Thursday, January 27, 2011
taking a little break...
Gotta do a new lanquage....hint....Ni Hao Ma?...a few more classes and I will be back in the saddle about June..till then zai jian! xiexie...
Tuesday, June 29, 2010
I like this.....21 Things You Should Never Buy New
21 Things You Should Never Buy New
If you're looking to get the most value for your dollar, it would do your wallet good to check out secondhand options. Many used goods still have plenty of life left in them even years after the original purchase, and they're usually resold at a fraction of the retail price, to boot. Here's a list of 21 things that make for a better deal when you buy them used.
[Slideshow: 10 Things to Splurge on This Summer.]
1. DVDs and CDs: Used DVDs and CDs will play like new if they were well taken care of. Even if you wind up with a scratched disc and you don't want to bother with a return, there are ways to remove the scratches and make the DVD or CD playable again.
2. Books: You can buy used books at significant discounts from online sellers and brick-and-mortar used book stores. The condition of the books may vary, but they usually range from good to like-new. And of course, check out your local library for free reading material.
3. Video Games: Kids get tired of video games rather quickly. You can easily find used video games from online sellers at sites like Amazon and eBay a few months after the release date. Most video game store outlets will feature a used game shelf, as well. And if you're not the patient type, you can rent or borrow from a friend first to see if it's worth the purchase.
4. Special Occasion and Holiday Clothing: Sometimes you'll need to buy formal clothing for special occasions, such as weddings or prom. Most people will take good care of formal clothing but will only wear it once or twice. Their closet castouts are your savings: Thrift stores, yard sales, online sellers and even some dress shops offer fantastic buys on used formalwear.
5. Jewelry: Depreciation hits hard when you try to sell used jewelry, but as a buyer you can take advantage of the markdown to save a bundle. This is especially true for diamonds, which has ridiculously low resale value. Check out estate sales and reputable pawn shops to find great deals on unique pieces. Even if you decide to resell the jewelry later, the depreciation won't hurt as much.
6. Ikea Furniture: Why bother assembling your own when you can pick it up for free (or nearly free) on Craigslist and Freecycle? Summer is the best time to hunt for Ikea furniture--that's when college students are changing apartments and tossing out their goodies.
7. Games and Toys: How long do games and toys remain your child's favorite before they're left forgotten under the bed or in the closet? You can find used children's toys in great condition at moving sales or on Craigslist, or you can ask your neighbors, friends, and family to trade used toys. Just make sure to give them a good wash before letting junior play.
8. Maternity and Baby Clothes: Compared to everyday outfits that you can wear any time, maternity clothes don't get much wear outside the few months of pregnancy when they fit. The same goes for baby clothes that are quickly outgrown. You'll save a small fortune by purchasing gently used maternity clothes and baby clothes at yard sales and thrift stores. Like children's games and toys, friends and family may have baby or maternity clothing that they'll be happy to let you take off their hands.
[See 20 Things You Should Never Buy Used.]
9. Musical Instruments: Purchasing new musical instruments for a beginner musician is rarely a good idea. (Are you ready to pay $60 an hour for piano lessons?) For your little dear who wants to learn to play an instrument, you should see how long his or her interest lasts by acquiring a rented or used instrument to practice with first. Unless you're a professional musician or your junior prodigy is seriously committed to music, a brand new instrument may not be the best investment.
10. Pets: If you buy a puppy (or kitty) from a professional breeder or a pet store outlet, it can set you back anywhere from a few hundred dollars to several thousand dollars. On top of this, you'll need to anticipate additional fees and vet bills, too. Instead, adopt a pre-owned pet from your local animal shelter and get a new family member, fees, and vaccines at a substantially lower cost.
11. Home Accent: Pieces Home decorating pieces and artwork are rarely handled on a day-to-day basis, so they're generally still in good condition even after being resold multiple times. If you like the worn-out look of some decor pieces, you can be sure you didn't pay extra for something that comes naturally with time. And don't forget, for most of us, discovering a true gem at a garage sale is 90% of the fun!
12. Craft Supplies: If you're into crafting, you probably have a variety of different supplies left over from prior projects. If you require some additional supplies for your upcoming project, then you can join a craft swap where you'll find other crafty people to trade supplies with. If you have leftovers, be sure to donate them to your local schools.
13. Houses: You're typically able to get better and more features for your dollar when you purchase an older home rather than building new. Older houses were often constructed on bigger corner lots, and you also get architectural variety in your neighborhood if the houses were built or remodeled in different eras.
14. Office Furniture: Good office furniture is built to withstand heavy use and handling. Really solid pieces will last a lifetime, long after they're resold the first or second time. A great used desk or file cabinet will work as well as (or better than) a new one, but for a fraction of the cost. With the recession shutting down so many businesses, you can easily find lots of great office furniture deals.
15. Cars: You've probably heard this before: Cars depreciate the second you drive them off of the dealership's lot. In buying a used car, you save money on both the initial cost and the insurance. It also helps to know a trusty mechanic who can check it over first. This way, you'll be aware of any potential problems before you make the purchase.
[See 20 Tips for Cleaning on the Cheap.]
16. Hand Tools: Simple tools with few moving parts, like hammers, hoes and wrenches, will keep for decades so long as they are well-made to begin with and are well-maintained. These are fairly easy to find at neighborhood yard or garage sales. If you don't need to use hand tools very often, an even better deal is to rent a set of tools or borrow them from a friend.
17. Sports Equipment: Most people buy sports equipment planning to use it until it drops, but this rarely happens. So when sports equipment ends up on the resale market, they tend to still be in excellent condition. Look into buying used sporting gear through Craigslist and at yard sales or sports equipment stores.
18. Consumer Electronics: I know most folks like shiny new toys, but refurbished electronic goods are a much sweeter deal. Consumer electronics are returned to the manufacturer for different reasons, but generally, they'll be inspected for damaged parts, fixed, tested, then resold at a lower price. Just make sure you get a good warranty along with your purchase.
19. Gardening Supplies: This is an easy way for you to save money, and all you need to do is be observant. Take a look outdoors and you'll likely find such gardening supplies as mulch, wood, and even stones for free or vastly reduced prices. Used garden equipment and tools are also common goods at yard sales.
