THE VALUE OF HOMEOWNERSHIP

  ^[1]RISMEDIA, December 29, 2010—2010 has been a year of real estate contrasts. While many consumers have taken advantage of historic buying opportunities and the market has seen a gradual stabilization of sales and prices, other challenges facing the nation have led some to question the value of homeownership for families, communities, and the country.

REBUILDING CREDIT AFTER FORECLOSURE

5 Strategies to Rebuild Your Credit after Foreclosure

  ^[1]RISMEDIA, November 30, 2010—(MCT)—If you’ve been through a foreclosure, you may wonder if there is hope for you to become a homeowner again. The answer is yes, but it will take a while. “It doesn’t mean you’ll never be a homeowner again,” said Linda Davis-Demas, director of housing at Consumer Credit Counseling Service of Greater Dallas.

CHANGES IN TAX BILL!

What the New Tax Bill Means for You

By Jennifer Waters Print Article

RISMEDIA, December 22, 2010—(MCT)—The new tax bill that President Barack Obama recently signed will save every American from a number of tax increases that would have begun January 1, 2011, and will add more than a year of benefits for those who are long-term unemployed. But there are plenty of other tax perks in the bill, most of which extend breaks already in place. Here’s a rundown:
-Marginal tax rates: Federal income-tax rates, which were lowered under the Bush tax plans of 2001 and 2003 and scheduled to end December 31, 2010, will remain in place through 2012. Had Congress and Obama not reached a compromise on the tax bill, everyone’s taxes would have risen on January 1, 2011. That includes an extension of lowered capital-gains taxes for investors.
-Unemployment benefits: Long-term unemployment benefits get extended for 13 months.
-Estate tax: Among Obama’s concessions to Republicans is a 35% tax levied on an inheritance of $5 million or more. If no estate provision had been passed, wealthy families would have been hit with a 55% tax on an inheritance of $1 million or more beginning January 1, 2011, according to the Tax Institute at H&R Block. House Democrats originally balked at the provision, seeking a higher tax on the wealthiest estates.
-Social Security tax holiday: The so-called payroll tax holiday stays put too, meaning employees who pay 6.2% in Social Security taxes out of each paycheck will pay just 4.2% for the next year on wages up to $106,800.
-Making Work Pay: The “Making Work Pay,” which was part of the 2009 Recovery Act, is set to expire December 31, 2010 and will not be renewed. The credit was worth $400 to taxpayers making $75,000 or less ($800 to couples earning under $150,000).
-Alternative minimum tax: The alternative minimum tax patch continues into 2011 and the exemptions increase slightly, according to Bankrate.com. For married joint filers, the 2011 threshold is at $74,450; its $48,450 for single or head of household taxpayers and $37,225 for married taxpayers filing separate returns.
-Tax breaks for families: The $1,000 per child tax credit stays through 2012 rather than reverting to $500 per child. The credits begin to phase out for singles with adjusted gross income of $75,000 and $110,000 for married couples. The tax credit of up to $3,000 for dependent care for children under 13 sticks too. If the kids are now in college, the $2,500 “American Opportunity Credit” for the first four years is available for anyone with a salary of $90,000 or less.
-Marriage penalty relief: Marriage still gets a reprieve. The Bush tax law aimed at fixing the so-called marriage penalty is extended to 2012. Before the 2001 tax changes, married couples got better deductions filing separately rather than in a joint tax return. Since then, the standard deductions for joint filers was double than that for individuals. Without these, joint filers with taxable incomes at $57,000 and above would have faced a tax increase in 2011, according to the Tax Institute.

-Other breaks: A number of additional energy- and business-related tax credits were also extended or expanded, including popular credits for homeowners who make energy-efficient home improvements or buy energy-efficient new homes.
(c) 2010, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

MORTGAGE RATES...INFLUENCE OR NOT?

• December 17, 2010, 9:39 AM ET

Will Mortgage Rate Rise Hurt Housing Market?

