New Mobile Search of the MLS

I'm excited to announce that our company has partnered with Smarter Agent, the nation’s leader in mobile real estate technology, to provide mobile search capability to ALL of our clients! 

CENTURY 21 advantage Gold's custom mobile App allows consumers to search homes for sale anytime, anywhere - right from their cell phone! The App works on standard cell phones and smartphones across all mobile carriers. The public can download the app to their phone to view all homes for sale in Southeast Pennsylvania, South Jersye and Delaware - the region covered by Trend MLS. 

Now consumers will have easier access to property information no matter where they are or what they're doing, including rentals, and properties sorted by location using the GPS features of your phone. Whether driving, or walking around looking at properties, consumers have access to all of the MLS information on the homes for sale around you, with just one touch of a button on your cell phone.   Hit “Call to See” and you will be put right in touch with our call center where you can get even more information to assist you in your home search.

The App is free and easy to obtain.  Just text C21AG to 87778, and the application will be sent to your phone by text message.  Just click on it and the application downloads right away.

With all of us relying on our phones more and more for valuable information, I know our consumers will love this great new way to look for homes.  So don’t delay – start searching for your dream home TODAY!

More Silly Toys

I really enjoy sharing silly videos - and with the holidays upon us, toys are right at the top of my mind - so here's another toy that belies the idea that children had complex toys 50 years ago... My favorite part - the look on the boy's face!

A Few Fathers I wanted to Thank

Its not a big holiday - there are no religous or historical overtones, and it was always a little embarassing for me after my son became a man but today , for some reason, without plan or deep thought, I wanted to take a minute to highlight a couple of fathers for their impact on my life.

 Meet Isadore Lublin, my dad's father who left Russia at the start of the last century to escape the pogroms that victimized his people and his family. He never spoke about his experiences there, but found a new start in this country, where his three sons ( my dad, my Uncle Paul, and my Uncle Harry) grew strong and capable starting businesses and families of their own. He passed away when I was only 7 , but the memories of him persist to this day as a kind and warm man whose family was all important to him.

This is David Krasno, my mother's father. David came to the U.S. as a master watch mechanic in the early 19th century, and after living in New york where he met his wife, moved to a small town in Pennsylvania where he started a jewelry business, and raised 3 girls, all of whom attended college and became successful in their chosen fields, my Aunt Ruth, my Mom, my Aunt Bette. And all of this at a time when women were not as liberated as they are today. From him I learned that life can be a long and curvy road, but the line to your family should always be a direct one.

 This is my father, George Lublin. Born in Philadelphia, he suffered from Polio as a child, though he persevered through and became a physically strong young man after being a sickly child. The oldest of three sons, he left high school during the depression so that he could work and help the family through the tough time. During World War II, physically limited by his encounter with polio, he worked in the Brooklyn Navy Yard, where he built ships and endured antisemitism while his younger brothers went to war . 

After the war he began a career as an insurance agent, building a business and a family with my mom, enduring the loss of a child between the births of my sister and myself. And in the midst of life, he endured another blow when in 1961, he was left a widower with an 11 year old son and a 17 year old daughter. He changed careers in the late 1960's to real estate at the urging of his brother Paul, and worked at the same company for the remaining 8 years of his life, until he struggled against lung cancer to the inevitable end.

It is impossible to tell you what I learned from my dad. I don't know if I can attribute my bizarre sense of humor to him, but I'm pretty sure I can attribute my love of books and art to him since I was surrounded by both growing up. I know that I learned a lot about dealing with people and facing adversity from him and he is still the standard for me. I know that he is a presence in my life and that I still miss him even today. I know that while he was a fallible individual as we all are but to me he was a great dad - and I know that he did the best he could with what life gave him to work with.

This picture is a pretty special one to me. Its the only picture I own that shows my dad with my son. My son Hal was born on January 9, 1997. My dad George died on August 11, 1977. They had very little time together, and Hal obviously can't remember his grandfather, but my dad knew my son and loved him very much. I still remember taking Hal to the Fox Chase Cancer Center, where my father could join Hal for an impromptu "picnic" on the grass outside his room - a point of happiness in a difficult time.

