THE VIRGINIA ASSOCIATION OF REALTORS PLANS TO PARTICIPATE IN THE CREATION OF A "HOUSING AFFORDABILITY INDEX".
I read an interesting post on the VARBUZ this a.m. VAR and Housing Virginia plans to develop a "Housing Afforability Index".
Dr. Yun, Chief Economist is quoted, "NAR's Chief Economist, Lawrence Yun, says that today's homes are more affordable than at any time in the past 40 years." Sadly, real estate practitioners who actually sell real estate might doubt the accuracy of that statement. Worse yet, this proposed index is statistical based and ignores the local and hyper-local budget needs of consumers that affect monthly housing costs and individual budget needs.
I am of the opinion that housing "affordability", in terms of what can the consumer afford, cannot be indexed by any set of criteria using median housing statistics or median consumer statistics. Neither the consumer nor housing fits into any "median" statistical mold. Sadly, if real estate agents were trained and understand basic buyer qualifying skills, the need for a "Housing Affordability Index" wouldn't be considered because real estate agents would be providing this information for prospective home buyers.
30% OF MONTHLY GROSS INCOME?? First, the proposed index presumes that "affordability" can be determined by a simple mathematical formula of a percentage of income. This reminds me of the 20 year old "rule of thumb" that a consumer is qualified for a home priced at 3 times their gross income. It didn't work 20 years ago and won't work now.
TAXES, INSURANCE, TRANSPORTATION, FOOD, EDUCATION, ETC. WILL REMAIN THE SAME?? What these simplistic indices do is make qualifying for housing by price as simple as a percentage of a consumer's income which ignores local taxes, hyper-local hazard insurance costs, transportation costs, family size and so many more things that affect a consumer's ability to "afford" the purchase of real estate.
Dr. Yun's statement that "today's homes are more affordable than at any time in the past 40 years", is simply not, in my opinion, true, or should I say accurate. Dr. Yun is a positive voice for the NAR, yet when applied to the consumer, it is misleading and encourages real estate practitioners to avoid the hard work of really qualifying home buyers. If homes are more affordable, the use of a simple 30% index of affordability might work. However, when taxes, insurance, transportation, consumer goods, groceries etc. are less affordable, the use of a simple percentage of affordability misleads the consumer and many real estate agents.
WHAT IS THE GOAL OF THIS PROPOSED INDEX?? It saddens me that resources are used to promote simplistic systems and reports to convince the consumer that "yes, you can" without any solid foundation on which to accurately "qualify" disparete individuals without consideration of house type, location, family size, extended families, other contractual debts and more.
ALL HOME BUYERS ARE DIFFERENT AND DON'T FIT INTO A STITISTICAL MOLD. I would suggest that the consumer would be better served by NAR and VAR members who received quality training to qualify home buyer, a topic for which there is a dearth of Continuing Education courses. Qualifying prospective home buyers is a skill that is included in pre-licensing education. Yet, once an agent has their license, it's rarely mentioned and "send them to a lender" is the usual first step. Often the agent never really knows just what their buyer/client's financial profile is or how a particular house payment will affect their other necessary living costs.
GET BACK TO BASICS. I believe that there is a void in our industry and that is the ability of the average real estate agent to understand just what a prospective home buyer's "affordability index" is based on the individual consumer's financial profile. Trying to fit median buyers into median housing price statistics will produce more confusion for the consumer and more avoidance on the part of agents to learn the skills needed to provide quality representation to the home buying consumer.
Inspired by Jim Crawford's thoughtful examination of budgets, down payments, and more, I can relate the the matter of larger down payments vs. cash in the bank.
Tim Maitski says it best in his comment to Jim's post. "Jim, I don't understand how having a bigger downpayment benefits the homebuyer."
In a volatile housing market, I'm less interested in home equity than I am leverage and money in my bank accounts.
Back in June 2005 when I began to finance the home I was building, my lender tried his best to get another $80K from me for a higher down payment. For some reason, I resisted and thought I wanted to keep the cash for a rainy day. Little did I know that we'd face a Tsunami in housing values and I'd see about $400,000 wiped out by a gigantic wave of negative equity shared by about 15,000,000 other home owners.
HA! I watched $400K evaporate from house equity, but I still have that $80K.
Until the market recovers and I see sound appreciation, a home is for living, not investing. Your mileage may vary. However, our personal security is probably a tad more important than protecting the lender. I higher interest rate means a higher mortgage payment, but that interest is deductible and that helps.
