Wednesday, May 25, 2011

57% Believe Homeownership is a Good Investment, Higher Than Others



Fannie Mae's latest national housing survey finds that Americans expressed newfound optimism about home prices, the economy, and personal finances. 57 percent of Americans still believe that buying a home has a lot of potential as an investment – ranking higher than other investments, such as buying stocks and putting money into and IRA or 401(k) plan. In addition, 30% of Americans expect home prices to strengthen over the next year, up four percentage points from the fourth quarter of 2010.

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Monday, May 23, 2011

Tax Planning for Life's Major Events


Excerpt from Tax Planning for Life's Major Events
By Kiplinger.com


The voluminous Internal Revenue Code now reaches into nearly every nook and cranny of our lives, from cradle to grave. A newborn brings tax breaks to his or her parents; death brings a series of tax repercussions; and the IRS has something to say about almost everything in between. After all, the tax bill you owe each spring is based on the saving, investing, spending, business and other personal decisions you make during the year.

As your life changes, so does the set of tax rules that affect you. That's why this compendium of life events is so important -- to alert you to new opportunities to embrace and pitfalls to avoid as your life as a taxpayer evolves.

The fact that federal income taxes are among most families' biggest annual expenditures trumpets the importance of tax planning. Shake off any notion that this is a game for the wealthy. Instead, draw your inspiration for this comment from a high-priced tax attorney: "The best and finest tax planning is done by people who have more money than they'll ever spend or be able to give away. The worst tax planning is done by nice middle-class people who have middle-class virtues, those who have to work hard and save and sacrifice." Tax planning will save you money. We're here to help.

Visit this article online to learn more about tax planning for the following major life events:
- Graduating from college
- Getting your first job
- Getting married
- Birth of a child
- Buying your first home
- Sending your child to college
- Changing jobs
- Working at home
- Selling your home
- Buying a second home
- Getting hit with a major illness or injury
- Getting divorced
- Retiring
- Death of a spouse

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Friday, May 20, 2011

Too Big To Fail



A little plug for HBO: Watch the premiere of their movie Too Big To Fail on Monday, May 23rd. A good portion of it was filmed on location here in Staten Island!


http://www.hbo.com/movies/too-big-to-fail/index.html#/movies/too-big-to-fail/index.html

The movie is about the financial crisis of 2008 that lead us into the current recession and is based on Alan Sorkin's book of the same name. The movie stars some pretty big names including William Hurt, Ed Asner, Billy Crudup, Paul Giamatti, Topher Grace, Matthew Modine, and Cynthia Nixon among others.

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Wednesday, May 18, 2011

57% Believe Homeownership is a Good Investment, Higher Than Others



Fannie Mae's latest national housing survey finds that Americans expressed newfound optimism about home prices, the economy, and personal finances. 57 percent of Americans still believe that buying a home has a lot of potential as an investment – ranking higher than other investments, such as buying stocks and putting money into and IRA or 401(k) plan. In addition, 30% of Americans expect home prices to strengthen over the next year, up four percentage points from the fourth quarter of 2010.

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Monday, May 16, 2011

Five Signs That Say 'Buy'


The Wall Street Journal had an article recently that suggests five reasons that now is a good time to buy a home:

Jobs. Some parts of the country were less affected by the recession than others. Prospective buyers should review job-growth data from the U.S. Bureau of Labor Statistics, at www.bls.gov. Unlike many backward-looking economic statistics, jobs data are only about a month old and can "clearly show the direction of the local economy," says Carolyn Beggs, chief operating officer of real-estate data provider Local Market Monitor Inc. The National Association of Home Builders also posts state and local employment data, at NAHB.com.

You also want to see a brightening personal-income picture for the previous six-month period. Those numbers are available via the U.S. Dept. of Commerce's Bureau of Economic Analysis, at www.bea.gov.

Recent sales

activity. Three factors should be taken together: housing inventory, sales volume and prices.

A large inventory of homes with few actual transactions are negative indicators, according to Jeffrey Jackson, chairman of Mitchell, Maxwell & Jackson Inc., an appraisal company in New York. On the other hand, if inventory is falling and transactions are picking up, that is a good sign.

State and local boards of realtors often publish monthly inventory statistics. Inventory breakdown by metro area also can be found at the U.S. Census Bureau's website, in the American Community Survey (www.census.gov/acs/www/). Be sure to compare current inventories with long-term averages.

