WASHINGTON (AP) – Dec. 18, 2009 – Mortgage finance companies Fannie Mae and Freddie Mac are suspending foreclosures and evictions for about two weeks in a temporary break for borrowers during the holiday season.
The suspension, announced Thursday by the government-controlled companies, runs from Saturday through Jan. 3. “No family should have to face the prospect of being evicted during the holiday season,” Michael Williams, Fannie Mae's chief executive, said in a statement.
Earlier Thursday, Citigroup Inc. announced a 30-day suspension of foreclosures and evictions, affecting about 4,000 borrowers. Fannie and Freddie did not estimate how many homeowners would get this grace period.
Last winter, most major lenders suspended foreclosures while the Obama administration developed its $75 billion loan modification program. But foreclosures picked up again after those suspensions lifted.
Saturday, December 19, 2009
Sunday, November 22, 2009
RESPA 2010 Rules, Changes to HUD-1 & GFE
This week I attended a training seminar held by SAR to learn the changes on the new HUD-1 (Settlement Statement) and GFE (Good Faith Estimate) RESPA 2010 Rules. This new form will go into effect January 1, 2010.
This is the most far reaching change that RESPA has initiated in many years. It's purpose is to protect consumers (borrowers) from surprises at the closing table, lower consumer costs, and making shopping for a loan easier. The 2 forms will have to match and must be no more than 10% above the final aggregate amount of certain sections.
The new HUD-1 is a three pages and have new rules about what goes where. The best one I see is no longer seeing various line items for title charges including wire fees, document storage and other "junk fees". Title companies will have to charge you one flat fee that will include everything.
I am so glad to have attended this presentation to better serve my clients in the confusing times ahead. Here is a link to the new form if you are interested in seeing it. This is far reaching and will change the way different service providers work together.
• New HUD-1
• New GFE
• Frequently Asked Questions
If you are confused about all this, rest assured I got you covered. Call me.
Dill
Thursday, October 22, 2009
The Drawbacks to Buying Foreclosures
Price-conscious home buyers are lured by the low prices advertised for properties in foreclosure. They hope to show up at the auction and win the lowest bid. However, many of these homes are not available for inspection prior to purchase. Is it smart to buy a home that you cannot inspect? Could be if the price was low enough to compensate you for the amount of work that might be required to bring the condition of the home to market standards.
Before you rush forward to buy a foreclosure, stop to think about some of the drawbacks and repercussions if you can't get in the house to inspect the interior.
Who Is Living at the Property?
If the property is occupied, the successful bidder is typically responsible for removing the occupants, who may not be the previous owners. They could be relatives or friends of the owners, renters or squatters. You might have to evict them.
- If you are unfamiliar with eviction processes, you should hire a lawyer to handle it for you.
- Be aware that tenants who are sued for eviction sometimes retaliate.
- A better solution might be to pay or bribe the occupants to leave.
(In the business we call this "Cash For Keys")
Non-Owner Occupied Homes
Here's an example, a house, was rented to a dubious couple: a former convict recently released on parole and his partner with sketchy credit, who flinched at loud noises like a domestic abuse victim.
The seller, unaware that his deed of trust contained an "assignment of rents" -- meaning the lender had a right to collect the rent if the owner did not make his payments -- stopped paying on his piggyback loans and didn't much care who he rented to as long as they paid him. Fully intending to pocket the rents and forget about his mortgage loans, the seller listed the rental for sale. His agent made an initial attempt to gain access to the home. The ex-con, a neo-Nazi with a shaved head, massive tattoos and holding back a barking pit bull, peeked through the door and then slammed it in the agent's face.
Soon as the For Sale sign was planted in the lawn, the tenants stopped paying rent. Neither the lender nor the seller could collect any money from the tenants. The agent could not show the property. This was an ugly situation. The lender (who held both the first and the second loan) filed for foreclosure and vowed to file a deficiency judgment against the seller, which junior lenders can do in California if the loans were not purchase money.
Condition of Foreclosed Homes
Because these homes are purchased "as is" from the lender or HUD, there is no guarantee of condition. Sometimes it is possible to inspect these homes prior to making an offer but sometimes, as in the above example of the home, access is not granted.
When sellers realize they are about to lose their homes through foreclosure, it's not uncommon for them to stop caring about the home.
- If something breaks or malfunctions, they aren't going to fix it.
- If they are angry or desperate enough, it's possible they might actually destroy the house. An effective way to flood the home is to turn on all the water faucets, plug the drains and leave. Others smash out walls, then pull out the copper pipes and wiring to sell as scrap metal. Owners will also sell the appliances and kitchen cabinets.
- Some horrible-excuse-for-human beings even leave animals behind, locked inside without food or water.
Tuesday, October 13, 2009
Leaving Home Loans Behind - To Pay or Not To Pay?
SAN DIEGO – Oct. 13, 2009 – Scott Conroy pays the mortgage every month on his one-bedroom condo in San Diego, even though it’s worth 33 percent less than what he owes, and it may take more than a decade to break even.
Homeowners like Mr. Conroy who can afford their monthly payments are weighing whether to sell and pay the difference, stick it out until housing prices recover, or walk away.
In the United States, 26 percent of borrowers owe more than their home is worth, said Karen Weaver, global head of securitization research for New York-based Deutsche Bank Securities Inc. In parts of California, Florida and Nevada, it’s as high as 75 percent.
So-called strategic defaults, in which homeowners stop paying their mortgages while remaining current on other debts, rose 128 percent to 588,000 last year, according to Experian PLC, a Dublin-based credit-checking company, and Oliver Wyman, a New York-based consulting firm. Two-thirds of those who walked away defaulted on their primary residences.
“You’re looking at an extremely long horizon in order to see a return of home values to where they were at their peak,” said Stan Humphries, chief economist for Zillow.com, the Seattle-based real estate data service. “It could be 15 to 20 years in some markets.”
Strategic defaulters represent about 4 percent of all homeowners underwater. That trickle could become a flood as the likelihood recedes that home prices will soon return to their peak values, said Rick Sharga, senior vice president of Irvine, Calif.-based RealtyTrac Inc., an online seller of real estate data.
In San Diego, where Mr. Conroy lives, home values are down about 40 percent since March 2006 when he bought his place, according to the S&P/Case-Shiller Index of 20 U.S. metropolitan areas. Prices have rebounded for three consecutive months, returning to the October 2002 level, before the start of the housing boom. Nationwide, home values are what they were in September 2003, according to the Case-Shiller index as of July.
“You have to ask yourself: Are you just renting the home from the bank?” said Michael Joe, a foreclosure expert at the Legal Aid Center of Southern Nevada. “Would it be cheaper to walk away and rent across the street?”
Mr. Conroy, 32, and his wife purchased their home for $385,000 in March 2006, a month before marrying. The property was reassessed this summer for $250,000. The couple is trying to save, he said, knowing they may have to move to a bigger place within 18 months to start a family.
“We’ve given up on this dream of having equity in our home,” Mr. Conroy said. “We don’t expect to walk away with cash in hand, we expect to pay.”
State laws
More homeowners may opt to take a hit to their credit score rather than come up with cash to cover the loss, especially in California and the nine other U.S. states where the legal repercussions of foreclosures are less than other parts of the country, said Mr. Sharga.
Ten states are so-called nonrecourse, prohibiting deficiency judgments after most home foreclosures: Alaska, Arizona, California, Hawaii, Minnesota, Montana, North Dakota, Oklahoma, Oregon and Washington, according to the National Consumer Law Center, based in Boston. The bank can repossess your home in those states, not other assets, to settle the debt.
In California, a second-mortgage holder may try to pursue a delinquent borrower to repay through litigation, said Rick Brooks, a financial adviser with the San Diego-based wealth advisory firm Blankinship & Foster LLC. Banks generally prefer not to sue because it can easily cost $60,000 or more, said Debra Guzov, co-founder of the law firm Guzov Ofsink LLC, based in New York.
Banks may be more willing to accept foreclosure alternatives, such as a short sale or deed-in-lieu of foreclosure, in states where a lender can’t sue for personal assets, said Brad Geisen, chief executive officer of Foreclosure.com, based in Boca Raton, Fla.
In a short sale, the borrower finds a buyer for the home at an acceptable price and the bank agrees to forgive the difference, said Greg McBride, senior financial analyst with North Palm Beach, Fla.-based Bankrate.com. In a deed-in-lieu of foreclosure, the bank sells the home after a similar debt negotiation.
Tax break
A 2007 law exempts from tax up to $2 million of debt forgiven in a foreclosure or similar proceeding for a primary residence, according to Internal Revenue Service spokesman Eric Smith. The tax break extends to 2012.
The lender’s willingness to negotiate varies and depends on the loan balance, condition of the property, location and resale opportunities, said Alberta Hultman, chief executive officer of USFN, an association of U.S. mortgage banking attorneys based in Tustin, Calif.
Short sales or deeds-in-lieu of foreclosures are considered the same as a foreclosure on your credit score, said Craig Watts, spokesman for Minneapolis-based FICO Corp., owner of the credit-scoring formula most widely used by U.S. lenders.
A foreclosure remains on a credit report for seven years. Credit scores can begin to rebound in as little as 2 years if bills are paid on time, according to FICO.
“You really want to think through the inability to borrow and higher rates that you’ll pay,” Christopher Van Slyke, a partner at Trovena LLC, a wealth management firm based in La Jolla, Calif., said of walking away.
“If you don’t have the gun to your head, then stay right where you are,” said Cheryl Morhauser, a financial adviser based in Nevada City, Calif., whose clients’ average net worth is $1.5 million to $3 million.
Jennifer Albaugh, 34, plans to keep her Las Vegas home, where prices have dropped 49 percent since she bought it in December 2004, according to the S&P/Case-Shiller index.
Ms. Albaugh, who owns a fabric store, might have sold her 3,000-square-foot house for as much as $550,000 four years ago, she said. Today she owes more than $300,000 on her mortgage and says her house isn’t worth even close to that. She and her husband are still looking to buy a bigger home for their two kids, especially while rates are low, and might turn their current home into a vacation rental, she said.
“Walking out of your house to get a better deal down the street is just not the right thing to do,” she said. “It hurts everybody.”
Social Stigma
Morality and social stigmas play an important role in whether someone who can afford the payments will walk away, said Paola Sapienza, professor of finance at Northwestern University’s business school, in a July study on strategic defaults. Eighty-one percent of 1,646 homeowners interviewed think it is morally wrong, the study found.
“If you know someone who’s done it, you’re way more likely to do it,” Ms. Sapienza said. “That’s the scariest part, is that there might be some contagion part of this.”
Ms. Albaugh and Mr. Conroy, the San Diego homeowner, said they’re frustrated by the lack of help for homeowners like them who keep paying.
“It seems like the banks are more willing to work with people who aren’t making their payments rather than people who are,” Mr. Conroy said.
Copyright © 2009 The Washington Times; Margaret Collins, Bloomberg News. Distributed by McClatchy-Tribune Information Services.
Thursday, October 8, 2009
Real estate flippers back in South Florida, but this time they could help
MIAMI – Oct. 8, 2009 – The flippers are back.
Bolstered by swelling foreclosures and bottomed-out prices, investors are returning to the South Florida real estate market, snapping up distressed homes with cash payments for either a quick turnaround or a short-term rent-then-sell investment.
Unlike the speculative flippers during the boom – scourges who unnaturally jacked up prices, spawned reality TV shows and led to the economic crumble – today’s flippers are erudite capitalists who could usher in positive change by buying dilapidated and abandoned homes, patching them up and selling them for a market-bearable price, experts say.
The downside: These cash-in-hand guys are competing with regular folks looking for deals and struggling to find loans.
But Realtors say this whole foreclosure flip phenomenon is not for the faint of heart.
It takes legwork. Homes may carry large HOA or tax liens. Many are stripped of appliances, toilets, countertops – everything but the drywall, and sometimes even that has been plundered.
“Without a doubt, people with opportunistic profit motivations are reentering to purchase properties,” said market analyst Jack McCabe of McCabe Research and Consulting in Deerfield Beach. “But this isn’t the group of cocktail sippers who were bragging years ago about buying and flipping. These are real investors.”
Jupiter-based Pudlit Joint Venture incorporated as a limited liability partnership in mid-June and began paying cash for Costco-style home buys.
In August and September, Pudlit purchased 42 Palm Beach County homes, according to the property appraiser’s office. The group’s buys vary from Lake Worth’s D Street to Wellington’s opulent Olympia.
Realtor Robert Littman, who represents Pudlit, said the company is made up of a “couple” of investors who are willing to do the job that banks aren’t – cleaning, re-roofing and replacing air condensers that disappear into the night.
Littman has sold eight homes.
“This is a very difficult job,” Littman said. “You could go down to the courthouse and look at hundreds of properties and then only buy two.”
Foreclosures in Palm Beach County grew substantially in August, with 4,150 receiving a foreclosure filing, a 110 percent increase from the same time the previous year.
St. Lucie County had 1,649 filings in August, up 57 percent from a year ago. Martin County, with 248 foreclosures, was up 8 percent from August 2008.
