Costs, Deadlines -- Where Now?

Where do we go from here? As usual, that is a good question. The money saving First Time Home Buyer and Existing Home Buyer Tax Credits are due to expire soon. Contracts MUST be signed by April 30th, and closings must take place by the end of June. If these programs "go away" then buyers will find it more expensive to move ahead with their real estate plans. And, the FHA initial mortgage insurance premium (MIP) may be rising soon to 2.25%, from 1.75%. It is even possible that the 3.5% down payment required for FHA may increase soon. Additionally, the Government will soon terminate some of its mortgage market support programs. What does all of this mean? Anyone "sitting on the fence" about making a move in the real estate market needs to seriously consider their options. Administrative costs in general and interest rates may be in an upward trend, soon.

Looking For What?

The February issue of Realtor Magazine says smaller is desirable. In terms of square footage, prospective home owners are reducing their size goals, and the current average size home has decreased from 2,277 Square feet to 2,215 square feet, nationally. The National Association of Real Estate's magazine claims this is the first reduction since the 1980's. According to the article this doesn't mean families are giving up "the luxury and toys, but they are putting them into a smaller space." If you are a seller, I can assure you that buyers continue to look for homes that have been well maintained. Additionally, sellers who present a home that seems fresh and clean, and also uncluttered, have an advantage in the memory bank of home seekers when they move into the decision phase of their home search.

Interest Rates Going Up?

Maybe, but not right away. By the end of March the Federal Reserve will no longer be purchasing mortgages directly from Fannie Mae and Freddie Mac. These are the quasi-governmental financial institutions that provide liquidity to the residential real estate market by purchasing conforming home loans from financial institutions such as mortgage brokers and mortgage bankers.

BUT, it is very likely that when the Federal Reserve purchase program is ended (and it will be) that mortgage interest rates will begin to rise. How much? Now, that is the question. So, if you are considering a home purchase, it may be in your interest to push your time frame forward. Do this only, however, if it makes sense. I don't think you should ever "step out" early unless it makes financial sense to do so and is achievable.

Plan for Extra Costs, Yeah

I was reading the Sunday newspaper and there was an article in the Homes Section, which was titled "Plan for extra home costs." Yes, by all means! If you purchase a new home it should be awhile before the maintenance items start queuing up, but it does happen. Whether your home is "new" or several years old, over time the systems in a home do wear out. Yes, someday the house will need a new roof. Perhaps the heat pump will need repair. Hint -- get your unit serviced every year and that first major repair won't come as soon and the unit will function better in the mean time.

This particular article I read said that homeowners should keep one percent of the homes purchase price in reserve for improvements and surprise expenses. The article went on to say "That is the absolute minimum. It's better to have 2 or 3 percent socked away somewhere." I could not agree more. Houses tire too, and when they do you need to have some extensive skills yourself or you will have to call in the repairman. There isn't an alternative.

Mortgage Application and Settlement Changes

The new realestate mortgage application and settlement procedures adopted by the Housing and Urban Development(HUD)Department, effective January 1st, will probably take a little getting used to. These changes, there are about 33o pages in the new regulation, are the first major changes since 1974. Everyone, including buyers, mortgage loan origination officers, and settlement attorneys will be busy adjusting to the new ways of doing things, and, at least initially, it will probably take a little longer to get from the point of contract to the closing. The intent of the new regulations is to improve accuracy and disclosure with regard to all residential loans. As I understand the new rules, the settlement "numbers" are supposed to be known three days before closing and are not to change in that timeframe. If they do, then the necessary changes are made and the clock is restarted. So, everyone has got to pay close attention to the process and whenever there is a requirement to provide information into it that person needs to be sure of the informations accuracy.

Happy New Year!

As we begin a new year may we all experience the joy of renewal and the expectation of happiness and the realization of the American dream! Let's be thankful for what we have, and let's ask God's blessing upon our country in 2010.

Best wishes and a Happy New Year to my readers!

Christmas Cheer!

Good news, today! The National Association of Realtors (NAR) reported that the November sales of existing homes across America was an increase of 7.4% over October. Why? It's believed to be a result of falling prices, comparatively low historical mortgage rates, and first time home buyers trying to qualify for the tax credit,which was originally scheduled to expire on November 30th. The tax credit has been extended and in all probability will be a boon to sales through part of 2010.

Also, good news -- Christmas is upon us! This is a special time of the year, and like Thanksgiving we should reflect on how fortunate we are to be Americans. Unlike many people in the world we have the freedom to worship God as we choose and to belong to the church we prefer.