Also, check out the rental vacancy rates in your area, and judge them against historical rates, which you can find at the Census Bureau's website (www.census.gov) or via local real-estate professionals.

Construction.While not as reliable as jobs or sales-trend data for getting a read on a local housing market, the number of permits recently issued for local builders is useful for gauging builder sentiment and, by extension, future housing activity.

You can get recent permit information from your county or municipal building department, or via the National Association of Home Builders (www.nahb.com).

Mortgage

availability. If you live in an area where most people use mortgages, it is especially important now to gauge local lending patterns. In the aftermath of the financial crisis, most national banks tightened lending standards. But some local banks haven't been hit as hard by the housing crash and are more willing to lend, even for higher-priced homes.

For instance, some smaller lenders in the New York and New Jersey area, such as Lake Success, N.Y.-based Astoria Federal Savings, are actively courting new "jumbo"-mortgage customers. Astoria Federal says it believes jumbo-loan borrowers pose less risk than other borrowers because they can demonstrate ample income and often opt for hefty down-payments.

Anecdotal evidence. It might sound old-fashioned in an era of electronic data, but driving around neighborhoods, checking out open houses and talking to local agents still are good ways to gather local-market intelligence.

The key is to do this kind of research only after you have gathered hard data, so that you don't misread the signs. For example, foreclosed homes can generate multiple bids and quick sales, often in all-cash deals—but that doesn't mean the market is healthy.

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Friday, May 13, 2011

Save Money on Homeowners Insurance


Excerpt from Save Money on Homeowners Insurance
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance


The market value of my home has declined over the past few years. Can I save money by reducing my homeowners coverage?

No. You should never lower the amount your house is insured for just because housing prices have dropped. That’s because cutting the amount of your insurance could leave you with insufficient coverage in the event of a disaster.

The market value of your home and its insurance value can vary widely because they are based on different assumptions and calculations. The insurance value is based on what it would cost to rebuild the house -- not on what you paid for it. And although housing prices have dropped, rebuilding costs have not. (On the other hand, the sales price takes into account the value of the land, which isn’t factored into the insurance value; the land could still be valuable, even if your home were to burn down .)

To calculate how much it might cost to rebuild based on your home’s size, building materials and any special features, try the calculator at AccuCoverage.com. For $7.95, you’ll get an immediate estimate of your home’s insurance value from Marshall & Swift/Boeckh, which provides building-cost estimates to the insurance industry. It’s also a good idea to rerun the numbers after you make any major home improvements, and notify your insurer if you need to increase your coverage. You can usually boost your insurance limit by tens of thousands of dollars without making your premiums go through the roof (see Upgrade Your Home Insurance for more information about calculating your insurance needs).

To save money on your homeowners insurance, however, you could increase your deductible. Increasing your deductible from $500 to $1,000 could lower your premium by as much as 25%. And increasing your deductible will discourage you from filing small claims that could jeopardize your insurer’s claims-free discount or get you dropped by your insurer altogether (boost your emergency fund to make sure you have enough money to cover the deductible). See Slash Your Insurance Costs for strategies to help you save money on all kinds of insurance.

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Tuesday, May 10, 2011

10 Smart Uses for Your Tax Refund


Excerpt from 10 Smart Uses for your Tax Refund
By Kiplinger.com


So you got a refund check. Chances are it's for thousands -- the average refund is nearly $3,000 this year, according to the IRS. That's a nice chunk of change. Here are ten good things you could do with the money.

1. Pay Off Credit-Card Debt
Using your refund to pay off a balance with an 18% interest rate is like earning 18% on your investments -- an incredibly valuable use of the money. And if you pay off your balances, you can afford to close some cards that are now charging high fees.

2. Rebuild Your Emergency Fund
Many people had to raid their emergency fund over the past year and had little extra money to restore it. You could use your refund to start rebuilding that fund, which can help you avoid landing in credit-card debt if you have an emergency. Keep the money easily accessible in a money-market account or savings account that earns interest.

