Posted in Housing Analysis

Georgia Takes Top Foreclosure Spot For First Time Since 2006

Foreclosure concentration June 2012

According to foreclosure data firm RealtyTrac, the number of foreclosure filings nationwide rose 9 percent in May as compared to April 2012. Filing topped 200,000 units for the first time in 3 months.

The term “foreclosure filing” is a catch-all term comprising default notices, scheduled auctions, and bank repossessions. On average, 1 in every 639 U.S. homes receiving a foreclosure filing in May.

As in most months, foreclosure activity was concentrated by state. Just 6 states accounted for more than half of the nation’s total filings.

Those six states were :

  1. California : 13.6% of all repossessions
  2. Florida : 11.0% of all repossessions
  3. Georgia : 9.8% of all repossessions
  4. Illinois : 6.6% of all repossessions
  5. Michigan : 6.5% of all repossessions
  6. Arizona : 6.3% of all repossessions

An interesting note, though, is that for the first time since February 2006, Georgia was the country’s most foreclosure-heavy state, displacing Nevada, which has dominated the foreclosure landscape for the last 5 years.

1 in 300 Georgia homes received a foreclosure filing in May. The national average last month was 1 in 639 homes.

At the other end of the foreclosure spectrum is Vermont. There was just 1 foreclosure filing for every 15,539 homes in The Green Mountain State last month.

Meanwhile, distressed homes remain in high demand with today’s home buyers, accounting for 28 percent of April’s overall existing home sales based on data from the National Association of REALTORS®. However, if your home purchase plans call for buying a foreclosed or bank-owned home, make sure you do your research first.

Buying bank-owned property is a different process as compared to buying a non-distressed home. The purchase contracts are different, the buyer-seller negotiations are different, and the homes are sometimes sold with defects. This can make it difficult to get a mortgage — or even impossible.

Before buying “distressed”, therefore, be sure to with a real estate agent. It’s good to have an experienced agent on your side to coach you through the process.

Posted in Housing Analysis

31 States Represented In June’s Improving Market Index

Improving Markets Index June 2012The number of U.S. housing markets showing “measurable and sustained growth” slipped by 20 in June, according to the National Association of Homebuilders.

The Improving Market Index is meant to identify housing markets in which economic growth is occurring as a whole — not just in the real estate space.

By using three separate, independently-collected data series, each tied to local economic conditions, the Improving Market Index takes a broader view of the housing market than other housing market indicators — the Case-Shiller Index, for example — which are often singularly tied to housing contracts.

The Improving Market Index tracks three distinct data series :

  1. From the Bureau of Labor Statistics : Employment statistics
  2. From Freddie Mac : Home price growth
  3. From the Census Bureau : Single-family housing growth

A given metropolitan area is categorized as “improving” by the National Association of Homebuilders if all three data series indicate growth at least six months after that area’s most recent economic trough.

In other words, the Improving Market Index looks past head-fakes of recovery, instead in search of long-term, sustainable growth.

This is one reason why its list of included cities is so fluid. It’s difficult for a metropolitan area to meet the Improving Market Index’s inclusion requirements month-after-month in a post-recession economy.

The Improving Market Index dropped to 80 in June, says the home builder trade group.

The list includes 28 new entrants, with forty-eight markets removed as compared to May. 31 states are represented nationwide.

For home buyers in New York , the Improving Markets Index is a non-actionable report but it does do a good job of highlighting the local nature of real estate. For example, Columbus, Indiana was added as an Improving Market in June. Yet, Indianapolis, Indiana — located just 46 miles away — was downgraded from the same list. 

Economies vary by locale.

The complete Improving Markets Index is available for download at the NAHB website. For a better gauge of what’s happening on the local level in Manhantten , though, talk to a local real estate agent.

Posted in Personal Finance

Before Moving, Check Your New Cost Of Living Estimates

Cost of Living adjustments in a new townWith home values slow to rise and mortgage rates at all-time lows, there’s never been a more affordable time to own a home.

However, there is more to the cost of living than just a mortgage payment. There’s the cost of groceries, gasoline and routine medical care, too.

Not surprisingly, where we live affects our costs.

Big cities are often more expensive in which to live, for example, and local tax laws influence daily costs, too. 

For home buyers moving across state borders, therefore — or even for those moving long distances intra-state — it’s important to know the relative costs in your new hometown as compared to your current one. Your household cash flow depends on it. You can’t know your budget for a home if you don’t know what life in a new town will cost you.

Enter Bankrate.com’s Cost of Living Comparison Calculator.

In comparing the costs of 60 mundane, everyday items, the Cost of Living Comparison calculator can show you how common costs in your current home town compare to costs in your soon-to-be new home town.

