Panel clears bill to freeze property tax

A key House committee on Wednesday approved a bill that could cost Horry County governments $31 million by allowing newly purchased property to keep its existing value for taxes rather than be listed at its new value.

The House Ways and Means Committee also approved a bill sponsored by Horry County's House members that would let public schools and colleges join on a 15-year capital projects referendum that would add a penny of sales tax for specific items if voters approve.

The assessment bill apparently hurts only Horry County, probably because of continued growth and real estate sales, said Rep. Bill Cotty, R-Columbia, who sponsored the proposal.

"This is costing the counties money" because the existing law requires immediate revaluation of property when it is sold, Cotty said.

Deals are falling through, especially for large projects, such as apartment buildings and commercial complexes, and that is bringing economic development to a halt in many areas, Cotty said.

At a subcommittee hearing on the bill two weeks ago, Horry County Councilman Howard Barnard said the latest figures show the change would cost the county $7 million, the school district $21 million and the towns would lose the rest.

The committee approved the bill on a voice vote with no discussion. It could be debated by the full House next week but must get through the Senate and be signed by the governor before it can become law.

The school referendum bill also drew little discussion. Rep. Herb Kirsh, D-Clover, wanted to be sure such a tax would not be imposed on groceries, and it would not.

Rep. Tracy Edge, R-North Myrtle Beach, said Horry Schools officials believe it could be easier to pass the sales tax if some projects at Coastal Carolina University or Horry-Georgetown Technical College are included.

The school officials believe if voters approve, their remaining school taxes for buildings could be cut and replaced with the sales tax.

Such projects on a sales tax ballot could include an arena that Coastal has been interested in building. But Edge said he is not sure voters will agree to tax themselves to assist state colleges or to build an arena that could also be used for private profit.

The bill allows the schools to decide what they will propose to voters for construction and how the money will be apportioned.

Horry voters passed a school-project sales tax bill two years ago, but the courts threw it out because materials distributed at the polls favored a yes vote.

The bill could be up for floor debate next week, but it could be difficult to get it passed by the May 1 deadline to send a bill to Senate, Edge said.

The Senate has the same bill, but it has not been acted on. Sen. Ray Cleary, R-Murrells Inlet, said if the House passes the measure, it has a chance of passing in the Senate.
 

04/17/2008 - Myrtle Beach Online

Real Estate Outlook: Positive Trends

You might assume from the steady drumbeat of bad news about housing and real estate that there's nothing encouraging out there in the economy.

But you'd be wrong. And you might just be missing some positives in the market equation that you could put to work for you.

So amid the gloom and doom, here are a few examples of trends that arer at least slightly hopeful ... and might even helpful:

Number One: New mortgage applications nationwide jumped last week for the first time in more than a month, according o the Mortgage Bankers Association.

New applications for loans to purchase houses -- a very important indicator of home buying in the months ahead -- were up by 1.4 percent on a seasonally-adjusted basis. But they rose by a surprising 14 and a half percent on an unadjusted basis -- that's the raw numbers last week compared with the week before.

Why the sudden increase? Probably because 30-year fixed rates dropped by a third of a percentage point ... down to 5.98 percent from 6.27 percent the week before. Home shoppers have been watching mortgage rates bounce around for the last month -- sometimes getting as high as the mid 6 percent range. So when they saw rates plummet, they put in their loan applications -- and locked.

Number Two: You might smile at this, but the fact is this. The pending home sales index didn't decline last month as many economists had predicted after months of negative numbers. It just stayed flat.

In a market that's been going negative, "flat" looks pretty good -- a sign that maybe -- just maybe -- two years plus of sales declines might be bottoming out, or could do so soon.

Number Three: The Federal Reserve is expected to keep turning the dial down on short-term interest rates -- whatever it takes to kick-start the U.S. economy back into growth mode. Look for another quarter point cut in rates next week -- and maybe more in the weeks ahead.

Now, we're the first to admit that these could be just bright, momentary specks in a real estate economy that otherwise looks pretty dark. But the cost of money is critically important to home buying ... and as long as rates stay low, at some point they intersect with declining home prices and consumers begin to say: "Hey! There are some attractive deals out there."

And they'll be right. And the market will have bottomed out, even though no one saw it coming because the rest of the economic news sounded so bad.

03/13/2008 - Realty Times

Housing sales creep up as prices slip

Home prices on the Grand Strand were down for the second month in a row, but sales have inched up, according to a February Realtors association report released this week.

The lower prices are what the area needs to jump-start real estate sales, help eat up excess inventory and stabilize the market, analysts said.

Until recently, steady home prices were considered the silver lining for an otherwise lackluster real estate market.

But now the oversupply of homes is forcing sellers to be competitive in their pricing. As a result, condo prices have fallen three of the past four months and single-family house prices have dropped since December.

