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Two leading economists have scanned the current real estate landscape and come to the same conclusion: it's time to buy! |
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Has the Housing Market Finally Reached Bottom? | -A A Has the Housing Market Finally Reached Bottom? Daily Real Estate News | Thursday, April 26, 2012 If home buyers or home owners are waiting for the housing market to hit bottom before acting, they may have already missed it. The crash is over, Mark Zandi, chief economist for Moodys Analytics Inc., told Bloomberg about the real estate market. Home salesboth new and existingand housing starts are now off the bottom. Several economists are saying the bottom of the housing market has already been reached, and the market has been showing several signs of progress, including home prices stabilizing and demand increasing. The economists say theyre optimistic about a recovery in the housing market, despite threats of a foreclosure wave coming. One of the biggest signs that a sustainable housing market recovery is taking shape: Consumer confidence is up. "Today's consumer confidence shows labor markets recovering and that confidence is going to allow consumers to go out and buy homes," Chris Rupkey, chief financial economist for Bank of Tokyo-Mitsubishi in New York, told Bloomberg. Indeed, real estate professionals have been reporting increased activity among home shoppers this spring, too. "This year's selling season is shaping up to be the strongest we've seen in years," says Margaret Kelly, RE/MAX's chief executive officer. "Although we don't expect home prices to rise in every market at the same rate, the worst is definitely behind us, and a slow, steady recovery is taking hold." Source: Housing Declared Bottoming in U.S., Bloomberg News (April 25, 2012) |
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Mortgages and Veterans Posted: 19 Apr 2012 04:00 AM PDT One of the great things about this country is that we do a lot for those who have served us. And in the area of real estate financing, we can do exceptional things. Understand that the VA (Veterans Administration) is, in the mortgage world, like HUD is with FHA financing. They are an insurance company, collecting premiums and using the backing of the Federal government to guarantee the payments to lenders. Because of the governments guarantee, lenders can stretch traditional guidelines and offer very competitive terms (of course, while adhering to the VAs guidance). Some of the more attractive features of a VA loan are: 1. 100% Financing on Home Purchases Veterans, assuming they are in good standing, can buy a home with no money down. In most cases, the maximum VA loan is $417,000. 2. The Ability to Finance Reasonable Closing Costs On many VA loans, the closing costs are negotiated into the sales price and the seller pays them. This feature can significantly reduce the cash a veteran needs to buy a home. 3. More Understanding with Regards to Credit Challenges In an effort to help those who served us, lenders are more liberal towards hiccups in credit. 4. Common-Sense Look at Income Rather than approve loans strictly by income ratios, VA mortgages incorporate what is called Residual Income. There is a form that actually budgets all expenses (not just housing) to account for family size, heating and electrical usage, and more. 5. Financed Insurance Premium The VA charges what they call a Funding Fee to set up a fund to reimburse lenders, should a default occur. The Funding Fee varies on loan terms and usage (consult your lender for exact costs), but the good news is that it is typically just added to your loan. Instead of paying thousands of dollars up front, you can pay $10-$50 a month in a higher payment. 6. Refinancing Your VA Loan is Easy Through the I.R.R.L. (Interest Rate Reduction Loan) Program, getting a better rate (if the market has better rates) does not carry with it all the verifications of income, credit, appraisals, and assets of other loansand closing costs can be added into the loan! The logic is the VA is already on the hook and lowering the payment increases the likelihood of continued payments, so why not be as lenient as possible. For more detailed answers, contact your local mortgage professional. With three million veterans returning home in the next couple years, the opportunity of VA financing needs to be publicized. |
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Here's a great link to useful tax information for homeowners... http://www.houselogic.com/home-topics/a-home-owners-guide-to-taxes/ For non-homeowners, it might be too late this year to take advantage of the tax benefits of homeownership, but now is the time to make sure this is the last year to be counted out. Geeze...low interest rates, plenty of inventory to choose from...it's a great time to buy a home!!! |
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For the complete report see www.clearcapitol.com which has insightful commentary and great charts, but found the below to be especially interesting. It is essential to recognize that all real estate is local, nieghborhood to neighborhood, so trying to time the market peak or valley is next to impossible. MSAs Expected to See Modest Growth The 50 MSAs tracked by Clear Capital are forecasted to show mixed gains and losses, with 30 markets expected to see gains and 20 markets projected to post losses through the end of 2012. A full 52% of the 50 metros should see prices move less than 2% in either direction. No double digit declines are expected, and only Phoenix and Tampa are expected to see double digit gains. The forecasts for all 50 MSAs from March to December are shown in chart 6 below: Chart 6: Forecast from March 2012 to December 2012 Metro 50 Forecast Rank Metropolitan Statistical Area Forecast to end of 2012 1 Phoenix, AZ Mesa, AZ, Scottsdale, AZ 12.1% 2 Tampa, FL St. Petersburg, FL Clearwater, FL 11.4% 3 Orlando, FL +9.0% 4 Washington, DC Arlington, VA Alexandria, VA 8.4% 5 Las Vegas, NV Paradise, NV 6.6% 6 Miami, FL Ft. Lauderdale, FL Miami Beach, FL 6.0% 7 Houston, TX Baytown, TX Sugar Land, TX 4.3% 8 Providence, RI New Bedford, MA Fall River, MA 4.0% 9 Cleveland, OH Elyria, OH Mentor, OH 3.7% 10 NY, NY No. New Jersey, NJ Long Island, NY 3.4% 11 Louisville, KY 3.4% 12 Fresno, CA - Madera, CA 2.9% 13 San Diego, CA Carlsbad, CA San Marcos, CA 2.6% 14 Virginia Beach, VA Norfolk, VA Newport News, VA 2.3% 15 Birmingham, AL Hoover, AL 2.2% 16 Baltimore, MD Towson, MD 1.9% 17 Denver, CO Aurora, CO 1.8% 18 Portland, OR Vancouver, WA Beaverton, OR 1.8% 19 New Orleans, LA Metairie, LA Kenner, LA 1.6% 20 Dayton, OH 1.5% 21 Honolulu, HI 1.5% 22 Hartford, CT West Hartford, CT East Hartford, CT 1.3% 23 Richmond, VA 1.3% 24 Pittsburgh, PA 1.3% 25 Riverside, CA San Bernardino, CA Ontario, CA 1.2% 26 Minneapolis, MN St. Paul, MN Bloomington, WI 1.0% 27 Dallas, TX Fort Worth, TX Arlington, TX 0.8% 28 Sacramento, CA Arden, CA Roseville, CA 0.6% 29 Boston, MA Cambridge, MA Quincy, MA 0.5% 30 Los Angeles, CA Long Beach, CA Santa Ana, CA 0.5% 31 Bakersfield, CA 0.0% 32 St. Louis, MO -0.2% 33 Memphis, TN -0.2% 34 Rochester, NY -0.3% 35 San Francisco, CA Oakland, CA Fremont, CA -0.5% 36 Columbus, OH -0.5% 37 Nashville, TN Davidson, TN Murfreesboro, TN -0.5% 38 Tucson, AZ -0.5% 39 San Jose, CA Sunnyvale, CA Santa Clara, CA -0.6% 40 Oxnard, CA Thousand Oaks, CA Ventura, CA -1.4% 41 Raleigh, NC Cary, NC -1.7% 42 Milwaukee, WI Waukesha, WI West Allis, WI -2.3% 43 Cincinnati, OH Middletown, OH -2.4% 44 Jacksonville, FL -2.7% 45 Detroit, MI Warren, MI Livonia, MI -3.1% 46 Charlotte, NC Gastonia, NC Concord, NC -4.4% 47 Philadelphia, PA Camden, NJ Wilmington, DE -4.7% 48 Chicago, IL Naperville, IL Joliet, IL -5.1% 49 Seattle, WA Tacoma, WA Bellevue, WA -7.7% 50 Atlanta, GA Sandy Springs, GA, Marietta, GA -8.3% |
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Investment Outlook: An Economy on the Rise March 27, 2012 @ 3:05 pm by David Lereah ] It is becoming increasingly clear that the U.S. economy is improving, creating a more favorable backdrop for residential real estate investment. Our nations economy is kicking into second gear; monthly job gains have exceeded 200,000 for three consecutive months, providing the necessary fuel to create modest economic growth. An improving economy translates into positive wage growth, boosting consumer confidence which in turn, boosts home buying. Sales of existing homes registered 4.59 million annualized units in February, reflecting a housing recovery that began in mid-2011. Similarly, sales of new homes registered 313,000 annualized units in February, compared to 295,000 annualized units in July of last year. Home sales are firming as job growth has stepped up over the past half year. In addition, housing affordability remains high due to historic low mortgage rates, creating pent-up demand for homes. This provides a favorable long term outlook for future property values, creating opportunities for investors. The current U.S. foreclosure situation has created unprecedented property acquisition opportunities. I expect about 1 million residential properties will move from delinquency into REO in 2012, returning to levels experienced before the robo-signing slowdown. This should keep property values down for investors seeking discounts on foreclosures and short sales throughout most of this year. The combination of distressed property price discounts in the near term, relatively strong rent growth and improving property values (due to improving housing conditions) in the longer-term, bodes well for residential property investors. Regionally, Floridas housing situation represents one of the most favorable residential property investment markets in the nation. Many existing Florida homeowners possess underwater mortgages and have struggled to stay current on loan payments. This has generated a serious distress property sale situation in Florida- perhaps even worse than the dire foreclosure situations in Arizona and Nevada. In addition, Florida has a large backlog of foreclosures because the foreclosure process takes longer in Florida than it does in most other states. Florida home values have plummeted almost 50 percent since the meteoric highs of the housing boom in the mid-2000s. Since Florida