From the category archives:

Finance

Unemployment rate falls

by Arnie Levine on February 4, 2012

in Finance

The economy added 243,000 jobs in January and the unemployment rate fell to 8.3%, its lowest level since February 2009.

The Labor Department said large gains in professional and business services, leisure and hospitality, and manufacturing jobs drove the gains, which came in well above most analysts’ estimates. The rate in December was 8.5%.

Analysts surveyed by Econoday expected 135,000 new jobs in January with a range of estimates between 110,000 and 189,000.

The unemployment rate is down from 9.1% in August. Private-sector employment rose by 257,000 jobs in January, while government jobs declined by 14,000, the Bureau of Labor Statistics said. For 2011, governments shed 276,000 jobs at the local and state level. 

Service industry jobs continued to climb in January with most of the 44,000 new leisure and hospitality jobs in food and drinking places. The Labor Department said food services added 487,000 jobs since a low in February 2010.

Retail sector employment also rose last month as department stores added 19,000 jobs, health stores added 7,000 and car dealers added 7,000, according to the BLS.

Jobs for nonresidential specialty construction increased by 30,000 the past two months, helping the construction industry add another 21,000 jobs last month on top of a December gain of 31,000.

The federal agency revised gains in nonfarm payrolls for November up to 157,000 from a prior reading of 100,000. The Labor Department slightly increased the December figure to 203,000 from 200,000.

The number of unemployed Americans fell to 12.8 million in January from 13.1 million the prior month, with the long-term unemployed, or those without jobs for 27 weeks or more, flat at 5.5 million, or nearly 43% of the unemployed.

The unemployment rate hit 9.8% in November 2010 and hovered around 9% for most of 2011 before decling the last few months.

How to shop for the best home loan

by Arnie Levine on January 21, 2012

in Finance,Latest News,Real Estate news

Interest rates are the lowest in decades, enticing many borrowers to shop for a loan.  Mortgage lenders adjust their rates based on perceptions of risk, so unless the borrower can show they’re a low-risk individual, the borrower is unlikely to qualify for a rate that matches those seen in recent advertisements and headlines.

The rates quoted are averages drawn from a variety of financial institutions, and lenders use varied approaches to set them.  Consumers who want to try for the lowest rates available need to consider basic factors, such as credit score, points, property type, down payment, and length of the loan.

Credit score: The ideal borrower has a FICO score of 740 or higher, which puts the individual in the best place for pricing.

Points: The lowest rates usually are decreased by paying a fee called a point, or 1 percent of the loan amount.  Borrowers may buy points in order to get the best rates at many banks.  Points might make sense depending on the borrower’s financial situation and how long they expect to stay in the home.

Property type: Borrowers planning to buy a duplex or a four-unit build likely will have a higher interest rate.  Condominiums also may have a rate premium rate, especially if they are newer or the down payment is less than 25 percent.  Lenders also may charge more if the borrower is not planning to live in the home.

Down payment: Borrowers who put down at least 25 percent are more likely to obtain the best interest rates.  Lenders offer different breaks on rates if equity in the property is higher, so borrowers should ask what is available.

Length of loan: Borrowers who are likely to move in a few years may want to look into an adjustable-rate loan with a low interest rate fixed for a few years, and adjusted afterword.

program available for helping all buyers (no first time homebuyer requirement) with their down payment.   Unlike most down payment assistance programs that charge interest or have a recapture tax associated with it, Wells Fargo’s Platinum Loan Program Grant is essentially the same as a gift.  There is no repayment necessary and no early penalties in case you decide to sell or refinance your home.

Some of the other programs are FHA Loans only 3.5% down payment or Fannie Mae foreclosures for 3% down Payment.

Buy a Home for as Little as 1/2% Down Payment. The special Loan Program Grant is available on FHA, VA and USDA Rural loans.  Minimum credit score is 620.   San Diego County Income Limit (tied to borrower not family size) is $89,880.  The 3% Grant can be used for down payment, closing costs, prepaid items and earnest money deposit.

