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!

Foreclosure-tracker RealtyTrac reports that the number of foreclosures nationwide rose 7 percent on a month-to-month basis last month.

However, 3 states dominated the foreclosure list, tallying more foreclosures between them than the rest of the country combined.

• California : 30.0 percent
• Florida : 15.7 percent
• Arizona : 5.4 percent

On a per-household basis, the states ranked 2, 3 and 4. Only Nevada’s foreclosure rate was higher.

Now, we point out these statistics for two reasons.

The first is to remind you that foreclosures can be highly local.  For all of the foreclosure-related stories that run in the papers and on TV, defaults make a much larger impact on home values in some areas versus others. In Pennsylvania for example, there are only 1 foreclosure for every 1030 housing units as opposed to New Jersey where there is one foreclosure for every 541 housing units, or the national average of one foreclosure for every 355 household units.

And, second — foreclosures can represent a terrific buying opportunity.  Not every foreclosed home is in pristine condition, but there is a plethora of affordable housing out there, suitable for first-time buyer, move-up buyers and investors, too. By buying a home after the foreclosure sale, all liens and encumbrances are removed, and the buyer will have title as clear and pristine as in any other type of sale. Title Insurance is still needed for the buyer’s protection, but is normally provided at settlement.

Furthermore, as banks get better at disposing of foreclosed homes, the process of buying one isn’t as challenging as it was, say, 12 months ago.

As part of its research, RealtyTrac.com catalogues a lot of foreclosed homes and lists them online.  However, you may find it better to start your search with a local real estate agent that knows the foreclosure market.

So long as buying foreclosures is a high-touch process — and it is a high-touch process — you may want to have a human face and agent to guide you through it. To search for foreclosure properties , just check the Century 21 Advantage Gold Web site.

The complete RealtyTrac report is available online.

The national home supply is falling, down to its lowest levels since December 2008.

In June, there was 9.4 months of supply, down from a year-ago level of 11.0 months. It’s one more sign that the housing market may be mending itself.

Housing supply is an important metric because home values across every U.S. market are rooted in Supply and Demand. When the supply of available homes outpaces buyer demand, home values tend to fall. And, by contrast, when homes are relatively scarce, values tend to rise.

We’re still a long way from historical averages, but dwindling home inventory may be one reason why the national median sale price rose by $7,000 last month.

A reduction in inventory may also explain why two other popular home value metrics — the government’s Home Price Index and the private-sector’s Case-Shiller Index — are each showing signs of a rebound, too.

However, before we get too excited, it’s important to remember that home sales of late have been spurred by low mortgage rates and by the First-Time Home Buyer Tax Credit. A real estate trade group says first-timers represent 29 percent of the market, for example.

But so long as rates remain low and buyer stimulus is in place, we can expect that the recent trends in real estate will continue. Inventory should continue to drop and prices should start to rise. And in a market like Philadelphia, where our inventory was not as large as some of the hard hit areas around the country, this may be even more significant. It would seem that for most home buyers, especially first time home buyers, now is certainly the time to act.

Therefore, if you’re planning to buy a home in the next 12 months, buying sooner rather than later may be a smart way to save on your next home.

September 11, 2008

Three years to the week after Hurricane Katrina caused $81.2 million in damages, Tropical Storm Gustav is charting a similar Gulf of Mexico path.

Memories of Katrina are making oil traders nervous.  The 2005 storm shut down 30 platforms and 9 refineries.  And, this week, oil prices are up nearly 4 percent on fears that the market, once again, may be disrupted by storm. 

Mortgage rates are edging higher on the news.

The link between oil prices and mortgage rates is not a direct one, but it’s worth paying attention to. 

Rising oil prices strain business and consumer budgets, creating inflationary pressures on the economy.  And at no time was this relationship more evident than in May and June of this year.  As oil prices reached new, all-time highs almost daily, Americans felt the impact each time they opened their wallets — the Cost of Living inflation gauge reached a 17-year high in July 2008.

Inflation is the enemy of mortgage rates so as inflation rises, mortgage rates tend to rise, too. 

And this is one reason why mortgage rates are ticking higher this morning — there is an overriding fear that Gustav will strengthen into a full-fledged Hurricane before making landfall, causing damage to oil refineries and shipping ports around the Gulf of Mexico.

Damage reduces oil supplies and that causes oil prices to rise.  It’s basic supply and demand.

Gustav is expected to make landfall Monday or Tuesday.  If the storm continues on its path, we may see mortgage rates continue to trend higher.  If the storm dissipates, rates should reverse.

