Tuesday, May 16, 2006

Blips and Burbs about real estate for May 15th

A bill that immediately limits the ability of local governments to condemn homes and other property for private redevelopment projects became law Thursday with Gov. Jeb Bush's signature.

A new survey of second-home owners by NAR shows that baby boomers continue to dominate the market, and minorities own a growing number -- more than one-in-ten. A surprising majority of respondents own multiple properties in addition to their primary residence.

Minorities own 11% of second homes-up from 6% in 2002, according to a new NAR survey.

What's more, about six in 10 respondents own two or more homes in addition to their primary residence, and a majority are interested in purchasing additional homes. An analysis of U.S. Census Bureau data shows there are 6.8 million vacation homes in the U.S. and 37.4 million investment units in addition to 74.6 million owner-occupied units. "We've always known that a certain segment has invested heavily in the rental market, and some people earn their living simply by holding and managing investment property," says NAR President Thomas M. Stevens. "What we see now is a crossover between largely vacation and investment homeowners, with people recognizing the value of those investments and pouring more assets into real estate."

Rates on 30-year mortgages edged down this week, the first decline after six straight increases. Mortgage giant Freddie Mac reported Thursday that rates on 30-year fixed-rate mortgages averaged 6.58 percent.

Even though the insurance industry paid out billions last year in hurricane claims, insurers, as a whole, are going into the 2006 storm season riding a wave of tidy profits. Allstate, for example, had $1.55 billion in hurricane-related losses but still rang up a 26 percent profit for the year.

State Farm Insurance Co., the largest home insurer in Florida, is seeking to boost premiums by an average of about 70 percent. If approved by state regulators, the increase would be effective Aug. 15. Coverage costs for mobile homes will almost double, and about 1,500 policies held by condominium complexes will be canceled.

Seniors leaving their long-time homes for a smaller apartment or assisted-living unit now have access to companies that manage all aspects of the move. These moving specialists handle everything, including helping the homeowners choose the furnishings and belongings they will keep; donating excess belongings to charity; purchasing new furniture; and even decorating the new digs to look similar to their old house. Transitional Assistance and Design in Gaithersburg, Md., and the national Moving Solutions franchise are examples of such firms. Though the exact cost varies based on location and services performed, most charge hourly fees of $65 to $125. They believe their services are worth it, as seniors often are too emotionally tied to their homes to make the transition on their own. "We are objective, we're not family," says Sue Ronnekamp, founder of Austin-based Living Transitions. Older children generally provide financial assistance, as they may be too busy with work and childrearing to help their parents make the move.

Source: Washington Post (05/11/06)

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