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Home price declines stabilizing: report

August 18th, 2008 dkiley

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Mon Aug 18, 2008 10:36am EDT

NEW YORK (Reuters) - Home prices appear to be stabilizing across the country even as foreclosures mount, First American CoreLogic said in its June 2008 LoanPerformance Home Price Index (FAF.N: Quote, Profile, Research, Stock Buzz) released on Monday.

“As of June, nominal home prices declined 10.7 percent from a year ago,” Mark Fleming, chief economist for First American CoreLogic said in a press release.

However, while nominal home price declines have stabilized in the 10 to 11 percent range for several months, a surge in inflation means real, or inflation-adjusted, home prices are still declining at an accelerating rate, he said.

Fleming said given their home price expectations for the remainder of the year, they expect 2.7 million preforeclosure and foreclosure filings in 2008, up nearly 50 percent from 2007.

Between April and June, home price declines were flat, falling by an average of 10.8 percent, but real home price declines accelerated to 16.8 percent in June from 15.3 percent in April, he said.

“Thirty-seven states are experiencing nominal price declines, which is the same as last month,” Fleming said.

California and Nevada are experiencing the largest drops, declining more than 20 percent from a year ago, while Arizona and Florida decreased more than 17 percent. Several New England and Midwestern states have declined between 9 and 13 percent during the last year, he said.

First American CoreLogic, a member of The First American Corp (FAF.N: Quote, Profile, Research, Stock Buzz), provides residential mortgage data and analytics for the mortgage industry and Wall Street.

Although nominal prices have moderated overall, the moderation is occurring for a few select states. With the exception of Florida, the top five and bottom five states in terms of price appreciation continue to experience larger declines and smaller increases relative to the last few months, Fleming said.

US foreclosure filings surge 55 percent

August 16th, 2008 dkiley

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By ALAN ZIBEL

WASHINGTON (AP) — The number of homeowners stung by the dramatic decline in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with the same month a year ago, according to data released Thursday.

Nationwide, more than 272,000 homes received at least one foreclosure-related notice in July, up 55 percent from about 175,000 in the same month last year and up 8 percent from June, RealtyTrac Inc. said. That means one in every 464 U.S. households received a foreclosure filing last month.  Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 77,000 properties were repossessed by lenders nationwide in July, the company said.

Nevada, California, Florida, Arizona, Ohio, Georgia and Michigan had the highest foreclosure rates. Foreclosure filings increased from a year earlier in all but eight states.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options to avoid foreclosure. Many can’t find buyers or owe more than their home is worth and can’t refinance into an affordable loan.
As foreclosures soar, banks and mortgage investors are also facing a pileup of foreclosed properties on their books and are cutting prices dramatically.

RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale, equal to about 17 percent of the 4.5 million U.S. homes that were up for sale in June.
To speed up the disposition of the 54,000 foreclosed properties it owns, Fannie Mae is opening offices in California and Florida and is considering selling those properties in bulk to investors. “I do not think this is a time to be holding onto (foreclosed properties) hoping for a better day,” CEO Daniel Mudd said last week.

It remains to be seen how much the government’s intervention will stem the housing crisis. President Bush last month signed sweeping housing legislation that aims to prevent foreclosures by allowing homeowners to swap their mortgages for more affordable loans, but only if their lender agrees to take a loss on the initial loan.

The bill is projected to help about 400,000 households.

The number of foreclosures “could start to stabilize as early as the first quarter of next year if the government program gains any traction,” said Rick Sharga, RealtyTrac’s vice president for marketing. “That’s really the unknowable right now.”

Even with government help, nearly 2.8 million U.S. households will either face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage’s value by the end of next year, predicts Moody’s Economy.com.

In the RealtyTrac report, the Cape Coral-Fort Myers area in Florida was the metro area with the highest rate of foreclosure, followed by three California cities: Merced, Stockton, and Modesto. Las Vegas ranked fifth.

Whitefish is state’s fastest growing city

August 15th, 2008 dkiley

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Whitefish is the fastest growing city in Montana, according to new census data released by the Montana Department of Commerce.

The population of Whitefish is estimated to have increased by 60.6 percent from the time of the 2000 Census to July 1, 2007, when it was estimated to be 8,083.

Kalispell saw the second highest population increase at 42.7 percent, and Columbia Falls came in fourth at 40.4.

The combined effect of the three cities was to place Flathead County as the second fastest growing county in Montana at 16.6 percent, behind Gallatin County at 28.8 percent.

The population of Flathead County was 86,844, Kalispell was 20,298 and Columbia Falls was 5,116. Whitefish ranked 11th in population, Kalispell seventh and Columbia Falls 16th.

Twelve counties in Eastern Montana saw double-digit population decreases from the 2000 Census to July 1, 2007. The population in Treasure County dropped 24.4 percent.

The total population of Montana increased about 6.2 percent to an estimated 957,861 residents.

