Thursday, July 31, 2008
The President signed into law the Landmark housing legislation yesterday. The law is designed to help the housing industry and the credit industry recover from the mortgage melt-down of the past year, and provide stability in the financial markets. Those portions of the bill are important, but some sections of the law impact first time home buyers in a manner they will immediately feel.
One part of the bill does impact "the average buyer" immediately in an important manner. This portion provides a tax credit of up to $7,500 for first time home buyers, whose individual incomes are less then $75,000 or married couples who earn less than $150,000 jointly. The tax credit can be used for homes purchased between April 9, 2008 and July 1, 2009, and should stimulate home buying, reduce excess supply in housing markets and shore up home prices.
The Tax Credit is based the purchase price of the property, being 10% of the purchase price, up to $7,500 (meaning that for most first time home buyers , the credit will be $7,500).
A comprehensive lists of questions and answers about the tax credit program can be found at the National Association of Home Builder's web site www.federalhousingtaxcredit.com.
Wednesday, July 30, 2008
According to the National Fire Protection Agency, the number of liquid propane-related accidents and deaths are statistically small.
However, a family can't be too careful when it comes to household safety and flammable gases.
Manufactured by Davom Products, the PROLOCK Propane Safety Cap is a lock-and-key device that prevents children (and anyone else) from opening the propane gas tank value and starting the flow of propane.
The PROLOCK Propane Safety Cap sells for $19.95 online.
Tuesday, July 29, 2008
Philadelphia scores once again as a great place to buy property! In a recent article listing the top 10 cities to buy a home published by Forbes magazine, Philadelphia ranked as the fourth best place to buy a house in the U.S.
In this Forbes article, the ranking was determined by the cost of buying versus renting, tax incentives where present, and whether a buyer would have an opportunity to build equity. Forbes surveyed the 40 largest metropolitan area housing metrics looking for cities where [rices have appreciated over the last two years. It also measured vacancy rates, providing extra points where rents are significantly higher than a buyer's mortgage payment for the same home. Houston and Austin took the top 2 spots, due to their healthy job market and growing tax revenues.
Philadelphia's place was earned due to price stability, increasing rents and affordable housing stock.
Its a story you may have read here before, but its certainly nice to have an outside validation of my ongoing opinion that our marketplace is one of the really good buys around the country.
Monday, July 28, 2008
Statistics won't always tell the whole story, but they often provide good perspective.
The graph at right shows Existing Home Sales data going back three years. An "existing home" is one that can't be called new construction; a "used home", so to speak.
Note the steep decline from 2005 through late-2007.
Since November, however, Existing Home Sales have remained within a very tight range and appear to have reached a flattening point.
The Existing Home Sales data supports the word-on-the-street from real estate agents nationwide that buyers are returning to the housing market in search of good values.
But let's not forget -- demand is only half of the story. There is the supply factor, too, and the supply side of the housing market is showing the same leveling signs as the demand part.
Looking at the national inventory at left, the number of existing homes for sale has hovered near 4.5 million for the last several months. No change suggests strength.
Now again, statistics won't tell the whole story but there are plenty of positive signals from the real estate market right now, just like there are negative ones, too.
This is one reason why real estate data causes so much debate -- people want to take an either/or proposition about the state of the real estate and it doesn't work like that. Real estate can be simultaneously strong and weak and when it is, buyers look for value.
On a local level,rates have been good, and our local inventory is smaller then the national inventory. Combined with Philadelphia being walkable (and therefore energy friendly) and affordable, people have started acting on their real estate needs and making purchases.
Perhaps this is why the national housing data is beginning to level off after a 3-year slide. There's good values to be had, and today's home buyers know it.
(Images courtesy: Wall Street Journal Online)
Friday, July 25, 2008
It even has its own abbreviation to add to the confusion -- CPI.
So, when a layperson hears that "CPI is rising", it's not always clear what it means. The tendency, therefore, is to ignore the news.
This is one reason CPI is commonly substituted with the more down-home expression of "Cost of Living".
