Friday, December 30, 2011

HOME MAINTENANCE: 5 tips to stay on top of home maintenance

You're not alone if your roof is leaking and you're kicking yourself for not having called a roofer during the summer months. Most people have a limited concept of preventative maintenance. This can lead to big problems that end up being more expensive than if you had routine maintenance in place.

Many buyers don't understand that home maintenance goes with homeownership. When you rent, someone else usually pays for repairs. As a homeowner, you're responsible for keeping your home in good condition.

Unless you're handy at home repairs, it can be costly to maintain a home properly. But there is a benefit at the end of the line. Buyers pay more for homes that are well-maintained and show a pride of ownership.

It can be a hassle to properly maintain your home unless you organize and prioritize the projects that need to be done. You also need to set a schedule and stick to it.

Most home maintenance can be done annually: roof maintenance (including gutters and downspouts); sealing exterior cracks; weatherproofing; a furnace and air conditioning inspection; and inspecting and cleaning the drainage system.

Mark these events on your calendar so that they can be scheduled for about a month before you'd like to have the work done. If you wait until just before the rainy season to start your annual maintenance, you could have trouble finding good contractors to

MARKET TRENDS: Home Prices Declined in October

Home prices in the United States fell by more than 1 percent in October, a private survey showed on Tuesday, and analysts expect the downward trend will continue in the months ahead.

But neither the discouraging real estate data nor a sharp gain in confidence in a separate report appeared to have much impact on Wall Street, which was winding down the year with light trading.

The Dow Jones industrial average closed down 3 points to 12,291.35, while the Standard & Poor’s 500-stock index rose less than a point to 1,265.43. The Nasdaq composite index was up 0.25 percent to 2,625.20.

Both the S.&P. and the Dow were on track to finish the year in positive territory.

The private Standard & Poor’s/Case-Shiller index, a closely watched measure of home prices, was down 1.2 percent from September, according to data tracking 20 cities.

Nineteen of the 20 cities experienced price declines, with prices reaching new lows in Atlanta since its 2007 peak and in Las Vegas, from its 2006 peak, S.&P. said.

Only Phoenix posted a gain, with a 0.3 percent rise, the Case-Shiller data showed.

The report on housing prices exceeded analysts' forecasts for a 0.4 percent drop for October. The index was down 3.4 percent from a year earlier, with Atlanta recording the worst annualized rate, dropping by 11.7 percent.

“Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness,” said David M. Blitzer, the chairman of the index committee at S.& P.

Many analysts expect the weak American housing market is in store for further declines because of a glut of supply, poor demand, and high rates of joblessness and foreclosures.

Patrick Newport, an analyst with IHS Global Insight, forecast that those factors could force

Thursday, December 29, 2011

TAXED: 10 Common Errors Home Owners Make When Filing Taxes

As you calculate your tax returns, consider each home tax deduction and credit you are—and are not—entitled to. Running afoul of any of these 10 home-related tax mistakes—which tax pros say are especially common—can cost you money or draw the IRS to your doorstep.

Sin #1: Deducting the wrong year for property taxes
You take a tax deduction for property taxes in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind—that is, you’re not billed for 2010 property taxes until 2011. But that’s irrelevant to the feds.

Enter on your federal forms whatever amount you actually paid in 2010, no matter what the date is on your tax bill. Dave Hampton, CPA, tax manager at the Cincinnati accounting firm of Burke & Schindler, has seen home owners confuse payments for different years and claim the incorrect amount.

Sin #2: Confusing escrow amount for actual taxes paid
If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed, says Bob Meighan, CPA and vice president at TurboTax in San Diego. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property tax bill. Your lender will adjust the amount every year or so to realign the two.

For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments.

Sin #3: Deducting points paid to refinance
Deduct points you paid your lender to secure your mortgage in full for the year you bought your home. However, when you refinance, says Meighan, you must deduct points over the life of your new loan. If you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $133 per year.

Sin #4: Failing to deduct private mortgage insurance
Lenders require home buyers with a downpayment of less than 20% to purchase private mortgage insurance (PMI). Avoid the common mistake of forgetting to deduct your PMI payments. However, note the deduction begins to phase out once your adjusted gross income reaches $100,000 and disappears entirely when your AGI surpasses $109,000.