Curtis Lowe, president of the Realtors Association of St. Lucie, said he’s also seen an increase in investment buys on the Treasure Coast. He had a client “more than happy” to pay the asking price on a flipped home because it was move-in ready.
Another wave of foreclosures is expected to hit Florida in 2010 as unemployed workers struggle with payments.
University of Florida economics Professor David Denslow said out-of-state investors will likely follow.
Actually, they’re already here.
Calabasas, Calif.-based group LE 1 LLC is an investment fund run by real estate investor Paul Elis, who is tiptoeing into the Palm Beach County market.
With a local partner, he paid $125,000 in cash for a four-bedroom home in West Palm Beach in May. Newly remodeled, it’s now on the market for $244,900.
But with few offers, Elis, who says he’s been flipping homes for profit for 40 years, is considering renting the home for a year or two before he sells.
“I know Palm Beach will be potentially rewarding,” Elis said. “This business is not about getting lucky with markets, it’s about skill and technical competence.”
Slowing down the flippers – and that’s not necessarily a bad thing – is the fact that buyers may have trouble getting Federal Housing Administration loans if the home has changed hands within the past 90 days.
To move the glut of houses on the market, the FHA has relaxed its 90-day rule for buyers using federal Neighborhood Stabilization Program Grants, but the policy still aims to prevent the predatory turnarounds and sky-high price increases that made “flip” a four-letter word.
Even today, Elis and his sort are called “vultures” for picking at the bones of the real estate market.
“Some people think of them that way,” said John Thomas, Palm Beach County director of residential appraisal services. “But someone has to clean up this mess.”
Copyright © 2009 The Palm Beach Post, Fla. Distributed by McClatchy-Tribune Information Services.
Bolstered by swelling foreclosures and bottomed-out prices, investors are returning to the South Florida real estate market, snapping up distressed homes with cash payments for either a quick turnaround or a short-term rent-then-sell investment.
Unlike the speculative flippers during the boom – scourges who unnaturally jacked up prices, spawned reality TV shows and led to the economic crumble – today’s flippers are erudite capitalists who could usher in positive change by buying dilapidated and abandoned homes, patching them up and selling them for a market-bearable price, experts say.
The downside: These cash-in-hand guys are competing with regular folks looking for deals and struggling to find loans.
But Realtors say this whole foreclosure flip phenomenon is not for the faint of heart.
It takes legwork. Homes may carry large HOA or tax liens. Many are stripped of appliances, toilets, countertops – everything but the drywall, and sometimes even that has been plundered.
“Without a doubt, people with opportunistic profit motivations are reentering to purchase properties,” said market analyst Jack McCabe of McCabe Research and Consulting in Deerfield Beach. “But this isn’t the group of cocktail sippers who were bragging years ago about buying and flipping. These are real investors.”
Jupiter-based Pudlit Joint Venture incorporated as a limited liability partnership in mid-June and began paying cash for Costco-style home buys.
In August and September, Pudlit purchased 42 Palm Beach County homes, according to the property appraiser’s office. The group’s buys vary from Lake Worth’s D Street to Wellington’s opulent Olympia.
Realtor Robert Littman, who represents Pudlit, said the company is made up of a “couple” of investors who are willing to do the job that banks aren’t – cleaning, re-roofing and replacing air condensers that disappear into the night.
Littman has sold eight homes.
“This is a very difficult job,” Littman said. “You could go down to the courthouse and look at hundreds of properties and then only buy two.”
Foreclosures in Palm Beach County grew substantially in August, with 4,150 receiving a foreclosure filing, a 110 percent increase from the same time the previous year.
St. Lucie County had 1,649 filings in August, up 57 percent from a year ago. Martin County, with 248 foreclosures, was up 8 percent from August 2008.
Curtis Lowe, president of the Realtors Association of St. Lucie, said he’s also seen an increase in investment buys on the Treasure Coast. He had a client “more than happy” to pay the asking price on a flipped home because it was move-in ready.
Another wave of foreclosures is expected to hit Florida in 2010 as unemployed workers struggle with payments.
University of Florida economics Professor David Denslow said out-of-state investors will likely follow.
Actually, they’re already here.
Calabasas, Calif.-based group LE 1 LLC is an investment fund run by real estate investor Paul Elis, who is tiptoeing into the Palm Beach County market.
With a local partner, he paid $125,000 in cash for a four-bedroom home in West Palm Beach in May. Newly remodeled, it’s now on the market for $244,900.
But with few offers, Elis, who says he’s been flipping homes for profit for 40 years, is considering renting the home for a year or two before he sells.
“I know Palm Beach will be potentially rewarding,” Elis said. “This business is not about getting lucky with markets, it’s about skill and technical competence.”
Slowing down the flippers – and that’s not necessarily a bad thing – is the fact that buyers may have trouble getting Federal Housing Administration loans if the home has changed hands within the past 90 days.
To move the glut of houses on the market, the FHA has relaxed its 90-day rule for buyers using federal Neighborhood Stabilization Program Grants, but the policy still aims to prevent the predatory turnarounds and sky-high price increases that made “flip” a four-letter word.
Even today, Elis and his sort are called “vultures” for picking at the bones of the real estate market.
“Some people think of them that way,” said John Thomas, Palm Beach County director of residential appraisal services. “But someone has to clean up this mess.”
Copyright © 2009 The Palm Beach Post, Fla. Distributed by McClatchy-Tribune Information Services.
Tuesday, October 6, 2009
Today Show: Sarasota is Number 1 Place in USA to buy!
This morning on the Today Show, Barbara Corcoran, Real Estate Correspondent, said Sarasota, Florida is the number one place in the NATION to buy a home today! Why not share this great news with your clients, potential clients and friends!
Wanna see the whole interview? Here's the link
According to the interview, Sarasota prices have stabilized and are heading back up, and the community attributes (as we all know) - the beaches, the weather, the culture, the homes and the people - are too good to pass up!
Check it out! We're Number One!
Visit msnbc.com for Breaking News, World News, and News about the Economy
Wanna see the whole interview? Here's the link
According to the interview, Sarasota prices have stabilized and are heading back up, and the community attributes (as we all know) - the beaches, the weather, the culture, the homes and the people - are too good to pass up!
Check it out! We're Number One!
Wednesday, September 23, 2009
Paperless Office: I Can Find Anything Quick
Paperless Office: I Can Find Anything Quick
by: Dill Ward, Real Estate Investor / Agent
As a real estate professional I value organization. As a geek I appreciate the ease of doing so using technology. I shudder at the thought of standing in the driveway of my next deal without every document that's ever come across my desk at my fingertips. I love having the ability to quickly thumb through my thousands of contacts to find just the person I'm thinking of who can help me problem solve. In my business, buying distressed property means having to make decisions very quickly as competition for the best deals is fierce. I use my mountains of carefully sorted data to mine and my clients' benefit.
How do I do this?
First, every single paper object that becomes in my possession gets assessed to determine if it contains data to be captured. If it is approved it enters the system to an "inbox" where it waits for a scanning/paper reduction session. Every few days I sit down with the folder and work through piece by piece. I determine what information needs to be recorded and decide where to store it. I use my Fuji S300M portable document scanner exclusively to convert paper to pdfs. It's super fast, portable powered by my laptop and scans every size document.
Second, naming folders & files something detailed is the most important part of the process when archiving data. If you can't remember "how" to look for it, forget it. What I do is make separate folders named as detailed as possible, business cards, receipts, contracts, photos, research, bills, even concert tickets. Last say goodbye forever and send it through the shredder.
There is nothing I can't retrieve at a moments notice. Of course this takes constant discipline. Keep with the system. Just like working out, it's hard at first but soon it's easy breezy and you'll reap the rewards of your effort by being more organized, more efficient and most importantly reduce your stress.
FREE Credit Report - Thought About Yours Lately?
If you haven't looked at it in awhile, now's the time! For one there are so many errors out there, you don't want to suffer when you decide you need your credit just because you weren't paying attention to who and what has been reported.
Don't hide under a rock, know what's on there and work on it piece by piece. Look at your credit report like you would a maintenance checklist on your car. Don't get emotional or take it personal just deal with it. The first step is reading it and checking for errors. Then decide a plan of attack for derogatory line items. Decide which ones you can set short term and long term goals to address.
It's FREE once a year and should be a part of your yearly goal planning. Pay the few extra bucks to get your FICO score.
www.AnnualCreditReport.com
Dill
Friday, September 11, 2009
Fed Survey Shows U.S. Recession May Be Over
WASHINGTON (AP) – Sept. 10, 2009 – The recession is ending and the U.S. economy is finally growing again.
That’s the message implicit in the Federal Reserve’s latest survey of businesses around the country, which found economic activity stabilizing or improving in most regions.
Economists warn the expansion is fragile and will have staying power only if consumers start spending more money. Rising unemployment that keeps Americans cautious could make for a plodding recovery in the months ahead.
The Labor Department will report on Thursday the number of new jobless claims filed last week, which could indicate whether the incipient recovery is slowing the pace of layoffs.
Wall Street economists expect that first-time claims for unemployment insurance benefits fell to a seasonally adjusted 560,000 from 570,000 the previous week, according to a survey by Thomson Reuters.
Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies’ willingness to hire new workers.
While the figures are volatile, first-time claims have trended downward in recent months. Initial claims topped 600,000 for most of this year, until falling below that level in early July.
The total number of people receiving benefits, meanwhile, is expected to drop by about 30,000 to 6.2 million. The figures on so-called continuing claims lag initial claims by a week.
All but one of the Fed’s 12 regions, meanwhile, indicated economic activity either was “stable,” showed “signs of stabilization” or had “firmed,” according to the Fed’s survey. The one exception was the St. Louis region, which reported the economic decline is “moderating.”
Businesses in most Fed regions said they were “cautiously positive” about the economic road ahead. The survey, known as the Beige Book, does not include precise figures.
Analysts predict the economy is growing in the current quarter, which ends Sept. 30, at an annual rate of 3 percent to 4 percent. That’s mostly because businesses, which had slashed investments during the recession, are spending more.
Auto sales have been lifted by the government’s recently ended Cash for Clunkers program. Manufacturing and the battered housing market, which led the country into recession when it collapsed, have also shown signs of improvement.
The problem for the economy is that the expected growth this quarter comes mainly from the auto companies and other manufacturers, which are refilling their depleted stockpiles.
Those inventories had dwindled as factories and retailers sought to bring what they had more in line with reduced sales. Any robust growth in the economy might be short-lived if shoppers don’t step up their spending.
In the Fed survey, most regions of the country reported that the clunkers program had boosted sales. Other merchants struggled. And consumer spending remained soft in most places.
Still, the assessments of businesses on the front lines of the economy were brighter than those they provided for the last edition of the Fed survey in late July.
At that time, most regions of the country reflected only that the recession was easing its grip. “That’s a pretty significant change in tone from the previous Fed report,” said Brian Bethune, economist at IHS Global Insight.
The survey’s findings will figure into discussions when Fed Chairman Ben Bernanke and his colleagues meet Sept. 22-23. The Fed is expected to keep interest rates at record lows, probably for some time, to help nurture the recovery.
“There are presently some signs that the economy is stabilizing and even reviving in certain areas, despite mixed signals,” Richard Fisher, president of the Federal Reserve Bank of Dallas, said in a speech in Texas.
The market for homes is still weak — though it flashed some signs of improvement. In most places, buyer demand was stronger for cheaper homes, and in and around Philadelphia, sales were up for more expensive homes, too.
Fed regions credited a tax incentive for first-time homebuyers with increasing sales. Home prices kept falling in most parts of the country, though in the Dallas and New York regions, the survey found prices “firming.”
In a sign that lenders’ efforts to help troubled mortgage holders may be helping, the number of U.S. households threatened with losing their homes held steady last month, RealtyTrac Inc. reported Thursday.
The number of foreclosure-related filings — including default notices, scheduled auctions and bank repossessions — remains 18 percent higher than a year ago.
There was plenty of bad news in the survey. In the commercial real estate market, demand stayed weak, and construction fell in all parts of the country. And the job market was still sickly all over the nation.
The nation’s unemployment rate, which stood at 9.7 percent in August, could top 10 percent this year. Fisher, of the Dallas Fed, called for “uncomfortably high unemployment” as businesses keep cutting costs.
Copyright © 2009 The Associated Press, Jeannine Aversa, AP economics writer. All rights reserved.
That’s the message implicit in the Federal Reserve’s latest survey of businesses around the country, which found economic activity stabilizing or improving in most regions.
Economists warn the expansion is fragile and will have staying power only if consumers start spending more money. Rising unemployment that keeps Americans cautious could make for a plodding recovery in the months ahead.
The Labor Department will report on Thursday the number of new jobless claims filed last week, which could indicate whether the incipient recovery is slowing the pace of layoffs.
Wall Street economists expect that first-time claims for unemployment insurance benefits fell to a seasonally adjusted 560,000 from 570,000 the previous week, according to a survey by Thomson Reuters.
Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies’ willingness to hire new workers.
While the figures are volatile, first-time claims have trended downward in recent months. Initial claims topped 600,000 for most of this year, until falling below that level in early July.