County Properties, 25 years of brokerage experience, trust and a Member of the local Better Business Bureau! We offer free counseling in real estate regarding; home values and information on options of selling vs. Foreclosure.

Click here to get loan informationbefore the rates go up. To get started on viewing homes, condos, investment properties, pre-foreclosures, bank owned foreclosures (REO’s) or thinking of selling your property, please contact me today for free counseling at (619) 540-5811.

New Pro-Property Search. We will setup a customized search for you by our professional REALTOR® Team. Sit back relax and shop at home! We will make changes to your Pro-Property Search any time you like, just let us know. Have fun!

By the way…if you know of someone who would appreciate the level of service in real estate we provide, please call me or have them go to www.CountyProperties.net/ and I’ll be happy to follow up and take great care of them.

U.S. Recovers 33% of Jobs Lost

by Arnie Levine on January 21, 2012

in Finance,Latest News

Recent news on December job creation showed that 200,000 non-farm jobs were added in December 2011.  Including December’s data, the economy is nearly one-third of the way to recovering the 8.8 million jobs that were lost during the recession (we’ve gained 2.7 million and have about 6.1 million more to go).

While the job gain of 200,000 is good news since it’s an improvement over average job creation in the recent period and adds workers collecting paychecks who can then spend money on things like housing, at this rate, it will take another two and a half years or so to get back to the number of payroll jobs on the books before the recession.

Adding in the fact that a hundred thousand jobs or so are needed to keep up with population growth each month a job growth rate of about 200,000 means that it could take more than 5 years to get back to a labor market that feels more normal, with a pre-recession unemployment rate.

Anyone who’s been following the coverage of the Presidential primary campaign may recall that some candidates like to remind voters that in one extraordinary month, September 1983, the US economy under President Reagan created 1.1 million jobs.  How typical is that?  Well, since payroll jobs have been tracked (January 1939) it’s the only instance of more than a million net payroll jobs added in a single month.  There have been 2 other occasions of net payroll job increases of 750,000 or more: March 1946 and August 1952.  There have been 30 months of job creation in excess of 450,000 (not consecutively) including, most recently, May 2010.  This doesn’t mean we couldn’t have a huge addition of jobs, it just shows that they haven’t happened frequently in the past.

Additionally, monthly data is variable; for example, that September 1983 million job creation was preceded by a loss of 300,000 jobs the month before.  What about the best 12 months in a row?  In the best 12 consecutive months since 1939, the US added 5.2 million jobs from August 1940 to July 1941.  The best 12 months in the post-war period were September 1983 to August 1984 when 4.9 million jobs were added.

dyk010912b U.S. Recovers 33% of Jobs Lost

More recently, in the best 12 consecutive months in the last decade the US added 2.9 million payroll jobs, from April 2005 to March 2006.  That works out to a little more than 240,000 jobs added per month.  If the US economy were to grow at that rate instead of the current rate, we’d get back to the previous payroll peak in 2 years instead of 2 and a half years.

Of course neither future trajectory is guaranteed, and in either case, a more normal labor market is still some time off, but just as compound interest can help savings grow over time, relatively small improvements in monthly job growth can help us get back to normal much faster.

County Properties, 25 years of brokerage experience, trust and a Member of the local Better Business Bureau! We offer free counseling in real estate regarding; home values and information on options of selling vs. Foreclosure.

Click here to get loan informationbefore the rates go up. To get started on viewing homes, condos, investment properties, pre-foreclosures, bank owned foreclosures (REO’s) or thinking of selling your property, please contact me today for free counseling at (619) 540-5811.

New Pro-Property Search. We will setup a customized search for you by our professional REALTOR® Team. Sit back relax and shop at home! We will make changes to your Pro-Property Search any time you like, just let us know. Have fun!

By the way…if you know of someone who would appreciate the level of service in real estate we provide, please call me or have them go to www.CountyProperties.net/ and I’ll be happy to follow up and take great care of them.

