Real Estate Information

I believe investors will pull us out of this housing problem. Investors provide affordable options and can single handedly bring home prices up. In addition to the ideas that Kelly has outlined, Congress should look at relieving capital gains and allow for more deductions. Obviously there are lots of ideas and solutions but allowing investors to go back to 10 properties is a step in the right direction.

Investors are an integral part of the U.S. economy in several ways.  Not just the you and me investors who purchase shares of stock through our 401k’s, or the power house investment banks ( of yore ) that gobble up billions of dollars of mortgage backed securities or U.S. Treasuries.  No. I am talking about Real Estate Investors. They can make a market stand up and get noticed in today’s fast paced world (think about the States of Florida or Arizona going up 20% or more yearly in value with second vacation homes on everyone’s mind that doesn’t live there in the early 2000’s).

Real Estate investors are the harbinger of good times.  When investors start buying, you should be too.  They have done the market research, the due diligence that makes an investment profitable.

So it only stands to reason the best way we can climb out of this real estate funk we are all in is by making money easier to obtain for the investor.  Quickly an investor in my mind is someone purchasing a home or multifamily home that will not be occupying the property.  That simple.  And the Federal National Mortgage Association (FNMA or Fannie Mae) has recently announced that beginning March 1st they will begin accepting applications for investor properties wherein the investor may own 9 other properties with financing on it.  That is BIG news!  Previously, is was 10, but with the mortgage meltdown in 2007 the pendulum swung to a more conservative side and that policy was restricted back to only 3 properties can be financed.  Re-opening the door will allow capitalism reign once more.

One caveat: mortgage cos. (GMAC, Wells Fargo, Chase) have the right to adopt the new rules or not.  We have found them to be very conservative recently due to their pipeline of foreclosures filling up.  While the Government might issue a new ruling, they do have the right to not include that in their underwriting guidelines.  Let’s hope mortgage services are as anxious as we are to kick start our economy and get purchases rolling once more.

To sell or not to sell - Now That IS the question! This might help you decide!

The Washington Post takes a look at the pros (and cons) of leasing out your property in today’s market, rather than selling. The article makes a number of good points about how to find and screen tenants, whether to use a leasing management company, and tax advantages you can gain from an investment property. One thing we’ll take exception to, though, is the idea that you should shelve your plans to sell your existing home and buy something larger (or that otherwise better fits your needs) until prices rise again. For one thing, you can’t know exactly how long it’s going to take for the value of your home to rise above what it was when you purchased it — and why put your life and needs on hold indefinitely? Second, and equally important, is the fact that though you may be selling your existing property for less than what you perceive as its “value” — you’ll also be buying your new home at a far lower value as well — so that when home prices do rise again, your net gains would be higher on the higher-priced home.  The bottom line — do what’s right for you!

If you have interest in leasing out your property, don’t hesitate to contact me.

British actuary Ross Russell and his wife Sally decided to leave behind their hectic London lives and move to the countryside. They wanted to build a home that was a little unconventional, but the local planning council was apparently more traditionally-minded. The end result — an interesting fusion contrived by Russell and a childhood friend who grew up to be a successful architect — is a fairly rustic-looking timber-clad shell that slides all the way back to reveal a modern glass and steel structure completely open to the land and the sky above. (The sliding shell, by the way, does have skylights cut out.) We always talk about “bringing the outdoors in,” but a wall of French doors just can’t compete with this. Read the whole story here.

Understanding housing tax credits.  It’s that time of year again - tax season.  Here is a useful article that breaks down the details of the housing tax credits .  Please feel free to call me at 845-598-5083 or email me with any further questions.

From The IRS : The First-Time Homebuyer Credit Form

As part of the American Recovery and Reinvestment Act of 2009, the IRS has officially released Form 5405 -- better known as the First-Time Homebuyer Credit Form.

True to tax code standards, the 10-field form is accompanied by 3 pages of instructions.

Form 5405 is a helpful, go-to resource for home buyers with questions about the tax credit.

For example, the form distinguishes tax consequences for homes bought in 2008 versus 2009, and clearly defines the term "first-time home buyer".

In addition, Form 5405 highlights the math behind the tax credit.  In general, the First-Time Homebuyer Credit is equal to the lesser of:

• $8,000 for homes bought in 2009
• 10 percent of the home's purchase price

Married couples filing separately are entitled to half of the expected credit, and homes sold within 3 years are subject to a credit repayment in the year the home ceases to be the "main home".

Form 5405 is a comprehensive reference.  However, be sure to check with your accountant for specific questions about your personal returns and how the First-Time Homebuyer Credit may impact your finances.  There is no substitute for professional, paid advice.

When the White House first introduced the Making Home Affordable program in February, it was positioned as a mortgage program with two goals:

1. To help financially-needy homeowners get mortgage relief
2. To help homeowners who've lose equity qualify for today's low rates

Wednesday, in a much-anticipated announcement, the U.S. Treasury introduced new details about Making Home Affordable. 

It also created an "Am I Eligible For Making Home Affordable" form on its website.

In the press release, the Treasury detailed the President's original blueprint.  Namely, it provided explicit loan modification instructions that will assist up to 4 million delinquent homeowners and their respective mortgage servicers.  

The modification guidelines are a thorough 17 pages long and leave little question about the loan modification process, and how it must be carried out.

But for as much ink committed to helping delinquent homeowners, the Treasury gave surprisingly little guidance to the estimated 5 million homeowners for whom deteriorating home equity has rendered refinancing impossible. 

For these Americans, the Treasury instead offers a basic Q&A and directs homeowners to call Fannie Mae and/or Freddie Mac to confirm their eligibility. The "refinance plan", in summary, says that a homeowner who has paid his mortgage as agreed and whose home value is "about the same or less" as the amount owed on his first mortgage may be eligible.

That's about as much as the Treasury could say.

If after browsing the website, you still have questions about the Making Home Affordable program, call your mortgage lender with specific questions.

Homes Listed For Sale Plummet Across 96% Of Major U.S. Markets

If you asked an economist why home prices have broadly fallen over the past 2 years, you'd get a short lesson in Supply and Demand.

Too many homes for sale and not enough people to buy them pushed values lower until a balance point can be reached. Looking at the chart at right, that balance point may be fast approaching.

According to data compiled by ZipRealty, the total number of homes listed for sale fell in February 2009 in 23 of 24 major housing markets. 

This is an especially important data point because home inventories typically rise in February, ahead of the Spring Home-Shopping Season. 

Since 1982, February home inventory has been up 3 percent on average. Last month, it fell.

So, in support of the Supply and Demand Theory, we shouldn't be surprised that the rate of price decline as shown by the Case-Shiller Home Price Index is easing in a lot of markets, too.

We may not have reached the housing market bottom yet, but if we haven't, the data shows us we're likely very close.

Source
Home Listings for February Stayed Steady 

The Wall Street Journal, March 5, 2009
http://online.wsj.com/article/SB123620588396833321.html

There are many different rationales for implementing Daylight Savings Time or Summer Time. Here is a fun way to find out the how's, why's and learn more about this sometimes controversial, shift in our daily routine.