"People are willing to take more of a cut," said Carolyn Raines-Harbin, a Realtor with Surfside Realty Co. "If you've got someone making an offer, do you really wnat to hold out for another $10,000?"

The median price for a single-family house sold in February was $193,245, down from $198,000 in January. Condos fell from $166,500 to $155,000. That brings single-family house prices down 10 percent from those sold in February 2007 and condo prices down 29 percent. The median price is where half sell for more and half sell for less.

"The market is starting to show decreases in pricing which we weren't necessarily seeing for the overall market," said Tom Maeser, market analyst for the Coastal Carolinas Association of Realtors. "The good news is the sellers are typically getting more realistic. ... All of this has to happen before you start seeing a good recovery."

The declines are evident marketwide - even million-dollar oceanfront condos are going into foreclosure and being sold for less - but the steepest price drops are in highly concentrated condo complexes where more than 10 percent of the units are listed, Maeser said.

"Right now where I'm seeing the most declines is in condos in areas where there are a lot of listings in that project," Maeser said. "Those that have just a whole bunch of condos in it and they were all built during the growth time, they're probably sitting on a lot of inventory right now."

The multiple listing service shows that many Myrtle Beach condos are selling with price cuts: One Myrtle Beach condo at the Patricia Grand recently sold for $138,500, down from the $146,000 asking price. Another on Lake Arrowhead Road sold for $180,000, down from the $189,500 asking price.

Foreclosures also are bringing down prices, although those don't show up in the multiple listing service report unless they're sold through a real estate company.

A Mortgage Bankers Association's report found 1.86 percent of S.C. mortgages in the fourth quarter of 2007 were in foreclosure, up from 1.68 percent in the third quarter and reaching its highest rate in more than two years.

On the Grand Strand and in Brunswick County, N.C., there were 50 foreclosure filings - default notices, auction sales notices and bank repossessions - in January, up from 32 in January 2007 but down from 79 in December 2007, according to Realty Trac.

"I think the foreclosures play a role in the initial phase of the recovery period that we're in because they're distressed sales. They're problems, and the people unfortunately have to sell," Maeser said. "As a result of that, you've got what I call bottom feeders: people that come out and just can't wait to be picking up these distressed sales."

The lower prices and cheap foreclosure properties are luring some buyers back into the market. The number of house and condo sales, though still fewer than this time last year, went up from 327 in January to 444 in February.

"I'm starting to see more investors," said Jeff Casterline, a Realtor with RE/MAX Southern Lifestyles.

"I think buyers are starting to return to the area because there are a lot of properties that have good value right now."

Raines-Harbin said her sales picked up at the start of the year, but she thinks there are many more potential buyers sitting on the sidelines, spooked by the recent economic downturn.

"People are afraidm, and it's not that they're afraid of real estate. I think they're afraid of everything in general right now," Raines-Harbin said. "Everyone feels like they're walking on eggshells."

February's uptick in sales is a good sign,m said Coastal Carolina University research economist Don Schunk. he expects sales to remain fewer than last year, but to stay steady or increase slightly for the first six months of this year.

Prices will be one of the last things to turn around, he said. When they do start to rise, he doesn't expect them to skyrocket as they did during the hot real estate market of 2005 and 2006.

"I think a lot of people in terms of builders, mortgage lenders and borrowers have learned a lot of lessons in the last year, and that's going to lead to a more realistic market over the next few years as opposed to the frenzy we saw a few years ago." 

03/13/2008 - Myrtle Beach Online

Playing the Housing Slump Time to Make Your Move?

Financial lore says you should buy when there's blood in the street -- which suggests real estate is a bargain, because there's blood all over the neighborhood.

Time to invest? I wouldn't be surprised to see home prices drop sharply this spring, as long-suffering sellers in hard-hit areas throw in the towel and slash their asking price.

That could spell opportunity for this year's buyers. But what if you already own a home -- and have no desire to become a landlord? Here are three ways to play today's battered housing market.

Trading up. If your're hankering after a larger home or a house in a better neighborhood, this could be your chance to trade up on the cheap.

To be sure, when you go to sell your current home, you will likely get a modest price. Since 2006's second quarter, real estate has fallen 10.2%, as measured by the S&P/Case-Shiller U.S. National Home Price Index. But your new, grander house will also be relatively inexpensive, so you're effectively cranking up your real-estate exposure when the market is well below its peak.

That said, I wouldn't think of this move as an investment. Your new home will probably mean not only a bigger mortgage, but also higher ongoing costs, including homeowner's insurance, property taxes and maintenance expenses. These ongoing costs will offset a large chunk of any future home-price appreciation.

In other words, trading up to a larger home or a better neighborhood is really about wanting to consume more real estate. Still, like any thrifty shopper, you want to buy when there's a sale -- and that is what today's market offers.