Sin #5: Misjudging the home office tax deduction
This deduction may not be as good as it seems. It often doesn’t amount to much of a deduction,

Wednesday, December 28, 2011

HOME MAINTENANCE: Tips on Choosing the Right Snow Blower

The song says “let it snow” but for home owners, that snow has got to go! For home snow removal tasks, electric and gas-powered snow blowers are just the ticket. Here’s what you need to know to choose the right snow removal tool for your area.

Home snow removal is an easier task with a snow blower. To choose the right snow blower, take into consideration the size of your property, average snowfall amounts in your area, and your budget. Generally speaking, as snow blowers go up in price, they increase in size and power, reducing the amount of time and effort it takes for snow removal.
The best way to decide what kind of snow blower you’ll need is to know the amount of snow your area gets. Find annual snowfall totals in nearby cities, or check winter storm snowfall totals at the website of your local news and weather source, such as a television or radio station.

Also, size matters. “The main thing I ask shoppers is, how big is their property,” says Andrew Kelly, department manager for Lowe’s. If you have a long driveway or more than 150 feet of sidewalk to clear, see if you can afford a heavier, more capable machine than indicated by snowfall totals.

Light snow removal jobs (up to 4 inches per year)
If you live in an area that receives the occasional light dusting of snow, you can likely get by just fine with a shovel. But if for reasons of health (or motivation) shoveling is impractical, an electric snow shovel is ideal. These walk-behind tools are good for small jobs, such as front porches and walks.

Plug-in, electric snow shovels feature plastic, rotating blades that throw snow out of the front of the machine. Expect to pay about $100. You’ll need a UL-listed outdoor extension cord to power your electric show shovel.

These lightweight machines have a few drawbacks. Small front openings can handle snows of only a few inches deep, and they’ll only clear a path about 1 foot wide. Their plastic blades are prone to cracking or breaking when they come in contact with ice and stones.

Light to moderate snow removal jobs (up to 12 inches per year)
Capable of handling snowfalls up to 8 or 10 inches in height, an electric snow blower is the right choice for home owners in moderately snowy locations.

Electric snow blowers are as close to maintenance-free as possible, requiring none of the hassles that accompany gas-powered lawn equipment, such as keeping gas cans and mixing two-cycle oil with the gas.

The downside, of course, is that you’ll need to drag around a lengthy extension cord.

With widths of just 14 to 18 inches, electric snow blowers are not the best choices for home

Tuesday, December 27, 2011

GREEN HOMES: 15 Tips for Living Green

With so much energy and attention being spent on fixing the economy, it’s easy to lose sight of other important issues. One of these is the environment. Homes and households consume a large amount of energy and products to keep in good working order.

Here are 15 simple ways you can transform your home into a green sanctuary. Every little bit helps. Do what you can and spread the word!

  1. Buy earth-friendly cleaning products: This used to be a tall order for budget-conscious households, but now there are a plethora of products on the market available for the same price as traditional cleaners. Some households take it one step further and harness the cheap cleaning power of baking soda, vinegar, and lemon.
  2. Lights out: Turning lights off when you’re not in a room means you use less energy. This means the power plant produces less power and emits less pollution.
  3. Turn the water off: It is tempting to let the water run while we brush our teeth or wash dishes. Take a quick second to turn the handle to “off” and preserve water each day!
  4. Upgrade Insulation: A well-insulated home can save you money! Insulation helps keep your warmed or cooled air inside the home. Check the attics and walls of older homes to see if upgrades are needed.
  5. Check for cracks: Air escapes through cracks around windows and doors. It is essentially wasted energy. Check windows and doors for leaks and fill them with caulking.
  6. Change lightbulbs to CFLs: These new bulbs might look a little funny and cost a bit more initially, but they last longer and save tons of money in the long run.
  7. Use cloth diapers: Attention all parents! Cloth diapers aren’t what they used to be. Not only do they work just as well as disposables (some say better), but they cost less and save the environment. A disposable diapers takes up to 500 years to biodegrade in a landfill. Americans send millions to the dump each year.
  8. Use a laptop: Did you know a laptop uses less energy than a desktop unit? For home use consider using a laptop. Not only will you save energy, but you’ll save space as well.
  9. Electric water heater: These compact units are great for families wanting to heat water only on demand. You’ll never run our of hot water and you’ll use less energy in the process

Monday, December 26, 2011

SELLING YOUR HOME: Choosing to Sell

Today’s market presents a difficult mix of conditions for many sellers. The housing market dipped in recent years in response to recession conditions and continues to struggle.