And of course, here's  the reason I get to participate in father's day - my son Hal. No reason for adding this picture here except I really like it. And no son could ever be more super than mine to me :-)

Just a quick jump to a new limb of the family tree - Here is my son's Father-In-Law, Ernest Kelley. (along with Sheila  and the lovely Janet Kelley - Hal's Mother-In-Law) . Ernest is a Father who deserves to be mentioned with the guys I'm assembling here. He and Janet are exceptional people who were an absolute bonus to a great daughter-in-law. But in our conversations on many long walks, Ernest has shown me that even though we come from different backgrounds, we meet on the values that make a parent - and a man. (Though I would be remiss if I didn't point out that he ,llike Hal and me married wayyyy over his head!)

And this picture is just one of my favorites. Though I miss my lovely wife, I still have my kids - Hal and Jennifer - and through them the circle of life (thanks Disney) continues - and like every Father everywhere today - they are the greatest gift anyone could ever have.  I hope your gifts are just as great!

Relocate America's Top 100 Places To Live (2010 Edition)

Relocate America recently released its 2010 list of Top 100 Places To Live In America. The rankings are topped by some cities you may expect, and some you may not.
According to Relocate America, the rankings highlight communities "moving in the right direction", defined as having a combination of strong leadership, job opportunities, improving real estate markets, recreational options and a good quality of life.
It's not a bad formula and topping the list of Top 100 Places To Live In America is Huntsville, Alabama.  Huntsville was chosen for its low levels of unemployment, stable housing stock, and low cost of living.  Last year, Huntsville placed fifth on the Relocate America list.
The Top 10 cities in which to live, as selected by Relocate America are:

1. Huntsville, AL
2. Washington, DC
3. Austin, TX
4. San Diego, CA
5. San Antonio, TX
6. Tulsa, OK
7. Charlotte, NC
8. Raleigh, NC
9. Boulder, CO
10. Minneapolis, MN

View the complete Top 100 Places To Live In America 2010 list at the Relocate America website.

Your Microwave Wastes $70 Per Year And Other Vampire Energy Facts

Even when they're not "on", a multitude of everyday home appliances continue to draw power from the grid, raising home energy bills and increasing atmospheric emissions. These so-called "Energy Vampires" cost U.S. homeowners $4 billion, collectively, in 2005.
In 2010, that figure is likely higher.
In the video above, some of the more common Energy Vampires are highlighted. As an example of how costly standby power can be, researchers show that idle microwave ovens consume enough energy each day to pop an entire bag of microwave popcorn. Annually, the kind of energy consumption wastes close to $70 per household.
Other household Energy Vampires include:

• Idle battery chargers
• Computers in "standby" mode
• Remote control sensors

Simply being aware of home energy-suckers is one easy way to reduce your electricity bill and do something good for the environment. The video shows you how you can both.

Markets Ignore The April Jobs Report And It's Good News For Mortgage Rates

On the first Friday of every month, the U.S. government releases its Non-Farm Payrolls report.
More commonly called "the jobs report", Non-Farm Payrolls is a major market mover. The number of working Americans is directly tied to the health of the economy which, in turn, drives the stock and bond markets.
In general, when jobs numbers improve, it's good for stocks and bad for mortgage bonds. It follows, therefore, that conforming mortgage rates in New Jersey rise because rates always move opposite of mortgage bond prices.
Conversely, when jobs numbers worsen, it tends to be bad for stocks and good for mortgage bonds.  Mortgage rates fall.
Today, markets are behaving a bit differently.
Despite 290,000 jobs created in April 2010 -- nearly twice the expected amount -- and a 40 percent upward revision of March's numbers, mortgage rates are essentially unchanged.
In a normal environment, rates would be higher.  Today is not normal.
Today is a departure because, for all of the jobs report's import to Wall Street, it's less important to markets than what's happening in Greece right now.
Greece is struggling to meet its debt obligations and its citizens are rioting.
Until a debt solution for Greece is made that sticks, unrest in the region will drive safe haven buying both domestically and abroad. U.S. mortgage bonds will gain on that movement because mortgage bonds are "safe", and mortgage rates will fall.
Indeed, this is exactly what's been happening since the start of April. Mortgage markets have been rallying for 5 weeks.
So, Friday's jobs news is terrific for the economy and mortgage rates should be rising because of it.  But, they're not. Consider taking advantage -- lock in a rate.