"It's like going from a Honda to a Mercedes," says Charles Farrell, a financial adviser with Denver's Northstar Investment Advisors. "It's a lifestyle choice. As long as it doesn't cut into your ability to accumulate capital for retirement, this is probably a pretty good time to upgrade."

Doubling down. Instead of trading up, you might be eyeing a vacation home. If you don't plan to rent the place out, the same logic applies: Once you subtract the annual costs from the price appreciation , you likely won't make very much money -- which means the property won't be much of an investment.

On the other hand, maybe you're two or three years from retirement and are toying with buying a second home that could become your sole residence once you quit the work force. Does it make sense to purchase now, given the decline in home prices?

Buying today is no doubt appealing, because it'll give you a chance to vacation in your future home. But whether it turns out to be a wise financial move depends on what happens to property prices -- and that's tough to predict.

Still, I wouldn't bank on a rapid bounce back in home prices. At the current sales pace, it would take a whopping 10.3 months to clear January's backlog of unsold homes. By contrast, in January 2005, the supply of unsold homes was at a mere 3.6 months, according to the National Association of Realtors.

The bottom line: If you think you'll get a lot of use from a second home, go ahead and buy. But if you view the purchase as a bet on rising home prices, I would hold off for now.

Helping hand. While buying more real estate for your own use probably won't be a great investment, you could help your adult children make good money -- by transforming them from renters to homeowners.

To that end, you might give your kids an advance n their eventual inheritance, so they have enough money to make a down payment. Yes, that means they will start to incur the housing costs I mentioned above, including property taxes and maintenance expenses. But your children will also replace their monthly rent check with a monthly mortgage check, and that will allow them to start building home equity.

"If you have kids who are first-time buyers in markets that are relatively depressed, this could be a good time,

03/13/2008 - Real Estate Journal.com

A Good Time to Buy a House If You Can Afford One

Finally, it's a buyer's market out there.

For years rapidly rising prices kept many first-time home buyers out of the housing market. But as home values slide further downward and interest rates hover at relatively low levels, it may be time to start looking to buy that first house.

That is, if you have a secure job, can afford higher down payments than were required a few years ago and can meet lenders' much stricter income and credit requirements.

"Lenders aren't cutting everyone off. They're reverting to sanity after years of making bad loans," says Dick Lepre, senior loan officer at Residential Pacific Mortgage, in San Francisco.

The U.S. median home price was $201,000 in January, down 4.6% from January 2007. The S&P/Case-Shiller national home-price index for the fourth quarter was down 8.9% from a year earlier, the biggest drop in its 20 years. Prices have plunged 10% to 12% in troubled markets like Florida and California, and many economists predict an overall slide of 20% or more before the housing market bottoms.

There was a 10-month supply of existing homes for sale in January, up from just under five months during boom times.

If you are about to get into the housing market, this is all good news. But before you begin visiting open houses, recognize that the old home-buying rules no longer apply. You want to approach buying your first house with a financially realistic point of view.

Remember: You're investing in a place to live, not speculating in the stock market or even puttingmoney into a savings account. So keep it simple. Buy smarter. Buy cheaper.

Determine what you can afford. "The days of easy money are over," says Jeff Bogue, a financial planner in Wells, Maine. Mortgage lenders have tightened their standards and are requiring larger down payments. Typically, they want buyers to spend no more than 28% of their gross monthly income on mortgage payments, real-estate taxes and home insurance.

To figure out how much you can afford, use online calculators at realestatejournal.com, dinkytown.com or bankrate.com and "get preapproved or preauthorized for a loan," Mr. Bogue says.

Be sure you also have cash for closing costs like legal fees and title charges. The total typically reaches 2% to 3% of the house price, but differs by state and mortgage product, says Ilona Bray, co-author of "Nolo's Essential Guide to Buying Your First Home." Also be prepared to pay for moving expenses and ongoing maintenance.

Know your market. Gone are the days of "sure thing" home purchases when buyers would bid up prices and then watch the values of their houses soar like tech stocks in 1999. Today, if buyers are bidding at all, they're far more likely to insist on lower prices and to walk away if they don't get what they want.

Now more that ever, location is crucial, down to the neighborhood and street level. Focus on good school districts, crime statistics and any impending construction or public works that could increase or decrease the value of a home. Conduct preliminary research online at Web sites like Zillow.com, Trulia.com and greatschools.net.

"Eighty percent to 90% of housing prices can be explained by what's happening in local economies. Take a hard look at job growth and neighborhood conditions, "says Patrick Newport, and economist at Global Insight in Waltham, Mass.

Make your dollars count. Although conditions vary by market, look for a home that is significantly lower than its 2004 price. (You can ask real-estate agents for information and check estimated historical values at Zillow.) "From the peak to trough, home prices in some markets will drop 35% to 40%, "says Christopher Thornberg, a principal at Beacon Economics, a consulting and research firm in Los Angeles.

