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September 1, 2007- September 30, 2007 September staged a modest comeback from the dismal August performance. August/September have historically been the slowest months and the national sub-prime mess also may have thrown some cold water on the waterfront party that was improving in the late spring and early summer. However, the average price of the 10 closings did set a monthly record of $2,826,500 and the median closed price was $1.975,000. The active inventory, reversing its downward trend, increased to 357 units from 341 in August after at low of 335 in July.
Looking at the bigger picture, there is a remarkable similarity between the year-to-date performance in 2006 and 2007. The number of units closed is almost the same and the average price is only down 2.44% (although the median is down 14.7%).
YEAR TO DATE Waterfront Closings in Fort Lauderdale East of Federal Highway: 127 vs. 128 in 2006
Total Closed Sales Year-to Date 127 (2006 128)
Average Closed Price: $2,111,975 (2006 $2,164,780)
Median Closed Price $1,700,000 (2006 $1,995,000)
DOM (Days on Market) 178 (2006 153)
SP/LP (Sold Price / List Price) 87% (2006 91%)
SP/SQFT (SoldPrice/SqFt) $518 $558
New Closed Sales in August, 2007 10
New Pending Sales August, 2007 9
New Listings In September, 2007 24
Current Active Listings 10/01/2007 357
August Closings # Avg $ Median $ DOM SP/LP SP/SQFT
2005 17 $2,062,901 $1,900, 000 101 92.08
2006 6 $2,914,166 $2,947,500 268 88.37
2007 7 $1,564,164 $1,512,000 248 90.0
September Closings
2005 19 $2,068,526 $1,950,000 94 93.52
2006 15 $2,219,298 $2.025.000 167 86.47
2007 10 $2,826,500 $1,975,000 246 89.0
October Closings
2005 8 $1,456,335 $1,337,500 34 96.33
2006 8 $1,756,068 $1,200,000 119 91.28
November Closings
2005 7 $3,760,571 $2,800,000 123 76.99
2006 7 $1,560,571 $1,640,000 115 93.90
December Closings
2005 9 $2,562,166 $2,350,000 176 87.61
2006 9 $1,900,555 $1,260,000 144 85.34
January Closings
2006 15 $2,842,000 $1,765,000 155 91.8
2007 3 $2,493,600 $2,700,000 134 92.2
February Closings
2006 14 $1,993,142 $1,762,500 87 92.2%
2007 12 $2,209,750 $1,347,500 130 86.5%
March Closings
2006 23 $2,299,435 $1,900,000 176 92.0%
2007 17 $2,254,044 $2,050,000 153 87.0%
April Closings
2006 12 $2,142,750 $2,100,000 212 90.0%
2007 18 $2,325,056 $1,725,000 214 85.0%
May Closings
2006 25 $2,004,808 $2,025,000 132 90.0
2007 14 $1,850,428 $1,795,000 136 91.0
June Closings
2006 8 $1,793,750 $1,700,000 47 90.0
2007 20 $2,128,240 $2,195,000 190 87.0
July Closings
2006 12 $2,718,833 $2,299,708 155 89.0
2007 14 $2,204,421 $1,976,679 202 90.0
New Pending Sales
Dec 5
Jan 9
Feb 18
Mar 20
Apr 23
May 14
Jun 14
Jul 18
Aug 7
Sep 10
End of Month Pending Sales
Dec 13
Jan 16
Feb 22
Mar 29
Apr 30
May 23
Jun 20
Jul 18
Aug 12
Sep 18
HEARD ON THE WATERFRONT THIS WEEK:
"Now you know why we are here" Senior Executive LXR Hotels and Resorts.