20. Timeshares: Buying timeshares isn't for everyone, but if you decide that it suits your lifestyle, purchasing the property as a resale would be a better deal than buying it brand new: on average, you'll save 67 percent on the price for a comparable new timeshare. If you're new to timeshare ownership, give it a test run first by renting short term.
21. Recreational Items: It's fairly easy to find high ticket recreational items like campers, boats, and jet skis being resold. Oftentimes, they're barely used at all. As long as they're in safe, working condition, they'll make for a better value when purchased used than new.
If you're looking to get the most value for your dollar, it would do your wallet good to check out secondhand options. Many used goods still have plenty of life left in them even years after the original purchase, and they're usually resold at a fraction of the retail price, to boot. Here's a list of 21 things that make for a better deal when you buy them used.
[Slideshow: 10 Things to Splurge on This Summer.]
1. DVDs and CDs: Used DVDs and CDs will play like new if they were well taken care of. Even if you wind up with a scratched disc and you don't want to bother with a return, there are ways to remove the scratches and make the DVD or CD playable again.
2. Books: You can buy used books at significant discounts from online sellers and brick-and-mortar used book stores. The condition of the books may vary, but they usually range from good to like-new. And of course, check out your local library for free reading material.
3. Video Games: Kids get tired of video games rather quickly. You can easily find used video games from online sellers at sites like Amazon and eBay a few months after the release date. Most video game store outlets will feature a used game shelf, as well. And if you're not the patient type, you can rent or borrow from a friend first to see if it's worth the purchase.
4. Special Occasion and Holiday Clothing: Sometimes you'll need to buy formal clothing for special occasions, such as weddings or prom. Most people will take good care of formal clothing but will only wear it once or twice. Their closet castouts are your savings: Thrift stores, yard sales, online sellers and even some dress shops offer fantastic buys on used formalwear.
5. Jewelry: Depreciation hits hard when you try to sell used jewelry, but as a buyer you can take advantage of the markdown to save a bundle. This is especially true for diamonds, which has ridiculously low resale value. Check out estate sales and reputable pawn shops to find great deals on unique pieces. Even if you decide to resell the jewelry later, the depreciation won't hurt as much.
6. Ikea Furniture: Why bother assembling your own when you can pick it up for free (or nearly free) on Craigslist and Freecycle? Summer is the best time to hunt for Ikea furniture--that's when college students are changing apartments and tossing out their goodies.
7. Games and Toys: How long do games and toys remain your child's favorite before they're left forgotten under the bed or in the closet? You can find used children's toys in great condition at moving sales or on Craigslist, or you can ask your neighbors, friends, and family to trade used toys. Just make sure to give them a good wash before letting junior play.
8. Maternity and Baby Clothes: Compared to everyday outfits that you can wear any time, maternity clothes don't get much wear outside the few months of pregnancy when they fit. The same goes for baby clothes that are quickly outgrown. You'll save a small fortune by purchasing gently used maternity clothes and baby clothes at yard sales and thrift stores. Like children's games and toys, friends and family may have baby or maternity clothing that they'll be happy to let you take off their hands.
[See 20 Things You Should Never Buy Used.]
9. Musical Instruments: Purchasing new musical instruments for a beginner musician is rarely a good idea. (Are you ready to pay $60 an hour for piano lessons?) For your little dear who wants to learn to play an instrument, you should see how long his or her interest lasts by acquiring a rented or used instrument to practice with first. Unless you're a professional musician or your junior prodigy is seriously committed to music, a brand new instrument may not be the best investment.
10. Pets: If you buy a puppy (or kitty) from a professional breeder or a pet store outlet, it can set you back anywhere from a few hundred dollars to several thousand dollars. On top of this, you'll need to anticipate additional fees and vet bills, too. Instead, adopt a pre-owned pet from your local animal shelter and get a new family member, fees, and vaccines at a substantially lower cost.
11. Home Accent: Pieces Home decorating pieces and artwork are rarely handled on a day-to-day basis, so they're generally still in good condition even after being resold multiple times. If you like the worn-out look of some decor pieces, you can be sure you didn't pay extra for something that comes naturally with time. And don't forget, for most of us, discovering a true gem at a garage sale is 90% of the fun!
12. Craft Supplies: If you're into crafting, you probably have a variety of different supplies left over from prior projects. If you require some additional supplies for your upcoming project, then you can join a craft swap where you'll find other crafty people to trade supplies with. If you have leftovers, be sure to donate them to your local schools.
13. Houses: You're typically able to get better and more features for your dollar when you purchase an older home rather than building new. Older houses were often constructed on bigger corner lots, and you also get architectural variety in your neighborhood if the houses were built or remodeled in different eras.
14. Office Furniture: Good office furniture is built to withstand heavy use and handling. Really solid pieces will last a lifetime, long after they're resold the first or second time. A great used desk or file cabinet will work as well as (or better than) a new one, but for a fraction of the cost. With the recession shutting down so many businesses, you can easily find lots of great office furniture deals.
15. Cars: You've probably heard this before: Cars depreciate the second you drive them off of the dealership's lot. In buying a used car, you save money on both the initial cost and the insurance. It also helps to know a trusty mechanic who can check it over first. This way, you'll be aware of any potential problems before you make the purchase.
[See 20 Tips for Cleaning on the Cheap.]
16. Hand Tools: Simple tools with few moving parts, like hammers, hoes and wrenches, will keep for decades so long as they are well-made to begin with and are well-maintained. These are fairly easy to find at neighborhood yard or garage sales. If you don't need to use hand tools very often, an even better deal is to rent a set of tools or borrow them from a friend.
17. Sports Equipment: Most people buy sports equipment planning to use it until it drops, but this rarely happens. So when sports equipment ends up on the resale market, they tend to still be in excellent condition. Look into buying used sporting gear through Craigslist and at yard sales or sports equipment stores.
18. Consumer Electronics: I know most folks like shiny new toys, but refurbished electronic goods are a much sweeter deal. Consumer electronics are returned to the manufacturer for different reasons, but generally, they'll be inspected for damaged parts, fixed, tested, then resold at a lower price. Just make sure you get a good warranty along with your purchase.
