Now that the mid-term elections are done it’s time to get on with the realities of life and some of those realities concern real estate. Writing in the Manchester Union Leader, commentator Deroy Murdock says that “since Bush’s May 2003 tax-rate reductions, total non-farm employment has expanded by 6.6 million new jobs, Americans for Tax Reform estimates. Unemployment has plummeted from 6.1 percent that month to 4.6 percent in September 2006. Average real GDP has accelerated 3.7 percent since 2003’s tax cuts.

It doesn’t matter which political party is in office, the recent heritage of debt must be addressed. While some debt is surely acceptable, we cannot continue with massive annual deficits and not harm the economy. Moreover, the additional debt created during the past five years is not without cost. At 5 percent, the interest on our new-found additional debt is $75 billion a year. That’s money not being spent on college scholarships, higher salaries for the military, universal health care, infrastructure repair or a number of other important programs. (more…)

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A financial planner who had never seen stock prices lose value probably isn’t the best place to turn for investment advice. But many Americans are taking just that kind of a flyer when it comes to their most valuable investment - their home. Just more than half of members of the National Association of Realtors (NAR) had four years or less of experience in a 2005 survey - which means they came into this year’s real estate downturn knowing nothing but boom times.

Home sales set record after record from 2001 through 2005, as prices rose to record levels as well. But the pace of sales is off 14 percent so far this year and the year-over-year change in existing home prices has fallen in the past two monthly reports from NAR.

That’s the first time there has been a decline in that key price measure in 11 years - not even one in three Realtors today was around back then.

Buyers and sellers are negotiating this rapidly changing market with the advice and guidance of agents who may not be terribly familiar with the current landscape.
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There’s a popular notion that baby boomers are making a habit of living like Laginess—buying second homes either on oceanfronts, lakeshores, mountains or lively urban downtowns. Some people are snapping these homes up now in part as investments, perhaps to be sold at significant profit to a retiring boomers. But Gary Engelhardt, a Syracuse University economics professor, says the notion of these waves of buyers is largely a myth. And he warns people to beware of investing based on hype that seems questionable.

In research done in conjunction with the Mortgage Bankers Association and the Radian Group credit risk management company, Engelhardt found that only a small proportion of older Americans have second residences, and there is no greater tendency by baby boomers than the previous generation to indulge in second homes. And there is actually more movement between suburbs by empty-nesters than into urban playgrounds. Only a tiny fraction of suburban empty-nesters are moving to the city, Engelhardt said. ‘’Suburbanites like the suburbs,'’ he said. Engelhardt scoured government data from the 2004 Health and Retirement Study, the 2005 Current Population Survey and 2000 Census to measure mobility by early baby boomers — people born between 1946 and 1955. The surveys do not yet capture activities by younger boomers, so Engelhardt can’t be sure what they will do. (more…)

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The elections are over, and the outcome had no detectable impact on the financial markets. Far more important than the switch in congressional control is President Bush’s transfer of national security policy from Neo-Con hands to Daddy’s bailout team — grounds for optimism for the world ahead. However, we’re not interested in the world, we’re interested in money; not the House but housing, and the bond market much prefers pessimism to optimism.

A recession from some other cause (a consumer or employment collapse, a Fed forced to overtighten into inflation) would certainly make housing worse, but not the other way around. With one exception: a mortgage-credit spiral. Housing markets are the slowest-roller of all. The last buyers in the party get burned by a routine and minor retreat in price in the year after the peak, but then prices just go flat, sometimes for decades. The bubble zones appear to be entering that flat phase now. The effect on GDP is thus far minor, mostly caused by the decline in mortgage equity withdrawal, sawing about 1 percent off of GDP — a reduction in stimulus, not a braking force. (more…)

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Private-property advocates placed measures on Tuesday’s ballot in 11 states that would restrict “eminent domain,” the government’s right to take private property. Residents of at least eight states have voted to prohibit what happened to Susette Kelo from happening in their home towns. Voters on Tuesday responded by voting in favor of the restrictive measures in eight of those initiatives - call it Kelo’s revenge.

Arizona, Florida, Georgia, Michigan, Nevada, North Dakota, Oregon and South Carolina all passed initiatives to restrict the use of eminent domain, in most cases overwhelmingly. In Florida, 69 percent voted yes on an amendment that prohibits using eminent domain to force the transfer of property from one private individual or entity to another. In Georgia, 83 percent voted to approve an amendment to the state constitution that says eminent domain can be used only for public use. A school or park might be okay; the government taking land to give to a mall developer would not be. The most one-sided vote in favor took place in South Carolina, where 86 percent voted yes to an amendment restricting eminent domain for public use only. A ninth state, New Hampshire, was expected to approve a similar initiative, but results would not be made available until late Wednesday, Nov. 8. (more…)

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Have you ever checked out the satellite photos and market value estimates of homes in your neighborhood on Zillow.com — the Internet real estate site that offers “free, instant valuations and data for 67 million-plus homes'’? Zillow was launched with major media fanfare in February, backed with a reported $57 million in venture capital. It is one of the most popular real estate sites on the Web — visited millions of times a month by sellers, buyers, agents, lenders and homeowners. It also has begun distributing its free “Zestimates'’ through Yahoo.com and real estate brokerage sites.

But now Zillow is coming under harsh scrutiny. In a complaint filed Oct. 25 with the Federal Trade Commission, the National Community Reinvestment Coalition charged that Zillow knowingly deceives the public by presenting its property estimates as accurate, whereas in fact they are frequently far off the mark. The non-profit coalition, which consists of housing and economic justice organizations around the country, says its own audit of Zillow’s accuracy documented that its valuations are within 10 percent of actual market value “less than one-third of the time.'’ The allegedly erroneous estimates are especially harmful in low- and moderate-income and minority neighborhoods, according to the complaint. (more…)

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The site of the old Mountain Park pool will soon be transformed into a teen-oriented passive park under a contract awarded Tuesday by the Gwinnett County Board of Commissioners. The old pool was demolished after the opening of the new Mountain Park Aquatic Center.

New facilities will include a small skate park, a sand volleyball court, an irrigated lawn for free play, a playground with climbing boulders and swings, a small picnic shelter and restrooms. A drinking fountain, bike rack, picnic tables and landscaping are also included in the million-dollar contract awarded to low bidder Lewallen Construction.

“This is another example of how we’re revitalizing the infrastructure in existing neighborhoods in the southern part of the county,” District 3 Commissioner Mike Beaudreau said. “These investments will help attract and encourage growing renovation and renewal in the area.” (more…)

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