3. Boost Retirement Savings
You can take up to $5,000 of that check and put it toward an IRA for 2011 (or $6,000 if age 50 or older). If your modified adjusted gross income is $122,000 or less if you’re single, or $177,000 or less if you’re married filing jointly, then you can contribute to a Roth IRA, which lets you withdraw the money tax-free in retirement. If you earn too much for a Roth, you can contribute to a nondeductible traditional IRA, then convert it to a Roth.

4. Fund a Taxable Account
Already maxing out contributions to your tax-deferred retirement account? Consider opening a taxable account and using your refund cash to buy stocks or funds. There are no restrictions (such as early-withdrawal fees) on tapping taxable accounts. Plus, when you sell a winner you are taxed on the profits at the maximum 15% capital-gains rate. Traditional-retirement-account distributions, however, are fully taxed at ordinary rates as high as 35%.

5. Fill Gaps in Your Insurance
For less than $1,000, you can plug menacing holes in your homeowners policy: coverage for flooding and liability. Flood-Insurance Policy. If you live in a low- to medium-risk area, it costs about $350 to $600 per year from the National Flood Insurance Program with the maximum $250,000 in dwelling coverage and $100,000 for possessions. Get a price quote at www.floodsmart.gov. Liability Insurance. Cover your legal expenses if someone is hurt in your home or by your car. It generally costs just $150 to $300 to buy a personal umbrella policy that provides $1 million in coverage over the limits or your auto- and homeowners-insurance policies.

6. Build Your College Savings
It’s always hard to juggle saving for college and retirement. Here’s an opportunity to use your extra money to contribute to a 529 account. You’ll be able to use the money tax-free for college bills, and you could get a state income-tax deduction for your contribution.

7. Help Your Kid Save
You can use the extra money to contribute to a Roth IRA for your child. Your kid is eligible as long as he or she has earned income -- from mowing yards or babysitting, for example. Your child can contribute up to $5,000 or the amount of his or her earned income for the year, whichever is lower, and you can give him the cash to do it. See Roth IRAs for Kids for details.

8. Improve Your Home's Energy Efficiency
You can lower your utility bills -- and get a tax credit -- for installing insulation, energy-efficient windows, central air conditioning and more.

9. Spruce up Your Yard
A little cash can go a long way to improve your home's curb appeal. If your house will be on the market, you can't afford not to spend some money and time on landscaping that will distinguish your house from others.

10. Give to Others
If you have your financial bases covered, consider using your refund to make a charitable contribution to help others in need. You’ll feel good -- and you’ll be rewarded for your good deed when you file your tax return in 2012 (charitable contributions are deductible if you itemize).

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Monday, May 9, 2011

In the Heights...


The Wall Street Journal posted an article on Friday about an up and coming neighborhood: Greenwood Heights. The article is an interesting look at a neighborhood that has the potential of Park Slope but is still in the very beginning stages of becoming a popular destination. Looks like an ideal buy for first time homebuyers looking for a slightly quieter version of the Slope.

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Friday, May 6, 2011

Housing Affordability Rises to Highest Level in Two Decades


Excerpt from Housing Affordability Rises to Highest Level in Two Decades
By National Association of Home Builders


Nationwide housing affordability during the fourth quarter of 2010 rose to its highest level in the 20 years since it has been measured, according to National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) data released today.

The HOI indicated that 73.9 percent of all new and existing homes sold in the fourth quarter of 2010 were affordable to families earning the national median income of $64,400. The record-setting index for the fourth quarter surpassed the previous high of 72.5 percent set during the first quarter of 2009 and marked the eighth consecutive quarter that the index has been above 70 percent. Until 2009, the HOI rarely topped 65 percent and never reached 70 percent.

"Today's report shows that housing affordability at the end of 2010 was at its highest level since we started computing the HOI," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev.

Indianapolis-Carmel, Ind., was the most affordable major housing market in the country for the second consecutive quarter, after relinquishing for a quarter the top spot it has held for five years. In Indianapolis, 93.5 percent of all homes sold were affordable to households earning the area's median family income of $68,700.

Also ranking near the top of the most affordable major metro housing markets were Youngstown-Warren-Boardman, Ohio-Pa.; Syracuse, N.Y; Warren-Troy-Farmington Hills, Mich.; and Detroit-Livonia-Dearborn, Mich.