In contrast to the term "CPI", the phrase "Cost of Living" is a lot more clear. When people hear that the Cost of Living is rising, instinctively, they get it. And now they can see how it works in numbers, courtesy of the Bureau of Labor Statistics.
The Inflation Calculator at the government Web site helps a person compare household income to the changing Cost of Living between any two years since 1913. For example, a U.S. household earning $48,201 in 2007 would have to increase that income to $50,868 just to keep up with "life".
CPI touched a 17-year high in June, jumping 5.000 percent year-over-year. Without a 5.000 percent increase an income, a household falls behind.
Thursday, July 24, 2008
After falling 7 cents per gallon over the last 7 days, gas prices are being pressured higher today as Hurricane Dolly barrels through the Gulf of Mexico.
The first landfall hurricane of the season is expected to flood the southern Texas coast and cause minor disruptions to the nation's oil supplies.
Versus Hurricane Katrina in 2005, Dolly's impact on oil supplies is expected to be small but that doesn't stop traders from bidding up oil prices "just in case" their expectations are wrong.
For instance, oil prices rose almost 2 percent Monday as Dolly drifted into the Gulf. Oil prices then receded as the storm's path was better defined.
Regardless, when hurricanes form in the Gulf of Mexico, it's going to be bad news for home buyers.
Because the Gulf of Mexico is stocked with oil refineries and shipping ports, when specific areas are hit by heavy rains and power outages, supply and demand takes over, pushing oil prices higher. This causes gasoline prices to rise and that is considered an inflationary pressure on the economy.
Inflation, of course, causes mortgage rates to rise so when hurricanes are brewing, it generally means that housing is about to get less affordable for Americans.
This week, mortgage rates are up by about 0.125 percent overall so far -- roughly $8 monthly per $100,000 borrowed.
(Image courtesy: Marketwatch.com)
Wednesday, July 23, 2008
Every homeowner's basic toolkit should include caulk, a sealing agent for sinks, bathtubs, windows and other places where seams exist.
And now, with the mass-market availability of Caulk Singles, that toolkit can be made a bit smaller.
Caulk Singles are a one-time-use caulk package, squeezable from the bottom-up and billed as easier-to-control and clean-up than the familiar caulking gun and tube.
But, at a cost of $2.50 per package, it's also considerably more expensive than "the old packaging". By comparison, a tube of traditional caulk costs about $6.00 per package and holds close to 8 times as much material as its single-use cousin.
Caulk Singles are marketed by GE and available for sales at Lowe's Ace Hardware and True Value. Free samples are available with sign-up at https://www.caulksingles.com.
Sunday, July 20, 2008
Photo Courtesy of creativecommons.org Ric E Ette
In a world where each gallon of gas costs over $4, people are interested in buying properties in convenient locations. They want to be able to take trains or buses or other forms of public transportation, and wonder of wonders, they want to be able to walk places.
Technology being what it is, someone created a website called WalkScorewhere they can actually find out how an area ranks in its "walkability". Their argument is unassailable.
Picture a walkable neighborhood. You lose weight each time you walk to the grocery store. You stumble home from last call without waiting for a cab. You spend less money on your car—or you don't own a car. When you shop, you support your local economy. You talk to your neighbors.
Recently, WalkScore decided to rank 2,508 neighborhoods in the top 40 cities in the United States. And there, at #5 was Philadelphia ! Philadelphia ranks at 74 for walkability, which is defined as "Very Walkable: It's possible to get by without owning a car. " Imagine a place where you can go to the store, the library, school, or recreation without owning a car!
Of course there are some areas where a car just makes sense, but many of the areas of the city are so easily walkable that a family can certainly get by with one car. Imagine what that savings would mean. Having that car payment available to use for your mortgage payment, or saving a tank of gas a week , perhaps as much as $300 per month to help with your housing expense,
Its sure nice to be at the top of this list. Makes me want to go out and walk over to buy a newspaper
At CENTURY 21 Advantage Gold, we often talk about CENTURY 21 International - the network of offices and companies serving consumers all over the world.
