Ralph And Diana Real Estate Blog Spot

10 Common Errors Home Owners Make When Filing Taxes

2012-02-10T13:09:00.001-08:00

10 Common Errors Home Owners Make When Filing Taxes
Don’t rouse the IRS or pay more taxes than necessary — know the score on each home tax deduction and credit. Read

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5 Reasons for a Mortgage Refinance Other Than Lowering Your Payment

2012-01-26T21:24:00.000-08:00

5 Reasons for a Mortgage Refinance Other Than Lowering Your Payment
There’s more to a mortgage refinance than lowering your monthly payments. Read

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Foreclosure Alternative: The Short Sale

2011-07-25T14:36:00.000-07:00

Foreclosure Alternative: The Short Sale
A short sale is far from hassle-free, but it’s a better alternative than foreclosure. And now you’ve got a little help from your friends in D.C. Here are the facts about short sales and how to get started. Read

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7 Mortgage Interest Deduction Myths

2011-05-24T12:20:00.000-07:00

7 Mortgage Interest Deduction Myths
Think losing the mortgage interest deduction would be no big deal? We bust seven myths to show why the cost is bigger than you think. Read

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5 Tips to Prepare Your Home for Sale

2011-05-18T11:31:00.000-07:00

5 Tips to Prepare Your Home for Sale
Working to get your home ship-shape for showings will increase its value and shorten your sales time. Read

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5 Tips for buying a Foreclosure

2010-11-23T00:05:00.000-08:00

5 Tips for Buying a Foreclosure
Get prequalified for a loan and set aside funds, and you’ll be ready to purchase a foreclosed home. Read

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Economic Overview July 30th!

2010-08-06T09:27:00.000-07:00

OVERVIEW ~ July 19 through 23 ~ The Dow Jones Industrial Average (DJIA), like most market indicators, made small gains as investors waited with concern for the first report of results from ”stress tests” for European banks. If an unexpectedly large number of banks were found to be unsafe, the markets would have likely reacted negatively. The results of the tests, however, did little more than affirm what investors already knew. Only a few banks were found to be truly weak, and they had already been named. On Friday, when the announcement was made, the news about the “stress tests” therefore resulted in what many analysts called a “relief rally.” The DJIA rose by 1% on the day, reaching 10424.63, having edged up enough over the week to climb 3.2% over the prior week’s closing figure. The rise was aided by good news from corporate earnings reports, notably with General Electric raising its quarterly dividend by 20%.

FOCUS ~ Mortgage interest rates, meanwhile, continued to edge lower. The 10-year Treasury note held its ground at 2.99%. The Freddie Mac average 30-year mortgage rate shed another basis point, ending the week at 4.56%. And the HSH Associates average of conforming and jumbo rates fell 8 basis points to 4.90%, Extremely attractive financing rates, in other words, became even more enticing during the week.

But low rates may not be motivating buyers to write up offers on residential real estate. While some experts forecast a surge in home sales as a result of the June 30 closing deadline for the home buyer tax credit, the National Association of Realtors ® reported that existing home sales actually fell 5.1% in June, although up 9.8% over June 2009.

Why aren’t lower interest rates bringing more of a boost to real estate purchase activity? There is no easy answer to this question, but a large number of factors can be cited. Many homeowners have refinanced already, and don’t need to refinance again at this level. Others, especially those whose home’s market value has fallen below the existing loan balance, simply cannot engineer a workable refinance. These factors, along with concerns about job stability, are keeping many people from acting on these interest rates. Still, the rates are extraordinary, and those who can will most likely take advantage of them sooner than later if confidence in the economy improves.

Economic Overview!

2010-07-10T00:17:00.000-07:00

The psychology of the economic marketplace, to the extent that it can be measured, shows up in the numbers. Over the course of the week, for example, the Dow Jones Industrial Average (DJIA) fell from 10143.81 at the opening on Monday to 9640.69, presumably on growing concerns about the apparent weakness in the American economy. Until recently, it has generally been agreed that the economy would stumble forward for several months and then, at the beginning of the next year, begin to grow in a sustainable way. By Friday, however, after the release of the June employment figures, the DJIA dropped and most other data edged lower. Even the manufacturing sector, which has been one of the brightest lights in the economy in recent months, showed a weakening with the Institute of Supply Management (ISM) Index dropping from a strong 59.7 in April to 56.2 in May, and a 1.4% fall for May factory orders. In such an environment, interest rates are likely to fall, and indeed the 10-year Treasury note declined from 3.110% to 2.956%.

FOCUS ~ The employment report was treated as if it were a mid-term report card for the economy in our nation. The Thursday report of 472,000 new claims for unemployment insurance worried most investors and then the larger employment report, released Friday, caused analysts to doubt their earlier hopes for recovery and caused the markets to fall significantly.

