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Most Americans Still Believe in Homeownership

by Desi Sowers

Most Americans Still Believe in Homeownership

While 80 percent of Americans still believe buying a home is a good financial decision, concerns about job security remain a barrier to homeownership for many potential buyers, according to NAR’s 2010 National Housing Pulse Survey. Seven out of 10 Americans say job layoffs and unemployment are big problems in their local area, and eight out of 10 believe these issues are a barrier to homeownership. 

More than two-thirds of respondents (68 percent) believe now is a good time to buy a home, down from 75 percent a year ago, but up from 66 percent in 2008 and 59 percent in 2007. Respondents say the biggest obstacles to homeownership are having enough money for a down payment and closing costs (79 percent) and lack of confidence in getting approved for a mortgage loan (73 percent). 

Renters are warming up to the idea of homeownership, however. More than one-fourth of renters say they are thinking more about buying a home than they did a year ago. Nearly two-thirds (63 percent) say homeownership is a priority in the future, and nearly 40 percent say it is one of their highest priorities. 
FRI, OCT 15, 2010

Sooooo Much Home for the $$$

by Desi Sowers

 

HUGE Price Reduction - Soooo Much Home for the $$$


HUGE Price Reduction - All Brick Home with 9.5 Acres

by Desi Sowers

BUY IT NOW Price!!

30-Year Mortgage Rates Plumb New Depths

by Desi Sowers

30-Year Mortgage Rates Plumb New Depths

Freddie Mac reports that the average interest on 30-year fixed mortgages slipped to an all-time low, for the third consecutive week, to 4.19 percent.   WOW!!!

Source: The Wall Street Journal, Nathan Becker (10/15/10)

Mont Co Assessments Remain Flat

by Desi Sowers

Montgomery County assessments remain flat

After gains of more than 30 percent for three straight reassessments, preliminary figures show a 3 percent growth.

| Katelyn Polantz

katelyn.polantz@roanoke.com, 381-1669

CHRISTIANSBURG -- Property values in Montgomery County have remained flat in the new county-wide reassessment, halting a steady climb in property assessments over the past 15 years.

County real estate increased by 3 percent, according to preliminary reassessment estimates for 2011 provided Monday night to supervisors.

Assessors may tweak that number in the coming months, and changes in value may vary greatly from neighborhood to neighborhood and street to street, they said.

The values are much steadier than the last reassessment and compared with housing markets elsewhere in the United States, said county assessor Tom Bland.

"Some areas are going to show healthy gains; some areas are going to show declines," said County Administrator Craig Meadows on Monday. "In the old days, mostly you saw gains."

Real estate values stagnated instead of fell, as some predicted, because organizations such as hospitals and universities anchor Montgomery County, Bland said.

Values also held while new home buyers benefited from a tax-incentive program in 2009. When the $8,000 tax credit from the federal government ended, home values in Montgomery County declined slightly.

Appariased values are determined largely by land and home sale prices.

Also, large, empty areas of land increased in value more than residential properties. For instance, assessors said two tracts of land sold for almost three times their assessed values.

A county-wide reassessment is held every four years.

In 2007, property in Montgomery County increased in value by 34 percent, according to the county budget. Four years before that, in 2003, it increased by 34 percent. In 1999, reassessment values grew by 29 percent.

The county doesn't know yet if it will need to adjust tax rates to stay revenue-neutral, said spokeswoman Ruth Richey.

The county's real estate tax is 74 cents per $100 assessed value, or $851 a year for a median-priced home worth $115,000. The county foresees about $50 million in revenue from real estate taxes this year, Richey said.

In the past, when property assessments grew by a third, county administrators had to drop the tax rate by more than 10 cents to keep revenues the same.

County staff members will determine the change in revenue, and then the board of supervisors will adjusts the tax rate accordingly.

Land-use changes will impact farming property

Values for agricultural property will increase in 2011 by about $140 per acre, to $440 per acre on average, as part of changes to the county's land-use value program. The changes will keep acreage in Montgomery County valued at less than in nearby localities.

Land in the program is not assessed and instead falls into one of eight soil classes. The U.S. Department of Agriculture determines these soil qualities, and the county sets the land values for each. Property owners are then taxed based on those values.