is a primary destination for baby boomers seeking retirement/vacation homes, the outlook for long-term property demand is favorable. Florida property values are projected to stay depressed or just modestly rise over the next year. However, when Floridas foreclosure situation bottoms out, relatively strong housing demand due to the states destination tag, is expected to raise home values over a longer-term investment horizon (5 years and greater). Looking forward, the outlook for our nations housing markets is brighter than it has been for some time, but the housing recovery will proceed at a slow pace. The upward trend in existing and new home sales over the past six months has been modest relative to the plummet in sales between 2005 and 2009. Downside risks for housing are lessening, but high gas prices, troubles in the euro zone, and the potential for rising mortgage interest rates still muddy the outlook. In summary, 2012 offers favorable investment opportunities to investors seeking competitive annual returns (rents) and significant price gains over a longer term time horizon. David A. Lereah, president of Reecon Advisors, is a recognized economic expert in the real estate and financial services industries. Dr. Lereah and his research staff were responsible for creating two of the nations most powerful real estate indicators-the Mortgage Bankers Associations Weekly Mortgage Application Indexes and the National Association of Realtors Pending Home Sales Index. Dr. Lereah was Senior Vice President and Chief Economist of the National Association of Realtors where he served as the associations spokesman on the U.S. economy, the housing and real estate markets as well as other economic and policy issues affecting the real estate industry in the U.S. and abroad. - RISMedia - http://rismedia.com - |
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The KCM Blog House Sales in the U.S. |
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Reminder: 3.8% Tax Is Not a Transfer Tax on Real Estate Tax time is nearing and once more rumors are circulating on the Internet and by e-mail that the health care reform law enacted two years ago includes a 3.8 percent transfer tax on real estate starting in 2013. That rumor is not true; NAR has material available to you to explain how that 3.8 percent tax works. Its a tax on a very narrow band of investment income for high-wealth households (those who earn $250,000 in a joint return or $200,000 as an individual) that could come into play on the sale of a house if the sales gain is more than $500,000 for a married couple or $250,000 for an individual. Even in the unlikely event the sales gain is more than that amount, the tax would only apply based on other considerations having to do with the households income and tax situation. The bottom line is that the tax, which was imposed to help shore up Medicare, will hit only some portion of investment income. |
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This post is just for fun. We'd bet that you've never seen houses quite like this before.... http://www.houselogic.com/photos/home-thoughts/ugly-houses/slide/a-house-that-rocks/#more-slideshows |
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Today, we are honored to have... |
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Your Comey & Shepherd agent can put you in immediate touch with... |
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More sound advice via our friends at KCM (Keeping Current Matters).......... When the Prophet Says Buy V BUY! John R. Talbott, previously a Goldman Sachs investment banker, is a bestselling author and economic consultant. When it comes to the housing market he is also a prophet. When housing prices started to skyrocket in 2003, he published The Coming Crash in the Housing Market correctly warning us that a real estate bubble was forming. Then in January 2006, he called the absolute peak of home prices in the US by releasing a new book, Sell Now! The End of the Housing Bubble. Mr. Talbott, the person who accurately predicted the housing bubble and its bust, now has a new prediction V IT IS THE TIME TO BUY A HOME! In a recent article, Homes V Buy Now!, Talbott simply explains: I have been waiting for more than five years to offer this advice. It is now time in most cities across the country to buy a new home or refinance your existing home with thirty-year fixed rate mortgage debt. He goes on to explain that his conclusion is based on four different metrics, all of which favor buying today: X Home Prices Relative to Peak Prices During the Bubble X Home Prices Relative to Construction Costs or Replacement Costs X Home Prices Relative to Incomes and Rents X Home Prices in Real Terms, Not US Dollar Terms Bottom Line If the person who called the real estate bubble and its bust says now is the time to buy, we believe it is time to buy. |
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There Are Tremendous Tax Advantages to Investing in a Home There is no doubt that selling an investment such as gold is easier than selling your home. However, this liquidity comes at a price. The price is called capital gains. That is the tax you pay on any financial gain you receive from the investment. This tax doesnt apply the same way when you sell your primary residence: Theresa Palagonia, a CPA and the Accounting Manager for the firm G.S. Garritano & Associates, was good enough to explain the Home Sale Exclusion Rules: You may qualify to exclude from your income all or part of any gain from the sale of your main home. Maximum Exclusion You can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true: X You meet the ownership test. X You meet the use test. X During the 2 year period ending on the date of the sale, you did not exclude gain from the sale of another home. If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions listed above. You may be able to exclude up to $500,000 of the gain on the sale of your main home if you are married and file a joint return and meet the requirements. (Special rules apply for joint returns.) Ownership and Use Tests During the 5 year period ending on the date of the sale, you must have: X Owned the home for at least 2 years, and X Lived in the home as your main home for at least 2 years Certain exceptions exist in which you may qualify for the exclusion without satisfying the tests listed. |
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Even the Naysayers Say Now Is the Time to Buy Business School professors Eli Beracha of East Carolina University and Ken H. Johnson of Florida International University have done extensive research on which makes more sense financially: to rent or own a home. They published, Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise? In their paper, the professors do not dispute the social benefits of homeownership: Home ownership is touted as the American Dream. It is credited with enhancing wealth, increasing civic pride, improving self-esteem, crime prevention, child development, and better educational outcomes, among other benefits. This paper does not dispute any of these claims. What the professors were proposing is that homeownership is not a better investment strategy than renting. The first of the two major findings was: After setting the holding period to the average Americans tenure in a residence, renting (not buying) proves to be the superior investment strategy over most of the study period Individuals, on average, were better off in economic terms to have rented for most of the years in the study period. This first result is strongly dependent upon fiscally disciplined individuals that, without fail, reinvest any residual savings from renting. Historically, people do not actually reinvest savings without fail. Check here for the findings of a recent study from The Joint Center for Housing Studies at Harvard. The second major finding says it all. According to both professors Beracha and Johnson, NOW IS THE TIME TO BUY! (F)undamental drivers now appear to be in place that favor homeownership over renting in the near term future The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting. They conclude their research paper with this sentence: Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases. Bottom Line Two researchers set out to prove that homeownership is not a good financial decision. After completing that research, they have determined that now is the time to buy. What more needs to be said? |
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Home Sales Continue Positive Trend in November Local home sales in November, for the fifth month in a row, continued a positive trend with 1,235 units -- up 11.8% over November 2010. Last months average price was $146,905, compared to a year ago of $147,890. The average price For the first 11 months of 2011 was $151,764 compared to $158,426 the same 11 months in 2010. Five months in a row of increased sales, on a year-over-year basis, is a definite indicator that buyers -- first-time, move-up or even investors -- are finding great value in our market, said Pete Kopf, president of the Cincinnati Area Board of Realtors. But, to generate and sustain a healthy housing market, we need to create and maintain more jobs. Just last week, it was reported by Governor Kasich that the Ohio unemployment rate dropped to 8.5% in November. This is a step in the right direction for our economy and the jobs outlook, said Kopf. So, for those who have jobs and who can afford to take advantage of our extremely affordable market, now is the time to buy. Today, the average interest rate in Cincinnati is 3.93% for a 30-year fixed rate mortgage. Nationally, the average interest rate is 4.19%. Today, there are variety home loans available to buyers which may provide substantial savings and tax benefits. Besides the normal fixed rate, FHA, VA and adjustable rate mortgages, some buyers may want to consider a home improvement loan such as a 203k, USDA Rural Development, Home Path Renovation Mortgage or construction loans. The Cincinnati area housing market has almost 10 months of available inventory compared to nearly 13 months a year ago. The inventory contains a wide variety of homes in a price range for anyone interested in buying a home. The current inventory contains the following: 34% are under $100,000; 46% from $100,000 - $249,999; 14% from $250,000 - $499,999; and 6% are over $500,000. |