5 Topics on housing for in 2012

by Arnie Levine on January 7, 2012

in Finance,Latest News,Real Estate news,San Diego Foreclosure news,San Diego Investment Properties,San Diego Real Estate,San Diego Short Sales

Just as in 2011, in 2012 many will be trying to figure out where housing is headed.  While the housing market didn’t worsen in 2011, it also didn’t stabilize either.  This year, the story will be about local markets.  While many housing markets rose and fell together, they’re recovering at difference paces so talking about housing on a national level is not beneficial.

  1. Confidence and jobs: Housing is more affordable than it has been in decades, but many would-be buyers are worried about buying today if prices are going to be lower tomorrow.  Still, others don’t want to buy a house until they have more evidence that they’re not going to get laid off or see their hours cut back.
  2. Foreclosures: Banks and other mortgage investors own around 440,000 foreclosed properties, but there’s another 3.4 million loans in foreclosure or serious delinquency, according to estimates by Barclays Capital.  Because banks are faster to cut prices to unload inventory than are traditional sellers, home values can fall further as the share of distressed sales rises.
  3. Rents: If low mortgage rates aren’t enough to give urgency to would-be buyers, rent hikes could accelerate buyers’ decisions to take the plunge.
  4. Mortgage credit and rates: It’s still hard for many buyers to get approved for a mortgage because banks are demanding lots of documentation of borrowers’ incomes.
  5. Regulation: Many analysts don’t expect Congress to make major changes to Fannie Mae and Freddie Mac during the election year, but several major regulatory changes could significantly reshape the future of the lending landscape in 2012.

Meanwhile, the regulator that oversees Fannie and Freddie is revamping the way that mortgage companies are paid for collecting loan payments.  This could lead to a broader shakeup in the mortgage industry that ultimately influences how much borrowers are charged for mortgages and how banks handle loans that fall into delinquency.

More questions we can help you, at County Properties, 25 years of brokerage experience, trust and a Member of the local Better Business Bureau! Want to know what your home is worth?

If you have equity in your home, we will sell your home and get top dollar in this challenging market with our  Internet Marketing and Sales Program. If you do not have enough equity, and you must sell your property as a short sale we have the expertise to do so also, go to www.ShortSaleRealtors4U.com

New Pro-Property Search. We will setup a customized search for you by our professional REALTOR® Team. Sit back relax and shop at home! We will make changes to your Pro-Property Search any time you like, just let us know. Have fun!

An Inconvenient Truth Fannie Mae and Freddie Mac

by Arnie Levine on January 7, 2012

in Finance,Latest News

As broker of County Properties I thought this was an interesting article that sheds some realty away from the mainstream of properganda and political news on this subject of what went wrong with the housing and market crash.

Article by Joe Nocera
In their heyday, these strange hybrids — part corporation, part government agency — were the biggest bullies in Washington, quick to bludgeon critics who dared suggest that their dual missions of maximizing profits while making homeownership affordable for low- and moderate-income Americans were incompatible. They steamrolled their regulator and pushed back at any suggestion that their capital was inadequate.

For years, they essentially wrote most of the legislation that affected them, which they larded with loopholes. In the mid-2000s, they had giant accounting scandals. Eventually, their quest for profits led them to make a belated, disastrous foray into subprime mortgages, which ended with their collapse, and which has cost taxpayers about $150 billion. Tragically, Fannie and Freddie could have led a housing recovery — if they hadn’t become crippled wards of the state instead.

Yet these real sins have been largely overlooked in favor of imagined ones. Over at the conservative American Enterprise Institute, two resident scholars, Peter Wallison and Edward Pinto, have concocted what has since become a political meme: namely, that Fannie Mae and Freddie Mac were ground zero for the entire crisis, leading the private sector off the cliff with their affordable housing mandates and massive subprime holdings.