At my house we decorate our grandfather clock each year and call it "the Christmas Clock." Some years my wife and I have even put our presents beneath it. the picture with this post is our Christmas Clock. From my house to yours -- Merry Christmas, and a Happy New Year!

New Library in Athens-Limestone's Future

It's just another sign of progress for our area. It appears that everything is "on-track" to build a new 37,000 square foot library for Athens and Limestone County. And, we are going to be eco friendly in the way it is done. First, an existing building, the old Kroger store on Jefferson Street in Athens will be renovated to be the new library. The building is already purchased, but it will take a fund raising effort to finish up the necessary finances. The county and the city are in partnership to "make it happen," and the Athens-Limestone Library Foundation will be raising money from the public. So, this is not going to be an immediately available resource for our citizens, but it is already well under way as architect plans are available, and fund raising has commenced. If you would like to know how you can be a part of this project, call me. Above is the architects elevation for the building. Nice, huh!?

Award Winning School

It doesn't get much better than this. Athens High School was recently named a Silver Medal School, which means it is one of the best high schools in America. The award was made by U.S. News & World Reports magazine. There is one gold medal school in Alabama and eight silver medal schools. Naturally, city officials, educators, and the local citizens in general, are very pleased. An article in the Athens News Courier, Dec. 12, 2009, noted that "of the 880 students enrolled, 28.5 percent took advanced placement classes last year." This is just one more indicator of the quality in the Athens city schools system.

Two Ways to Save

Consider -- you can get a tax rebate of $8,000 from Uncle Sam by purchasing a home if you are a first time home buyer, OR if you already have a home with a mortgage consider refinancing. With interest rates as low as they have been in a long time, individuals with a home mortgage that still has several years to mature may benefit by refinancing. If you are in this situation, and you intend to continue living in the home you own now either indefinitely or for a few more years, it may pay to refinance. Of course there are administrative costs to be paid if you refinance. By calculating what these will be and dividing that by your current monthly payment you will get a "payback" number which means that it is the number of months required to break even. And, if that doesn't make sense to you then consider the purchase of a home that appeals to you and benefit from the tax credit. Last month 72% of the mortgages applied for across the country were for refinancing. Good luck!

Happy Thanksgiving!

I have much to be thankful for, and I hope each of you can say the same. Today,
November 26th, has been restful and "filling" as my wife and I enjoyed the holiday with friends, and we ate our share of Turkey. I read recently that Turkey can make a person feel sleepy. It sure worked on me. There is a hormone in Turkey, according to the article, as I recall, named Triptophyn (or something like that). It is supposed to make one drowsy. Of course that Turkey had some help. Let's see -- there was also dressing, and some ham, sweet potato souffle, fried apples, jellied cranberry, and to top it off, pumkin pie. Just thought I would wake up from this nap long enough to share. Best wishes to you as we start the holiday shopping season and celebrate Christmas and the New Year.

CALL ME!

Is the Rabbit Out of the Hat?

Now isn't that an interesting question? And, "for heavens sake" what does it mean?

More indicators and opinions of so called "guru's" are pointing toward a better future for home sales. Warren Buffet has called a bottom to the stock market. Yeah, but this is about home sales. OK, but it has been shown historically that a bullish stock market also affects increasing home prices. Anyhow, good news, Warren! Also, the economy expanded 2.8 percent during the third quarter. An expanding economy should be beneficial to stabilized and improving home sales, which by the way "existing homes" on a nationwide basis were just reported to have been "up" in October. Could the nationwide home sales market finally be stabilizing?

Ken Rosen, a real estate economist with the Fisher Center for Real Estate, in San Francisco, was interviewed on Nov. 22nd by MarketWatch, and he says, "yes," the real estate market nationwide has stabilized. He attributes this to the Tax Credit for first time home buyers, which has been extended to April 30th of 2010. He believes that after April 30, 2010 job creation in the nation as a whole will help create demand and support home prices, which he believes have stabilized. Rosen is encouraging individuals who want a house as a home to consider buying now. He believes the country is now on a sustainable growth path.

NEW LOCATION

Hey there! I've been "missing in action" for a few weeks, at least with regard to keeping my blog updated. So, to any of my followers, I apologize.

I am now with RE/MAX Legacy. My new street address is 22980 Highway 72 E, Athens, Alabama 35613. For my friends who know my old location, this new one is "just down the road" toward Huntsville before you get to Piney Creek on the east bound lane of Highway 72, next to Hertrz Rental Car and Custom Flooring & Design.