The total number of people receiving benefits, meanwhile, is expected to drop by about 30,000 to 6.2 million. The figures on so-called continuing claims lag initial claims by a week.
All but one of the Fed’s 12 regions, meanwhile, indicated economic activity either was “stable,” showed “signs of stabilization” or had “firmed,” according to the Fed’s survey. The one exception was the St. Louis region, which reported the economic decline is “moderating.”
Businesses in most Fed regions said they were “cautiously positive” about the economic road ahead. The survey, known as the Beige Book, does not include precise figures.
Analysts predict the economy is growing in the current quarter, which ends Sept. 30, at an annual rate of 3 percent to 4 percent. That’s mostly because businesses, which had slashed investments during the recession, are spending more.
Auto sales have been lifted by the government’s recently ended Cash for Clunkers program. Manufacturing and the battered housing market, which led the country into recession when it collapsed, have also shown signs of improvement.
The problem for the economy is that the expected growth this quarter comes mainly from the auto companies and other manufacturers, which are refilling their depleted stockpiles.
Those inventories had dwindled as factories and retailers sought to bring what they had more in line with reduced sales. Any robust growth in the economy might be short-lived if shoppers don’t step up their spending.
In the Fed survey, most regions of the country reported that the clunkers program had boosted sales. Other merchants struggled. And consumer spending remained soft in most places.
Still, the assessments of businesses on the front lines of the economy were brighter than those they provided for the last edition of the Fed survey in late July.
At that time, most regions of the country reflected only that the recession was easing its grip. “That’s a pretty significant change in tone from the previous Fed report,” said Brian Bethune, economist at IHS Global Insight.
The survey’s findings will figure into discussions when Fed Chairman Ben Bernanke and his colleagues meet Sept. 22-23. The Fed is expected to keep interest rates at record lows, probably for some time, to help nurture the recovery.
“There are presently some signs that the economy is stabilizing and even reviving in certain areas, despite mixed signals,” Richard Fisher, president of the Federal Reserve Bank of Dallas, said in a speech in Texas.
The market for homes is still weak — though it flashed some signs of improvement. In most places, buyer demand was stronger for cheaper homes, and in and around Philadelphia, sales were up for more expensive homes, too.
Fed regions credited a tax incentive for first-time homebuyers with increasing sales. Home prices kept falling in most parts of the country, though in the Dallas and New York regions, the survey found prices “firming.”
In a sign that lenders’ efforts to help troubled mortgage holders may be helping, the number of U.S. households threatened with losing their homes held steady last month, RealtyTrac Inc. reported Thursday.
The number of foreclosure-related filings — including default notices, scheduled auctions and bank repossessions — remains 18 percent higher than a year ago.
There was plenty of bad news in the survey. In the commercial real estate market, demand stayed weak, and construction fell in all parts of the country. And the job market was still sickly all over the nation.
The nation’s unemployment rate, which stood at 9.7 percent in August, could top 10 percent this year. Fisher, of the Dallas Fed, called for “uncomfortably high unemployment” as businesses keep cutting costs.
Copyright © 2009 The Associated Press, Jeannine Aversa, AP economics writer. All rights reserved.
Friday, September 4, 2009
NY Times Reminds us People Vacation Where We Live & Invest
I love to once again see Sarasota specifically Siesta Key getting good press. It is a beautiful natural resource and it helps fuel our local economy. Kudos NYT!
Dill
_______________________________
If They Gave Awards for Sand ... Well, They Do
By ELIZABETH MAKER
SUMMER may seem an odd time to flee to Florida, but thanks to a happy accident of geology, there’s one small island there that may be better to visit the more the mercury rises.
“Do you really have to put this in your paper?” asked a frequent visitor, Linda Guckenberger of Columbus, Ind. “Siesta Key is a hidden treasure, especially in the summer. The heat in Indiana is oppressive in August, so when we tell people we’re going to Florida, they think we’re nuts. They say, ‘Why aren’t you going north?’ ”
Siesta Key, an eight-mile-long, crescent-shaped barrier island on the Gulf Coast south of Sarasota, is becoming more popular in hotter months as tourists discover its powdered-sugar white sand that seems always to stay cool, no matter how high the heat outside. Other enticements include cool gulf breezes; clear, temperate, turquoise water; and huge discounts on accommodations from July through September at luxury high-rises, cozy cottages and funky beachfront bungalows.
Summer seems to lure mainly Midwesterners and Europeans to Siesta Key, said Dale Nelson, a volunteer with the Siesta Key Chamber of Commerce, while winter is the province of Northeastern and Canadian snowbirds.
Ms. Guckenberger and 15 family members have been renting the same neighboring condos at Siesta Sands Beach Resort for two weeks every summer for the last eight years. “It really is ‘The World’s Finest, Whitest Sand,’ ” she said, mentioning the title the beach won in 1987 in the Great International White Sand Challenge, adjudicated by Florida International University.
This year Stephen Leatherman, known as Dr. Beach and director of the university’s Laboratory for Coastal Research, named Siesta Key’s beach as the second-best in the nation. (Hanalei Bay on Kauai, Hawaii, was first.)
“I use 50 criteria to rate every beach, and in terms of sand alone Siesta Key is definitely the best in the world,” Dr. Leatherman said. Science backs up the hyperbole: Siesta Key’s beach is 99 percent limestone quartz, which stays consistently cool and silky.
Why the other archipelagic islands nearby didn’t get the same sacred sand is harder to explain. Hop over to Lido Key to the north, or Casey Key to the south, and you’ll find the more typical crushed-shell beaches that are beautiful but make barefooting a painful proposition when the sun is searing. “Why is it like this on Siesta Key and nowhere else?” asked Mark Smith, president of the Siesta Key Village Association. “Because God loves us? Who knows?”
Actually, Dr. Leatherman said, quartz grains deposited from the southern Appalachians over millennia settled in a protected pocket around Siesta Key. “Other beaches have a mix of all kinds of minerals that make the texture coarser and the color darker, but Siesta Key is all refined quartz,” he said. “It’s cushy and squeaky and absolutely dazzling.”
Siesta Key was virtually uninhabited until the 1880’s (except by rattlesnakes, copperheads, wild boars and the like). First called Sarasota Key, it was connected to the mainland in 1917 when the first of two bridges was built and the island was discovered by an eclectic mix of artists, writers and business professionals. Residents changed the island’s name to Siesta Key in the 1920s.
The island has a population of 9,581, which almost doubles in winter, according to the 2000 census.
The village has just undergone a multimillion-dollar makeover. Utility wires have been buried; concrete sidewalks were replaced with wider brick walkways, 16 new brick crosswalks have been laid; elegant lamplights, benches and a gazebo have been installed; and flowering, fragrant landscaping and black olive shade trees were planted along its main street, Ocean Boulevard.
Graham and Beverley Easton of West Yorkshire, England, say summer on Siesta Key is more sublime than anywhere they’ve vacationed in Europe. “We’ve been to Spain, France, Portugal, but Siesta Key is our true paradise,” said Mr. Easton, whose family spent three weeks in August at the Sandbox on the Beach for the 10th consecutive year. “We’re taking two other families with us, and we can’t wait to see their reaction. You walk into the apartment and open the back door to the beach, and it’s the most amazing ‘Wow’ factor you’ve ever experienced. Everyone is completely blown away.”
The Eastons start their days at 5:30 a.m. with a cup of coffee and a long walk down the beach. Their two teenage daughters build elaborate sand sculptures, swim and watch dolphins play in the surf, almost close enough to touch.
“We walk into the village and shop at the great boutiques, grab a cold beer or a daiquiri, then go back and barbeque dinner out on the grill,” Mr. Easton said. “And everyone oohs and ahhs as the sun sets: a huge orange globe slipping into the water.”
There are several new luxury resorts, including the $100 million Hyatt Siesta Key Beach Residence Club, which opened in June, offering time-share units that cost from $140,000 to $695,000.
But there are also accommodations across the street from the beach that are available for a comparable song in summer. The Ringling Beach House, for example, a pink stucco building with Old Florida charm, has rooms starting at $120 a night, and all have fully-equipped kitchens, linens and towels, air conditioning, TV, and access to barbeque grills and three small pools.
Dining choices are varied, with an emphasis on flip-flop casual: there are tapas bars and tiki bars, raw bars and crab shacks. The Daiquiri Deck, which used to be a speakeasy, offers 18 daiquiri flavors. And though it’s far from New England, Captain Curt’s Crab & Oyster Bar won the annual Great Chowder Cook-Off in Newport, R.I., in 2007.
There is more sophisticated, waterfront dining at Ophelia’s on the Bay, a top pick in Zagat’s, with dishes like Norwegian salmon with mango-honey barbeque sauce and ginger-nectarine salsa, or yellowfin tuna with grilled watermelon and kimchee-spiced aoli.
The most hopping spot on the island is the public beach pavilion, famous for its Psychedelic Superman ice cream (vanilla with bright food-colored stripes). People of all ages walk around to reggae music, licking melting cones; some stop under the large straw-roofed pavilion to get temporary tattoos or their hair braided in Bo Derek cornrows.
“You get a lot more bang for your buck in the summer, and there are no crowds, no hustle bustle,” Ms. Guckenberger said from her home in Indiana. “We just got back, and we’re still laughing with all the memories of the little ones doing face plants in the sand, like they couldn’t get enough of it.”
Dill
_______________________________
If They Gave Awards for Sand ... Well, They Do
By ELIZABETH MAKER
SUMMER may seem an odd time to flee to Florida, but thanks to a happy accident of geology, there’s one small island there that may be better to visit the more the mercury rises.
“Do you really have to put this in your paper?” asked a frequent visitor, Linda Guckenberger of Columbus, Ind. “Siesta Key is a hidden treasure, especially in the summer. The heat in Indiana is oppressive in August, so when we tell people we’re going to Florida, they think we’re nuts. They say, ‘Why aren’t you going north?’ ”
Siesta Key, an eight-mile-long, crescent-shaped barrier island on the Gulf Coast south of Sarasota, is becoming more popular in hotter months as tourists discover its powdered-sugar white sand that seems always to stay cool, no matter how high the heat outside. Other enticements include cool gulf breezes; clear, temperate, turquoise water; and huge discounts on accommodations from July through September at luxury high-rises, cozy cottages and funky beachfront bungalows.
Summer seems to lure mainly Midwesterners and Europeans to Siesta Key, said Dale Nelson, a volunteer with the Siesta Key Chamber of Commerce, while winter is the province of Northeastern and Canadian snowbirds.
Ms. Guckenberger and 15 family members have been renting the same neighboring condos at Siesta Sands Beach Resort for two weeks every summer for the last eight years. “It really is ‘The World’s Finest, Whitest Sand,’ ” she said, mentioning the title the beach won in 1987 in the Great International White Sand Challenge, adjudicated by Florida International University.
This year Stephen Leatherman, known as Dr. Beach and director of the university’s Laboratory for Coastal Research, named Siesta Key’s beach as the second-best in the nation. (Hanalei Bay on Kauai, Hawaii, was first.)
“I use 50 criteria to rate every beach, and in terms of sand alone Siesta Key is definitely the best in the world,” Dr. Leatherman said. Science backs up the hyperbole: Siesta Key’s beach is 99 percent limestone quartz, which stays consistently cool and silky.
Why the other archipelagic islands nearby didn’t get the same sacred sand is harder to explain. Hop over to Lido Key to the north, or Casey Key to the south, and you’ll find the more typical crushed-shell beaches that are beautiful but make barefooting a painful proposition when the sun is searing. “Why is it like this on Siesta Key and nowhere else?” asked Mark Smith, president of the Siesta Key Village Association. “Because God loves us? Who knows?”
Actually, Dr. Leatherman said, quartz grains deposited from the southern Appalachians over millennia settled in a protected pocket around Siesta Key. “Other beaches have a mix of all kinds of minerals that make the texture coarser and the color darker, but Siesta Key is all refined quartz,” he said. “It’s cushy and squeaky and absolutely dazzling.”
Siesta Key was virtually uninhabited until the 1880’s (except by rattlesnakes, copperheads, wild boars and the like). First called Sarasota Key, it was connected to the mainland in 1917 when the first of two bridges was built and the island was discovered by an eclectic mix of artists, writers and business professionals. Residents changed the island’s name to Siesta Key in the 1920s.
The island has a population of 9,581, which almost doubles in winter, according to the 2000 census.
The village has just undergone a multimillion-dollar makeover. Utility wires have been buried; concrete sidewalks were replaced with wider brick walkways, 16 new brick crosswalks have been laid; elegant lamplights, benches and a gazebo have been installed; and flowering, fragrant landscaping and black olive shade trees were planted along its main street, Ocean Boulevard.
Graham and Beverley Easton of West Yorkshire, England, say summer on Siesta Key is more sublime than anywhere they’ve vacationed in Europe. “We’ve been to Spain, France, Portugal, but Siesta Key is our true paradise,” said Mr. Easton, whose family spent three weeks in August at the Sandbox on the Beach for the 10th consecutive year. “We’re taking two other families with us, and we can’t wait to see their reaction. You walk into the apartment and open the back door to the beach, and it’s the most amazing ‘Wow’ factor you’ve ever experienced. Everyone is completely blown away.”