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REAL Trends Housing Market Report November 2011 November 2011 report shows that rate of housing sales increased substantially on an annualized basis from October 2011 and improved from a year ago. November 2011 unit sales were up 8.3% from a year ago. The average price of homes sold declined 4.7% from November 2010 to November 2011. The annualized rate of home sales increased 8.3% in November 2011 over November 2010, increasing from an annualized rate of 4.616 million to an annualized rate of 4.999 million in November 2011. November annualized sales were up 4.9% from October 2011. Average prices of homes sold in November decreased 4.7 percent from November of 2010. December 15, 2011 The REAL Trends Housing Market Report showed that the combination of new and existing home sales in November 2011 increased strongly from both the prior month and from the same month a year earlier. The annualized rate of home sales increased from 4.616 million in November 2010 to 4.999 million in November 2011 and increased from 4.764 million in October 2011. The average price of homes sold in November 2011 declined by 4.7 percent from November 2010. This is the fifth consecutive decline in the average sales price. Housing unit sales for November 2011 were up 12.2 percent in the West on a year over year basis. The next highest region was the Midwest where closed units were up 10.6 percent. Every region was up in unit sales in November 2011. The average prices of homes sold in November 2011 decreased 4.7 percent across the country. The Midwest had the best performance with average prices down just 1.1 percent. The worst performing regions for prices was the West which saw the average sales price decline 6.5 percent. The results for November show that the housing market continues to mend with unit sales up strongly over a year ago and the month prior. Unit sales in every region were up strongly. Prices continue to be soft as the mix of what is being sold favors the lower end of the market with continued softness in the upper end. Overall the volume of homes sold was up slightly over a year ago with an overall increase of 3.2 percent in the total value of new and existing home sales, said Steve Murray, editor of the REAL Trends Housing Market Report. It appears both from the results of this report and from anecdotal evidence that activity in the lower price brackets is strengthening while that in the higher priced segments continues to be soft. The recovery is underway but it will be some time before we see prices firming across all segments of the market. Housing Market Report REAL Trends Housing Market Report November 2011 October 2011 (Versus same month a year ago) Closed Sales AVG Price Closed Sales AVG Price National +8.3% -4.7% +11.6% -7.3% Regional Report Northeast +0.9% -3.8% +6.9% -9.0% South +7.9% -3.7% +11.6% -2.6% Midwest +10.6% -1.1% +17.3% -2.4% West +12.2% -6.5% +10.5% -9.0% |
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Cost vs. Value Each year Remodeling Magazine calculates the averages cost of various remodeling projects and the average return/value of that investment when the property is sold. For those homeowners who are trying to decide what (if anything) to do to ready their homes for the market, this is vital information. In todays challenging market, buyers have lots of inventory from which to choose. So each seller battles with decisions related to bringing their property up to buyer expectations while not over-improving to the point of diminished return. Hopefully, the below link and the advice of your Comey & Shepherd professional will guide you in those decisions. http://www.remodeling.hw.net/2011/costvsvalue/national.aspx |
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Home energy efficiency tax credits to expire Dec. 31 Home owners may be able to take advantage of several tax credits for energy efficiency home improvements from this year. But they need to hurry: The tax credits are set to expire Dec. 31, and Congress has yet to renew them for 2012. Making efficiency improvements this year will lower home energy bills and improve home comfort for years to come, while also reducing 2011 federal income tax bills, Kateri Callahan, president of the Alliance to Save Energy. The allowance for the tax credits that home owners may be eligible for include: 10% of the cost of insulation and sealing materials, exterior doors and certain types of energy efficient roofs. 10% of the cost, up to $200, of exterior windows or skylights. $300 for electric heat pump water heaters, electric heat pumps, central air conditioners, biomass stoves, and natural gas, propane, or oil water heaters. $50 for advanced main air circulating fans. $150 for natural gas, propane, oil furnace, or hot water boilers. For more information about applying for these tax credits, visit the Alliance to Save Energy Web site. |
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Prices |
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There is more and more research... |
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Still "on the fence" about whether now is the time to buy? |
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We found this thoughtful advice from our friends at Keeping Current Matters to be very timely. The Cincinnati market is currently blessed with abundant, fairly-priced inventory and record low mortgage interest rates ... and is additionally a really nice place to live! |
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News Flash! |
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With the monthly cost of owning an average priced home decreasing and the cost of rent increasing, why wait? |
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Home values inch upward, but still down 28 percent from peak |
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Courtesy The KCM Blog |
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Mortgage Rates Lowest in Over 50 Years MCLEAN, Va., Aug. 18, 2011 /PRNewswire/ -- Freddie Mac today released the results of its Primary Mortgage Market Survey (PMMS), showing mortgage rates, fixed and adjustable, reaching all-time record lows providing further incentive for those homeowners looking to refinance. The 30-year fixed averaged 4.15 percent, breaking the previous record low of 4.17 percent set November 11, 2010. News Facts 30-year fixed-rate mortgage (FRM) averaged 4.15 percent with an average 0.7 point for the week ending August 18, 2011, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.42 percent. 15-year FRM this week averaged 3.36 percent with an average 0.6 point, down from last week when it averaged 3.50 percent. A year ago at this time, the 15-year FRM averaged 3.90 percent. 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08 percent this week, with an average 0.5 point, down from last week when it averaged 3.13 percent. A year ago, the 5-year ARM averaged 3.56 percent. 1-year Treasury-indexed ARM averaged 2.86 percent this week with an average 0.6 point, down from last week when it averaged 2.89 percent. At this time last year, the 1-year ARM averaged 3.53 percent. Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Quotes Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac. "The Federal Reserve's policy statement last week and ongoing market concerns over the European debt market carried momentum into this week allowing all mortgage products in our survey to reach all-time record lows. For instance, 30-year fixed mortgage rates are now the lowest in over 50 years. In comparison, the Bureau of Economic Analysis estimated the average effective mortgage rate was about 5.3 percent on single-family loans outstanding during the second quarter of 2011. "Not surprising, many homeowners took advantage of this low mortgage rate environment and have already refinanced their loans. The refinance share of applications averaged nearly 70 percent of all mortgage activity in the first half of this year, according to our survey. In addition, an increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter, according to Freddie Mac's Quarterly Product Transition Report." Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. SOURCE Freddie Mac |
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The Economy: Why All the Panic? |
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By The KCM Crew on August 16, 2011 |
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From our trusted advisors at Keeping Current Matters, comes some good advice for sellers Several pricing indices have reported that, on a month-over-month basis, home values have ticked up slightly over the last quarter. This has caused some to call the bottom to the housing market at least from a price standpoint. We must realize that prices are determined by supply and demand. Demand has indeed shown improvement in many parts of the country. However, the supply side of the formula is being impacted by legal issues. The number of foreclosures coming to market has been slowed dramatically by the courts as the banks still struggle with improperly filed paperwork. This inventory will eventually find its way to the market and again put downward pressure on values. Here is a chart showing the challenge: Bottom Line If you are selling, there currently is a window of opportunity to get your best price before the distressed properties are released. |