The calculator asks for just three inputs — (1) In what city do you live now, (2) To what city are you moving, and (3) What is your current salary — then uses that information to produce a detailed cost comparison.

Some of the Cost of Living items compared include :

  • Ground beef costs
  • Veterinary services costs
  • Dozen egg costs
  • Doctor visit costs
  • Hair care costs

The calculator also includes local mortgage rate differences to help plan for housing, and accounts for median home prices, too.

The online Cost of Living calculator is based on data from the ACCRA. On the ACCRA website, a similar cost comparison report sells for $5. At Bankrate.com, you can get the data for free.

Posted in Mortgage Rates

Mortgage Payments Fall To All-Time Lows

Mortgage payments

It’s a money-saving time to be a Manhantten home buyer. Historically, mortgage rates of all types — conventional, FHA, VA and USDA — have never been lower and low mortgage rates make for low monthly payments. 

According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage fell to 3.67% nationwide last week for borrowers willing to pay 0.7 discount points at closing, plus a full set of closing costs. 0.7 discount points is a one-time closing cost equal to 0.7 percent of your loan size, or $700 per $100,000 borrowed.

Today’s mortgage rates are a bargain as compared to just 1 year ago.

In early-June 2011, the average 30-year fixed rate mortgage nationwide was higher by 88 basis points, or 0.88%. If you are among the many U.S. homeowners who bought or refinanced a home around that time, refinancing to today’s mortgage rates could save you 10% or more on your payment.  

Home buyers have measurably more buying power, too.

Here is how mortgage payments on a typical 30-year fixed rate mortgage have changed in 12 months :

  • June 2011 : $509.66 principal + interest per $100,000 borrowed
  • June 2012 : $458.59 principal + interest per $100,000 borrowed

Setting the math to a real-life example, a homeowner whose $350,000, 30-year fixed rate mortgage dates to last June would recognize monthly savings of at least $179 per month just by refinancing into a new 30-year fixed rate mortgage at today’s current levels. That’s more than $2,145 in payment savings per year.

Even after accounting for the required loan discount points and closing costs, the “break-even point” on a refinance like that can come quickly.

Mortgage rates have been dropping but there’s no promise they’ll fall forever. Once rates reverse higher, they’re expected to rise sharply. Therefore, if you’re planning to buy a home or refinance one in New Jersey , consider locking in a mortgage rate while mortgage rates are low.

The market looks good for that today.

Posted in Around The Home

How To Keep A Clean Refrigerator

Clean refrigeratorDo you clean your refrigerator regularly, or only after you’ve run out of space? If your answer is the latter, your refrigerator may be harboring dangerous bacteria that can make you, your family, and your house guests ill.

Refrigerators should be cleaned monthly, inside and out, ideally. The process involves removing all foods, cleaning all shelves, and wiping down drawers. Spoiled food is removed and old containers reclaimed.

The process takes 20 minutes. Here’s how to do it.

First, prepare your cleaning stations, including filling a sink with soapy water, and having drying towels handy. Complete this step before you start to remove food from the refrigerator. This limits the amount of time that food has available to reach room temperature.

Next, remove all food from the appliance. Throw out old food past its expiration, and leftovers which have been in containers for more than a few days. Check dairy products for expiration dates — especially cheeses and creams. Toss fruits and vegetables that have spoiled. Wipe down condiment jars and bottles with a damp towel.

Next, with the refrigerator empty, remove all shelves and drawers and wash them in the water-filled sink. Scrub to remove any caked-on foods and spills. Rinse off the soapy water and dry the part on your drying towels.

Then, while the shelves and drawers are drying, using a mixture of baking soda and water, wipe down the interior surfaces of your appliance. The mixture should be roughly 2 tablespoons of baking soda for every 1 gallon of water. Wipe the mixture off with a clean towel.

Lastly, move the shelves and drawers back into the refrigerator and replace all of the food that’s “good”.

Refrigerators can be a dirty place. We rarely wash our hands before handling food in a refrigerator and that can contribute to a bacteria-heavy environment. A good cleaning, though, can keep our foods — and our home — healthy.

Clean your refrigerator regularly.

Posted in Housing Analysis

Phoenix Leads Annual Home Price Gains, According To Case-Shiller Index

Case-Shiller Index

Standard & Poors released its March 2012 Case-Shiller Index last week. The index is meant to measure changes in home prices from month-to-month, and from year-to-year, in select U.S. cities.

According to the report, home values rose in 12 of the Case-Shiller Index’s 20 tracked markets, and one market remained unchanged.

Of the Case-Shiller markets, Phoenix, Arizona posted the largest one-year gain, climbing 6.1 percent. Atlanta, Georgia posted the largest one-year loss. Values falling more than seventeen percent there year-over-year.