March Pending Home Sales Point To Stronger Spring Market

The Pending Home Sales Index moved higher in March as home sales were spurred by low mortgage rates and an expiring tax credit.

A "pending home" is a property that is under contract to sell, but not yet closed.
March marks the second straight month in which the Pending Home Sales Index improved after a series of weak showings this past winter.
March showed a 5 percent increase over the month, but the Pending Home Sales Index is still off its October 2009's peak.  October 2009 is a comparable period to March 2010 in that it marked the 1-month deadline before the home buyer tax credit's initial expiration date. The credit was later extended to April 2010, of course.
That said, March's surge in sales is being felt on the street.
Home buyers in Philadelphia no doubt noticed the change in activity. Both locally in our company and around the country, anecdotally, multiple offer situations were more common last month and "right-priced" homes tended to go under contract quickly.

The increase in March's Pending Home Sales is diminishing the nation's home supply which, in turn, should cause prices to rise in most markets -- including Philadelphia and surrounding counties including New Jersey.

Today's buyers should consider making an offer sooner rather than later.  We will probably see the trend continue as activity in the month on April as measured by our firm was even higher than in March, but for an  offical number, we'll  have to wait until next month. But looking at the data, it appears the best time to have found a "deal" on a home may have been in February, when snow kept many homebuyers off the streets, giving the hardy souls who braved the weather a competitive edge.

What Happens After the Tax Credit is gone?

Image by reeltor99 via Flickr

With less than a week to go before the tax credit is over, I've been thinking about what the real estate market in Philadelphia will look like for the rest of the year. I was thinking specifically about the real estate market here, because real estate is too local for me to have a sense of what the national scene will look like in May and after.

The tax credit has certainly sped up the market so far this year. All of our offices have outpaced their production for the same period last year (when we were ranked as the number Century 21 company in our area, and number 3 for the state), so its obvious that the tax credit has had some impact. The question is whether is has driven the market or enhanced the market, and my opinion leans towards enhancement. Investors seem to have re-entered our market, and that (to me) is a sing that they percieve value in our real estate. Though activity is speeding up as we near the deadline, my sense is that the market will slow but not stall after the tax credit, because all of the basic reasons to buy a home are in place.

1. Prices are stable and gaining ground. According to Trend MLS, in the first qiarter of this year, closed transactions were up almost 10% (9.6% actually) and the average sale price actually increased over the same period in 2009.
2. Interest rates remain historically low - I don't think I really have to explain this one. Articles speak about rates going up from 5 to 6% as if that were a lot. People wouldn't be happy unless the bank paid them, but frankly, anything under 9% has always been really indicative of inexpensive money.
3. The financial benefits of home ownership are undeniable in the current market. In a recent article, the New York Times once again published its rent vs. buying calculator, and in our market, with no appreciation and no rental increases, a home buyer still makes out better after only 5 years of home ownership - and any prudent landlord would certainly increase the rent at least a few percent over 5 years!

With all of that going for us, it would seem that we have reason to believe that there will be reasonable activity for the rest of the spring market. Certainly if more jobs are created, and we avoid any major economic body blows, it would seem that we might be headed towards the recovery we have heard so much about.

Home Resales Boom Into The End Of The Tax Credit; Home Values Seen Rising.

Existing Home Sales rose in March, as expected. U.S. home buyers closed on 7 percent more homes as compared to February.

Furthermore, versus March 2009 -- a month many people equate to the low point of the U.S. economy -- sales volume was up 16 percent.

"Existing home sale" is the technical term for a home resale; a home previously inhabited by a person. It's the opposite of a "new home sale" which is a sale of a newly-constructed home.

Existing Homes Data is tracked by the National Association of Realtors® and a closer look at the March data reveals some other interesting notes:

1. Year-over-year sales are higher for the 9th straight month
2. Real estate investors represented 19 percent of all homes purchased
3. First-time home buyers account for 44 percent of all buyers

Also worth noting is that the supply of available homes is down on a broader basis. At the current rate of sales, the existing home inventory will be exhausted in 8 months.