Often the choice is a lower mortgage payment vs. cash in savings. I like cash.
YES!!! IF AT ALL POSSIBLE, APPEAL YOUR TAX ASSESSMENT.
This cannot be said too often. Cash starved counties are knowingly keeping assessments high to continue to collect real estate taxes at the higher assessed value. Home owners must be proactive to bring the assessment down.
I did and lowered my annual taxes by $1,500.
I've sent notice to home owners in my database to do the same. Sadly, some counties in my market area are on to this and have made the process more difficult and time limited. Home owners should check the regulations for appeal in their individual county. I've sent comperable SOLD information to home owners who have requested the help.
Carlsbad Property Taxes - Do you need to appeal your assessment?
My guess is that you do.
The assessed values of many homes in Carlsbad (and certainly elsewhere in San Diego County) have declined due to the housing market. So too have the assessed values which the San Diego County Assessor's Office uses to determine your property taxes.
If you believe your property's assessed value has declined, there IS something you can do - file an APPLICATION FOR CHANGED ASSESSMENT before November 30, 2009 for this current tax period to request a reassessment.
You simply complete the appropriate sections of the form, sign and date it, and be sure to include the CURRENT value of the land and the structures (from your tax bill), PLUS YOUR estimate of value for these items, and you're done.
While there is no guarantee that your request will be honored, given the decline in values it is well worth a few minutes of your time.
Note that this is for 1 YEAR ONLY, and it is critical to still pay your current property taxes on time.
If I can provide more information about Carlsbad real estate and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.
JUST WHAT IS IT THAT REAL ESTATE LICENSEES DO?? Part I.
"YOUR MISSION, SHOULD YOU CHOOSE TO ACCEPT IT . . . " is to manage the orderly transfer of real property from a seller to a buyer. The average consumer doesn't understand a fraction of what we do to help them accomplish their goal.
SELLERS. Home sellers are presented a simple-to-complex marketing plan by listing agents prior to listing the property for sale. The listing agent promises to perform a series of showing, advertising activities geared to receiving contract offers.
BUYERS. Buyers are assisted in their home search by agent(s) who helps to locate, tour properties for sale, write and negotiate the contract and arranging for settlement services.
Sounds easy doesn't it? Actually it is, in the hands of experienced listing and buyers agents and ifnothing unusual occurs.
THE MOST HELPFUL AND LEAST UNDERSTOOD PART OF LISTING AND SELLING REAL PROPERTY is the complex and institutionalized systems which include the brokerages employing the licensed agents and brokers, the Multiple List Systems that make the homes for sale information available to licensees and now to the public, the board approved forms that provide consumer protections,
Achieving the consumer's goal of selling or buying real property requires the services of a variety of service providers in addition to the real estate licensee. Achieving the orderly transfer of real property from a seller to a buyerrequires services of vendors that perform critical tasks to help the consumer achieve their goal. The vendors include but are not limited to: mortgage providers, home inspectors, termite/radon inspectors, appraisers, title services which include or are managed by attorneys.
WOW! How do we keep up with all of these tasks that are necessary to get to the settlement table? I'm going to disclose a secret that will help many consumers understand how things can go so smoothly and the consumer's goal of selling and buying real estate is achieved.
IT'S ALL IN THE CONTRACT!
That's right. IT'S ALL IN THE CONTRACT!
Getting to the settlement table begins with the selection of an experienced listing or buyer's agent who will MANAGE THE CONTRACT OF SALE. To demonstrate the importance of understanding contract management, below are the titles included in a typical Contract of Sale.
Description of Real Property
Price and Financing
Deed of Trust
Deposit
Down Payment
Settlement
Equipment, Maintenance and Condition
Utilities
Personal Property and Fixtures
Financing Terms
Appraisal
Purchasers Representations
Access to Property
Termite Inspection
Repairs
Damage and Loss
Title
Possession Date
Fees
Broker's Fee
Adjustments
Attorney's Fees
Performance
Default
Assignability
Definitions
Void Contract
Warranty
Listing agents and Buyers agents must not only understand the meaning and execution of each of these titles, they should help the seller or buyer understand the meaning of all parts of the contract that apply to their particular transaction.
I'm sure VCH hopes no one notices this Public hearing set for:
TOMORROW, NOVEMBER 16TH, 2009 AT 6:30 at the COMMUNITY CENTER.
