New Jersey Estates/Weichert Realtors/ NJ Luxury Real Estate/ New Homes

THE DONKEY ATTITUDE

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Mon, 09 Nov 2009 07:26:14 -0600

One day a farmer's donkey fell down into a well. The animal cried piteously for hours as the farmer tried to figure out what to do. Finally, he decided the animal was old, and the well needed to be covered up anyway; it just wasn't worth it to retrieve the donkey.

He invited all his neighbours to come over and help him. They all grabbed a shovel and began to shovel dirt into the well. At first, the donkey realized what was happening and cried horribly. Then, to everyone's amazement he quieted down. A few shovel loads later, the farmer finally looked down the well. He was astonished at what he saw. With each shovel of dirt that hit his back, the donkey was doing something amazing. He would shake it off and take a step up.

As the farmer's neighbours continued to shovel dirt on top of the animal, he would shake it off and take a step up. Pretty soon, everyone was amazed as the donkey stepped up over the edge of the well and happily trotted off!

MORAL : Life is going to shovel dirt on you, all kinds of dirt. The trick to getting out of the well is to shake it off and take a step up. Each of our troubles is a steppingstone. We can get out of the deepest wells just by not stopping, never giving up! Shake it off and take a step up.

Remember the five simple rules to be happy:

1. Free your heart from hatred - Forgive.

2. Free your mind from worries - Most never happen.

3. Live simply and appreciate what you have.

4. Give more.

5. Expect less and the last bust not the least...

6.For success always network..network is the in thing in today's business

Paul Stillwaggon,
For All Your Real Estate Needs
Contact New Jersey Estates
Real Estate Group
E-mail: njestates@gmail.com
Web: http://www.newjerseyestates.net
908-561-5492 (Paul S) 908-310-1358 (Cell)

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

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Save Housing, At Any Cost (again)

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Fri, 06 Nov 2009 10:55:09 -0600

"Congress voted on Thursday to extend the tax credit and President Obama plans on signing it into law Friday morning. The $8,000 credit will apply to all contracts, for homes up to $800,000, entered into before April 30, 2010, and closed by June 30. It creates a new $6,500 credit for property owners who have lived in their home for at least five consecutive years."

Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples, from $75,000 and $150,000, respectively. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return. From the NY Times:

2009 MULTIFAMILY SOLAR FUNDING PILOT

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Fri, 06 Nov 2009 10:37:29 -0600

The 2009 Multifamily Solar Funding Pilot provides a 0% loan to eligible affordable multifamily building owners for the installation of solar photovoltaic (PV) renewable energy systems.

View the Program Guidelines:

http://www.state.nj.us/dca/hmfa/gho/dprograms/multifamily/pdf/20090714_MFSOLAR%20Guidelines.pdf

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

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Preservation Outweighs Economic Blues in New Jersey

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Fri, 06 Nov 2009 06:34:41 -0600

New Jersey, like many others states these days, is facing a severe budget crisis.

In the interest of cost cutting and finding ways to save dollars, New Jersey could have dismantled its preservation and open space programs, citing the need to channel its limited funds elsewhere. Or New Jersey could have said preservation was not fiscally sound in a tough economic climate. Other states are certainly doing this so why not New Jersey too?

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

First Time Homebuyer Interest Rate - 5.750% with 0 points - 30 years!

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Thu, 05 Nov 2009 10:59:23 -0600

A below-market, fixed interest rate is offered to first-time home buyers and urban area buyers. Down payments of as little as 3.5% are required and must come from the borrower's own assets. Loans are 30-year fixed rate. Certain closing costs can be gifted by family members, non-profit organizations or government agencies. Debt to income ratios are as high as 33 percent (housing debt, i.e., mortgage, taxes, insurance) and up to 38 percent (total monthly debt load).

Find additional information here:

http://www.state.nj.us/dca/hmfa/consu/buyers/ownprg/firsttime.html

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

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N.J. groups urge political leaders to consider housing problems

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Thu, 05 Nov 2009 06:40:21 -0600

Here are questions that haven't been asked during the gubernatorial election campaign:

What kind of state should New Jersey be? How should its people live - separately, divided by race and wealth? Or together, in integrated communities, sharing its riches and its problems?

