Preparing For Retirement – Part IV

For many people, the bulk of their wealth is tied up in their homes. As people approach retirement with a PLAN (Part I), the home and whether to downsize… or to acquire a 2nd home is a key decision.

If you have been diligent about paying down your mortgage, selling the home can be a source of liquidity to make sure that you have enough cash to live on and establish an emergency fund. In an ideal world, the home’s value would have appreciated and this equity could be the foundation of your retirement ‘nest egg’. This scenario is a far cry from the backlash reality of the current market decline, as people are seeing their home values slide.

On the other hand, there are amazing opportunities for purchasing a dream home at a fraction of its original cost. If you are in a position to take advantage of the market with a purchase and hold out a while longer for the market to shift back toward positive, that may be the best answer. Each geographic area has unique market characteristics. Truly understanding a certain market will help in timing a sale or purchase. This is called “gaming” the real estate market. This decision is critical in the overall success of the retirement plan.

Pay close attention to trends in the region you are considering by reading the local newspapers, searching the Multiple Listing Service… and by all means, using the service of a professional Realtor®.

Thanksgiving Day - A Day To Be Thankful

As we approach another Thanksgiving Day, it seemed a great time to share what we are grateful for this year. What a perfect time to reflect and be thankful for all the positive things that have happened in the last 12 months? Granted, it would be easy to get caught up (like so many others) in just trying to survive and focus on the negatives around us. All that does is to create more stress. To merely focus on the negative, it is easy to miss things like the beauty of a sunset, the serenity in the reflection of the birds, the smile of a child or the encouragement of a friend.

Mark is always talking about the importance of BALANCE and in these difficult economic times there is no better time to make it a priority. Negative energy can come into your life through all those anxious moments and the toll of daily stress… not to mention the added impact of a down economy. What becomes important is to find something that will neutralize that energy and turn it positive.

The answer is right there in front of us. Every moment spent in gratitude creates a mindset that leaves no room for negative energy. A grateful heart and a grateful mind reminds us of all we have to be grateful for... the solid support of our family committed to helping each other in both difficult and easier times… the friends who remain steadfast year after year who with a mere word can lift our spirits… our family pets who are always right there evoking a smile… our clients whom we are able to help navigate this market and even in their difficult time say “thank you”.

Every day is a gift not to be taken for granted. What we do with that day to be grateful for its gift is what has the potential not only to reduce stress but add wonderful positive energy to our lives.

This Thanksgiving Day amidst all the family gatherings, parades and football games, stop for a moment to appreciate the wonder of living in a free society like ours… freedom in itself is a hard won miracle compared to all those in countries without those rights or freedom. The freedom of choice is yours… and ours. We are grateful to have this amazing opportunity to walk on the beach and see such glory!

And to all of our friends and family, have a very Happy and Healthy Thanksgiving!

Preparing For Retirement – Part III

Getting closer to retirement years? A move might be in order. Considering the cost of retirement that we went over in Part II of this series, finding an affordable living situation is definitely a factor.

Here are some other things to consider and is Florida (specifically Tampa Bay) for you:

