2008: EXISTING-HOME SALES TO GO UP
12/29/2007
Written by Walter Molony, wmolony@realtors.org
Existing-home sales are projected to trend up in 2008, with pending home sales showing a slight near-term rise, according to the latest forecast by the National Association of Realtors®. However, a recovery for new-home sales is unlikely before 2009.
Lawrence Yun, NAR chief economist, said the worst part of the credit crunch has already worked its way through the data. “The unusual mortgage disruptions that peaked in August were clearly seen in lower home sales that were finalized in September and October, so the market was underperforming,” he said. “Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in October, increased 0.6 percent to an index of 87.2 from an upwardly revised reading of 86.7 in September. It was the second consecutive monthly gain, but remained 18.4 percent below the October 2006 index of 106.8. “The broad trend over the coming year will be a gradual rise in existing-home sales, but because sales are exceptionally low in the final months of 2007, total sales for 2008 will be only modestly higher than 2007,” Yun said.
The PHSI in the Northeast jumped 16.0 percent in October to 80.6 but is 11.1 percent below a year ago. In the West, the index rose 8.4 percent to 87.3 but is 16.9 percent lower than October 2006. The index in the Midwest slipped 1.4 percent in October to 85.5 and is 11.7 percent below a year ago. In the South, the index dropped 7.8 percent in October to 91.6 and is 25.3 percent below October 2006.
“The improvement in the Northeast reaffirms a trend apparent for some months now that shows signs of recovery, noteworthy because that was the first region to slump, and the gain in the West indicates some easing of interest rates for jumbo loans,” Yun said. “Lawmakers need to understand that raising the loan limits on FHA and GSE-backed conventional loans will markedly improve mortgage availability.”
Existing-home sales are likely to total 5.67 million this year, the fifth highest on record, rising to 5.70 million in 2008, in contrast with 6.48 million in 2006. Existing-home prices should be down 1.9 percent to a median of $217,600 for all of 2007, and then rise 0.3 percent to $218,300 in 2008.
“Home price growth in the vast affordable midsection of America will help raise the national median existing-home price slightly in 2008. I then expect price appreciation to return to more normal patterns in 2009, perhaps rising one or two percentage points above the rate of inflation,” Yun said.
“Even with a modest decline in the national aggregate price this year, it’s important to keep in mind that nearly two-thirds of the metro areas in the U.S. are showing price increases,” he said. “The apparent disparity results from fewer sales in high-cost markets, so a change in the mix of sales is dragging down the national median home price.”
Areas showing healthy price gains include disparate markets such as Gary-Hammond, Ind.; Binghamton, N.Y.; Corpus Christi, Texas; and Spokane, Wash. “We can’t emphasis enough how much local conditions vary, even within a given area, so it’s important for consumers to make decisions based on local market conditions.”
New-home sales are forecast at 788,000 this year and 693,000 in 2008, down from 1.05 million 2006; no sustained improvement is seen for new homes until 2009. Because builders have correctly adjusted production, housing starts, including multifamily units, will probably total 1.36 million this year and 1.16 million in 2008, down from 1.80 million last year. The median new-home price is projected to drop 3.0 percent to $239,100 for 2007, and then decline another 0.2 percent to $236,600 in 2008.
The 30-year fixed-rate mortgage is estimated to rise slowly to the 6.4 percent range by the end of 2008, with additional cuts in the Fed funds rate lowering short-term interest rates.
Growth in the U.S. gross domestic product (GDP) should be 2.1 percent in 2007, down from a 2.9 percent growth rate last year; GDP growth is forecast to improve to 2.4 percent in 2008.
The unemployment rate is likely to average 4.6 percent for 2007, unchanged from last year, but rise to 5.0 percent in 2008. Inflation, as measured by the Consumer Price Index, will probably be 2.8 percent this year and 2.7 percent in 2008, down from 3.2 percent in 2006. Inflation-adjusted disposable personal income is estimated to grow 3.1 percent this year, the same as in 2006, and then grow 2.2 percent next year.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
Existing-home sales for November will be released December 31; the next Forecast / Pending Home Sales Index will be released January 8.