Read about it: http://blog.nj.com/njv_bob_braun/2009/11/being_a_leader_demands_vision.html

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

Now is the time to make the leap to homeownership

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Wed, 04 Nov 2009 06:51:08 -0600

COLUMBUS, OH - August 31, 2009 - (RealEstateRama) -- As a potential homebuyer, you have an incredible opportunity to qualify for the federal first-time homebuyer tax credit of up to $8,000.

Read the full article: Now is the time to make the leap to homeownership ...

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

NAR Commends Congressional Action to Extend Higher Mortgage Loan Limits

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Wed, 04 Nov 2009 06:30:18 -0600

Washington, DC - November 2, 2009 - (RealEstateRama) - The National Association of Realtors® thanked Congress for speedy action in passing a congressional resolution yesterday that would extend the current higher Fannie Mae, Freddie Mac and FHA loan limits through 2010. The present loan limits would expire at the end of 2009 and revert to previous lower limits.

"NAR commends both houses of Congress for their quick action in continuing these higher limits during a time for recovery in the housing market and national economy. The higher limits, along with the home buyer tax credit extension, are necessary to keep the markets moving at this critical time," said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

"Home sales have shown significant movement upwards in the past six months and reduced inventory in some segments of the housing market, but not in all. Home purchases in the middle-income and higher brackets have not moved much, and those markets must improve before we can experience a fully sustained housing recovery. These higher loan limits will help motivate qualified home buyers to purchase in those markets," McMillan said.

The resolution would extend the present loan limits for FHA, Fannie and Freddie through the 2010 calendar year at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas. The floor for FHA is $271,050; the floor for Fannie Mae and Freddie Mac conforming loan limits is $417,000.

The resolution now goes to President Obama, and he is expected to sign it today or Saturday to avoid a government shutdown.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Contact:
Lucien Salvant 202/383-1176

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

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Can I 1031 Exchange Into a Promissory Note?

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Tue, 03 Nov 2009 10:12:09 -0600

Buying Distressed Notes

I overheard a conversation recently while circulating at a commercial real estate networking event in Los Angeles. The person speaking said they were buying distressed loans (promissory notes) at significant discounts from commercial banks. The loans were already in foreclosure, and the person speaking (buyer) wanted to buy the notes now so that they would end up with the actual real estate by completing the foreclosure.

Buying Notes Through a 1031 Exchange

She indicated that she would like to sell certain real estate that she already owns through a 1031 exchange, and then acquire the promissory notes from the commercial bank as her like-kind replacement property to complete her 1031 tax deferred exchange transaction.

She indicated that she had asked a couple of 1031 exchange Qualified Intermediaries about doing just this but that the two Qualified Intermediaries said that the transaction would not qualify for 1031 exchange treatment because the installment notes were personal property and not real estate.

Expertise and Experience Counts Here

The answer that she received appears to be correct on the surface. She wants to sell real estate, so it stands to reason that she must acquire real estate in order to qualify for tax deferred exchange treatment under Section 1031.

However, there actually is a way to structure the transaction so that it will qualify as a 1031 tax deferred exchange. The concept is relatively easy and straight forward. The strategy combines the concepts of the Reverse 1031 Exchange parking structure and the Build-To-Suit 1031 Exchange improvement strategy.

Reverse 1031 Exchange Parking Structure

She could implement the Reverse 1031 Exchange parking structure under Revenue Procedure 2000-37 where the note would be acquired and "parked" by the Exchange Accommodation Titleholder (EAT) as her intended like-kind replacement property.

The note is absolutely personal property as the two 1031 exchange Qualified Intermediaries pointed out to her when asked if it could be done. It is clearly not real estate, yet.

Build-To-Suit 1031 Exchange Improvement Strategy

Real estate is often acquired and parked by an Exchange Accommodation Titleholder in order to improve the property. The real estate is then transferred to the taxpayer to complete his or her 1031 tax deferred exchange once the improvements have been completed. This is referred to as an Improvement 1031 Exchange or a Build-To-Suit 1031 Exchange or a Construction 1031 Exchange.

The same concept can be used for her proposed 1031 tax deferred exchange. The note would be acquired and parked by the EAT. The EAT would "improve" the property by completing the foreclosure. The EAT would end up with the actual real estate upon completion of the Trustee's Sale. The real estate can then be transferred to her to complete her 1031 exchange.

