Freddie: Rising Mortgage Rates Chip Away at Affordability

The majority of housing markets remain affordable to the average family, but rising mortgage rates and rising housing prices are causing more families to have to stretch financially, according to Freddie Mac’s U.S. Economic and Housing Market Outlook for December.

“Rising mortgage rates and rising housing prices over the past six months are making it more challenging for the typical family to purchase a home without stretching beyond their means, especially in the Northeast and along the Pacific Coast,” says Frank Nothaft, Freddie Mac’s chief economist. “Like most, we expect mortgage rates to rise over the coming year, so it's critical we start to see more job gains and income growth in the coming year. This will help to keep payment-to-income ratios in balance -- an important factor not only for first-time buyers but for sustaining homeownership levels among existing owners."

According to Freddie Mac’s report, more than 70 percent of the nation’s housing stock remained affordable to the typical family in the third quarter at a 4.4 percent interest rate for a 30-year fixed-rate mortgage. However, that percentage decreases to about 63 percent at a 5 percent mortgage rate;  55 percent at a 6 percent interest rate; and 35 percent at a 7 percent interest rate.

Source: Freddie Mac

Returning Real Estate Market

Markets in 54 out of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today. The index’s nationwide score of .86 indicates that, based on current permits, prices and employment data, the nationwide market is running at 86 percent of normal economic and housing activity.

The LMI figures for November showed that 55 housing markets were operating at or above their last normal levels and the nationwide market was operating at 85 percent of normal growth.
LMI data for the two months were released simultaneously because of the delay in collecting data during the partial government shutdown in October.

“This index shows that most housing markets across the nation are continuing a slow, gradual climb back to normal levels,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “Policymakers must guard against actions that could impede or even reverse the modest gains of the past year.”

Noting that smaller metros accounted for most of the 54 markets on the current LMI that are at or above normal levels, NAHB Chief Economist David Crowe said that “smaller markets are leading the way, particularly where energy is the primary economic driver. Nearly half of the markets in the top 54 are in the energy states of Texas, Louisiana, North Dakota, Wyoming and Montana.”

“The fact that more than 125 markets on this month’s LMI are showing activity levels of at least 90 percent of previous norms bodes well for a continuing housing recovery in 2014,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report.

Baton Rouge, La., tops the list of major metros on the LMI, with a score of 1.42 – or 42 percent better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Pittsburgh – all of whose LMI scores indicate that their market activity now exceeds previous norms.

Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores of 2.0 or better, meaning that their markets are now at double their strength prior to the recession. Also at the top of the list of smaller metros are Casper, Wyo.; Bismarck, N.D.; and Grand Forks, N.D., respectively.
The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity.

More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

Editor’s Note: In calculating the LMI, NAHB utilizes employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permits from the U.S. Census Bureau. The LMI is published on the fourth working day of each month, unless that day falls on a Friday -- in which case, it is released on the following Monday.

For historical information and charts, please go to

2013 Profile of Home Buyers and Sellers

Earlier this year a 122-question survey from NAR was mailed out to thousands of homebuyers and sellers across the U.S. The survey gives a profile of home buyers and sellers that covers everything from buying, selling, technology, financing, and how consumers interact with their real estate agents.

Here's  a short analysis of homebuyer characteristics for 2013...

First-time homebuyers still make up a lower-than-average share of total homebuyers, but their not too far behind; in 2013, they’ve made up 38 percent of buyers, down from the historical average of 40 percent.

One surprising faction that is multi-generational homebuyers, who made up 14 percent of all purchases; such purchases were made to account for college graduates living with their parents, aging parents living with their children and cost savings.

The median income for households was $83,300, while for first-time buyers and repeat buyers, it was $64,400 and $96,000, respectively.

Interestingly, despite those seemingly high income levels, 66 percent of recent homebuyers were married couples, the highest such share since 2001.

The typical homebuyer was 42 years old, while the typical first-time homebuyer was 31 and the typical repeat buyer 52.

Finally, the simple desire to own a home remains potent among American consumers – 30 percent of recent homebuyers said it was their primary reason for buying a home.

Update on the Housing Market for Active 55+ Homeowners

Builder confidence in the 55+ housing market showed continued improvement in the third quarter of 2013 compared to the same period a year ago, according to the National Association of Home Builders’ (NAHB) latest 55+ Housing Market Index (HMI) released today. All segments of the market—single-family homes, condominiums and multifamily rental—registered strong increases. The single-family index increased 14 points to a level of 50, which is the highest third-quarter number since the inception of the index in 2008 and the eighth consecutive quarter of year over year improvements.

“We have seen steady improvement in the 55+ housing sector as buyers and renters are attracted to new homes and communities that offer the lifestyle they desire” said Robert Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group. “Although the market is significantly stronger than it has been in recent years, we still have a ways to go to get back to full production.”

There are separate 55+ HMIs for two segments of the 55+ housing market: single-family homes and multifamily condominiums. Each 55+ HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for that market are good, fair or poor (high, average or low for traffic). An index number below 50 indicates that more builders view conditions as poor than good.

All of the components of the 55+ single-family HMI showed considerable growth from a year ago: present sales climbed 16 points to 52, expected sales for the next six months rose 11 points to 53 and traffic of prospective buyers increased 10 points to 43.

The 55+ multifamily condo HMI posted a gain of 14 points to 37, which is the highest third-quarter reading since the inception of the index. All 55+ multifamily condo HMI components increased compared to a year ago as present sales increased 15 points to 37, expected sales for the next six months climbed 11 points to 40 and traffic of prospective buyers rose 13 points to 35. The 55+ multifamily rental indices also showed strong gains in the third quarter as present production increased 17 points to 48, expected future production rose 15 points to 50, current demand for existing units climbed 18 points to 60 and future demand increased 16 points to 60.

“Right now the positive year over year increase in confidence by builders for the 55+ market is tracking right along with other segments of the home building industry,” said NAHB Chief Economist David Crowe. “And like other segments of the industry, the 55+ market is improving in part because consumers are more likely to be able to sell their current homes, which allows them to buy a new home or move into an apartment that suits their specific needs.”

For the full 55+ HMI tables, please visit

             Hope you'll stop by for a visit !

Home Housing Forecast for 2014

Lawrence Yun, chief economist of the National Association of Realtors®, said existing-home sales have shown a 20 percent cumulative increase over the past two years, while prices have gained 18 percent, but incomes have risen only 2 to 4 percent in the same timeframe.

“We’ve come off of record high housing affordability conditions in the past year, and are now at a five-year low, but conditions are still the fifth best in the past 40 years,” Yun said. “While the median-income family in many areas will still be well positioned to buy a home in 2014, income is barely budging given growth in consumer prices.”

Yun said the other headwinds moving forward include limited inventory conditions in many areas and mortgage lending standards that are still unnecessarily stringent. “Although home sales have recovered over the past two years, mortgage purchase applications have been flat for the past four years, even with rising sales,” he said.

With higher mortgage interest rates, he expects refinancings to collapse in 2014 to the lowest level in at least 15 years, and hopes purchase applications will begin to rise. “This is an incentive for banks to increase mortgage origination, especially considering the low default rates in recent years. But even with cheap mortgages for the past four years, all-cash buyers stayed high, accounting for over 30 percent of sales,” Yun noted.

Beyond bank motivation, Yun said Washington policies for mortgage lending have been too restrictive. He cited rising fees for Fannie Mae and Freddie Mac, higher Federal Housing Administration premiums, as well as Dodd-Frank banking regulations, which have been strangling community banks. In addition, Yun said banks are holding onto funds for potential Department of Justice lawsuits, rather than making them available to mortgage borrowers.