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Why They Are Saying to Buy A Home Now by The KCM Crew on June 14, 2011 Despite what appears to be a non-stop wave of tough news regarding real estate, four major media players have come out this month with the same advice: It Is Time to Buy a Home! Here are the four articles and a breakdown as to why the advice makes sense. The Wall Street Journal: Why Its Time to Buy CBS Money Watch: Why the Time to Buy is Now Forbes Magazine: 9 Reasons to Buy a House Now National Public Radio: For Many, Its Still a Good Time to Buy a Home With prices continuing to depreciate in most regions of the country, some may wonder why these four entities are suggesting to their readership that now is the time to buy. Each organization realizes that PRICE is not as important as COST. The cost of a home can go up even if prices continue to fall. Unless you are an all cash buyer, you must take into consideration the expense of mortgaging when calculating the full cost of a home. Here is some information to consider. Interest Rates Currently, interest rates sit at historic lows. However, Fannie Mae, Freddie Mac, PMI and the National Association of Realtors are all projecting approximately a 1% increase in mortgage rates over the next year. A one percent increase in rate negates a ten percent fall in prices. Lending Standards The government has proposed a tightening of lending standards called Quality Residential Mortgage (QRM). If accepted as proposed two things will happen: The qualification process for loans will become more difficult The cost of a loan will increase Bottom Line There is a reason more and more financial organizations are suggesting to their followers that now is the time to buy a home: because the cost of purchasing a home is about to increase (even if prices continue to fall). |
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Buyers better hurry For the sixth straight week, fixed mortgage rates inched down, reaching new lows for 2011. The 30-year fixed-rate mortgage averaged 4.60 percent this week while the 15-year mortgage averaged 3.78 percent, Freddie Mac reports in its weekly mortgage market survey. Meanwhile, the National Association of Home Builders reported this week that home affordability reached its highest level in 20 years, making the purchasing power for home buyers even better during this traditionally prime buying season. Heres a closer look at mortgage rates: 30-year, fixed-rate mortgage:Averaging 4.60 percent this week, it was down slightly from last weeks 4.61 percent average. Last year at this time, 30-year rates averaged 4.84 percent. The 30-year fixed rate mortgage hasnt been under this weeks 4.60 percent average since early December 2010 when it fell to 4.46 percent. 15-year, fixed-rate mortgage: Averaging 3.78 percent this week, it also was down from last weeks 3.80 percent average. Last year at this time, the 15-year fixed-rate mortgage averaged 4.21 percent. It has not been under this weeks 3.78 percent average since late November 2010 when it fell to 3.77 percent. 5-year adjustable-rate mortgage:Averaging 3.41 percent this week, it was down from last weeks 3.48 percent average. A year ago at this time, the 5-year ARM averaged 3.97 percent. Source: Fixed Mortgage Rates Continue to Find New Lows, Freddie Mac (May 26, 2011) |
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Real estate affordability sets record in Q1 74.6% of homes affordable to median-income households By Inman News, Wednesday, May 25, 2011. Housing affordability hit a new record high in the first quarter, surpassing the previous high set in fourth-quarter 2010, according to an index released by the National Association of Home Builders and Wells Fargo today. The Housing Opportunity Index found that 74.6 percent of new and existing homes sold in the first quarter were affordable to families earning the national median income of $64,400. That's up from 73.9 percent in the fourth quarter of 2010, and it's the highest level recorded in the more than 20 years the index has been measured. "With interest rates remaining at historically low levels, today's report indicates that homeownership is within reach of more households than it has been for more than two decades," said Bob Nielsen, chairman of the NAHB, in a statement. "While this is good news for consumers, homebuyers and builders continue to confront extremely tight credit conditions, and this remains a significant obstacle to many potential home sales." Before 2009, the index had never hit 70 percent and rarely topped 65 percent, the association said. Last quarter was the ninth straight quarter the index was above 70 percent. Indiana, Ohio and Michigan dominated among the most affordable metro areas. Among metro areas with populations under 500,000, Kokomo, Ind., was the most affordable area, with 98.6 percent of homes affordable to households making a median income of $61,400. The median sales price in the area was $88,000 in the first quarter. California dominated among the least affordable metro areas. San Luis Obispo-Paso Robles, Calif., was the least affordable among the smaller metro areas with 47.6 percent of homes affordable to households making the median income of $72,500. The median sales price in the area was $320,000 in the first quarter. Among metro areas with populations of 500,000 or more, Syracuse, N.Y., was the most affordable metro with 94.5 percent of homes affordable to households making the median income of $64,300. The median sales price in the area was $80,000 in the first quarter. Another New York market, New York-White Plains-Wayne, N.Y.-N.J, was the least affordable among both the larger metros and the markets overall for the 12th straight quarter. Less than a quarter of homes, 24.1 percent, were affordable to families making the median income of $65,600 in the first quarter. The median sales price of a home in the area was $425,000. Source: NAHB/Wells Fargo Housing Opportunity Index |
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Update Interiors with Wisdom Rather Than Big Budgets Print Article RISMedia, May 19, 2011Donna Hoffman, a Philadelphia interior designer, offers tips for those looking to refresh their dated decor without starting from scratch or incurring sky-high expenses. As real estate values have fallen, many people are concerned with how much money to put into their homes. Yet discerning clients recognize that a dated interior really lowers the value of their home, Hoffman says. To reclaim your enjoyment of your home, here are five fool proof and fiscally prudent design tip secrets that Hoffman says are the budget savvy penicillin for outdated interiors: Deconstruct The Color Palette. Dont throw out an existing color palette; deconstruct it. To do this, create a new color strategy that flips the existing main room color into the secondary position of accent color. For example, if its a blue and mauve interior thats at issue, turn the blue into the new accent color. Neutralize The Room. Now that youve isolated your new accent color, remove all strong colors in the room except for your one accent. This includes removing area rugs, throw pillows, accessories, dated wallpapers anything that sings too loudly in the old color palette, Hoffman says. Keep only the new accent color, letting everything else go neutral. By projects end, youll be left with an accent color that gorgeously pops amidst a new palette of neutrals. Paint the walls in a rich neutral like latte or one of the new chameleon neutrals of 2011 for a crisp current look. Elicit The Power of Throw Pillows. Custom is ideal for variety and impact, but if its beyond your budget, look for little jewels at retail, Hoffman explains. Sprinkle mostly neutral accent pillows in varied shapes and sizes through the room to move classic color, create interest and reinvigorate older upholstery. Evaluate Draperies. If draperies boast the old color scheme, look tired or overly swagged and dated, take them down. Go bare if you must, Hoffman cautions, because nothing in a room is better than something bad. If you can afford to do custom in the new color strategy, this is the place to invest. Custom draperies give tremendous aesthetic return on the dollar, Hoffman explains. But if custom is out, then to go for the best quality you can afford at retail, not the cheapest. Examine The Sofa. Pillows can tone down a loud sofa, but they cant hide a worn eyesore or a thoroughly outdated silhouette. Opt to update a dated sofa, even if at a budget retailer. Select a solid in a classic style, like a track arm or English arm. These have the staying power of that little black dress. Keep it simple and dress it with accessories. In our case were doing pillows instead of pearls, says Hoffman. For more information, visit www.InteriorsByDonnaHoffman.com. |
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Here are five reasons why: 1.) This is when your house will get the most exposure The spring, and particularly the month of May, is when most buyers enter the real estate market. This surge of buyers dramatically increases the exposure for your house . The best chance of getting quality offers (perhaps even multiple offers) is RIGHT NOW! 2.) Foreclosures and short sales will increase in about 90 days The good news is that the number of people paying their mortgage on time is increasing. This will lead to less distressed property sales later this year and throughout 2012. The not-so-good news is that there is still a large inventory of existing foreclosures and short sales that will still be coming to market. As an example, LPS reported in their latest Mortgage Monitor that: There are still twice as many loans going 90+ days delinquent as are starting foreclosure There are almost three times the number of foreclosure starts as there are foreclosure sales Distressed property inventory levels are almost 45 times the rate of monthly foreclosure sales This means that there is a backlog of properties which will start coming to the market in about 90 days as banks clear up their paperwork challenges. These properties sell at dramatic discounts. They will be your competition. Both Fannie Mae and Freddie Mac have recently discussed the magnitude of this challenge. 3.) Interest rates have risen over the last six months Interest rates have stabilized recently. However, in the last six months, interest rates have climbed over 1/2%. Every time the rates increase 1/4%, approximately 250,000 buyers are eliminated from qualifying for a mortgage. In an environment of volatile rates, waiting could mean that there will be fewer buyers eligible to purchase your house. It also could mean that you will pay a higher rate on the next home you buy. 4.) Qualifying for a mortgage is about to get even more difficult Besides increasing rates, there are other factors that will hinder a buyers ability to qualify for a mortgage as we move forward. Lending standards have been getting tighter over the last year. And as the government debates the new proposed guidelines (QRM), banks are gearing up for even more stringent standards. Morgan Stanley recently stated: Recent developments in issues such as GSE reform, Dodd-Frank securitization rules, and foreclosure settlement issues suggest a tighter and more expensive environment for mortgage credit. This may impact any potential purchaser for your property and may also impact your next purchase. 5.) Its time to get on with your life Probably the most important reason to sell is so you can get on with your life. You placed your home on the market for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you decided to move in the first place. Are these reasons still important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question. Bottom Line If you plan to sell this year, the reasons above prove that selling now makes more sense than waiting to later in the year. Sit with a real estate professional in your area today to fully understand your best option. 459 Share -------------------------------------------------------------------------------- Article printed from The KCM Blog: http://kcmblog.com URL to article: http://kcmblog.com/2011/05/10/5-reasons-you-should-consider-selling-now/ Click here to print. Copyright 2011 Keeping Current Matters. All rights reserved. |