Accessing credit is challenging. Many of today’s lenders require hefty downpayments of at least 20 percent along with excellent credit scores for the best rates. Many homeowners with “good” credit may indeed find themselves wholly unable to procure a mortgage.

Some homeowners find themselves selling out of necessity instead of a true desire to move. They may be facing foreclosure or have had sizable decrease in their household income and now need to size down.

Making selling even more challenging is the fact that home prices have been on the decline. Many homeowners may be surprised to find their home is now worth less than they bought it for 10 years ago. Prices are now at 2003 levels in many areas of the country.

If a homeowner bought during the peak of the market, during the boom years, they may find they now own a house worth a fraction of what they paid.

How do you know if now is the time to sell?

First, be sure to solicit the advice of a local real estate agent. They have access to mountains of statistics for your area, including how long homes are taking to sell, what neighborhoods are hot, median prices, and so much more.

Find out what your home is worth in the current market. This will help you decide whether you can afford to sell or what kind of loss you mind be facing if you are needing to sell now.

Once you have armed yourself with solid stats, it’s time to evaluate your own

Saturday, December 24, 2011

MARKET TRENDS: Housing to Be Key Factor in 2012 Election

HouseLogic, the consumer website for the National Association of Realtors® has released the results from their latest survey. They found that when it comes to the upcoming 2012 election, jobs and housing are at the forefront of voters' minds.

Their research indicates that almost one-third of those surveyed reveal housing is the top issue. It's no wonder why. Millions of homeowners across the country are currently in foreclosure or are at risk of entering this state. Many others have experienced a dramatic loss of equity in their homes as prices shrank back to 2003 levels.

Perhaps one of the biggest issues is the large number of homeowners who are now upside down in their mortgages, meaning they owe more to the bank than their home is currently worth. What should be one of their biggest assets is now one of their biggest liabilities. Many don't have the option to sell or move if the need arises. Is there a new job being offered in the neighboring state? May homeowners may have to forgo a move in order to keep good credit and a roof over their heads.

The pent-up demand has left a considerable mark on the construction market. Millions of workers are out of jobs as builders find it difficult to obtain credit and are wary of beginning new projects. Building permits have been down across the entire country.

"We need to keep housing first on the nation's public policy agenda, because housing and home ownership issues affect all Americans," said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. "The results of this survey show that many Americans

Friday, December 23, 2011

MARKET TRENDS: Mortgage rates fall to record lows

NEW YORK (CNNMoney) -- Mortgage rates sunk to record lows again this week.
The average rate on the 30-year fixed mortgage fell to 3.94%, matching the all-time low hit in early October, according to Freddie Mac's weekly mortgage rate survey. Meanwhile, 15-year fixed-rate loans hit a new record low of 3.21%, surpaFive-year adjustable rate mortgages also plumbed new depths, ssing the record set on October 6. hitting 2.86% for the week.
"We've been hanging around record lows for a few months now and we finally hit another one," said Keith Gumbinger of HSH Associates, a provider of mortgage data.
Low-interest mortgages will be available at least through mid-2012, according to Freddie Mac's chief economist, Frank Nothaft.

Where homes are affordable

The low rates can translate into big savings for home buyers. Five years ago, a home buyer would have been lucky to land a 5% rate on a 15-year loan. On a $200,000 mortgage, that would have meant the borrower would have paid $1,582 a month. Should a borrower land a 3.2% rate on a $200,000 loan now, the monthly mortgage payment would come to $1,400 -- a savings of $182 a month.
Mortgage rates tend to closely track Treasury bond yields, which have also been very low lately. For the past three months, 10-year Treasury notes have often fallen below the 2% mark as bond

Thursday, December 22, 2011

MARKET TRENDS: Home sales up for fifth-straight month

November home sales in the 53 largest metro areas rose 8.1% from last year, the fifth-straight month of increases from a year earlier, according to the real estate networkRE/MAX.

Sales did fall 5.7% from the previous month, following a seasonal trend. The inventory of homes on the market dropped for the 17th straight month. Inventory is down 23.7% from last year.
Given the rate of sales, the national market currently holds a 7.8-month supply of homes, which is down from a 10-month supply last year. A market balanced by sellers and buyers usually holds a six-month inventory.

"This market is trying hard to stabilize itself with home sales significantly stronger than one year ago, even though we are entering the holiday season when sales traditionally decline," said Margaret Kelly, CEO of RE/MAX.