He said job creation, and hopefully a relaxation in stringent lending standards, will offset higher mortgage interest rates. Existing-home sales this year are forecast to rise 10 percent to nearly 5.13 million, but should hold fairly even at about 5.12 million in 2014.

Limited supplies were the biggest factor in price performance in the past year, with inventory bouncing around 13-year lows, and seriously delinquent mortgages have been trending steadily down. The national median existing-home price for all of 2013 will be up just over 11 percent, to about $197,000; then increase nearly 6 percent next year.

Yun expects the inventory shortages to be felt again next spring. “Housing starts are the only way to alleviate inventory shortages,” he said. “Housing starts need to rise 50 percent to meet underlying demand.”
Housing starts are forecast to hit 917,000 this year and reach 1.13 million in 2014, which is still well below the underlying demand of about 1.5 million. New-home sales are likely to total 429,000 in 2013, and grow to 508,000 next year.

Inflationary pressure may begin to build during the course of 2014, with consumer prices projected to rise 2.7 percent, but Yun said inflation could reach 4 to 6 percent in 2015.  Mortgage interest rates are expected to trend upward and reach 5.4 by the end of next year.

Yun projects growth in Gross Domestic Product to be 1.7 percent this year and 2.5 percent in 2014. “If not for the housing recovery, we could be on the verge of a recession,” Yun noted. “The rent component of inflation is rising, so the only way to tame price growth is new home inventory.”

Since the economic downturn, 8.8 million jobs were lost, but only 7 million have been regained. “We need another 6 to 8 million jobs to get back to normal,” Yun said. The states with the fastest job growth are North Dakota, Utah Idaho, Texas, Colorado, Minnesota, Georgia, Washington, Arizona and New Jersey. The unemployment rate is projected to decline to about 6.7 percent around the end of next year.

Source: The National Association of Realtors®,

FHA Rules for Consumers to Buy, Sell Condos

Condominiums are often the most affordable home ownership option for first-time buyers, small families, single people, and older Americans, especially when purchased with low down payment FHA-backed condo mortgages, which are among the strongest performing loans in the FHA portfolio. However, FHA data show approximately 60 percent of condo projects seeking approval in 2013 were denied, that’s up from 2011 when only 20 percent of projects were denied.

Joanne Kuczma, housing program officer in the Office of Single Family Program Development at the Department of Housing and Urban Development, cited the top reasons for FHA projects being denied approval, including financial instability, pending litigation, insufficient insurance coverage, and outdated or missing documentation, among others.

“The goal isn’t to reduce FHA’s footprint in the condo market, but to ensure that homeowners are buying into a viable, sustainable homeownership opportunity,” said Kuczma. She said HUD is working hard to improve the approval process and is considering changes, such as reinstating spot approvals for individual condo units in projects that aren’t already FHA approved.

Jim Cantrell, president of Cantrell, Harris and Associates, a real estate management and consulting firm in San Francisco, agreed with the top reasons for why projects are denied and offered advice to attendees for helping get condo projects approved.

“It’s critical to ensure that all the required documents are completed and filed correctly,” he said. “My advice is to ask the right questions of the right people and get it done right the first time; otherwise the process will be prolonged and that puts the condo sale at risk.”

Cantrell said while condo boards, management companies and developers can seek their own approvals, hiring a private third-party project consultant that specializes in getting projects approved can help reduce the timeframe and increase the likeliness of approval; the cost is usually between a few hundred and a few thousand dollars.

Dawn Bauman, senior vice president for government affairs at Community Associations Institute, said condo communities have grown tremendously in recent decades, from about 70,000 housing units in 1973 to nearly 26 million units today. Her advice for buyers and agents seeking to buy in those communities is to work closely with the seller.

“The best source for information is the individual selling the unit, they are a great contact for agents and their buyers to quickly get the information and paperwork needed for approval,” she said.

NAR has advocated reforms to ease FHA’s burdensome condo financing rules to give consumers access to a wider choice of condo developments and to increase affordable financing options available to purchase within those developments. Those reforms include extending FHA’s recertification process from two to five years. To avoid a lapse, many condo projects begin the recertification process at least six months prior to the deadline, so many condo projects end up going through the recertification process every 18 months.

Another NAR recommendation is to simplify the recertification process, which requires the same amount of paperwork as the initial project approval. NAR believes employing an electronic filing system, similar to what FHA uses for its multi-family loan programs, would increase efficiency, improve data accuracy and help reduce costs.

According to Kuczma, HUD has heard the feedback from Realtors® and others in the industry and is evaluating the recertification process to make improvements and reduce the amount of required paperwork.

NAR also encourages HUD to align the condo approval standards across the housing finance system and create consistent condo approval guidelines for Fannie Mae, Freddie Mac, Department of Agriculture, Department of Veterans Affairs, and other agencies that are involved in housing finance.    
“Realtors® believe that making these changes to FHA’s condo rules will help protect the long-term value of homeownership in the country and ensure the housing recovery stays on track,” said NAR President Gary Thomas, broker-owner of Evergreen Realty, in Villa Park, Calif.

NAR has also established a working group of Realtor® members from across the country to review condo rules and guidelines and assess their impact on the market. For more information, visit

Flood Insurance Rate Uncertainty

Realtors® and homeowners across the country have been reporting significant increases in annual premium rates before NFIP rate changes took effect on October 1; this is raising concerns among consumers and Realtors® about decreased property values and a stalled housing market recovery.

Ed Connor, FEMA deputy associate administrator, Insurance, Federal Insurance and Mitigation Administration, said Congress took action to reform the NFIP and make it financially sound following several devastating storms.

“The last two major storms, Hurricane Katrina in 2005 and Hurricane Sandy in 2012 were the costliest storms in U.S. history,” Connor said. “Last year, the NFIP was forced to borrow money from Treasury; program debt is now $24 billion dollars.”

Flood insurance rates are dependent on risk levels, property type and location. Under the Biggert-Waters Flood Insurance Reform Act, rate increases for older primary residences go into effect when the policy lapses, the property is sold or a new policy is purchased.

Rates for commercial properties and non-primary residences are increasing by 25 percent per year until premiums reach the full actuarial cost. Changes to flood insurance rate maps in some communities may also affect the timing of increases, and some could go into effect immediately.

“This isn’t going to affect property owners in every state to the same degree,” said Thomas Hayes, FEMA chief actuary, Federal Insurance and Mitigation Administration. “There are going to be some counties that are harder hit than others; it’s going to depend on the location of the property and several other factors.”

Panelists told attendees that under the Biggert-Waters Flood Insurance Reform Act of 2012, homeowners could save $75,000 or more over 10 years if they build three feet above base flood elevation. Panelists also encouraged policy holders to talk to an insurance agent about their options and to obtain an elevation certificate.

NAR is a strong supporter of the NFIP and believes it is critically important to Americans and the nation’s economy since it increases the number of self-insured properties and reduces the cost of post-flood disaster governmental assistance. However, due to the unprecedented scope of premium increases, NAR recommends that FEMA take interim measures to ensure that the NFIP continues on a path towards financial solvency and actuarial responsibility without damaging the real estate recovery.
In addition to delaying future premium increases until FEMA submits its affordability study, NAR recommends that FEMA issue proposed regulations for installment payments and appeals reimbursement; and that FEMA work to improve and publicize the Community Rating System program, which encourages community floodplain management activities that exceed NFIP’s minimum requirements, and rewards participating communities with lower premiums.

Other NAR recommendations include streamlining and improving the process for obtaining property elevation certificates, and improving and publicizing information and education resources for consumers, real estate agents, lenders, and insurers, among others.