There is a lot of conversation in the real estate industry about print advertising being overtaken by on-line alternatives.

There are surveys that show that most buyers start their search for homes on th Internet, and obviously it is better for the consumer to see more photos,in color, with maps and statistics,then it is to read a classified print ad.

When I started in the business, the real estate section of the Sunday paper was thick, bulging with ads and articles about neighborhoods, new construction,mortgages and more. And of course there were just tons of ads- and it was because of that concentration of ads that the real estate section existed. The content that was written was to attract the attention of the newspaper reader that needed information on the housing process.

Over the years, the ads became more expensive,covering smaller areas, and real estate professionals worked to find alternatives to print ads. And as that happened , the real estate section got thinner and thinner.

Even so, the real estate section is such a tradition that one would have thought that its demise lay far in the future. At least I would have thought that before I read this in the LA Times real estate blog.

In case you missed the announcement today in Real Estate, because of reductions in staff and space, the Sunday Real Estate section has printed its final edition.”

With some much information available to the consumer online from photos to maps, to street views, and demographics, people just don;t need to sit with the newspaper to get their information. And as the sources of news expand electronically as well, the competition for the attention of the consumer just became too great.

Obviously, the amount of real estate print advertising was no longer concentrated enough to warrant generating articles for the consumer. The Times will continue their real estate blog which will have the same quality writing that the paper is known for, but this may be the most obvious signpost to date that consumers want to find their real estate information on-line, and the providers of that information will need to be where the readers are if they wish to remain relevant.

Monday, President Bush signed the Housing and Economic Recovery Act of 2008 into law and the press jumped on the obvious storylines:

• First-time home buyers get a $7,500 purchase “credit”
• Conforming loan limits move to $625,000
• Delinquent homeowners get a lifeline from the FHA
• Local governments get federal money for buying and restoring foreclosed homes

However, tucked away on the last few pages of the text, in a section called “Revenue Offsets”, there’s an important tax implication. The new housing law changes the way in which capital gains exclusions are calculated on the sale of a residence.

Under the old system, a taxpayer was entitled up to $250,000/$500,000 of tax-free gains from the sale of a home if filing separately/jointly provided he lived in the residence for at least 2 of the preceding 5 calendar years.

Savvy homeowners exploited this verbiage, moving from home-to-home every 2 years to avoid paying capital gains.

The new law thwarts this tactic.

Capital gains exclusions are now calculated by taking the capital gains on the sale of the home and multiplying it by a ratio of how long a person has lived in a home, by how long that person owned the home.

In the example above, a person living in a home for 2 of 5 years would be entitled to 40 percent of tax-free gains on a home sale instead of all of it. Therefore the impact on home buyers who are not planning on relatively short term moves (under 5 years) will be minimal. Like many other of the bill’s provisions, the lawmakers attempted to direct this bill to relief for the home buyer who is trying to find a place for their family, and not the real estate investor or “flipper”. As always, however, it’s best to talk with a qualified accountant about how tax code changes may impact you personally.

The new capital gains rules go into effect starting January 1, 2009.

As flood waters ran through Iowa and other Midwestern states, the nation’s corn supply was thought to be in danger.

Prices spiked in the wake of the floods, adding to the already-peaking grocery bills that many Americans are now bearing. With shortages of rice, and the unexpected increases in food costs due to transportation expense as gasoline and diesel costs skyrocket, there was concern that a new burden might bed added to the consumer.

But yesterday, in a surprise report, the Agriculture Department said that many farmers had over-planted corn earlier in the season in order to cash in on corn’s rising market value.

The abundance of planting is offsetting a portion of the flood damage and this year’s harvest is now predicted to be the second highest on record.

For Americans in need of a home loan, this is terrific news because more corn supply means lower food prices and that puts a hold on at least one source of inflation.

Inflation is the enemy of mortgage rates, and therefore the housing market.

The revised outlook for this year’s corn supply is now so much better than it was yesterday that the price of a corn bushel fell by 30 cents at the Chicago Board of Trade — the maximum allowable amount by rule.

Now, rapid movements in the price of corn may not seem relevant to everyday life, but even the smallest of details about the economy can trickle down and impact you as a homeowner.

The strength of the housing market may be correlated to consumer confidence and consumer confidence is definitely tied to the Cost of Living.  And the same goes for the mortgage market — it’s all related to inflation. 

With a surprise crop of extra corn, things may look just a little bit better.

Source
Corn Crop Largely Intact, Despite Floods
Scott Kilman
The Wall Street Journal, July 1, 2008