Home sales increased 31% in New Orleans, the most of the 41 metros that saw gains. With sales trending higher, Kelly expects prices to follow. Most banking analysts forecastprices to find a bottom sometime in 2012 before heading back up.

The median sales price of homes sold in November was $181,322, up 1.4% from the month before but down 4.2% from last year, according to RE/MAX. Only nine of the 53 metros showed

Wednesday, December 21, 2011

MARKET TRENDS: U.S. Housing Starts Jump 9.3%, to Highest in Year

Builders broke ground in November on more houses than at any time in the past 19 months, led by a surge in multifamily units, signaling the market is stabilizing heading into 2012.
Starts increased 9.3 percent to a 685,000 annual rate, exceeding thehighest estimate of economists surveyed by Bloomberg News and the most since April 2010, Commerce Department figures showed today inWashington. Building permits, a proxy for future construction, also climbed to a more than one-year high.
Work on multifamily units like apartments and townhouses is growing as the rental market improves. Single-family-home construction may be starting to strengthen as lower home prices and borrowing costs near record lows draw in some buyers, even as builders face competition from existing houses as another wave of foreclosures throws more marked-down properties on the market.
“It’s a solid report,” said Brian Jones, a senior U.S. economist atSociete Generale in New York, who had the highest forecast in the Bloomberg survey. “For months we’ve been flagging the strength in multifamily construction, but now we’re starting to get signs that single-family is pulling itself off the canvas.”

Shares Climb

Stocks rose as the housing data added to recent evidence the world’s largest economy was strengthening. The Standard & Poor’s 500 Index climbed 2.5 percent to 1,235.52 at 10:57 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 1.89 percent from 1.81 percent late yesterday.
German business confidence unexpectedly rose in December for a second month as two economic institutes predicted Europe’s biggest economy will stave off the debt crisis and avoid a recession in 2012, other reports showed today.
Australia’s central bank said resource investment is also helping the economy ride out Europe’s sovereign-debt crisis. The Reserve Bank of Australia lowered borrowing costs Dec. 6 because of the “non-trivial possibility of a very sharp contraction” in Europe, according to minutes of the meeting released today.
Payrolls increased in 29 U.S. states in November, while the jobless rate declined in 43, a sign the labor market is recovering across much of the U.S., figures from the Labor Department also showed today.New York led the nation with a 29,500 gain in jobs, followed by Texas with 20,800. The biggest drop in unemployment was in Michigan, where the jobless rate fell 0.8 percentage point to 9.8 percent.

Survey Results

The median estimate of 79 economists surveyed by Bloomberg called for a gain in U.S. housing starts to a 635,000 rate from a previously reported 628,000. Projections ranged from 600,000 to 655,000. The Commerce Department revised the October reading down to 627,000.
The November results compare with last year’s overall tally of 587,000 starts, the second-fewest on

Tuesday, December 20, 2011

HOME DESIGN: Designing on a Human Scale

Sarah Susanka's newly-constructed 'not so big house' in Libertyville, Ill., provides smart ideas for comfortable living in fewer square feet.

The house of the future — at least the immediate future — probably won’t look anything like what we saw watching “The Jetsons” as kids. But it may very well look like acclaimed architect and author Sarah Susanka’s “not so big” home that’s making its premiere just outside of Chicago.

Susanka designed the show-home for the new SchoolStreet development in Libertyville, Ill., and it’s the first time she’s created a home that is available in the mass market. In partnership with developer John McLinden, Susanka has created a home that integrates technology of the present with the comforts of the past. It’s based on an architectural concept — smarter construction in a smaller footprint — that Susanka has nurtured at least since the 1998 publication of her book, The Not So Big House: A Blueprint For the Way We Really Live.

The SchoolStreet house isn’t small; it’s more than 2,500 square feet. But as a show house, it offers numerous ideas for adapting existing space.

“People are looking not just for a smaller house, but for a better house,” says Susanka. “You can make less square footage feel like more if it’s well designed.”

According to a recent study by the National Association of Home Builders, by 2015 homes are expected to average 2,152 square feet, which is 10.5 percent smaller than the average single-family home built during 2010 (that, in turn, is down from the peak of 2,520 square feet in 2007 and 2008). Susanka’s home embodies the trend toward living well on a smaller scale by incorporating an open floor plan with ceiling accents that define the space, several multipurpose rooms, energy-efficient features, and outdoor entertainment areas. Smart organizational built-ins blend seamlessly, such as a cabinet just the right size for extra toilet paper in the home’s bathrooms and a murphy bed in a first-floor room.