NAR also calls on FEMA to convene a summit about the impact of premium increases on property owners. At the summit, industry experts could develop valuable recommendations for how FEMA could minimize the impact of future premium increases, strategize ways to help property owners and communities lower their rates, and discuss ways the real estate industry can partner with FEMA on those efforts.

Source:The National Association of Realtors®

IRA and Retirement Plan Limits for 2014

The maximum amount you can contribute to a traditional IRA or Roth IRA in 2014 remains unchanged at $5,500 (or 100% of your earned income, if less). The maximum catch-up contribution for those age 50 or older in 2014 is $1,000, also unchanged from 2013. (You can contribute to both a traditional and Roth IRA in 2014, but your total contributions can't exceed this annual limit.)

Traditional IRA deduction limits for 2014
The income limits for determining the deductibility of traditional IRA contributions have increased for 2014 (for those covered by employer retirement plans). For example, you can fully deduct your IRA contribution if your filing status is single/head of household, and your income ("modified adjusted gross income," or MAGI) is $60,000 or less (up from $59,000 in 2013). If you're married and filing a joint return, you can fully deduct your IRA contribution if your MAGI is $96,000 or less (up from $95,000 in 2013). If you're not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct your IRA contribution if your MAGI is $181,000 or less (up from $178,000 in 2013).
If your 2014 federal income tax filing status is:Your IRA deduction is reduced if your MAGI is between:Your deduction is eliminated if your MAGI is:
Single or head of household $60,000 and $70,000 $70,000 or more
Married filing jointly or qualifying widow(er)* $96,000 and $116,000 (combined) $116,000 or more (combined)
Married filing separately $0 and $10,000 $10,000 or more
*If you're not covered by an employer plan but your spouse is, your deduction is limited if your MAGI is $181,000 to $191,000, and eliminated if your MAGI exceeds $191,000.

Roth IRA contribution limits for 2014
The income limits for Roth IRA contributions have also increased. If your filing status is single/head of household, you can contribute the full $5,500 to a Roth IRA in 2014 if your MAGI is $114,000 or less (up from $112,000 in 2013). And if you're married and filing a joint return, you can make a full contribution if your MAGI is $181,000 or less (up from $178,000 in 2013). (Again, contributions can't exceed 100% of your earned income.)
If your 2014 federal income tax filing status is:Your Roth IRA contribution is reduced if your MAGI is between:You cannot contribute to a Roth IRA if your MAGI is:
Single or head of household $114,000 and $129,000 $129,000 or more
Married filing jointly or qualifying widow(er) $181,000 and $191,000 (combined) $191,000 or more (combined)
Married filing separately $0 and $10,000 $10,000 or more
Employer retirement plans
The maximum amount you can contribute (your "elective deferrals") to a 401(k) plan in 2014 remains unchanged at $17,500. The limit also applies to 403(b), 457(b), and SAR-SEP plans, as well as the Federal Thrift Savings Plan. If you're age 50 or older, you can also make catch-up contributions of up to $5,500 to these plans in 2014 (unchanged from 2013). (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)
If you participate in more than one retirement plan, your total elective deferrals can't exceed the annual limit ($17,500 in 2014 plus any applicable catch-up contribution). Deferrals to 401(k) plans, 403(b) plans, SIMPLE plans, and SAR-SEPs are included in this limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can defer the full dollar limit to each plan--a total of $35,000 in 2014 (plus any catch-up contributions).
The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) plan in 2014 is $12,000, unchanged from 2013. The catch-up limit for those age 50 or older also remains unchanged at $2,500.
Plan type:Annual dollar limit:Catch-up limit:
401(k), 403(b), governmental 457(b), SAR-SEP, Federal Thrift Savings Plan $17,500 $5,500
SIMPLE plans $12,000 $2,500
Note: Contributions can't exceed 100% of your income.
The maximum amount that can be allocated to your account in a defined contribution plan (for example, a 401(k) plan or profit-sharing plan) in 2014 is $52,000 (up from $51,000 in 2013), plus age-50 catch-up contributions. (This includes both your contributions and your employer's contributions. Special rules apply if your employer sponsors more than one retirement plan.)
Finally, the maximum amount of compensation that can be taken into account in determining benefits for most plans in 2014 has increased to $260,000, up from $255,000 in 2013; and the dollar threshold for determining highly compensated employees remains unchanged at $115,000.

Source: Sean Henderson, Financial Advisor - Waddell & Reed 210-826-0685 ext: 140
This information is prepared by an independent third party, Broadridge Investor Communication Solutions, Inc. and is provided for informational and educational purposes only. Waddell & Reed believes the information has been obtained from sources considered to be reliable, but does not guarantee the accuracy of the information provided. This information is not meant to be a complete summary or statement of all available data necessary for making financial or investment decisions and does not constitute a recommendation.

Please note that the information provided may include references to concepts that have legal, accounting and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to you to assist in understanding the issues discussed. Neither Waddell & Reed, Inc., nor its Financial Advisors give tax, legal, or accounting advice.

This information is not meant as financial or investment advice pertaining to your personal situation. The selection of appropriate investment, insurance or planning options and/or strategies should be made on an individual basis after consultation with appropriate legal, tax and financial advisors. Nothing contained herein is intended as a solicitation or an offer to buy or sell any product or service mentioned and they may not be suitable for all investors.

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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013.

Housing Market Gains Forecast by Top Lenders

NAR President Gary Thomas and CEO Dale Stinton moderated the candid discussion during the “Straight from the Top: Insights from Lending Leaders” session at the 2013 Realtors® Conference and Expo, where the top mortgage industry executives expounded on new regulatory hurdles that could temporarily restrict lending to some buyers, but will likely even out over time.

The Qualified Mortgage, or ability-to-repay rule, will become effective in January 2014 and contains a number of underwriting standards that will constrict mortgage availability and deny credit to some first-time homebuyers, said Bill Emerson, CEO of Quicken Loans. The QM rule requires significant documentation from consumers to justify lenders’ underwriting decisions; lenders face strict penalties if a loan is made outside of the specific criteria.

Kevin Watters, CEO of JPMorgan Chase, agreed that lower- and moderate-income buyers, as well as self-employed buyers who don’t have a consistent flow of income, might have a tougher time in the new lending environment. “We need to work together to help first-time buyers into affordable housing options.”
“It’s important for Realtors® to be educated about the new documentation requirements so they can work with buyers and meet lender expectations,” said Matt Vernon, home loan sales executive for Bank of America.

Mike Heid, president of Wells Fargo Home Mortgage, added that Wells Fargo is using new technologies to create learning tools to help consumers prepare to be homeowners, even before they find the house they love. The new lending standards and documentation requirements are making some potential borrowers anxious about competing with cash buyers in the real estate market.

Thomas asked the panelists to share their average approval timelines.Vernon said that in California, Bank of America’s mortgage loan officers can process and approve loans in 16 days and always strive to quickly deliver approvals. He said that the approval process can move more swiftly when borrowers are educated about lender’s application requirements.

“Our mission is to get someone approved. With clarity and transparency, buyers will know exactly what is needed of them. We want to do this in a manner that is as stress free as possible for consumers and Realtors®,” said Emerson.

Heid agreed and said, “The way to compete against a cash buyer is to build a process that has no surprises as you go.”

Stinton turned the conversation to the debate over reforming the secondary mortgage market and asked the lenders whether they fear the risk of mortgage security “putbacks” and how that impacts underwriting. A putback occurs when a bank is liable for misrepresenting the creditworthiness of a borrower to the entity that buys the loan, and the bank is forced to buy back the mortgage.