19. Gardening Supplies: This is an easy way for you to save money, and all you need to do is be observant. Take a look outdoors and you'll likely find such gardening supplies as mulch, wood, and even stones for free or vastly reduced prices. Used garden equipment and tools are also common goods at yard sales.
20. Timeshares: Buying timeshares isn't for everyone, but if you decide that it suits your lifestyle, purchasing the property as a resale would be a better deal than buying it brand new: on average, you'll save 67 percent on the price for a comparable new timeshare. If you're new to timeshare ownership, give it a test run first by renting short term.
21. Recreational Items: It's fairly easy to find high ticket recreational items like campers, boats, and jet skis being resold. Oftentimes, they're barely used at all. As long as they're in safe, working condition, they'll make for a better value when purchased used than new.
Tuesday, June 22, 2010
Federal tax credits???....not working here...
Home sales dip 2.2 pct despite tax credits
May home sales sink 2.2 percent despite help from
WASHINGTON (AP) -- Sales of previously occupied homes dipped 2.2 percent in May, signaling that a boost from home-buying tax credits is fading sooner than expected.
Last month's sales fell from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal incentives is gone entirely, starting next month.
Sales have climbed 25 percent from the 4.5 million annual rate hit in January 2009 -- the lowest level of the recession. But they're still down 22 percent from the peak rate of 7.25 million in September 2005.
The report counts home sales when a deal closes. So federal tax credits of up to $8,000 for home buyers likely influenced May's results. The deadline to get a signed sales contract and still qualify was April 30. Buyers must close their purchases by the end of this month.
The tax credits were expected to lift sales in May and June. Lawrence Yun, the Realtors chief economist, said delays in the mortgage-lending process put about 180,000 potential buyers in limbo. He's unsure if they will qualify by the June 30 deadline. The trade group is pushing Congress to extend the deadline for closing a sale until Sept. 30.
The report is "a worrisome sign for what will occur in July and thereafter when the effect of the tax credit is behind us," said Joshua Shapiro, chief U.S. economist at MFR Inc., an economic consulting firm in New York.
The drop in May sales was led by a more than 18 percent decline in the Northeast. Sales were unchanged in the Midwest, but rose nearly 5 percent in the West and 0.5 percent in the South.
The inventory of unsold homes on the market dropped 3.4 percent to 3.9 million. That's an 8.3 month supply at the current sales pace, compared with a healthy level of about six months. The median sales price in May was $179,600, up 2.7 percent from a year earlier.
Foreclosures and short sales -- in which the lender agrees to accept less than the total mortgage -- made up 31 percent of sales in May. First-time buyers made up 46 percent.
The report "suggests that even government stimulus in the form of a tax credit isn't enough," to support the U.S. housing market, wrote Guy LeBas, an analyst with Janney Montgomery Scott.
My Take...we need jobs, good jobs...and a serious correction of the price of homes with the current state of income.
According to the 2008 census..60K is the medium household income....realistically a bank would qualify you with perfect credit for a home in the 150K range..so if you we're gainfully employed and was looking for a home, in 1990 the cost would be appropriately priced at around 150-190K...for a 3 bedroom 2000 square foot home on a 5000 sqft lot.now the price is about 400K....so you can see there is a huge gap.
So that's the issue....I wont talk about the bank problem here but we're due for a correction before this southern california housing market gets back on it's feet...
Or maybe I'm delusional and think this is the reality, we're going to be slaves to our homes, the banks and the goverment or...maybe the Oil Spill will force the southeast to move here pushing the values up...maybe, just maybe.
May home sales sink 2.2 percent despite help from
WASHINGTON (AP) -- Sales of previously occupied homes dipped 2.2 percent in May, signaling that a boost from home-buying tax credits is fading sooner than expected.
Last month's sales fell from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal incentives is gone entirely, starting next month.
Sales have climbed 25 percent from the 4.5 million annual rate hit in January 2009 -- the lowest level of the recession. But they're still down 22 percent from the peak rate of 7.25 million in September 2005.
The report counts home sales when a deal closes. So federal tax credits of up to $8,000 for home buyers likely influenced May's results. The deadline to get a signed sales contract and still qualify was April 30. Buyers must close their purchases by the end of this month.
The tax credits were expected to lift sales in May and June. Lawrence Yun, the Realtors chief economist, said delays in the mortgage-lending process put about 180,000 potential buyers in limbo. He's unsure if they will qualify by the June 30 deadline. The trade group is pushing Congress to extend the deadline for closing a sale until Sept. 30.
The report is "a worrisome sign for what will occur in July and thereafter when the effect of the tax credit is behind us," said Joshua Shapiro, chief U.S. economist at MFR Inc., an economic consulting firm in New York.
The drop in May sales was led by a more than 18 percent decline in the Northeast. Sales were unchanged in the Midwest, but rose nearly 5 percent in the West and 0.5 percent in the South.
The inventory of unsold homes on the market dropped 3.4 percent to 3.9 million. That's an 8.3 month supply at the current sales pace, compared with a healthy level of about six months. The median sales price in May was $179,600, up 2.7 percent from a year earlier.
Foreclosures and short sales -- in which the lender agrees to accept less than the total mortgage -- made up 31 percent of sales in May. First-time buyers made up 46 percent.
The report "suggests that even government stimulus in the form of a tax credit isn't enough," to support the U.S. housing market, wrote Guy LeBas, an analyst with Janney Montgomery Scott.
My Take...we need jobs, good jobs...and a serious correction of the price of homes with the current state of income.
According to the 2008 census..60K is the medium household income....realistically a bank would qualify you with perfect credit for a home in the 150K range..so if you we're gainfully employed and was looking for a home, in 1990 the cost would be appropriately priced at around 150-190K...for a 3 bedroom 2000 square foot home on a 5000 sqft lot.now the price is about 400K....so you can see there is a huge gap.
So that's the issue....I wont talk about the bank problem here but we're due for a correction before this southern california housing market gets back on it's feet...
Or maybe I'm delusional and think this is the reality, we're going to be slaves to our homes, the banks and the goverment or...maybe the Oil Spill will force the southeast to move here pushing the values up...maybe, just maybe.
Thursday, June 17, 2010
Hey now...Reality Check.....20% dip for 3 more years!!