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SEE GREEN WITH YOUR SECOND HOME
12/28/2007
With more people remodeling their second homes, going green (and all of the benefits that go with it) looks more and more enticing. Homeowners are often looking to maximize resource usage and decrease waste for both economic and environmental reasons. From wood alternatives to natural fiber fabrics many homeowners are applying green building practices and saving money; all while contributing to the efforts to reduce global warming. Build your dream home while being environmentally conscious...read more:
http://2ndhome.idigitaledition.com/issues/20071219/Page32
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IMPORTANT SHORT SALE CHANGES!
12/27/2007
Here is some good news for sellers facing a short sale. Until now, they were liable for paying the tax on the amount the lender forgave. But the President signed into law today a relief program:
TAX BREAK FOR MORTGAGE DEBT FORGIVENESS
President Bush signed into law today a new measure giving tax breaks to homeowners who have mortgage debt forgiven. Under preexisting law, the debt forgiven by a lender, such as for short sales and refinances, was generally taxable to the borrower as debt discharge income. With the passage of the Mortgage Forgiveness Debt Relief Act of 2007, a taxpayer does not have to pay federal income tax on debt forgiven for a loan secured by a qualified principal residence.
This tax break applies to debts discharged from January 1, 2007 to December 31, 2009. Qualified principal residence indebtedness is debt incurred in acquiring, constructing, or substantially improving the residence (up to $2 million for refinances).
For purposes of calculating capital gains, any debts discharged excluded from income under the new law must be subtracted from the basis of the taxpayer's principal residence (but not below zero). However, taxpayers may generally exclude from capital gains income up to $250,000 (or $500,000 for married couples filing jointly) for properties owned and used as their principal residence for at least two of the last five years.
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WINTER IS COMING AND THERE IS GOOD NEWS IN REAL ESTATE
11/14/2007
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TOP 10 REASONS TO BUY IN REAL ESTATE
10/19/2007
The Top Ten Reasons It's a Great Time To Buy Real Estate!
by Paul Pastore
- Selection, selection, selection. There are about 57,000 resale homes on the market in Maricopa county(Phoenix). Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago the resale inventory dropped below 5,000 units. A buyer was forced to make compromises if they were going to locate the home of their dreams. There is a great selection of attached homes, condos, and townhouses. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are lots of options in this market.
- No Bidding Wars. In 2005 we had one client that made an offer on ten homes. They lost the first nine to the 'feeding frenzy' that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer's market.
- You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you 'make them an offer they can't refuse'.
- Patience is tolerated. In the hot seller's market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer. Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
- Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.
- There are plenty of specs. In the not too distant past buyer had to 'play games' if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. R.L. Brown estimates that builders have thousands of specs ready for immediate occupancy.
- Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold 'as is'. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
- Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It's a great time to buy without having to compete with hundreds of prospective landlords.
- Location, location, location. Today's buyers can find homes closer to work. In the past buyers flocked to Maricopa and Queen Creek in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.
- Real Financing is available. The 'wink, wink' zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It's a great time to buy real estate!
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
DEBRA SACCO EARNS E-PRO CERTIFICATION
10/1/2007
FOR IMMEDIATE RELEASE
10/1/2007--Debra Sacco of Country Air's Platinum Properties has successfully completed the e-PRO course to become one of a select few real estate professionals to earn the prestigious certification offered by the National Association of REALTORS® .
The e-PRO® certification course is an educational program unlike any other professional certification or designation course available, comprehensive and interactive. It is specifically designed to provide real estate professionals with the technology tools needed to assist consumers in the purchase or sale of a home.
With more then 70% of consumers beginning their real estate research on the Internet, e-PRO certified agents have the experience and expertise to meet the demands of today's buyer and seller.