There were 125,000 jobs lost in June. Analysts had hoped for a furthering of the positive numbers reported in the prior month. We need at least 150,000 new jobs each month to just keep up with the employment needs in our nation. In June, the economy failed even to tread water.

The unemployment rate actually declined from 9.7% to 9.5%, but this was not good news either, because the survey indicated that 652,000 capable workers had simply stopped looking for work, pulling themselves out of the so-called "labor pool." Thus, the unemployment rate declined, not because more people found jobs, but because fewer people are looking for them.

The May employment report apparently lulled investors and analysts into a more optimistic view than it should have, largely because of the many census jobs that increased employment numbers and then swiftly fell away. A survey of American economists had resulted in a median expectation of 110,000 new jobs in June. Thus, the markets reacted strongly to the decline.

If there is any good news to be found in the week, it is the fact that overall mortgage interest rates remain even more attractive than they were before.

2010-06-16T00:43:00.000-07:00

Housing Rebound Dependent Upon Jobs

With the job market in dire straits, household incomes declining and foreclosures dragging down home values, the housing market may take years to recover, according to the annual State of the Nation's Housing report released Monday by Harvard University's Joint Center for Housing Studies.
What's required for a housing rebound now: jobs. The jobless rate is one of the biggest drags on the housing market today, according to the report. And many economists predict unemployment will remain high as discouraged workers head back into the labor force and job gains come slowly. If history is a guide, what happens with jobs will matter the most to the strength of the housing rebound. Jobs keep homeowners out of foreclosure and help others feel confident enough to form households.
Another problem: Affordability issues are still lingering.. According to the report, 40.3 million households spent more than 30% of their income on housing in 2008, and 18.6 million spent more than half of their income, up from 13.8 million in 2001. Real median household incomes are poised to end 2010 lower than they were in 2000, according to the report. The household median income was $49,800 in 2008, down from $52,400 in 2000.
Meanwhile, an estimated one in seven homeowners has a home worth less than they owe on their mortgage, and 5 million need their home price to rebound by 25% before they're again above water.
Despite somewhat of a comeback in home sales and housing starts last year – thanks to improved affordability for first-time buyers and a dose of government intervention – foreclosures continue to hammer homeowners and the neighborhoods in which they live, increasing inventory and depressing prices.

Will Gen Y buy?

Household formation has slowed during this recession, partly because uncertain or jobless workers chose to live with their families or roommates instead of living on their own. But in the future, demographics should start working for the overall housing market's favor, according to the Harvard report.
The echo-boom generation is already larger than the baby boomer generation, and the baby-bust generation born between 1966 and 1985 is nearly as large. Add immigration projections, and household growth should approach 15 million from 2010 to 2020, according to the report.
Still, unemployment might need to fall to 7% or 8%, from almost 10% now, before household formation really begins to pick up, say most experts.
Moreover, there may be a shift in the type of housing that new households seek, with a greater demand for renting over buying a home – especially for young Americans, he said.
Members of Generation Y will want to be able to move for jobs if need be, and many have also had the misfortune to enter the job market during a recession. That's not to say Gen Y won't want to own homes, but it is very possible that they might do so later in their lives than previous generations.

Millions of foreclosed homes

Often the housing market leads economic recoveries, but not this time. We haven't seen a housing boom and bust like we have these past few years. Low interest rates usually spur home buying and renovating, which in turn creates more jobs. In 2010, there are hints of a rebound in remodeling activity. That's partly due to the number of homeowners who decided – or have been forced due to financial reasons – to stay in their current home instead of moving. Some of the increase in remodeling also comes from the pickup in existing home sales and the decline in interest rates, the report said, because people often remodel soon after buying a home, and they may need to borrow to fund the project. But this time around, job creation is needed to stunt foreclosures, which will in turn limit the amount of inventory on the market.
The new variable that we had this time is the high levels of foreclosures, not that we built too many homes. The real inventory problem is these millions of foreclosed homes, which drives down overall prices in the marketplace, helping to kill consumer confidence and making for a sluggish housing recovery.
What remains to be seen is whether owning a home will still be as desirable in the future as it was to previous generations. While there has been a bias toward homeownership in the U.S., this housing crisis has created an awakening that renting is a viable option.

Ralph And Diana Real Estate Blog Spot

10 Common Errors Home Owners Make When Filing Taxes

10 Common Errors Home Owners Make When Filing Taxes

5 Reasons for a Mortgage Refinance Other Than Lowering Your Payment

5 Reasons for a Mortgage Refinance Other Than Lowering Your Payment

Foreclosure Alternative: The Short Sale

Foreclosure Alternative: The Short Sale

7 Mortgage Interest Deduction Myths

7 Mortgage Interest Deduction Myths

5 Tips to Prepare Your Home for Sale

5 Tips to Prepare Your Home for Sale

5 Tips for buying a Foreclosure

5 Tips for Buying a Foreclosure

Economic Overview July 30th!

Economic Overview!