Pay Attention to the Actions of the Campton Officials (I can't use the word "leaders" becase they're anything but that)!!!!
There's a zoning change request from a current land owner regarding annexation into the village.
The property is located at 2N190 Harley Road. (what it doesn't say is that for it to be contiguous to the Village, the property must start at 38 and extend down the west side of Harley to that address and maybe even further down Harley)
The Agenda also does not state the original zoning and what the change is being requested. Maybe they don't want the citizens of Campton What the F____ Hills to know. There are assumptions that it's to change the zoning from Farming to some type of PUD/ Residential. HOW COOL IS THAT? Gotta love the Campton leaders here.
This may be your only chance to speak about this change before it happens!!!
The village is looking to grow (this time south of 38) and needs to agree to change zoning to meet with the owners request for annexation. ISN'T THIS WHAT ELGIN DID? Annexed unincorporated land and changed the zoning to residential? Look out LaFox big bad Campton is coming.
Please get the word out, don't be fooled again.
Larry Bettag - Regional Vice President, Midwest Region
STATISTICS ARE A WONDERFUL TOY. I LOVE STATISTICS.
HOWEVER, THE DATA MUST HAVE SOME MEANING TO PRODUCE MEANINGFUL AND USEFUL INFORMATION. LET'S GET RID OF "MEDIAN".
The most recent market report for one area I follow on a monthly basis reports:
Average Sold Price Oct. 2009/2008:
$ 375,565
$ 374,141
0.38 %
Median Sold Price Oct. 2009/2008:
$ 342,000
$ 310,000
10.32 %
Clearly, the Average Sold Price above shows that prices are stable in this area. However, the Median Sold Price makes it appear that prices have increased more than 10% in the past 12 months.
HOW MISLEADING DATA HARMS THE CONSUMER. Would a seller want to use this data to overprice their home for sale?? You bet they would. Would this data lead a home buyer to believe that their newly purchased home would appreciate about 10% in value in the next 12 months? You bet it would.
Now, I know full well the meaning of median. However, I have yet to determine the value of median in evaluating real estate value. In fact, I've always avoided any mention of medianin market reports because, in my experience, sellers don't list for and buyers don't buy for the median price of homes for sale.
VOLUME vs. VALUE. I believe the government and national reporting services use median as a way to avoid meaningful data. It's meaningless to them but looks impressive in reports. Their interest is in amassing great volumes of data.
As a real estate broker and consumer of real estate data, I need meaningful data and information, the less the better to inform.
Median is the middle. So what?
Median means half are above and half are below. So what?
MEDIAN PRICE REPORTS MISLEAD CONSUMERS. Give me some data or information to which I or a consumer can relate. I have actually had consumers suggest that we should make offers for homes for sale based on the median prices for the area with no relationship to the actual property under consideration. A short description of what comparative market analysis means got the buyers on track. However, having the median data even published was a distraction for the home buyer. The consumer is always tempted to accept what is published vs. what is said by their agent.
REALTORS: HERE'S THE SKINNY ON THE $8,000 / $6,500 TAX CREDIT FOR HOMEBUYERS.
$8,000. Tax Credit Legislation Extended and Modified
Until the new legislation was signed into law, first time homebuyers could apply for and receive a tax credit in the amount of $8,000. when they purchased a home before the sunset date of November 30, 2009.
The new legislation, signed into law by President Obama on Friday, November 6, 2009
extends that date until April 30, 2010 for civilians, and to April 30, 2011 for certain military buyers.
increases the income limits so that millions more can qualify for the tax credit, and
enacts a reduced tax credit of $6,500 for move-up buyers who are not first time homebuyers.
Extended Timeframe
The existing sunset date established by the Housing & Economic Recovery Act of 2008 has been extended to April 30, 2010 for most buyers.
Qualifying members of the military who served outside the borders of the United States at any time during the period from 1/1/2009 to 4/30/2010 will have an extra year to apply for the tax credit.
Increased Income Limits
The earlier legislation put caps on income for single buyers at $95,000.Married buyers filing jointly capped out at $170,000.
The new legislation allows single wage earners to make up to $145,000, and married couples can earn up to $245,000.
NEW: $6,500 Tax Credit for Move-up Buyers
The new legislation provides a tax credit incentive for people who are not first time homebuyers.(A first time homebuyer is defined as one who has not owned a home in the last 36 months.)You may qualify for this $6,500 tax credit if you owned and lived in your home for five consecutive years out of the past eight.