Haggle. Don't assume the seller is even in the right ballpark with his asking price. Most real-estate agents and sellers only look at comparable sales prices, or "comps," of similar homes in similar neighborhoods. Take a lesson from property investors and appraisers instead and check out prices from other angles as well.

Consider what it would cost to buy land and build a comparable structure. Insurance companies can provide general cost estimates, but for a thorough assessment consider hiring an appraiser (search online by zip code at AppraisalInstitue.org).

Also compare your estimate monthly costs for the mortgage, taxes and other expenses with the cost of renting a similar place nearby. If you can rent virtually the same house for a much lower cost, the seller is asking too much.

Builders, sellers and banks are eager to unload unoccupied houses, giving the buyer more leverage to ask for lower prices or incentives. And don't overlook REOs ("real estate owned" properties) held by lenders, says Patrick Carey, executive vice president of default and retention operations for Wells Fargo.

Buy for the long haul. "Most first-time home buyers don't buy the house they're goint to end up in," says Ilyce Glink, author of "100 Questions Every First-Time Home Buyer Should Ask." But experts suggest that in a downward market, people should purchase a home only if they intend to live there for seven to 10 years.

"Historically, housing bubbles have taken several years to deflate, but it's hard to tell if we'll see prices drop a lot in the next two or three years or moderate drops over the next 10 years, "says Mr. Newport, the economist.

If you're not planning to stay in the house for long, he notes, "it may be wise to watch from the sidelines."

03/11/2008 - The Wall Street Journal

Remember the Nasdaq, Homebuyers May Balk At Homebuying Even If Conditions Improve

If you missed the lowest mortgage interest rates, you may be wondering what's happening. Why are they going up when the Fed is expected to cut federal funds rate by as much as three-quarters of a point?

The bubble has floated from housing to stocks and burst in both investing arenas. Now there's a bubble in commodities. According to Realty Times mortgage expert David Reed, as long as commodity prices keep going up, mortgage rates won't come down again any time soon.

Economic indicators don't move up or down in a vacuum. And right now commodity prices are rising on the weaker dollar and world demand for corn and other grains to produce ethanol and food. Gold is near $1,000 an ounce hedging against a weaker dollar. Oil is setting new records almost daily, the latest at $106 a barrel.

That's keeping inflation higher than the two percent rate the Federal Reserve is comfortable with.

Reed points out that if inflation were in check, we could have seen mortgage interest rates as low as 5.00 percent, but that train has left the station. Instead mortgage rates are closer to 6.25 percent today.

"Today's Unemployment Report showed that we actually lost 63,000 jobs last month," says Reed, "but instead of mortgage rates falling on the news, the street rate has barely nudged since yesterday."

That's a bad sign that inflation is really taking off.

So here's what's likely to happen. Buyers will be more hesitant about buying homes. Since mortgage interest rates aren't as accommodating, home prices will have to drop further, and in the meanwhile, housing inventory will stack up higher than the 10 months on hand we already have.

There's pent up demand from buyers, but as long as they're on the sidelines, there will also be pent-up demand to sell from sellers, those with homes on the market and those who have been waiting to put their homes on the market.

The Federal government will have to step in to avoid a depression, and the only thing they can do now is sweeten homebuying incentives, like they did in 1987 and 1997. Why will this be necessary?

Today's homebuyer thinks a home is only an investment. The NASDAQ has never recovered to its 2000 highs because people want the big return on their investment. They could likely look at housing the same way - not interested if it only returns two percent a year. Never mind that two percent a year is the historical norm. They want more.

It will take a while, but people will start buying homes again, but only with incentives. And the whole housing crisis will be over because once those incentives are given, they're mighty hard to take away.

03/10/2008 - Realty Times

Borrowing Yourself Out of Trouble

FOR a mortgage borrower verging on delinquency, a cheaper loan mau be the best way to save a home. But Fannie Mae, which holds major sway in the morgage industry, is offering another alternative: an additional loan.

The company, which bolsters the mortgage market by buying loans from lenders and reselling them in bulk to investors, announced the HomeSaver Advance late last month. This program will enable borrowers to take out an unsecured personal loan to cover missed mortgage payments quickly.

Mike Quinn, a Fannie Mae senior vice president, says the loan is best suited for those who have fallen behind "because of a temporary life event or hardship, like loss of a job or divorce or sickness." Once they emerge from such situations, he said, borrowers may be able to pay their monthly bills but may not be able to catch up easily on the missed mortgage payments. Lenders typically give borrowers two years, at most, to catch up.

Under the HomeSaver Advance program, loan servicers -- companies that provide billing and payment services on a mortgage lender's behalf -- can offer a 15-year loan at a 5 percent interest rate to cover delinquent payments. Borrowers are not required to make a payment on that loan for the first six months.