Despite banks releasing foreclosures and REO into the Palmyra market, that's still one half-month less from February.

When supplies drops, home prices tend to rise. It suggests an underlying strength in housing that should support home prices through the next few months -- especially as the home buyer tax credit finishes working its way through the system.

That said, real estate markets are local. You shouldn't assume that what's happening on the national level is also happening here at home. Be sure to check with your real estate agent about local market conditions before making a decision to buy or sell.

CNNMoney.com Predicts The Best And Worst Real Estate Markets For 2010

CNNMoney.com recently published its 2010 forecast and projections for home prices in the country's largest metro markets.

Listed as "Top 25" and also comprehensively by state, CNNMoney.com's home price forecasts puts Santa Rosa, California at the top of 2010's home appreciation list and Hanford, California at its bottom.

The 10 cities projected for highest home appreciation in 2010 are:

1. Santa Rosa, CA : +6.0%
2. Cheyenne, WY : +4.7%
3. Kennewick, WA : +4.6%
4. Merced, CA : +4.4%
5. Bremerton, WA : +4.2%
6. Fairbanks, AK : +4.2%
7. Corvallis, OR : +4.1%
8. Tacoma, WA : +3.9%
9. Anchorage, AK : +3.8%
10. Bend, OR : +3.3%

The Pacific Northwest is the region most heavily-represented among price gainers. The Southeast and Middle Atlantic are most represented on the under-perform list.

However, just because a city's homes are expected to appreciate (or depreciate) in 2010, that doesn't mean that every home within its limits will follow suit. Real estate cannot be grouped on a city level like CNNMoney.com tries to. There will always be areas in demand within city limits in which prices rise, just as there will be out-of-demand areas in which prices fall.

Real estate data can't be grouped by city or even by ZIP code, really.

Real estate in Mount Holly is more local than that.

When we say "real estate is local", it means that every street in every town has a distinct set of traits that drives its home values. Homes that are one block closer to the train; or, homes that are facing north; or, homes that are made of brick. Each of these characteristics can affect a home's desirability which, in turn, can affects its sales price.

National surveys can't capture "essence" like this. They only report on the aggregate.

For local real estate data, look to established, publicly available websites and to active, local real estate agents. Both will have data and insight that can help you. National surveys often make for good headlines, but do little to help homebuyers find good value.

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• America's most overvalued cities (money.cnn.com)

The Best And Worst Cities For Commuters (2010 Edition)

According to the Census Bureau, 2.8 million people commute to work 90 minutes or more each day, in each direction.

Now, your daily commute may not be as long, but time spent in cars, trains and buses is time away from work and from family. Drive-time can affect a person's Quality of Life and it's one reason why Forbes Magazine's Best and Worst Commutes is worth reviewing.

Measuring travel time, road congestion and travel delays in the 60 largest metropolitan areas, Forbes ranks city commutes from best-to-worst with Salt Lake City topping the list and Tampa-St. Petersburg finishing it.

The Top 5 Commutes, as compiled by Forbes:

1. Salt Lake City, Utah
2. Buffalo-Niagara Falls, New York
3. Rochester, New York
4. Milwaukee-Waukesha-West Allis, Wisconsin
5. Albany-Schenectady-Troy, New York

The bottom 5 are Tampa-St. Petersburg, Detroit, Atlanta, Orlando, and Dallas-Forth Worth.

Long commutes shouldn't deter you from moving to a particular city, but the potential commute should be consideration. Before making an offer on your next home, make a rush-hour commute to work from your potential new neighborhood. Then imagine doing it every day.

You can read the complete Forbes list of Best and Worst Cities for Commuters on its website.

Mortgage Approvals Are Getting More And More Scarce

The economy's improving but lending standards are not. Nationally, banks are making mortgage approvals harder to come by.

Underwriting guidelines are tightening.

The data comes from the Federal Reserve's quarterly survey to its member banks. The Fed asks senior bank loan officers around the country to report on "prime" residential mortgage guidelines over the most recent 3 months and whether they've tightened.

For the period October-December 2009:

• Roughly 1 in 4 banks said guidelines tightened
• Roughly 3 in 4 banks said guidelines were "basically unchanged"

Just 2 of 53 banks said its guidelines had loosened.