“SchoolStreet houses are designed to align with a cultural shift in how home owners truly want to live — more soulful designs, filled with detail, that are sensitive to the environment and connected to a pedestrian-friendly, vital community,” McLinden said. “For decades, Sarah has been espousing the benefit of such houses. Few people have had as great an influence on the American home and lifestyle as Sarah.”

The SchoolStreet project serves as a beacon of success in today’s housing market and new-home construction. The location was previously home to a luxury townhome development that went into foreclosure. When McLinden purchased the property, he went back to the drawing board to create smaller, high-quality, cutting-edge bungalows, and slashed the prices in half, with homes now starting at $500,000. He also converted Libertyville’s neighboring historic Central School building into 15 loft condominiums. As of early December, 21 of the 26 homes and 5 of the 15 lofts had been purchased.

“I’ve been a REALTOR® since 1978, and in all those years I’ve seen many different

Monday, December 19, 2011

Every insurance policy is different. Properly understanding what's covered requires the homeowner to ask a lot of questions and to read the fine print on his or her insurance policy. Though there are differences between policies, there are some things that almost all insurance policies will have in common.
What's Covered?Homeowners insurance typically covers a broad range of possible damages. You can expect that your actual dwelling is covered, as well as some other structures on your property, like a garage, fence, driveway or shed. However, if you run a business on your property that's housed in a separate structure, this is generally not covered in the typical insurance policy.
Personal Property is typically accounted for in your policy as well. This is sometimes known as contents insurance. The amount of coverage for personal property may be limited on certain types of high-value items, like jewelry or artwork, unless additional coverage is purchased for these items.
Replacement Cost Vs. Fair Market ValueNot all insurance policies offer homeowners the replacement cost of the property. Replacement cost helps to bridge the gap that can be caused by inflation. Otherwise, if a claim is made, it will be assessed at fair market value. Since some items depreciate quickly, this means that you may not get enough money from a claim to cover or replace the items that were lost or damaged. Coverage for replacement costs will ensure that you're able to replace the items that were lost, with similar items. If having this coverage is important to you, you'll want to be sure that both your home and personal property are covered for replacement cost.
Car Broken in at HomeMost homeowners insurance policies generally include coverage for personal effects and separate structures on your property, such as a garage or a workshop, but what happens if your car is broken into while it's on your property? This is where the distinction between your home and auto insurance policies can become a little blurry. Many home insurance policies will provide some insurance for personal items that are stolen from your car, but some of the more comprehensive auto insurance policies may cover this too. Insurance companies may also limit the coverage available through your policy, if the items stolen were purchased for use in the vehicle exclusively.
Natural Disaster CoverageA wide range of natural disasters are typically covered by your homeowners insurance policy, though not all of them. If you live in some regions, you'll want to be sure to inquire about things like tornado or earthquake insurance. However, the typical inclusions for natural disaster include fire, lightning, windstorm and hail. Your policy may also include coverage for smoke damage, or damage caused by falling items. Earthquakes and other natural movements of the earth are not typically covered by insurance policies, though you can purchase separate insurance to cover these types of events.
FloodingFlooding is much the same as earthquakes, when it comes to homeowners insurance. Flash