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Published on Inman News (http://www.inman.com) Home selling tax tips for accidental landlords By StephenFishman Created 2011-04-22 01:00 Due to the precipitous decline in the housing market over the past few years, many homeowners who would otherwise sell their homes are renting them out. This may be because prices are too low, or because they have to move before they can sell due to a job change. Such accidental landlords should understand that if they rent out their homes too long before they sell them, they could lose the biggest tax break available for most people: the home sale exclusion. Homeowners who qualify for the home sale exclusion don't have to pay any income tax on up to $250,000 of the gain from the sale if they're single, or up to $500,000 if they're married and file a joint return. Of course, this exclusion is useful only for homeowners who have equity in their homes, not the millions who are "under water" and will receive no profit if they sell their homes. To qualify for the exclusion, a homeowner must satisfy the ownership and use tests. This means that during the 5-year period ending on the date of the sale, the homeowner must have: Article continues below Advertise with Inman owned the home for at least 2 years (the ownership test), and lived in the home as a primary residence for at least 2 years (the use test). However, the homeowner need not be living in the house at the time it is sold. The two years of ownership and use may occur anytime during the five years before the date of the sale. This means that a homeowner can move out of the house for up to three years and still qualify for the exclusion. Moreover, a homeowner can rent out a home and count that time as ownership time. This rule has a very practical application: A homeowner may rent out a home for up to three years prior to the sale and still qualify for the exclusion. However, the exclusion works a bit different for homeowners who have rented out their homes. They cannot exclude from their income the part of their gain equal to the depreciation they claimed (or could have claimed) while renting the home. Moreover, if the home is rental property at the time of the sale, the sale must be reported to the Internal Revenue Service on Form 4797: Sales of Business Property [1]. Example: Connie purchases a house on Feb.. 1, 2007, and lives in it for two full years. She then moves to another state to take a new job. Rather than sell the house in a down market, she elects to rent it out. If she sells the house by Feb.. 1, 2012, she'll qualify for the $250,000 home sale exclusion because she owned and used the house as her principal home for two years during the five-year period before the sale. If she waits even one more day to sell, she will get no exclusion at all. Thus, accidental landlords who have equity in their homes need to sell them before the three-year rental period expires, or they'll lose the home sale exclusion. If they can't or don't want to sell, they would have to move back into the home to preserve the exclusion. Homeowners who don't qualify for the exclusion will have to pay a 15 percent capital gains tax on their gain from the sale (assuming the home was owned for at least one year). Stephen Fishman is a tax expert, attorney and author [2] who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants [3]," "Deduct It [4]," "Working as an Independent Contractor [5]," and "Working with Independent Contractors [6]." He welcomes your questions for this weekly column. |
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Home Columnists Categories Top issues that derail real estate closings What lenders are scrutinizing may surprise you By Dian Hymer, Monday, April 25, 2011. Inman News It can take weeks for an offer to be ratified. Buyers and sellers often counter back and forth for weeks before reaching mutual agreement on both price and terms. In this case, it's a good idea to re-evaluate the closing date in the contract before inking the final agreement. Some buyers make offers that propose closing a certain number of days from acceptance of the contract, often 30 days. Even if you negotiate for a month, you will have 30 days, or whatever number of days agreed to in the contract, to arrange financing, complete inspections and close the transaction. However, sometimes closing is to occur on a specific date, say June 1. If you start negotiating on May 1 and it takes a couple of weeks to arrive at agreement, you may not be able to close on time if you need a mortgage. It's best to modify the closing date in writing at the time you go into contract. One of the main reasons transactions don't close on time is the mortgage approval process. Even though you may be preapproved by a lender, you will still need to provide additional documentation to satisfy today's underwriters who scrutinize buyers' finances zealously. Article continues below Advertise with Inman HOUSE HUNTING TIP: Be aware that you will be asked to document where the funds for the down payment and closing costs came from. It's not enough to produce a cashier's check or wire for the amount of cash necessary to close. You must verify the source of the funds in writing for the lender. One buyer who had more than enough cash to close the sale decided to send money for closing from several different accounts, rather the one account that she said she'd draw on. This required additional documentation at the last minute from each institution that transferred money to close the sale. Lenders not only scrutinize the buyer's financial wherewithal before they approve a mortgage, they also examine the preliminary title and appraisal reports for the property. Sellers should have a look at a preliminary title report on their property before they put their home on the market to make sure there aren't any irregularities. If there are, they can attempt to clear these up before the home goes on the market. Your real estate agent or attorney can help you with this. Appraisals have not only delayed closings in recent years, they have caused some transactions to fail when the appraisal came in low and the buyers and sellers were unable to negotiate a satisfactory resolution. If the buyers need to switch to a different lender whose appraiser might have a different opinion of the value of the property, this will take time and can delay closing. It's also possible that an appraisal could come in so much under the contract price that the seller might not be in a position to close the sale. For example, if the property is listed for $1.5 million and the sellers owe $1.4 million, they could have a problem if the property appraised for $1.4 million or less. Some buyers don't want to pay more than the appraised value in this market. In this case, the sellers would have to be willing and able to bring enough cash to closing to cover their closing costs and any amount they might owe the lender. If the sellers were not in a position to do so, the sale becomes a short sale and would require lender approval. A short sale, as defined by the National Association of Realtors, is "a sales transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance due on the loan." THE CLOSING: Short sales take time, which might be worth the wait if you are committed to buying the home at the right price. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide." |
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Tree Falls Over Property Line: Who Pays? Who Picks Up the Pieces? By: Ann Cochran If a neighbors tree falls over your property line, file an insurance claim for repairs and cleanup. No house damage? Check if chopping and hauling debris is covered. If a neighbor's tree damages your property, your insurance company should pay to repair the damage, then decide whether to seek reimbursement from your neighbor. When a neighbors tree falls over your property line, yell TIMBER, then call your insurance company. Home owners policies cover tree damage caused by perils like wind and winter storms. Most policies cover hauling away tree debris if the mess is associated with house damage; some will cover cleanup even if no structures were harmed. When a tree falls Your neighbor is responsible when a tree falls over your shared property line only if you can prove he was aware that his tree was a hazard and refused to remedy the problem. Regardless, your insurance company restores your property first, and later decides whether or not to pursue reimbursement from the neighbor or his insurer if the neighbor was negligent in maintaining the tree. Before a tree falls Write a letter to your neighbor before his dead, diseased or listing tree falls through your roof or over your property line. The letter should include: Description of the problem Photographs Request for action Attorney letterheadnot necessary but indicates you mean business. Trim their trees If the limbs of a tree hang over your property line, you may trim the branches up to the property line, but not cut down the entire tree. If a tree dies after your little pruning, the neighbor can pursue a claim against you in civil or small claims court. Depending on the laws of your state, your neighbor may have to prove the damage was deliberate or caused by negligence, but may also be able to recover up to three times the value of the tree. Before you cut, tell your neighbors what you intend to do to protect your property. They may offer to trim the whole tree instead of risking your half-oaked job. Your tree falls Its always a good idea to take care of your big and beautiful trees, and keep receipts for trimmings and other care. But if your tree falls over a neighbors property line, do nothing until their insurance company contacts you. You may not be liable unless you knew or should have known the tree was in a dangerous condition. If you pruned a tree or shored up trunks to prevent problems, gather your receipts to prove your diligence. Ann Cochran has written about home improvement and design trends for Washingtonian, Home Improvement and Bethesda Magazine. |