Combine the Fed's survey with recent underwriting updates from the FHA and generally tougher standards for conventional loans and it's clear that lenders are much more cautious about their loans than they were, say, in 2007.

Today's Philadelphia home buyers and would-be refinancers face a bevy of new borrowing hurdles including:

• Higher minimum FICO scores
• Larger downpayment requirements for purchases
• Larger equity positions for refinances
• Lower debt-to-income ratios

So, if you're on the fence about whether now is a good time to buy a home, or make that refi, consider acting sooner rather than later. It doesn't necessarily matter that mortgage rates are low, or that there's an up-to-$8,000 home purchase tax credit for households that qualify. With each passing quarter, fewer and fewer applicants are eligible to take advantage.

New 2010 FHA Guidelines Give Buyers Reasons to Act NOW!

Securing an FHA mortgage in Pennsylvania and New Jersey is about to get more expensive.

In a statement issued last Wednesday, the Federal Housing Authority outlined policy changes to its mortgage assistance program. The shift is meant to both reduce the government group's portfolio risk while strengthening its overall financials.

For consumers, the changes mean higher costs.

As listed in the official announcement, there are 3 major guideline updates for the FHA:

1. Upfront mortgage insurance premiums are increasing to 2.25% from 1.75%



2. Minimum downpayments for applicants with sub-580 FICOs are rising to 10 percent



3. Seller concessions are being limited to 3%, down from today's allowable 6%

Furthermore, the FHA has appealed to Congress to raise an FHA borrowers' monthly mortgage insurance premiums.

To read the FHA's statement, it's clear what the group is trying to balance. On one side, the FHA wants to provide affordable financing to families that need it. That's its mission statement. On the other side, though, the FHA must manage the risk that comes with insuring lesser-quality loans.

To that end, the FHA is stepping up its enforcement of "bad lenders" in hopes of stopping problems where they start.

Also in its new policies, the FHA is introducing a "termination clause". If banks or loan officers that produce more than their fair share of bad loans, they lose their right to originate FHA mortgages.

As a result, homebuyers in Philadelphia and surrounding areas should expect tougher FHA underwriting in 2010. Not because the FHA says so, necessarily, but because banks don't want to do "bad loans". Lenders are incented to turn down at-risk applicants and, already, we're seeing examples of this. Despite FHA allowing 580 FICOs and lower, many banks have made 620 their minimum.

Some have other guideline overlays, too.

Even with these changes, the issues surrounding conventional loans made by lenders who are risk adverse and being scrutinized by federal regulators make FHA loans a pretty good alternative. Since the FHA's new guidelines don't go into effect until spring buyers have another reason to act quickly duting the next few months. First there was the tax credit program which ends April 30, 2010. Add to that the fact that between now and the spring, the old guidelines will apply. Therefore, if you know you're going to buy a home to take advantage of the tax credit, and you think you may need an FHA home loan in the next few months, consider moving up your time-frame.

If nothing else, you'll save some money at closing.

RealtyTrac's 2009 Foreclosure Report Gives Reason For Optimism

Like real estate, it appears that foreclosure activity is a local phenomenon, too.

As reported by RealtyTrac.com, more than half of all foreclosure-related activity in 2009 came from just 4 states:

1. California
2. Florida
3. Arizona
4. Illinois

More than 1.4 million filings made in 2009 are attributed to the above states. Furthermore, each ranks in the Top 10 for 2009 Foreclosures Per Capita.

The other states are Nevada, Utah, Georgia, Idaho, Michigan and Colorado.

Versus 2008, foreclosures are up 21 percent nationwide and that's a big number, but a deeper look at RealtyTrac's annual reports reveals a more positive undertone on the housing market.

1. 40 states fell below the national Foreclosures Per Capita average in 2009
2. Foreclosure activity fell on an annual basis in 10 states as compared to 2008

Foreclosures are still prevalent, though, and buying homes in foreclosure in Philadelphia continues to be big business. Having been active in selling foreclosures for over 22 years, our firm sees this activity on a day to day basis in the inquiries from the Lender's web sites sending buyers to us. First-time buyers, move-up buyers, and real estate investors each are bidding aggressively.