But its not always real to us, until we meet someone from another country who worked for or bought their home from a CENTURY 21 firm, and then it all comes crashing home. We really are one of the most powerful real estate organizations in the world - Not just our local offices in Pennsylvania and New Jersey.
Enjoy this short commercial from our Australian Colleagues.
Saturday, July 19, 2008
In this two-and-a-half minute video from Expert Village, nurseryman Scott Reil tells us:
- Why weeding is important
- How to weed with efficiency at home
- How to use mulch as a weed-retardant
There are two basic ways to weed a garden, according to our video host -- you can use your hands or you can use your garden tools. Both are effective, but the latter can be a real time-saver.
Friday, July 18, 2008
Another day, another piece of inflationary data.
June's Consumer Price Index showed a 5 percent year-over-year increase in what is now the largest annual Cost of Living increase for Americans in 17 years.
This is bad news for active home buyers because rising costs are considered inflationary and inflation causes mortgage rates to increase.
Predictably, mortgage rates jumped Wednesday morning after the CPI data was released and they continued to move higher throughout the day.
For most home loans, mortgage rates finished the day up by 0.125 percent.
Applying Wednesday's mortgage rate movement to the true cost of owning a home, the eighth-percent increase added $8 per $100,000 mortgaged per month. The silver lining of this cloud in our market is that our housing stock is still so affordable, that now may be the time to act before rates increase more.
(Image courtesy: The New York Times)
Wednesday, July 16, 2008
A Little while ago I began posting the Video series published by NAR on the REALTOR Code of Ethics.
One of the oldest Codes of Ethics in the United States, the Code is a living document which breakes the obligations of REALTORS into three categories, Duties to Clients, Duties to the Public, and Duties to Other REALTORS.
This Video continues the explanation of the Second and Third obligations of a REALTOR to their Client.
Article Two talks about avoiding exaggeration, misrepresentation, and the avoidance of pertinent facts, and the REALTORS need to tell the truth.
Article Three discusses REALTOR'S obligation to cooperate with Brokers when it is in our client's best interests. This unusal part of our industry is not required in every instance, and after seeing this video, hopefully your understanding of the process will be even better.
Tuesday, July 15, 2008
Investors have turned their attention back to the U.S. economy this morning, causing yesterday's mortgage rate improvements to unwind a bit.
Rates had fallen Monday after the Federal Reserve and U.S. Treasury's joint announcement in support of Fannie Mae and Freddie Mac. Today, it's the data that is taking center stage.
Most notably, the U.S. Dollar is trading at an all-time low versus the Euro and other currencies.
This is a negative for active home buyers because American homeowners repay their mortgage interest in U.S. dollars. When the dollar loses value, so does the value of those interest payments so mortgage rates end up increasing in order to attract new investors.
Another reason why mortgage rates are higher this morning is that June's Producer Price Index registered much higher than was expected, posting its largest one-month gain since November 2007.
PPI is a lot like the Cost of Living index, except that it measures operating costs for businesses instead. When business costs are increasing, they are often passed onto consumers and this is why rising PPI is thought to be inflationary and inflation -- like a weakening dollar -- pressures mortgage rates to rise.
So, while Monday's rate improvements haven't completely erased, today's action reminds us that mortgage markets wait for no one and yesterday's mortgage rates rarely carry forward.
Especially when inflation is in the mix.
(Image courtesy: The Wall Street Journal)
Monday, July 14, 2008
When people lack confidence, prophecies or concerns sometimes become self-fulfilling.
Last week saw the largest Bank failure in our history, when there was a run on IndyMac Bank, causing the third largest bank failure in our history.
According to Marketwatch.com, " Regulators said the "immediate cause" of IndyMac's failure was a deposit run in recent days that began after a June 26 letter to the OTS and the FDIC from New York Senator Charles Schumer was made public. The letter voiced concerns about IndyMac's soundness.
By July 10, depositors had pulled more than $1.3 billion from their accounts, the OTS said in a statement. "
The impact of the IndyMac failure has been softened by the FDIC insurance which provides $100,000 on some covered deposits, and up to $250,000 coverage on IRA deposits, but the cost to the FDIC will be substantial.