House Prices Still Have Another 10%-20% To Fall, Says Gary Shilling
Posted Jun 16, 2010 11:30am EDT by Henry Blodget in Investing, Banking, Housing
Related: ^DJI, ^GSPC, XHB, TOL, KBH, ^IXIC
A year ago, house prices finally stopped collapsing after two years of brutal declines. Over the following few quarters, moreover, they actually rose. This led many observers to conclude that the housing bottom had been reached and that we were headed for a v-shaped bounce.
Not Gary Shilling.
Gary Shilling, head of economic research firm A. Gary Shilling & Co., thinks house prices still have another 10%-20% to fall. Just as bad, Gary thinks this fall will happen over the next three years, meaning that house prices won't bottom until 2013. Most people think prices have already bottomed, or will bottom later this year or next.
Why is Gary so bearish?
Supply versus demand.
Basically, Gary says, we still have way too many houses relative to the number of people who want to buy them. Consumers are under pressure, overloaded with debts and struggling to find work, and the mass-hallucination that investing in housing was a "sure thing" is now a distant memory. These days, many would-be home buyers are moving in with relatives or downsizing or dumping second homes. And the supply-demand balance is so out of whack, in Gary's view, that even super-low interest rates won't keep prices afloat.
http://finance.yahoo.com/tech-ticker/house-prices-still-have-another-10-20-to-fall-says-gary-shilling-504808.html?tickers=%5Edji,%5Egspc,xhb,tol,kbh,%5Eixic&sec=topStories&pos=8&asset=&ccode=
Posted Jun 16, 2010 11:30am EDT by Henry Blodget in Investing, Banking, Housing
Related: ^DJI, ^GSPC, XHB, TOL, KBH, ^IXIC
A year ago, house prices finally stopped collapsing after two years of brutal declines. Over the following few quarters, moreover, they actually rose. This led many observers to conclude that the housing bottom had been reached and that we were headed for a v-shaped bounce.
Not Gary Shilling.
Gary Shilling, head of economic research firm A. Gary Shilling & Co., thinks house prices still have another 10%-20% to fall. Just as bad, Gary thinks this fall will happen over the next three years, meaning that house prices won't bottom until 2013. Most people think prices have already bottomed, or will bottom later this year or next.
Why is Gary so bearish?
Supply versus demand.
Basically, Gary says, we still have way too many houses relative to the number of people who want to buy them. Consumers are under pressure, overloaded with debts and struggling to find work, and the mass-hallucination that investing in housing was a "sure thing" is now a distant memory. These days, many would-be home buyers are moving in with relatives or downsizing or dumping second homes. And the supply-demand balance is so out of whack, in Gary's view, that even super-low interest rates won't keep prices afloat.
http://finance.yahoo.com/tech-ticker/house-prices-still-have-another-10-20-to-fall-says-gary-shilling-504808.html?tickers=%5Edji,%5Egspc,xhb,tol,kbh,%5Eixic&sec=topStories&pos=8&asset=&ccode=
Wednesday, April 7, 2010
you snoozed...you waited and guess what..
Homebuyers scramble as mortgage rates jump
By ALAN ZIBEL and ADRIAN SAINZ, AP Real Estate Writers Alan Zibel And Adrian Sainz, Ap Real Estate Writers – 32 mins ago
WASHINGTON – The era of record-low mortgage rates is over.
The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market — a threat to the fragile recovery in the housing market.
And if you wanted to refinance at a super-low rate, you may have missed your chance. Mortgages under 4 percent are still available, but only for loans that reset in five or seven years, probably to higher rates.
Rates are going up because of the improving economy and the end of a government push to make mortgages cheaper.
For people putting their homes on the market this spring, rising rates may actually be a good thing. Buyers are racing to complete their purchases and lock in something decent before rates go even higher.
"We are seeing some panic among potential buyers who have not found houses yet," said Craig Strent, co-founder of Apex Home Loans in Bethesda, Md. "They're saying: Man, I should have found a house three weeks ago or last month when rates are lower."
It's all about affordability. For every 1 percentage point rise in rates, 300,000 to 400,000 would-be buyers are priced out of the market in a given year, according to the National Association of Realtors.
The rule of thumb is that every 1 percentage point increase in mortgage rates reduces a buyer's purchasing power by about 10 percent.
For example, taking out a 30-year mortgage for $300,000 at a rate of 5 percent will cost you about $1,600 a month, not including taxes and insurance. But the same monthly payment at a rate of 6 percent will only get you a loan of $270,000.
Good economic news is the first reason rates are rising: U.S. government debt, a safe haven during the recession, is losing its appeal as investors turn to stocks and riskier corporate bonds.
Lower demand for debt means the government has to offer a better interest rate to sell its bonds. The yield on the 10-year Treasury note, which is closely tracked by mortgage rates, hovered above 4 percent this week, the highest since June, before falling back slightly.
The second reason is the Federal Reserve. Last week, the Fed ended its program to push mortgage rates down by buying up mortgage-backed securities. When demand from the central bank was high, rates plummeted to about 4.7 percent for much of last year. And business boomed for mortgage lenders as homeowners raced to refinance out of adjustable-rate mortgages and into fixed loans.
As of Wednesday, the Mortgage Bankers Association put the national average for a 30-year fixed-rate mortgage at 5.31 percent. One week ago, it was 5.04 percent.
Many analysts forecast rates will rise as high as 6 percent by early next year. If they go much higher, the already shaky housing recovery could stall. And that could slow the broader economic rebound.
In a normal market, with home prices steadily rising, a jump in rates doesn't cause a big dip in demand. That's because people know their homes will eventually rise in value, and are willing to accept a higher mortgage payment.
But now home prices are flat nationally and still falling in some places. Potential buyers are nervous about jumping in.
"In this environment, any rise in mortgage rates does significant damage because people don't think they're going to get their money back" if prices fall, said Mark Zandi, chief economist at Moody's Analytics.
For people who bought their first home in the 1980s, when rates stayed over 10 percent for several years, paying 6 percent for a home loan may seem like a steal. But it's coming as a shock to many first-time homebuyers this spring.
In Overland Park, Kan., Sirena Barlow checks mortgage rates online once a day. She's been shopping for a something around $130,000 and wants to sign a contract this month, to take advantage of a tax credit for first-time homebuyers.