The maximum loan amount is the lower of $15,000 or 15 percent of the unpaid balance and may be used to cover all mortgage-related bills. These include lawyers' fees and escrow advances, which are payments made by mortgage servicers to cover increases in taxes and insurance that result in shortfalls in a borrower's escrow account.

A borrower never receives the money directly. Rather, it goes to the loan servicer, which also receives $600 from Fannie Mae for initiating the loan. A borrower pays no origination fees.

These loans will be available to borrowers starting next month. To qualify, a borrower must have al oan that was sold to Fannie Mae by the original lender, as is the case with about 23 percent of all mortgages nationwide. A borrower may call or write the customer-service department listed on the monthly mortgage bills to determine if the loan is a Fannie Mae mortgage.

Prospective applicants must be in arrears by an amount that is equal to or greater than two full payments of the mortgage principal, interest, taxes and insurance, and the loan must be at least six months old.

Beyond that, borrowers must demonstrate that they have resolved the reasons behind their delinquency and show they can afford an additional loan payment of at least $200 per month. If borrowers have the ability to repay their mortgage debt within nine months, they cannot qualify for the HomeSaver Advance loan.

Isis Rockwell, a counseling manager at NovaDebt, a financial counseling service in Freehold, N.J., said the Fannie Mae program "sounds like an attractive idea." Still, Ms. Rockwell said, when borrowers manage their finances poorly enough to put themselves in peril once, additional monthly debts may not be a wise option. "It's generally not a good idea to borrow yourself out of debt," she said.

But Mr. Quinn of Fannie Mae said lenders would give the loans only to borrowers who have good chances of shouldering the additional debt. "We've had a very, very high success rate in workouts we've done in the past," he said, using industry shorthand for flexible payment plans offered by lenders to borrowers. 

"Well over 60 percent of the borrowers we've done modifications for -- and this is like a modification program, just simpler -- have never come back and been delinquent again," he said. 

03/10/2008 - The New York Times

Press Begins To Suggest It's Time To Buy A Home

Builders are tired of being hammered by the press, but slowly, some writers are beginning to build a case for buying a home. 

That's because the mood couldn't be gloomier in housing.

Toll Brothers CEO Robert Toll says that "ceaseless" talk of a recession continues to dampen the "mood of consumer," ... "whether or not a recession actually occurs," keeping pent-up demand for housing "on the sidelines."

His sentiments were accurately expressed in the latest new home sales results. The Commerce Department says new home sales in January fell to the slowest pace since February 1995, and that prices have returned to September 2004 levels, or $216,000 for a median-priced new home.

New home inventories rose to 9.9 months on hand, the most bloated inmore than 26 years.

That mirrors the dismal showing in existing home sales reported by the National Association of Realtors. In January, sales were down 0.4 percent from December, but 23.4 percent below January 2006.

Consumers sentiment is down, the economy is slowing, and many feel we may already be in a recession.

The natural instinct is to roll up the driveway, shutter the windows and wait for the financial storm to blow over, but not everyone is locking themselves in the basement.

Some members of the financial press are beginning to suggest that a bottom is near, and that buyers should get out and start looking for bargains in homes.

Time Magazine ran a piece this week titled, "Ignore the Headlines!" by Dan Kadlec, where he notes that Fed rate cuts always "lift the economy eventually." He also makes the case that buying a home today will beat waiting another year even if home prices drop an additional 10 percent.

To buy a $218,900 home at 5.5 percent is $994.31 a month. To buy next year at $197,010 at 6 percent will cost $994.94.

The irony is that in the time Kadlec did his research and when the magazine came out, interest rates were already back over 6 percent, making his example all the more compelling.

The Motley Fool's Marko Djuranovic wrote on February 25th, 2008 that "the shape of the U.S. housing market is not nearly as bad as some analysts would have you believe." In his spirited defense of home prices as being far from overvalued, he points out that home sizes have increased 47 percent from 1973 (1,525 to 2,248 square feet), and that today's homes feature sturdier construction materials, more expensive siding, outdoor amenities, more complex wiring, sophisticated heating and cooling systems, and larger kitchens.

"And the moment that the supply of existing homes begins to shrink, potential first-time home buyers will wake up to the fact that between low interest rates and homes that sell at (or below) replacement cost, they can grab the deal of a lifetime," says Djuranovic.

As Kadlec points out, you just never know, but you may not save anything to wait, and you've "spent a year living someplace you'd rather not be."

03/07/2008 - Realty Times

New Shopping Center Planned

Holrob Investments is building a 24,000-square-foot shopping center on the former Myrtle Beach Air Force Base near The Market Common.

The Knoxville, Tenn.-based company is talking to restaurants and shops that might lease space in Conventry Crossing at Withers Preserve, including an Italian restaurant and a spa, said Leslie Baugues with Holrob. She declined to name the stores because leases have not been signed.

Site work began recently on the 5-acre tract, and the center is slated to be finished this summer, she said. About 10 to 12 spots will be available by the time construction is complete.