Would IndyMac have failed without the failure of consumer confidence caused by the Schumer later? Maybe yes and Maybe no, but the lack of confidence was in fact a precipitating factor.
As the government moves to shore up the trouble financial industry, the big question is when and how will consumer confidence be restored? The facts of the economy seem to have much less impact then media coverage and its impact on public perception, and action.
Perhaps we would all be better served, like the people in the movie "Its A Wonderful Life" if we just remember not to panic. In our market at least, the price of homes is very affordable, and the risk of loss of equity is minimal according to the risk assessment done of major metropolitan areas, recently concluded. But I'll cave that for another post.
Saturday, July 12, 2008
"Economic uncertainty" is turning into a 2008 buzzword and there's a lot of good reasons why.
On the one hand, there are precursors to inflation in the economy:
- Rising oil costs
- Rising food prices
- Higher Cost of Living
On the other hand, there are precursors to recession in the economy, too:
- Mounting job losses
- Less access to credit and/or loans
- Falling consumer confidence data
The pie chart at right illustrates just how uncertain the "experts" are about the state of the U.S. economy. They're evenly split, right down the middle.
This isn't good news or bad news for Americans, per se, but it does legitimize the idea that the economy's future direction is in doubt. This is one of the biggest reasons why there's been no clear direction for mortgage rates or stock markets since the start of the year, and that can impact the housing markets, too.
As the experts remain confused, so are the consumers, so spending becomes as limited as the confidence of the consumer.
Until the picture gets more clear, we can expect the volatility to continue.
(Image courtesy: Wall Street Journal)
Friday, July 11, 2008
According to RealtyTrac, the rate of foreclosures across the U.S. is slowing. Versus May, June foreclosures fell at a 3 percent clip.
25 states showed improvement month-over-month, led by many of the same areas that had fueled foreclosure activity in 2007.
A sampling of RealtyTrac's data includes:
- California : Foreclosures down 4.54 percent
- Georgia : Foreclosures down 14.91 percent
- Arizona : Foreclosures down 0.07 percent
- Michigan : Foreclosures down 6.00 percent
- Illinois : Foreclosures down 15.65 percent
However, the improving nature of the data is not what is making news this morning. Instead, the press is reporting that foreclosures are up by half since last year and that bank seizures have tripled.
And while the annual data may be accurate, that doesn't mean that it's necessarily relevant to home buyers and home sellers across the country.
This is because people buying and selling homes don't usually boast an "annual" mentality; when someone's an active participant in the real estate market, the mentality is "right now".
In other words, annual data fits an economist, but month-to-month data fits you.
June's foreclosure data may be the start of a trend, or it may be a blip. It's really too soon to tell. But the RealtyTrac data reinforces what real estate professionals already know -- that markets all over the country are showing signs of life.
Thursday, July 10, 2008
A noon-hour, mortgage-bond rally rendered homes more affordable for Americans Tuesday. It was the second straight day on which this happened.
On both days, the action was swift.
The speed at which Monday's and Tuesday's respective rallies tore through mortgage markets illustrates how deep the uncertainty that surrounds the U.S. economy really is.
One reason why the market swings so quickly is that, lately, traders are tending to follow the herd.
As a mortgage rate shopper, it's outstanding when the herd is moving in your favor. However, when the herd moves in the opposite direction, the impact on your monthly housing cost can be huge.
Volatility has been the common theme for mortgage rates in 2008 and it's likely to remain a factor until the nation's economic picture gets a little bit more clear.
Some experts are saying that may happen in 2009. Therefore, you should be prepared for rapid mortgage rate movement and act accordingly when you see a rate-and-payment combination that makes sense for your household budget.
The payment you see in the morning is likely to be gone by the afternoon. So with prices as affordable as they are in the Philadelphia Marketplace, now is an opportunity to act that may disappear.
Wednesday, July 9, 2008
The Federal Open Market Committee adjourned from its 2-day meeting aton June 28th. It' announced that the group will leave the Fed Funds Rate unchanged at 2.000 percent.