Distressed homes account for one-third of home resale activity, according to an industry trade group.

That said, buying foreclosures can be tricky.

First, properties are often sold "as-is" and the cost of repairs may unwind the home's status as a "value buy". Furthermore, a lender may require specific fixes to be made prior to closing and that, too, costs money.

Second, buying a foreclosed home in Pennsylvania isn't as streamlined as buying a "normal" home. Closing on a foreclosure can be a longer process if the sherriff deed is not yet recorded, though many foreclosures can settle much faster. But you need to know the time frame since a 4-month time-frame may not fit your schedule.

And, third, finding foreclosures can be difficult. Despite the growth in foreclosure search engines, it still takes a good real estate agent to uncover the best homes at the best prices. Luckily, being such a vendor, we can make it a little easier. You should still concentrate on finding the best house for you, even if its not a foreclosure.

Read the complete foreclosure report and take a peek at RealtyTrac's foreclosure heat maps. If you like what you see, talk to your real estate agent about what to do next.

There's still good deals in the foreclosure market -- you just have to know where to find them

Retail Sales Dropped In December And Now So Are Mortgage Rates

Mortgage rates are dropping this morning on weaker-than-expected Retail Sales data from December. Lower rates means more bang for your home-buying buck.

Excluding motor vehicles and parts, December's "ex-auto" sales receipts were down roughly $500 million from November. Analysts had expected receipts to grow.

The relevance of Retail Sales to home affordability isn't obvious, but it's definitely logical.

Retail Sales is directly related to consumer spending and consumer spending accounts for the majority of the U.S. economy. When consumer spending slows, the economy often does, too. It leads investors to seek out "safe" investments.

It's the reason why stock markets often drop on weak economic data -- stocks are among the riskiest investment classes available.

Conversely, the best place to find safety is in the market of government-backed bonds. This world includes products like U.S. Treasuries and many of the mortgage-backed bonds that help set mortgage rates for people in Philadelphia. Weak economic data puts mortgage bonds in demand.

For rate shopper, this is good news. More demand for mortgage bonds causes mortgage rates to fall. Mortgage rates are lower this morning because Wall Street is shedding some risk.

December's Retail Sales report closes out a year of generally-weak data. 2009 marks just the second time that Retail Sales fell year-over-year since the government started tracking it 40 years ago. The other year was 2008.

For home buyers in Philadelphia and around the country, though, today may represent an opportune time to lock a mortgage rate. Housing data is still improving and other economic indicators are showing strength. Soon, Wall Street will shift from a "safe" mentality and move toward risk.

When it does, mortgage rates will rise.

10 Cities For Home Bargains

As the housing market improves across the country, certain cities are emerging as relative bargains. Some areas, like Miami, were hit hard by the recession, and other areas are buoyed by good school systems and strong labor markets.

In this 5-minute video from The Today Show, 10 cities are highlighted for their home prices. And they're not "small towns", either.

Among the featured cities:

• Miami, Florida
• Akron, Ohio
• Tuscon, Arizona
• Minneapolis, Minnesota
• Trenton, New Jersey

Now, this piece is about finding gems on a national scale. They exist locally here in Philadelphia , too. In fact with our traditionally moderate prices combined with the Tax credit, the market place is ripe for buyers. You just need to know what to look for.

With mortgage rates low and tax credits available, it's not likely that bargains will last.

Looking At The 2010 Predictions For Housing Markets And Mortgage Rates

2010 is just a few days old and already the "experts" are making predictions for the year.

Housing calls and mortgage rate predictions run the gamut:

• Home prices will fall in 2010
• Home prices will rise in 2010
• Mortgage rates will rise in 2010
• Mortgage rates will rise by a lot in 2010

Given how varied their outlooks, it's clear that the professionals have no better view of the future than the amateurs. An expert can make an educated guess, but it's a guess nonetheless.

Last year, Wall Streeters predicted a 25% pullback in home prices. 12 months later, we know prices didn't fall. Wall Street also predicted higher mortgage rates for 2009. That prediction was fulfilled.

In a recent article in Real Estate Trends, it was predicted that the Philadelphia market would appreciate at a rate that would make it one of the top 20 markets in the country. And based on the early activity this year, demand for our moderate priced housing may well lead to increased prices.