"The real estate industry has undergone a fundamental change over the past several years," said Debra Sacco of Country Air's Platinum Properties. "A majority of consumers are taking the time to conduct their own research prior to contacting an agent. In turn, real estate professionals must be knowledgeable of how technology can assist them in serving the needs of the buying and selling public."
The exclusive e-PRO® certification course is presented entirely online and certifies real estate agents and brokers as Internet professionals. Because of its innovative design, students are able to complete the course at their own pace, when and where they want, via any Internet connection. The course is designed to help REALTORS® stay at the leading edge of technology and identify, evaluate and implement new Internet business models.
Once completed, the e-PRO certified real estate professional joins the ranks of a special community of highly skilled and continuously trained professionals who provide high quality and innovative online-based real estate services. Consumers can identify the e-PRO through the exclusive e-PRO Internet Professional logo.
Both the content and the delivery platform were created by San Diego-based technology company InternetCrusade® . The course instructs participants in the professional use of e-mail, the development of an interactive Web site, and the use of online research tools. Graduates use the skills they've acquired to provide clients information on properties for sale, local communities, and the local real estate market.
For more information, e-mail Debra Sacco at debra@countryair.com or call 707-227-4713.
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IRS ARTICLE- SHORT SALES
9/19/2007
http://www.irs.gov/newsroom/article/0,,id=174034,00.html
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DEBRA SACCO RECEIVES NATIONAL RECOGNITION
6/12/2007
FOR IMMEDIATE RELEASE
LOCAL REALTOR ACHIEVES NATIONAL RECOGNITION
Lakeport, CA - Debra Sacco with CPS/Country Air Properties has been awarded the Accredited Buyer Representation (ABR® ) designation by the Real Estate BUYER'S AGENT Council, Inc. (REBAC® ) of the NATIONAL ASSOCIATION OF REALTORS® (NAR).
Debra Sacco joins more than 32,000 real estate professionals in North America who have earned the ABR designation. All were required to successfully complete a comprehensive course in buyer representation and an elective course focusing on a buyer representation specialty, both in addition to submitting documentation verifying professional experience.
REBAC® , found in 1988, is the world's largest association of real estate professionals focusing specifically on representing the real estate buyer. There are more than 43,000 active members of the organization world-wide. THE NATIONAL ASSOCIATION OF REALTORS® , "The Voice for Real Estate," is the world's largest professional association, representing over 1,000,000 members involved in all aspects of the real estate industry.
You may contact the Real Estate BUYER'S AGENT Council by telephone, (800) 648-6224, by email, [rebac@realtors.org], or by visiting the REBAC website, [www.REBAC.net].
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com
1031 EXCHANGE MAGIC
1/26/2007
Want to leverage yourself up to more and more expensive properties, while defering capital gains? Exchange! The number of exchanges in recent years have drastically increased due to the IRS's clarification on the whole process. What is the process? It's pretty straightforward actually. Taxpayer must identify the property being acquired within 45 days of the date of transfer of the property being relinquished in the exchange---and the exchange must be completed within 180 days.
The Basics:
- One or more properties must be exchanged for one of more "like-kind" properties; properties must be used in trade or business or held for investment
- No gain or loss can be recognized during an exchange
- Property sold in a 1031 exchange is known as the "Relinquished Property"
- Property purchased in a 1031 exchange is known as the "Replacement Property"
Why 1031? Section 1031 allows the taxpayer to shift tax basis from the relinquished property to the acquisition property in order to defer taxes on capital gains. Why pay taxes when you can use the money for a great investment?! One word of caution to those who would love to exchange a 2nd home or vacation home...in order for a vacation home to be eligible for an exchange the taxpayer must not have used the home for personal use more then 14 days a year, or 10% of annual total occupied days. If you have a rental property that you'd like to convert to a primary residence to save on capital gains through your exemption, plan on holding it for personal use at leasts 5 years.
Be sure to use a qualified intermediary- an independent party who facilitates tax-deferred exchanges- and to give notice to all other parties to the contract.
