The Scott Ingraham BLOG

Haste Makes Waste in Shifting Foreclosure Market

Prospective investors in Florida foreclosures need more than a buy low, sell high philosophy. They have to buy fast, too.

A local banker told me cash buyers in the marketplace have rose from three to 24 percent. Cash buyers have a distinct advantage because some homes need to sell before a foreclosure sale appears. This means that more savvy investors with cash are here already picking up the best properties, the cream of the crop. By the time everyone else figures out that this is the time to buy, the best properties will be gone.

A few years ago, even a few months ago, this was less of an issue. In addition to a smaller proportion of cash buyers, supply skyrocketed. In September 2006, Florida had the country’s highest foreclosure activity - more than four times higher than the national average – and accounted for 27 percent of the nation’s total.

By the start of July 2007, the Sunshine State had fallen to number two behind California but its foreclosure listing filing rate still grew 23 percent from earlier in the year. In February of this year, filings increased from January while it dipped four percent nationwide.

According to the latest research report from RealtyTrac Inc., however, the tide is changing. The number of Florida homes in some stage of foreclosure dropped seven percent from February to March as the national amount rose five percent.

Judging when the market will rebound for sure and property values will once again begin to climb is difficult. We probably have not hit bottom yet, despite the most recent swerve, but the surge in cash buyers is already a factor. If the savvy buyers are here with their cash, we should all pay attention!

For anyone looking to get in at a very low cost, and set themselves up for either reselling properties or renting them out for a substantial profit, the time to buy is now.

-posted by Scott Ingraham at 9:52 PM 0 comments

Insurance Industry's Windfall Sends Real Estate on Downward Spiral
April 30, 2008

Weather forecasters are not the only ones paid when they make mistakes. Insurance companies profit pretty well, too.

And the Florida real estate industry is paying the price.

It’s been two years since a hurricane struck The Sunshine State, but residents continue to face rising insurance rates or dropped coverage. According to the Insurance Information Institute, rates are likely to rise between 20 and 100 percent over the next year for the 43 percent of the U.S. population living in coastal areas stretching from southern Texas to the northern tip of Maine. In addition, the Institute singles-out Florida as a possibility for even higher increases.

While current commercial and residential borrowers struggle to pay the premiums and prospective ones become hesitant to buy because of it – thus slowing the real estate sales market – insurance companies are laughing all the way to the bank. According to a St. Petersburg Times article last week, the property and casualty industry in America made almost $60-billion in 2006.

Eight hurricanes and three tropical storms either struck or brushed Florida between 2004 and 2005. Before, the average cost of homeowners insurance in Florida was $930. After, the cost had nearly doubled to about $1,600. For those living on or near the coast, such as Panama City residents, the cost of insuring a condominium or a house is closer to $3,000. Combine that with the fact that the last two hurricane seasons have been quiet and it’s clear why insurance companies are doing well.

Since the real estate industry took a hit from the active hurricane seasons, it should also benefit from the slow ones. The finger pointing for why this hasn’t happened goes to hurricane forecasters. These forecasters are trying to justify their grants and jobs by coming up with more reasons why they cannot be relied upon, but still should be considered an authority.

Dr. William Gray, a University of Colorado professor, has been prognosticating hurricane seasons since 1984. In April 2005, he and research associate Philip J. Klotzbach predicted that seven hurricanes would emerge that season (15 eventually did). The next year, they projected 17 named storms and nine hurricanes (there were actually 10 named storms and five hurricanes).

Gray and Klotzbach’s report released last week has a similar prediction for 2008: 15 named storms and eight hurricanes. This year’s forecast does include something new, however – a disclaimer. It reads: "Everyone should realize that it is impossible to precisely predict this season's hurricane activity in April.”

That hasn’t stopped some insurance companies from taking it as gospel and crying global warming – thought by many professionals to result in more hurricanes. Insurance companies are now using global warming as an excuse to raise rates and even dump clients, according to an article published last August on Scientific American.com. Florida Consumer Action Network Executive Director Bill Newton backed up the claim.

After living in Panama County for 37 years, I have concluded that I may have to be here hundreds of years, maybe thousands, to truly understand climate and weather patterns. One thing I do understand, however, is the only constant right now are raising insurance rates. That needs to change. Florida’s real estate future depends on it.