Though Holrob has built shopping centers in the Southeast, this is its first in South Carolina, Baugues said. The Market Common was a major draw.

"That area is just so exciting. There's just so much going on, "she said. "I think when The Market Common opens in April, you're just going to see a lot of traffic in that area."

The Market Common, set to open April 3, will have restaurants and stores with apartments above them.

03/07/2008 - The Sun News

Stores, eateries gear up for opening

Shops are shaping up at The Market Common as the reail an dhousing development's April opening inches closer.

Where Air Force personnel once tromped on the former military base, soon shoppers wil peruse new stores.

The first stores open April 3.

People driving down Farrow Parkway might have noticed the Piggly Wiggly and the P.F. Chang's China Bistro are almost finished.

About 40 restaurants and sotes have leased spaces, including well-known chains such as Pottery Barn, Anthropologie and Tommy Bahama as well as local stores such as Xtreme Surf & Skateboard Co. and izzi-b.

The stores will occupy the street-level spaces, with apartments in the floors above them.

03/07/2008 - The Sun News

Ignore the Headlines

Famed Money Manager is perhaps best known for his timeless wisdom that you can beat the pros by focusing on stocks of companies where you either work or shop or  have some other edge.  But a more relevant Lynchism today is this gem: Ignore the Headlines.

That's no easy thing.  How do you tune out all the chatter and ink on recession, housing, subprime woes, the credit crunch, rogue traders, insolvent bond insurers, $100 oil and nukes in Iran?  It's enough to make you sit on your thumbs and wait before making any big moves.  But what, exactly, are you waiting for?

There has rarely been a moment in history when you couldn't scare yourself into doing nothing.  And yet, as Lynch observed nearly 20 years ago, "in spite of all the great and minor calamities that have occured ... all the thousands of reasons that the world might be coming to an end--owning stocks has continued to be twice as rewarding as owning bonds."

A top reason to not buy stocks, in Lynch's view, is if you don't already own a home--in which case, that should be your first investment, since an owner-occupied home is nearly always profitable.  Through a spokesman, Lynch reaffirmed these views to me--housing debacle and all.

When prices are falling, few people have the discipline to buy stocks, a house, gold, art or any other asset.  But those who do pull the trigger excel in the long run.  As John D. Rockefeller famously said, "The way to make money to to buy when blood is running in the streets."

And the streets are stained crimson.  Start with stocks.  They have been pummeled this year.  GDP braked sharply last quarter, and there has been plenty of panic about recession.  The Federal Reserve is slashing short-term interest rates at the fastest clip in decades.  But if you stick to your steady, diversified plan while everyone else is retreating, you will be happy years from now.  For one thing, Fed rate cuts always lift the economy eventually, and the stock market typically starts responding just as headlines get gloomiest.  Sure, the market could fall again before recovering.  But the recession may be half over already--or we may avoid one altogether.  You just never know.

As for housing, certainly some skepticism is in order.  Formerly sizzling markets in Florida, Nevada, Arizona and California probably haven't seen the worst headlines just yet, though they may well be close.  And "jumbo" mortgages, those mroe that $417,000, are likely to remain artificially high for a few more months while banks work through their credit issues.

But let's say you are emotionally ready to be a homeowner.  You have good credit, plan to stay put for five years and have been waiting for the perfect entry point.  It's time to get serious--before an inevitable rise in interest rates wipes out your advantage.  "The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher," says Jim Svinth, chief economist at mortgage firm Lending Tree.  So anything you gain by a further drop in prices might be offset by rising financing costs.

Consider a typical home that sells for $218,900.  You put down 20% and get a 30-year fixed-rate mortgage at today's rate of 5.5%.  Monthly principal and interest come to $994.31.  Let's say that 12 months from now the same house goes for 10% less, or $197,010.  But by then the recession is history and the Fed is jacking up rates to stem inflation.  If morgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you'd have saved nothing.  Meanwhile, home prices might steady and sellers might become less willing to negotiate.  And you have spent a year living someplace you'd rather not be.

It's more complicated if you must sell before you can buy.  But that logjam won't persist forever--and if it appears you'll be trapped for a few years, try to refinance at today's lower rates.  Risks always seem most acute when the headlines give you ulcers.  But that's exactly when you should think long term--and get off your thumbs.

03/05/2008 - Time Magazine

Investors drawn to land near Hard Rock Theme Park

A few developers are looking to buy an $8 million tract south of the park to build hotels or multifamily housing.  Other buyers have scooped up homes in the nearby neighborhoods such as Azalea Lakes, Cimerron and Hunters Ridge.

Prices shot up shortly after the park announced its plans but seem to have stabilized as the park nears its planned opening in April, said Coastal Carolina Association of Realtors market analyst Tom Maeser.  Listings show homes and land within five miles of the park selling for between $55,000 and $8 million.