Watters said fears over putbacks are real and Heid agreed. “The putback fear is still there and we’re working to put it to rest,” said Heid. “The time is right for that. If the government-sponsored enterprises weren’t in conservatorship, the issue of put backs wouldn’t be there. We need a world where everything is more of a natural market and we need competition with Fannie Mae and Freddie Mac. The conservatorship should end.”

Thomas followed up by asking whether immediate steps should be taken to reduce the government role in the housing finance market. Emerson said that the security of their guarantee needs to stay, not the actual government entities.

“I think if we want the 30-year fixed-rate mortgage, you need the government guarantee,” said Watters. “The 30-year fixed-rate mortgage needs the government guarantee because not all banks can soak up the size of the market.”

When asked whether private investors are ready to take a bigger role in the secondary mortgage market as the government’s footprint shrinks, the executives provided varied responses. Heid said that more certainty is needed before taking action.

“We’ve already started to do some private label securities,” said Watters. “People are getting back into the marketplace, which is a good thing. We might not be ready to take it all on, but we are headed in the right direction.”

The lending leaders unanimously agreed that consumers will see a healthy increase in the market next year, keeping pace with gains made in 2013. Mortgage originations will dominate the 2014 housing market as interest rates creep up and refinancing trends downward.

Heid said that while home values will continue to increase as the market continues to heal, the economy is the wild card and the downturn would be a game changer. “In spite of the economic crisis, Americans still want to be homeowners. That hasn’t changed one bit,” he said. “Homeownership is at the heart of what we do and that is worth preserving.”

Source:The National Association of Realtors®

To Buy a Foreclosure or Not?

When you buy a bank owned property, you take risks. The bank has not lived in the home and the bank doesn’t have knowledge about the home’s history. You, as the buyer, must take extra care when buying a foreclosed home. It seems that you tried to take care but still have found problems with the home.

The real question is whether the problems you uncovered could have been discovered by a reasonable home inspection. We’re not sure whether a normal home inspection could have uncovered problems with the sewer system. We know of two basic ways to discover plumbing sewer problems with a home. The first way is to have a plumbing company scope the drainage system with a camera. The second is to start using the system until you uncover the problem.

Keep in mind that a home that has been vacant for some time develops problems on its own. It’s as if a vacant home knows that it should start to fall apart. By that, we mean that the sewer system may not have been used for some time and that lack of use could have contributed to the problems you now face. Furthermore, a new family moving into a home frequently ends up using the systems of the home to a greater degree than previous owners did.

It’s not unusual to have an elderly couple sell their home to a new young family and for that new family to uncover plumbing problems. Consider that the new family may use the showers, bathtubs, toilets, laundry room, kitchen sink and dishwasher to a much greater degree than their predecessors. In this situation, a collapsed drain with some flow might not be detected by the elderly couple, but the new homeowners will certainly find it, and fast.

Turning to the electrical issue, it seems that you uncovered that problem once you dug into the electrical system in the attic. If these connections were visible without opening up walls or floors or turning over insulation, the inspector should have discovered them. Now, if you found the problem by opening up areas of the home, few, if any, inspectors could have found that out.

Sometimes homeowners or their contractors do a sloppy job of renovating a home. In many cases, poor workmanship may violate local codes and ordinances. Nevertheless, that violation may be too difficult to find in an ordinary inspection. We don’t believe that inspectors should be responsible for uncovering problems that could only have been discovered by opening up walls.

You’ll have to judge for yourself if your inspector could have or should have seen these electrical problems.

You are out about $2,000 and have the right to be upset. When you buy a home, you attempt to limit your potential exposure to these problems by hiring a home inspector. If the home inspector did his or her job and found other items that were problems with the home, he or she probably satisfied their duty as a home inspector.

As for the bank, it probably knew little if anything about the home. If the home had electrical work done, the real estate agent for the bank may have told you that electrical work had been done on the home, but the agent would not have known if it was done properly.

You certainly can talk to a real estate attorney about your complaint, but we recommend that you learn more about the issues you faced and how easy or hard it would have been for someone to find out about them. Just because you purchased a home with problems doesn’t mean that you will find a party responsible to sue and get money from. It’s quite possible that the bank has no responsibility to you and that the home inspector performed as required. If this is the case, you might be out of luck.
If you decide to talk to an attorney, find out if you will have to pay for the initial consultation. If you decide to proceed with the attorney, you’ll have to decide whom you would go after and your likelihood of success. Your likelihood of success will depend on the strength of your case and willingness to spend money — a lot of money — to go after someone.

What you may quickly discover is that suing to recover $2,000, while a lot of money to you, isn’t worth the cost or time it will take.

Source: Ilyce R. Glink.  Her latest book is “Buy, Close, Move In!” If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11 a.m. to 1 p.m. EST. Contact Ilyce through her Web site,

Social Media Jargon: 15 Terms You Should Know

New words, phrases, and acronyms are constantly popping up across social networks. You can't afford to ignore social media, so here are 15 terms you might find useful to know.

1. Circles. These are the community groups users put together on Google+.

2. Connections. This is the online version of your business network, made up of the people you decide to "connect" with on LinkedIn. When you're a "connection" in someone's LinkedIn network, you can view their "full," profile instead of their "limited," one and send them private messages and updates.

3. Geotagging. This is adding a geographic ID to let others know your location. Found on smart phone apps for social media sites. 

4. Hashtag. A hashtag begins with a number sign followed by a word or string of words with no spaces. On Twitter, and now Facebook, this creates a hyperlink that when clicked on, performs a search for that word or phrase on the social network.

5. Meme. Rhymes with "seem." Short for "mimicked theme." A meme is an idea, style, or action that spreads virally, often as mimicry, over the Internet. It may be an image, video, hashtag, or hyperlink.

6. Pinning. This is how you show you like content on Pinterest. Once content is pinned, it appears on your own Pinboard.

7. RSS. Often called Really Simple Syndication, but actually stands for Rich Site Summary. A web standard for content delivery for everything from blog posts and news stories to images and videos. Lets you stay current with information sources without having to browse all their content.

8. Social Graph. A visual that shows all the connections an individual has within a social network.

9. Social Media Optimization (SMO). SMO is the process of checking that all the content you've created or curated is available to share across your key social media and networking sites. Types of media to check include RSS feeds, social news and bookmarking sites, as well as the social networks, video, and blogging sites you use.

10. Tag. A keyword or phrase assigned to a piece of information, such as a blog, bookmark, or digital image. It helps describe the item or topic and enables it to be found again through a browse or search.

11. Tumblr. Another blogging website and social platform. Lets users share content and connect based on their blog entries, as well as "follow" other users' blogs.

12. Tweets, Retweets. Tweets are posts on Twitter, limited to 140 characters. When a user tweets another's tweet, it's called a retweet. Credit still goes to the original user and the tweet appears as RT in the timelines of all the retweeter's followers.

13. Twebinar. This is a live podcast or audio broadcast that uses Twitter as the backchannel for discussion.

14. Viral. This describes anything that is rapidly shared across the Internet through social media, email, and video sharing websites.

15. Widget. This is a mini application that performs a specific function connecting a user to the Internet.

Social media's influence now reaches way beyond teenagers glued to their smart phones. Business professionals don't need to spend tons of time on every social network, but it makes sense to stay up to speed.