You can certainly feel the energy level in Ft. Lauderdale rising to an even higher pitch than usual. Every day more and larger yachts are arriving back in town. Party boats are cruising the ICW. Restaurants are full and the season of the charity fund raising benefits is back. Last night Grill 66, at the Hyatt Pier 66 Resort, was abuzz and packed with people for a worthwhile charity auction and dinner. A guest of the event visiting from Miami could not get over the ambiance of the evening with a beautiful sunset on the Intercoastal overlooking an amazing collection of Super Yachts, literally at the Gateway to the Yachting Capital of the World! A senior executive of LXR Luxury Resorts and Hotels summed it up to her: "Now you know why we are here." LXR manages the prime hotel resort properties in Fort Lauderdale for The Blackstone Group (the largest real estate investment firm in the world) which purchased the South Florida package of properties for over $1.25 billion and announced recently that it plans to invest more than $400 million into its LXR properties over the next several years to ensure they become or continue to be the finest resorts and hotels in the luxury marketplace."
I rest my case. Now you know why I am here. Don't worry...be happy!
Now for the rest of you that insist on worrying let me go on.
There are definite areas of stress in the market, but the single family home waterfront market is demonstrating resilience, in spite of the "perfect storm" of issues regarding taxes, insurance, hurricanes, rising interest rates and credit market crises. We have weathered two hurricane seasons without a named storm hitting Florida shores, and shocks to the market from increases in interest rates, insurance and property tax (and the constant barrage of the media) seem to have peaked and are now on their way back down, albeit slowly.
Recently, I have heard comments from Canadian and European market watchers that the media stories of doom and gloom have been way overdone when it comes to our luxury waterfront market. These prospective buyers, and presumably others, are now taking advantage of buying opportunities before this phase of the cycle comes to an end.
Iin the last 10 years the Canadians have seen the dollar go from $.80 to $1.02. The Euro also has been on a tear. What will happen to our market when some of that purchasing power flows back into Florida real estate? What will happen if our state political leaders finally see the light and roll back budgets and eliminate taxes? What will happen when gaming expands and generates more economic activity and other tax revenue?
One more development needs to be noted. That is the all-time records that were set in the equity markets last week, less than a month after the stock market took a tumble when the sub-prime mess hit the press. As painful as it is to many affected by the credit crises, it may be that the sub-prime hysteria was an over-reaction by the media and the market-makers took advantage of it?
"The size of the total subprime market is estimated by Reuters to be about $500 billion. Again, this is the total asset pool, not nonperforming loans. The GDP of the United States today is about $14 trillion. That means this crisis represents about 3.5 percent of GDP, compared to between 9 percent and 10 percent of GDP in the S&L crisis. If history repeats itself -- which it won't precisely -- for the subprime crisis to equal the S&L crisis, the entire asset base would have to be written off, and that is unlikely. That would require a collapse in the private home market substantially greater than the collapse in the commercial real estate market in the 1980s -- and that was quite a terrific collapse." And, it should be noted, following the recovery of the S and L crises witnessed one of the best real estate markets in history for the next fifteen years.
Go Figure!
We will have to watch several factors which will affect the market in the months to come:
1. Interest rates continue to fall for the fifth month for borrowers with good credit and documentation, while underwriting requirements continue to stiffen (see my Mortgage Market Update below and on www.WaterFrontJim.com)
2. Property taxes and government budgets are going back down (although not as much as we want...yet). Plus, law suits and taxpayer protests are keeping the pressure on the Governor and the Legislature to bring about meaningful tax reductions in the coming year).
3. The hurricane season, so far, has been another non-event like last year. This should take pressure off of insurance rates.
4. A drop in fuel prices will encourage the Fed to relax interest rates further into the end of the year.
PROPERTY TAX UPDATE
A new taxpayer revolt movement is gathering steam after the miserable failure of the Governor and the Legislature to pass meaningful tax and budget reform (They are not doing any better in the current October Special Session after their previous bill was ruled unconstitutional). Known as www.FloridaBallotInitiative.com, the citizen reform group proposes six petitions to go on the 2008 Ballot. Please go to the website, print and sign the 6 Petitions and mail them to the address on the website. Over 60,000 signatures are needed as soon as possible. Please help to eliminate property taxes.
Judge declares tax-cut plan unconstitutional. " Meant to deceive." Really?
A Tallahassee judge heard arguments to take the proposed property-tax amendment off the Jan. 29 ballot.