One investment group recently put 21 acres just south of the park on the market for $8 million.

Another top-dollar tract nearby sold last year to an Israeli company that invested in the Hard Rock Theme Park, but developers won't say exactly what they will put there.

That parcel, where the Waccamaw Factory Shoppes onced flurished, will be transformed into a $300 million complex called "Paradise City".

Plans for the complex include a hotel, homes, stores and a recreation area, according to the company's web site.

Waccamaw Pottery anchored the shopping center there until it closed in 2004, and many tenants pulled out shortly afterwards.  The 52.29 acres went for $20.75 million.

Real Estate listings and blogs are also using the proximity to the park as a selling point.

02/29/2008 - Myrtle Beach Online

A Buyer's Market!

As a housing bust reverberates through the nation, falling home sales and rising foreclosures have flooded the market with inventory and made it a buyer's market.

On the Grand Strand, some sellers have slashed prices by $5,000, $10,000 - even $60,000 to get buyers to bite.

Despite the abundance of supply and price cuts at some properties, average prices along the Grand Strand aren't dropping.

Median prices (where half sell for more and half sell for less) for single-family homes rose 5 percent on the Grand Strand in 2007 and condo prices rose 4 percent.  That's partially because those figures include people who are closing on homes that they put down payments on during the housing boom when prices were inflated, said Tom Maeser, president of the Fortune Academy of Real Estate.

Unlike some markets such as south Florida, Las Vegas and the central valley of California that have seen sharp price declines, median prices along the Grand Strand have held steady, ending the year at $216,500 for single-family homes and $192,148 for condos.

There are still deals out there, real estate agents are quick to point out.  Bargain hunters have a host of options and the time to peruse with little competition from other buyers.

Buyers who are trying to get the best price are wondering when prices will stop falling - and there's no definitive answer.

Tom Maeser predicts the Grand Strand market will rebound in mid-to-late 2008 because the excess of inventory is already starting to disappear.

Between November and January, inventory decreased from 6,227 to 5,880 for single-family houses and from 8,493 to 7,659 for condos.

Market conditions are improving for buyers with better credit scores and the cash for hefty down payments.  For them, interest rates on conforming, prime 30-year fixed rate mortgages are lower than they were at this time last year.

Mortgage giant Freddie Mac reported Jan. 3 interest rates on 30-year fixed rate mortgages averaged 6.07 percent that week, down from 6.18 percent the same week last year.

01/13/2008 - Kimberly Willis-Smith

Housing crisis fosters drop in local sales as prices rise

Turmoil in the housing market spurred double-digit drops in sales of houses and condos along the Grand Strand last year, though prices inched up, according to year-end figures released this week.

"You have to remember that the last half of 2005 was the best half a year we've ever had, and the first half of 2006 was the best first six months we've had, " according to Tom Maeser with Fortune Academy for Real Estate.  "That makes those two years extremely difficult to compare with this year."  

Single-family homes priced less than $150,000 are most in demand with only nine months of inventory.  People trying to sell single-family homes that cost $1 million and up could have the longest wait with a 59-month supply.

The year-end report also shows that inventory is up 20 percent for single-family homes to 5,838.  For condos, it's down 12 percent to 7,646.

The average number of days homes spent on the market were up 17 days for single-family homes to 164 days.  For condos, it was up 46 days to 271.

01/12/2008 - Kimberly Willis-Smith

Basics of a Real Estate 1031 Exchange

Just a few months ago, I began working with Greystone Real Estate Group which specializes in 1031 Exchanges and Tenants In Common.  These real estate techniques are  fascinating to learn about and  safe solutions for people interested in creative alternatives to building wealth.  There is not a more secure way to build wealth than through real estate!  Right?  For those who have not heard about a 1031 Exchange or those who have heard and are not quite sure what it is, let me explain.

A 1031 exchange, also known as a tax deferred exchange, is a strategy for real estate owners to sell one property and acquire another "like-kind" property deferring capital gains taxes.  The benefit of this strategy is to defer the taxes, leaving the owner with more money to purchase another property.  There are many rules and guidelines that must be followed in order to successfully complete this process.  Here are those guidelines simplified:   

• The Exchanger must use a Qualified Intermediary (QI) to prepare all necessary documentation and to hold the money during the exchange.  It is important that this company be experienced and work full-time with 1031 exchanges.  It is required by  the IRS that the QI not be someone that the Exchanger has known or done business with prior to the transaction.

• The old property (relinquished property) and the new property (replacement property) must be "like-kind" and be used for productive purposes.

• The Identification Period ~ The 45 day period that begins from the transfer of the sold property in which the Exchanger must identify the new property in writing.