For more information, visit online at http://ceic.mt.gov/EstimatesPlacePop.asp.

Can a Taxpayer 1031 Exchange Their Car?

August 13th, 2008 dkiley

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Wednesday, August 13, 2008 at 11:59AM
William L. Exeter

In theory, yes.  1031 exchanges can be used for more than just real estate.  A 1031 exchange of a car would be considered a personal property 1031 exchange.

Held For Investment
The question is whether the car - or any personal property for that matter - was held for investment (such as rental property) or used in the taxpayer’s trade or business.  It will qualify for 1031 exchange treatment if it has ben held for investment or used for business.

Like Kind Property
The next issue is what to 1031 exchange the car for.  The definition of like-kind property when dealing with personal property 1031 exchanges is much more specific than when dealing with real estate.  The 1031 exchange would have to be a car for another car, and they would both have to be held for investment or used in a trade or business.

Canadians Buoy Tourism Season

August 13th, 2008 dkiley

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A weak dollar, high gas prices, a late opening of Going-to-the-Sun Road and a modest cherry crop may seem like a recipe for disaster. But during the Flathead Valley’s most crucial economic time, tourism dollars continue to stack up.

Granted, many of those are in the form of loonies from the record number of Canadians pouring over the border to take advantage of their newfound financial strength. They have buoyed Flathead tourism, which past the midway point of its peak season, is mostly unscathed by the country’s slow economy.

Delayed roadwork in Glacier National Park actually helped some tourism sectors. When the opening of Going-to-the-Sun Road was set back, busloads of sightseers and their pocketbooks were rerouted to Whitefish.

“There’s never a slow time during the summer,” Whitefish Chamber of Commerce Director Sheila Bowen said. “And when Going-to-the-Sun was delayed, we noticed a huge difference – they had to find an alternate plan.”

In-state lodging, slowed by late-season precipitation and economic factors, was mostly offset by the number of foreign travelers.

“The park garners visitors from all over the world,” Joann Schadewitz, general manager at the Kalispell Grand Hotel, said. “And our international business is up – it’s exciting.”

In fact, over the last month, some in-state travelers who waited until the last minute to make hotel reservations have been shut out in Whitefish, where rooms have been booked solid. And golfers beware. Reservations at Whitefish Lake Golf Club start at 6:45 a.m. two days in advance.

Canadians and their renewed economic vigor are showing up in hoards. Since 2006, the loonie’s value has risen 30 percent, now slightly stronger than the struggling dollar. Moreover, the price of goods in Canada is still more expensive. In Banff, British Columbia, for example, a pack of Camel lights costs $10 and a six-pack of Budweiser, $13.

A trip to the Flathead Valley, which was once a relatively affordable three-day weekend for Canadians, is now an attractive place for them to buy everyday goods.

“This is where we come four times a year,” Calgary, Alberta resident Randy McDonald said as he waited for coffee at Ceres Bakery in downtown Kalispell. “My in-laws from Lethbridge come seven or eight times.”

The Roosville Port of Entry north of Eureka reported 14,724 auto entries – not including busses, trucks and pedestrians – into the United States during July. That’s 3,000 more than in June and more than double the number that crossed during the same time in 2004.

When the Owens & Hurst Lumber Company mill in Eureka closed in 2005, the community took a serious financial hit. Since then, however, Canadian traffic has helped sustain the local economy.

“We get a lot of people here with second homes,” Silver Fish Gallery owner Clover Kincheloel said. “Eureka is booming. And in the summer, it explodes.”

Eureka Chamber of Commerce Director Randy McIntyre acknowledged in-state travel is down from last year, but increasingly Montanans are traveling closer to home and in larger groups.

“They pick a destination or a day trip and do it without traveling too much,” McIntyre said. “For instance, I saw a group of 17 traveling in two motor homes. Maybe they’re getting together and taking fewer vehicles. Last year there were a lot of couples.”

But, like elsewhere, Canadians are making up the difference.

Roosville Customs Inspector Mike Burris chalks up the increased number of Canadians crossing the border to the obvious: an exchange rate advantageous to our northern neighbors. He says not too long ago, “Americans were doing the same thing.” He also pointed to Alberta’s oil and wheat, two commodities selling at record highs and providing many Canadians with extra cash.

“(They) are buying cars, trucks, and snowmobiles here,” Burris said. “They’re saving five, six, $7,000.”

Canadians who do buy automobiles in Montana, though, are still required to pay all applicable taxes when returning to Canada. But that’s not a deterrent.

And contrary to conventional wisdom, Americans are still traveling north, according to Canadian customs officials. Although statistics were not available, Canadian customs reported that the number of Americans entering Canada through Roosville was high this summer.

Another benefit to this tourism season is visitors to Western Montana haven’t had their vacations cut short by fire. Clear skies are keeping tourists in the valley, including Canadians, who the good-humored Burris says travel more than any other nationality – no matter the financial constraints.

“They’re a traveling bunch of fools,” he said.

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