Barlow, a legal assistant, has already told her landlord she's moving, so her stress level is high. Her real estate agent, Michael Maher, has been doing his best to calm Barlow and other clients, but rising rates are making them anxious.
"It's like giving hyperactive kids ice cream," he said. "It has really taken the ones who are focused on buying and amped them up a little bit."
By ALAN ZIBEL and ADRIAN SAINZ, AP Real Estate Writers Alan Zibel And Adrian Sainz, Ap Real Estate Writers – 32 mins ago
WASHINGTON – The era of record-low mortgage rates is over.
The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market — a threat to the fragile recovery in the housing market.
And if you wanted to refinance at a super-low rate, you may have missed your chance. Mortgages under 4 percent are still available, but only for loans that reset in five or seven years, probably to higher rates.
Rates are going up because of the improving economy and the end of a government push to make mortgages cheaper.
For people putting their homes on the market this spring, rising rates may actually be a good thing. Buyers are racing to complete their purchases and lock in something decent before rates go even higher.
"We are seeing some panic among potential buyers who have not found houses yet," said Craig Strent, co-founder of Apex Home Loans in Bethesda, Md. "They're saying: Man, I should have found a house three weeks ago or last month when rates are lower."
It's all about affordability. For every 1 percentage point rise in rates, 300,000 to 400,000 would-be buyers are priced out of the market in a given year, according to the National Association of Realtors.
The rule of thumb is that every 1 percentage point increase in mortgage rates reduces a buyer's purchasing power by about 10 percent.
For example, taking out a 30-year mortgage for $300,000 at a rate of 5 percent will cost you about $1,600 a month, not including taxes and insurance. But the same monthly payment at a rate of 6 percent will only get you a loan of $270,000.
Good economic news is the first reason rates are rising: U.S. government debt, a safe haven during the recession, is losing its appeal as investors turn to stocks and riskier corporate bonds.
Lower demand for debt means the government has to offer a better interest rate to sell its bonds. The yield on the 10-year Treasury note, which is closely tracked by mortgage rates, hovered above 4 percent this week, the highest since June, before falling back slightly.
The second reason is the Federal Reserve. Last week, the Fed ended its program to push mortgage rates down by buying up mortgage-backed securities. When demand from the central bank was high, rates plummeted to about 4.7 percent for much of last year. And business boomed for mortgage lenders as homeowners raced to refinance out of adjustable-rate mortgages and into fixed loans.
As of Wednesday, the Mortgage Bankers Association put the national average for a 30-year fixed-rate mortgage at 5.31 percent. One week ago, it was 5.04 percent.
Many analysts forecast rates will rise as high as 6 percent by early next year. If they go much higher, the already shaky housing recovery could stall. And that could slow the broader economic rebound.
In a normal market, with home prices steadily rising, a jump in rates doesn't cause a big dip in demand. That's because people know their homes will eventually rise in value, and are willing to accept a higher mortgage payment.
But now home prices are flat nationally and still falling in some places. Potential buyers are nervous about jumping in.
"In this environment, any rise in mortgage rates does significant damage because people don't think they're going to get their money back" if prices fall, said Mark Zandi, chief economist at Moody's Analytics.
For people who bought their first home in the 1980s, when rates stayed over 10 percent for several years, paying 6 percent for a home loan may seem like a steal. But it's coming as a shock to many first-time homebuyers this spring.
In Overland Park, Kan., Sirena Barlow checks mortgage rates online once a day. She's been shopping for a something around $130,000 and wants to sign a contract this month, to take advantage of a tax credit for first-time homebuyers.
Barlow, a legal assistant, has already told her landlord she's moving, so her stress level is high. Her real estate agent, Michael Maher, has been doing his best to calm Barlow and other clients, but rising rates are making them anxious.
"It's like giving hyperactive kids ice cream," he said. "It has really taken the ones who are focused on buying and amped them up a little bit."
Sunday, February 21, 2010
10 tips for property virgins
If you're a property virgin about to take the plunge, here are some common blunders to avoid--and helpful tips that could mean the difference between financial security and a mountain of debt:
1. Not checking your credit report and score
You've clicked through hundreds of online listings, compared floor plans and square footage, and are eager to jump-start your search. But before you even think of setting foot in an open house, make sure you get a copy of your credit report. The cleaner your credit report and the higher your credit score, the more likely you are to be preapproved for a mortgage at a low interest rate. According to Keith Gumbinger of HSH.com, most home buyers will need a credit score of about 720 to obtain the most favorable mortgage rates.
Review your credit report a few months before you begin your house hunt, and you'll have time to ensure the facts are correct and dispute mistakes before a mortgage lender checks your credit. You can access a free copy of your credit report at annualcreditreport.com once every 12 months.
2. Not getting preapproved
After you've assessed your credit report, it's time to establish with a qualified lender how much you can afford. "First-time home buyers need to take the time to get an approval from their lender before looking at homes," advises Ray Boss Jr., a six-year licensed Realtor with RE/MAX Realty Group in Maryland. "This includes getting a credit check and giving their lender a copy of W-2s, pay stubs, and bank and brokerage statements." Getting preapproved can help you save time by looking for homes that you know you can afford instead of lusting after something out of your price range. And it will put you in a better position over another bidder with no preapproval.
3. Not creating a long-term budget
If the housing crisis proved anything, it's that mortgages were given to people who clearly did not have the means to pay them back. To avoid making this mistake, home buyers should create a budget before even beginning their home search to determine just how much house they can really afford. A good rule of thumb is to devote no more than a third of your monthly household income to housing costs, which include mortgage principal, interest, taxes, and insurance. "A good number would be 30 percent," Zandi says. "If you are over 35 percent, you are really pushing the envelope." There are several work sheets available online to help you figure out how your income, debts, and expenses affect what you can afford each month for the next 15 or 30 years.
4. Forgetting about the hidden costs
You grossly underestimated what you can afford to pay each month. You factored in the purchase price of the home but didn't consider the cost of taxes, insurance, utilities, and fees. There are several hidden costs that first-time home buyers neglect to prepare for. They can be anything from the closing costs to appraisal fees, escrow fees, homeowner's insurance fees, property taxes, and even moving costs. Another factor is the cost of repairs and maintenance. "When you're renting and the furnace goes out, what do you do? You call the landlord," says Tom Vanderwell, mortgage officer for Fifth Third Bank in Michigan. "When you own a house, what do you do? You have to fix it yourself." You may find there are numerous "nickel and dime" things to account for that could add up to a significant chunk of money over time.