Sunday, December 18, 2011

NEW YORK (TheStreet) -- Despite the apparent economic improvement, with the unemployment rate finally moving below 9% in November, millions will still face the possibility of losing their home through foreclosure in 2012.
While it's not a "magic bullet" that can discharge a first mortgage loan on your residence, filing for bankruptcy can buy you some time, force a mortgage lender or servicer to negotiate with you, and eliminate a significant portion of other unsecured debt, depending on your circumstances.
According to regulatory data provided by SNL Financial, the "big four" U.S. banks had huge amounts of one-to-four family residential loans on their balance sheets and serviced for others, for which the underlying homes were in the midst of the foreclosure process as of Sept. 30:
  • Bank of America had $23.0 billion in residential mortgage loans on its balance sheet with homes in foreclosure, while loans serviced for others in foreclosure totaled a whopping $90.6 billion.
  • for JPMorgan Chase , residential mortgage loans in foreclosure totaled $28.9 billion, while loans serviced for others in foreclosure totaled $54.7 billion.
  • For Wells Fargo , one-to-four family mortgage loans on the balance sheet with collateral homes in some phase of foreclosure totaled $18.1 billion, while loans serviced for others in foreclosure totaled $37.7 billion.
  • Citigroup reported $6.9 billion in residential mortgage loans in foreclosure on the balance sheet, and $10.3 billion serviced for others that were in foreclosure.
While President Obama's expansion of the Home Affordable Refinance Program , or HARP, will allow millions of borrowers with mortgage loans held by Fannie Mae and Freddie Mac to refinance their entire balances at today's low rates -- even if the borrowers owe significantly more than the homes are worth -- HARP is only available to borrowers who have been current on their loans over the past six months, and the Fannie/Freddie loans only represent about half of U.S. mortgages.
Filing for bankruptcy, of course, can't be taken lightly, and you will need the help of an attorney.
According to Geoff Walsh, a staff attorney with the National Consumer Law Center, "the first threshold question that people need to consider when they're looking at bankruptcy as an option for foreclosure is whether all of their major assets are covered by state exemption laws."
For example, in New York $100,000 in home equity is exempt if you go through bankruptcy. This means that if the difference between the market value of your home and the outstanding liens on your home is less than $100,000, you will emerge from bankruptcy still owning your home. If you have more than $100,000 in home equity, the bankruptcy trustee will sell the home, give you $100,000, and pay the rest to the mortgage lien holder.
This underlines the importance of hiring an attorney. "There are some people who can really be hurt if they file for bankruptcy without properly what the exemptions are," says Ward.

Chapter 7 Bankruptcy

According to Ward, a Chapter 7 filing "doesn't help if the lender has a lien on an asset," such as a house or a car, since the lien allows the lender to take back the collateral and the Chapter 7 filing "does not get rid of line or security interests."
A Chapter 7 filing is a liquidation bankruptcy, where the court-appointed trustee sells nonexempt

Saturday, December 17, 2011

MARKET TRENDS: Residential Housing Ready to Awaken?

After half a decade of withering sales and slumping prices, there are strong and diverse signs that the single-family housing market is poised for a rebound.
In some metropolitan areas, the market has bottomed, with both sales and prices on the rise and foreclosures on the decline.
This contrarian - and largely overlooked - thesis flies in the face of the persistent gloom that has nagged the industry since 2007, when the subprime crisis flared.
Industry analysts and players cite a number of reasons - some traditional (employment), others unique to the post-credit bubble era (foreclosures)  - for the long-awaited sea change. An analysis of industry and government data also support the forecast.
"It has become increasingly apparent to us that the pieces for a housing rebound next year are beginning to fall into place," declared Barclays Capital analyst Stephen Kim in a recent note to investors.
Proponents admit that the nascent rebound could easily be derailed, but stress that after years of government efforts to support sales and prices as well as the volatile impact of foreclosures, the market has regained a measure of normalcy.
"With the exception of really hard-hit markets, the vast majority is ready to turn around," adds Jerry Howard, president and CEO of the National Association of Home Builders, NAHB. "The Washington, D.C., area is not only ripe for recovery, they need to start building units."
The iShares Dow Jones US Home Construction Index Fund (NYSE Arca: itb), for example, is up some 38 percent, while the S&P 500 is up about 21 percent.
Nevertheless, skeptics overwhelmingly outnumber the optimists, given the false-starts of previous years, the economy's sub-par performance, a new wave of distressed properties and the capacity for the European debt crisis to spook business, consumers and investors.
"I think it's premature," says Richard Smith, CEO of Realogy, the nation's largest real estate company, whose brands include Century 21, Coldwell Banker and Sotheby's International. "We see little indications here and there. Transaction volume is improving. Prices are still under pressure. This isn't going to be one of those spiked robust recoveries."
Smith is echoing the conventional industry calculus: that price increases follow sales growth amid consistently strengthening demand.
There's been little conventional, however, about this housing slump, which is one reason it's had so many false bottoms. Among its many firsts - housing starts fell through 1 million annual units, foreclosures topped 2 million in three consecutive years, and home prices declined on a national basis.
The catalysts to recovery are mostly the same: for potential buyers, residential rents have now risen enough to consider buying; existing-home inventory is the lowest in five years, while that of new homes is at a 40-year low; affordability is at a record high; delinquencies have peaked;consumer confidence is on the rise ; and job growth is accelerating.
For investors, with a continuation of the gold rally in question, real estate is beginning to look like a viable inflation hedge alternative, while rising rents mean greater profits.
That thinking may help explain why the iShares Dow Jones US Home Construction Index Fund(NYSE Arca: itb), a broad barometer for the housing market, is up some 38 percent from the stock market's October bottom, while the S&P 500 is up about 21 percent.
Finally, there's the intangible fatigue with bad news, and a desire to end the negative feedback loop.
"We believe there is sizable housing demand that could be released into the market," says Lawrence Yun, chief economist of the National Association of Realtors, NAR.
The NAR is forecasting existing home sales will rise 5 percent in both 2012 and 2013; prices will edge up 2 percent in each of those two years, then 4 percent in 2014.
The NAHB is forecasting a 5.1-percent increase in new home sales and a 10-percent increase for new home starts in 2012.
Jobs, Jobs, Jobs
A turnaround in the housing market will require continued improvement in the job market.
The economy has created jobs 13 months in a row for a total of almost 1.9 million. Weekly jobless claims have been routinely below the key level of 400,000, and the national jobless rate is down to 8.6 percent.
There are already signs in some markets that an improving employment picture is boosting housing demand and sale prices.
In cities such as Tampa, Fla., South Bend, Ind., Grand Rapids, Mich., Raleigh, N.C., Wichita, Kan., and Green Bay, Wis.., the median sales price of an existing single family home increased 1-2 percent in the third quarter, during which time the jobless rate and/or payrolls growth improved dramatically.
Even in the Cape Coral-Fort Myers, Fla. metropolitan area - considered the epicenter of the foreclosure crisis a few years ago - prices were just 1.4 percent lower in the third quarter than the previous year.