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OK. You Win. Stop Listening to Real Estate Agents! by The KCM Crew on April 5, 2011 3 comments in For Buyers Share Each day we attempt to give truthful insight on the current housing market. If we report what is perceived as negative news, some in the real estate community come down on us hard. However, when we explain that we think now is a great time to buy, we get an avalanche of feedback from the general public attacking us for being nothing more than puppets for real estate agents across the country. Today, we dont want you to listen to what we think about the opportunities that exist for buyers in this market. Instead, we want to report on what some members of the investment community are saying. The Wall Street Journal Jim Woods wrote an article earlier this year for Market Watch, part of the Wall Street Journals digital network. Its title: Why your best investment is a house. Mr.. Woods compared the investment potential of real estate against other asset classes such as stocks and precious metals. Here was his conclusion. One reason your best investment right now could be a home has to do with the relative upside of getting in on an asset class while its at the bottom versus buying into other asset classes that could be near a top. Consider for a moment the tremendous upside weve seen in stocks, precious metals and agricultural commodities over the past 12 months If youre a long-term investor looking to put money to work, now is not really the best time to get into any of these three asset classes. However, with home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today Mr. Woods went on to talk about the financing portion of the purchase: Yes, mortgage rates still are near historical lows, but if we see these rates rise, then the cost of a new home could climb significantly. So, now could really be the best time to pull the trigger on that home purchase and it could also be your best investment right now. Fortune Magazine Shawn Tully, senior editor at large for Fortune penned an article last week which was titled: Real estate: Its time to buy again. In the article, Mr. Tully explained: Forget stocks. Dont bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing. Lets state it simply and forcibly: Housing is back. Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year. Bottom Line Neither of the two media sources mentioned above has ever been accused of cuddling up to the National Association of Realtors. However, both have come to the same conclusion. Its time to buy real estate. Perhaps we should listen to them. |
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Update on First Time Homebuyer Credit and Tax Refunds Print Article RISMEDIA, March 26, 2011The IRS recently released information on processing issues that are impacting a small percentage of tax returns involving repayment of the First Time Homebuyer Credit (FTHB), primarily involving 2008 home purchases. While most of these returns are processing normally, the IRS recognizes the hardship caused by delayed refunds, and it has assigned additional staff and resources to address the issues promptly. It is important to note that taxpayer returns claiming a home purchase in 2010 are not affected, and those returns are being processed as are the vast majority of other homebuyer returns. Heres an update on the source of the processing issues: 1. Married Filing Joint taxpayers who received the FTHB credit on a 2008 purchase There seems to be an identified processing issue primarily impacting refunds for married couples filing joint returns this year who received the First Time Homebuyer credit on their 2008 tax return. This credit was an interest-free loan, and must be paid back beginning this year under the provisions of the law. This issue, related to Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, primarily impacts Married Filing Jointly taxpayers who filed their tax returns this year before Feb. 22. The IRS is working aggressively to manually process tax returns for this group of taxpayers. It expects most, if not all, of these refunds to be available by April 5, and others the following week. (The date assumes that there are no other issues with their return, and that their refunds are not subject to any offsets for unpaid federal taxes or other debts.) 2. Taxpayers who received the FTHB credit and are now reporting the sale or disposition of their home 3. Taxpayers who received the FTHB credit and are attempting to pay back more than the amount required (typically $500) These two issues require changes to IRS core tax processing systems. The IRS is actively working on the development and testing of the required changes that will allow these impacted tax returns to be processed and appropriate refunds issued. The IRS does not currently have a definitive date for when these changes will be complete, although it will be in April. What should taxpayers do? The IRS understands that taxpayers affected by this issue are anxious to get the status of their refund. For those who have already filed, no action is necessary. They can check Wheres My Refund at www.IRS.gov for updates. Because the IRS is already aware of this issue and is taking corrective action, there is no need to call. For those who have not yet filed and are making a repayment of a First Time Homebuyer Credit this year, there is a simple step taxpayers can take to help speed processing. Couples filing a joint return for tax year 2010 who received the credit on their jointly filed 2008 tax return should file two 5405 forms, one for each taxpayer. For couples filing a joint return for 2010 but who had a different filing status in 2008 and only one spouse received the credit, the IRS recommends filing one Form 5405 for the taxpayer who received the credit. For more information visit www.IRS.gov. |
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The 4 Stages Of Wealth Building As A Homeowner Posted By Dean Hartman On March 24, 2011 One of the primary objectives of owning a home is to let the home appreciate over time and become a pillar of a familys financial strength. But before we can discuss wealth, we need to identify the stages to get there. Stage 1 Having Emergency Cash is the first stage. Its having $5-7,000 liquid for lifes inconveniences (the boiler breaking down, the car needing work, etc). When faced with the inevitable challenges that arise, many people are forced to run to their credit cards to make it through. They become stuck with high interest rate, non-tax deductible borrowing. Stage 2 The second stage is the elimination of Bad Debt. We define Bad Debt as any debt whose interest is not tax deductible. Obviously, those high interest rate credit cards must be the first to go. But we also want to divest ourselves of the borrowing associated with car loans, boat loans, student loans, and personal loans because it typically can be done cheaper. Stage 3 Shockingly, when you arrive at stage three, you will be considered in the Top 5% of Americans in terms of financial security. Stage three is accomplished when you have 3-6 months of your total expenses in reserves. The average homeowner (who is logically financially better off than the non-homeowner) has less than one months expenses in reserve! When life shows them more than a minor inconvenience (like a job loss, an illness/disability, or worse), most people are in a panic situation. With 3-6 months reserves, you will have time to weigh options and make better choices. Stage 4 True financial security is attained when you become Debt Free. But not without debt. We consider our clients Debt Free when they have enough liquid assets to pay off whatever mortgage they have outstanding. Wealth building almost requires utilizing the tax benefits of having a mortgage in combination with strategies that utilize The 3 Miracles of Money The 3 Miracles of Money 1. Compound Interest The impact of money left to grow upon itself can be dramatic. If you had $1 on Monday and you could double it every day ($2 on Tuesday, $4 on Wednesday, etc.), by the end of 20 days, you would have $1,048,576.00!!! Now, you cant double your cash every day, not even every year, but the concept holds true..compounding interest is a good thing! 2. Tax Free Growth The ability to accumulate assets without giving Uncle Sam a third of it (in the form of Federal and State Income Taxes) is how the $1 became $1 million. If the growth was taxed at 33% ($1 on Monday gave you $1.67 on Tuesday instead of $2- and so on), your $1 would only grow to $28,466.20 after 20 days!!! THAT IS NOT A TYPO! You would have lost over $1 million. 3. Leverage and Arbitrage If you can put up minimum of cash and take title to a significant asset (like a down payment on a home.the smaller the down payment the better), you can leverage that cash investment to large returns. At the same time, if you can take the cash that you dont bury in home equity and effectuate a spread between your after tax cost of money (mortgage payment) and your investment options (hopefully, in a tax free environment), you can gain the exponential growth that creates wealth. Bottom Line Please take the time to investigate all that is possible, by harnessing the POWER of a mortgage to help you move your family towards wealth. Work with a loan officer who can educate you on the power behind properly leveraged real estate via tax savings and reallocation of equity. Copyright 2010 Keeping Current Matters. All rights reserved. |