5. Not using professional help
Sure, it's possible to go out and buy a home without the aid of a professional real estate agent. But think about how much time and stress a good agent can save you. For starters, Realtors have access to all the homes on the market through the multiple listing service, or MLS, plus all the ones that are under contract and have been sold. A specialist has time to sift through all of these listings, says Boss, and make the appointments to show you the houses, create comparative market analyses to determine proper pricing, and meet with necessary inspectors. Real estate agents also can help buyers traverse a taxing, 70-page legal contract. "I would want someone who is going to look out for my interests first and foremost," says Boss. "Someone who knows the contracts, who has experience negotiating, and who can walk me through the entire process smoothly--step by step--and make sure I get the house that's right for me."
6. Picking your real estate agent and lender blindly
"One of the mistakes a lot of people make is finding a Realtor they aren't comfortable with," says Boss. Begin your search at the National Association of Exclusive Buyer Agents, a nonprofit that represents buyers. Or ask relatives, friends, neighbors, and coworkers for referrals.
First-time home buyers, Boss says, are generally more time-consuming than the average buyer and require more attention. A good real estate agent will be friendly and accommodating, show only homes that fit your parameters, and help you with strategies during the bidding process--but never pressure you into something you're not comfortable with. "It's important that the Realtor be experienced with first-time buyers, understand their wants and needs, and be able to connect with them well," says Boss.
Similarly, the buyers should feel at ease with and have complete confidence in their mortgage lender, and they should fully discuss and understand their financing options with that lender. "Don't apologize for asking questions," says Vanderwell, who stresses the importance of knowing what you're getting into. "There's a pretty substantial chunk of people who are in really rough straits right now and would not have been had they done their homework."
7. Thinking you'll get everything on your "wish list"
Another mistake people make is being too close-minded while searching for their home, says Boss. He suggests sitting down with your real estate broker before searching for a home and creating a need/want list. Some of the items you might want to include as "must haves" or deal breakers are the towns you'd want to live in, square footage, or accessibility to transportation. The second part of the list would be things you don't necessarily need but wish to have, such as a garage, new kitchen appliances, or an extra room for an office. "As you search for your home, you may realize there are certain parameters you really want or don't want," says Boss. "Understand that a certain amount of flexibility is essential." Your aim is to be able to afford everything you need--as well as some items you want--all while staying within a long-term budget.
8. Not keeping your feelings in check before hiring a home inspector
You've already chosen the perfect paint color to match your living room set. But hold on: Before you start picking out accent pillows for your sofa, you need to bring in a home inspector to check the safety of your potential new home. Inspectors will evaluate the structure, construction, and mechanical systems of the home and will give you the approximate price of repairs that may be needed. They will examine everything from the electrical system, water heater, and HVAC system to the foundation and floors.
Buyers should find and hire their own inspector--independent of the real estate broker--to ensure there isn't a conflict of interest. When you make your offer, make sure the seller is aware that your offer is contingent on the house passing inspection. You can also add a clause to the contract stating that the seller will pay up to a certain amount for any repairs required as a result of the inspection.
[See the 5 Best--and 5 Worst--Home Improvement Projects for Your Money.]
9. Not researching your neighborhood
You may be living in your dream home, but your neighborhood's a nightmare. Or you may have children or are planning to have children in the near future, but you didn't consider the quality of the school districts or parks in the vicinity. You should ask yourself a number of questions during your home search, such as "Are there good schools nearby?" and "Do I feel safe coming home at night?"
Boss suggests that if schools are an important factor, you should go check them out personally. Speak with the principals or the parents waiting on the steps outside to pick up their kids. To learn more about the community, open up the local newspaper, Boss says. You can find out about community events or even how good the local high school football team is. Today's buyers can gather all sorts of neighborhood information from real estate blogs and websites like Zillow and Trulia. (U.S. News has a partnership with Trulia.) "It is the responsibility of the buyer to check crime reports, school options, churches, and shopping," says Boss. "Remember, you can change your house, but you can't change the neighborhood."
10. Not considering the resale value of your home
You've just started the home-buying process. The prospect of selling a home hasn't even crossed your mind. Besides, you're thinking you might live in whatever home you buy forever. Yet life is full of surprises, whether it is a job transfer or having another child or taking care of an incapacitated relative.
When the time comes to put your house on the market, will your home be easy or difficult to sell? While you're on the hunt, it's a good idea to account for preferences of the typical home buyer. Just because you love to landscape or enjoy a bright-pink backsplash doesn't mean a prospective buyer will. "How we make our plans initially has a big impact on our ability to adjust those plans and to deal with whatever comes our way," says Vanderwell.
1. Not checking your credit report and score
You've clicked through hundreds of online listings, compared floor plans and square footage, and are eager to jump-start your search. But before you even think of setting foot in an open house, make sure you get a copy of your credit report. The cleaner your credit report and the higher your credit score, the more likely you are to be preapproved for a mortgage at a low interest rate. According to Keith Gumbinger of HSH.com, most home buyers will need a credit score of about 720 to obtain the most favorable mortgage rates.
Review your credit report a few months before you begin your house hunt, and you'll have time to ensure the facts are correct and dispute mistakes before a mortgage lender checks your credit. You can access a free copy of your credit report at annualcreditreport.com once every 12 months.
2. Not getting preapproved
After you've assessed your credit report, it's time to establish with a qualified lender how much you can afford. "First-time home buyers need to take the time to get an approval from their lender before looking at homes," advises Ray Boss Jr., a six-year licensed Realtor with RE/MAX Realty Group in Maryland. "This includes getting a credit check and giving their lender a copy of W-2s, pay stubs, and bank and brokerage statements." Getting preapproved can help you save time by looking for homes that you know you can afford instead of lusting after something out of your price range. And it will put you in a better position over another bidder with no preapproval.
