wetland development as private developers will be encouraged to join in wetlands credit trading, opening areas for commercial use. The prime lending rate went to 8% in May, 2006, raising the costs for adjustable rate mortgages. Nationally, commercial RE investment yielded 34% earnings 2005.

Notes From All Over

Housing starts slipped about 10% to 1.85 million, with luxury properties suffering the biggest hit proportionately. Construction contribution to the GDP growth won’t shrink, as increased public and commercial building will offset home starts. Kiplinger projects that total home sales for the year face a 6% decline to 7.85 million. Fed’s 3/26/06 quarter % point increase was the 15th raise since 06/04. NJ inventory of unsold homes was 42,500 in Dec. 2005. Dec. 2004 was 31,000 homes.

Notes From All Over

According to the American Farm Bureau, should the realization of the House passed bill on border security which omits inclusion of a temporary worker status become law, the loss of labor availability will impact the economy to $9 billion and eliminate 1/3 of the produce farms in the US. Office rents increased about 6% during 2006 compared to a 4% hike in 2004. Vacancy rates are about 14%, the lowest since 2003. New Fed chairman Ben Bernanke said he expects the nation’s interest rates to be raised a bit further in response to inflationary pressures still present in the economy. Of the AFB Top Ten Concerns, 7 impact real estate.

Notes From All Over

By early October 2005, more than 11,000 Realtors® had contributed toward the National Assn. of Realtors® donation of $1.1 million toward Hurricane Katrina relief. In 2005, 43% of first time buyers bought their home with zero down payment. According to the Kiplinger Letter, the Dow will hit a new high, not seen since 2000 because of less competition from real estate and an end to the Fed’s rate hikes by midyear. Global housing needs are being driven by a population shift in developing countries where people will be migrating from rural to urban areas in search of economic opportunities. Half the global population lives in urban areas and the predicted population burst will require infrastructure redevelopment and housing solutions for 3 billion more people by 2030.

Notes From All Over

In mid-December of 2005, the NJ Assembly Environmental Committee approved a bill (A-3560) which exempts solar panels and similar equipment from property tax assessment. The bill is expected to be passed into law. Another approval (A-2342) was for a $.03/1000 gallon water tax statewide on water produced by utilities. The proceeds are expected to be $12-18 million annually and would go toward conservation projects and protection of watershed land. Seniors identify “safety” as their top reason for living in a retirement community. In the wake of Katrina, property owners can expect to pay higher premiums for flood insurance. A revised flood law will widen coverage to 500 year floodplains from the 100 year plains now. Congress will trim flood program subsidies.

Notes From All Over

New regulations adopted by the EPA makes it explicit that current owners of idle industrial sites are not responsible for contamination that occurred under prior owners. Housing price indicates a national gain of 4% in 2006, down from 10% in 2005. Good real estate investment can be found by developing a commercial portfolio – 30% offices, 20% retail, 20% industrial, 20% multifamily 10% other property. Hotels yielded a 10-14% return on investment in 2005 and stayed strong in 2006 thanks to booming business travel. An estimated $160+ billion spent on home remodeling in 2006.

Notes From All Over

The average home heating bill for winter 2006 was up 50% from the previous year. The upside of high energy prices is a surge in investment in the energy sector…probably a good place to put stock allotted moneys for the next year.

Consumer spending will ease with mortgage rates increasing. Fewer home owners will be willing to tap into their home’s equity for cash. Expect to see built-in escalation clauses in new construction contracts as costs of cement, gypsum, plastic pipe are being driven by damage to Gulf Coast oil refineries. From late 2005 til 2007, over 60% of all homebuyers in the US will be minorities.