However, it's not what the Fed does that has markets so interested. It's what the Fed will say.
One of the Federal Reserve's roles is to promote stability in the U.S. economy by protecting it from two major threats:
The Federal Reserve's primary weapon against both of these hazards, though, is the same -- the Fed Funds Rate. To combat inflation, the Fed raises the Fed Funds rate. To fight recession, it lowers the Fed Funds Rate.
But in today's economy, there is evidence of both inflation and recession meaning that the Federal Reserve is likely to leave the Fed Funds Rate unchanged for fear of setting the economy too far towards either threat.
Therefore, markets will be left looking for clues in the carefully-worded press release signed by Federal Reserve Chairman Ben Bernanke and the other voting members of the FOMC.
If the Fed admits added vigilance against inflation, it's expected that mortgage rates will fall because inflation causes rates to rise. By contrast, if the Fed harps on the downside risks in the economy, it's expected that mortgage rates will increase.
Either way, today's press release should be a market-mover.
If you're currently floating your mortgage rate or are deciding between different lenders, be aware that mortgage rates will enter a period of extreme volatility this afternoon.
It may be prudent to complete your rate shopping before 2:00 P.M. ET.
Tuesday, July 8, 2008
When a home buyer is gifted cash for a downpayment, there is a right way and a wrong way to receive the funds.
The right way includes:
- Completing an acceptable gift letter
- Documenting the withdrawal of funds with receipts
- Documenting the deposit of funds with receipts
The wrong way is to ignore the rules that mortgage lenders clearly spell out for you.
Mortgage lenders watch gifts closely because they want to make sure that the "gift" is not really a loan-in-disguise. If it's a loan, the total dollar amount must be counted against the home's total loan-to-value and higher loan-to-values typically increase lender risk.
If it's a gift, a signed and dated gift letter should accompany the home loan application. An example:
I am the [relationship to recipient] of [name of recipient] and this letter serves as evidence that I am gifting [name of recipient] [amount of gift] to be used for the purchase of the home at [complete address of property].
This is a gift -- not a loan -- and there is no expectation of repayment.
[Signature of donor]
For additional evidence that the gift is legitimate, the recipient should make sure that deposited funds are not commingled at the bank. If the gift is for $12,000, for example, then the recipient's bank deposit receipt should indicate that a $12,000 deposit was made.
There may be legal and tax liabilities when gifting funds between family members so if you're unsure about how donating or receiving a gift may impact you, call or email me. If I can't answer your question, I can certainly refer you to somebody that can.
Saturday, July 5, 2008
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report.
More commonly, it's called the "jobs report".
The jobs report is a sector-by-sector look into the U.S. economy and whether businesses are hiring -- or firing -- workers. This is one of the reasons why its release is so hotly anticipated each month -- the jobs report can reveal a lot about the state of the U.S. economy.
Last month, the economy shed 62,000 jobs.
Now, many people will assume that job losses like this are terrible for the U.S. economy. Sometimes, that's true.
This month, it's not.
Given the ongoing tug-o-war between inflation and recession, markets are somewhat pleased with the June job loss figures because job losses reduce the likelihood of inflation in the U.S. economy.
Inflation is considered by many -- Ben Bernanke included -- to be among the top threats to the U.S. economy -- it devalues the dollar and leads to increases in the Cost of Living.
Inflation also threatens home affordability because mortgage rates tend to rise when inflation is present.
June's job losses -- while bad for those impacted -- is helping to relieve inflationary pressures on the economy and that is boosting markets performance this morning. Stocks are slightly up, and mortgage rates are slightly down. Whenever mortgage rates trend down, the amount of house a buyer can afford increases, and in a time of stable prices, that means more house for your dollars.Publish Post
(Image courtesy: The Wall Street Journal)
Friday, July 4, 2008
I'm breaking with my habit of not publishing duplicate posts. I just wrote this for the holiday post at REReflections, my other blog, but I liked it enough that I didn't want to write another- I hope you like it as well
I love being from Philadelphia. It is a place of opportunity. As an example, when I was kid I touched the Liberty Bell. Like uncounted Philadelphia children before me, I walked right up to it, and stuck my little fingers in the crack, below the bolt holding the crack from widening. I still remember the cold feel of the metal and the angled metal of the crack. It was a school trip to Independence Hall, the former Pennsylvania State House, and coincidentally the place where the Second Continental Congress met , and ratified the Declaration of Independence on July 4th her, 1776.