• Proximity to family members: Is it feasible to live closer to family members or at least be easily accessible to them? As we age, that support system becomes invaluable. Our personal experience was that soon after we moved to the Tampa Bay Beaches, my mother moved here and soon after our daughter. The more you visit, the more you want to call it home.
• Access to healthcare facilities: Let’s face it… if we are planning to live a long and healthy life, being close to good health care facilities is important. (An example of what NOT be the best idea is to find an affordable home in a very remote area of a mountain that access gets impassable in snowstorms.) Morton Plant Hospital in Clearwater… with a network spreading throughout the county is a nationally recognized 687-bed facility providing highly technical and specialized care to more than 50,000 patients annually. Working in more than 50 specialty areas, Morton Plant Hospital's board-certified physicians, Magnet-designated nurses and other skilled staff help take research, diagnostics and patient-centered care in bold new directions.
• Access to entertainment (such as shows and sporting events): OK, you plan to stay active. Finding a location with great things to do can lend excitement to later years! Well, Tampa Bay never stops with something to do! From Spring Training baseball that is home to 9 major baseball leagues in the surrounding area (such as the Cardinals, Phillies and Yankees!) to major entertainment such as Busch Gardens (and only 2 hours to Disney, Universal and Epcot in Orlando) … to International Shopping and Outlets, the Annual Grand Prix in St Petersburg and the International Ironman Competition in Clearwater Beach… to the huge variety of Festivals & Shows… every day offers a new opportunity!
• Proximity to a major airport: If you plan to travel, access in and out to a major airport will not only make flight times shorter, but also save on costs. Tampa’s International Airport is ranked #26 among North American airports with an average of 30,000 passengers a day! But wait, there’s more! Tampa also is home to Port of Tampa. Both Carnival Cruise Line and Holland America sail every week from here.
• Year-round weather conditions: Maybe we aren’t as limber as we once were. But slipping and falling are quite intimidating when a broken bone or hip could be the result. For that reason, maybe it was easy to be in snowy conditions in our youth… but later on, not so sensible. Tampa Bay’s weather remains temperate year round and sunshine is a daily event. (The temperature rarely drops below 32 degrees and the last measurable snowfall was on January 19, 1977 with .2 inches.)
• Taxes (state income, property and estate tax): Florida is one of 7 states that have no state income tax.

If you are exploring where to relocate, check out Why Tampa Bay? We think you will discover what we did… The PURTEE Team has four seasoned professional Realtors® ready to help you.

Preparing For Retirement - Part II

Yes... you have this dream of how you want to retire. But, without that money tree out the back door, there is definitely some planning that needs to be done! But how do you know how much money you will need to retire? My guess it... more than you think. Whether it is extended life spans, reduced employer benefits, lower market returns or increased cost of living... saving more is the only way to secure that dream retirement in the future.

The problem is that most Americans do a very poor job of securing their future with saving. "The Employee Benefits Research Institure reports that if current trends continue, by 2030, the annual shortfall between the amount retired Americans need and the amount they actually have will be at least $45 billion." That is a pretty scary number! Planning today is necessary if you don't want to be looking for supplemental income at age 75!!! Our retirement depends largely not only on our own ability to save and invest wisely, but also on our ability to plan.

How Much You Need in Total? Obviously, the first thing is to determine how much you will need. Most studies agree that an estimate of 80-90% of pre-retirement income would be needed to maintain your current standard of living.

So, a reasonable target is one that will provide you with an annual income similar to the income you have now. The following table offers some quick estimates of how much you might need to accumulate before you can retire.

Annual Retirement Income Need = Total Nest Egg Required (Estimate)
$50,000 = $833,333
$100,000 = $1,666,667
$175,000 = $2,916,667
$250,000 = $4,166,667

There is no time like the present to begin saving! Learn more about how much to save to achieve your goal HERE. The PURTEE TEAM is here to help, too! Feel free to call on us!

Preparing For Retirement Series - Part I

In an economy that is uncertain at best, it may seem a bit odd to be speaking of retirement... but with the baby boomers getting closer to their early to mid-60's, it is time to start the planning process! As a refresher, it might be a good idea to review the Blog I did on the Aging Population.

On our website, we have a page devoted to Preparing For Retirement (specifically, Five Retirement Questions Everyone Must Answer). Let's address the Grand Plan first. If you live a life 'living for today', you may easily have been caught with the credit crunch and rising debt. Job losses are rocking solid families and unemployment has exceeded 10%. Check out the Blog on the importance of the Unemployment Factor. The key focus when looking toward a time when life is easier and less stressful is in understanding what kind of life you aspire to and what the best approach is to get to that desired place.