The Eastons start their days at 5:30 a.m. with a cup of coffee and a long walk down the beach. Their two teenage daughters build elaborate sand sculptures, swim and watch dolphins play in the surf, almost close enough to touch.
“We walk into the village and shop at the great boutiques, grab a cold beer or a daiquiri, then go back and barbeque dinner out on the grill,” Mr. Easton said. “And everyone oohs and ahhs as the sun sets: a huge orange globe slipping into the water.”
There are several new luxury resorts, including the $100 million Hyatt Siesta Key Beach Residence Club, which opened in June, offering time-share units that cost from $140,000 to $695,000.
But there are also accommodations across the street from the beach that are available for a comparable song in summer. The Ringling Beach House, for example, a pink stucco building with Old Florida charm, has rooms starting at $120 a night, and all have fully-equipped kitchens, linens and towels, air conditioning, TV, and access to barbeque grills and three small pools.
Dining choices are varied, with an emphasis on flip-flop casual: there are tapas bars and tiki bars, raw bars and crab shacks. The Daiquiri Deck, which used to be a speakeasy, offers 18 daiquiri flavors. And though it’s far from New England, Captain Curt’s Crab & Oyster Bar won the annual Great Chowder Cook-Off in Newport, R.I., in 2007.
There is more sophisticated, waterfront dining at Ophelia’s on the Bay, a top pick in Zagat’s, with dishes like Norwegian salmon with mango-honey barbeque sauce and ginger-nectarine salsa, or yellowfin tuna with grilled watermelon and kimchee-spiced aoli.
The most hopping spot on the island is the public beach pavilion, famous for its Psychedelic Superman ice cream (vanilla with bright food-colored stripes). People of all ages walk around to reggae music, licking melting cones; some stop under the large straw-roofed pavilion to get temporary tattoos or their hair braided in Bo Derek cornrows.
“You get a lot more bang for your buck in the summer, and there are no crowds, no hustle bustle,” Ms. Guckenberger said from her home in Indiana. “We just got back, and we’re still laughing with all the memories of the little ones doing face plants in the sand, like they couldn’t get enough of it.”
Wednesday, August 26, 2009
Roth IRA's 2010 Tax Laws & How it Will Help Investors
Thanks to Paul DaCosta, tonight I listened in on a conference call with Dave Owens, CEO of Entrust Freedom, one of the industry leaders in Self Directed IRA and 1031 Exchange accounts. If you aren't familiar with these and you invest in Real Estate, you better start getting your feet wet, especially if you plan to retire.
I found this starter's guide on their website: www.entrustfreedom.com/free-reports/thanks/
Dave highlighted two important changes to 2010 tax laws governing Roth IRAs
1) Starting in 2010, taxpayers with modified adjusted gross income of more than $100,000 will be allowed to convert a traditional IRA to a Roth IRA.
2) Income taxes due on the 2010 conversion can be spread over two years. So the 2010 conversion amount may be included as taxable income in 2011 and 2012 - helping to spread out the tax bite.
Taking Advantage of the 2010 Rule
Fortunately there is a way for all taxpayers - regardless of income - to take advantage of this change in the tax code:
Start Funding a Traditional IRA Right Now!
Even if you don't qualify to make Roth IRA contributions or traditional IRA contributions on a before-tax basis, you can still make after-tax contributions to a traditional IRA. If you invest in a non-deductible IRA in the tax years 2006 through 2010, then you can convert those IRAs to Roth IRAs in 2010.
Most investors shy away from making non-deductible contributions to an IRA because they are not tax deductible, the investment growth is fully taxable, and because they are subject to minimum distribution rules they offer only a minimal tax shelter. But by converting these non-deductible IRAs to Roth IRAs in 2010 many of those disadvantages disappear.
The bottom line is... and this has been on my mind a lot lately. If we are working so hard to live, what are we making all this money for? I think it's so we don't have to work so hard later when we aren't physically able. If you aren't thinking about how Real Estate can play into your retirement portfolio you should be!
Call me! I'll get you pumped up.
Dill
The Conference Board Consumer Confidence Index bounces back
NEW YORK – Aug. 25, 2009 – The Conference Board Consumer Confidence Index®, which had retreated in July, rebounded in August. The Index now stands at 54.1 (1985=100), up from 47.4 in July. The Present Situation Index increased slightly to 24.9 from 23.3 last month. The Expectations Index improved to 73.5 from 63.4 in July.
“Consumer confidence, which had posted back-to-back monthly declines, appears to be back on the mend,” says Lynn Franco, director of The Conference Board Consumer Research Center. “The Present Situation Index increased slightly, mainly the result of an improvement in consumers’ assessment of the job market. The Expectations Index improved considerably and is now at its highest level since December 2007 (Index, 75.8). Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations. And, as long as earnings continue to weigh heavily on consumers’ minds, spending is likely to remain constrained.”
Consumers’ assessment of current conditions improved slightly in August. Those claiming business conditions are “bad” decreased to 45.6 percent from 46.5 percent; however, those claiming conditions are “good” decreased to 8.6 percent from 8.9 percent. Consumers’ appraisal of the job market was more favorable this month. Those saying jobs are “hard to get” decreased to 45.1 percent from 48.5 percent, while those claiming jobs are “plentiful” increased to 4.2 percent from 3.7 percent.
Consumers’ short-term outlook was much improved from last month. Those expecting an improvement in business conditions over the next six months increased to 22.4 percent from 18.4 percent. Those anticipating conditions to worsen decreased to 15.8 percent from 19.0 percent.
The labor market outlook was also more upbeat. The percentage of consumers expecting more jobs in the months ahead increased to 18.4 percent from 15.5 percent, while those expecting fewer jobs decreased to 23.3 percent from 26.1 percent. The proportion of consumers expecting an increase in their incomes increased slightly to 10.6 percent from 10.1 percent.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS, one of the world’s largest custom research companies. The cutoff date for August’s preliminary results was Aug. 18.
© 2009 FLORIDA ASSOCIATION OF REALTORS
“Consumer confidence, which had posted back-to-back monthly declines, appears to be back on the mend,” says Lynn Franco, director of The Conference Board Consumer Research Center. “The Present Situation Index increased slightly, mainly the result of an improvement in consumers’ assessment of the job market. The Expectations Index improved considerably and is now at its highest level since December 2007 (Index, 75.8). Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations. And, as long as earnings continue to weigh heavily on consumers’ minds, spending is likely to remain constrained.”
Consumers’ assessment of current conditions improved slightly in August. Those claiming business conditions are “bad” decreased to 45.6 percent from 46.5 percent; however, those claiming conditions are “good” decreased to 8.6 percent from 8.9 percent. Consumers’ appraisal of the job market was more favorable this month. Those saying jobs are “hard to get” decreased to 45.1 percent from 48.5 percent, while those claiming jobs are “plentiful” increased to 4.2 percent from 3.7 percent.
Consumers’ short-term outlook was much improved from last month. Those expecting an improvement in business conditions over the next six months increased to 22.4 percent from 18.4 percent. Those anticipating conditions to worsen decreased to 15.8 percent from 19.0 percent.
The labor market outlook was also more upbeat. The percentage of consumers expecting more jobs in the months ahead increased to 18.4 percent from 15.5 percent, while those expecting fewer jobs decreased to 23.3 percent from 26.1 percent. The proportion of consumers expecting an increase in their incomes increased slightly to 10.6 percent from 10.1 percent.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS, one of the world’s largest custom research companies. The cutoff date for August’s preliminary results was Aug. 18.
© 2009 FLORIDA ASSOCIATION OF REALTORS
Monday, August 24, 2009
Friday, August 21, 2009
New credit rating guidelines cut homeowners no slack
WASHINGTON – Aug. 20, 2009 – Facing one of the worst housing markets in memory, struggling homeowners now have another incentive to walk away from an investment gone bad.
It’s hard enough to modify terms of a home mortgage, despite the federal government’s efforts to ease those procedures for individuals desperate to hold onto their houses. Unfortunately, the “Big Three” credit bureaus – Equifax, Experian and TransUnion – have issued new guidelines that allow lenders to report new mortgage loan modifications as “partial payment status,” a designation that could lower an individual’s credit score by more than 50 points.
A loan modification doesn’t reduce the principal, but makes it easier for homeowners to repay what’s owed by reducing the interest rate and stretching the length of the original loan. Credit agencies are paid to assess credit risks, and that includes people who can’t pay their mortgages. But these are extraordinary times. Penalizing a homeowner for successfully re-negotiating a loan could have the unwanted consequence of inducing more foreclosures.
First American CoreLogic, a real estate analysis firm, says more than 15 million mortgage holders, or 32.2 percent, are “upside down” on their mortgages, meaning they’re paying more than their houses are worth. In Florida, the negative-equity picture is worse at 49 percent, and the figures are even higher in South Florida, hovering around 51.5 percent in the Miami-Fort Lauderdale area.
Now, thanks to the credit-rating agencies and an indifferent government bureaucracy of financial regulators, there will be homeowners who will unnecessarily become credit risks. While a loan modification provides a better outcome than a short sale, foreclosure or bankruptcy, punishing homeowners who work with their lenders is counterproductive.
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla. Distributed by McClatchy-Tribune Information Services.
It’s hard enough to modify terms of a home mortgage, despite the federal government’s efforts to ease those procedures for individuals desperate to hold onto their houses. Unfortunately, the “Big Three” credit bureaus – Equifax, Experian and TransUnion – have issued new guidelines that allow lenders to report new mortgage loan modifications as “partial payment status,” a designation that could lower an individual’s credit score by more than 50 points.
A loan modification doesn’t reduce the principal, but makes it easier for homeowners to repay what’s owed by reducing the interest rate and stretching the length of the original loan. Credit agencies are paid to assess credit risks, and that includes people who can’t pay their mortgages. But these are extraordinary times. Penalizing a homeowner for successfully re-negotiating a loan could have the unwanted consequence of inducing more foreclosures.
First American CoreLogic, a real estate analysis firm, says more than 15 million mortgage holders, or 32.2 percent, are “upside down” on their mortgages, meaning they’re paying more than their houses are worth. In Florida, the negative-equity picture is worse at 49 percent, and the figures are even higher in South Florida, hovering around 51.5 percent in the Miami-Fort Lauderdale area.
Now, thanks to the credit-rating agencies and an indifferent government bureaucracy of financial regulators, there will be homeowners who will unnecessarily become credit risks. While a loan modification provides a better outcome than a short sale, foreclosure or bankruptcy, punishing homeowners who work with their lenders is counterproductive.
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla. Distributed by McClatchy-Tribune Information Services.
Monday, August 17, 2009
HUD moves away from ‘ownership society’
WASHINGTON – Aug. 17, 2009 – The Obama administration is moving away from encouraging low-income Americans to buy homes, instead spending $4.25 billion on new rental units, officials say.
The White House decision to pump the federal stimulus funds into the Department of Housing and Urban Development’s low-rise rental apartment program is a clear ideological break with the administration of former President George W. Bush, whose policies of making mortgages available to low-income home buyers fell victim to the mortgage crisis, The Boston Globe reported Sunday.
The collapse of the for-sale housing market has left many low-income people holding mortgages they can no longer afford, becoming victims of skyrocketing foreclosure rates, and has led HUD to reassess the Bush-era goals of an “ownership society,” the Globe said.
“We’re trying to have a balanced policy,” Carol Galante, HUD’s assistant secretary for multifamily housing, told the newspaper, adding that the agency will also be using the stimulus funds to buy foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates.
Conservative critics, however, told the Globe that rent payments in some cases can be more expensive than mortgages for low-income residents.
Copyright © 2009 by United Press International.
The White House decision to pump the federal stimulus funds into the Department of Housing and Urban Development’s low-rise rental apartment program is a clear ideological break with the administration of former President George W. Bush, whose policies of making mortgages available to low-income home buyers fell victim to the mortgage crisis, The Boston Globe reported Sunday.
The collapse of the for-sale housing market has left many low-income people holding mortgages they can no longer afford, becoming victims of skyrocketing foreclosure rates, and has led HUD to reassess the Bush-era goals of an “ownership society,” the Globe said.
“We’re trying to have a balanced policy,” Carol Galante, HUD’s assistant secretary for multifamily housing, told the newspaper, adding that the agency will also be using the stimulus funds to buy foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates.
Conservative critics, however, told the Globe that rent payments in some cases can be more expensive than mortgages for low-income residents.
Copyright © 2009 by United Press International.
Saturday, August 15, 2009
Understanding the $8,000 Tax Credit
First Time Home Buyer? If you haven't bought a house in 3 years you are considered FTB. Read everything you need to know here:
www.floridarealtors.org/AboutFar/homebuyercenter/upload/firsttimehomebuyer.pdf
Most importantly to qualify transaction MUST CLOSE by November 30, 2009 If you are getting a loan, plan for 45 days from contract to closing. Mortgage closings are taking longer and longer, don't wait till the last minute to find a house, you may miss the deadline!
Start looking!
Search the Database
Marketing 101: Is Social Media a Fad?