Posted on Wed, Sep. 12, 2007
BY MARC CAPUTO
TALLAHASSEE --
A conflict over the real intent of the Legislature's property tax cut amendment has a judge deciding whether lawmakers meant to lower taxes or phase out the state's Save Our Homes tax assessment cap.
It's chiefly the second choice, argued Weston Mayor Eric Hersh, whose lawsuit to block the five-year, $23 billion local-government tax-cut plan was heard Tuesday in Leon County Circuit Court.
Hersh and his attorneys argue the Legislature wrote ''misleading'' language in the ballot's summary because it fails to tell people they'll eventually lose the popular protection that has kept taxes disproportionately low for most homesteaders. His suit also claims the Legislature improperly set the election date and infringed on local-government taxing powers.
Judge Charles A. Francis said he'll rule on a motion for summary judgment within 10 days. Regardless of what he decides, both sides will take the case to the state Supreme Court, which initially declined to hear the case.
The state's lawyers say the case has no merit and that the Legislature followed the proper procedures for getting the measure on the ballot, isn't unilaterally affecting the local-government taxation system and didn't have to clearly state every possible effect of the amendment.
''There's no intent to deceive,'' said Scott Makar, the state's solicitor general, who is representing the Secretary of State's Office and Department of Revenue. ``There's nothing misleading going on here.''
Though Makar suggested the Legislature's chief intent was not to do away with Save Our Homes, the senator who helped draft the package, Dan Webster of Winter Garden, said repeatedly during the June special session on property taxes that the homestead-exemption plan was designed to phase out Save Our Homes, which limits homestead tax-assessment increases to a maximum 3 percent yearly and has helped distort the tax system.
Hersh's lawyer, Jamie Cole, said the Legislature was ''hiding the ball.'' He pointed out that by saying the homestead exemption would be boosted from $25,000 for ''everyone,'' it failed to tell people that they won't get the exemption unless they choose it.
Also, the Legislature wrote the ballot language to say the plan ''revises'' Save Our Homes, rather than ''eliminates'' it.
On that point, Judge Francis wondered if the punctuation in the ballot language was clear enough for voters to help them understand what they would be deciding.
Said Hersh, who's not acting in his official capacity in suing: ``If they put in there that this would eliminate Save Our Homes, it would fail.''
More Relief in Sight...More casinos a sure bet for South Florida...Could take pressure off property tax payers.
"In closed-door negotiations with the Seminole Tribe, Gov. Charlie Crist has offered the tribe permission to run Las Vegas-style slot machines at its casinos as well as the exclusive right to run Las Vegas-style card games, like blackjack and baccarat, according to people close to the administration.
Flash:
Florida Legislators Will Not Back Seminole Gambling Expansion....(editor's note: what's with this? All the more reason to back the www.FloridaBallotInititative.com The state needs to stop the games eliminate property taxes and find more ways cut the budget, and raise revenue such as from gaming! More on this is the News at www.WaterFrontJim.com Go Charlie!)
As has been reported here at CGW, Florida Governor Charlie Crist is close to getting a deal done with the Seminole Indians that would allow Vegas style slots, as well as Blackjack and Baccarat.
On Monday, however, that pending agreement was put in jeopardy as State House leaders claimed they would not ratify such an agreement.
Marco Rubio, the House Speaker, in a letter to Governor Crist said that his chamber would not support an agreement that would allow more than what is already offered in Broward County. In other words, table game expansion would not be supported.
Although the addition of these games would give a major boost to the states economy, Rubio had this to say,"Because of our opposition to the expansion of gambling, we believe that the pursuit of increased revenue for the state should be of secondary importance in Florida's negotiations with the tribe."
He went on to say in the letter, which was signed by Rubio and his top lieutenants,"For us, money is not and never will be the primary consideration. Rather, we believe the aim of the negotiations should be to agree to the bare minimum amount of gambling to which the Tribe is entitled to under law."
The problem with Rubio's thinking and statement, is that it does not seem well researched. The Seminole Indians are not asking for anything that is not already legal according to law. The new law in affect gives access to class three gambling licenses, that is what the Vegas style slots that Broward County allows, falls under.
The Seminoles are simply stating that if slots are legal under the class three license, then so too should Blackjack and Baccarat, both games that also fall under the class three gambling license.