• The Exchange Period ~ The 180 day period that begins from the transfer of the sold property in which the Exchanger must acquire the title to the new property.
•  

01/08/2008 - Jessica Sledge

Sunny Skies for Myrtle Beach Real Estate

There was an article printed in the Sun News written by Tom Maeser, President of the Fortune Academy real estate school, that was about the positive news for the Myrtle Beach real estate market.  That is the first time I have seen the industry receive "glass is half full" attention.  It should come as no surprise, given that all of the negative issues that have arisen over the past year in a half were really only short term downfalls and it was only to correct and stabilize our market, leading to an even stronger economic driving force.  I think the surprise came because it happened sooner than expected.
So what are the positive issues that he highlighted?

1) Insurance rates are being lowered and more insurance companies are coming to South Carolina.
2) Interest rates are low.
3)Subprime lending is coming to an end, bringing back reputable lenders and qualified buyers.
4) There are fewer real estate agents- the ones that are still in the business are taking better care of their clients
5)Seller's are pricing more realistically.
6) The "flippers" have left, leaving investors who are in it for the longterm investment, not ones who will back out of their contracts at the last minute.
7) Builders are realizing that they need to adjust their prices to get rid of the oversupply of inventory instead of giving huge incentives.
8) Sales are today like they were in 2004- that was a good market

Bottom line - we had to experience all of these issues in order to be more competitive and get to a healthier market and now we can see sunny skies ahead!

11/01/2007 - Jessica Sledge

Is 40 The New 30 In The Life Of A Mortgage?

Forty year mortgages can reduce your monthly mortgage payment, but is that enough to offset the extra cost of tacking 10 more years onto the conventional 30-year mortgage?

The question is probably too simplistic, says Dan Green, a mortgage planning specialist at Mobium Mortgage in Chicago.

He says loan products like the 40-year mortgage are deemed risky because they are viewed in a vacuum, without considering the needs of the individual borrower or without comparing their benefits with other mortgages.

"It's not the loan that is risky, it's the behavior of the person paying the loan," is the advice he offers in his treatise on home loans longer than 30 years.

The draw of a 40-year mortgage is its relatively lower payment -- compared to a 30-year loan -- due to stretching out the amortization schedule over a longer period of time.

That could be attractive to those in high-cost housing areas, those who can't qualify for a 30-year mortgage payment or for those who want to qualify for a larger home. Longer term loans are also beneficial for people who don't plan on moving for a long time.

But here's the rub, not only will you pay more over the life of the loan for a 40-year mortgage, the higher interest rate on a 40-year mortgage bites into some of the expected monthly savings.

According to LendingTree.com the rate on a 40 year mortgage could be 0.25 percent to 0.375 percent higher than the rate on a 30.

So let's do the math on a $250,000 mortgage, at 6 percent for a 30 year mortgage and 6.25 percent for the 40, using Nolo.com's "How much will my fixed rate mortgage payment be?" calculator.

The interest and principal payment on the 30-year loan would be $1,498.88 with a total of $539,593.37 paid over the life of the loan.

For the 40-year mortgage, the payment would be, $1,419.35 with a total of $681,285.85 paid over the life of the loan.

That's less than $100 savings each month in exchange for more than $140,000 in extra cost over the life of the loan.

Also consider the fact that the principal is not paid down on a 40 as fast as it is on a 30, toss in a market with flat or falling home values and homeowners with a 40 year mortgage could really feel a pinch instead of relief.

Or so the theory goes.

"These arguments are all based on a single tenet -- that paying down a principal balance is a good thing. That's not always true," says Green.

Green says the more a homeowner invests in the home, the smaller the return because the cash-in-investment isn't generating the return. It's the home's value that grows -- market permitting.

The 40-year mortgage behaves somewhat like a no- or low-down mortgage in terms of using more leverage and leverage is the tool investors use to play the game, for good reason.

You get the same level of market-based equity growth with a 30-year, 40-year or even 15-year mortgage. With a 40-year mortgage it's just that you get that equity growth at a smaller monthly cost. Greater leverage.

Most people move or refinance within five to seven years and the low monthly payment could work from them in the right market. Given home equity growth historically shows up during a 10 year housing cycle, but not for the entire cycle, timing is important.

The 40-year mortgage can be a good fit if for those at an early stage in their career. It can allow them to buy a home they might not otherwise be able to afford. Later during the next equity-growth cycle they can sell and buy anew sell or refinance with the next appropriate financing tool.

A 40-year mortgage can also be advantageous for high-income earners whose mortgage interest payments may be their only large income tax deduction. And it can be used by vacation rental owners to reduce carrying costs.

Other mortgages can perform the same high-leverage trick, provided you can qualify for them, provided they are a risk-fit for your financial status and planning and provided the market cooperates.

The key, says Green, is running all the numbers, both the cost-comparisons of mortgages along with your financial goals, planned tenure in the home and lifestyle.

"New loan products like the 40-year mortgage are not dangerours to everyone. They are only dangerous to homeowners who operate without a financial plan," says Green.

03/13/1008 - Realty Times