You really can acquire a Promissory Note as part of your 1031 tax deferred exchange transaction as long as the like-kind replacement property is actually a real property interest when it is received by the taxpayer completing the 1031 exchange.

This article was written by a contributor to the book Be a Real Estate Heavyweight. For more information on the book, be sure to check out www.RealEstateHeavyweight.com.

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

When Zero Is Way Too High

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Tue, 03 Nov 2009 07:14:04 -0600

Interest rates still aren't low enough to stimulate the U.S. economy. Washington needs to engender more inflation so "real" rates turn substantially negative

Can an interest rate of zero be too high? Unfortunately, yes. A new analysis by Goldman Sachs (GS) concludes that the Federal Reserve's cut in the federal funds rate to a record low of zero to 0.25% on Dec. 16 isn't going to be nearly enough to get the economy going again. The report says the Fed would need to reduce the federal funds rate to negative 6% by the end of 2010 to supply the needed amount of monetary stimulus.

The problem: It's literally impossible to cut interest rates below zero. As a result, "we are entering a world with interest rates that are far too high for the economy's good," Goldman Chief U.S. Economist Jan Hatzius wrote in a Jan. 16 research note.

That's a big negative for a U.S. economy that's already in a deep slump, with retail sales, industrial production, and exports all plummeting. Citigroup (C), Bank of America (BAC), General Motors (GM), and Chrysler, among others, are struggling to keep their heads above water. Circuit City, the second-biggest U.S. electronics retailer, announced on Jan. 16 that it was going out of business and closing all its stores by the end of March. Meanwhile, homebuilders like Lennar (LEN) and D.R. Horton (DHI) are getting squeezed by a record decline in home prices.

Inflation Headed to Zero?

Ordinarily when the economy slows, the Federal Reserve can juice it up by cutting short-term interest rates to below the rate of inflation, meaning that in inflation-adjusted terms, rates are actually negative. For example, if inflation is running at 6% per year and interest rates are at 4%, the "real" rate is negative 2%. Negative real rates entice people to borrow money for consumption or investment, which gets the economy going again and soaks up unemployed workers and equipment.

Right now, zero is about right for interest rates. But the economy is continuing to soften, so it will soon be too high, according to Goldman. Hatzius bases his calculation on Goldman's own version of the so-called Taylor Rule, which is named after Stanford University economist John Taylor. Taylor says the Fed needs to lean against the wind by raising rates when the economy is overheating and lowering them when there's a lot of slack.

Trouble is, the Federal Reserve can't cut interest rates below the rate of inflation if inflation falls to zero, which many economists expect to happen soon. Clearly the Fed can't take in $1,000 and pay back only, say, $950 a year later. Rational investors would simply keep their money in cash outside the banking system to preserve its value.

The solution is obvious: The Fed needs to deliberately raise the rate of inflation-maybe not all the way to 6%, but significantly above zero.

One way to do that is to print lots of money. The Fed can create money from thin air by purchasing assets such as Treasuries and mortgage-backed securities and paying for them by crediting the seller with newly created reserves at the central bank.

"Usual Rules No Longer Apply"

That way today's zero interest rates would be negative in inflation-adjusted terms and the economy would get the boost it needs. Fed rate-setters would need to swallow hard, since 99.99% of the time they try to quell inflation, not raise it. But most of the voters on the Federal Open Market Committee are aware that deflation can be an even greater nemesis than inflation.

Even generating negative real rates won't be enough to turn the economy around. So the government will also need to strengthen the banking system and give the economy a fiscal stimulus by cutting taxes and increasing government spending, as the Obama Administration proposes to do. To rescue the banks, Hatzius favors more purchases of bad assets that are on banks' balance sheets as well as lending by the Fed against consumer asset-backed securities.

Princeton University economist Paul Krugman favorably cited Hatzius' research in his New York Times blog on Jan. 17. No surprise there, since Krugman himself pinpointed a similar problem in Japan during its "lost decade" of slow economic growth in the 1990s. Wrote Krugman: "This is why we need a huge fiscal stimulus, unconventional monetary policy, and anything else you can think of to fight this slump. Quite literally, the usual rules no longer apply."