There's a lot of talk on CNBC and elsewhere about what's coming in 2010. Before you take those predictions to the bank, just remember that analysts do a much better job interpreting data from the past than projecting it into the future.

The only thing that's certain right now is that mortgage rates are historically low, the government is giving tax credits to qualified buyers, and there's a lot of good "deals" in housing. Make the most of what's out there today because it will take 12 months for us to look back and know which predictions were right and which were wrong.

Until then, predictions are just opinions and guesses.

Happy New Decade - A 7 Minute review

The end of 2009 is also the end of the first decade of the century - and that makes it a good time to get some perspective on the last 10 years.

This video, courtesy of our friends at Newsweek that gives you a quick overview of the decade - it might surprise you to realize that even something as ubiquitous as the Ipod is less than 10 years old.. seems like those white earbuds have been around forever doesn't it?

Anyway, here's best wishes from our family to yours,for a better decade ahead!

A Simple Explanation of the Last Federal Reserve Statement

Image via Wikipedia

The Federal Open Market Committee voted last week to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that the U.S. economy "has continued to pick up", that the jobs markets is getting better, and that housing market has shown "some signs of improvement" lately.

It's the fourth straight statement in which the Fed speaks optimistically about the U.S. economy -- a signal that the worst of the recession is likely behind us. Which doesn't mean that things are better, just that they are getting better.

Just as there was speculation about the end of the last "boom" before the impact of that end was felt, there is always a lot of conversation about recovery before its impact is completely felt. People who are struggling now may be feeling some relief, but they may continue to struggle for a while longer - though they can do so feeling that things are getting better, and should continue to do so.

The economy isn't without threats, however, and the Fed identified several, including:

1. Tight credit conditions for consumers


2. Businesses are reluctant to hire new workers


3. Lower overall housing wealth

The impact of each is obvious. Without more liquid credit, larger purchases like homes, cars, and business equipment may be stalled (or at least slowed) even though the demand or need for those purchases is growing. Until more people are employed, many families will be more conservative in their spending, delaying some of the benefits of the recovery. And finally, with less equity in their homes, people have a harder time releasing that equity for education, purchases, or opening new businesses. At least in our market area, since our price adjustments have been very moderate in comparison to the national averages, people have not lost as much housing wealth as in other parts of the country.

The message's overall tone remained positive, however and inflation appears to be held in check.

Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent "for an extended period" and to honor its $1.25 trillion commitment to the mortgage bond market. That plan -- due to expire at the end of March 2010 -- should be noted by today's homebuyers. Fed insiders estimate that the program suppressed rates by 1 percent through 2009.

Mortgage market reaction to the Fed press release is negative. Mortgage rates aincreased after the annoucnement.

The FOMC's next scheduled meeting is January 26-27, 2010.

Should I consider a 15 Year Mortgage?

For today's home buyers and homeowners that can manage the higher monthly payments, 15-year fixed rate mortgage rates look attractive as compared to comparable 30-year products.

The 15-year/30-year interest rate spread is near its 5-year high. As a result, the savings afforded by the 15 year mortgage is at its 5 year high also.

Despite lower rates, however, homeowners opting for a 15-year fixed mortgage should be prepared for its higher monthly payments. This is because the principal balance of a 15-year fixed is repaid in half the years as with a standard, 30-year amortizing product.

As compared to 30-year terms, 15-year products repay 3 times as much principal each month. It is this difference which makes the payment so much larger.

Versus a 30-year, 15-year fixed mortgages have a few downsides worth noting. The first is that, because 15-year mortgages are heavy on principal and light on interest, homeowners who itemize tax returns may have to claim a smaller mortgage interest tax deduction at tax time. Balanced against that of course, is the benefit of making much larger principal payments and retiring your debt earlier.

Another negative is that the sheer size of the payment. If you run into fiscal trouble down the road, the only way to reduce the monthly obligation is to refinance into a 30-year product and that costs money to do.

In other words, be sure you can manage the payments over the long-term before you opt for a 15-year term. If you can manage it, though, the rewards are tangible.

At today's rates, a 15-year fixed and 30-year fixed costs $230 extra per $100,000 borrowed.