The Social Media Revolution: Statistics From Socialnomics show Social Media isn’t a fad anymore, it's bigger than you think
Is Social Media the biggest shift since the Industrial Revolution? We are definitely in the Generation Now and you have to be oblivious to believe that Social Media is not the new precedent in marketing.
The powers of Social Media below…enjoy!
• By 2010 Gen Y will outnumber Baby Boomers….96% of them have joined a social network
• Social Media has overtaken porn as the #1 activity on the Web
• 1 out of 8 couples married in the U.S. last year met via social media
• Years to Reach 50 millions Users: Radio (38 Years), TV (13 Years), Internet (4 Years), iPod (3 Years)…Facebook added 100 million users in less than 9 months…iPhone applications hit 1 billion in 9 months.
• If Facebook were a country it would be the world’s 4th largest between the United States and Indonesia
• Yet, some sources say China’s QZone is larger with over 300 million using their services (Facebook’s ban in China plays into this)
• comScore indicates that Russia has the most engage social media audience with visitors spending 6.6 hours and viewing 1,307 pages per visitor per month – Vkontakte.ru is the #1 social network
• 2009 US Department of Education study revealed that on average, online students out performed those receiving face-to-face instruction
• 1 in 6 higher education students are enrolled in online curriculum
• % of companies using LinkedIn as a primary tool to find employees….80%
• The fastest growing segment on Facebook is 55-65 year-old females
• Ashton Kutcher and Ellen Degeneres have more Twitter followers than the entire populations of Ireland, Norway and Panama
• 80% of Twitter usage is on mobile devices…people update anywhere, anytime…imagine what that means for bad customer experiences?
• Generation Y and Z consider e-mail passé…In 2009 Boston College stopped distributing e-mail addresses to incoming freshmen
• What happens in Vegas stays on YouTube, Flickr, Twitter, Facebook…
• The #2 largest search engine in the world is YouTube
• Wikipedia has over 13 million articles…some studies show it’s more accurate than Encyclopedia Britannica…78% of these articles are non-English
• There are over 200,000,000 Blogs
• 54% = Number of bloggers who post content or tweet daily
• Because of the speed in which social media enables communication, word of mouth now becomes world of mouth
• If you were paid a $1 for every time an article was posted on Wikipedia you would earn $156.23 per hour
• Facebook USERS translated the site from English to Spanish via a Wiki in less than 4 weeks and cost Facebook $0
• 25% of search results for the World’s Top 20 largest brands are links to user-generated content
• 34% of bloggers post opinions about products & brands
• People care more about how their social graph ranks products and services more than how Google ranks them
• 78% of consumers trust peer recommendations
• Only 14% trust advertisements
• Only 18% of traditional TV campaigns generate a positive ROI
• 90% of people that can TiVo ads do
• Hulu has grown from 63 million total streams in April 2008 to 373 million in April 2009
• 25% of Americans in the past month said they watched a short video…on their phone
• According to Jeff Bezos 35% of book sales on Amazon are for the Kindle when available
• 24 of the 25 largest newspapers are experiencing record declines in circulation because we no longer search for the news, the news finds us.
• In the near future we will no longer search for products and services they will find us via social media
• More than 1.5 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared on Facebook…daily.
• Successful companies in social media act more like Dale Carnegie and less like David Ogilvy Listening first, selling second
• Successful companies in social media act more like party planners, aggregators, and content providers than traditional advertiser
Is Social Media the biggest shift since the Industrial Revolution? We are definitely in the Generation Now and you have to be oblivious to believe that Social Media is not the new precedent in marketing.
The powers of Social Media below…enjoy!
• By 2010 Gen Y will outnumber Baby Boomers….96% of them have joined a social network
• Social Media has overtaken porn as the #1 activity on the Web
• 1 out of 8 couples married in the U.S. last year met via social media
• Years to Reach 50 millions Users: Radio (38 Years), TV (13 Years), Internet (4 Years), iPod (3 Years)…Facebook added 100 million users in less than 9 months…iPhone applications hit 1 billion in 9 months.
• If Facebook were a country it would be the world’s 4th largest between the United States and Indonesia
• Yet, some sources say China’s QZone is larger with over 300 million using their services (Facebook’s ban in China plays into this)
• comScore indicates that Russia has the most engage social media audience with visitors spending 6.6 hours and viewing 1,307 pages per visitor per month – Vkontakte.ru is the #1 social network
• 2009 US Department of Education study revealed that on average, online students out performed those receiving face-to-face instruction
• 1 in 6 higher education students are enrolled in online curriculum
• % of companies using LinkedIn as a primary tool to find employees….80%
• The fastest growing segment on Facebook is 55-65 year-old females
• Ashton Kutcher and Ellen Degeneres have more Twitter followers than the entire populations of Ireland, Norway and Panama
• 80% of Twitter usage is on mobile devices…people update anywhere, anytime…imagine what that means for bad customer experiences?
• Generation Y and Z consider e-mail passé…In 2009 Boston College stopped distributing e-mail addresses to incoming freshmen
• What happens in Vegas stays on YouTube, Flickr, Twitter, Facebook…
• The #2 largest search engine in the world is YouTube
• Wikipedia has over 13 million articles…some studies show it’s more accurate than Encyclopedia Britannica…78% of these articles are non-English
• There are over 200,000,000 Blogs
• 54% = Number of bloggers who post content or tweet daily
• Because of the speed in which social media enables communication, word of mouth now becomes world of mouth
• If you were paid a $1 for every time an article was posted on Wikipedia you would earn $156.23 per hour
• Facebook USERS translated the site from English to Spanish via a Wiki in less than 4 weeks and cost Facebook $0
• 25% of search results for the World’s Top 20 largest brands are links to user-generated content
• 34% of bloggers post opinions about products & brands
• People care more about how their social graph ranks products and services more than how Google ranks them
• 78% of consumers trust peer recommendations
• Only 14% trust advertisements
• Only 18% of traditional TV campaigns generate a positive ROI
• 90% of people that can TiVo ads do
• Hulu has grown from 63 million total streams in April 2008 to 373 million in April 2009
• 25% of Americans in the past month said they watched a short video…on their phone
• According to Jeff Bezos 35% of book sales on Amazon are for the Kindle when available
• 24 of the 25 largest newspapers are experiencing record declines in circulation because we no longer search for the news, the news finds us.
• In the near future we will no longer search for products and services they will find us via social media
• More than 1.5 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared on Facebook…daily.
• Successful companies in social media act more like Dale Carnegie and less like David Ogilvy Listening first, selling second
• Successful companies in social media act more like party planners, aggregators, and content providers than traditional advertiser
Friday, July 31, 2009
Fla. Tax Collections Take Hit, But it Could be Worse
TALLAHASSEE, Fla. – July 31, 2009 – Florida’s school districts could have a half-billion dollars less to spend in 2010 under gloomy new forecasts approved by state economists on Thursday.
While there are glimmers of hope in the national economy, the meltdown in the real estate market continues to drag down property values in Florida. Economists forecast that Florida’s total property values in 2010 will decline to $1.88 trillion compared to $2.52 trillion in 2007 when the market peaked.
The one piece of good news: In March, economists had predicted a much steeper decline this year and in 2010, saying property values subject to school taxes would decline by 12 percent this year and 6.6 percent next year. Instead, this year’s decline is now projected at 10.7 percent, and the decline next year will be roughly 5.5 percent.
“We’re slightly less pessimistic than we were,” says Amy Baker, coordinator of the Office of Economic and Demographic Research.
But economists warned that foreclosures and other problems in the real estate market could take a while to work themselves out before it results in an upswing in property values. The new estimates forecast that taxable values for schools won’t fully rebound until 2013.
“We’re still trying to figure out a very dynamic market,” said Bob McKee, staff director of the Senate Finance and Tax committee.
It also takes time for changes in the economy to be fully accounted for because annual tax rolls adopted in July are based on property values as of Jan. 1. The estimates adopted on Thursday could require budget cuts for school districts in 2010 unless tax rates are raised or state lawmakers pour in more state aid.
The drop in real estate values is also having another effect: A dramatic decline in the difference between what homes are worth and how much is counted toward property taxes.
Homeowners in Florida get a break on their property taxes because voters can shield some of the value of their home from taxes due to the Save Our Homes constitutional amendment passed in 1992. Annual assessment increases are capped at 3 percent or the increase in the consumer price index, whichever is lower.
Out-of-state residents and business owners in the past have complained that Save Our Homes has created an unfair taxing system that penalizes those who don’t have a homestead here.
But the gap between what homes were worth and how much is counted for tax purposes was $427 billion in 2007. Now it is just $168 billion and that gap is expected to drop to $115 billion in 2010. The gap is expected to creep back up once the economy begins to recover.
Source: News Service of Florida, Gary Fineout
Bulk Purchases Latest Condo Trend in Florida
MIAMI – July 31, 2009 – They’re lurking, holding bags of cash and eyeing distressed condo markets.
Big-time cash investors are snapping up South Florida condo units in bulk. There have been at least seven purchases of 10 or more condos this year, including four since June, according to county records. Investors are re-selling the units or renting them until the market recovers.
Last month, Tom D. Sullivan and Jorge Arevalo shelled out $14.6 million for 51 oceanfront, condo-hotel units in the One Bal Harbour complex from developer WCI Communities, which is reorganizing under bankruptcy protection.
“It didn’t take 10 years of research to see it was a pretty good deal,” said Sullivan, founder of Lumber Liquidators Inc.
That’s because existing condo prices in Miami have fallen by half since the peak in December 2006, and investors think they see the bottom. There’s also plenty of selection. Miami has a two-year supply of condos for sale, at the current demand, according to the local Realtors associations.
Since 2003, nearly 23,000 units have been built or are still under construction in greater downtown Miami, said Peter Zalewski, a principal with Condo Vultures Realty. In June, developers were still holding about 9,400 units, he said. Banks own about 5,000 local homes and condos.
Desperate to get them off their books, banks and developers are auctioning off Miami condos by the dozen. That’s where investor Ed Pascoe, an antiques dealer, snapped up 56 units for $4 million in a 135-unit building in February.
This month, he started offering the units for rent at $1,000 a month, or for sale from $99,000 to $299,000, according to his broker Brian Carter. Pascoe declined to comment.
By paying monthly fees on time, these new owners can be a financial relief for homeowners associations struggling to cover the costs of maintenance and insurance in a building dotted with empty units. While lenders and developers are obligated by law to keep up with association fees, it doesn’t always happen.
The cash for some of these deals is coming from groups of private investors. One multibillion-dollar firm, Contrarian Capital Management LLC in Greenwich, Conn., is looking closely at bulk purchases in Florida, according to Gil Tenzer, the firm’s real estate portfolio manager.
He’s not the only one.
“We’re getting much closer on several deals,” said Jay Massirman, managing partner of Rivergate Residential, a Miami-based real estate investment firm. Massirman said he has researched dozens of bulk purchases for investors.
Unlike the condo investors of the boom years, who borrowed recklessly with the intention on flipping the units within months, more investors today are using cash and thinking strategically.
“They have the money and the knowledge and wherewithal to hold them until the market turns around,” said Jennifer Drake, a real estate attorney with Becker & Poliakoff.
Talk of bulk condo purchases has reached San Diego, where “there’s some scurrying about in the local market on the part of investment groups who have explored the idea,” said Gary London, president of The London Group Realty Advisors.
And, if values stay depressed in troubled condo markets like Phoenix or Las Vegas, developers and banks could make bulk deals with cash investors at a discount to unload their unsold units. So, for now, Florida is the testing ground, and investors with deep pockets are watching.
Tuesday, July 28, 2009
Your Credit Report - Helpful Tips for Home Buyers
by Brandon Cornett
When was the last time you saw a copy of your credit report? Do you know your credit score? Do you even know if it's good or bad?
If you can't answer these questions, you have some homework to do -- especially if you're planning to apply for a mortgage loan in the near future.
Here are some step-by-step instructions to help you obtain your credit reports, review them for accuracy, and correct any errors you come across.
Step 1 - Understand how your credit affects you.
When you apply for a home mortgage loan (or some other major purchase), you can be sure your credit will go under the microscope. Mortgage lenders will analyze your credit to find out what risk category you fall into.
When your credit score is high, your risk factor is low. In this scenario, you'll have a good chance of qualifying for a loan. But when the opposite is true -- low credit score and high risk factor -- you could have trouble obtaining a loan.
Credit reports are maintained by three credit reporting companies (sometimes called credit bureaus or agencies): Experian, Equifax and TransUnion. Your credit score is based on the information contained in these credit reports. Three agencies, three reports, three credit scores ... all about you!
Step 2 - Request copies of your credit report.
According to the Fair Credit Reporting Act (FCRA), you are entitled to one free credit report per year from each of the credit reporting companies -- Equifax, Experian, and TransUnion. To request your credit reports from all three companies, visit www.AnnualCreditReport.com, or call 1-877-322-8228.
If you request your report online, you should have access to it immediately. If you request your credit report through the toll-free number, it will be processed and mailed to you within 15 days.
