A year after the financial collapse of 2008, the housing market is very different than it was before the foreclosure crisis.
Here are seven bits of wisdom from economists and financial planners for anyone contemplating a home purchase today:
Old-fashioned basics are more important than ever. The safest way to purchase a home is to put down 20 percent on a fixed-rate, 30-year (or less) mortgage.
Don't become overconfident about income growth. Even though buyers in their 20s and 30s will likely see their incomes grow more quickly than previous generations, it is important to act sensibly when borrowing.
Anyone contemplating adding children to the family should calculate whether they could live on one income because having both halves of a couple work may turn out to be impractical.
Include a maintenance budget. Even new homes need upkeep and repairs.
Buyers who can't afford their dream home now should opt for a starter home where they can save money each month for what they really want.
Consider a property that can be expanded and improved down the road when money is available.
No two buyers are the same, but they should all feel confident with the loan they enter into, no matter the size of the mortgage.
Source: The New York Times, Ron Lieber (09/12/2009)
Construction of single-family homes rose 1 percent in July, the fifth month of continuous increases and a 37 percent rise compared to last winter when housing construction hit bottom, the U.S. Commerce Department announced Tuesday.
Construction of apartment buildings fell 13 percent in July, which pushed the combined level of construction starts down 1 percent to a seasonally adjusted annual rate of 581,000 units. This number surprised some knowledgeable observers who had predicted an overall increase.
Applications for building permits also declined in July, down 2 percent from June to an annual rate of 560,000 units.
Most economists ignored the bad news. "It's the general trend that matters and with housing, the direction is up," wrote Joel Naroff, president of Naroff Economic Advisors.
Source: The Associated Press, Alan Zibel (08/18/2009)
The Jones Group Mike & Cindy Jones Real Estate Consultants
Convicted Ponzi Schemer's Properties Hit the Market
The federal government is about to sell off more than $20 million in real estate owned by Ponzi scammer Bernard Madoff. Properties for sale include his Upper East Side Manhattan duplex; valued at $7.5 million; his 3,000-square-foot, Long Island, N.Y., beach house, $7 million; and his 6,475-square-foot Palm Beach, Fla., mansion on the Intracoastal, $7.5 million.
Besides these properties, the Feds are selling Madoff's 55-foot fishing boat for $1.5 million, approximately $6 million in furniture, and they've already unloaded a three-bedroom vacation house on the Cote d'Azur for $1.48 million.
Some observers say the government's estimate for the Manhattan duplex and the Florida mansion to be high, but they think the Long Island beach house may be bid up beyond the sale price because it is closer to the water than current zoning would allow.
Perhaps you heard about the husband who lacked tact. Early one morning his wife left for a trip abroad . . . and that very day their poodle died. When she called home that evening, she asked how everything was---and he bluntly blurted out, "Well, the dog died!" Shocked, she chided him through tears for being so tactless.... so strong.
"What should I have said?" he asked.
"You should have broken the news gently, perhaps in stages. When I called you from here in New York, you could have said, 'The dog is on the roof.' And the next day when I called you from London, 'He fell off the roof.' The following day from Paris, you could have told me, 'He is at the vet's . . . in the hospital.' And finally, from Rome, I could have then been informed, 'He died.'"
The husband paused and thought about the advice. His wife then asked, "By the way, how is mother?" He responded, "She's on the roof!"
Jacksonville Real Estate?? Buy now before the opportunity is GONE!!
Experts Say Now is the Time to Buy Many investment experts advise it's time to buy. With prices falling, it is a once-in-a-generation chance to load up on property, they say.
How much of an investment portfolio should be devoted to real estate? David Swensen, who manages Yale University's endowment, says 20 percent is a smart number.
One possibility is real estate investment trusts (REITs), which, despite the fact that they are slashing dividends to conserve cash, are still paying average yields of 7.3 percent. That's double the yield on Treasurys.
Should a home be part of the equation? Michael Kirby, founder of Green Street Advisors, says no.
"You should own a house to provide shelter," says Kirby. "In a way, it's not an investment, and it's not part of your investment portfolio. It's really just a living expense. By owning a house you are prepaying rent."