-posted by Scott Ingraham at 4:25 PM 0 comments

Like a Good Neighbor?

April 16, 2008

Historically, Florida has been known for a few specific things.

We are the Spring Break capital. Any college football fan can’t deny our talent for producing great players all over the State. Just this year, one of our very own was the youngest player ever to be awarded the Heisman Trophy. Ask any 4 year old where Disney World is and he can tell you.

Oh, and hurricanes. We have those, too.

Since 2005 when hurricanes ravished our State, insurance companies all over the Atlantic and Gulf Coasts have gone into panic mode. Rates for homeowners have sky-rocketed…that is, if they didn’t drop you entirely.

Enter State Farm Insurance. Probably one of the most well-known insurance companies in America. Well, minus Florida.

Need car insurance? Health or life insurance? Great. They’ve got you covered. But you’re left out if you own a home. Sorry.

This reminds me of a commercial that Burger King runs. People go up to the speaker at the drive-thru window and are told Burger King no longer serves the Whopper. What? Isn’t that what they’re known for? What good is a fast-food restaurant without their specialty food item?
Now, if that really happened, Burger King would probably go out of business pretty quickly. People would just stop going there if their favorite menu item was no longer available. And what would happen if Florida was the only state that Burger King no longer served the Whopper? CNN would be camped out in our back yards!

But for some reason, State Farm doesn’t seem to think it should be a big deal they’ve taken away our “Whopper.” They still believe they deserve a piece of the pie anyway, with the other types of insurances they offer us.

While I’m on a roll with these food analogies, I’ll throw in one more. Should insurance agencies be allowed to carry out business as a buffet line, where we are only allowed to choose from whatever they’ve decided to serve us?

I say no. Why should Floridians continue to give money to a company who doesn’t believe we’re deserving of the full menu?

We can all agree that businesses are in business to make money, right? But it’s my understanding that State Farm can be found in all states. Over the past ten years, Tennessee has been hit with more tornadoes than I can count. Betcha they still offer homeowners insurance there, don’t they?

In any business dealings, the day I feel like I have to beg anyone to take my money is the day I walk away from that company and never look back. And that’s what we Floridians need to do. Change car insurance companies, life insurance, etc. If State Farm is so worried about losing money on us, they don’t deserve one dime of what we work for.

Come on, State Farm. We don’t care if you go away mad…we just want you to go away. Faster than the wind speeds of those hurricanes that have your wallets so scared.

-posted by Scott Ingraham at 1:05 PM 0 comments

Tax Caps
April 02, 2008

These have been stressful times for everyone.You can’t turn on the television without hearing something about tax increases, gas prices…something that wants to suck the life out of our wallet and bank account.

When the Florida Legislation session began this month, a few more clouds over the Sunshine State floated away.Property owners all over the state let out a sigh of relief that could probably be heard all the way to South Carolina when we received a little more tax relief.

Citizens will gain the freedom to purchase a new home without huge tax penalties. Rental home owners, second home owners and businesses will benefit from limits on future tax increases. The amendment contains two provisions that we have long advocated: doubling the homestead exemption and the ability for families to take with them their Save Our Homes tax savings, or “portability.

Sound like a bunch of political mumbo-jumbo? Let’s break it all down:

1. Doubles the homestead exemption for almost all homeowners, providing an average savings of about $240 annually. The new exemption applies fully to homesteads valued over $75,000, and partially for homesteads valued between $50,000 and $75,000. This new exemption does not apply to school taxes.

2. Portability allows homeowners to transfer their Save Our Homes tax benefits from their current home to a newly purchased home within any Florida county. Portability applies to homes purchased in 2007 and later, and the benefit is capped at $500,000.

3. Provides an assessment cap of 10 percent for all properties not previously capped: While homestead properties are already capped at three percent, now all other properties, including rental properties, second homes, and business properties, will be protected from huge tax increases.

Perhaps now homeowners and future home owners won’t be scrambling around, worried to make a move – literally. Buying or selling a property should always be more exciting than stressful.Perhaps now it can be.

This was a great step in the right direction for Florida homeowners.But there is still much that can be done. More relief can come our way.I know. Politics aren’t everyone’s best friend.However, as cliché as it sounds, we all CAN make a difference. Write or call our government officials.Remember, they work for us.And when the time comes, get out there and vote! We need a real tax reduction and the 10 % cap is too high.