UPDATE: Goldman Sachs' Hatzius returned my phone call on Jan. 21 and spelled out what he thinks is the right strategy to combat the recession. To be absolutely clear, Hatzius does not think the government should try to get inflation up to 6% or anywhere close to it. Hatzius said that since the Fed can't reduce interest rates below zero, the government has to use other tools that would give an amount of stimulus equivalent to an interest rate cut of 6% or more. That would be a combination of fiscal stimulus (tax cuts and spending); efforts to get the banks lending again; and monetary stimulus such as increasing the money supply. The goal, says Hatzius, would be to get the inflation rate back up to around 1% or 2%. That's believed to be the Fed's target range.

By Peter Coy

Coy is BusinessWeek's Economics editor.

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

Federal Housing Authority-insured loan

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Sun, 01 Nov 2009 06:32:45 -0600

U.S. Representative Scott Garrett (R-NJ) recently introduced legislation that would raise the amount borrowers put down on a Federal Housing Authority-insured loan. The current requirement of three and one-half percent would be raised to five percent under Mr. Garrett's proposal. Mr. Garrett believes that taxpayers should not be exposed to FHA's risk of insolvency and that this risk can be reduced by increasing the amount of mortgage downpayments.

FHA provides mortgage insurance for persons to purchase or refinance a principal residence. The loan itself is funded by a bank, mortgage company, or savings and loan. Qualified borrowers are eligible for financing up to 97 percent of the purchase price of the residence.

Like a considerable number of his Republican brethren who claim to be free market proponents, Mr. Garrett has substituted marginalist thinking for more risky but higher rewarding outside-the-box thinking. Increasing the downpayment requirement from three and one-half percent to five percent won't reduce defaults or delinquencies. The inability to pay due to life changing circumstances like loss of employment, medical events, and divorces lie at the root of the problem. Combine that with poor financial planning or lack of substantial assets to weather the storm of a two-year recession and we are bound to see problems.

What Garrett should be proposing is a free market approach to the financing of a house. If ever there was a time for America to reevaluate our policy on homeownership, this is it. Just like farm subsidies add to the cost of feeding our families, government insurance of mortgages is adding to the risk of moral hazard and probably the cost of a mortgage. Why do we want to guarantee home ownership anyway? So that some land developer can turn dirt and trees into cash? Yes, its a noble concept but the Constitution does not guarantee home ownership. This notion needs to be sent bye-bye along with the post-classical liberal thinking of the 1930s.

If Americans consider home purchase an investment, then they should act like investors and bear the risks and costs of making that investment. For example, instead of insuring traditional loans, government should promote partnerships between buyer and finance companies. A potential owner-partner goes to his bank to obtain alternative financing. Under an alternative financing scheme, the bank owns all legal and equitable interest in the house, minus any downpayment that the owner-partner brings to the partnership. Each payment made goes to buying out the bank's original investment.

FHA would insure the partnership. At the end of 30 years, the bank has the option of keeping its accumulated equity or selling it to the owner-partner. If the owner-partner defaults on a payment, the bank gives him notice to leave and the owner-partner loses all accumulated and contributed equity. There would be no foreclosure per se. The FHA pays the bank the difference between what the owner-partner paid and the balance of the purchase price. The bank transfers legal and equitable ownership in the property to the federal government. In addition, the government collects the unpaid balance from the owner-partner through garnishment of wages or liens on other property.

The government benefits from not having to subsidize any downpayments or closing costs. If there is a default, the government takes ownership of property that it can sell or lease in order to generate revenues for taxpayers. Foreclosure filings would be eliminated and any court expenses involved in removing occupants would be greatly reduced. More importantly, government would get out of the business of a making a market for house purchases.

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

Attracting Business by Mastering Your Market

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Fri, 30 Oct 2009 07:46:52 -0500

What does being a "Master of your Market" mean? I believe it means that if someone tells you where they live, you get a mental image of their neighborhood or subdivision or condo building. You may not necessarily know how big their house is or what year it was built, but you can probably guess within a decade or two, and you have a general sense of the overall ambience, what amenities are nearby and even a personal anecdote or two about the area you can toss out.