Governor Crist has realized the problem for the state here if the Seminoles case goes to Federal Court, so he has decided to enter into negotiations with the tribe to get the state a portion of the profits.
Crist has said before that he would like to offer legislators a say on the compact, but he does not feel legally that he must have their approval, and he plans on having the compact ready by next week.
Now this article shows that other states are having the same issues that we are. But Georgia has a leader with a solution, much like what we are proposing in
This is must reading and send it to your local political reps!
House speaker seeks to abolish ad valorem taxes
By Glenn Richardson Ga. House Speaker
The time has come to eliminate all property taxes in Georgia, and I firmly believe the people of the state of Georgia should be given an opportunity to vote on a constitutional amendment to repeal all property taxes.
That opportunity could come in November of 2008 if the General Assembly will agree that Georgia's economy should be based on the exchange and receipt of money and not taxing property.
While I welcome any and all discussion and debate about tax reform and HR 900, a recent House proposal to eliminate property taxes, it is helpful if that discussion and debate is based on fact.
When HR 900 was originally written, it was intended simply as a framework to open debate, gather ideas, and obtain input. Since then, we have received complaints, suggestions and opinions from citizens all across the state, and that is exactly what we wanted.
From the beginning of this process, our goal has been to eliminate all ad valorem taxes in Georgia. The details of exactly how we reach that goal have changed and will continue to change as we weigh the best options for our state, but one thing is clear.
The current property tax system is outdated, unfair and excessive.
Georgia is divided into 159 counties, each with the power to tax their residents. One hundred and eighty school districts also each have the power to tax.
But that power goes beyond simply collecting taxes. Rather than determining the amount of money they have and then creating a budget, as Georgia's families do every day, a county can simply determine how much money they need first and then decide how much to charge their residents.
If a county or school district decides they need $50 million, all they have to do is determine where to place the millage rate and their property values in order to raise $50 million.
If times get tough, they simply raise the millage rate or increase property values rather than tighten their belts like working families must do. The system is completely backwards.
The biggest part of the problem is that property taxes are increasing faster than personal income.
Since 1990, personal income has increased 146 percent while property taxes have increased 176 percent. Even though people are not earning more income, the government is requiring that they pay more taxes.
A family can live in a home for 30 years and suddenly find they cannot afford it anymore because their property taxes have increased so much.
They are not requiring any more services from their local government, and yet that government keeps taking more and more money from them. The biggest asset most people have is their home; it's the American dream. Yet if they can't pay, they lose their home.
The current property tax system was created when we were an agricultural society and people made a living off of their land.
The last overhaul of the system was 70 years ago, and since that time our economy has changed significantly.
Home ownership has increased from 30 percent to 70 percent. We have moved from an agricultural society to a service-based society, as has the rest of the nation, and yet, we do not tax services at all.
It is the twenty-first century. It is time to go to a system that taxes the receipt and exchange of money, not the ownership of property. It is time to eliminate property taxes.
Our proposal is called the GREAT Plan, which stands for Georgia's Repeal of Every Ad valorem Tax.
The GREAT Plan calls for a sales, use and service tax of 4 percent. It also calls for elimination of many sales tax exemptions that special interests have accumulated over the years.
By taxing services and eliminating most exemptions, we can generate the same amount of money being generated from the property tax, and we can eliminate all property taxes in Georgia.
Local counties, cities and school districts will be guaranteed to receive not less than the amount they are currently receiving.
If local control is what a community wants, they may continue local option sales taxes such as the SPLOST and ELOST, all of which will continue to be determined by the vote of the citizens.
We have opened a dialogue in this state on serious reform of taxes so that Georgia may lead the nation.
Over the coming months, we will hold hearings and continue to seek advice.
I look forward to hearing from you and working together to make Georgia a GREAT place to live, work and raise a family.
Glenn Richardson, RHiram, is speaker of the Georgia House of Representatives.
Interest Rates
Mortgage rates tumbled to their lowest level in four months as a shockingly downbeat employment report convinced investors that a Fed rate cut is at hand. The benchmark 30-ye |