Your credit report will not come with a credit score, so you'll need to purchase this separately. You can obtain your credit score by visiting www.MyFICO.com. This website is owned by Fair Isaac's, the organization that converts your credit reports into credit scores. Here's a quote from Fair Isaac's:
"FICO scores are your credit rating. Most lenders base approval on them. You have three FICO scores, one for each credit bureau, and you can only get all three from myFICO."
Step 3 - Review your credit reports for errors.
Examine your credit reports closely for any errors or inaccuracies. Make sure your personal information is correct and up to date. Check for loans or lines of credit that aren't yours, as this could be an indication of credit fraud. Anything at all that seems out of place, write it down for further investigation.
Step 4 - Start the correction process immediately.
Under the Fair Credit Reporting Act (FCRA), credit reporting companies are responsible for correcting inaccurate or incomplete information in your credit report. So don't hesitate to exercise your rights under this law.
If you only find errors on one report (for example, the one provided by Experian), you only need to contact the company associated with that report. Visit the company's website to find instructions on how to begin the correction process. By law, each credit reporting company must publish their correction requirements.
You can find these instructions on each company's website:
www.experian.com
www.transunion.com
www.transunion.com
Tell the company in writing what information is inaccurate. File a copy of your initial request, as well as any subsequent communication (such as their response to you). Start a folder and label it with "credit report" to keep your documents together. Keep the folder secure, as it will obviously contain sensitive information.
When was the last time you saw a copy of your credit report? Do you know your credit score? Do you even know if it's good or bad?
If you can't answer these questions, you have some homework to do -- especially if you're planning to apply for a mortgage loan in the near future.
Here are some step-by-step instructions to help you obtain your credit reports, review them for accuracy, and correct any errors you come across.
Step 1 - Understand how your credit affects you.
When you apply for a home mortgage loan (or some other major purchase), you can be sure your credit will go under the microscope. Mortgage lenders will analyze your credit to find out what risk category you fall into.
When your credit score is high, your risk factor is low. In this scenario, you'll have a good chance of qualifying for a loan. But when the opposite is true -- low credit score and high risk factor -- you could have trouble obtaining a loan.
Credit reports are maintained by three credit reporting companies (sometimes called credit bureaus or agencies): Experian, Equifax and TransUnion. Your credit score is based on the information contained in these credit reports. Three agencies, three reports, three credit scores ... all about you!
Step 2 - Request copies of your credit report.
According to the Fair Credit Reporting Act (FCRA), you are entitled to one free credit report per year from each of the credit reporting companies -- Equifax, Experian, and TransUnion. To request your credit reports from all three companies, visit www.AnnualCreditReport.com, or call 1-877-322-8228.
If you request your report online, you should have access to it immediately. If you request your credit report through the toll-free number, it will be processed and mailed to you within 15 days.
Your credit report will not come with a credit score, so you'll need to purchase this separately. You can obtain your credit score by visiting www.MyFICO.com. This website is owned by Fair Isaac's, the organization that converts your credit reports into credit scores. Here's a quote from Fair Isaac's:
"FICO scores are your credit rating. Most lenders base approval on them. You have three FICO scores, one for each credit bureau, and you can only get all three from myFICO."
Step 3 - Review your credit reports for errors.
Examine your credit reports closely for any errors or inaccuracies. Make sure your personal information is correct and up to date. Check for loans or lines of credit that aren't yours, as this could be an indication of credit fraud. Anything at all that seems out of place, write it down for further investigation.
Step 4 - Start the correction process immediately.
Under the Fair Credit Reporting Act (FCRA), credit reporting companies are responsible for correcting inaccurate or incomplete information in your credit report. So don't hesitate to exercise your rights under this law.
If you only find errors on one report (for example, the one provided by Experian), you only need to contact the company associated with that report. Visit the company's website to find instructions on how to begin the correction process. By law, each credit reporting company must publish their correction requirements.
You can find these instructions on each company's website:
www.experian.com
www.transunion.com
www.transunion.com
Tell the company in writing what information is inaccurate. File a copy of your initial request, as well as any subsequent communication (such as their response to you). Start a folder and label it with "credit report" to keep your documents together. Keep the folder secure, as it will obviously contain sensitive information.
Home Buying Steps - 10 Basic Steps to Buying a Home
by Brandon Cornett
This tutorial is designed to teach you about the various steps to buying a home. Though the home buying process differs from one buyer to the next, there are certain home buying steps that most buyers go through.
So without further ado, here are the home buying steps you are likely to face during your home buying process. (This sequence may be slightly different for you, based on your own unique circumstances.)
Step 1. Examine Your Finances
One of the first home buying steps should always be a good review of one's financial situation. You can bet that a mortgage lender will put your finances under the microscope, so you should do the same. The articles below will teach you how to judge your buying power and review your credit situation -- two very important steps to buying a home.
Step 2. Choose a Type of Mortgage
Generally speaking, the next home buying step is choosing a type of mortgage loan. This part of the home buying process requires careful consideration on your part, because your mortgage will stay with you for some time (until you sell, refinance or pay the mortgage off). The articles below will help you negotiate the all-important home buying step of mortgage selection.
Step 3. Get Pre-Approved
There are actually two home buying steps rolled into one here, but there so closely related I've listed them together. Our next step to buying a home will be choosing a mortgage lender and getting pre-approved. Pre-approval will help you immensely during the home buying process. For one thing, it will show sellers that you are serious about buying their home (and financially capable). This can make a big difference in whether or not they accept your offer.
Step 4. Find a Real Estate Agent
Continuing along in our steps to buying a home, we will need to find a qualified real estate agent to help us through the remaining home buying steps. The home buying process can move pretty fast, and there's a lot at stake financially. So having a skilled agent on your side can help you avoid making costly mistakes, especially if it's your first time buying a home.
Step 5. Choose a Neighborhood
Some buyers will neglect this particular home buying step, rushing off to look at houses without doing the proper research on neighborhoods. Which neighborhood you choose is almost as important as which home you choose. Neighborhoods have a direct influence on quality of life, social and recreational satisfaction, property values, commute time, educational opportunities and more. So doing a little neighborhood research is a crucial step to buying a home.
Step 6. Start House Hunting
Let's review our home buying steps up to this point. You've got your finances in order, been pre-approved for a certain type of mortgage, found a good agent, and narrowed your search to a few select neighborhoods. Excellent! You're ready for one of the most exciting steps to buying a home -- the house hunting process. Here are some tips to help make your experience a good one.
Step 7. Make an Offer
Once you find a home you like, you'll need to make an offer on it. For this home buying step, work closely with your agent to determine a reasonable offer amount based on recent, comparable sales in the area (referred to as "comps"). The articles will below will give you a good base of knowledge and make you more comfortable with the offer process.
Step 8. Get a Home Appraisal
Step 9. Get a Home Inspection
The main home inspection is one of several inspections you should have done on the home. A home inspection is an important home buying step that should not be skipped. After all, it will give you the peace of mind of knowing what condition the home is truly in. Read the articles below for more information on this crucial step to buying a home.
Step 10. Settlement / Closing
The period between offer acceptance and the final settlement is known as escrow. You've probably heard somebody say, "My house is in escrow." During this part of the home buying process, you might have additional inspections (for radon, pests, etc.), and you'll likely have some more paperwork to finalize as you move toward the closing / settlement date. The articles below will tell you what to expect leading up to and during the settlement process.
This tutorial is designed to teach you about the various steps to buying a home. Though the home buying process differs from one buyer to the next, there are certain home buying steps that most buyers go through.
So without further ado, here are the home buying steps you are likely to face during your home buying process. (This sequence may be slightly different for you, based on your own unique circumstances.)
Step 1. Examine Your Finances
One of the first home buying steps should always be a good review of one's financial situation. You can bet that a mortgage lender will put your finances under the microscope, so you should do the same. The articles below will teach you how to judge your buying power and review your credit situation -- two very important steps to buying a home.
- Your Credit Report - Tips for Home Buyers
- Are You Ready to Buy a Home?
- Things to Consider Before Buying
Step 2. Choose a Type of Mortgage
Generally speaking, the next home buying step is choosing a type of mortgage loan. This part of the home buying process requires careful consideration on your part, because your mortgage will stay with you for some time (until you sell, refinance or pay the mortgage off). The articles below will help you negotiate the all-important home buying step of mortgage selection.
- Top 9 Mortgages Explained
- Understanding the Different Types of Mortgages
- A-to-Z of Mortgage Loans: 42 Definitions
Step 3. Get Pre-Approved
There are actually two home buying steps rolled into one here, but there so closely related I've listed them together. Our next step to buying a home will be choosing a mortgage lender and getting pre-approved. Pre-approval will help you immensely during the home buying process. For one thing, it will show sellers that you are serious about buying their home (and financially capable). This can make a big difference in whether or not they accept your offer.
Step 4. Find a Real Estate Agent
Continuing along in our steps to buying a home, we will need to find a qualified real estate agent to help us through the remaining home buying steps. The home buying process can move pretty fast, and there's a lot at stake financially. So having a skilled agent on your side can help you avoid making costly mistakes, especially if it's your first time buying a home.
- Finding the Right Real Estate Agent
- 8 Steps to Finding a Real Estate Agent
- Choose a Realtor You Can Trust
Step 5. Choose a Neighborhood
Some buyers will neglect this particular home buying step, rushing off to look at houses without doing the proper research on neighborhoods. Which neighborhood you choose is almost as important as which home you choose. Neighborhoods have a direct influence on quality of life, social and recreational satisfaction, property values, commute time, educational opportunities and more. So doing a little neighborhood research is a crucial step to buying a home.
- Neighborhood Scout (off site)
- Yahoo Neighborhood Reports (off site)
Step 6. Start House Hunting
Let's review our home buying steps up to this point. You've got your finances in order, been pre-approved for a certain type of mortgage, found a good agent, and narrowed your search to a few select neighborhoods. Excellent! You're ready for one of the most exciting steps to buying a home -- the house hunting process. Here are some tips to help make your experience a good one.
Step 7. Make an Offer
Once you find a home you like, you'll need to make an offer on it. For this home buying step, work closely with your agent to determine a reasonable offer amount based on recent, comparable sales in the area (referred to as "comps"). The articles will below will give you a good base of knowledge and make you more comfortable with the offer process.
Step 8. Get a Home Appraisal
To be honest, there's not much you need to do for this next home buying step. Your lender will arrange for the appraisal, and you basically have to stand by and watch (while hoping that the home appraises for the price you've agreed to pay).
- Facts About Real Estate Appraisals (off site)
- Home Buying Terminology - The Appraisal (off site)
Step 9. Get a Home Inspection
The main home inspection is one of several inspections you should have done on the home. A home inspection is an important home buying step that should not be skipped. After all, it will give you the peace of mind of knowing what condition the home is truly in. Read the articles below for more information on this crucial step to buying a home.
Step 10. Settlement / Closing
The period between offer acceptance and the final settlement is known as escrow. You've probably heard somebody say, "My house is in escrow." During this part of the home buying process, you might have additional inspections (for radon, pests, etc.), and you'll likely have some more paperwork to finalize as you move toward the closing / settlement date. The articles below will tell you what to expect leading up to and during the settlement process.
Friday, July 24, 2009
Is Sarasota Inventory Really Dropping? No.
If you read the papers you see data that reflects the answer to this question is, yes. Data shows inventory level is down and there is a small squeak of an increase in price. What this does not reflect is the moratorium that was enacted in December 2008 restricting lenders ability to file for foreclosure.
Well that flood gate has been opened and we can expect a new wave of sweet deals coming to the market place. Yes, it's unfortunate that it is happening but more importantly if you are the kind of person who can see opportunity in chaos you can find yourself buying property at prices from nearly 2 decades ago.
- Dill
Search Properties
Monday, July 13, 2009
Mortgage Defaults: Many Are Intentional, Study Finds
Tuesday, Jul. 07, 2009 / By Barbara Kiviat
Up to 26% of U.S. homeowners who stop paying their mortgage may be doing so intentionally, not because they can't make the payments but because they don't want to put money into a house that's worth less than what they owe. That finding, from a paper by economists at the University of Chicago, Northwestern University and the European University Institute, raises some doubt about the approach the Obama Administration has taken toward stabilizing the housing market. The current approach focuses on whether or not homeowners can afford their monthly payments, and largely ignores the fact that some 20% of homeowners owe more than their house is worth — a situation known as negative equity, or being "underwater," which, according to the paper's findings, may itself trigger default.
The paper's authors caution that their statistics are not exact and should be taken primarily as an indication that there is a looming problem, one that needs to be addressed. The 26% figure comes from a series of consumer surveys that feed into the Booth Chicago/Kellogg School Financial Trust Index. In December 2008 and again in March 2009, 1,000 people were surveyed and asked, among other things, if they knew anyone who had defaulted on a mortgage, and if they knew anyone who had defaulted on a mortgage even if he or she could afford to make the monthly payment. By taking the ratio of the two answers, the economists calculated that more than a quarter of defaults are, as they put it, "strategic." (Read "Home Sales Perk Up, but Expensive Houses Languish.")