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How Well Are You Insured Against Flooding? By Claudia Buck Print Article RISMEDIA, March 23, 2011(MCT)The frightening images of Japans tsunami wiping out homes, roads and entire cities are vivid reminders that a natural disaster can strike at any time. And whether its an earthquake, a wildfire or flooding, being covered against severe damage to your home or business is essential. Across the United States, flooding is the No. 1 natural disaster, according to the Federal Emergency Management Agency. And given the regions swollen rivers and the promise of heavy runoff this spring from melting snow, now is a good time to assess how well youre protected against flooding. A basic homeowners or business insurance policy will cover damage caused by storms, such as a leaky roof, fallen tree limbs or broken pipes. But a homeowners policy typically does not cover damage due to flooding, or whats known as rising water. Floodingsuch as a levee break, a river overflowing its banks or water from springtime snow meltis generally defined as a temporary inundation of normally dry land. For that type of coverage, you need a separate flood policy, which is provided by the federal governments National Flood Insurance Program and purchased through a local insurance agent. The distinction is that homeowners insurance covers water falling from the sky; flood insurance covers water rising from the ground, says Tully Lehman, spokesman for the nonprofit Insurance Information Network of California. In some areas, flood insurance is required, particularly in high-risk areas. In other areas, flood insurance is suggested but not mandatory, says Vince Wetzel, the Sacramento-based spokesman for State Farm Insurance. People need to evaluate the costs and (flood) risks and decide for themselves. Flood insurance covers most damage to your home, business and personal property caused by temporary inundation of water. It includes mudflows, but not landslides. One limitation to flood insurance is basements. Improvements such as sheetrocked walls, finished floors and personal belongings in a basement are not covered by flood insurance; essential household equipment such as furnaces or water heaters is covered. For residential policies, the maximum coverage is $250,000 for the structure and $100,000 in personal property. For a business or commercial property, the maximum limits are $500,000 structural and $500,000 in contents. Flood insurance premiums vary, depending on where you live and whether your home is considered at high or low risk of flooding. The average residential flood insurance premium is about $570 per year, according to the NFIP. But homeowners in low-risk areas can purchase coverage for as little as $129 a year; those whose homes are in heavily flood-prone areas will pay $2,700 or more in annual premiums. Commercial property rates are higher. See www.floodsmart.gov for details. And keep in mind: If you get a policy today, it doesnt go into effect until 30 days after its purchased. Regardless of whether you purchase flood insurance, its a good idea to conduct a home inventory. Heres a test recommended by insurers: Sit and mentally visualize everything in your living room, from the TV to the bookshelves to the candle collection on your mantel. Got your list? Now walk through the room itself, seeing all the items you missed. Its easy to underestimate the number and value of possessions, from major appliances to decorative objects. But in the event of a disaster, you want to be able to get reimbursed for your losses. Doing a home inventory can help with replacement costs for any type of damage, whether its a flood or other disaster covered by your regular homeowners policy. If you dont have an accurate inventory and your policy only lists that 12-inch TV from your college days and doesnt include that big flat-screen TV you bought, you could be vastly underinsured, says Lehman. The same goes for home-remodeling projects. Any time you do changes, such as kitchen and bath upgrades, you want to be sure your homeowners insurance policy includes that information, says Lehman. If youve gone from Formica countertops to a nice marble or granite, or from a Frigidaire to a SubZero refrigerator, you should include those improvements, he says. To do a home inventory, walk through your house, room by room, with a video or regular camera, photographing major objects, such as furniture, electronics, etc. If using a video camera, talk and describe the room and its contents. If taking still photos, date and label each photograph with details. Jot down serial numbers for major appliances and electronics. You can file everything in a binder, on a CD or on your computer, ideally with copies of sales receipts for major purchases, such as electronics, appliances, furniture, etc. Websites, such as the California Department of Insurance (www.insurance.ca.gov) or the Insurance Information Institute (www.knowyourstuff.org), have handy inventory planners that you can print out or download. And, of course, theres an iPhone app, too: Home Inventory. Keep a copyalong with your insurance policy and insurance agents contact informationin a secure and waterproof place: a safe-deposit box, a home safe or in a separate location, such as with a trusted family member. Like Hurricane Katrina, which set records in the United States six years ago for water-related insurance claims, the overwhelming losses suffered by individuals and families in Japan can serve as a wake-up call to be prepared. Whenever a disaster like this happens, it makes people question: If this were to happen here, what do I need to do to be covered? says State Farms Wetzel. It makes you re-evaluate. (c) 2011, The Sacramento Bee (Sacramento, Calif.). Distributed by McClatchy-Tribune Information Services. |
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KAREN'S TIP: Inspiring Interior Decorating Ideas Will Inspire Those You Know How many times do we hear, I just love looking at houses to get decorating ideas for my home. Lots of people pay money to walk through home shows like Homearama, heres an online service (free) that can serve the same purposewww.houzz.comfrom the newest buyer, the current seller, a wannabe seller or a friend who wants to do a little updatingheres a great way for them to acquire ideas and inspiration without leaving the comfort of their home. Houzz.com is a "digital look book" for design ideas, visitors can create ideabooks of their favorite photos. With over 90,000 home design photos, the site is a massive source ideas sure to make homeowners (and future homeowners!) excited. After a free account is created, users can tag and organize photos into themed albums, it's quick and easy to check out specific "ideabooks" by design styles, room types, colors & patterns, green design, furniture and more. In addition to photo browsing, visitors can also ask questions of the community and find professional architects and designers to help them fulfill their vision. From our houzz to your houzz: http://www.houzz.com. Enjoy! |
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Home sales rebounded in 49 states... |
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Home Columnists 7 tips to protect your online identity Big Brother isn't just watching, he's selling private information By Bernice Ross, Thursday, February 3, 2011. Inman News Flickr image courtesy of JJ & Special K.People from all walks of life willingly share their information on Facebook and other social media sites. The Department of Motor Vehicles in some states sells your Social Security number and other identifying data to anyone who is willing to pay for it. Is there anything you can do to protect yourself? There's an old saying that "the horse is already out of the barn." When it comes to protecting your privacy online, this may indeed be the case. Perhaps it's unrealistic to think that monitoring your personal information is worth the trouble. On the other hand, having your identity stolen -- or worse yet, the personal identifying information about your clients -- can cost you much more than the inconvenience of having to delete your information from public databases. In previous columns, I have written about data being posted on sites such as ZabaSearch.com and Intellius.com. These two sites provide information such as year of birth, address and personal phone numbers. Removing yourself from the searches on these sites is a major production. For example, this is how the removal works from the ZabaSearch site: "As a courtesy we can 'opt out' your specific information from the ZabaSearch People Search service. What this means is that your name as it appears in a particular record and the associated identifying information such as your address and phone number will be suppressed if you request this in the manner described below. Article continues below Advertise with Inman "However, please note that any time your identifying information appears in a public record in a manner which is different from the record you opted out, it will again appear in our system. There also are many other public records search services which are not owned by ZabaSearch and your request that we opt out your information will not prevent your information from appearing on these other services." Removal from their searches takes four to six weeks and you must fax your personal identifying information to them. Even if you do this, however, it does not remove you from the original lists. In other words, you can opt out and still appear under a slightly different variation of your original listing. Compounding the problem, other sites that provide an even more sophisticated version of the ZabaSearch data are cropping up. To illustrate, I recently received a Facebook message alerting me to take specific steps to remove my contact information from a site called Spokeo.com. When I went online, they had my correct age, three of the addresses of the properties I have owned, my phone number, family names, and much more. If you're willing to shell out $15, you could also get my exact birth date, my income, the value of my property, and just about any other details that you would need to steal my identity. What was truly amazing was that they even had the home addresses and home phone numbers for the U.S. president, the vice president and the speaker of the House. If this personal information is out there for the three most important political leaders in our country, how can you protect yourself when even their data is available? Like ZabaSearch, you can remove yourself from the Spokeo list. Unfortunately, the process is not simple. Because they had four different postings for me, I had to enter two different e-mail addresses, as they limited my access. After making the four corrections, I was blocked from removing anything else. (To remove yourself, enter your name and then click on the button that says, "See it all." Once you do so, copy that URL in your browser and open a new browser window to www.Spokeo.com/privacy. Paste the URL into that site and follow the instructions from there.) What can you do to further protect yourself from this public release of information? Here are some additional tips. 1. Remove yourself from the ZabaSearch, Intellius and Spokeo databases using the guidelines in today's column. 