With people living longer and maintaining a more active lifestyle for well into the later years, there are questions about full retirement or semi-retirement. As you consider the way you want to spend your days... traveling, favorite activities, hobbies, family and neighbors... you want to plan to be in the best location that enhances those dreams. This played a large part in our decision to move to the Tampa Bay area from Atlanta.
We chose Tampa Bay because of 1) The temperate climate to enjoy our outdoor hobbies such as tennis, fishing and sailing; 2) Having the Gulf of Mexico, Intercoastal and Bay offering water in every direction...something that is very soothing to us; and 3) Having access to Tampa, Clearwater and St Petersburg within minutes so there is always something to do and somewhere to be entertained; and 4) Most importantly... a dynamic location with a vibrant population offering employment opportunities that could ease over time into semi-retirement.

So what is your idyllic lifestyle for your 60's and beyond? Work on the plan now to start your preparation early.

Do I Really Need To Use A Realtor?

The buying of real estate is the largest financial investment many people make. Whether buying for the first time or selling a family estate, Realtors take a complicated maze of requirements and, with knowledge of the local real estate market, simplify the process. They also maximize the profit. Realtors uniquely understand legal issues that affect real estate transactions, and they’re trained to negotiate the best possible prices and terms in the contract.

Perhaps more importantly, they offer professional advice and objective insight into a process that, for many, is very emotional. On the nuts-and-bolts level, Realtors have a complete list of area homes for sale, as well as all the data buyers need to know; they stay abreast of changing market conditions that can affect local real estate prices. (That is what we are doing with this Blog.) Realtors can also recommend reliable local lenders, real estate evaluators and insurers to help the transaction process proceed smoothly. Why a Realtor? Realtors adhere to a strict code of ethics approved by the National Board of Realtors (NAR). The code assumes that people conducting a real estate transaction must adhere to a higher set of standards that those people working in other business arenas. Realtors are, according to the Realtor Code of Ethics and Standards of Practice, "zealous to maintain and improve the standards of their calling."

The Florida Association of Realtors, the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its 125,000 members in 67 boards/associations.

When you are ready to choose a Realtor along the beaches of Tampa Bay, let us show you why The PURTEE Team is your best choice!

IRONMAN 70.3 In Clearwater Beach Smashes Records!

Clearwater Beach draws quite the international crowd during the annual Ironman 70.3 World Championship, which was held over the weekend. The triathalon took place on Saturday. We had guests from Germany and Switzerland staying at our condos at Harborview Grande.

Germany's Michael Raelert and Great Britain's Julie Dibens both broke away from the pack and set course records. Raelert broke a course record with an overall time of 3:34:04. Dibens, a top finisher at the event in recent years, held off the field and set a 70.3 course record, crossing the line at 3:59:33.

Raelert was followed by Italian Daniel Fontana in 2nd place and American Matthew Reed in 3rd place. Dibens was followed by American Mary Beth Ellis and Canadian Magali Tisseyre.

The race began and ended right at Pier 60 by the Clearwater Beach Roundabout. First, they swam in the Gulf of Mexico... a 1.2mile/1.9km rectangular course. Wetsuits were permitted in the 72-74 degree water. Next, the bike race covers most of Pinellas County in the fairly flat, 56 mile/90.1 km bike course. And last, the 13.1 mile/21.1 km run that takes the athletes over the Memorial Causeway bridge, through various elevations taking them through some of the paved areas of the Pinellas Trail bringing them back to the finish line located south of Pier 60 in Clearwater Beach.

An absolutely gorgeous day and a great opportunity to see world class athletes!

1 in 20 Americans Plan A Home Purchase For 2010

According to the Associated Press yesterday, citing a Move.com survey, despite today's challenging economy, 5% of Americans plan to buy a home next year. Nearly 10% plan to buy within the next 2 years! The survey goes on to say that of those planning to purchase, nearly half are first time home buyers 34 years old or younger.