Overall, the Case-Shiller Index was relatively unchanged in March as compared to the month prior, but down nearly 3 percent on an annual basis. Nationwide, says Standard & Poor’s, home values are back to the levels of late-2002.

Don’t be overly concerned, however. Though widely-cited, the Case-Shiller Index is a flawed and misleading metric. It’s methodology almost guarantees it.

The first flaw in the Case-Shiller Index is its limited geography. Despite there being more than 3,100 municipalities nationwide, the Case-Shiller Index tracks just 20 of them. They’re not the 20 largest ones, either. Houston, Philadelphia, San Antonio, San Jose are specifically excluded from the Case-Shiller Index and each is among the Top 10 Most Populous Cities in the United States.

Minneapolis (#48) and Tampa (#55), by contrast, are included.

The Case-Shiller Index’s second flaw is that only tracks the sales of single-family, detached homes. Sales of condominiums and multi-unit homes carry no weight in the index whatsoever — even in cities such as Chicago and New York in which condos can account for a large percentage of the overall real estate market.

And, lastly, when the Case-Shiller Index is published, it’s published on a two-month delay. Buyers and sellers in Manhantten don’t need housing data from two months ago — they need data from today. The Case-Shiller Index tells us what housing was, in other words. It doesn’t tell us how housing is

Buyers and sellers need real-time, actionable information. You can’t get that from the flawed Case-Shiller Index. For more accurate, relevant real estate data, talk to your real estate professional instead. 

Posted in Mortgage Guidelines

FHA To Change Its Mortgage Insurance Premium Schedule Monday, June 11, 2012

New FHA MIPBeginning Monday, June 11, the FHA is changing its mortgage insurance premium schedule for the second time this year.

Some FHA mortgage applicants will pay lower mortgage insurance premiums going forward. Others will pay more. The new premiums apply to all FHA mortgages, both purchase and refinance.

The MIP update will be the 5th time in four years that the FHA has changed its mortgage insurance premium schedule.

FHA-backed homeowners who have not refinanced within the last 3 years will benefit from the new MIP. This is because, beginning with all FHA Case Numbers assigned on, or after, June 11, 2012, homeowners whose current FHA mortgage pre-dates June 1, 2009 will be entitled to dramatically reduced annual mortgage insurance premiums and almost zero upfront MIP via the FHA Streamline Refinance program.

Whereas new FHA applicants may pay up to 1.25% per year for annual mortgage insurance plus 175 basis points at closing for upfront MIP, the “grandfathered” FHA applicants will pay just 0.55% per year for mortgage insurance and 1 basis point at closing.

Assuming an FHA loan size of $200,000, the savings are large :

  • New FHA applicant : $208 per month for annual MIP; $3,500 due at closing for upfront MIP.
  • Pre-June 2009 FHA applicant : $92 per month for annual MIP; $20 due at closing for upfront MIP.

The premiums apply to all FHA mortgage applicants, regardless of loan product or term. For example, 15-year FHA mortgage will follow the same mortgage insurance premium schedule as a 30-year FHA mortgages.

Another class of FHA-backed homeowners won’t get so lucky. For homeowners in high-cost areas whose mortgages are between $625,500 and the local FHA loan limit, annual mortgage insurance premiums will be raised by 0.25% for all 15-year and 30-year loan terms.

For loan sizes above $625,500, the new annual FHA mortgage insurance premiums are as follows :

  • Loan term of 15 years or fewer, loan-to-value of 90% or less : 0.35% per year
  • Loan term of 15 years or fewer, loan-to-value greater than 90% : 0.60% per year
  • Loan term of more than 15 years, loan-to-value of 95% or less : 1.45% per year
  • Loan term of more than 15 years, loan-to-value greater than 95% : 1.50% per year

FHA-backed homeowners with loan terms of 15 years or fewer, and with loan-to-values below 78%, are exempt from annual MIP. Upfront MIP payments, however, remain mandatory.

The FHA continues to tinker with its mortgage insurance premiums, attempting to strike a balance between affordability for its homeowners and solvency for its program. Experts expect the FHA to change its premiums again. And, when it does, it’s likely that premiums will rise.

If your FHA mortgage will be for more than $625,000, and you plan to make a purchase or refinance application soon, it’s best to get your FHA Case Number prior to Monday, June 11. Otherwise, you’ll pay higher annual MIP.

Against a $700,000 mortgage, the extra 0.25% in MIP per year will add $1,750 to your annual housing payment.

Posted in Real Estate Definitions

Simple Real Estate Definitions : Home Inspection

Get a home inspectionWhen you preview homes as a home buyer, you can get a good feel for the home’s visible traits — its finishes, its room counts, and its landscaping, for example. What you can’t get a feel for, though, is the home’s “bones”.