Whether you’re in the market to buy your first home or your tenth…or maybe you’re still on the fence in your current situation...buying a home is ALWAYS a big deal. Hopefully the good news will help all of us have a clearer picture of our real estate future.

And wouldn’t you rather be disagreeing with your spouse over what color you should paint the new dining room?

-posted by Scott Ingraham at 9:34 PM 0 comments

Pier Park Progress: Southern Waters Outfitters ready to Open

February 3, 2008

Southern Waters Outfitters, a unique outdoors and lifestyle apparel store is set Southern Waters Outfitters in Pier Park to open in the Pier Park retail location in a few weeks. The store is a high-end retailer of outdoor apparel and supplies. The opening of the store in Pier Park is part of the retailers planned expansion to throughout the southeastern US.

The look of the store is unique and not typical of other hardware stores. The stores have what the company describes as an “’old warehouse’ with exposed brick walls, stained concrete floors, mismatched antique tables, and very little in the way of “vendor branded” fixtures, and of course their trademark antique 1963 Land Rover” (Source: Southern Waters takes outdoor retail to the next level).

Pier Park project: History of ups and downs

The opening of the store is another exciting addition to the Pier Park complex, Pier Park Map

which over the past few years has experienced some bumps in the road to its construction. According to Pier Park’s leasing vice president Paul Ajdaharian, changes in ownership of the property called the project’s viability into question over the years. But once the Simon Property Group, the nation’s largest, public, retail real estate company, got involved, the project went full steam ahead.

The 93-acre complex will hold its Grand Opening in May 2008, just in time to attract spring tourists. Anchor stores Panera Bread, Target and The Grand Movie Theater are already open. The Boardwalk section of the project is set to open on February 15th, 2008. Anchor stores opening on that day include Margaritaville, Ron Jon Surf Shop, Borders Books and Music, Dillard’s, Fresh Market, JCPenney, and Old Navy.

New project brings new jobs

According to a recent report in the News Herald, the opening of Pier Park may positively impact Bay County’s employment statistics. The complex is expected to employ about five thousand people and should help keep the county’s unemployment under the national average of 5 percent.

More:
Southern Waters Outfitters Website
Pier Park Website
News Herald Report on Bay County’s Unemployment Statistics
“Pier Park casts out wide net for retailers”, The Walton Sun

-posted by Scott Ingraham at 9:44 AM 0 comments

Panama City Tops in Existing Condo Sales
Friday, December 7, 2007 Panama City’s real estate market continues to show signs of strength even as Florida’s real estate market remains somewhat sluggish. According to third quarter 2007 sales data released by the Florida Association of Realtors, Panama City Panama City Tops In Condo Sales

leads the state in existing condo sales and showed a minimal decline in existing single family home sales compared to the same time period last year.

Sales of existing condos increased 38% in Panama City, making it the top existingcondo sales market in the state. Fort Walton Beach ranks second with an increase of 26 percent; Sarasota ranks third with a 15 percent increase in sales for the third quarter.

Panama City Ranks Third in Existing Home Sales

In sales of existing single-family homes, Panama City showed a relatively small decrease compared to activity statewide. Panama City’s existing home sales was down eight percent. Statewide, existing home sales suffered a much bigger decline of 29 percent. Panama City is third behind Marco Island, which just barely outranked Panama City with a seven percent decrease. Sarasota is the strongest market for existing home sales with decline of only five percent.

Bay County Association of Realtors President Scott Bowman attributes the strong performance of the Panama City market to public awareness and education campaigns carried out in Panama City, Sarasota and Marco Island.

A Postive Forecast

The forecast for Panama City’s real estate market remains positive. Recent coverage by major news organizations, including CNN, featured forecasts for Panama City including a possible 72 percent increase in home prices and a 12 percent jump in population. The population increase will be accompanied by a projected 30 percent increase in per capita income over the next five years.