If Americans weren’t buying homes when rates were at 4.25%, what happens now that rates have popped back to 5%?
On Thursday, the average 30-year fixed-rate mortgage stood at 5.09% (with average fees equal to 0.28% of the loan amount), according to HSH.com, a financial publisher. That’s up from 4.8% last Friday. A separate survey from Freddie Mac said rates averaged 4.83% for the week ending Thursday (with average fees of 0.7%), and that’s up from a record low of 4.17% one month ago. (See “Swift Rise in Yields Pushes Up Mortgages“)
Rising rates certainly doesn’t make it any easier for homeowners to sell.  But how much will it hurt? Economists say the impact might not be all that bad if rates are rising because the economy is growing. “Low rates in a crummy economy are worse for the housing market than somewhat higher rates and an improving economy,” says Thomas Lawler, an independent housing economist in Leesburg, Va.
Moreover, rates are now back to early May levels, when home sales first plunged following the expiration of tax credits. They’re still lower than they were one year ago, and historically, they remain at very low levels. So while higher rates have likely slammed the door shut on refinancing opportunities, rates are just one of a handful of factors that go into a home-buyer’s decision.
“Since the recent rate increases have essentially just undone the declines from earlier months, it is hard to see why sales should drop significantly further from current levels,” wrote Goldman Sachs economist Ed McKelvey in a research note published Thursday evening.
But rising rates could still squeeze some housing markets because first-time home buyers may find that they’re not able to qualify for as large a loan as they could just four weeks ago.  That could put pressure on home sellers to reduce prices. Analysts at Credit Suisse estimate that the recent rise in rates has the same effect as a 7% increase in home prices for prospective buyers.
Bob Dorman, a real-estate agent in Corona Del Mar, Calif., is representing a buyer who now needs to come up with an additional $10,000 in order to qualify for a loan on the $412,000 home he’s under contract to purchase. “How many first-time home buyers have access to that kind of cash?” says Mr. Dorman.
The rise in rates could also have a greater impact on housing markets that still look overvalued. In Sacramento, where Zillow.com estimates that home prices have fallen 45% from their peak, “the perception that home prices have bottomed out will be the driving force over an interest-rate change,” says Larry Knapp, chief executive of local real-estate brokerage Lyon Real Estate.

NEGATIVE EQUITY SLOWLY DECLINING

  ^[1]RISMEDIA, December 15, 2010—(MCT)—The number of homeowners in the U.S. who owe more on their properties than what those homes are worth has declined steadily for most of 2010, according to Santa Ana, Calif. research firm CoreLogic. But the drop in properties with negative equity has more to do with troubled borrowers losing their homes to foreclosure than an increase in prices. About 10.8 million, or 22.5% of residential properties with mortgages were in negative equity positions at the end of the third quarter. That is down from 11 million, or 23%, in the second quarter.

No Need To Be Afraid!

House hunters are too scared to buy despite low prices

The Johansons were afraid to buy despite affordable prices and low interest rates. By Les Christie, staff writerDecember 5, 2010: 6:08 AM ET

NEW YORK (CNNMoney.com) -- Despite some of the best home-buying conditions in years -- affordable prices, low interest rates and lots of choices -- fear of buying has infected the market.
It has paralyzed house hunters, making them unable to pull the trigger even on attractive deals. Some are worried about making the payments, while others are convinced they'll save even more if they wait.

•  

It's perfectly natural that they should feel that way in the wake of the housing bust, said Lawrence Yun, the chief economist for the National Association of Realtors. "It's like when the stock market is crashing," he said. "People are waiting to see if deals will get better."
In fact, home sales are down by about 25% from last year, which means a lot of people are sitting on the sidelines. And real estate agents are having to get used to the fear of buying trend.
Anne Williams, an agent with Wallace & Wallace in Knoxville, Tenn., said, "I have several buyers that fit this category. I have learned not to be too pushy. Buying a home is a big decision and if they aren't convinced that now is the time, I back off."

12 cities: Where to rent vs. where to buy

Even in markets that have not experienced a devastating price decline, buyers are still very wary.
"I have to convince people that the market is not as horrible as they think," said Zachary Bales-Henry, an agent in Des Moines.
One of his clients has looked at scores of homes over the past 18 months but has yet to purchase.
"My primary concern is being able to afford the home with one salary," said Jess Mart, a 21-year-old hairdresser. "I'm single and I would have to rely on other people renting a room from me to pay the mortgage."

0:00 /2:38Buying a $250K house for $40K

Living in inexpensive, stable Iowa makes home price declines less of a concern for Mart, who is considering starter homes in the $100,000 range.
In more volatile markets, the price level may matter more. In Long Beach, Calif., for example, home prices have fallen about 35% since peaking in 2006, so house-hunter Juan Banuelos wants to minimize the risk of further price drops. He is looking in the $200,000 price range and has considered many foreclosures, comparing the current listing prices to past selling prices.

Most (and least) affordable cities to buy a home

But the 28-year-old, who is fresh out of the U.S. Army and enrolled at Cal State, found that none were move-in ready. "I saw some houses that needed way too much repair or remodeling," he said.
When he recently bid on a house, it was because the $195,000 price tag was far below the $417,000 it last sold for. "I felt like it had already come down as much as it would," he said.
Tim Zembek, another Long Beach resident, has been house hunting over the past couple of years. But he has always held back, fearful about his own financial health even though he has paid off his car loan, student loans and credit cards, and saved for a down payment.
The 46-year-old director of education has even moved into a more expensive rental to test out his ability to pay a higher amount. That has given him more confidence -- "It told me I could afford to buy" -- although he still hasn't been able to sign on the dotted line.
Some established buyers have a worry first-timers don't: Selling their existing homes. Janette Johanson and her husband, Erik, couldn't pay for two mortgages at once so felt like they couldn't buy until they had a sure deal on the old house.
"We put up our own house for sale but we were too scared to go out and look for another," said Johanson of McKinney, Texas. "One of the scariest parts was, what if one of us loses their job."
To reassure themselves, they did a lot of research, studied spreadsheets of estimated costs, and peppered sellers with questions. With that information and some advice from Johanson's dad, a recent homebuyer, they finally overcame their fears and purchased a four-bedroom in mid-November.
Easley, South Carolina residents Tonya Hines and her husband Jason looked for divine help to deal with house hunting fears.
"We prayed about it -- and we got stop signs," said Tonya.

