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PCS Posts
By Joseph E. Seagle, Esq. ● Dec 30, 2022
Smart Brevity® count: 3.5 mins...922 words
👋 Happy last Friday of 2022! 🎊 It’s been a journey with an easy stroll the first half of the year, and a slog through the second. But, if you’re reading this, we can at least say, “We made it.” Thanks for taking this journey with me. Here’s to a happy and prosperous new year to all our readers. See you in 2023!
BTW, this is the last “PCS Posts.” We’ll return next year under a new name but with the same mission.
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1 big thing: What’s ahead
The real estate market outlook for 2023 is better than it was for 2022.
Why it matters: 2023 isn't an election year. Neither party will have compelling reasons to play the economy up or down as it fits their narrative.
The bottom line: The question I often hear this time of year is, “What is going to happen in Florida in 2023 when it comes to house prices?” and “What do you think 2023 will look like economically?”
Dammit, Jim! I’m a lawyer, not an economist! But I read a lot of economists’ outlooks and try to summarize them for those who ask my opinion.
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If Fannie Mae is to be believed, the US will slip into a very shallow recession in 2023, with a GDP drop of about half a percentage point over the year.
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Fannie expects consumers to deplete their savings and max out credit so that they can’t keep consuming with wilful abandon as they have been.
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If the recession happens, the Fed could pull back on rate increases, which would help increase home sales. But that will happen only if the Fed sees the recession going deep.
Meanwhile, REALTOR’s economists expect Miami home prices to skyrocket over the next year. However, the same report predicts that the Tampa and Bradenton areas will see some of the largest price declines in 2023.
Our thought bubble: Florida’s market isn’t as mortgage-rate sensitive as other areas. Cash-buyer retirees see to that. Tampa and Miami, pandemic boomtowns, won’t be booming.
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As the market balances supply and demand, it should keep price increases or decreases pretty stable along with the rest of the economy.
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Wildcards: China. Ukraine. Natural disasters. Vaccine-resistant viruses.
Go deeper: Yahoo! Finance
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Beneficiaries of land trusts are signing leases, sales agreements, and building contracts.
Why it matters: This is not a safe practice as it jeopardizes the beneficiary’s anonymity and asset protection attributes provided by the trusts.
Situation Awareness: We act as land trustees for hundreds of properties. The reasons our clients want us to hold title in trust for them vary.
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Some want anonymity and privacy in their ownership, so the public won’t know they have any interest in the property.
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Others want to segregate the property's potential liability from themselves as individuals.
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And some want to keep their potential liabilities away from their property.
But when a beneficiary signs any contract individually or even in their capacity as a beneficiary of the trust, they are — as an individual — in the gunsight of the plaintiff’s attorneys.
The bottom line: Stop it. Too many times, we have been served with a lawsuit that named us as the trustee of the trust and the beneficiary.
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The pleadings then reveal that the beneficiary signed the lease, sales contract, or construction contract independently.
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We didn’t sign it.
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Sometimes, the beneficiary was named as a property manager when the suit was for a person injured at the property.
To be safe, if your property is held in a trust, have the trustee sign everything or use a professional, independent, and insured property management company to manage the property. Also, be sure that the insurance policy for the property names the trustee, as trustee of the trust, as the “insured,” with the beneficiary, and any property management company named as a “certificate holder.”
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Four signs that a pending home sale will fall through. Real Trends
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New home sales defied expectations, rising in November. CNN
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Warren Buffet’s most-watched housing metric is singing to him. Benzinga
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Florida’s new condominium guidelines are straining Fannie Mae and Freddie Mac, drying up lending for condo buyers. Dodd Frank Update
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A throttled credit market is the biggest danger to housing. Bigger Pockets
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MV Realty … second verse, same as the first. St. Louis Post-Dispatch
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A lone Bird of Paradise is all that remains once the rest of the plant was removed after dying in the latest Bomb Cyclone cold blast. It’s not looking backward toward 2022. It’s flying toward 2023.
Our New Year’s Eve will consist of our traditional passing out on the sofa with the dogs and waking up as the ball drops in Times Square. Our plans for New Year’s Day are to eat the traditional meal of collard greens, black-eyed peas, and ham (money, luck, and health).
What are you doing New Year’s Eve?
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We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below.
Be on the lookout for our next issue! 👋
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