Kids of boomers smarter about housing

NEW YORK – Oct. 31, 2012 – Members of Generation Y believe the recent housing slump has made them more knowledgeable about homeownership than their parents were at their age, based on 1,001 responses to a Better Homes and Gardens Real Estate poll.

Nearly 70 percent of the 18- to 35-year-olds say they’re savvier about owning than Baby Boomers were at the same age. And most of them – about 75 percent – still recognize the value of homeownership and consider it an indicator of success.

Buying a first home isn’t easy, however. Despite affordable home prices and favorable borrowing costs, 69 percent of survey respondents said they would wait to make a purchase until they can afford a home and it doesn’t disrupt their lifestyles. Some 40 percent said they would work a second job to save for a home, while 23 percent would move back in with their parents to prepare financially for ownership.

“They’re not going to end up getting into a situation that they’ve seen … where they can’t keep the house because they cannot afford it any longer,” says Matt Rand of Better Homes and Gardens Rand Realty, a New Jersey-New York-based brokerage of Better Homes and Gardens Real Estate. Members of Gen Y “are living at home with their parents, but this [survey] suggests they’re being strategic in living at home – not because they’re slacking.”

Source: MarketWatch (10/22/12) Hoak, Amy

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Buffett’s firm buys Prudential real estate network

OMAHA, Neb. – Oct. 31, 2012 – Warren Buffett’s company said Tuesday that it is buying the Prudential and Real Living real estate franchise and launching a new brokerage brand for those agents.

Berkshire Hathaway Inc.’s real estate unit is acquiring the network from Brookfield Asset Management. Berkshire’s HomeServices of America and Brookfield will launch Berkshire Hathaway HomeServices next year and begin switching agents to the new firm.

Buffett said he’s happy to lend Berkshire’s name and financial strength to the new company, which will be based in Irvine, Calif., and be led by a team of executives from Prudential Real Estate.

“I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand,” Buffett said in a statement.

Financial terms of the deal weren’t disclosed, but Berkshire’s HomeServices of America will be the majority owner. HomeServices already owns local brokerages with 16,000 real estate agents in 21 states.

HomeServices, which is part of Berkshire’s MidAmerican Energy unit, played the lead role in the deal with Buffett offering final approval on the use of the Berkshire Hathaway name, MidAmerican spokeswoman Ann Thelen said.

HomeServices Chairman and CEO Ron Peltier said the deal gives the company a national franchise network with more than 53,000 agents to complement its local brokerages. Peltier said in an interview that he wanted to acquire a national franchise because building one would be too costly and take several years.

The Prudential and Real Living brands will be eliminated over the next couple of years.

“The strategy going forward is to migrate the franchises over to one super brand: Berkshire Hathaway HomeServices,” Peltier said. That will help the company build one main brand online under the Berkshire Hathaway HomeServices banner.

Peltier said the independent local brokers that HomeServices already owns won’t be forced to switch affiliation to the new franchise network, but they will begin noting they are owned by Berkshire Hathaway. For example CBS Home Real Estate in Omaha will keep its name, but add that it’s a Berkshire Hathaway affiliate.

Peltier said that will help ensure that both the independent brokers it owns and Berkshire Hathaway HomeServices locations will show up in Internet searches.

Berkshire owns roughly 80 subsidiaries, including railroad, clothing, furniture and jewelry firms, but its insurance and utility businesses typically account for more than half of the company’s net income. The Omaha, Neb., company also has major investments in such companies as Coca-Cola Co., IBM and Wells Fargo & Co.

Brookfield, based in Toronto, manages more than $150 billion worth of utility, infrastructure and real estate assets.
Copyright © 2012 The Associated Press, Josh Funk, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Insurers: Losses from Sandy won’t hit Florida

TALLAHASSEE, Fla. (AP) – Oct. 31, 2012 – Insurance experts said Tuesday that home and business owners in Florida should not be affected by insured losses suffered when super storm Sandy ripped through much of the Atlantic seaboard and the Northeast.

Sam Miller of the Florida Insurance Council said the Florida market is dominated by state-backed Citizens Property Insurance Corp., local insurers who operate only in Florida, and a smaller number of Florida-only subsidiaries under a few national carriers.

“The price of homeowner’s coverage in Florida in the private market is predominantly driven by scientific estimates of the costs of exposure,” said Miller, FIC executive vice president. “Hurricane Sandy will not have a direct impact on these estimates.”

Lynne McChristian of the Insurance Information Institute (III) said Sandy’s effect on reinsurance markets should be minimal since much of the damage is from water, and that is covered by the National Flood Insurance Program.

“Rates charged for insurance in Florida are exclusively based on past and expected losses that occur within our state,” said III’s McChristian.

Both said Sandy shouldn’t have a dramatic effect on the cost of reinsurance either.

“Reinsurers enter Hurricane Sandy with historically high levels of capital, and access to increasing sources of additional private sector capital,” Miller said. “Reinsurers, rating agencies and analysts expect vigorous, comprehensive competitive conditions to prevail in 2013, even considering potentially significant regional losses from Hurricane Sandy.”

However, Florida business and homeowners have experienced sharp increases in recent years on property policies although the state has not seen a hurricane since Wilma in October 2005.

All increases on property insurance premiums must be approved by the Office of Insurance Regulation (OIR), which is recent years has consistently given its OK to hikes – often times by double digit amounts.

OIR spokesman Jack McDermott said it would likely be January at the earliest before regulators would see how insurers respond to losses from Sandy in future rate requests.

“We may begin seeing some impacts of the storm at that time,” McDermott said.
Copyright © 2012 The Associated Press, Brent Kallestad.

 

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