Source: Gina L. Acree. SWBC Mortgage Office: (210) 408-2600


Financial Updates for The First Week of November

Here's the breakdown of the current market indicators for your review

 DateTime (ET)ReleaseForConsensusPriorImpact
Nov 5
10:00ISM ServicesOct54.054.4Moderate
Nov 6
10:00Leading Economic Indicators (LEI)Sep0.6%0.7%Moderate
Nov 6
10:30Crude Inventories11/2NA4.087MModerate
Nov 7
08:30Initial Unemployment Claims11/2335K340KModerate
Nov 7
08:30Continuing Unemployment Claims10/262.863M2.881MModerate
Nov 7
Nov 7
08:30GDP Chain Deflator–Adv.Q31.4%0.6%Moderate
Nov 8
08:30Average WorkweekOct34.434.5HIGH
Nov 8
08:30Hourly EarningsOct0.2%0.1%HIGH
Nov 8
08:30Nonfarm PayrollsOct100K148KHIGH
Nov 8
08:30Unemployment RateOct7.3%7.2%HIGH
Nov 8
08:30Personal IncomeSep0.2%0.4%Moderate
Nov 8
08:30Personal SpendingSep0.2%0.3%HIGH
Nov 8
08:30Core PCE PricesSep0.1%0.2%HIGH
Nov 8
09:55Univ. of Michigan Consumer SentimentNov75.373.2Moderate

A Facelift for your Home with New Windows

If your windows are more than 15 years old, you may be putting up with draftiness, windows that stick in their frames, and skyrocketing energy bills. Energy-efficient windows would be a great improvement, but replacement can be very expensive, from $8,000-$15,000 or more for a typical home. For that reason, think long and hard before committing to new windows. In most cases you can get the same energy savings by investing $1,000 or so in insulation, sealing air leaks, and repairing your windows instead of replacing.

What Your Return on Investment Will Be
The range for energy-efficient window pricing is wide, but Energy Star-qualified windows start around $120 for a 36-by-72-inch, single-hung window and can go up to 10 times that. With labor, you’re looking at about $270-$800+ per window. Typically, windows at the low end of the price spectrum are less energy efficient.

But that doesn’t mean the numbers can’t make sense for you. For starters, window replacement is one of the best home remodeling projects in terms of investment return: For vinyl windows, you can recoup 71.2% of the project cost in added home value, according to Remodeling magazine’s annual Cost vs. Value Report. Based on the replacement projects outlined in Cost vs. Value that use vinyl windows, that’s a value add of about $7,000-$9,300. Plus, if you choose windows that qualify for the federal tax credit, you can effectively lop $200 off the purchase price for windows put into service if installed before Dec. 31, 2013.

You’re also likely to see modest savings on your energy bill. In general, you’ll save $126-$465 a year if single-pane windows in a 2,000 sq. ft. house are replaced with tax-credit-eligible windows, according to the Efficient Windows Collaborative, a coalition of government agencies, research organizations, and manufacturers that promotes efficient window technology.

Keep in mind, though, that the savings can vary widely by climate, local energy costs, and the energy efficiency of both the windows purchased and the windows being replaced. Finally, you may qualify for low-interest loans or other incentives offered by your local utility that can sweeten the deal, although fewer of these are becoming available.

Price vs. Energy Efficiency
The most efficient windows on the market are usually the most expensive, but it’s not necessary to buy the highest-end products to realize utility bill savings or improve comfort and aesthetics. So how do you choose the most energy-efficient models for the price?
Thanks to Energy Star, you really don’t have to. Energy Star labels will tell you whether a window performs well in your climate based on ratings from the National Fenestration Rating Council.

The Language of Windows
It’s also helpful to familiarize yourself with terms that appear on many window labels:
Glazing is simply the glass used in the window. The number of layers of glazing (single, double, or triple) doesn’t necessarily equal greater efficiency; the presence or absence of the other items in this list affects a window’s total energy performance. Glazing coatings can substantially affect a window’s U-factor, or degree of insulation against the outdoors.
Low-E stands for low emissivity, the window’s ability to reflect rather than absorb heat when coated with a thin metallic substance. Low-E coatings add up to 10% to the price of a window.
If your windows are in relatively good shape but you’d like better insulation, you can buy and apply Low-E films to your windows. They’re effective, but not as much as those put between glazing layers during manufacturing. Look for the NFRC rating on these films. Low-E films start at about $0.50/sq. ft., but you may want to check into the cost of having them professionally installed for large or complicated applications.
Gas fills typically consist of argon or krypton gas sandwiched between glazing layers to improve insulation and slow heat transfer. They often won’t work at high altitudes because differences in air pressure cause them to leak out.
Spacers separate sheets of glass in a window to improve insulating quality; the design and material are important to prevent condensation and heat loss.
Frame materials include vinyl, wood, aluminum, fiberglass, or a combination of those. They each have different strengths: Vinyl windows are good insulators and are easy to maintain but contract and expand with temperature changes, affecting the window’s air leakage; wood offers a classic look but is similarly affected by moisture changes and needs regular maintenance; fiberglass is very stable and low-maintenance but can be expensive; and aluminum is lightweight, stable, and a good sound proofer but is a rapid conductor of heat, making it a drain on energy efficiency.
Source: What You Need to Know About Buying Energy-Efficient Windows By: Karin Beuerlein
Read more: Visit for more articles like this. Reprinted from with permission of the NATIONAL ASSOCIATION OF REALTORS®  

Flipping Homes in the Luxury Market?

According to a new report by Irvine, Calif.-based RealtyTrac, between July and September of this year, 32,993 homes around the country were flipped. That figure marks a 13 percent decline from the 37,871 house flips recorded for the same three months in 2012. The term refers to the process of buying a home, renovating it and then subsequently selling it again within six months, RealtyTrac explains.

Though flipping has been popular in California, Texas has never been a hot flipping market. And between the third quarters of 2012 and 2013, the rate of flipping declined. All told, 240 homes were flipped during the third quarter of 2013 — marking a 45 percent decline from the 437 homes that were flipped over the same three months in 2012.

From a bigger-picture perspective, the house flipping industry has taken some interesting turns. RealtyTrac reports that a total of 968 homes priced at $750,000 and above were flipped during the third quarter of 2013 — marking a 34 percent jump from the number of homes in this price range that were flipped a year ago. Take a look at these statistics:

Flips on homes priced between $1 million and $2 million increased 42 percent on a year-over-year basis. Flips on homes priced between $2 million and $5 million was up 350 percent.

“Increasing home prices over the past 18 months, combined with decreasing foreclosures, have created a market less favorable to the high quantity of middle- to low-end bread-and-butter flips that we saw late last year and early this year,” explains RealtyTrac Vice President Daren Blomquist. “But the sharp rise in high-end flipping indicates there is still good money to be made for flippers willing and able to take on the additional risk of buying and rehabbing more expensive homes. With that higher risk also comes the potential for higher reward.”

Source: San Antonio Business Journal

Housing Inventory Low in San Antonio

As of September 2013, housing inventory in the Alamo City stood at 4.6 months — a six-year low for the market, according to the latest San Antonio Board of Realtors (SABOR) report. The September report also shows that homes are on the market, on average, 70 days. Of the homes sold, 97 percent were bought at the listing price.

“We have seen our inventory getting smaller and smaller all year, making this more of a competitive market,” says Steven Gragg, 2013 SABOR chairman of the board. “Low inventory could result in sellers receiving multiple bids on homes located in prime locations or being able to sell closer to their asking price.”

In September, the average price of a home in the greater San Antonio area stood at $205,728 — up from an average price of $193,026 last September, and an average price of $189,723 in September 2011.

A total of 2,031 homes were sold over the 30 days ended Sept. 30, 2013, according to the latest SABOR analysis. By comparison, 1,686 sales were recorded last September. Two years ago, 1,576 home-sales were recorded.The median price of a home currently stands at $168,700 — up from $158,400 a year ago, and $154,600 as of September 2011.

