Due to a credit crunch, a housing downturn and a wobbly economy, consumers opting to remodel their home or condo are having no problem finding contractors. While these same factors have dampened the once-booming home remodeling industry, several housing experts say that can mean less frustration finding a contractor and maybe even lower costs.

According to Harvard University’s Joint Center for Housing Studies, overall growth in spending on remodeling projects in 2007 is expected to be 3 percent. A year ago, it was 6.8 percent. In 2004 and 2005, at the height of the housing boom, it was nearly 20 percent each year. And, the Home Improvement Research Institute, an organization backed by manufacturers, retailers and wholesalers, projects that total home improvement product sales will decline this year by 1.3 percent.

Some people are spending on renovations precisely because of the housing-market downturn. When they know they’re going to have to hold on to their homes longer, they have more time to get the best out of the price of renovation. One good thing about the slowdown, remodelers said, is having their pick of employees. During the boom, finding qualified subcontractors, such as electricians, plumbers and laborers, was a challenge. With new-home construction slowing down, there are plenty of people looking for work.

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The past 10 years saw a fabulous, explosive boom in Florida real estate. Yet, with all the frenzy there was little guidance people received when taking out a mortgage. Now, the mortgage brokers who have survived the recent downturn are working diligently to remake their business.

Marketing campaigns of the major mortgage lenders are in full swing. Countrywide, which is the nation’s and Florida’s largest mortgage lender, is dispatching 200 loan officers in South Florida to open houses. They expect to make a total of 3,000 visits in the next few weeks. Bank of America has its loan officers working in the offices of several large real estate companies.

For all minority groups nationwide last year, almost four out of every 10 mortgages made to minorities nationwide were subprime, which is double the rate of subprime loans made to white borrowers. Don’t take that deal unless you’re sure there’s nothing better. One of the revelations of this crisis has been that people who could have qualified for cheaper home loans were offered more expensive subprime mortgages, because the commissions paid to mortgage brokers were higher.

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Proponents and critics agree that if enacted the Mortgage Reform and Anti-Predatory Lending Act will transform major portions of the home loan transaction for prime and subprime borrowers.

As written, the bill will impose a new “federal duty of care” standard on anyone who originates a home loan – whether a broker, retail lender, credit union loan officer or employee of a large mortgage bank. That federal standard will require all originators to be licensed and registered at the state or federal level; to offer applicants only “appropriate” mortgage loans; and to make full disclosures to consumers about all the key features and costs of the loans they obtain.

At a Congressional committee hearing last Wednesday, mortgage brokers welcomed the concept of nationwide licensing and registration of all originators – something they’ve advocated for years as a way to eliminate unethical loan officers from the business. But they strongly opposed the plan to prohibit yield-spread premiums, arguing that it would prevent cash-poor borrowers from financing their closing costs by raising the note rate.

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Last week, Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.33 percent with an average 0.5 point for the week ending October 25, 2007, down from last week when it averaged 6.40 percent. Last year at this time, the 30-year FRM averaged 6.40 percent.

The 15-year FRM this week averaged 5.99 percent with an average 0.6 point, down from last week when it averaged 6.08 percent. A year ago, the 15-year FRM averaged 6.10 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.03 percent this week, with an average 0.5 point, down from last week when it averaged 6.11 percent. A year ago, the 5-year ARM averaged 6.14 percent.

One-year Treasury-indexed ARMs averaged 5.66 percent this week with an average 0.6 point, down from last week when it averaged 5.76 percent. At this time last year, the 1-year ARM averaged 5.60 percent.”Market concerns about slower economic growth over the next few months allowed mortgage rates to drift lower from last week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “How much of a drag the housing slump will be on the economy remains unknown. Additionally, recent reports suggest some regional manufacturing weakness in October.”

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House and Senate leaders, under the aegis of Gov. Charlie Crist’s office, had reached general accord on how to reduce property taxes earlier this month. But House Speaker Marco Rubio, of West Miami, thinking the payoff for taxpayers wasn’t impressive enough, broke ranks and marshaled an overwhelming majority of House members this Monday to call for ever bigger tax cuts.

As the final days for securing a tax cut agreement slip away, fewer than a half-dozen legislators remain major players. Chief among them are Rubio, a brash, impatient leader of the right, and Sen. Daniel Webster, a calmer, more measured politician from Winter Garden who held Rubio’s post a decade ago. Both are hailed as staunch conservatives. But they have strikingly dissimilar personalities, work styles and political visions. And those have spilled over into the Legislature’s inability, so far, to agree on what to do to stem rising property tax bills.

The gambit upset Webster and Senate President Ken Pruitt, R-Port St. Lucie, who thought they had a deal. A legislative equivalent of a college food fight ensued. One of Rubio’s allies, Rep. Carlos Lopez-Cantera, R-Miami, sent an e-mail to a constituent criticizing senators’ “egos.” Rep. Evan Jenne, D-Davie, compared the behavior of senators to that of children. In this polarized atmosphere, legislators, who are scheduled to meet again Monday, will have just a few hours to find a way to get a proposal on the Jan. 29 ballot. By midnight Tuesday, according to Crist, the legal time limit for writing a proposed constitutional amendment will expire.