Friday, December 16, 2011

MULTIFAMILY HOME LOANS: Loans for Multifamily Homes

THE rental market’s strength may be enticing some buyers to look at multifamily properties, but qualifying for a mortgage on rental units is often more difficult than on a single-family residence.
“It looks a lot easier than it is,” said Neil B. Garfinkel, a partner in charge of the real estate practice at Abrams Garfinkel Margolis Bergson, suggesting that anyone new to this subject work with a real estate professional experienced in rental properties.
But the extra effort may be worthwhile for some people looking for income, or at least help with covering monthly expenses.
A recent report by Frank E. Nothaft, the chief economist for Freddie Mac, noted that “the rental market has been a bright spot in the housing sector this year,” as more households postpone home-buying because of the uncertain economy. The overall rental vacancy rate in Manhattan is hovering around 1 percent, while rents are up for all kinds of apartments.
Mr. Garfinkel, who is also an owner of apartments in Brooklyn and the Bronx through aninvestment firm, says buyers of multifamily property will need to do their due diligence on all the active leases and any service contracts for the building, including the employment terms of the superintendent.
Some lenders are more comfortable lending for property with tenants in place, said John Manning, a

Thursday, December 15, 2011

INVESTING: More parents helping kids buy homes

NEW YORK (CNNMoney) -- Hey, baby boomers! Pondering what gift to get your kid who's all grown up? For many of your peers, the answer is a house.

One in five baby boomer couples have already given at least one of their children the means to purchase a home -- either buying it outright, furnishing the down payment or co-signing the loan, according to a survey from Better Homes and Gardens Real Estate.

And more than two-thirds (68%) of respondents said they expect to provide financial support to their children or grandchildren in the future to help them afford homeownership.
Many real estate agents around the country have observed this trend gain steam since the housing bust began.

"Parents want to see their kids in a stable living situation," said Chayah Masters, a Coldwell Banker Residential agent in Los Angeles. "Plus, property values have come way down. Why not help the kids while they are so low?"

The typical U.S. home now costs about the same as it did back in 2003. In some markets, like Phoenix, Orlando and Las Vegas, prices haven't been this reasonable since the late 1990s. And low interest rates make homebuying an even more affordable investment.

In New York City, according to real estate agent Chazz Levi, many foreign nationals are buying apartments for kids going to college in town.

"I think it's a smart thing to do right now," she said.

Why kids need help
Some of the kids have good jobs and enough income to afford a home on their own except for one thing: too little cash.

Cash is king right now. Cash buyers get the best deals on homes like bank-owned foreclosed properties or short sales. Even ordinary sellers prefer it because sales are more likely to go