“Interest rates have been at historic lows for some time now, allowing many people to take advantage of the opportunity,” observes Angela Shields, president and CEO for SABOR.

Even the slight increases in interest rates have done little to slow down the housing market.“Although the rates have started to inch up, they still remain below five percent, making home buying affordable for a wide range of people,” Shields adds

Source: SABOR and San Antonio Business Journal

Buying in the Luxury Home Market

One-third of consumers with a gross annual household income of $250,000 or more say they are considering the purchase of residential property in the next 12 months for personal use or as an investment

On average, wealthy consumers who say they are in the market for residential property expect that the home they purchase will increase in value by about 14% in the next five years according to the survey by the Luxury Institute for Coldwell Banker Previews International.

Luxury buyers should find better inventories to select from than three months ago according to the Institute for Luxury Home Marketing’s latest market action index, which has the luxury segment retreating to buyers’ market territory after reaching sellers’ market in June for the first time in years.

In the Coldwell Banker survey, on average, the last residential property purchased by wealthy consumers had a purchase price of $1.6 million. On average, affluent consumers with incomes of $400K+ are spending 225.4% more on a residential property than consumers with incomes of $250K to $399K. Affluent consumers with a net worth of $2mm+ are spending an average of 97.2% more than consumers with a net worth of less than $2mm.of those who are not considering a purchase, very few indicate they view the market as risky.

“New York City remains a dominant player in the luxury housing arena and today is being impacted by an infusion of affluent foreigners who recognize the benefits of the stable U.S. economy while also enjoying the status symbol and lifestyle New York offers,” said Budge Huskey, president and chief executive officer of Coldwell Banker Real Estate LLC. “Many plan to hold these properties for the foreseeable future. Interestingly, the high end is mirroring all facets of the city’s housing spectrum with low inventory creating a seller’s market.”

ZIP Codes with the Highest Volume of SALES $10 Million and Up
ZIP Code
City / State
# Sales $10 Million and Up
Beverly Hills, Calif.
New York, NY
New York, NY
Aspen, Colo.
Bel Air, Calif. (LA)
Miami Beach, Fla.
New York, NY
New York, NY
Malibu, Calif.
Brentwood, Calif.
According to the Real Estate Economy Watch, One-third of consumers with a gross annual household income of $250,000 or more say they are considering the purchase of residential property in the next 12 months for personal use or as an investment

On average, wealthy consumers who say they are in the market for residential property expect that the home they purchase will increase in value by about 14% in the next five years according to the survey by the Luxury Institute for Coldwell Banker Previews International.

Luxury buyers should find better inventories to select from than three months ago according to the Institute for Luxury Home Marketing’s latest market action index, which has the luxury segment retreating to buyers’ market territory after reaching sellers’ market in June for the first time in years.

In the Coldwell Banker survey, on average, the last residential property purchased by wealthy consumers had a purchase price of $1.6 million. On average, affluent consumers with incomes of $400K+ are spending 225.4% more on a residential property than consumers with incomes of $250K to $399K. Affluent consumers with a net worth of $2mm+ are spending an average of 97.2% more than consumers with a net worth of less than $2mm.of those who are not considering a purchase, very few indicate they view the market as risky.

“New York City remains a dominant player in the luxury housing arena and today is being impacted by an infusion of affluent foreigners who recognize the benefits of the stable U.S. economy while also enjoying the status symbol and lifestyle New York offers,” said Budge Huskey, president and chief executive officer of Coldwell Banker Real Estate LLC. “Many plan to hold these properties for the foreseeable future. Interestingly, the high end is mirroring all facets of the city’s housing spectrum with low inventory creating a seller’s market.”

ZIP Codes with the Highest Volume of SALES $10 Million and Up
ZIP Code
City / State
# Sales $10 Million and Up
Beverly Hills, Calif.
New York, NY
New York, NY
Aspen, Colo.
Bel Air, Calif. (LA)
Miami Beach, Fla.
New York, NY
New York, NY
Malibu, Calif.
Brentwood, Calif.

Planning Room Sizes in New Homes

How space is distributed in a new home is a frequently asked question.  To collect information on this, NAHB recently surveyed its single-family builder members. The average percent distribution of finished space in the typical new home built by NAHB’s members is illustrated below.
Spaces in New Homes
In addition to an average breakdown of space in all new homes, NAHB looked at the breakdown for a small home (based on averages for homes under 2,000 square feet) and a large home (based on homes with at least 3,000 square feet).

Findings include the following:
Bedroom space accounts for just under 29% of floor space in new homes, irrespective of the overall size of those homes.

Bathroom space is allotted 12.3% of total floor area on average, with more space allocated in larger homes, and less in smaller ones.

The share of space covered by the laundry room—which is present in the vast majority of homes, irrespective of their size—is 3.7% and varies only to a minor extent with the size of the home.
Entry foyers account for 3.4% of the finished area on average.

Kitchens get about 11.9% of the space in small homes, versus 11.1% of the space in larger ones.

Dining areas account for 7.8% of the space in small homes and 7% of the space in larger ones.

The family room accounts for just over 11% of floor space in small, average, and large size homes, while the living room accounts for nearly 12% of the space in the small home and 7.5% in the large one.

Complete details, including tables showing how often builders include various types of rooms in new homes and the size of the rooms in square feet, are available in the October 1 Special Study published by NAHB in

San Antonio Tops for Global Trade

Global Trade Magazine has named Texas its top state for global trade in the nation. Texas, which has led the nation in exports for the past 11 consecutive years, beat out Florida and California this year for the magazine’s top honor.

 “Over the last 10 years, Texas has built one of the best job creation climates in the nation by committing to low taxes, smart and predictable regulations, fair courts and a maintaining a highly-skilled and educated workforce,” says Texas Gov. Rick Perry. “This combination has not only attracted businesses of all sizes from around the world, it has also given Texas the opportunity to grow and thrive.”

Global Trade conducted a survey that compared production volume of small and midsize companies, which the magazine defined as a firm with fewer than 500 employees. The survey ranked each state by the quality of its infrastructure and regulatory hurdles placed on its companies. “Texas’ success is no doubt a sum of its parts,” Global Trade wrote. “Its excellent infrastructure, its commitment to low regulatory burdens and the wealth of global enterprises already established among its many cities all make the state the undisputed frontrunner for global trade.”

In a separate report, the magazine also named six Texas cities in its top 25 best cities for global trade. Houston took the top spot, followed by San Antonio, Dallas, Corpus Christi, Brownsville and Beaumont.

Source: SA Business Journal

Does My Insurance Cover That?

What does your homeowners insurance cover? The short answer is: “A basic homeowners insurance policy (called HO-1 in insurance lingo) covers your home and possessions if they’re damaged or destroyed by these things:
  • Fire
  • Lightning
  • Windstorm (unless you live in a hurricane zone)
  • Hail (not available everywhere)
  • Explosion
  • Riots
  • Civil commotion
  • Aircraft  (and things falling from aircraft)
  • Vehicles (and things thrown from vehicles)
  • Smoke
  • Vandalism (although some policies exclude this)
  • Malicious mischief
  • Theft
  • Volcanic eruption
But many states don’t allow this basic policy to be sold. Instead, you have to buy an upgraded policy that covers more perils.
Upgraded Homeowners Insurance
That upgraded policy (called HO-2) adds protection to your home and possessions from even more perils. You get protection from everything on the HO-1 list (above) plus:
  • Falling objects
  • The weight of ice, snow, or sleet
  • Flooding from your appliances, plumbing, HVAC, or fire-protection sprinkler system
  • Damage to electrical parts caused by artificially generated electrical currents (such as a power surge not caused by lightning). But damaged electronics such as computers aren’t covered.
  • Glass breakage
  • Abrupt collapse (say from termite damage)
That same list applies to the homeowners insurance you buy for a condominium or co-op (except then it’s called HO-6 instead of HO-2). With HO-1, HO-2, and HO-6, what you see is what you get. So if zombies attacked your home, your HO-1 or HO-2 wouldn’t cover the damage because zombies aren’t on the list of specific things those policies cover.

