Florida Commercial Law

Gainesville's Housing Market is Insulated from Downturn

Gainesville's Housing Market is Insulated from Downturn
by Zana Holley Dupee, Esq.
Florida Commercial Attorney
Bogin, Munns & Munns, P.A.

(352) 332-7688

Why is Gainesville's housing market insulated from the downturn hitting the rest of Florida and the US?

Home prices next to the University of Florida campus in Gainesville, Florida have been strong despite the state's real estate downturn.  Plus, next year, Shands at UF is opening a new Cancer Hospital which is a $388-million, 500000-square-foot facility.  This facility will bring a significant number of high paying medical jobs into the market buoying Gainesville's insulated economy even more. 

Gainesville has the triple good fortune of having an economy that is driven by external economic stimulus from

1. millions of dollars of government support of the University of Florida,
2. millions of dollars of health insurance coming into the local market paying for patients' health care at the 4 local hospitals and numerous other medical facilities that are the life blood of Gainesville, and
3. significant foreign investors from South Florida and around the globe.  Plus, Gainesville is geographically insulated from the hurricanes that hit Florida, with no hurricanes ever hitting Gainesville in recorded meteorological history.

Of the 400 cities in the United States and Canada cataloged, examined, analyzed and described in the 850-page book, "Cities Ranked and Rated, Second Edition," Gainesville ranked No. 1. Gainesville began receiving national recogition as a great place to live in 1995 when Money Magazine declared the city to be the "Best Place to Live in America."  The city has ranked eighth among the "Top Ten Value Towns for Those Considering Retirement in 2007," was No. 11 on an AARP list of "Best Places to Reinvent Your Life," and was ranked the "Most Technologically Advanced City" in Florida by Popular Science magazine. 

And Gainesville ranked 12th on a list in Forbes Magazine of the best places to do business and have a career.  Gainesville has a lot of very positive things going for it: a very educated labor supply, very strong income growth over the last few years, and very low business costs. These are very strong indicators of a healthy economy and an attractive place for businesses.

In addition to a strong local economy and quality of life, the Amendment 1 Homestead Exemption Portability appears to be kick starting home sales activity this spring.  This improved real estate tax environment together with stimulus packages and low interest rates are spurring more local sales.

Gainesville is one of Florida's most optimistic real estate markets, with 83 percent of local homeowners indicating they expect the value of their homes to remain stable or increase in value in the next 12 months; mortgage interest rates remain affordable, and it is a great time to buy.  Although the median price of homes sold recently has declined somewhat, a more accurate measure of individual home prices is the Office of Federal Housing Enterprise Oversight House Price Index, which measures price changes in repeat sales or refinancings on the same properties. By that measure, Gainesville home values were up 2.22 percent in the three months ending in December 2007.  Plus, existing home sales increased 2.9 percent in February 2008.

Florida topped the list of states favored by international real estate investors with 26 percent of foreign investors buying properties in Florida.  The weak dollar has made American properties popular among global investors.  Some of Gainesville's foreign real estate investors are buying in bulk, such as clusters of condo units or whole floors of buildings, but others are making single-unit purchases to be rented or used as a base for U.S. travel.

For most Europeans, especially people in the United Kingdom, the United States is on sale! It's like buying stuff for 50 cents on the Euro.  I help foreign investors overcome legal, financial and cultural barriers to buying real estate in Gainesville.  The weak dollar and affordable home prices are exciting foreign investors in Europe and Asia.

Investing in Gainesville real estate is very attractive to international investors. It is fairly easy to purchase a home in this country; the U.S. does not restrict or scrutinize most property purchases by foreigners, as happens in other countries. There are few barriers to owning a property.Foreign investment in Gainesville real estate is likely to grow, especially as the affordable prices and weak dollar make the real estate market a bargain-hunter's paradise.

While Gainesville housing markets are no longer performing at record-breaking levels, Gainesville real estate is still considered a prime investment opportunity for foreign buyers and a 'safe haven' in which to put their money.

If you need the assistance of a real estate attorney in investing in Gainesville real estate, please call Zana Holley Dupee, Esq. of Bogin, Munns & Munns, P.A. at (352) 332-7688.

Please Help

My family and I are participating in March for Babies because we support the March of Dimes mission to save babies. Please support our fundraising efforts by sponsoring us in March for Babies today.

Contributing to our march online is fast, easy and secure. You can donate directly from my personal webpage with a credit/debit card or PayPal. If you prefer, I can also accept cash or check. Just click the appropriate box on my webpage.

The money we raise helps save premature and sick babies. Premature birth is the #1 cause of newborn death and the biggest threat to babies’ health today, and through March for Babies, the March of Dimes is funding important research to find out why premature birth happens and what can be done to prevent it.

I’ve joined with millions of compassionate people across the country who support March for Babies each year. Won’t you please help me in this worthy cause? Visit my webpage and sponsor me in the march that saves babies!

With your support, there’s hope.

Visit my personal fund raising page at www.marchforbabies.org/zanadupee

How Can You Sell Your Vacation Home without Getting Hit with Income Tax?

By Zana Holley Dupee, Esq.
Florida Commercial Attorney
Bogin, Munns & Munns, P.A.
(352) 332-7688

Did you know that you can sell your vacation home without having to pay income tax on the gain?  It is possible if you don't use it that much and if you have rented it out over the last 2 years.