0:00 /1:41Build a zero-energy home in 2 days

One stop sign was that any house that interested them soon sold. God must not have wanted them to buy it, they told themselves. So they stopped shopping and started saving.
The couple was living in Jason's grandfather's house, paying only taxes and other small expenses, so they were able to hoard cash and build up a down payment of 20%.
The couple still worried over their jobs, though.
Luckily Tonya's employer was understanding. When she asked to dash out to look at homes, he not only reassured her that was okay, he encouraged her to make a purchase.
"That took away a lot of the worry over job security," said Tonya.

They're now the proud owners of a three-bedroom ranch, their angst ended -- mostly. 

Tips For Buying A Home With A Sunroom

For Your Clients: 5 Common Sunroom Issues to Watch For

By Charles Furlough Print Article

RISMEDIA, December 2, 2010—We all need a little sun sometimes. Even though a sunroom isn’t the major consideration in buying a home, it’s often the cherry on top that encourages you to write the down payment check. What makes these rooms so irresistible is obvious: Read a book in a sunroom in the winter, and automatically it becomes summer again. Sunrooms range in scope and drama—the term can describe anything from a room with oversize windows, all the way up to glass-enclosed wonders. But unfortunately, not all sunrooms are as well-built as they are nice to look at. Whether you’re having a new sunroom built, or perhaps you’ve just bought a home that has an older sunroom, here are some common sunroom issues to look out for:
1. Water leakage: Overall, this is the biggest sunroom problem, and it can be due to several factors. Most commonly, the joints and connecting materials between panels are one of the most vulnerable areas for leakage, especially in older sunrooms. Present-day sunrooms have much more air-tight connectors; if you have inherited an older sunroom and find any caulking at the joints, that’s the sign of a problem. Another area that is particularly susceptible to leaks is the point where the roof joins the house; this is one of the most difficult connection points for installers, and inexperienced installers do not complete the job tightly enough. If your sunroom’s roof is leaking at the point where it connects to the house, it must be rebuilt to remedy the problem; caulking won’t do the trick for long.
2. Condensation: A sunroom with a lot of glass can encounter condensation quite easily, either on the exterior during hot weather, or, more seriously, indoors in cold-weather months—which can lead to mold. Especially if you live in an area with extreme temperatures, choose an installer or restorer who knows which materials to choose to reduce or eliminate the risk of condensation.
3. Safety glass: You might let a leak go, but safety is not an option. It is essential that all glass, especially any overhead glass, be tempered safety glass that adheres to the most recent codes. Some areas even require laminated glass (which has a plastic film holding it together, for an extra layer of protection when it breaks).
4. Beware the converted deck/porch: A lot of people think that simply enclosing an existing terrace, deck or porch can create a sunroom—but these conversions are much more susceptible to problems than sunrooms that are built specifically as such. Converted porches may suffer from a sloped, wavy floor—an exterior flooring surface is not built to the same standards as an interior one, meaning that floors in converted porches often leave something to be desired. A converted deck may have even more significant structural problems. A deck is generally safe, as there’s nothing above it; but often, it’s not an adequate structure to support something built on top of it; in the most serious cases, this can result in total structural failure.
5. Call in the experts: If you’re building a sunroom, don’t even think of having someone start a job without asking for references. And if you’re buying a home with a sunroom, get a home inspector’s opinion on its safety and integrity, and make the repairs as soon as possible to avoid potentially more expensive repairs later

The Mortgage Interest Deduction (MID) is vital to both home ownership and our economy.
I'm disappointed that anyone in Congress — or on a Presidential Commission — would even suggest limits to the Mortgage Interest Deduction. Mortgage interest has been deductible for nearly 100 years, and the proposed changes will affect all 75 million home owners in the United States. We must act now to make sure the MID is not changed.
Ever since the Deficit Commission announced its conclusions, the news media have been buzzing about the report. And what do they emphasize? Proposals to limit or even eliminate the Mortgage Interest Deduction. I'm concerned because all this does is scare the public — and potential buyers — away from the housing market. The last thing the housing industry needs right now (and for the foreseeable future) is another bucket of ice water to be thrown on the market. People who hear these news reports don't differentiate between a proposal and a done deal. They just know that a tax provision they actually understand and rely on is under siege. This is just unacceptable.