Like any business, real estate is subject to certain market forces that affect values. The life-blood of commercial real estate is affordable financing for the acquisition, development, redevelopment and refinancing of improved properties. The availability of financing is determined by the overall economy, overbuilding, interest rates, market perception (right or wrong), unemployment and, of course, local product supply and demand. Real estate prices can fluctuate wildly as these factors exert their influence.

Historically, real estate cycles typically have an average duration of six to nine years. There are four distinct phases to a commercial real estate cycle including: Recession, Recovery, Expansion and Contraction.

Recession

The Recession Phase follows a market contraction, when the availability of financing has dried up and property values fall precipitously. Properties experience vacancies and owners cannot sell because financing has become unavailable to prospective buyers. Prices fall far below the cost to construct the same facility new, resulting in many good buying opportunities for those with the liquidity to take advantage of market weakness. Foreclosures increase and property owners become even more motivated to sell as investors sit on the sidelines. The longer the Recession Phase drags on, the lower prices usually go. This is the time to buy.

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Iowans may have far less car insurance than they think, trial lawyers told lawmakers Wednesday.

“We come in contact with people on a regular basis who believe they had paid for coverage, only to find out when tragedy strikes that they don’t have that,” said Tim Semelroth, president of an Iowa trial lawyers’ group.

State law requires drivers to carry some coverage in case of accidents involving uninsured or underinsured motorists, but the law is flawed, Semelroth said. Iowans can end up with heavy bills if they’re involved in a hit-and-run accident or if the driver at fault has no insurance or not enough insurance, he said.

For example, the law requires coverage if a hit-and-run driver makes actual contact with your car, but not if you are run off the road without any collision.

And your own insurance might not kick in for medical bills, lost income or quality of life damages if you were riding in someone else’s vehicle and an uninsured driver causes a crash.

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Some local real estate experts think the market has nowhere to go but up.

Just 645 residential and commercial properties sold in Coos County in 2008, down from 980 the previous year, according to a county assessor’s report on sales and foreclosures. In January, 20 properties sold. Forty-six changed hands in that month the previous year.

But local Realtors hope better times are ahead for their industry and property sellers.

“We should be very close to having reached the bottom,” said Sam Roth.

Roth, general manager and principal broker at Century 21 Best Realty in Coos Bay, can base his gut hunch on history. He’s been in real estate since 1975.

The average price for closed sales on residential homes went from $215,263 in 2007 to $191,900 in 2008, according to Market Action, a Regional Multiple Listing Service. The publication includes homes listed for sale by real estate offices, but not for-sale-by-owner homes.

Roth said the ideal would be for home prices to rise 5 percent to 6 percent each year.

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Michigan motorists are the safest drivers in the nation, car crashes here are down 54 percent and auto thefts have dropped 46 percent since 1986. Yet, auto insurance companies are soaking Michiganders with the highest auto insurance rates in the U.S.

These are insurance policies that the state’s no-fault insurance law requires drivers to buy.

It’s a dream deal for insurers, whose profits have soared this decade, and a nightmare for drivers who, in the worst economy in the nation, increasingly can’t afford to pay these exorbitant, and rising, rates.

That’s the picture that Melvin “Butch” Hollowell, Michigan consumer insurance advocate, paints in his 328-page report delivered to Gov. Jennifer Granholm on Jan. 28. It’s a main component behind Granholm’s demand of Feb. 3 for auto insurers to freeze their rates for a year, by March 1, while the state Legislature reforms the no-fault auto insurance system.

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Q: My mother recently applied for a reverse mortgage. I have been trying to find a benchmark for reasonable costs associated with this loan to no avail. Could you please guide me in the right direction?

A: Congress recently enacted a law putting a maximum limit of $6,000 on closing costs for federally insured reverse mortgages. But different lenders will have different costs. I recommend that you do a search for “Reverse Mortgage” at your favorite Internet search engine. Specifically, AARP has a lot of helpful information, which can be found at www.aarp.org.