It’s for this reason that real estate professionals recommend that you have a property formally inspected immediately after going into contract for it.

A home inspection is a thorough, top-to-bottom check-up of a property’s structure and systems. It is not the same as a home appraisal, which is a valuation of the property. By contrast, home inspections are an objective report on a home’s physical condition.

Home inspections are performed by home inspectors who will typically do the following :

  • Check heating and cooling systems for leaks and efficiency
  • Check electrical systems for safety and soundness of design
  • Check plumbing systems for venting, distribution, and drainage

In addition, a home inspector will review a home’s roofing system; its doors, windows and garages; plus, any attic spaces and basements, where appropriate.

A home inspection may also uncover out-of-code electrical work that municipalities required to be fixed by law.

Meanwhile, it’s not just home buyers who can order inspections. Sellers can order them, too.

One recommended tactic is for a home seller to have the home inspected prior to listing for sale so that all required repairs can be made in advance of showing the home. This can speed up and simplify the sales process, and may help your home sell at a higher price. Buyers often prefer homes in “move-in” ready condition.

A thorough home inspection can take up to 6 hours to complete, depending on the size of the home.

Posted in The Economy

U.S. Posts Its 20th Straight Month Of Job Growth

Non-Farm Payrolls 2010-2012For the second straight year, the jobs market looks to be slowing into the summer.

Last Friday, in its monthly Non-Farm Payrolls report for May 2012, the Bureau of Labor Statistics reported 69,000 net new jobs created, plus a one-tick rise in the national Unemployment Rate to 8.2%.

2012 is shaping up like 2011, it appears.

Last year, between May and August, the jobs market was decidedly worse as compared to the rest of the year, adding just 80,000 jobs on average per month as compared to 190,000 new jobs created on average during each of the other 8 months.

This year, a similar slowdown may be in store. 

Although the May jobs report marks the 20th consecutive month during which the U.S. economy added new jobs, the reported figure fell well short of analyst expectations, which called for 150,000 net new jobs last month.

In addition, it was found that the previously-reported tallies for new jobs created in March and April were overstated by a total of forty-seven thousand jobs. This lowered the overall net new jobs created last month to 22,000.

Mortgage rates in Manhantten are falling on the news.

Since the jobs report’s release, 30-year fixed rate mortgage rates have dropped below Freddie Mac’s reported 3.75% mortgage rate for borrowers willing to pay 0.7 discount points plus closing costs; and, the 15-year fixed rate mortgage has dropped farther below 3.00%.

The weaker-than-expected data has moved Wall Street investors away from stock markets in favor of the relative safety of bond markets, a market which includes the one for mortgage-backed bonds. When mortgage-backed bonds are in demand like this, it helps to push down mortgage rates nationwide.

That’s exactly what we’re seeing.

Mortgage rates are expected to make new lows this week, in part, because of U.S. employment weakness. Should this year’s jobs market rebound like in 2011, though, look for mortgage rates to climb back shortly.

Posted in Around The Home

How To Keep Your Home House Fly Free

Keep your home house-fly freeAs the calendar turns to June and the temperatures start to rise in New York and nationwide, we begin to spot more bugs, insects and pests as compared to during the winter.

Hiring an exterminator is one way to limit the number of ground-based bugs in your home. For example, periodic treatments can help to keep ants, beetles and termites at bay.

For airborne pests, however, prevention can be more difficult.

House flies can be especially nagging. They often enter through open doors and windows, then buzz through kitchen and bedrooms, spreading germs and general annoyance.

If your home is battling house flies, the good news is that there are a number of chemical-free, environmentally-friendly ways to reduce or eliminate house flies; solutions that are safe for homes with children and pets.

First, make sure your screen doors and screened-in windows are all in working order. Tears, rips and holes should be repaired or replaced. This is often a house fly’s easiest point of entry into your home.

Next, remember that house flies are attracted to surfaces with sugar or protein. Therefore, it’s important to keep kitchen surfaces and non-carpeted floors clean because these are probable “hot spots” for a house fly. Clean once or multiple times per day, and try to use products containing orange, clove or lemon oil. These oils often repel flies.

Then, examine all trash cans. Lids should remain tightly closed and garbage bags should be changed frequently. Garbage is a breeding ground for house flies and, because flies can hatch from eggs in a matter of hours, the sooner your garbage is sealed and moved to a garage or outdoor dumpster, the better.

Lastly, consider placing 2-3 dozen cloves into an apple and leaving it in a room in which flies are bothersome. The smell of the cloves repels flies and, although it won’t prevent flies from returning, the method is helpful for temporary fly relief.