-posted by Scott Ingraham at 5:55 PM 0 comments

Groundbreaking Ceremony for New Panama City Airport
Friday, November 9, 2007

Panama City Airport officials broke ground recently at the new location of the Panama City-Bay County Airport. About 1000 people gathered to watch the ceremonies including a number of government officials, Airport Authority members, and representatives from the St Joe Company and the Audubon of Florida. State Representatives Mari Coley (R-Marianna) and Jimmy Patronis (R-Panama City) served as co-masters of ceremonies for the event. Governor Charlie Crist was scheduled to be at the ceremony, but was unable to attend at the last minute. He sent an audio taped a message, which was played during the event.

An Economic Rebound

The ceremony marked the end of a 10-year process of design and planning. It also put in motion the West Bay Sector Plan, which is a plan for development of the 34,000 acres that run along the new airport site. Area leaders are hopeful this new development will help the real estate market in the area bounce back after two years of a downward trend.

Airport Authority chairman Joe Tannehill expressed some emotion as he as talked about the start of the $330 million project. The airport will be the first to be constructed since 9-11 and may just become a model for how airports will be built in the future, balancing economic development with the need to preserve natural habitats. In his taped message, Governor Crist described the airport as “America’s first truly green airport.”

Balancing Development with Preservation

As a part of the relocation plan, more than 40,000 acres of St. Joe land in the West Bay sector will be protected and preserved. This will create a major conservation sector in West Florida and provide the area an opportunity to participate in the growing ecotourism trend. At the ceremony, Audubon Director Eric Draper said, “There is a great story being written today, a story of balance” between the environment and economic development.”

In an agreement made earlier this year between the Audubon of Florida and the St. Joe Company, the Audubon of Florida will oversee a new Audubon Center of West Bay and will manage the conservation area. The St. Joe Company will develop another 34,000 acres around the airport into commercial, office and light industrial space. New recreational facilities and more than 5000 new homes are also planned for the area.

Work on the site will begin immediately and will take about 30 months to complete the airport’s first phase. The airport is set to open in early 2010.

New Airport, New Name?

Recently, local businessman Charles Hilton called for the renaming of the airport to reflect the areas beyond Bay County that the airport will serve, including Washington, Holmes, Jackson and Walton counties. This may be somewhat difficult to do, since changing the name may mean changing the 3-letter code (currently PFN) used to identify the airport in national and international aviation databases. But an FAA spokesperson said that the 3-letter code does not necessarily have to be changed to reflect the new name. He notes the change of Newark’s airport to Newark Liberty International Airport after 9-11. The name of the airport was changed but the 3-letter code remained the same. The Airport Authority has yet to take Hilton’s suggestion under consideration.

Sources: Regional name for airport sought, November 4, 2007, The News Herald, FL - Nov 3, 2007
Airport groundbreaking marks development boon, The News Herald, FL - Nov 1, 2007

-posted by Scott Ingraham at 3:44 PM 0 comments

The Florida Trail
Wednesday, October 24, 2007

The Florida Trail runs 1,400 miles from one side of Florida to the next. The trail crisscrosses mostly public land, but the Federal Government has purchased parts of the trail from private landowners where the trail is comes to an end. Among the purchases is the acquisition of 320 acres purchased in a nearly $2 million deal with the St. Joe Company. This purchase allowed for the continuation of the trail through a small section of Bay County.

The Beginning

The Florida State Trail is the vision of wildlife photographer and real estate broker James Kern. Kern developed the idea after visiting the Appalachian Trail for a backpacking trip. Moved by the Appalachian Trail’s beauty, Kern founded the Florida Trail Association in the 1960s and began recruiting others who shared his dream of a hiking trail that stretches across Florida.

-posted by Scott Ingraham at 1:05 PM 0 comments

New additions at Frank Brown Park
Wednesday, October 24, 2007 There are more opportunities for outdoor recreation now at Frank Brown Park PCB Aquatic Center

thanks to a $50 million renovation and expansion project completed this spring. The project added new biking and jogging trails and a new $6 million aquatic center to the popular venue. The aquatic center includes a 50-meter, Olympic-size outdoor pool, a splash pool with play features, concessions and classrooms.

Another new feature at Frank Brown Park is the start of construction of a trailhead that will be the beginning of 20-miles of trails that will run across the island of Panama City Beach. Named Gayle's Trails after Mayor Gayle Oberst of Panama City Beach who is a major supporter of the project, the trails will provide a natural preserve in an urban area.

-posted by Scott Ingraham at 1:05 PM 0 comments

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