Anyone considering an exchange should first consult a tax advisor and attorney, and second your favority realtor to find the right properties for you!
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AN INTRODUCTION TO LAKE COUNTY
1/1/2007
![[ Fishing on Clear Lake ]](http://www.geocities.com/TheTropics/1051/images/canoe.gif)
Clear Lake is the major recreation attraction in Lake county. The lake is more than 19 miles long and 9 miles wide at it's widest point and is the largest natural lake in the state of California and the oldest lake in North America. Average depth is 28 feet with water temperatures varying from the low 40's in winter to the mid 70's in summer. It has 100 miles of shoreline and is circled by 60 miles of scenic roads.
Water sports abound around the lake. There are several public beaches, parks and launch ramps which are free to the public. Many private resorts line the lake and some will allow use of their facillities free or for a small fee. Fishing is permitted 24 hours a day but water skiing is not allowed between sunset and sunrise.
Water skiers and swimmers alike enjoy the early morning as the lake is smooth as a billiard table at this time. Afternoon breezes can become quite strong and white caps can form any time of the year so small sailing craft should beware at this time of day.
Check the Map for information on getting to Clear Lake.
Blue Lakes
Located in Northwest Lake County, the two lakes of Lower Blue Lake and Upper Blue Lake are Lake County's "other lakes". They offer boating and fishing along with four resorts and are restricted to small craft with a 5 MPH limit. Upper Blue Lake hosts an annual Trout Derby which is hosted by the Narrows Lodge. (800) 476-2776
The Geysers
![[ The Geysers at Night ]](http://www.geocities.com/TheTropics/1051/images/s_geyser.jpg)
Lake County is part of one of the world's foremost geothermal resource areas. Geothermal development has grown dramatically since the late 1950's in the area known as "The Geysers" in the Mayacmas Mountains near the Cobb Mountain Area. There are more than 300 wells, 80 of which serve Lake County power plants.
The magma body responsible for the steam fields is associated with volcanic activity which began in the Clear Lake area a million years agao. The Geysers were known as an area of hissing fumaroles and boiling springs in the late 1840's and by the end of the century had become nationaly known for it's hot springs resorts and health spas.
Lake County 'Diamonds' (Moon Tears)
Lake County "diamonds", also called "Moon Tears", are semi-precious stones of volcanic orign found nowhere else in the world. While not equal in hardness to real diamonds (7.5 - 8 compared to a diamonds 10) Lake County diamonds have been used commercially and are capable of cutting glass. They are highly prized for collectors and can be faceted and polished to make beautiful jewelery which are almost as brilliant as real diamonds.
According to one Indian legend a Pomo Indian Chieftain and the Moon fell in love. The Moon could not stay with the Chieftain because she was needed by the people to light the night sky and mark the seasons. She was so sad to leave the Chieftain that she wept "Moon Tears" which became Lake County diamonds.
Mt. Konocti
![[ Mt. Konocti ]](http://www.geocities.com/TheTropics/1051/images/s_konoct.jpg)
From the Fire Tower atop 4200 foot Mt. Konocti you can see the entire lake. It is a sacred place to local indian tribes and can be seen from almost any place on Clear Lake.
At the base of Mt. Konocti, along Soda Bay Road, you'll find 2 golf courses, numerous small resorts, old lava quarries, Clear Lake State Park, the town of Kelseyville, the Konocti Harbor Resort & Spa, and many other attactions.
Tule Elk
Tule Elk have returned to their native range here in Lake County after an absence of over 100 years. A herd was recently released near the Cache Creek Basin Recreational Area east of Clear Lake on Highway 20. These magnificent animals were bred in Bakersfield and are being relased here to try and bring back the natural population. Tule Elk are native to California (and Lake County) and are not seen anywhere else in the world.
Copyright © 1997, 1998 Peter Conrad Cumminsky. All rights reserved.
URL: http://www.geocities.com/TheTropics/1051/intro.html
If you have a question you’d like to have answered in this blog, please email me at dsaccomcatee@gmail.com