Stop by to see me, and our new office. It has been under renovation for several weeks, which is another reason for my seeming absence from the fray. The new office is very nice, and I am proud of it. As always, I am ready to do business. The present office phone number is (256) 230-1113. Our old number should also work -- (256) 232-4490.

Over a Barrel

Don't feel that way -- "over a barrel," that is. Markets are always changing. One really big change this year is the return to the real estate market of the first time home buyer. This is a term that requires definition as the Government defines a FIRST TIME HOME BUYER as someone who has not owned a personal residence in the prior three years.

This year, according to the National Association of Realtors, 44 percent of home sales have been to first time buyers. That is the biggest such number since 1991. Of course, the Government's $8,000 tax credit has helped. And, there is now talk of the tax credit dead line (currently Nov. 30th) being extended, which would be a good thing, but don't hold your breath. First time buyers are about to run out of time to use the tax credit unless the time line is changed. Maybe it will happen. Let's hope so!

If I can help, call me.

Where Now?

Interest rates, that is. We all know they have recently been headed downward. Investor's Business Daily newspaper said late last week that Freddie Mac (the quasi Government agency) reported rates had dropped three weeks in a row and were less than anytime since late May of this year. Rates move from day to day and tend to follow the lead of ten year Treasury Notes. The nationwide average late last week for 30 year money was 5.04%. Today (Wednesday) they are down a little more in the Athens - Limestone County area. A local mortgage loan officer this morning quoted me 4.85% on 30 year FHA and conventional loans of more than $100,000. And, there is a lesson. When you ask for rate quotes you need to be specific about the type loan, the approximate amount, and for how long a period of time. If you want a 15 year loan you can expect the quote will be about a quarter point less. Then there are programs such as Rural Development loans which are going to be quoted a little higher than the FHA average. Happy shopping!

Need a Down Payment?

Consider borrowing from your 401K plan or individual retirement account. Seemingly, it would pay to do so, particularly if you are a first time home buyer. As I understand it, money borrowed from a 401 K must be repaid within five years, and generally the interest rate is very low. Indeed, once you get your tax credit of up to $8,000 you could repay that loan. Traditional IRA accounts (I'm not talking about SEP's or Roth's) will allow you to borrow up to $10,000. Check with your fund's advisor, and also check with your financial planner or accountant if you have questions about how this works or if it is the right thing for your to do.

Tech Job Heaven

U.S.News & World Reports website, on September 15th, reported that Huntsville is the fourth best place in the nation to get a high technology job. In an article written by Liz Wolgemuth the magazine stated that Huntsville "...boasts the second-largest tech and research park, Cummings Research Park, which hosts 225 companies and 23,000 employees." So, what has that got to do with Athens and Limestone County? We are part of the Huntsville Metropolitan Area, which also includes Decatur. The three cities form a "golden triangle." There are also lots of jobs created that support high tech, which are lower tech themselves, such as administgrative, sales, tourism, manufacturing -- we really are quite diverse. Limestone County borders Madison County on its west boundary, home to Huntsville. Athens is no more than a twenty-five minute drive from Huntsville, provided the traffic is moving well, otherwise add a few minutes. And, if you have been reading my blog you know of the advantages of Athens and Limestone county as a place to live. If you would like more information about this community send me an e-mail at rodh@pclnet.net and I will send you an information paper.

Stuff!

You've got it! I've got it! Stuff! Treasures! Junque!

I was looking back at newsletters I used to write before the days of "blogging." In 2002 I wrote the following, based on something I had seen on CBS Market Watch. "The average homeowner has so much 'stuff' that 25 minutes a day is spent just looking for things. In a years time we spend a week looking for 'stuff.' Obviously, we are very well off compared to so many citizens of other countries and this is just one more indicator."

So, the point in revisiting this issue is that all those extra 'treasures' around the house often result in clutter. Don't let it build up, especially if you are considering the sale of your home. Clutter makes your home look smaller and it is distracting to purchasers. So, purchasers pay heed, and in the future don't let this happen to you. Sellers you need to clean up, discard 'stuff' as appropriate, or move extra treasures to a storage location.

Glad I could help!

Athens Students Out Perform State and National on SAT

"We really did well -- above the state and national average in every subject tested," said Superintendent of Schools Dr. Orman Bridges, Jr., as reported in the Athens News Courier, Sept. 10, 2009. His comment was due to the release of the recent 2009 Standard Achievement Test (SAT) results. The Athens overall average score was 66.6, which means the students are in the top third nationally.