The Most Complete Homeowners Insurance
The most complete and protective form of homeowners insurance (called HO-3) covers you for all perils except some specific ones like:
  • Floods
  • Earthquakes
  • Wars
  • Nuclear accidents
  • Landslides
  • Mudslides
  • Sinkholes
With this policy, if zombies attacked, you’d be covered because zombies weren’t specifically excluded by your HO-3 policy.

What Homeowners Insurance Doesn’t CoverNo matter which basic policy you get, it’s not going to cover everything than can damage or destroy your home. Typical homeowners policies don’t cover:
  • Bad things that happen because you failed to maintain your home (like mold)
  • Hurricanes
  • Floods
  • Earthquakes
  • Mudslides
  • Landslides
  • Sinkholes
  • War
  • Nuclear accidents
  • Sewer backups
  • Sump pump failure
  • Ground movement and holes caused by mining (known as mine subsidence insurance)
  • Pollution
You can buy additional policies to cover some but not all of those perils (a quick Google search didn’t turn up any nuclear accident coverage). And even if insurance is available for the most common natural disaster in your area, you may not be able to buy it if your home has features that make it vulnerable. For example, a home with unrated wood shake roof shingles may be tough to insure in an area where wildfires are common.

Other Things Homeowners Insurance Covers
In addition to covering your home, homeowners insurance also covers four more things:

1. Your outbuildings, landscaping, and hardscaping. If you have outbuildings (like a barn), landscaping, or hardscaping (like fences), your homeowners policy most likely covers those for up to 10% of your policy amount (5% for plants). For example, if you have $100,000 in homeowners insurance and someone drives into your fence, the policy would cover 10%, or $10,000 in repairs.
Sometimes policies exclude damage to outbuildings, landscaping, or hardscaping caused by a particular peril (like wind).

2. Damage or loss of your personal belongings. Your homeowners policy covers your family’s belongings, even when you take them out of the house. If your child heads to college with a laptop and it’s stolen, that’s probably covered by your homeowners insurance policy.

A home insurance policy covers a lot of your personal belongings, but not necessarily everything.
You’ll need additional insurance if you have many expensive items like jewelry, furs, or antiques.
Policies will either state that your personal belongings are insured for replacement cost or cash value.
Replacement cost means that the insurance company will pay the full cost of replacing an item (such as the laptop mentioned above, or a sofa damaged in a fire) once you show a receipt. Cash value means the insurance company will issue you a check for the amount that the laptop or sofa would have been worth when it was stolen or destroyed.

3. Temporary living expenses if your home is so damaged you can’t live in it. When you can’t live in your home, your homeowners insurance covers your living expenses, including hotel bills and meals. But, you can’t live in the hotel forever and eat lobster every night on the insurance company’s tab. Your policy will have limits on how long you stay and how much you can spend.

4. Injuries or accidents at your house. Homeowners insurance coverage includes liability – meaning it covers you when you or your family members cause injuries or damage. This coverage also pays when your dog bites someone (medical payments) or someone falls and injures themselves.
Add an umbrella policy to boost your liability coverage into the millions.

Homeowners Insurance for Older Homes
There’s another kind of homeowners insurance (HO-8) used when your home is so old it would be impossible to replace. It couldn’t be built like the original — that is, new electrical code wouldn’t permit the same electrical, etc. An HO-8 policy covers the same perils as the basic HO-1, but will only pay you the repair cost or market value instead of the replacement value. If your home is old, but not so old that it’s historic, you might want another homeowners insurance coverage. A “law and ordinance” policy covers the cost of rebuilding using today’s building codes. It’s good to have if the building codes have changed a lot (for example, in Florida) since your home was built.

Source: What Does Homeowners Insurance Cover? By: Dona DeZube. Read more articles like this at: Reprinted from with permission of the NATIONAL ASSOCIATION OF REALTORS®

Increase Your Home's Value with Curb Appeal

Clumsy, neglected, and hodgepodge landscaping not only hurts your home’s curb appeal, it can cut the value of your property and make it harder to sell. Real estate appraisers say bad landscaping is a buyer turnoff that can increase the number of days a property languishes on the market, which also hurts prices. “I’ve been with clients who won’t even go into a house because of the bad landscaping    outside,” says Mack Strickland, a Chester, Va., REALTOR® and appraiser. Even more important,bad landscaping is a downer that hurts the way you see and enjoy your home. Don’t let bad landscaping happen to you.  Here are the seven landscaping mistakes that bust, rather than boost, your home’s curb appeal.
1. Planting Without A Plan
Some landscaping choices, such as a line of begonias, will last a season; others, like trees, can last a lifetime. So, take time to plan and plot a yard that gives you maximum enjoyment and curb appeal.
For the design challenged, landscape architects are worth the investment ($300-$2,500 depending on yard size). They will render elevations of your future yard, and provide plant lists so you can install landscaping yourself.

2. Too Much Togetherness
Yes, planting in clusters looks way better than installing single plants, soldier-like, throughout your yard. But make sure your groups of perennials, shrubs, and trees have plenty of room to spread, or they’ll look choked and overgrown. Also, over-crowded landscaping competes with itself for food and water, putting the clusters at risk, especially during drought.
Google how high and wide the mature plant will be, and then combine that info with the spacing suggestions on planting labels. At first, garden beds of young plants will look too airy and prairie-like. But within three years, your beds will fill in with room to grow.
Remember: First year it sleeps, second it creeps, third it leaps.

3. Zoning Out
Don’t be seduced by catalog plants that look gorgeous on paper but aren’t suited to your hardiness zone. You’ll wind up with plants that die prematurely, or demand winter covers, daily watering, and other intensive efforts to keep them alive and well.
Check plant labels to see which hardiness zones are best for your plants.

4. More of the Same
Resist the design temptation to carpet-bomb your yard with your favorite plant or shrub, which will create a boring, monochromatic landscape. Worse, your yard will look great when your fave flowers bloom, then will look drab the rest of the year.
Mix things up and strive for four-season color. For example, combine spring-blooming azaleas with summer-blooming roses and autumn-blazing shrubs — such as burning bushes (Euonymus alatus). For winter color, try the red osier dogwood (Cornus stolonifera), a hardy shrub that sports bright-red branches in winter.

5. Refusing to Bury Your Dead
Nothing wrecks curb appeal faster than rows of dead or dying shrubs and perennials. So quickly remove your dearly departed landscaping from your front and side yards.
Spent plants that lived their natural lives are good candidates for a compost pile — if you grind them first, they’ll decompose faster. But if your landscaping succumbed to disease or infestation, it’s best to inter them in black plastic bags, then add to the trash.

6. Weeds Gone Wild
Weeds not only wreck the look of your landscaping, they compete with pricey vegetation for water and food. Weeds also can shorten the life of brick, stone, and pavers by growing in mortar cracks.
The best way to stop weeds is to spread a pre-emergent about three weeks before weed seeds typically germinate. If you can’t stop weeds from growing, at least get rid of them before they flower and send a zillion weed seeds throughout your yard.