The truth is the opposite: Fannie and Freddie got into subprime mortgages, with great trepidation, only in 2005 and 2006, and only because they were losing so much market share to Wall Street. Among other things, the Wallison-Pinto case relies on inflated data — Pinto classifies just about anything that is not a 30-year-fixed mortgage as “subprime.” The reality is that Fannie and Freddie followed the private sector off the cliff instead of the other way around.

Nevertheless, Wallison, who was a member of the Financial Crisis Inquiry Commission — charged with investigating the root causes of the crisis — wrote a 99-page dissent when the F.C.I.C. issued its final report, claiming it was all Fannie and Freddie’s fault. In a column I wrote at the time, I described Wallison’s dissent as a “lonely, loony cri de coeur.” He’s been trying to get me to take it back ever since.

On Friday, the Securities and Exchange Commission waded into the Fannie/Freddie wars by filing a lawsuit against three executives from each company. The complaint charges them with making “materially false” disclosures about the size of the companies’ subprime portfolios.

In unveiling the lawsuit, Robert Khuzami, the agency’s enforcement chief, said that the S.E.C.’s action showed that “all individuals, regardless of their rank or position, will be held accountable.” Not really. What it shows is how desperate the S.E.C. has become to bring a crowd-pleasing case.

The complaint is extraordinarily weak. Taking its cues from the Wallison/Pinto school of inflated data, it claims that Fannie and Freddie failed to reveal to investors the true extent of their subprime portfolios. To make this claim, however, the S.E.C. has included categories of loans, such as so-called Alt-A loans, that may have had a subprime characteristic, such as low documentation, but which were often made to borrowers with high credit scores.

There are no damning internal e-mails in the complaint, with executives contradicting their public statements, and no examples of sleazy insider stock sales. A quick look at Fannie and Freddie financial disclosure statements shows that they clearly laid out the credit characteristics of their mortgage portfolios, even if they didn’t label every non-30-year-fixed loan as subprime. More than a year ago, a federal judge presiding over a shareholder lawsuit against Fannie Mae threw out the allegations surrounding lack of disclosure. Why? Because, he said, the company’s disclosure of its subprime portfolio had been adequate.

There is something else missing from the S.E.C. complaint, which Wallison and Pinto also conveniently ignore: default data. The truth is, for all their mistakes, Fannie and Freddie had some scruples about the nonprime loans they guaranteed or bought — and they have the default numbers to prove it.

For instance, according to David Min, a leading Wallison critic at the Center for American Progress, as of the second quarter of 2010, the delinquency rate on all Fannie and Freddie guaranteed loans was 5.9 percent. By contrast, the national average was 9.11 percent. The Fannie and Freddie Alt-A default rate is similarly much lower than the national default rate. The only possible explanation for this is that many of the loans being characterized by the S.E.C. and Wallison/Pinto as “subprime” are not, in fact, true subprime mortgages.

After the S.E.C. filed its charges on Friday, I received an e-mail from Wallison, suggesting that the complaint proved that he had been right and that I had wronged him. I now concede that he is half-right. Loony though his theory may be, he’s sure not lonely anymore.

unemployment down to 8.5% economy is getting ready

by Arnie Levine on January 7, 2012

in Finance,Latest News

Nonfarm payroll employment rose in December and the nation’s unemployment rate fell to 8.5%, which is the lowest rate in nearly three years.

The Labor Department said the economy added 200,000 jobs last month with modest growth in transportation and warehousing, retail trade, manufacturing, health care and mining.

Analysts surveyed by Econoday expected 150,000 new jobs in December with a range of estimates between 110,000 and 200,000.

Private-sector employment rose by 212,000 last month and government jobs dropped by 12,000. Ryan Sweet, senior economist for Moody’s Analytics, expected 160,000 new nonfarm payroll jobs in December with 175,000 new private-sector jobs.

The Labor Department said 1.6 million new jobs were added to nonfarm payrolls in 2011, while government employment declined by 280,000 over the 12 months. Employment in state and local government has been declining since the second half of 2008.