Source: Forbes (08/03/2009)
Mike and Cindy Jones The Jones Group Real Estate Sales and Marketing Jacksonville, Orange Park, St Augustine (904) 874-0423
Mortgage fraud continues to increase as vulnerable homeowners seek answers to their housing issues, according to the 2008 Mortgage Fraud Report released Tuesday by the Federal Bureau of Investigation.
Reported losses to fraud hit $1.4 billion, up 83 percent compared to 2007 and are likely to climb even higher in 2009, the FBI said.
The number of fraud reports was 63,713 in fiscal 2008, up from 46,717 the previous year.
"The downward trend in the housing market during 2008 provided a favorable climate for mortgage fraud schemes to proliferate," the report said. "Several of these schemes have the potential to spread if the current economic downward trend, as expected, continues into 2009 and beyond."
Home owners are choosing showers over tubs, despite the long-standing notion that it is important to have a tub for resale value.
"We're definitely seeing a trend toward walk-in showers versus tubs," says Katie Campbell, sales manager for the Heritage of Palatine, a Chicago-area development where homes are priced from $221,900. "We used to do a lot of big soaking tubs with shower stalls in the master bathroom, but we had a lot of people eliminate the tub because they wanted a bigger shower."
Having at least one tub in the house is still important because some buyers want them, insists Kathy Dames-Mattox, an associate with ReMax of Joliet. But she advises homeowners not to spend a lot of money on whirlpool tubs.
"I don't see whirlpool tubs as being a big deal anymore," Dames-Mattox says. "Everybody who adds one says they never use it."
Source: Chicago Tribune, Allison E. Beatty (07/03/2009
The Jones Group Mike & Cindy Jones Real Estate Consultants (904) 874-0423 Keller Williams First Coast Realty
Treasury Makes Refinancing More Attractive The Treasury Department on Wednesday expanded its foreclosure prevention plan, lifting the current 105 percent loan-to-value cap to refinance up to 125 percent of a home's value.
Applications to refinance mortgages have fallen as rates have increased in the last couple of weeks, but this move may bring more borrowers to the table.
At the same time, Fannie Mae and Freddie Mac have agreed to reduce the processing fee for borrowers who select a 25-year mortgage.
Fannie said in a statement, "The reduction is intended to lure borrowers to select shorter terms and build positive equity in their homes sooner than with a typical 30-year mortgage."
Source: Reuters News, Patrick Rucker (07/01/2009)
The Jones Group Jacksonville and Orange Park Real Estate Consultants (904) 874-0423
Echo boomers, the children of baby boomers, will be the salvation of the housing market, Harvard University's Joint Center for Housing Studies predicts.
In its annual state of the nation's housing study, the center says that the 75 million Americans born between 1979 and 1995 will mean plenty of demand for housing units.
"There will be 5 million more echo boomers than there were boomers when they first started swelling housing markets," says Eric Belsky, executive director of the Joint Center.
Belsky predicts that once the job market turns around, the housing market will recovery quickly because inventories are close in balance between supply and demand.
But the study warns that while echo boomers will increase demand significantly, they may not drive up prices much because their real incomes are lower than those earned by people a decade older when they entered the job market.
"While fundamentally we see what could be the foundation for long-term recovery, we still have to get through today's challenges," says Nicolas Retsinas, director of the Harvard center.
Sources: CNNMoney.com, Les Christie, and Reuters, Lynn Adler (06/22/2009)
The Jones Group Mike & Cindy Jones Your Jacksonville Real Estate Resource (904) 874-0423 Keller Williams Realty
So refreshing to list a house where the seller is reasonable and not in need of a short sale.....one such house is on Osprey Bluff in the Fleming Island area of Orange Park. Not waterfront but neighborhood has a community dock on Swimming Pen Creek, just steps away and included in the sale of this property is a private boat slip with 10000lb lift.
Selling your Jacksonville or Orange Park home, vacant land investment property in todays highly competitive real estate market. Pricing and marketing are the name of the game today. Buyers, get information on how to take advantage of one of the best buyers markets ever
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