Headlines – Week of January 22, 2012
January 27, 2012
Florida Ranked No. 5 nationally as ‘Best for Business’
According to the Tax Foundation’s State Business Tax Climate Index, Wyoming, Florida and Texas rank among the 10 best states for taxes on business, while companies in states like New York, New Jersey and California have a far less pleasant tax climate.
The Tax Foundation says it looks at dozens of state tax provisions to create the ranking –a single easy-to-use score that measures each state’s tax climate against every other state. While some similar studies focus on residents’ tax burden they pay each year, the Index focuses on how a tax system enhances or harms a state’s businesses.
The 10 best states in this year’s Index
2. South Dakota
6. New Hampshire
The 10 lowest ranked states in this year’s Index
44. North Carolina
46. Rhode Island
49. New York
50. New Jersey
A copy of the latest report is available HERE.
Population Projections and the Effect on Real Estate
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR) recently wrote a blog posting entitled Population Projections: United State and the World in which he tried to explain another reason why real estate prices have dropped in the recent past.
In the U.S., he ignores the claim that the large number of people retiring and an eventual dying off of the baby boomers will mean less housing demand in the future since the broader population are not just the baby boomers.
Every year about 3 million additional people live in the U.S. The projection by the Census further calls for more people for the foreseeable future with the total tally rising to 436 million by 2050 from the current total of 311 million people. Such growth assures steady housing demand.
While he admits it is hard for even a smart economist to understand what all this means, demand for real estate is automatically created.
Below is an interested chart from the posting on global population growth projections.
Homeowners by Age
In another interesting blog posting, the NAR noted that in 2000 (a very normal housing year without a bubble), 67 percent of Americans lived as a homeowning household. The easy credit conditions that followed fueled home buying beyond normal and the ownership rate rose to 69 percent. The subsequent housing bust brought the ownership rate down to today’s 66 percent.
Not all age groups had similar experiences throughout this cycle. The very young were mildly impacted. The very old did not on average feel any pain. The big impact was felt among people in their 30’s, who have much the same homeownership rate today as back in 2000, well before the bubble. It is also this group where there is potential for re-entering into the homeownership market in the near future.
International Buyers Help Miami Break All-time Sales Record in 2011
Accord to a recent article WORLD PROPERTY CHANNEL, Miami was the fastest rebounding residential property market in US in 2011.
According to the Miami Association of Realtors and the Southeast Florida Multiple Listing Service (SEFMLS), total 2011 sales, including both condominiums and single-family homes, in Miami-Dade County were 24,929, up four percent from the 24,025 in 2005 and 46 percent from 17,068 in 2010. Year-end closed sales of condominiums surged 54 percent, from 9,760 in 2010 to 15,009 in 2011. Total single-family home sales increased 36 percent from 7,308 in 2010 to 9,920 in 2011.
Unlike other markets throughout the U.S., Miami has recovered faster and stronger than expected and is poised for further growth and double-digit price appreciation in 2012.
International buyers and investors continue to play a major role in boosting market performance in Miami, according to the Miami Association of Realtors. Miami is the top area in the U.S. for international real estate buyers. These buyers from worldwide markets will continue to strengthen the Miami market long into the future.
The inventory of residential listings in Miami-Dade County dropped 39 percent from 24,278 in to 14,087 over the last year. Currently, there is a 4.9-month supply of condominium inventory and a 5.8-month supply of single-family homes in Miami-Dade County, reflecting a very healthy marketplace. Total housing inventory nationally fell 9.2 percent at the end of December.
Heightened demand for bank-owned (REO) properties and improved processing of short sales has resulted in rapid absorption of distressed listings and price appreciation. In December, 54 percent of all closed residential sales in Miami-Dade County were distressed, including REOs (bank-owned properties) and short sales, compared to 59 percent in December 2010 and 56 percent the previous month. Contrary to a year ago, there are now more short sales being transacted than REOs.
In Miami-Dade County, 63 percent of total closed sales in December were all-cash sales. Cash sales accounted for 42 percent of single-family and 77 percent of condominium closings. Nearly 90 percent of international buyers in Florida purchase properties all cash.
Nationally, all-cash sales accounted for 29 percent of transactions, reflecting the stronger presence of international buyers in the Miami real estate market.
Posted by Scott R. Lodde