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The new Florida homeowner’s insurance law changes are not working. The new law was passed last month, but so far there have been no signs of any rate reductions, that is, unless you have Citizens insurance. And the people who have that, are paying such high premiums, that a measly 20% reduction will seem like nothing. What happened to the big companies that the law makers have claimed will come back to Florida?. I have called my agent several times and so far nothing is happening. As a matter a fact, they told me that rates are still rising. We need cheaper homeowners insurance, or at least the option to insure our houses for less money. For example I am willing to accept the first $50,000 from insurance and anything that exceeds that amount, than I would pay for it myself. So If a Hurricane hits my roof and it looses a few tiles, I would replace them even if the color does not exactly match. One reason why Florida’s homeowners insurance is so expensive is that so many people are getting their whole roof replaced only because many insurance adjusters tell the homeowners that if they cannot find the same color roof tiles or shingles, that they can use that as an excuse to get a whole new roof. This is why a smaller hurricane like Wilma has caused insurance claims to be almost as high as was after hurricane Andrew. Hurricane Andrew was a much stronger storm. Roofs needed to be replaced back then, because they were really damaged. Shame on anybody who makes the insurance company’s pay for a whole new roof! If you only loose a few tiles, you should fix your roof. If you do otherwise, then you are a thief. And the insurance company’s aught to force those people to go with Citizens, because thieves belong with thieves.  

In Todays edition of the Sun Sentinal, there is an article about how higher property taxes in Florida are hurting the Real Estate Market.

I know this is true, because it has affected many people that I know, including myself. It is probably the combination of high taxes and insurance, that makes owning a home almost unaffordable. I know that this is also affecting some business, which may lead them to move to other states, where the taxes and insurance are cheaper.

So if that happens, then we will loose even more jobs. This has got to be stopped. I recently wrote several posts about this. One of my suggestions is that Florida should take a look at how things are run in some other states that also have a booming real estate market.

I also said that I think we should have a higher sales tax rate and use this to lower the property tax rate. This will force tourists as well as illegal aliens, which do not own homes to help us to pay for our government.

Just because we are smart enough to own a home, does not mean we should be the only ones to pay higher taxes.

PLEASE ADD SOME COMMENTS!!!

What are your thoughts, I keep writing about current events, I am sure are many people out there, reading my posts and you may either agree or disagree with my postings. But please feel free to add a comment. I promise I will not send you any Spam. As a matter a fact I hate Spam.

I recently had to activate a special plugin on this Wordpress Weblog, just to stop it from getting flooded by spam comments. But if your comments are simple and do not contain any bad words, all you have to do is type them and they will be automatically posted. It is that simple.

So lets see some more Comments!!!!!!

Do you agree or disagree ??

Today I’ d like to discuss the controversial type of loan, which really is not so bad if you understand how it works. You probablly hear radio commercials about this.

Disclaimer: please not that I am explaining this as a consumer. So it is my advise that you consult with your bank of mortgage lendor for the exact details of this. This is only my single opinion about this. I like this loan. But there are also some people who have lost money, because of a lack of understanding of it. Always consult with a licenced lendor first, before you make any type of financial decissions.

Now here is my explaination of how this has worked for me:

As far as know: A true mortgage loan never has a 1 percent, 1.5 or 1.75 percent rate. So they call this a teasor rate for advertising purposes. Also this is only one option of payment when you use this type of loan. 

What you really get is a loan that is adjustable and it used the MTA or LIBOR index plus a margin of 2.75 percent. So the actual mortgage rate is currently at about 7.5 percent. This is actually pretty close to some regular fixed rates, but this is adjustable so it can go up or down each month.

When you apply for this loan and close: You are given a special option to pay a lower payment rate of lets say 1.5 percent of the interest only for a limited amount of years.

Afterwards you may have to make a higher payment. But this is usually after 5 years or more.

If the true interest rate is at 7.5 percent: Than the other 6 percent is it is actually taken away from your home equity each month. 

So you are actually creating some  negative equity with each payment.

And to explain this in another way you are given an option to make a much lower payment then you would if you had a regular mortgage. This is how some people are able to have super low mortgage payments. This works out excellent if you are in the business of buying homes and flipping them in 1 or 2 years. If you make a lot of equity gain, it will most probably ofset any losses.

Since the loan is called an option loan, you also have the option to make the full interest only payment or even a fully amortized payment. Sometimes they even give you an option to convert it over to a fixed rate. But you have to ask your bank or mortgage broker about this.

I have this type of loan and even though I may be creating some negative equity, my own home has increased in value by a much greater amount. I am also planning to start paying the full interest only payment later this year. Or I may sell my house and use my remaining equity to buy a smaller home for cash!

This is also an example of how you can leverage the banks money to build wealth via home equity much faster than you could ever save it in the bank.

The main purpose of this blog is to discuss economics. I love economics and I am happy to see how some simple things can affect supply and demand. The recent gas price drops have now pushed the DOW JONES Average into an all time high. 

I live in South Florida and I hope this will help everybody, and bring more new people to South Florida and South Beach, to enjoy a nice vacation. Also if you are planning to move here. Please do not forget that I own a moving company and it is very popular in Miami Beach, downtown and Brickell and all of Miami and South Broward areas.

You can visit mysite at http://www.movicompservices.com

I also notice that some spammers like to post spam links on this site. I will delete them, but if you would like to add a link to this blog, just post a legitamate comment and if I find it related to some of the topics on this site, then you can have the link.

Has the Bubble Burst? What will happen to the South Florida Real Estate market and some other economic outcomes?
 

We are so lucky that we did not get any more hurricanes this year. If we had, that could have really affected our housing market, by creating totally unaffordable insurance premiums. Now I hope that never happens, although we are getting close to that. Now the Real estate market is slowing down and in some cases it is still rising, while in other places it is declining.  The reasons:
 

1) Depending on the area, and the house. If somebody paid too much money last year due to speculation, well then that person may have to deal with some kind of price adjustment, or they can just ride it out with time.
It may take some people about 2 to 3 years for the price to catch up. For others it will only take about 1 year.
After that prices should continue to rise between 10 and 15 percent annually. That is the good thing about Real Estate. Also in some emerging markets, where lots of new homes, condos and business are we will see a little extra price stabilization and then some more rises. The major declines will be in the older neighborhoods where older homes that were build over 20 or 30 years ago, will become less desirable as people have many more new homes and neighborhood to choose from.
 
Meanwhile for Stocks, which Bubbled in 2001, It has now been over 5 years and the stock market still has not revisited its all time high. Yet it is very close to that. I am also pretty sure that it will make it to that level before this year is up.
The reason: for one, gas prices are declining. This alone can help keep inflation in check, holding back any more interest rare hikes and giving the Dow Jones just enough steam to pass 11,700 again.
 

I can almost bet that it will do that and pass that. The major economist’s always have to have something up their sleeve to help push the markets up. So if you are shorting some stocks. It may be time to buy again, or buy to cover those stocks!

Attention: If you own property in South Florida, you need to read this.