"They can still afford to pay but they decide not to," says Paola Sapienza, a finance professor at Northwestern University and one of the paper's authors. "It's very easy to do this in the U.S." Even though there are serious consequences to reneging on a home loan — including wrecked credit, not being able to buy another house for years to come, the cost of moving and the social stigma associated with being a person who does not honor one's commitments — lenders tend not to pursue former homeowners for the money they are owed because of the prohibitive cost of tracking down such people and suing them.
Notably, other survey data included in the paper suggest the percentage of intentional defaults may be much lower than 26%. The researchers also asked if respondents themselves would welsh on their mortgages if they were $50,000 underwater. Among the people for whom $50,000 represented less than 10% of their home's value, none would walk away. However, once $50,000 represented between 10% and 20% of the house's value, 5% said they would walk away, and when the shortfall reached 50% of home's value, a full 17% said they would. (See "Renting a Modernist House.")
When the shortfall amount in question was $100,000, the walk-away responses accelerated at a faster rate. Some 7% of people said they would intentionally default when a $100,000 shortfall represented less than 10% of their house's value. Once that shortfall represented between 50% and 60% of the home's value, an entire 25% of respondents said they would walk away. The hesitation to intentionally default when the theoretical amount of negative equity was $50,000, even when representing the same percentage of a home's value, may relate to the high fixed costs that come with walking away, such as moving.
What is not clear is how the survey results map onto what is actually happening in the U.S. today. It is true that in some areas of the country homes have lost half their value. It is also true, according to data aggregator First American CoreLogic, that there are five states where more than 30% of mortgage holders are underwater and another 15 states where at least 15% of homeowners are. However, this sort of data does not indicate how much homeowners are underwater — or their attitudes about future home prices. If a homeowner believes house prices will recover during the time he intends to live in his house — which could easily be 10 or 15 years — then the incentive to walk away stops making sense from an economic perspective.
Christopher Foote, a senior economist at the Federal Reserve Bank of Boston, who studied negative equity in Massachusetts during the late 1980s and early 1990s when home prices dropped 23%, argues that most walk-aways are likely driven by the combination of two things: both negative equity and an economic hardship, such as job loss. (See 10 ways your job will change.)
More recently, Foote and his colleagues have studied patterns of mortgage nonpayment, and found that in certain states there is a disproportionate number of people who suddenly stop making payments and never try to catch up. This, they surmise, might be an indication of walk-aways — as opposed to struggling borrowers desperately trying to stay in their homes, making payments when they can. The states with more sudden stops are California, Florida, Nevada and Arizona — places where property prices have plummeted and more than 30% of homeowners are underwater. "That's consistent with the idea that there should be more walk-aways in those states," says Foote. "But outside of those states, I would think that walk-aways are more rare than people think."
Data from the new paper also point to the likelihood of mass walk-aways being a highly localized event. Sapienza and her colleagues plotted data on late mortgage payments and home-price declines and found very little relationship between the two when house prices in a metropolitan area had dropped less than 20% from their peak. However, once prices had fallen more than 20%, a disproportionate number of people wound up behind on their mortgage payments, even when the unemployment rate (a measure of means to pay) was held constant.
The research also suggests that social cues can play a large role in deciding to walk away. The researchers found that even though 81% of people surveyed considered it immoral to intentionally default, those respondents who said they knew somebody who had were nearly twice as likely to say they themselves would. People who live in areas with high foreclosure rates were also more likely to say they'd be willing to walk away. "Once you see everyone else doing it, maybe the stigma goes down," says Sapienza. "It's also possible that there's a multiplication effect: if I know other people are walking away, the value of my house deteriorates." Which then would create the problem anew.
Saturday, July 11, 2009
Real Estate Funnies: County Property Taxes
This one cracked me up... scroll down... - Dill
YOUR HOUSE AS SEEN BY... YOURSELF:
YOUR BUYER:
YOUR LENDER:
YOUR APPRAISER:
YOUR COUNTY'S TAX ASSESSOR:
Home Again: After Two-and-a-Half Years, Teardown is Complete
Advice for those brave enough to invest in home improvement.
By NANCY KEATES THE WALL STREET JOURNAL
It's a wrap. Thirty months after making the decision to tear down and rebuild, my husband and I have moved into a brand new house on the lot where we lived for 10 years. Moving into a new house is like coming home to a gift–though one we will pay dearly for every month.
The new house is 1,000 square feet bigger and 50% more expensive than we initially planned. And the housing crash and the recession have made the decision much riskier. But being intimately involved in the design and construction of our home is an unparalleled experience–and a challenge I would gladly take on again.
We now have a house big enough (five bedrooms, three bathrooms) for our two sons to run around in the winter when the rain in Portland makes playing outside difficult; and we have a guest bedroom where our parents and friends can stay.
For this final Teardown Diary column, I offer lessons learned and advice for future home builders and renovators still willing to invest in home improvement in this uncertain environment.
Assume the final bill will be at least 50% more expensive than the initial calculations. Even though most home-building books and Web sites warn this will happen, it can be hard for novices to believe that individual cunning or just plain frugality can't make an exception. It isn't just one aspect of the process that causes the bloat. It is everything from the design getting more ambitious, to the price of materials going up and dealing with miscalculations by a contractor or architect. Cost overruns also come from the little decisions adding up: When faced with an option of slightly more expensive but significantly better performing fill-in-the-blank (water heater, windows, alarm system, etc.) most people choose to upgrade.
Decide if you want an architect who is passionate about the project. Our architect, Dave Giulietti of Giulietti Schouten, is said by other architects to be one of Portland's best. He did an excellent job explaining the design steps, figuring out what we wanted through an extensive questionnaire and helping sort through our wants and needs. The house he designed for us is beautifully sited and exactly what we asked for (though we all could have worked harder to keep the size down). (See photos.) The rooms are proportioned so they aren't too big or too small, the ceilings are high enough (10 feet on the first floor) without feeling cathedral. Whenever the contractors had a question or some detail wasn't fully worked out, Mr. Giulietti stepped in to take care of it.
The new house (right) is on almost the exact same footprint as the old house (left). It is just two stories taller. The yard and landscaping did not change.
But we never felt Mr. Gulietti's heart was fully in our project. His firm handles all kinds of architecture, but its pride is its contemporary designs. Drawing a Colonial–what is essentially a "period piece" as one worker called it–isn't his dream. A week after our home was finished, a card came in the mail from his firm advertising its new and in-progress projects. They were all modern and there was no mention of our house. Mr. Giulietti's response: "I certainly enjoy designing modern houses more. But the mission that I built the firm on is to provide good design and architectural services to our clients, no matter the size, budget and type of project…" Passion in an architect can make the project more exciting. But it has a downside: Sometimes architects take over and don't listen to the client's needs, resulting in a design and a final price that is way off base.
Check the contractor's references. It is amazing how many people are told that the right contractor is the keystone for the building process–and they still don't check references carefully or ignore previous homeowners's complaints. All the self-help books on building and renovation say the most important decision is to find a good contractor. We asked everyone we could find who had used JDL Development and never heard a bad word about them. They came through for us 100%.
Of course JDL isn't cheap–they charged us a 17.5% fee. It is possible to find contractors who charge a lower percentage or a fixed price. But in my opinion it is more cost effective to splurge on the security of knowing that someone is looking after every little detail to make sure it is done right than to scrimp on the contractor and spend more on materials or finishes. Our project managers, Dave Lyons and Ron Boersma, built our house as if it was their own. Now, four weeks after move-in, Ron has been available to help solve problems like the squeaking garage door and an incorrectly placed shower head.
Read the fine print of the loan agreement.Some readers gave me a hard time when I ("a financial journalist!") complained I didn't know when I signed our loan--which covered construction through to permanent financing, or home mortgage--that the bank could change its mind and not extend the loan amount it said it would. We didn't see the final contract until we were in the title office, faced with hundreds of pages of tiny type in unfamiliar language punctuated by dollar amounts that didn't always add up. It was confusing and frightening and I would never go into that again without the help of a real estate attorney.
When the housing market tanked and credit froze, banks started changing their lending guidelines. We worried the appraisal of our property at completion would show its value had declined from the initial appraisal because of the overall drop in housing prices.
Luckily the value of our home actually increased and Wells Fargo came through, extending a 30-year fixed Jumbo loan for 6.5%. It is higher than some Jumbo loans out there. One mortgage broker said if we could get that rate for a Jumbo we should take it; another said he could find us one for 6.25%. But we had started the process with Wells Fargo, formed good relationships with the loan officers and had already handed over reams of financial statements. Others haven't been as lucky, getting stuck with construction loans they cannot convert to permanent financing.
Ask anyone and everyone about their construction experiences. It was by accident one evening at a cocktail party that two women told me how bad window installations had caused leaking and structural problems in their new homes; they gave me a list of questions to ask my contractor. It turned out the subcontractor had cut some steps in installing our windows.
I quizzed neighbors and friends who had built or remodeled their homes about their mistakes and good decisions. One sat in on a meeting with me between the contractor and the heating and air company to determine the best system for our house. She also took a look at our initial design and suggested moving the first floor playroom to a part of the house where the mess they inevitably create wouldn't be visible from the front entry. Another friend pointed out that the color options the designer had chosen for our walls were not the kinds of colors I had really liked when I showed her magazine cuttings. She spent hours with me finding just the right hues–and also gave me all her favorite lighting catalogues.
This kind of sourcing can go beyond acquaintances. When I saw a new house built to look like an old Colonial in another newspaper, I called the architect to get the exterior paint color. Just one call to the owner of a pretty home on a design blog on the Internet opened up a new world of tiles. Confused by conflicting information from different types of insulation manufacturers prompted a query to the government agency in charge of testing insulation.
Don't be afraid to read and learn about subjects that seem intimidating. When we first started, as I wrote back then, I didn't know the difference between a Colonial and a Tudor. I certainly didn't know about the existence of on-demand water heaters or that most home insurances won't cover for earthquakes if you have a slate roof. I learned: For example, it is necessary to understand how different types of insulation work in order to make the cost benefit decisions that will work best for your budget and your house. Different roofing materials are appropriate for different climates and environments. An on-demand hot water heater might or might not make sense for the way your family uses water.
The same principle holds true for design decisions. There may be some innate talent in choosing how one color plays against another in the placement of living room furniture. But there's also a logic that is learnable; and the more you study it, the more you understand.
Read, study, ask, listen, watch–those are the golden rules of home building. The other truism is that the first time is just practice. Now we are really ready to build a new house.
Wednesday, July 8, 2009
Cracked Houses: What the Boom Built
By M.P. McQueen THE WALL STREET JOURNAL JULY 8, 2009
Robert and Kay Lynn lay in bed shortly after closing on their new home in the Blue Oaks subdivision in Rancho Murieta, Calif., abutting an 18-hole golf course. They were listening to the “pop, pop, pop” of what they thought were acorns falling onto the roof.
The Lynns soon realized those were not acorns dropping on the roof.
“Little did we know it was the house cracking,” says Mrs. Lynn, 67 years old. Mr. Lynn, 68, says they bought the property in 2002 for $357,000 as a weekend home and an investment. The stucco house was moving and shifting, with part of it subtly pitching toward the golf course, resulting in cracks and fissures in the walls, ceiling and floors, the couple says.
Many of their neighbors say they had similar problems. In the Sacramento Valley subdivision of about 250 houses, more than half the residents have reported some type of flaw. The Lynns and dozens of their neighbors last year filed construction-defect lawsuits against the builders, and the lead case is expected to go to trial next week. They are seeking enough money to permanently repair the houses, a figure expected to total millions of dollars.
A spokeswoman for the builders, Reynen & Bardis Development LLC, said they would have no comment pending litigation, but a response the company’s attorneys filed with California Superior Court said time limits for some of the plaintiffs’ claims had run out.
Whatever the outcome of the case, hundreds of thousands of people from
California to Georgia say their almost-new homes need costly repairs because of construction defects. The furious pace of home building from the late 1990s through the first half of the 2000s contributed to a surge in defects, experts say. It caused shortages of both skilled construction workers and quality materials. Many municipalities also fell behind inspecting and certifying new homes.
At the height of the boom in 2005, more than two million houses were built in the U.S., according to the National Association of Home Builders, a trade group. Criterium Engineers, a national building-inspection firm, estimates that 17% of newly constructed houses built in 2006 had at least two significant defects, up from 15% in 2003.
Residential construction-defect claims filed with insurance companies in the current housing slump have been receding, “but the ones that are being filed are pretty severe in terms of the total damage alleged,” says Paul Amirata, vice president of claims for Axa Insurance Co. in New York, a unit of AXA SA.
James Wadhams, a Nevada lobbyist who represents builders and insurers, says homeowners are filing lawsuits mainly because home inspectors and attorneys are “prospecting” in new subdivisions. Like California, Texas and Florida, Nevada experienced a surge in construction-defect claims in recent years.
Because of tumbling real-estate values, those stuck with faulty houses say repairs often cost more than the homes are now worth. Many say they can’t refinance their mortgages or sell, and they have no equity to leverage for repairs.
Defects are also a concern for those shopping for a home. Owners generally are required to disclose housing defects to potential buyers. Buyers of new homes should scrutinize purchase and warranty contracts with a real-estate attorney, with special attention to arbitration clauses and liability releases.