After three years of staggering price declines, Americans are finally getting the wake-up call that the fragile housing recovery is on its way. The number 1 reason for purchasing is the belief the market has bottomed out and the second is a fear of rising interest rates. "This latest Homeownership Survey validates what many had hoped to see in the housing markets -- affordable prices and ample inventories are restoring the appeal of real estate to investors while providing opportunities for first time home buyers to enter the market," said Move, Inc. Chief Revenue Officer, Errol Samuelson. "In today's environment, regardless of whether you're an investor or interested in purchasing a home to live in yourself, residential real estate is a more attractive investment today for many than is has been in recent years."

Home prices have rebounded this past summer at an annualized rate of almost 7%, according to Standard & Poor's/Case Shiller home price index. Low prices and foreclosure bargains have been the primary motivating factors.

We have found a great way to help with buyers seeking to purchase in the Tampa Bay area... through our Home Buyer Program. It is so simple and lets a potential buyer program in the specifics they are looking for in their purchase. We can enter that data directly into the realtor site of the multiple listing service to determine current matches. What really works is after that. Now any price reduction or new property that fits your criteria is automatically emailed to you. This has been a great tool for many of our clients!

13th Annual Veterans Boat Parade

When living in Florida, a boat parade is sure to bring out the crowds! Last Saturday, on November 7th, the Veterans Boat Parade was a remarkable tribute to veterans and active service men and women from all branches of the military. Each boat is fully decorated in patriotic style and about 45 boats participated. In addition, there were 8 parade boats, including the Dolphin Quest carrying area Pearl Harbor survivors.

The route started at American Legion Post 273 just north of the Tom Stuart Causeway through John's Pass and headed south to the Treasure Island Bridge and back. Even though the wind had kicked up a bit, the turnout was great! Started in 1996 to raise awareness, support our veterans, and have a great day honoring those that have and are currently involved in defending and protecting our freedom every day, the Veterans Boat Parade is one example of how many ways you can live at the beach and yet remain involved... quite a combination. Why Tampa Bay?

Rebuilding Your Life After Foreclosure

Recent statistics indicate that foreclosure filings could reach as high as 2.4 million by year’s end! Unfortunately, the impact of a foreclosure filing will follow these families around for a long time. If you have recently lost your home to foreclosure, it is perfectly natural to feel overwhelmed and depressed. It may even seem that life will never be the same again. But, one step at a time and you can get past it. This is a rough spot in the road, but like most things… it too will pass.

The immediate concern following a foreclosure is finding a new place to live. In many cases, in order to retain the home, cash reserves get depleted. Combine that with a lower credit score due to the foreclosure and a prospective landlord can be leery about approving an applicant in this situation. Here are a few options:

1. Write a letter of explanation that accompanies the lease application. Putting a story behind the current situation (along with a detailed solution) can go a long way. Don’t be embarrassed to tell the landlord that you are in the process of starting over.

2. Offering a larger deposit than is normally required (even if it is borrowed or saved for just this reason during the last stages of a foreclosure) may lessen the perceived risk to the landlord. Good personal references help as well.

3. If there is a solid income history, leasing a property at a small fraction of the total income may ease the concerns of the landlord. Families may have to adjust to housing that is not as spacious as they are used to. Try to make plans as soon as you know a foreclosure is inevitable.

Even though a foreclosure shows on your credit report for 7 years, if you have worked to re-establish some credit, most banks will consider you after 3 years. You may find that household expenses have dramatically gone down due to the reduced housing expenses. For the first time, you may be in a position to save money. This is the time to start an emergency fund. The rule of thumb is to have at least 3 months of living expenses.

This is the time to start on a new financial plan… one that includes a college fund if you are raising a family and adequate life insurance to protect your loved ones. Start putting aside 10% of your income every month and in a few years you can have enough to use for a down payment on your next house! Focus on learning from the mistakes of the past, because they are just that – PAST. Move forward and quit blaming yourself or others for what has happened. The future is limitless… filled with opportunity.