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Wisconsin’s car insurance industry says a proposal buried in Gov. Jim Doyle’s budget would result in higher rates for car insurance holders.

The Wisconsin Insurance Alliance objects to Doyle’s proposal to require higher minimum level of car insurance coverage.

Under current law, the lowest level of coverage a person who opts to buy insurance can get covers $25,000 for injuries to each person in an accident not to exceed $50,000 total.

Doyle wants to make the lowest possible coverage available $100,000 per person and $300,000 total.

Wisconsin does not require drivers to carry car insurance and Doyle does not propose changing that.

Wisconsin Insurance Alliance President Andy Franken says the proposal will cause people to drop insurance because they won’t be able to afford the higher rates.

Found here.

Local real estate agents and brokers are still digesting President Barack Obama’s plan to help millions of Americans save their homes.

“It certainly doesn’t hurt,” said Mike Hughes, a vice president for Downing-Frye Realty Inc. in Naples. “But I really have to look at the specifics.”

He planned to do a lot of reading to try to sort it all out.

The $75 billion plan, unveiled Wednesday, promises to keep as many as 9 million people from losing their home to foreclosure. It’s unclear how many of those homeowners may be in Florida – or how many homeowners might benefit from the plan in Southwest Florida.

The plan includes billions in incentives for mortgage lenders to cut monthly mortgage payments, and it would offer help to borrowers who are “under water,” or owe more than their home is worth, and haven’t been able to refinance if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac.

More government support will go to Fannie Mae and Freddie Mac under the plan.

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Anthem promises to make amends but Blue Shield says it’s not obliged to follow guidelines. 

Two of California’s largest insurers have been selling health coverage intended to be a safety net for the state’s sick and jobless at premiums that exceed state-issued rates, in some cases by thousands of dollars a year.

Two other companies — Aetna and Health Net — uniformly adhere to the state-issued rates. But a Times investigation found that Blue Shield of California’s premiums are as much as 55% higher. And those charged by Anthem Blue Cross have been as much as 36% higher.

The rates affect more than 13,000 people with Anthem coverage and more than 6,000 with Blue Shield policies.

When the higher rates were pointed out to Anthem, the company said it had erred and moved swiftly to make amends. In contrast, Blue Shield defended its rates. It said it was not required to follow the state-issued rate structure because the company did not believe it was legally binding. It also said it reports its rates annually to the state.

Regulators acknowledged that they had not scrutinized these premiums for years. But they have recently opened investigations.

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In July, Lacey Peterson couldn’t have asked for a better living arrangement.

The 30-year-old had just moved into a two-bedroom rental home on South 12th Avenue in Yakima.

Living directly across the street was her aunt, who was like a mother to her and who offered support and much-needed child care when she worked tending bar at a restaurant.

Peterson spent the summer repainting. And she didn’t complain about the cost of the paint because she believed she’d be staying in the house.

But in September, just weeks before her third child was born, the bad news was posted on her door. It was a notice from the bank that the property owner was several months behind on mortgage payments.

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We agree with The Detroit News that Michigan drivers need options when purchasing medical coverage through their auto insurance (“Insurance reform plan misses root of problem,” Feb. 11). Our coalition believes offering people a choice in the amount of personal injury protection they are required to buy will reduce premium rates. We have a plan — called PIP Choice — to do that.

We’re happy Gov. Jennifer Granholm acknowledged this problem in her State of the State address. Unfortunately, the state insurance advocate’s proposal lacks the urgency needed to reduce rates now. Parts of Butch Hollowell’s proposal might help slightly, but it could take years to grind through the process. Drivers need relief now.

Michigan is the only state that forces drivers to purchase unlimited medical coverage, even if they are insured through personal health plans or seniors through Medicare. This overlapping coverage and one-size-fits-all law is wasteful and costly to drivers.

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