About one quarter of December’s gains came from new transportation and warehousing jobs, most of which were couriers and messengers. And the Labor Department said seasonal hiring was particularly strong last month.

Construction employment changed little in December, although nonresidential specialty contractors added 20,000 jobs over the month, offsetting losses of the prior two months.

The Labor Department revised gains in nonfarm payrolls for November to 100,000 from 120,000 and to 112,000 from 100,000 previously reported for October.

“Part of the improvement in the labor market may be due to warm weather in much of the country that distorted normal seasonal patterns in some industries, but combined with improvement in other recent indicators, including home sales, this report shows the economy is entering 2012 with some wind at its back,” according to Fannie Mae Chief Economist Doug Duncan.

He also said the encouraging job report “does not change the underlying picture of the recovery as too modest to result in a rapid healing of the housing market.”

The number of unemployed Americans fell to nearly 13.1 million in December from 13.32 million the prior month, with the long-term unemployed, or those without jobs for 27 weeks or more, dropping to 5.59 million from 5.68 million in November.

After climbing to 9.8% in November 2010 the unemployment rate hovered at or near 9% for most of 2011, before dropping to 8.7% in November and falling again the final month of the year.

Earlier this week, Automatic Data Processing Inc. said pivate-sector employment grew by 325,000 jobs in December when compared to the previous month. According to the ADP National Employment report, which is compiled in conjunction with Macroeconomic Advisors, the number of new jobs in November was revised down slightly to 204,000 from 206,000.

If you have equity in your home, we will sell your home and get top dollar in this challenging market, go to County Properties Marketing Homes. If you do not have enough equity, and you must sell your property as a short sale we have the expertise to do so also and close escrow in 45-60 days or less. Learn more about mortgage relief options and how to take advantage of our FREE REALTOR (R)  CONSULTATION for loan modification and or selling .  or go to www.ShortSaleRealtors4U.com

More questions we can help you, at County Properties, 25 years of brokerage experience, trust and a Member of the local Better Business Bureau! Want to know what your home is worth? Click here for a free market evaluation !

By the way…if you know of someone who would appreciate the level of service in real estate we provide, please call me or have them go to www.CountyProperties.net and I’ll be happy to follow up and take great care of them.

___________________________________________________________________________

Commercial real estate may start to “Looking Good!”

by Arnie Levine on January 7, 2012

in Finance,Latest News,San Diego Investment Properties

Investors see commercial real estate as a good bet
Despite the economy, investors are bullish on the prospects for office buildings, the largest commercial real estate sector, a survey finds. Apartments are viewed as the most favored category.

As 2011 came to a close, some commercial real estate experts found promising signs in often troubled markets.

The office market is gaining interest from investors amid a mixed bag of property-related economic fundamentals such as improvement in employment and business expansions, a recent survey showed.

Commercial real estate continues to offer attractive yields compared with alternative investment vehicles, said respondents to a quarterly poll by consulting firm PricewaterhouseCoopers.

“Despite a sluggish U.S. economic outlook, the majority of surveyed investors view commercial real estate as favorably priced and a good play,” said Mitch Roschelle, the U.S. real estate advisory practice leader at PwC, as the firm brands itself.

Investors are bullish on the general prospects for office buildings, the largest commercial real estate sector. They expect to see occupancy stabilizing and rents rising in many markets this year. Most attractive are office districts that have abundant tenants in technology or energy businesses.

Rent growth is expected to be highest in San Francisco, New York and the Pacific Northwest. Los Angeles ranked ninth among 51 markets as a desirable place to invest.

Newer, well-located industrial and retail properties are sought out by investors, but apartments took the crown as the most favored real estate category.

“Investors continue to view the apartment sector as an attractive play in delivering steady cash flows driven by solid rental demand and rising rents,” said Susan Smith, editor in chief of PwC’s survey. “As a result, investors view this sector as a hotbed for further investment activity.”