2. Remove your birth date and other personally identifying information from all public sites, including your Facebook and LinkedIn profiles. Use your business numbers and a P.O. Box for correspondence. Password-protect any personal posts, videos, and especially any pictures of minors. 3. Change your passwords regularly and use a site such as One Password to keep track of your various passwords while making it easy for you to use them. 4. Avoid all games on Facebook and most free Google apps. The reason? Facebook and Google partially pay for all those great services they provide by selling user data to other companies or using it for their own purposes. (This practice is called data mining.) 5. Install spyware and adware programs on your computer to protect yourself from sites that install tracking cookies to learn even more about your Web surfing habits. 6. Create multiple e-mail accounts. Keep your business e-mail exclusively for your business clients. Create at least one other e-mail account with either Gmail or Hotmail. Use this address for all those sites that you know will spam you if you give them your contact information. These separate accounts cost nothing and also protect your personal and business e-mail from being compromised. 7. Use your extra computer. Many agents have more than one computer. If you're concerned about your online banking or stock trades, set up your old computer and use it only for financial transactions. Do not use it for e-mail or for surfing on the Web. While there is no way to completely guarantee your privacy, taking the steps outlined above will reduce your exposure to those who would compromise your privacy and your security. Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors' No. 1 best-seller, Real Estate Dough: Your Recipe for Real Estate Success. Hear Bernice's five-minute daily real estate show, just named "new and notable" by iTunes, at www.RealEstateCoachRadio.com. You can contact her at Bernice@RealEstateCoach.com or @BRoss on Twitter. |
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The tax benefits of homeownership Real Estate Tax Talk BY STEPHEN FISHMAN, FRIDAY, FEBRUARY 4, 2011. Inman News The tax benefits of buying a home include: Home mortgage interest deduction: The interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home is deductible as an itemized deduction. In the early years of a home loan most of the payments consist of interest, so this deduction is particularly substantial during the first years of homeownership. Depending on the state a buyer lives in and his or her tax bracket, this deduction can reduce the cost of borrowing by one-third or more. Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest as an itemized deduction. The money can be used for any purpose, such as paying off high-interest credit card debt. In contract, the interest on credit card debt is not deductible. Property tax deduction: Homeowners also get to deduct from their federal income taxes the state and local property taxes they pay on their home. This is another itemized deduction that renters don't get. Deductible homebuying expenses: Various closing costs ordinarily involved in a home purchase are also deductible as itemized deductions, including loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement. $250,000/$500,000 home-sale exclusion: Perhaps the greatest tax benefit of owning a home comes when a person sells it at a profit. Homeowners who lived in their home for two of the prior five years prior to its sale need pay no income tax on a substantial amount of their profit -- $250,000 for single homeowners and $500,000 for married homeowners who file jointly. This exclusion can be used once every 24 months. 14 days of free rental income: Another little known tax benefit of owning a home is that the owner can rent it out for up to 14 days during the year and pay no tax at all on the rental income. In contrast, a renter who sublets his or her rental must pay income tax on all the rental income he or she earns. Tax benefits of renting: The only tax benefit that a renter can qualify for by virtue of being a renter is the home office deduction. This is a business deduction available to renters who own a business and have a home office they use regularly and exclusively for business purposes. Some employees can qualify for this deduction as well. The deduction is limited to the amount of profit earned from the business each year. If a renter pays a lot of rent, this deduction can be substantial. Homeowners who are in business and have a home office can also qualify for the deduction. Of course, the value of the tax benefits of buying a home depends on the state the buyer lives in and his or her tax bracket. Buyers who live in high tax states like New York or California get the most benefit. This is why the blanket statement "it's always better to buy than rent" is not always true. It all depends on the buyer's individual circumstances. You should encourage prospective buyers to run the numbers. There are some excellent websites you can refer clients to that have online calculators they can use to compare the costs of renting vs. buying a home. A good rent vs. buy tool can be found on the Smart Money Magazine website: http://www.smartmoney.com/personal-finance/real-estate/to-rent-or-to-buy-9687/. Freddie Mac also has a good online calculator: http://www.freddiemac.com/corporate/buyown/english/calcs_tools/. Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column. |
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While it takes time to accumulate and evaluate data, the National Association of Realtors (NAR) does a great job of presenting the facts in a readable, understandable format. We're of the opinion that 2011 will see a rise in the number of home sold in the Greater Cincinnati Area, though home prices will continue to be soft for the next months. Here are the NAR Cincinnati stats for Q3 2010: http://www.realtor.org/wps/wcm/connect/3740770041b33257bfdbffa3819af93a/lmr_oh_cincinnati.pdf?MOD=AJPERES&CACHEID=3740770041b33257bfdbffa3819af93a |
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We almost always agree with pundit Steve Harney... and again this time we think he is right on the money. We look for 2011 to be a happier time for homeownership. |
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We've been saying for some time that the housing market could really stand a shot of consumer confidence. This article out today from FNMA ought to help... |
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Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets... |
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The sharp fall in residential property prices in the third quarter means that housing in the U.S. has become even more undervalued, according to the analysts at Capital Economics. |
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By listing now, you may have fewer actual showings, but more qualified and motivated buyers. You have less competition, resulting in a quicker sale and a better price for you... |
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Home buyers today have affirmed a long-term view of home ownership, the typical seller is experiencing positive returns and the vast majority of home owners see their property as a good investment, according to the latest consumer survey of home buyers and sellers... |
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Cincinnati Area Boasts Amazing Home Affordability... |
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From the folks at PMI comes the Economic and Real Estate Trends (ERET), PMI's quarterly report that includes commentary on the national economy and regional housing price trends... |
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5 Reasons You Should Sell Your House TODAY! |
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Be Market-Smart: Do's and Don'ts for Home Sellers and Buyers... |
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Sunshine & Light Bulbs...Whats the connection? Both are shining here in beautiful Cincinnati today and both are free! |
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Ohio has received $320 million in federal foreclosure prevention funding to help families dealing with a permanent or temporary loss of income to avoid foreclosure through Restoring Stability, a Save the Dream Ohio Initiative... |
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All real estate is local! Just like no one would pay attention to a national average weather forecast, national housing forecasts will be right some of the time and off the mark some of the time... |
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Is there no more compelling reason to buy a house than a credit? |
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Mortgage interest rates are incredibly good...historic lows! However, you must have good credit in order to qualify for the very best rates. We thought the following article gave the very best advice on this timely topic... |
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