Life After Foreclosure: What To Expect

I am sharing a 2-part blog today and tomorrow regarding the impact on people going through foreclosure. Today will be about what you need to know and tomorrow will be about rebuilding your life and your credit.

Going through a foreclosure is stressful enough, but once it is final the turmoil... both financial and emotional... is far from over. There is a 5-year and 7-year benchmark where various rules apply that determine how to press forward. According to Fannie Mae, in their Guidelines Regarding Bankruptcy and Foreclosure, certain timelines take effect.

• A 5-year elapsed time period from completion of foreclosure is now required to reestablish credit. This has increased from 4 years to deter what Fannie Mae sees as "reckless debt decisions."
• The purchase of a principal residence is allowed with a 10% down payment and a minimum credit score of 680.
• Purchase of a second home or investment property is not.

Finding a new home can be a challenge. A homeowner's credit score will see the impact of a foreclosure for 7 years, although the impact will lessen over time. If you are looking to rent, the credit report will reflect the foreclosure. We have found that putting together a resume of sorts that explains why the foreclosure happened (or any other credit problems). Having cash for a larger deposit will help, as well as building to a minimum credit score of 580. Making plans early is critical to navigating through this time.

Creditors are also watching consumer credit history and credit cards have a "default rate" that could result in rates jumping to as much as 30%. Getting a car loan or any other advance from a lending institution will most likely also be impacted.

Getting hit with a tax bill can really be a burden. If you lose your home, a tax bill can still arrive for taxes on the amount of the mortgage the lender was not able to recover from the sale of the property. (Whenever debt is forgiven, it is a taxable event which the IRS sees as income.)

Exceptions can be filed if a foreclosure is an isolated event as a result of extenuating circumstances ( a long history of good credit and a solid job). In that case, credit can be reestablished in as short a time as 24 months.

With the record-breaking foreclosure statistics, the number of foreclosures may lessen the stigma. There are a multitude of advisers with tips on coping with stress, which bill to pay first, what to tell creditors, etc. We found one at http://www.ToughTimes.Illinois.edu that has some good advice.

Tax Credit Extension Confirmed

As expected, President Obama signed H.R. 3548 this morning which, among other things, extended the $8,000 tax credit for first-time buyers into 2010.

“Florida residents enjoy two additional advantages,” says Florida Realtors Vice President of Public Affairs John Sebree. “The Florida Homebuyer Opportunity Program (FHOP), created by the Florida Legislature earlier this year, still has approximately $28 million that first-time homebuyers can access and use toward their downpayment. And move-up buyers now have the ability to ‘port’ their current property tax savings to a new home.”

Under the new law:

• A purchase must be under contract by April 30, 2010
• A purchase under contract by April 30 must close no later than June 30, 2010
• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.
• Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.

$8000 Homebuyer Tax Credit Extension Likely

This afternoon, the extended life of the $8000 first time home buyer credit looks like a "go" to extend it beyond its scheduled November 30th deadline! The extension was added as an amendment to an existing bill, HR 3548, that extends unemployment benefits. The U.S. Senate passed that bill on Wednesday and, after debate, the U.S. House passed HR 3548 this afternoon. It now needs only President Obama’s signature to become law, and the White House has indicated it will sign it, perhaps as early as tomorrow.

In addition to extending the tax credit for first-time homebuyers, the bill adds a smaller tax credit for homesteaded homebuyers who have lived in the house for five of the past seven years that are looking to make a move to a new home. This could bode well for those looking to relocate here to the Tampa Bay area and planning to sell their home up north. More about the $8000 First Time Home Buyer Credit.