3. Not creating a long-term budget
If the housing crisis proved anything, it's that mortgages were given to people who clearly did not have the means to pay them back. To avoid making this mistake, home buyers should create a budget before even beginning their home search to determine just how much house they can really afford. A good rule of thumb is to devote no more than a third of your monthly household income to housing costs, which include mortgage principal, interest, taxes, and insurance. "A good number would be 30 percent," Zandi says. "If you are over 35 percent, you are really pushing the envelope." There are several work sheets available online to help you figure out how your income, debts, and expenses affect what you can afford each month for the next 15 or 30 years.
4. Forgetting about the hidden costs
You grossly underestimated what you can afford to pay each month. You factored in the purchase price of the home but didn't consider the cost of taxes, insurance, utilities, and fees. There are several hidden costs that first-time home buyers neglect to prepare for. They can be anything from the closing costs to appraisal fees, escrow fees, homeowner's insurance fees, property taxes, and even moving costs. Another factor is the cost of repairs and maintenance. "When you're renting and the furnace goes out, what do you do? You call the landlord," says Tom Vanderwell, mortgage officer for Fifth Third Bank in Michigan. "When you own a house, what do you do? You have to fix it yourself." You may find there are numerous "nickel and dime" things to account for that could add up to a significant chunk of money over time.
5. Not using professional help
Sure, it's possible to go out and buy a home without the aid of a professional real estate agent. But think about how much time and stress a good agent can save you. For starters, Realtors have access to all the homes on the market through the multiple listing service, or MLS, plus all the ones that are under contract and have been sold. A specialist has time to sift through all of these listings, says Boss, and make the appointments to show you the houses, create comparative market analyses to determine proper pricing, and meet with necessary inspectors. Real estate agents also can help buyers traverse a taxing, 70-page legal contract. "I would want someone who is going to look out for my interests first and foremost," says Boss. "Someone who knows the contracts, who has experience negotiating, and who can walk me through the entire process smoothly--step by step--and make sure I get the house that's right for me."
6. Picking your real estate agent and lender blindly
"One of the mistakes a lot of people make is finding a Realtor they aren't comfortable with," says Boss. Begin your search at the National Association of Exclusive Buyer Agents, a nonprofit that represents buyers. Or ask relatives, friends, neighbors, and coworkers for referrals.
First-time home buyers, Boss says, are generally more time-consuming than the average buyer and require more attention. A good real estate agent will be friendly and accommodating, show only homes that fit your parameters, and help you with strategies during the bidding process--but never pressure you into something you're not comfortable with. "It's important that the Realtor be experienced with first-time buyers, understand their wants and needs, and be able to connect with them well," says Boss.
Similarly, the buyers should feel at ease with and have complete confidence in their mortgage lender, and they should fully discuss and understand their financing options with that lender. "Don't apologize for asking questions," says Vanderwell, who stresses the importance of knowing what you're getting into. "There's a pretty substantial chunk of people who are in really rough straits right now and would not have been had they done their homework."
7. Thinking you'll get everything on your "wish list"
Another mistake people make is being too close-minded while searching for their home, says Boss. He suggests sitting down with your real estate broker before searching for a home and creating a need/want list. Some of the items you might want to include as "must haves" or deal breakers are the towns you'd want to live in, square footage, or accessibility to transportation. The second part of the list would be things you don't necessarily need but wish to have, such as a garage, new kitchen appliances, or an extra room for an office. "As you search for your home, you may realize there are certain parameters you really want or don't want," says Boss. "Understand that a certain amount of flexibility is essential." Your aim is to be able to afford everything you need--as well as some items you want--all while staying within a long-term budget.
8. Not keeping your feelings in check before hiring a home inspector
You've already chosen the perfect paint color to match your living room set. But hold on: Before you start picking out accent pillows for your sofa, you need to bring in a home inspector to check the safety of your potential new home. Inspectors will evaluate the structure, construction, and mechanical systems of the home and will give you the approximate price of repairs that may be needed. They will examine everything from the electrical system, water heater, and HVAC system to the foundation and floors.
Buyers should find and hire their own inspector--independent of the real estate broker--to ensure there isn't a conflict of interest. When you make your offer, make sure the seller is aware that your offer is contingent on the house passing inspection. You can also add a clause to the contract stating that the seller will pay up to a certain amount for any repairs required as a result of the inspection.
[See the 5 Best--and 5 Worst--Home Improvement Projects for Your Money.]
9. Not researching your neighborhood
You may be living in your dream home, but your neighborhood's a nightmare. Or you may have children or are planning to have children in the near future, but you didn't consider the quality of the school districts or parks in the vicinity. You should ask yourself a number of questions during your home search, such as "Are there good schools nearby?" and "Do I feel safe coming home at night?"
Boss suggests that if schools are an important factor, you should go check them out personally. Speak with the principals or the parents waiting on the steps outside to pick up their kids. To learn more about the community, open up the local newspaper, Boss says. You can find out about community events or even how good the local high school football team is. Today's buyers can gather all sorts of neighborhood information from real estate blogs and websites like Zillow and Trulia. (U.S. News has a partnership with Trulia.) "It is the responsibility of the buyer to check crime reports, school options, churches, and shopping," says Boss. "Remember, you can change your house, but you can't change the neighborhood."
10. Not considering the resale value of your home
You've just started the home-buying process. The prospect of selling a home hasn't even crossed your mind. Besides, you're thinking you might live in whatever home you buy forever. Yet life is full of surprises, whether it is a job transfer or having another child or taking care of an incapacitated relative.
When the time comes to put your house on the market, will your home be easy or difficult to sell? While you're on the hunt, it's a good idea to account for preferences of the typical home buyer. Just because you love to landscape or enjoy a bright-pink backsplash doesn't mean a prospective buyer will. "How we make our plans initially has a big impact on our ability to adjust those plans and to deal with whatever comes our way," says Vanderwell.
Friday, February 5, 2010
The 10 Must-Have Features in Today's New Homes
The 10 Must-Have Features in Today's New Homes
by Steve Kerch
Thursday, February 4, 2010
Americans want smaller houses and they are willing to strip some of yesterday's most popular rooms -- such as home theaters -- from them in order to accommodate changing lifestyles, consumer experts told audiences at the International Builders Show here this week.