What being a Master of your Market doesn't mean is that you're a walking encyclopedia of facts, figures and statistics. No amount of research sitting behind your desk will give you the level of intimacy and familiarity with your market that you'll need to be a master of it. Again, a good definition of a market master is the ability to visualize a neighborhood when given an address -- and there's no way you'll get that from MLS research.

How does being a Market Master help you attract business? Well, as a real estate agent out there in the world with your antenna up, what do you have to offer the Average Joe who strikes up a conversation with you? Does he care how many listings you have? Does he care how gorgeous your home brochures are? Does he really want to hear about your 32-step marketing plan for selling houses? Probably not. But if he's at all interested in what $300,000 buys you in his neighborhood (and you know), or how much it costs these days to get into South Park Hill (and you know), your ability to make intelligent conversation about the market will get him, if he's gettable.

But if the best you can come up with is something like: "I'm not sure about that, but I'd be happy to find out for you;" well, it doesn't have quite the same effect.

The same thing applies when you're sitting on floor time or at an open house. If the best you can do is hand a visitor a list of other homes in the neighborhood, but can't really make conversation about them, the possibility of watching that stranger walk back out your door just went way up. But if you can chatter about nearby listings or comparable neighborhoods, you just dramatically increased the chances that your visitor will ask for your business card.

When you're on floor time, or take a sign call, again, if you can speak intelligently about the market either surrounding your listing, or that your office specializes in, you'll easily capture those leads.

So, how do you become a Master of Your Market? First, if it's customary to "preview" in your market, do that. A lot. (If previewing is customary in your market, you might be surprised to hear that it's frowned on or flat-out not allowed in some! If that's the case in your market, you might want to move)

All new agents should spend some serious quality time previewing in their first few months. By "serious," I mean every other day if they can. The best way to effectively preview is to practice what I call "Opinionated Previewing" or "Previewing with a Purpose." That means to look at somewhat similar homes and compare them to each other or against your "subject" property. You would practice both when you preview in preparation for an open house, or preview for a new buyer. If you don't have a new buyer or an upcoming open house, go preview all the houses in a certain price range or architectural style. Whatever your excuse, being able to compare homes to each other helps you internalize the data you're gathering (so you can spit it out intelligently if the opportunity arises).

A great side benefit of pro-active previewing is that karma always seems to provide you with an audience to share your newly-found expertise with. If you go out and preview all the Bungalows in your neighborhood between $250,000 and $350,000, within a week or two, you'll almost certainly meet someone with one of those to sell, or who knows someone who'd like to buy one! It's previewing magic! Another way to Master Your Market is to always have your antenna up for opportunities to show properties to buyers. Even buyers who probably won't ever lead you to a paycheck.

It's one thing for you to go out alone and preview, but quite another to have someone else with you to provide feedback on what you're seeing. And if you make conversation with this person, you'll get to hear their impressions of neighborhoods and styles and features, which will help you better understand what's important to the consumer. So, drive across town for a sign call. Take a buyer out to look at properties even if she says she won't buy til next summer.

If you've chosen to master a particular geographic market, you'll want to learn about the flow and amenities of the area as well as the housing stock. Drive the area using a variety of access points. Visit the grocery stores and the neighborhood parks. If you have friends who live there, ask them what they like and dislike about their neighborhoods. Read local neighborhood newspapers and subscribe to other agents' newsletters who specialize in your new favorite neighborhood.

Do open houses in that neighborhood as often as you can, even if you have to do them for an agent in a different office (if your office policy allows this).

The job of "becoming" a market master is never really done. Markets change (no kidding) and in order to truly be a master, you have to keep up with the changes. Don't go overboard; you do have other things to do besides preview (I hope), but try to keep Market Mastery on your to-do list. You'll feel awfully smart the next time you capture a great new client at a party because you knew how much that Victorian down the street sold for!

Written by Jennifer Allan
October 29, 2009

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

Business property tax Appeal

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Fri, 30 Oct 2009 07:00:21 -0500

"Want to lower your Business Property Tax Appeal and lower your commercial property taxes?"

If you are serious about appealing your commercial property taxes, you'll want A definitive guide to Commercial Property Values and Adjustments to use for the type commercial tax appeal you need to engage in. Use our examples for your particular approach to valuation in order to Win your Business Property Tax Reduction Appeal.