Who does that help?Let’s say you sold your home in 2008.You’re not a first time homebuyer, but if you meet the “five of eight” criteria, you can buy a move-up home and still qualify for the $6,500 tax credit.Check with your tax professional for advice on your particular situation.
NOTE: Additional Requirements
There are other rules of eligibility in the legislation.(This list is not exhaustive, so you’ll want to check with your tax professional.)
You can’t buy the home from a relative.
You must be 18 or older
You cannot be claimed by any other taxpayer as a dependent
If you’ve sold a home, and that sale affects your eligibility, you must included the settlement statement (HUD-1) with your tax return.
Most buyers (check with your tax professional) must live in the home for a minimum of three years or face a government demand for repayment.
Originally published on InvestmentRealEstateCorner.com by Mike in Tucson
___________________
I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender. SUNSTREET MORTGAGE Call me if I can help you or someone you know with a purchase or refi mortgage. (520) 349-9090
SO, Dr. Yun is one of the country's most "trusted" economists. I have a more apt award for Dr. Yun. If there were an award for the prognostications of Dr. Yun, it would have to be THE WIZARD OF OZ AWARD.
Like the wizard, Dr. Yun has a position of prominence due to the financial support of about 1.3 million hard working NAR members that makes his prognostications appear to be creditable.
However, once the curtain of obfuscation is drawn back, Dr. Yun, like the Wizard, will be exposed as a purveyor of "feel good" economic statistical manipulation.
SMOKE AND MIRRORS in the housing market analysis permits the prognosticators to focus on the increase in the simple numbers of homes sold. However, historical trends would be based on a comparison of a "greased" market with the market of a year ago - - before the tax credit (grease) was available. What a creditable prognosticator would demonstrate is the true cost to the economy of the actual cost of each sale that they can identify as the result of this stimulus, the tax credit.
Dr. Yun reports: "In fact, the credit is working better than first projected - it now looks like we'll have 2.3 to 2.4 million first-time buyers this year."
Again, I ask, "at what cost"? It would appear that the cost to the American public is about $18,400.000.000. Yes, that is $18.4 BILLION DOLLARS added to the American debt .
THE FARTHER IT GOES, THE LARGER IT GROWS. Dr. Yun's thinking or "rationalle for the tax credit" is, IMO, like a cascading snow ball on a Swiss mountainside. SOONER OR LATER, WE'LL BE BURIED IN DEFICIT, that is if we haven't already been so.
SOMETIMES IT ISN'T WHAT THEY SAY, BUT WHAT THEY DO NOT SAY.
PROMISES, PROMISES. Like the Wizard of Oz, the government promises to "help" the housing industry by "giving" first time home buyers an $8,000 incentive to buy a home. Will it help the housing industry?? Sure, for a short time. However, what happens when the government hand-outs end???
IS THE TAX CREDIT DOING ANYTHING TO HELP THE UNEMPLOYMENT RATE? Do I even need to answer that??
IS THE TAX CREDIT DOING ANYTHING TO REDUCE THE BUDGET DEFICIT? No need to answer that either.
IS THE TAX CREDIT INCREASING THE NUMBERS OF HOME BUYERS? It would appear so. However, how many of those first time home buyer simply moved their purchase dates forward from next year to this year?
DR. YUN SPECIALIZES IN "FEEL GOOD ECONOMIC PROGNOSTICATION" and that is not a long term cure for the housing market. National economic stability, high employment, rising earnings, higher take-home pay, low real estate taxes and more disposable income would surely do more and without increasing the debt.
WHAT ABOUT THE AMERICAN HOME OWNERS TRAPPED BY NEGATIVE EQUITY? Where do the 20,000,000 American home owners who lost all of their equity, their retirement nest egg, their financial future fit into Dr. Yun's economic prognostications???
"Honey, do you think we'll be able to move to a larger house before the baby comes?"
"No Dear, we owe about $300,000 more than what homes here are selling for. It will be many years before we can move to a larger home"
Courtesy, Lenn Harley, Broker, MD and VA, Homefinders.com, 800-711-7988.
Several years ago I came across an article about this really unique neighborhood development in Bend, OR, called "The Shire". Following up, intentionally or not, on the mega-success of "The Lord of the Rings" movie trilogy, the homes and ambience of this development are Tolkien-inspired.