The bill also increases the income limits of homebuyers from $75,000 (single) to $125,000; and from $150,000 (married) to $225,000. After the president signs the bill and extends the tax credit, the Florida Homebuyer Opportunity Program – a down payment and closing costs assistance program relating to the federal tax credit –automatically gets extended too. The state still has about $28 million available for homebuyers.*

The money is essentially a loan to first-time buyers; they receive it upfront, use it for a down payment or other costs, and pay it back once they get their federal refund.

La Vistana - A Gem Of A Location In Redington Shores!

We have said it before that in 2005 it appeared that the national bird should be the crane (the construction one)! Once the market dived in 2007, all new construction literally came to a standstill. Finding a construction crane today is an interesting task and when we find one there is an innate curiosity as to what they know or are banking on.

But the task at hand is to convey that, as the market recovers, finding new property that meets the 2004 updated building codes and is block construction brings the number of properties to a precious few. La Vistana is one of those. Completed in 2006, La Vistana was planned to be a direct gulf-front two-building project with a coordinating retail area right on Gulf Boulevard. The building shown was completely sold out pre-construction and offered a sophisticated gated complex with a dynamic center open air atrium. The large pool and two hot tubs right on the beach were designed to accommodate both buildings.

As buyers closed on their condos in the second half of 2006 in Building 1, Building 2's future was looking bleak. Because of the limitation on density ruling for the space, the units were designed to be sprawling and had price tags to go along with it. At this point, the Building 2 property is tied up in foreclosure and the retail area is an extra parking lot with green space. What did make it, however, is La Vistana's Building 1 that is situated on an absolutely pristine beach location. Gorgeous views of the Gulf and the nightly sunset extravanganza! The 30-day rental policy keeps the building with a residential feel and each 3-bedroom/3-bath unit is definitely noteworthy. The occasional unit that has taken the pricepoint freefall that the market impacted has been swooped up by eager buyers ready to live the lifestyle La Vistana affords... at a fraction of the original pre-construction purchase price!

Response To The Trick or Treat Question About The Market...

Well... I was looking for an answer, once that could clearly define when the real recovery is underway in Florida and especially here in Tampa Bay. Did the question in the sand - and no, the answer wasn't written back. BUT, while reading the St Petersburg Times over the weekend, I got their take on that exact question.

According to the article, there are 5 signs that we want to look for to indicate we are truly on our way back. As realtors, we see the increase in sales and more buyers considering a purchase as a chief indicator. Here are the 5 signs to go along with that observation:

1. Single Digit Unemployment: Nationally, unemployment is expected to peak at 10.5% in 2010. In Florida, unemployment is now at 11% and could go as high as 12%. (However, see prior blog posts on unemployment statistics and rapid rail increase in employment.) These numbers need to be in the single digits and to be truly healthy, we are looking at a goal of less than 6%!

2. Small Businesses Growing: The credit freeze that began over a year ago and brought small businesses to its knees has eased slightly in recent months. "A July survey by the Federal Reserve found that 35% of banks had tightened lending to small firms and 79% of small business owners reported that their credit card lines had been cut significantly. For the Small Business Administration's fiscal year that just ended Sept. 30, business loans were down 43% in the Tampa Bay area."

3. Florida's Housing Pipeline Ramps Up Again: We have that covered and are watching as prices inch back up. This will tie directly in to retirees up north and their ability to sell their homes there in order to relocate to the Tampa Bay area.

4. Banks Stop Bleeding Loan Losses: Essentially, this is referring to the difference between the large financial companies invested in trading stocks and bonds versus more regional and community banks heavily invested in commercial real estate. The recent bank failures are up to 106 nationwide and the tally is expected to grow.

5. Retail Sales Pick Up: For the first time in a year, a small increase in sales has been reported by the International Council of Shopping Centers (a measly .1%). According to the article, store owners are anticipating this holiday season to be the second worst (the worst was last year). In a survey released Thursday, Consumer Reports said 65% of Americans plan to cut back on holiday shopping, travel and entertaining.

So... stay tuned as we include these 5 signs in our following of the market!