Read all about it: http://www.housetaxax.com/comm.htm

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

Renewable energy: the next economic bubble?

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Thu, 29 Oct 2009 06:43:18 -0500

When the US-originating ‘dot-com bubble' of 2001 or the current ‘economic bubble' in the housing market burst or ‘crashed', they wreaked havoc on the world economy and its financial markets. What is this ill-understood phenomena?

‘Economic', ‘market' or ‘speculative bubbles' have occurred throughout history with varied causes and impacts. One of the earliest examples in Europe was the Dutch ‘tulip mania' of 1637, where tulip contracts were signed at 2000% of what they had been three months before. Bubbles typically develop in advanced capitalist economies, with highly sophisticated financial markets where capital is abundant compared to capital-scarce poor countries.
Playing bubble pop

Economists differ over what causes these bubbles. Some argue that it is the ‘herd behaviour' - a group action without a direction - of investors. Others say that it is down to ‘excess liquidity' - the loose lending of standards and low rates, or capital, or problems with forecasting market developments. What they do share is the strong diversion of asset prices from the intrinsic value of a good, be they tulip bulbs, houses or internet start-ups. Often it is the adoption of a new technology or a new market ‘fad' that leads to a rapid surge in the valuation of asset prices, as investors pile into the new product in their search for higher yields.

With the world facing the prospects of a drawn-out recession, looking for new economic bubbles might seem inexpedient. However, it is in times of economic downturns that investors are looking for new investment opportunities where capital could be placed, in the hope of reaping high returns. When trying to identify where a new bubble might be developing, the renewable energy sector seems a good candidate.
Heading towards a renewable energy bubble?

Currently, with oil prices plummeting to historic lows due to the decreased aggregate demand as a consequence of the recession, the world is nonetheless running out of fossil fuels. The drop in oil prices is not because there is increased supply. Actually, oil production might peak in the coming years. Once the economy recovers, energy prices will increase again. Supply will be even more limited if alternative sources are not developed any further.

In the US - the driving economy behind the last economic bubbles - the Obama administration has developed an ambitious plan to develop the renewable energy sector. It has promised to double the share of renewable energies (currently 7%) in its national energy mix over the next three years. It promises to create some 460, 000 new jobs in the energy sector. Under the current stimulus plan, it will invest $25 billion directly in the renewable energy sector. A new energy bill will slate additional funding for the sector. A nationwide emissions trading system will be introduced by 2012.

Will Obama's ‘green revolution' be the source of future US economic power?

While it was the internet revolution that propped up the US economy under Bill Clinton and the housing boom that fuelled economic growth under George W. Bush, will Obama's ‘green revolution' be the source of future US economic power? Widespread talk about ‘a global race for renewable energy leadership' and the ‘green collar workers' of the future already has markets pumping. A recent KPMG report identified a frenzy of mergers and acquisition in the renewables sector throughout 2007. It is likely that new government investments and global competition will further turn up the heat. Will the result be another speculative bubble in the renewables sector? As private investors struggle to find new profitable sectors to invest in a sinking economy while governments subsidise energy investments, it is possible that the foundations of a new bubble are being lay down on our watch, only to burst at the end of the next economic boom.
The risks are real. The damage could be high. A short boom and bust cycle could set back the development of feasible energy alternatives for decades. Setting an appropriate regulatory framework to curtail market exuberance should therefore be a priority for both US and European governments.

By: domenec ruiz devesa

Frank says: If this bubble burst will it take real estate with it?

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity

Sale of Business

Frank Festa NJ Estates Real Estate Group (Weichert Realtors) — Wed, 28 Oct 2009 08:40:53 -0500

"New Jersey Appellate Division Confirms that the Consumer Fraud Act Does Not Apply to the Sale of Business."

Caselaw: New Jersey: The New Jersey Appellate Division recently evaluated a claim arising from allegations of fraud in connection with the sale of business and associated real estate.

Read about it:

http://www.saleofbusinesslawblog.com/2009/07/new-jersey-appellate-division-confirms-that-the-consumer-fraud-act-does-not-apply-to-the-sale-of-bus.html

NJ Estates Real Estate Group
Weichert Realtors
908-561-5492
55 Stirling Road, Watchung, N.J. 07069

Equal Housing Opportunity