Well, the Eye of Sauron, in the form of our current economic meltdown, has struck the Shire. Having only sold one home in the Shire (according to the news release), bank ownership has set in. On the downside, a really cool idea has gone down; on the upside, anyone have $1.3 million to play with? If so, you can buy the development.
In the time of McMansions and cookie-cutter five-four-and-a-door homes, I think its a shame a novel (no pun intended) concept such as this has become stranded in Mordor.
"To what event will history attribute that blue spike on the right, a deficit never equaled except in a time of world war?"
I believe that we ARE, indeed, in a "time of war". I also believe that our present national financial mess began on 9/11 following a period when our government ignored the physical attacks on our property and military installations around the world.
The perpetrators of 9/11 were not criminals, they were enemies of our state, though they do not represent one state. As long as our government prefers to white wash the motivations of our enemies and try them as criminals and not prisoners of war, our enemies will be free to continue their jihad while our government shakes in their boots with no clear way to defend our country and our citizens.
Our country is under siege by our enemies and our institutions are under siege by our government.
It's ugly and I don't know what it will take to wake folks up other than a mushroom cloud over New York City.
Don't believe me?? On the news this a.m., it was announced that Khalid Sheikh Mohammed, the mastermind of 9/11 will be tried in civilian federal court in NYC. Of course, he'll receive all of the protections of the U.S. Constitution.
Just because there's been no declaration of war doesn't mean that we are not under attack. Enemies of the U.S. who don't wear uniforms and insignia and who do not kill Americans in the name of a foreign country are still enemies of our country. Our citizens are still just as dead as the Sailors at Pearl Harbor.
If I seem to be off-subject for this reblog, my apologies, but I don't believe that we can separate our present fiscal disaster from the fact that there IS a war going on.
A picture graph is worth 1,000 pages of congressional lawmaking.
The chart on the left was compiled by Bloomberg, and shows the budget surplus / deficit as a percentage of Gross Domestic Product.
I came across this chart this morning, and mentally did an overlay of historical events. That led me to wonder what a longer historical perspective would show.
Deficits since the Civil War
I found the most interesting and interactive website to help me with this. The chart below shows the Federal Deficit as a percentage of Gross Domestic Product since 1860. You'll want to note some significant events that have taken place in our nation since that time, and overlay the events on the chart.
The American Civil War
1861 to 1865
US Involvement in World War I
1917 to 1919
US Involvement in World War II
1941 to 1945
The First Gulf War
1990 to 1991
The Iraq War
2003 - 2009
And that leads me to wonder this: To what event will history attribute that blue spike on the right, a deficit never equaled except in a time of world war?
Back to that first chart...
From the TARP bill to the current legislation passed over the weekend under the heading "health care reform," it's apparent that none of the elected representatives we voted into office take the time to READ, EVALUATE, and UNDERSTAND the legislation they enact into law.
"There wasn't time," I've heard lawmakers say on CNN, "the crisis was so great that we had to act..."
I beg to differ.
You can't run your real estate business like that.
You can't operate your household like that.
We ought not to let our representatives run our country like that.
The Voter Revolution
2009 to ...
___________________
I'm Mike in Tucson, and I blog here on the Active Rain Real Estate Network just about every day.
I'm an internet-based mortgage lender who happens to reside in Tucson, Arizona. Read my blog, and get to know me. The internet allows me to perform at the highest level of trust and productivity.
Sunstreet Mortgage is a correspondent bank.
Click the Active Rain link below to see my guarantee of service.
SUNSTREET MORTGAGE, LLC a correspondent banker Call me if I can help you or someone you know with a purchase or refi mortgage. (520) 349-9090
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
The assessed values of many homes in Carlsbad (and certainly elsewhere in San Diego County) have declined due to the housing market. So too have the assessed values which the San Diego County Assessor's Office uses to determine your property taxes.
SELLERS. Home sellers are presented a simple-to-complex marketing plan by listing agents prior to listing the property for sale. The listing agent promises to perform a series of showing, advertising activities geared to receiving contract offers.
Posted by 
Several years ago I came across an article about this really unique neighborhood development in Bend, OR, called "The Shire". Following up, intentionally or not, on the mega-success of "The Lord of the Rings" movie trilogy, the homes and ambience of this development are Tolkien-inspired.
A 
;)
;)