"This is a traumatic time in this country and the future isn't something we're 100% sure about now either. What's left? The answer for most home buyers is authenticity," said Heather McCune, director of marketing for Bassenian Lagoni Architects in Park Ridge, Ill.
Buyers today want cost-effective architecture, plans that focus on spaces and not rooms and homes that are designed 'green' from the outset," she said. The key for home builders is "finding the balance between what buyers want and the price point."
For many buyers, their next house will be smaller than their current one, said Carol Lavender, president of the Lavender Design Group in San Antonio, Texas. Large kitchens that are open to the main family living area, old-fashioned bathrooms with clawfoot tubs and small spaces such as wine grottos are design features that will resonate today, she said.
"What we're hearing is 'harvest' as a home theme -- the feeling of Thanksgiving. It's all about family togetherness -- casual living, entertaining and flexible spaces," Lavender said.
Paul Cardis, CEO of AVID Ratings Co., which conducts an annual survey of home-buyer preferences, said there are 10 "must" features in new homes.
1. Large Kitchens, With an Island
"If you're going to spend design dollars, spend them where people want them -- spend them in the kitchen," McCune said. Granite countertops are a must for move-up buyers and buyers of custom homes, but for others "they are on the bubble," Cardis said.
2. Energy-Efficient Appliances, High-Efficiency Insulation and High Window Efficiency
Among the "green" features touted in homes, these are the ones buyers value most, he said. While large windows had been a major draw, energy concerns are giving customers pause on those, he said. The use of recycled or synthetic materials is only borderline desirable.
3. Home Office/Study
People would much rather have this space rather than, say, a formal dining room. "People are feeling like they can dine out again and so the dining room has become tradable," Cardis said. And the home theater may also be headed for the scrap heap, a casualty of the "shift from boom to correction," Cardis said.
4. Main-Floor Master Suite
This is a must feature for empty-nesters and certain other buyers, and appears to be getting more popular in general, he said. That could help explain why demand for upstairs laundries is declining after several years of popularity gains.
5. Outdoor Living Room
The popularity of outdoor spaces continues to grow, even in Canada, Cardis said. And the idea of an outdoor room is even more popular than an outdoor cooking area, meaning people are willing to spend more time outside.
6. Ceiling Fans
7. Master Suite Soaker Tubs
Whirlpools are still desirable for many home buyers, Cardis said, but "they clearly went down a notch," in the latest survey. Oversize showers with seating areas are also moving up in popularity.
8. Stone and Brick Exteriors
Stucco and vinyl don't make the cut.
9. Community Landscaping, With Walking Paths and Playgrounds
Forget about golf courses, swimming pools and clubhouses. Buyers in large planned developments prefer hiking among lush greenery.
10. Two-Car Garages
A given at all levels; three-car garages, in which the third bay is more often then not used for additional storage and not automobiles, is desirable in the move-up and custom categories, Cardis said.
Copyrighted, MarketWatch.
All rights reserved. Republication or redistribution of MarketWatch content is expressly prohibited without the prior written consent of MarketWatch. MarketWatch shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
by Steve Kerch
Thursday, February 4, 2010
Americans want smaller houses and they are willing to strip some of yesterday's most popular rooms -- such as home theaters -- from them in order to accommodate changing lifestyles, consumer experts told audiences at the International Builders Show here this week.
"This is a traumatic time in this country and the future isn't something we're 100% sure about now either. What's left? The answer for most home buyers is authenticity," said Heather McCune, director of marketing for Bassenian Lagoni Architects in Park Ridge, Ill.
Buyers today want cost-effective architecture, plans that focus on spaces and not rooms and homes that are designed 'green' from the outset," she said. The key for home builders is "finding the balance between what buyers want and the price point."
For many buyers, their next house will be smaller than their current one, said Carol Lavender, president of the Lavender Design Group in San Antonio, Texas. Large kitchens that are open to the main family living area, old-fashioned bathrooms with clawfoot tubs and small spaces such as wine grottos are design features that will resonate today, she said.
"What we're hearing is 'harvest' as a home theme -- the feeling of Thanksgiving. It's all about family togetherness -- casual living, entertaining and flexible spaces," Lavender said.
Paul Cardis, CEO of AVID Ratings Co., which conducts an annual survey of home-buyer preferences, said there are 10 "must" features in new homes.
1. Large Kitchens, With an Island
"If you're going to spend design dollars, spend them where people want them -- spend them in the kitchen," McCune said. Granite countertops are a must for move-up buyers and buyers of custom homes, but for others "they are on the bubble," Cardis said.
2. Energy-Efficient Appliances, High-Efficiency Insulation and High Window Efficiency
Among the "green" features touted in homes, these are the ones buyers value most, he said. While large windows had been a major draw, energy concerns are giving customers pause on those, he said. The use of recycled or synthetic materials is only borderline desirable.
3. Home Office/Study
People would much rather have this space rather than, say, a formal dining room. "People are feeling like they can dine out again and so the dining room has become tradable," Cardis said. And the home theater may also be headed for the scrap heap, a casualty of the "shift from boom to correction," Cardis said.
4. Main-Floor Master Suite
This is a must feature for empty-nesters and certain other buyers, and appears to be getting more popular in general, he said. That could help explain why demand for upstairs laundries is declining after several years of popularity gains.
5. Outdoor Living Room
The popularity of outdoor spaces continues to grow, even in Canada, Cardis said. And the idea of an outdoor room is even more popular than an outdoor cooking area, meaning people are willing to spend more time outside.
6. Ceiling Fans
7. Master Suite Soaker Tubs
Whirlpools are still desirable for many home buyers, Cardis said, but "they clearly went down a notch," in the latest survey. Oversize showers with seating areas are also moving up in popularity.
8. Stone and Brick Exteriors
Stucco and vinyl don't make the cut.
9. Community Landscaping, With Walking Paths and Playgrounds
Forget about golf courses, swimming pools and clubhouses. Buyers in large planned developments prefer hiking among lush greenery.
10. Two-Car Garages
A given at all levels; three-car garages, in which the third bay is more often then not used for additional storage and not automobiles, is desirable in the move-up and custom categories, Cardis said.
Copyrighted, MarketWatch.
All rights reserved. Republication or redistribution of MarketWatch content is expressly prohibited without the prior written consent of MarketWatch. MarketWatch shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
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