New York-White Plains-Wayne, N.Y.-N.J., again led the nation as the least affordable major housing market during the fourth quarter of 2010. In New York, more than a fourth — 25.5 percent — of all homes sold during the quarter were affordable to those earning the area's median income of $65,600. This was the 11th consecutive quarter that the New York metropolitan division has held this position.

The other major metro areas near the bottom of the affordability index included San Francisco-San Mateo-Redwood City, Calif.; Honolulu; Los Angeles-Long Beach-Glendale, Calif.; and Santa Ana-Anaheim-Irvine, Calif., respectively.

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Thursday, May 5, 2011

Good Time to Buy: Home Prices in Metro Areas Continue to Decline


Excerpt from Home Prices in Metro Areas Continue to Decline
By Claire Easley, BuilderOnline.com


Home prices in major metropolitan areas across the nation tumbled again in November, indicating that now is a good time to buy real estate.

According to data released in the S&P/Chase-Shiller Home Price Indices, home prices dropped in 19 of the 20 metropolitan statistical areas (MSAs) measured compared with October levels. San Diego was the only city with a gain—a meager 0.1% increase. Detroit was hardest hit, posting a 2.7% loss compared with the month before.

Meanwhile, nine markets—Atlanta; Charlotte, N.C.; Chicago; Detroit; Las Vegas; Miami; Portland, Ore.; Seattle; and Tampa, Fla.—hit the lowest home price levels they’ve seen since the peak years. Thirteen of the 20 MSAs tracked have posted at least seven months of decline since the beginning of 2010. Fourteen areas have posted at least four consecutive months of dropping prices.

The indices' data come from major metro areas scattered across the country. However, even with a variety of geographical points, it’s worth keeping in mind that the 20 markets that the data track include a population total of 26.78 million, a scant 8.5% of the total U.S. population, based on 2009 U.S. Census data.

The 10-City Composite Index came down 0.8% from October and dropped 0.4% from the year before; the 20-City Composite was down 1.0% from October and came in 1.6% lower than November 2009. With both composites down a dramatic 30.3% compared with the bubble months of June and July 2006, these indices have returned to where they were in the latter half of 2003. Measured from April 2009, their lowest level since the boom, prices were up in both the 10- and 20-city indices, 4.8% and 3.3% respectively. Both composites have declined during at least seven of the months tracked in 2010.

The poor showing in numbers prompted David M. Blitzer, chairman of the Index Committee at Standard and Poor's, to suggest that a double-dip in home prices—something builders have been worried about for some time—may be confirmed by spring.

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Tuesday, May 3, 2011

Sales of New U.S. Homes Rebounded in March


Excerpt from Sales of New US Homes Rebounded in March
By Derek Kravitz, Associated Press


More people bought new homes in March, giving the battered industry a small lift after the worst winter for sales in almost a half-century.

New-home sales rose 11 percent last month from February to a seasonally adjusted rate of 300,000 homes, the Commerce Department said Monday. That follows three straight monthly declines. Still, the pace remains far below the 700,000 homes a year that economists view as healthy.

Builders are struggling to compete with a record number of foreclosures, which have forced down the price of re-sales and made them more of a bargain. The disparity has dragged on the economy. New homes represent a fraction of sales but they have an out-sized impact on the broader economy. Each new home creates an average of three jobs for a year and $90,000 in taxes, according to the National Association of Home Builders.

Many builders are waiting for the glut of foreclosures and other distressed properties to be cleared before stepping up construction. But with 1.2 million foreclosures forecast this year nationwide, according to foreclosure tracker RealtyTrac Inc., a turnaround isn't expected for years.

High unemployment, tight credit and a lingering fear that prices will fall further have kept people from making home purchases.

The seasonally adjusted number of new homes for sale in the United States is the fewest since the summer of 1967, when there were 110 million fewer people in the country.

Requests for building permits, a gauge of future construction, sank in the winter to their lowest level in more than 50 years. They recovered somewhat in March, but that improvement was spurred by a more than 28 percent jump in permits for apartment and condo buildings.

New-home sales rose in most regions of the country last month. Sales jumped nearly 67 percent in the Northeast, which was hit hard by wintry weather; by almost 26 percent in the West, which saw a surge in buying three months ago because of a Jan. 1 deadline for a California state tax credit; and by nearly 13 percent in the Midwest. Sales fell 0.6 percent in the South, which accounts for the nation's biggest home-sale market.

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