More questions we can help you, at County Properties, 25 years of brokerage experience, trust and a Member of the local Better Business Bureau! Want to know what your home is worth?

If you have equity in your home, we will sell your home and get top dollar in this challenging market with our  Internet Marketing and Sales Program. If you do not have enough equity, and you must sell your property as a short sale we have the expertise to do so also, go to www.ShortSaleRealtors4U.com

New Pro-Property Search. We will setup a customized search for you by our professional REALTOR® Team. Sit back relax and shop at home! We will make changes to your Pro-Property Search any time you like, just let us know. Have fun!

Back in the black or the green

by Arnie Levine on December 30, 2011

in Finance,Latest News,Real Estate news

More than 2.6 million households are at least 60 days delinquent on their mortgage payments, according to the nonprofit coalition Hope Now. While those who are delinquent 60-120 days can make back payments to help them become current, those who are more than two months behind may need to employ other means to catch up.

Beyond the obvious threat of foreclosure, falling behind on a mortgage can be costly:  Lenders charge late fees as well as legal and administrative costs, and the borrower’s credit score will suffer.  Experts say the sooner a delinquent borrower deals with the situation, the better the chances are of making a full economic recovery.

Borrowers who are determined to stay in their home but cannot immediately make back payments need to start by contacting their lender or a credit counselor to discuss available options.  Among them are devising a repayment plan, modifying the loan, doing a short sale, and adding what is owed back into the mortgage balance.

The first step borrowers should take is to assess their financial situation by looking at the amount of money brought in each month versus what is spent.  Many credit and housing counselors have worksheets on their websites to help with this.

Next, borrowers should collect pay stubs, documentation on other income, two years’ worth of tax returns, two months of saving and checking account statements, and mortgage records.  If the borrower has experienced a hardship, such as a layoff, a divorce, or an illness, they should gather evidence of that, such as unemployment insurance receipts, medical bills, a copy of a doctor’s letter to their employer, or a divorce decree.

Finally, borrowers should talk to their lender, servicer, or an adviser.   The federal Dept. of Housing and Urban Development certifies counseling agencies that provide free advice and assistance, and has a list of them on its website.  Counselors can offer alternatives and prepare a budget to see if the homeowner can afford to stay in the house.

Before agreeing to a repayment schedule, it is important homeowners understand how their lender treats partial payments.  Some credit partial payments toward the balance immediately, while others hold the money in a “suspend account” until the full amount is received.  Some will return the check to the borrower, and some will stop accepting payments after the mortgage is seriously delinquent.

If you have equity in your home, we will sell your home and get top dollar in this challenging market, go to County Properties Marketing Homes. If you do not have enough equity, and you must sell your property as a short sale we have the expertise to do so also and close escrow in 45-60 days or less. Learn more about mortgage relief options and how to take advantage of our FREE REALTOR (R)  CONSULTATION for loan modification and or selling .  or go to www.ShortSaleRealtors4U.com

More questions we can help you, at County Properties, 25 years of brokerage experience, trust and a Member of the local Better Business Bureau! Want to know what your home is worth? Click here for a free market evaluation !

By the way…if you know of someone who would appreciate the level of service in real estate we provide, please call me or have them go to www.CountyProperties.net and I’ll be happy to follow up and take great care of them.

New tax changes will go into effect on Jan. 1, 2012

by Arnie Levine on December 30, 2011

in Finance,Latest News,Real Estate news

Several tax changes will go into effect on Jan. 1, 2012 — some good, some not so good. Here are the most important changes you should know about:

Tax breaks that have been reduced for 2012

Several tax breaks will be reduced, but not eliminated, for 2012.

1. Bonus depreciation: During 2011 taxpayers can deduct in one year 100 percent of the cost of most types of personal property they buy for their businesses and place in service during the year. This amount is scheduled to lower to 50 percent for most types of property placed in service during 2012. However, it is possible that 100 percent bonus depreciation will be extended through 2012.