Acreage values were lowered by the former Commissioner of the Revenue Sharon Gilbert between 2007 and 2010. Next year's values will revert to what they were before then, said current Commissioner Alice Jones.

Class one soil, which is the highest quality soil, will be worth $840 an acre next year, compared with $570 currently. Class eight soil, of the lowest quality, will increase from $30 to $50 per acre in value. Forest land will increase by about $80 per acre, from $220 to $300.

More than 36,000 notices will be mailed next week

Property owners should receive their reassessments after Oct. 12, when the county mails about 36,500 notices.

Representatives from Wampler-Eanes Appraisal Group LTD, which conducted the assessment, will begin to meet with property owners who dispute their apparaisals Nov. 1.

The assessors will hold some hearings on Saturdays and in the evenings. Property owners may call the reassessment office at 381-6800 or visit the website reassessment.montva.com.

WSJ Article - 10 Reasons To Buy a Home

by /posted Desi Sowers

Enough with the doom and gloom about homeownership.

Sure, maybe there's more pain to come in the housing market. But when Time magazine starts running covers that declare "Owning a home may no longer make economic sense," it's time to say: Enough is enough. This is what "capitulation" looks like. Everyone has given up.

[roiA0915]

The Sept. 6 cover of Time magazine: This is what capitulation looks like.

After all, at the peak of the bubble five years ago, Time had a different take. "Home Sweet Home," declared its cover then, as it celebrated the boom and asked: "Will your house make you rich?"

But it's not enough just to be contrarian. So here are 10 reasons why it's good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We're four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30% from their peak, according to Standard & Poor's Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it's mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You'll never catch the bottom. It doesn't really matter so much in the long haul.

Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.

Brett Arends discusses why he thinks now is a particularly good time to buy a home.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What's not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won't see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.

3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains–if any–when you sell. Sure, you'll need to do your math. You'll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

[roiB0915]

The June 13, 2005 cover of Time.

4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You'll feel better about your own place if you own it than if you rent. Many years ago, when I was working for a political campaign in England, I toured a working-class northern town. Mrs. Thatcher had just begun selling off public housing to the tenants. "You can tell the ones that have been bought," said my local guide. "They've painted the front door. It's the first thing people do when they buy." It was a small sign that said something big.

5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you're better off buying.

6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That's valuable inflation insurance, especially if you're young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.

roiC0915

7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That's below last year's peak, but well above typical levels, and enough for about a year's worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed–either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the "glut" simply won't matter: It's concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won't have any long-term impact on housing supply in your town.

Written by Brett Arends

Pending Home Sales Show Another Gain

by Desi Sowers

Pending Home Sales Show Another Gain

Pending home sales have increased for the second consecutive month, according to the NATIONAL ASSOCIATION OF REALTORS®.

The Pending Home Sales Index, a forward-looking indicator, rose 4.3 percent to 82.3 based on contracts signed in August from a downwardly revised 78.9 in July, but is 20.1 percent below August 2009 when it was 103.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said the latest data is consistent with a gradual improvement in home sales in upcoming months. “Attractive affordability conditions from very low mortgage interest rates appear to be bringing buyers back to the market,” he said. “However, the pace of a home sales recovery still depends more on job creation and an accompanying rise in consumer confidence.”

Although Yun expects a continuing steady rise in home sales from favorable affordability conditions and some job creation, he cautioned any sudden rise in mortgage rates could slow the recovery. “Current low consumer price inflation has helped keep mortgage interest rates very attractive this year. However, recent rising trends in producer prices at the intermediate and early stages of production, along with very high commodity prices, are raising concerns about future inflation and future mortgage interest rates,” he said. “Higher inflation would mean higher mortgage interest rates. In the meantime, housing affordability is hovering near record highs.”

The PHSI in the Northeast declined 2.9 percent to 60.6 in August and remains 28.8 percent below August 2009. In the Midwest the index rose 2.1 percent in August to 68.0 but is 26.5 percent below a year ago. Pending home sales in the South increased 6.7 percent to an index of 90.8 but are 13.1 percent below August 2009. In the West the index rose 6.4 percent to 101.1 but remains 19.6 percent below a year ago.

Source: NAR
Daily Real Estate News  |  October 5, 2010  |

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