It didn't mean much to my family when it happened, because they were is different parts of Eastern Europe living lives that ranged from tough to marginal to unbearable. About 100 years later however, the actions of those men, in that place, meant they had an option. There was a place where they could live their lives as they wished, raise their children, and succeed if they worked hard. So they came to what they called the Golden Medina (the Golden Country). They worked hard, they learned English, and they raised their children to love their adopted country. And love it they did, with a deep and abiding passion that impelled them to make sacrifices in defense of the country when called on, and to pass that passion on to their children and Grandchildren.
Its July 4th, and I'm feeling real grateful and sentimental. I'm spending the weekend on holiday, celebrating our country's birthday with millions of my fellow Americans. I was on the road to the New Jersey shore yesterday behind a car with a bumper sticker that said "My son's a Marine - Sleep Well America, He's Got your Back!".
It made me want to call every person serving in our armed forces and thank them personally for allowing me to live in a place where my daily concerns revolve around whether Twitter is working well, or if duplicate blogs are a problem, or buying blog content is a difficult moral issue. I need to thank them for allowing me the privilege of living in a place where getting dressed well and going into an air conditioned office is considered hard work, and where I can whine about single digit mortgage rates.
Its easy to take for granted where we live ,how we live, and the rights we enjoy every day without thinking. And with gas at record prices and a tough economy, every day can be a challenge. But under the worst of circumstances we still live in the best place in the world. A place where we can speak, blog, and create as we wish. A place where home ownership is achieved by a huge number of our citizens, and everyone has potential to achieve and excel that is matched in few places around the world.
As a favor to me , just for today, be grateful for what we have and the opportunities that await us in the future. After traveling to many wonderful places in the world, I truly believe that we live in one of the best places anywhere with a system, that no matter how imperfect, beats the pants off the alternatives, - and it all started in Philadelphia.
Happy Birthday Everyone - Hope We all share lots more of these.
Thursday, July 3, 2008
- No one buys a home that they don't see
- No one Sees a home their agent doesn't show them.
In a market where there are many properties with bonuses from$500 to $5,000 we wanted a way to make well priced listings stand out, like the shiny penny in a pocketful of change. At the same time we were sensitive to the expenses incurred by the seller in this market
We decided that we would try this marketing program to see how the property marketing was impacted. What we found out, during the first 50 sales of properties in the program was that 21K properties sold faster then competiting properties.
After completing the first round of 21K properties and having our breakfast veent, where a selling agent was awarded a $21,000 check for participating, and reviewing the feedback from agents with other companies who do not have such an innovative program, we've decided to continue the program.
For information on whether your property might be elgiible to participate in the 21K program, and more details on the program go to http://www.c21ag.com/ and contact one of our agents.
Wednesday, July 2, 2008
Tuesday, July 1, 2008
Neutralizing home odors is an important part of preparing a home for sale but it's not always so easy. Every home has a unique odor that's ground into carpets, walls, fabrics. Cooking at home plays a big role, too. And people being who we are, we become accustomed to those smells because we are exposed to them every day, but a potential buyer who walks into our home msy hsve s different tske on those odors!
Remember, just because a home is listed for sale doesn't mean that the kitchen is off-limits. You still need to live and using that kitchen may generate smells that are attractive to you , but to an outsider, not so much!
This 2-minute video from About.com offers a bunch of smell-related kitchen tips, including:
- Removing "the fish smell"
- Fighting the aroma from deep-fried foods
- Getting stubborn smells from hands
When your home for sale, the last thing you want buyers paying attention to is your dinner from the night before. Watch the video, read the transcript, and cook fear-free in your own home -- listed for sale or just planning on company.