On March 10, 2008, the Internal Revenue Service issued a ruling that tells how vacation properties can qualify for 1031 exchanges, which defer the income tax on the sale of investment properties. If a property owner follows the guidelines in this ruling, then the IRS will not challenge whether the vacation home qualifies for deferred income tax.

In order to defer income tax from the sale of your vacation home, the property must be held by the taxpayer for 24 months. The holding period is broken into 12-month blocks, and during each 12 month period, the property must be rented at the fair market rate for no less than 14 days.

Additionally, the owner can use the property for 14 days or 10 percent of the days rented, whichever is greater, plus a "reasonable" number of days devoted to maintenance tasks.

However, anyone wanting to do this sort of exchange must really keep good records of the property's rental history and the dates the property was occupied by the owner for maintenance.

For purposes of this revenue procedure, the vacation home must be "a dwelling unit."  A dwelling unit is real property improved with a house, apartment, condominium, or similar improvement that provides basic living accommodations including sleeping space, bathroom and cooking facilities. It cannot be vacant land.

There are also specifications regarding the replacement property that you buy after selling the vacation home. It must be investment property.  If it is another vacation home, then the dwelling unit must be owned by the taxpayer for at least 24 months immediately after the exchange (the “qualifying use period”); and the qualifying use period is broken into 12-month blocks, and during each 12-month block, the property must be rented at the fair market rate for no less than 14 days.

The taxpayer also must satisfy all other requirements for a like-kind exchange under § 1031 and the regulations thereunder.  For example, the exchange must be properly structured before the real estate sales and purchase contract are drafted and signed because special language needs to be added to the contracts to make the transactions qualified for the deferred income tax treatment.  Additionally, there are strict time lines that must be followed to qualify for deferring your income tax on the gain.

This procedure is effective for exchanges of dwelling units occurring on or after March 10, 2008.

For further information regarding the tax implications of real estate transactions in Florida, contact Ms. Zana Holley Dupee of Bogin, Munns & Munns, P.A. at (352) 332-7688.

DISCLAIMER: The information in this blog is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, call us to schedule a consultation on your case and ask us about our qualifications and experience.

What is UM Insurance and Why is it Important?

What is UM Insurance and Why is it Important?

UM (uninsured motorists) coverage protects you when the person who hits you does not have insurance or doesn't have enough insurance.  In Florida, 22% of drivers have NO insurance!  Another 48% have very little insurance.  That means that if someone hits you, you have a 70% chance of needing your UM coverage because that driver does not have enough insurance to protect you !

Here is a story that an attorney friend of mine posted that illustrates how important this coverage is:

A new client called my friend's office early this year regarding a horrible auto crash in which she was involved. Let's call her Mrs. Jones.

Mrs. Jones is elderly. Both she and her husband are retired. They own two vehicles with one of the larger national auto insurers. The have bodily injury coverage on their vehicles in the amount of $100,000 per person and $300,000 per accident. That is the coverage that comes into play when one of the them causes a crash and a claim is brought against them.

Florida law requires that their insurance company sell them uninsured motorists coverage in an amount equal to their bodily injury limits. So, in the Jones' case, they would have $100,000 of uninsured motorists coverage times the number of cars they insure. So, because they have 2 cars, they would have $200,000 in uninsured motorists coverage.

Remember, uninsured motorists coverage comes into play when the person who injures you either doesn't have any bodily injury coverage or not enough.

Early in January, Mrs. Jones suffered very severe injuries when another driver drove through a stop sign at high speed. This driver only had $10,000 of bodily injury coverage. Her injuries required an extended hospital stay and weeks of recovery at home. Her medical bills continue to come accrue. Mrs. Jones and her husband hired A&S to assist her.

Unfortunately, the investigation disclosed that Mr. Jones had signed a form with his insurance company rejecting uninsured motorists coverage. So instead of having $210,000 in coverage available to her (the $10,000 in bodily injury coverage and $200,000 in UM coverage) Mrs. Jones only had $10,000. This was grossly insufficient to cover all the costs, expenses, and trauma of what she has gone through.

In discussing this with Mr. Jones, he really had no recollection of signing the form. He acknowledged that it was his signature. Like many people, he likely signed a bunch of forms and simply relied on his agent.

UM coverage is one of, if not the cheapest type of coverage you have on your policy. Over the years, we have recommended to friends and clients that if an agent recommends that you reject UM or select lower limits, you should find another agent.

Do yourself and your family a favor today. Check your policy. If it says you have rejected UM coverage, have "non-stacking" UM coverage, or have selected lower UM limits, call your agent and demand that they give you all of the UM that your policy permits. No other coverage will protect you when you are injured by a driver who doesn't have insurance or doesn't have enough.

If your agent tries to talk you out of it, find another agent. The premium difference is minimal and the coverage protects you and your family.

If you have questions about uninsured motorists coverage and how it protects you and your family, please call me at (352) 332-7688.

IRS Economic Stimulus Payments in May 2008

Starting in May, the U.S. Government will begin sending economic stimulus payments to more than 130 million households. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of income and file a 2007 federal tax return. The IRS will take care of the rest.

Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Millions of retirees, disabled veterans and low-wage workers who usually are exempt from filing a tax return must do so this year in order to receive a stimulus payment.

Only taxpayers who file a valid 2007 tax return will be entitled to receive a stimulus payment.  Most people only need to file their taxes as their normally would.  Recipients of social security, veterans benefits and low income worker may need to file a tax return in order to be eligible for the stimuls payment.

This information is provided by Zana Holley Dupee, Esq. of Bogin, Munns & Munns, P.A.  (352) 332-7688