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Florida isn’t the only state with a growing homeowners insurance crisis. According to the New York Times, over three-million homeowners along the east coast of the United States have had their insurance policies canceled over the past three years.

Many who were lucky enough to have their insurance renewed experienced a substantial increase in premiums. Most states along the easter seaboard already have a “risk pool” homeowners insurance plan. Here in Florida, the plan is administered by Citizens Property Insurance. Some state lawmakers are blaming insurance company greed for the crisis, while the insurers are saying they have to protect against the next catastrophic storm along the Atlantic coast.

It all sounds familiar to Floridians, and maybe the message will finally get through to Congress now that more voices are saying it. The lack of availability and affordability of homeowners’ insurance is a growing threat to the national economy. Congress has two efforts going forward to address the problem. One would offer wind insurance to homeowners through the federal flood insurance program, and the other would give federal backing to states that join together to pool their resources in a catastrophe fund.

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An outcry for lower property taxes stems in part from homeowners disputing county assessments. Since January, when government appraisers last made assessments, the housing market has bombed and slumping home values may drop more. A flawed system needs correcting, quickly, and political factors are driving the legislative rush to get something to voters.

Last month a judge squashed a proposed amendment rammed through the Legislature in June that would have given homeowners the option to utilize a “super-exemption.” The judge ruled it did not tell voters the amendment would phase out the popular “Save Our Homes” program. Passed in 1992, Save Our Homes limits annual increases in taxable property values to the cost of living or 3 percent, whichever is less.

The newest package legislation passed through the House Government Efficiency and Accountability Council earlier this month. The reform package centers around doubling the homestead exemption to $50,000, saving the owner of a $259,000 home up to $412 a year. Not all waterfront properties would be assessed like they are potential sites for condos, a practice called “highest and best use.” Property taxes for low-income seniors would be eliminated and it would become easier to dispute appraiser assessments.

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During the height of Florida’s real-estate boom, property investors bought thousands of homes, hoping that skyrocketing prices would inflate their investment portfolio. Now, some are considering filing for bankruptcy protection.

A growing number of investors are making the decision to walk away from their properties and ultimately send their homes into foreclosure. Many investors who were hoping to quickly flip their investments are now left with homes that can no longer be sold for more than the mortgage debt. In some cases, these investors can’t even find tenants willing to pay enough rent to cover hefty mortgages. According to an August study by the Mortgage Bankers Association, defaults on mortgages where the owner doesn’t live in the house are a major driver of the defaults in Florida, one of the states with the fastest rising rates of seriously delinquent loans.

Defaulted mortgages are defined as those 90 days or more past due or in foreclosure. But walking away from a mortgage is almost always a bad idea. You can lose your ability to take out future loans, and you might find the lender coming after your personal assets, such as your principal residence, depending on your state’s laws and the terms of your loan. “A lot of these people can’t think clearly because the level of financial distress is so great,” says David Dweck, president of the Boca Real Estate Investment Club in Boca Raton, Fla., who is also a Realtor. “They’re hoping [that by taking this step], it’s going to work itself out.”

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Turning a home into a Bed & Breakfast offer opportunities for some but the complexities attached to gaining these benefits can be a significant challenge. People searching for the pleasure they receive from meeting people from different countries and walks of life often consider operating a B&B.

A B&B can be a 24-hour service. Usually there are one, two, three or more rooms dedicated to the enterprise, depending on local zoning statutes. Usually B&Bs with four or more rooms are called inns and may have very different licensing requirements. With higher prices there is always an expectation of high quality and service. Research is essential to establish prices that drive the business, but keep visitors knocking on your door.

Among the expenses to consider are commissions of 4 to 15 percent paid to reservation agencies, travel agents, tour operators and online booking services. New owners want to depend entirely on B&B income but it’s probably not enough revenue with just one or two rooms. However, with an excellent three room operation, it is possible to make enough to live without outside employment. It will also depend greatly on the business acumen of the operator and the amount of money spent on marketing. With aggressive marketing, most owners see a significant increase of revenue after a few years operation.

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The slow down in residential real estate hasn’t had a major effect on commercial real estate development. Led by strong growth in the office and retail segments, commercial property sales hit $401 billion through Oct. 18, 2007. As a result, sales outpaced last year’s $359 billion total, according to Real Capital Analytics, a New York based real-estate research firm.

For the most part, buyers and sellers are more sophisticated and they have more financial flexibility and resources to ride out credit-market turmoil. However, if the broader economy stumbles, the commercial real estate market would be vulnerable to “credit-risk contagion”. Already, the credit crunch that started in mortgages has spread to other markets, including the commercial market, with some sellers asking for more capital upfront when mortgage-backed assets are financing a transaction.

Fundamentals in the commercial market remain strong with rising rents and occupancy levels expected to continue, especially in metropolitan areas. And while overbuilding in residential housing is worsening the magnitude of the downturn, commercial markets are not in oversupply mode. As the housing market struggles to regain its footing, the outlook for commercial real estate is mostly positive, and investors are reaping the benefits.

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In the market for Delray Beach real estate? Consult with licensed agent Caesar Parisi. Caesar has assisted hundreds of buyers and sellers, giving sound advice on how to most effectively buy and sell property.

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