2. Section 179 expensing: For 2011, the maximum Code Section 179 deduction is $500,000, the highest it has ever been. The maximum Section 179 deduction will be reduced to $139,000 for 2012. Moreover, the 2012 limit will have to be reduced dollar for dollar by any amount by which the cost of Code Section 179 property placed in service during 2012 exceeds $560,000.

3. Employee transportation benefits: For 2011, an employer can provide up to $230 per month in tax-free transportation benefits — this includes transit passes or reimbursement for commuting to work by vanpool. Starting in 2012, the limit will be reduced to $125 per month.

Tax breaks that have been eliminated for 2012

Three widely used tax breaks will be eliminated entirely starting in 2012:

1. State and local sales tax deduction: For 2011, taxpayers can elect to deduct as an itemized deduction on their Schedule A (itemized deductions) state and local sales taxes, instead of state and local income taxes. This deduction is eliminated starting in 2012. This is bad news for taxpayers who live in states with no state income tax.

2. $4,000 education expense deduction: For 2011, taxpayers with modified adjusted gross income of $65,000 or less ($130,000 or less for joint returns) may deduct up to $4,000 of qualified education expenses paid during the year for themselves, their spouses, or their dependents.

Such expenses include tuition and mandatory enrollment fees to attend any accredited public or private institution above the high school level. This deduction is eliminated entirely for 2012.

3. Charitable Contributions: IRA (individual retirement account) owners age 70 1/2 and up can directly transfer up to $100,000, tax free, to eligible charities during 2011. This option, created in 2006, is available for distributions from IRAs regardless of whether the owners itemize their deductions. This provision is eliminated for 2012.

Tax breaks that have been expanded or extended

A couple of tax breaks have been expanded for 2012:

1. Hire a veteran, get a tax credit: If you hire an eligible unemployed veteran for your business during Nov. 22, 2011, through Dec. 31, 2012, you’ll qualify for an expanded work opportunity tax credit. This is a tax credit against income tax of up $5,600 (more for disabled veterans).

2. Reduced Social Security Taxes? During 2011, Social Security taxes are reduced to 10.4 percent up to the annual income ceiling, instead of the normal 12.4 percent. The U.S. Senate passed a two-month extension of the 2 percent reduction, but the House rejected the Senate bill.

However, most people believe that — one way or another — the 2 percent reduction will be extended through the end of 2012.

The information provided needs to be verified with you tax professional, for I am a realtor not a tax professional.

If you have equity in your home, we will sell your home and get top dollar in this challenging market, go to County Properties Marketing Homes. If you do not have enough equity, and you must sell your property as a short sale we have the expertise to do so also and close escrow in 45-60 days or less. Learn more about mortgage relief options and how to take advantage of our FREE REALTOR (R)  CONSULTATION for loan modification and or selling .  or go to www.ShortSaleRealtors4U.com

More questions we can help you, at County Properties, 25 years of brokerage experience, trust and a Member of the local Better Business Bureau! Want to know what your home is worth? Click here for a free market evaluation !

By the way…if you know of someone who would appreciate the level of service in real estate we provide, please call me or have them go to www.CountyProperties.net and I’ll be happy to follow up and take great care of them.

Good Signs for the New Year

by Arnie Levine on December 23, 2011

in Finance,Latest News,Real Estate news

Good Signs for the New YearGood Signs for the New Year

By Lawrence Yun, NAR Chief Economist

Here’s a change. Lately most of the dire economic news has been coming out of Europe: talk about the future of the Eurozone, whether or not the EU will hold together as an entity, and even some predictions that the euro may not survive as a currency. Some analysts in the U.S. are suggesting that problems in Europe are contagious and will doom our economy to another recession. But despite those European currency and economic troubles, a possibility of an economic recession in the upcoming year here in the U.S. looks less and less likely.