7. Contain Those Critters
Deer, rabbits, and other backyard pests think your landscaping is an all-you-can eat buffet, leaving you with denuded branches and topless perennials.
If you’ve got a critter problem:
  • Plant deer- or rabbit-resistant varieties. Your local extension agent can provide a list of green things critters won’t eat in your area.
  • Install an electric fence around landscaping you want to protect.
  • Spray plants with critter repellent. After a hard rain, spray again.
Source:7 Landscaping Mistakes That Wreck Curb Appeal - by Lisa Kaplan Gordon
Read more: Visit for more articles like this. Reprinted from with permission of the NATIONAL ASSOCIATION OF REALTORS®

Refreshing Your Garden and Your Curb Appeal

The gardening season is coming to a close, but it’s not entirely over yet. If you’re an avid green thumb, you can still squeeze a little more out of the growing season. Here are some tips on how to get the most out of the end of the year and how to get your garden set up for next year.

Plant Bulbs For Spring Flowers
Fall is the perfect time to plant bulbs like tulips, irises and crocuses, which need a winter freeze to start their growing process. By getting them in the ground now, you will ensure a colorful garden by early spring. For best results, plant bulbs once temperatures are in forties and fifties, but several weeks before the ground completely freezes.

Look for Discounts
Get a jump on next year’s garden by buying gardening equipment, seeds and plants at discounted prices. Many garden centers slash prices in the fall months to move unsold stock. Store seed packets in the freezer to keep them fresh, and keep discount seedlings going indoors until you can replant them next spring.

Repot Overgrown Plants
If a summer’s worth of growth has caused your plants to outgrow their homes, take some time this fall to replant them in larger containers. Dense or compacted soil, poor drainage, or roots creeping out of the bottom of a pot are sure signs that plants are root bound and struggling for more space.

Winter-Loving Plants
Depending on what region you live in, winter doesn’t have to be a dead season. Some hearty plants like kale, lettuce, broccoli and chard thrive in colder temperatures and can even tolerate the occasional frost. As long as snow stays off the ground and the temperatures don’t dip below freezing for too long, these plants will continue to grow, allowing you to garden into the winter months.

Plant Some Quick Growers
September isn’t too late to grow a final crop. Many vegetables can go from seed to table in as little as four to six weeks, giving you vegetables by late October or early November. Radishes can be grown in around 25 days, and some leafy greens like spinach take as little as 40 days to grow, so get in a final few vegetables before the frost sets in.

Plant Shrubs and Saplings
If you plan on adding trees and shrubs to your yard, fall is the best time to do it. By planting these plants in the fall, you’ll give their roots a chance to get established and avoid the withering effects of the summer sun. You’ll want to plant trees and shrubs in the ground a few weeks before the first frost, and if you live in an area with colder temperatures and heavy snows, wrap their  branches and leaves in burlap to protect them from their first winter.

Trim Perennials
Once your garden has gone to seed and perennial plants have run through their life cycle, it’s time to trim them back. Not only will it clean up an overgrown garden, but it will give the plants more energy next year, and limit potential garden problems like powdery mildew or insect infestations.
Fertilize the Lawn

While it might look like your lawn has shut down for the season, a little lawn care in the fall months will guarantee a lush, green garden next spring. Growth slows above the surface in autumn, but beneath the soil, your lawn is still hard at work establishing strong roots. Help it out this fall with a good mix of phosphorus-rich fertilizer, which helps strengthen roots.

Source: Adam Vermymeren (Around the House)

Sales Trends in Real Estate for the Third Quarter

Existing-home sales increased in August and reached the highest level in six-and-a-half years, while the median price shows nine consecutive months of double-digit year-over-year increases, according to the National Association of Realtors®.

Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August from 5.39 million in July, and are 13.2 percent higher than the 4.84 million-unit level in August 2012. Sales are at the highest pace since February 2007, when they hit 5.79 million, and have remained above year-ago levels for the past 26 months.

Lawrence Yun, NAR chief economist, said the market may be experiencing a temporary peak. “Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” he said. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”

Total housing inventory at the end of August increased 0.4 percent to 2.25 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace, down from a 5.0-month supply in July. Unsold inventory is 6.3 percent below a year ago, when there was a 6.0-month supply. “Limited inventory in some areas means multiple bidding remains a factor; 17 percent of all homes sold above the asking price in August, although 63 percent sold below list price.”

Data from NAR’s listing site, shows large declines in inventory from a year ago in Naples, Fla., down 23.5 percent; the Detroit area, down 23.3 percent; and the greater Boston area, down 20.7 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.46 percent in August from 4.37 percent in July, and is the highest since July 2011 when it was 4.55 percent; the rate was 3.60 percent in August 2012.

The national median existing-home price for all housing types was $212,100 in August, up 14.7 percent from August 2012. This is the strongest year-over-year price gain since October 2005 when the median rose 16.6 percent, and marks 18 consecutive months of year-over-year price increases.
Distressed homes5 – foreclosures and short sales – accounted for 12 percent of August sales, down from 15 percent in July, and is the lowest share since monthly tracking began in October 2008; they were 23 percent in August 2012. Ongoing declines in the share of distressed sales are responsible for some of the growth in median price. Eight percent of August sales were foreclosures, and 4 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in August, while short sales were discounted 12 percent.

NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said rising home values will encourage more people to sell. “As the equity position of most homeowners continues to improve, some who have been on the sidelines will list their home for sale,” he said. “Most of those owners also will be buying another home, but higher levels of new home construction going into 2014, combined with some reduction in demand from less favorable affordability conditions, will help to moderate price growth to more sustainable levels.”

The median time on market for all homes was 43 days in August, little changed from 42 days in July, but is much faster than the 70 days on market in August 2012. Short sales were on the market for a median of 98 days, while foreclosures typically sold in 52, days and non-distressed homes took 41 days. Forty-three percent of homes sold in August were on the market for less than a month.
First-time buyers accounted for 28 percent of purchases in August, down from 29 percent in July and 31 percent in August 2012.

All-cash sales comprised 32 percent of transactions in August, up from 31 percent in July and 27 percent in August 2012. Individual investors, who account for many cash sales, purchased 17 percent of homes in August, compared with 16 percent in July and 18 percent in August 2012. Last month, three out of four investors paid cash.

Single-family home sales rose 1.7 percent to a seasonally adjusted annual rate of 4.84 million in August from 4.76 million in July, and are 12.8 percent above the 4.29 million-unit pace in August 2012. The median existing single-family home price was $212,200 in August, which is 14.4 percent higher than a year ago.

Existing condominium and co-op sales rose 1.6 percent to an annual rate of 640,000 units in August from 630,000 in July, and are 16.4 percent above the 550,000-unit level a year ago. The median existing condo price was $211,700 in August, up 17.7 percent from August 2012.
Regionally, existing-home sales in the Northeast were unchanged at an annual rate of 710,000 in August but are 12.7 percent above August 2012. The median price in the Northeast was $268,800, up 7.6 percent from a year ago.

Existing-home sales in the Midwest increased 3.1 percent in August to a pace of 1.32 million, and are 18.9 percent higher than a year ago. The median price in the Midwest was $166,100, which is 10.0 percent above August 2012.

In the South, existing-home sales rose 3.8 percent to an annual level of 2.19 million in August and are 13.5 percent above August 2012. The median price in the South was $181,000, up 14.6 percent from a year ago.

Existing-home sales in the West declined 2.3 percent to a pace of 1.26 million in August but are 7.7 percent higher than a year ago. With the tightest regional inventory conditions, the median price in the West rose to $287,500, which is 18.8 percent above August 2012.

Source: NAR