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Coffee Talk (Tampa)
No crisis yet
Richard X. Bove has weighed in on the much-debated housing bubble.
The Pinellas Park-based banking industry analyst has his doubts, both about the severity of home prices and the predicted dire consequences of them.
"For the vast majority of home owners, current housing prices are not a problem," writes Bove, taking a national perspective.
Using data from the National Association of Realtors, Bove says, home mortgage costs have only recently spiked above 20% of median family income. That's quite low when Bove looks back over the last 25 years.
Principal and interest costs were much higher as a percentage of median family income in the early 1980s. Mortgage costs were up near 40% of family income. That was due to a combination of two factors inherited from the 1970s: a run-up in housing prices and soaring interest rates.
In recent years, we are experiencing similar price appreciation but have yet to endure a reappearance of double-digit mortgage rates.
That's why the Punk Ziegel & Co. analyst insists home prices are still comparatively affordable in many of America's hottest real estate markets.
With median family income currently at $56,719 a year and the median price for a single-family home at $203,800, Bove calculates mortgage rates would have to climb to 8% before the typical household couldn't afford a 30-year fixed-rate loan with a 20% down payment.
The average rate for a 30-year fixed mortgage was 5.66% during the week that ended July 14, according to the congressionally chartered home-finance agency known as Freddie Mac.
But Bove is not prepared to endorse the view that there are no unsustainable bubbles anywhere. He is keeping an eye on areas where optional adjustable-rate mortgages and interest-only loans have become prevalent.
"Our initial studies into the new mortgage types like Option ARMs and IOs indicate clear abuses in some sectors," he writes.
Even in those markets, however, Bove doesn't necessarily see housing busts coming, unless there is a major decline in local employment or a severe national recession or depression.
Attention: Medical malpractice attorneys
Almost 15% of Florida physicians who answered recent queries from regulators could not provide state-required proof that they can pay a medical malpractice claim.
In May, the Department of Health quietly released the results of an audit of 577 randomly selected physicians from a group of MDs who renewed their two-year licenses to practice medicine in Florida between 2002 and 2004. The department says the sample represented about 3% of all doctors renewing during that period.
Forty-seven physicians did not respond to two letters from the state Board of Medicine. Of the rest, the board determined that 457 physicians were in compliance with the financial responsibility requirement.
With certain exceptions, doctors must have professional liability insurance, an escrow account or letter of credit to show they can pay a civil judgment.
Physicians who practice without insurance, known in the profession as "going bare," are required to post notices in the reception areas of their offices to inform patients.
There were 57 doctors going bare of those who responded to the audit. But Board of Medicine auditors found just one physician who wasn't notifying patients of the MD's no-insurance status when the inspectors visited offices.
Where discrepancies or deficiencies were found, the auditors referred those physicians to a consumer services office for further review and possible discipline.
Clearwater bar loses oldest past president
In 1951, Harry Truman was the U.S. president and Winston Churchill was British prime minister. That same year Howard P. Rives became president of the Clearwater Bar Association.
And the Clearwater group had about 35 members that met monthly at Morrison's Cafeteria. One of the president's main duties, Rives wrote earlier this year, was to ensure plans for the annual Oyster Roast were "well laid and carried out."
Back then, the roast was still held at Judge John Bird's orange groves - as close to the February full moon as possible to add "special beauty" to the night, wrote Rives, a retired Pinellas circuit judge.
In the newest edition of the Clearwater bar newsletter, the group bid goodbye to Rives - its oldest living past president. He died June 5 at the age of 81.
Rives' father was an attorney, so is his son, Howard P. Rives III.
Joining big lobby
A Sarasota bank executive is taking a more active role in advocating for his industry.
Charles O. Murphy, president and chief executive of the Bank of Commerce, has signed up for a tour on the government relations council of the American Bankers Association. The $234 million-asset Bank of Commerce celebrates its fifth birthday in September.
The bank council, more than 100 executives from banks of various sizes around the country, meets twice yearly to chart the association's strategy for pushing its agenda on Capital Hill.
Fortune magazine recently named the bank association as one of the 25 most powerful lobbies in Washington.
More important than money?
Sarasota Business Center is pushing a summer special that's a little different from the typical real estate promotion. Building owners are pushing office/warehouse-suite sales through July 29 with the added inducement of a free cruise for two to a destination of the buyer's choice.
"People are definitely calling in," says Courtney Milligan, marketing director for the center. "We don't have any contracts yet, but we definitely have more calls than normal."
Milligan estimates that prospects are up by more than 25% since the center announced the offer.
"We were trying to think of something more creative," Milligan says. "Usually, we just offer cash incentives. I think this is really motivating people that may have been thinking of buying to begin with .... business owners who may have been waiting for their leases to expire. I think giving people something like $2,000 off the purchase price doesn't really make people (close) the purchase. I think the idea of a cruise just sticks with people a little more."
Milligan says the cruise offer is comparable to previous price-related incentives the company has offered.
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