The key reason is the housing market recovery. After six years of a demoralizing and protracted housing market recession, a light is finally appearing at the end of the tunnel – and it is not a headlight from a freight-train. It is a genuine warm sunny glow. The latest pending home sales index – which reflects contract signings to purchase a home – rose more than 10 percent in October from the previous month and more than 9 percent from one year ago. Because the wide swings in sales related to the homebuyer tax credit are largely over, that year over year increase is a clean jump and not just a rise due to some artificially low comps of the past year. Clearly the data implies something is brewing out there. Yes, there are still cancellation issues related to appraisals, tight underwriting, and other issues. But buyers are evidently recognizing the great opportunity to own real estate and acting accordingly. Let’s examine several of the factors that suggest the worst is over.

First, existing home inventory has been trending downward consistently. The total number of homes listed for sale at the end of October was 3.3 million, down from 4.5 million in the middle of 2008. Remember, there are seasonal swings in the number of listings – with spring/summer months reflecting more home sellers (more listings) and autumn/winter months reflecting fewer sellers (fewer listings), so we still need to make proper seasonal adjustment comparisons. When we look just at the month of October during the past several years, this October registered the lowest inventory since 2005. The same was true for the month of September; September 2011 registered the lowest September inventory since 2005. Again, similar stories are seen for July and August of this year. In short, inventory has been running at six-year lows for several consecutive months. That is important to note, because lower inventory is a signal that price declines are coming to an end. In fact, the government measurement of home prices – from the Federal Housing Finance Agency (FHFA) – has risen in five out of the past six months, and home prices according to the FHFA are up two percent from their low point in March of this year. Other price data, such as that from Case-Shiller and NAR, have been moving both up and down with no consistent direction since 2009. In other words: prices have been roughly stable for the past three years.

Second, rents are rising and rent increases accelerating. The primary rent component of the Consumer Price Index (CPI) is up 2.4 percent from 12 months ago, but has been accelerating at 4.8 percent in the most recent monthly reading on an annualized basis. Rising rents will tip some renters into home buying, while real estate investors will have an added reason to own another property. According to The Economist magazine, the rent metric in the U.S. is such that home values are eight percent below justifiable levels.

Third, jobs are being added to the economy. Since the low point in early 2009, the economy has added 2.5 million net new jobs. Generally more jobs mean more home sales. So far, the extra jobs have not led to higher home sales. But to view it another way, pent up demand for housing has been growing and it is inevitable that home sales will have to tick higher with more jobs.

Fourth, mortgage rates are too low to pass up. While some financially qualified buyers are strategizing about the perfect time to enter the market in term of rates and home prices, these considerations are like picking up nickels and dimes when viewed from a far-off horizon. Consider what has happened in the past 30 years regarding the prices of consumer goods. On a broad basis, consumer prices have risen 160 percent from 1981 to 2011. Rent – and coincidentally gasoline prices – rose 200 percent. Home values rose 220 percent, even after accounting for the price declines during the recent housing downturn years. Medical care costs increased a whopping 400 percent. But even that increase was bested by the increase in college tuition which rose nearly 700 percent (which raises a number of questions about where the tuition monies go). One consumer item that did not rise in cost was the average monthly mortgage payment for those who took out a 30-year fixed-rate mortgage back in 1981.

What will happen over the next 30 years? If the cost of some of the above consumer items rises at a similar pace as in the past 30 years, then gasoline prices will run around $9 per gallon while the $20,000 college tuition of today will reach $140,000 per year. But one item which the consumer will not pay a nickel more is on their monthly mortgage payment. At the current median home price and current mortgage rate, the monthly mortgage payment would be fixed at $698 per month for the next 30 years. At the same time, home values likely will have tripled.

So, as we approach the end of 2011, I am fairly hopeful that our housing recovery is on the right track. Jobs are coming back, people are buying homes, home prices are stabilizing. All in all, not a bad way to end the old year, and start the new. Happy holidays!

Page 1 of 2812345»1020...Last »