One of the best defenses against buying a defective house is a thorough inspection by a state-licensed building-inspection engineer, experts say.
Charlene Croal, 34, a consultant, says it would cost $228,000 to fix her nearly nine-year-old house in North Branch, Minn., though the house would be valued at only $190,000 today if it were in good condition. Its interior is riddled with mold because of water seepage, partly caused by a faulty roof and poorly installed windows, she says. She and her husband relocated their family of seven because of health problems linked to the mold, says Ms. Croal, who did not name the builder.
Owners of defective properties say they’re finding it even harder to get repairs now because of rising builder bankruptcies. Some builders, especially smaller ones, also carried inadequate liability insurance, construction experts say. Other homeowners say they are hamstrung by mandatory binding arbitration clauses in purchase contracts and new-home warranties, as well as “right to cure” laws, which require homeowners to notify builders and give them a chance to remedy a defect before the homeowners can file a lawsuit. More than 30 states have some type of right-to-cure legislation, according to the home-builders group.
The NAHB says it “strongly supports” the option of using “alternative dispute resolution including mandatory, binding arbitration in consumer contracts,” saying litigation is an inefficient means to resolve construction-defect disputes.
In Rancho Murieta, residents say they just want to save their homes. It turned out that much of Blue Oaks Estates was built on clay soil that expands in the rainy season and contracts in the scorching summers, the builder, Reynen & Bardis, acknowledges. This is damaging the homes’ foundations and subtly twisting the frames, causing homes to slowly pull apart—as evidenced by cracking floors, walls and ceilings, separating gutters, and jammed windows and doors.
At first Reynen & Bardis made numerous attempts to address the problems, repurchasing about 50 houses, and installing new drainage systems and foundation underpinnings on scores of others, the company says. But it stopped making repairs on houses in the subdivision in November 2007, saying it could no longer afford them.
By law in California and many other states, builders are on the hook for certain new home defects for up to 10 years, depending on the circumstances and state laws.
In April 2008, John D. Reynen, co-owner of the firm, filed for personal bankruptcy protection, saying he owed creditors nearly $1 billion. Months later, his partner, Christo Bardis, also filed for personal bankruptcy. The partners had personally guaranteed hundreds of millions in bank loans to buy thousands of acres of land for development from Bakersfield, Calif., to Reno, Nev. None of the business entities of Reynen & Bardis is bankrupt, says a spokeswoman.
Even Rancho Murieta residents whose homes are OK say they are being affected. Michael Yager, 61, a retired real-estate agent and firefighter, says his bank would not refinance his mortgage unless he paid for a $7,000 engineering study certifying the house is structurally sound. Mr. Yager’s home was built later with a different type of foundation and hasn’t had problems.
“It’s given the whole community a bad name,” he says.
Mr. Lynn, a retired bank executive, says losing money on a defective house was worse than losing retirement money in the stock market.
“The one thing that won’t get better is this house, which will always have foundation problems,” he says. “It has driven me from retirement to doing part-time work at the golf course, and I thought I was financially stable for the rest of my life.”
Rip Out. Remodel. Repeat.
By Teri Karush Rogers, New York Times
KELLY GIESEN is three months into her second New York renovation in five years — a 10th-floor one-bedroom across the street from the American Museum of Natural History — and she is already dreaming of taking on another, bigger project in the same building. This is on top of the three renovations she did in Baltimore over the previous 10 years. Ms. Giesen is well acquainted with the unpleasant side of home remodeling, like her recent two-day stint scouring blackened porcelain in the bathroom and vomiting in reaction to chemical fumes. And she admits that renovation “definitely disrupts your life a little,” preventing her, for example, from bringing home a potential boyfriend.
Still, she finds the process invigorating. “I would never buy a ‘done’ apartment,” she said. “This way I get everything I want. I like to do it from soup to nuts.” Each day of a renovation, she added, is like a treasure hunt. “Sometimes you’ll come home and the doors have been done or the floors are done or the ceiling has been chipped back,” said Ms. Giesen, 40, who works in marketing and sales at Pfizer in Manhattan. “It’s the hint of progress: I’m one step closer to getting into this bathroom.”
As torturous as home renovation is for most people — its pain is often likened to that of childbirth, and most of those who go through it avoid doing it again for years, until the worst memories have faded — there are some, like Ms. Giesen, who cannot get enough of it. Like the people who move from Botox injections to eyelifts to cheek implants, there are renovators who become more than a little compulsive about the work they are doing, and who pursue their ideals through a never-ending series of projects.
“When you’re in the middle of one you’ll swear you’ll never do another because every house has its problems,” said Greg Kristiansen, 41, an interior designer at the Hunt & Gather home furnishings and accessories store in Portland, Ore. Mr. Kristiansen has redone a half-dozen homes in the past decade. He and his partner, Jerry Hagerman, 41, a contractor, are almost finished with their second project in 10 months. Mr. Kristiansen said he loves hearing praise from neighborhood residents when a house is done. “And, of course, you sell it for three times what you paid,” he added.
“For me it’s always been this elusive concept of getting it right,” said Christopher P. Wilson, 47, a director of operations for the Manhattan real estate firm Stribling & Associates, who has been renovating every 18 to 36 months since he was 23. With each project “you think you’ve been cured of the bug and this is the one you’re going to get perfect,” said Mr. Wilson, who is finishing a house in East Hampton, N.Y., and a condo in Ft. Lauderdale, Fla. “But you move in and nothing is ever perfect. It’s almost like an addiction you can’t shake.”
“Almost” may be putting it mildly. Most of the decorators, architects and contractors interviewed for this article said that serial renovators are far outnumbered by serial decorators, for reasons having to do with budget and time constraints. But they also said that the numbers of both groups had multiplied in recent years along with the explosion of home-improvement magazines and TV shows, the real estate boom and the heightened nesting instinct that many attribute to the social anxieties since 9/11. And there was agreement among many that some serial renovators go too far for their own good.
“I’ve had a few clients over the last 20 years that basically, as soon as you’re done, they say, I’m going to live with this for six months and then change it,” said Lee J. Stahl, the president of the Renovated Home, a design and contracting firm in New York. The life expectancy of a high-end kitchen or bathroom is about 20 years, he said, but some clients are not interested in waiting even a fraction of that. He recalled one who asked him to “rip out” a bathroom that had been remodeled for $75,000 less than a year before. Like a plastic surgeon, he said, in cases like this he sometimes has “to say no, there’s nothing wrong with their nose,” even though “they might go somewhere else — they might go to someone more driven by the dollar than the reality.”
The serial renovator does not seem to fit any single profile, but Mr. Stahl said he has observed patterns among the renovators he encounters in his work. They are often creative industry types, he said, typically between their late 30’s and mid-50’s. Many have never had children or are empty-nesters, he added; the all-consuming needs of a child can impede the impulse to build.
Theories about the causes of serial renovation abound. Mr. Stahl cites the need of certain people to “make sure they have the latest and greatest thing all the time,” but also the social dimension of the habit: “They’re bored. They become attached to us; they don’t view us as contractors. They view us as their inner circle.”
Irene S. Azar, a Manhattan psychotherapist, sees a link between the serial renovator’s need to “do it over and over again” and the compulsive behavior of other groups — workaholics, say, who use work to avoid addressing festering issues in their lives. (And, as with other compulsive behaviors, the patterns may form early: many serial renovators, including Ms. Giesen and Mr. Wilson, said they moved frequently during childhood.)
Ms. Azar is echoed by Heidi Semler, an interior designer in Portland, Ore., who has observed that “there are a lot of people who may have other things in their lives that aren’t working who put a lot of energy into making their house perfect.” And Kevin Harris, an architect in Baton Rouge, La., who says he has worked on some 380 renovations in the last 25 years, has often noticed how seductive and addictive the cause and effect aspect of renovation can be for his clients. “You can get up in the morning, talk to the carpenters and say, ‘I’d like this to be done,’ and when you come back it’s framed up and you feel like it’s the pyramids — it’s that power, that rush,” he said.
MS. GIESEN, certainly, seems compelled by that daily one-step-closer feeling, and by the larger drama of transformation involved in renovation. “It’s taking something that’s awful and turning it into something beautiful,” she said.
When she visited her new apartment with a friend in April, just before the closing, they found towers of junk, a stomach-churning stench and “thousands of roaches” (in addition to the dead ones stacked six inches deep in the cupboards). “It looks like a crime scene,” the friend remarked about the dwelling in the otherwise pristine building.
But Ms. Giesen went ahead and paid $700,000 for the place, and set about transforming it into what she says will be a soothing taupe-and-cream throwback to old Hollywood glamour, with a mix of French-style antiques and contemporary details like the rippled linen curtains that will hang around her bed on a ceiling-mounted track. (Her last project, a studio down the hall, consumed $75,000 in renovation costs and months of her life, and was recently featured on HGTV’s “Small Space, Big Style.”)
Ms. Giesen strives to live as stylishly as possible during her renovations. On a recent Sunday the apartment was an orderly shell of primed drywall and masonite-protected wood floors, with a faint scent of Verbena home perfume by L’Occitane in the air.
Lining the walls of the living room and the dining area were nearly two dozen architectural salvage pieces, including a five-foot mirror with egg-and-dart molding rescued by a salvage store from the Plaza Hotel, arched French doors, four antique Venetian mirrors and a pair of tall wood and plaster pilasters, all collected in the months before the renovation began in April. Ms. Giesen took hold of a pilaster and demonstrated how she moves the objects around like gigantic chess pieces, rocking them back and forth on each corner, in a continuing effort to see where each belongs. Like many serial renovators, she describes renovation as an important creative outlet in her life.
So does Greg Matusky, a child of unhandy parents and the president of the financial communications firm Gregory FCA in Ardmore, Pa. “The whole act of creating is really liberating,” he said, adding that the renovation process also seems to have a rejuvenating effect on his marriage. “I read a book once that said there’s different ways to be a couple, and one strategy is to be a partnership,” said Mr. Matusky, 45, not elaborating on what the other strategies might be. “Home renovation is a real partnership between my wife and I. Our relationship is never as good as when we have a renovation project going on.”
Mr. Matusky, who said he was obsessed with the home remodeling show “This Old House” in his 20’s, bought his first house in 1987 and spent six years renovating it. He bought his second “utter disaster,” a five-bedroom English Tudor in Ardmore, a Philadelphia suburb, with his wife, Judy, a part-time dietician, in 1993; they spent more than a decade replacing all the wood floors and subfloors, putting in a new kitchen, redoing the basement, turning the side porch into a family room, building a backyard gazebo and a cedar tree house, and installing a stamped concrete patio.
This year the Matuskys completed another extensive renovation of the same house, this one for $200,000, which included a family room and another renovation of the kitchen that extended it into the old garage.
For three months they lived in the basement, along with their three teenage children and a large Crock-Pot.
His wife, who said she enjoys the teamwork of renovation and is happy to have him at home instead of on the golf course, nevertheless stopped short of his blithe assessment of all the work. “After a couple of weeks trying to eat in the basement, that gets old pretty quickly,” she said.
Indeed, while many couples view serial renovations as a way to become closer, said Mimi Maddock McMakin, the owner of Kemble Interiors in Palm Beach and Manhattan, others can wind up in therapy. And Ms. Azar, the psychotherapist, said she had seen apartments become power struggles, as renovations led to discussions of money and the “different ways they want to live.”
And even when spouses are in full agreement about the value of renovation, other family members may not be. Salita Armour, 48, a serial renovator and real estate flipper in Austin, Tex., says she has remodeled 26 houses in 26 years. Her husband supports her in her habit, she says, largely because of its profitability, but also because of his own hunger for novelty. (Ms. Armour said he switches cars every four months.)
But the couple’s 17-year-old son, Shane, said he finds the construction process, which his mother clearly enjoys, “kind of lame, because you know how slow it is.” He added that he and his sister “have grown up like this, so it’s not like any big deal, but it’s kind of a pain in the butt moving all that stuff again and again.”
Matt Tarlow, the 31-year-old son of Shannon Brown, an interior decorator in Portland, Ore., had a stronger reaction to his mother’s ceaseless renovating. By her account, Ms. Brown, 60, moves and renovates every 9 to 36 months; seven times in the last 10 years. When he was growing up, Mr. Tarlow said, “we’d stay at a place for maybe two years, three years if we were lucky.” Then, after he was in college and she divorced, “one lasted six months,” he said. “It got to be such a joke with everyone around Christmas and Thanksgiving that we’d take wagers” about how long Ms. Brown might stay in one place.
The chaos caused by one renovation led to a year of strained relations between mother and son, said Mr. Tarlow, who, although he sells real estate in Los Angeles, calls himself a stable renter.
Ms. Brown, for her part, is philosophical about the effects of her habit on her family. “The only regret I do have is I do think probably there were times this was hard on my kids,” she said, though she added that she moved 9 or 10 times as a child and always found it kind of exciting. “As a parent, you have your life,” Ms. Brown said. “It’s basically what I do. I’m a nomad. Once I get half done with something, it’s not that I lose interest, but once you know exactly what it’s going to look and feel like, you see something else and go, ‘Look what I can do with that!’ ”
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