Consumers should be shouting off the rooftops about the fantastic deals they are being offered in both housing and mortgage rates. Mortgage rates have dropped to the lowest level since the 1970s. Housing prices are the lowest they have been in years, affordability is available and offered. So why are so many consumer waiting? I believe many consumers are waiting to see what will happen. They want the best deal possible so they are on the fence waiting for rates to drop even lower and home deals to get even better. But sadly they may be missing out on something that will not last much longer.
According to a recent poll done by local real estate industry professionals asking when they think the market will start to recover (meaning the sellers will once again get the upper hand) 25% said mid 2009, 25% said late 2009, and 37% said late 2010. If these predictions hold true we could see a shift in the next year towards stabilization of home prices and mortgage rates. This means that sellers will no longer give away the firestorm deals and incentives they have in the past 2 years and it is likely that with this stabilization the Fed will bring the interest rates back to a normal level we have seen in recent years rather then the under 6% range we see now.
So like any other investment there is risk and in a market like this the risk is much lower for buyers then it is for sellers. The deals are out there but many consumers might have noticed that less and less builders are giving away their homes and re-sale sellers are taking their homes off the market until the prices stabilize. The time is now; buy now or you might loose money later.
Buyers are seeing that there are a lot of great resale deals or perhaps hearing about all the quick sale/ foreclosures that are out there. Yes quick sales are up meaning that the amount of distressed properties are up. Many people are struggling to make their house payments because of all the crazy loans they were put into are now adjusting. This is both bad and good. The bad news is we never want to see this many people struggling with their payment, this is bad for both them, the banks, and the community. However President Obama has pledged that between $50billion and $100billion will be used to help boost efforts in combating the increasing mortgage foreclosures. The good thing is that an increase in Foreclosed sales and closes in the area means the inventory will soon be going down. The idea is the more inventories we wash out the more stable the market will be.
There is a pent up demand for homes out there and anytime now consumers will realize that now is not only the time to buy but the BEST time to buy. So as the title of this blog suggest, time is of the essence. Buy now or soon or else you could miss out or find yourself purchasing your home with a higher interest rate and a higher price.
Monday, February 9, 2009
Time is of the essence
Tuesday, February 3, 2009
For more information or for additional testimonials please email me at knoble@campbellhomes.com
Monday, February 2, 2009
Foreclosure Talking Points
Foreclosure Talking Points
• The Mortgage Bankers Association’s latest survey (http://www.mbaa.org/NewsandMedia/PressCenter/66626.htm) shows that the percentage of loans in the foreclosure process increased from 2.75 percent in the second quarter to a record 2.97 percent in the third quarter of 2008.
• The media is sensationalizing these numbers and conveying the false impression that foreclosures are running rampant in every community across the nation.
• Certainly there is no question that rising foreclosure rates are a serious problem.
• But a close examination of the facts shows that many of these reports are grossly exaggerated.
• It’s important to note that the vast majority of American home owners – 93 percent -- are making their mortgage payments on time.
• Breaking down prime and subprime loans, more than 95 percent of prime borrowers – the bulk of the mortgage market -- are up-to-date on their payments.
• The problem is in the subprime market. Nationally, about 20 percent of subprime borrowers are behind on their mortgage payments.
• But it’s also important to remember that 37 percent of all single-family homes are owned debt-free – without any mortgage – and that home owners nationwide have built up $8.5 trillion in equity that provides a good cushion against any decline in values.
• Furthermore, housing is not a national market. All housing markets are local.
• For example, the Mortgage Bankers Association’s data show that most foreclosures are concentrated in the once super-heated markets in two states: California and Florida.
• These two states combined (California 54 percent and Florida 41 percent) have about 95 percent of all prime and subprime ARM foreclosure starts, respectively.
• And remember, prime and subprime ARMs comprise the highest share of loan foreclosures.
• Foreclosure actions began on 1.07 percent of all home loans in the third quarter, down one basis point from the previous quarter. Only nine states were above the national average: Nevada, Florida, Arizona, California, Michigan, Rhode Island, Illinois, Indiana and Ohio.
• The remaining 41 states plus the District of Columbia were below the national average.
• Still, the foreclosure problem is a major issue that needs to be addressed.
• The best way to do this is to halt the slide in home prices.
• The solution is to stimulate demand. Congress should make the recently implemented home buyer tax credit much bigger and better, and available to all purchasers.
• At the same time, it should enact a sizeable government buy down of home mortgage rates.
• Together these measures would ignite buyer demand, which would help stabilize home values, reduce foreclosures and get the housing market and economy back on the right track.
Tuesday, January 27, 2009
ANSWERS TO COMMON HOME BUYING QUESTIONS
Q: Shouldn’t I wait until home prices go even lower to buy?
A: No. Just as no one can accurately predict the peaks and valleys of the stock market (name one person who sold their tech portfolio in April of 2000), the same holds true for housing. If you wait for what you think is the absolute best deal, you could end up waiting for years. All the market fundamentals show that now is a good time to buy – prices are down, interest rates near historically low levels, and there are lots of homes to choose from.
If you buy now, you will not only be in the driver’s seat during the buying process, you will also reap the gains of price appreciation. Remember, those who purchased homes in the early 1990s during the last big economic and housing downturn came out as big winners.
Q: Doesn’t it make sense to wait out the market until can I get the same price on my home that my neighbor got when he sold a year ago?
A: No. It’s always better to trade up in a buyer’s market. While the value of your house has fallen, the prices of higher-end homes have also dropped. Here’s an example:
Your neighbor sold for $300,000. Let’s say values in your area have dropped 10 percent, so you could get only $270,000 for your home today. You have your eye on a move-up home that previously sold for $500,000, but now is selling for $450,000. If you sold your home today for $270,000 and purchased the larger house for $450,000, the difference in price would be $180,000.
But if you waited to recoup the 10 percent value on your home and sold it at $300,000, chances are the move-up home would also increase in price 10 percent to $500,000. That’s a $200,000 price difference. So by selling today, you would actually save $20,000.
Q: Interest rates keep going down. Shouldn’t I wait until they go even lower before I buy a home?
A: Interest rates for 30-year, fixed-rate mortgages are currently around 6 percent and are extremely favorable for buyers. In fact, they are hovering near 30-year lows. But waiting to time the market is a dangerous game. Even those who follow the market for a living can’t figure out when interest rates will bottom out. If they could, they would all be multi-millionaires.
And home prices don’t necessarily move in unison with interest rates. So, if you decided to wait to purchase a home and the price dropped $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up by a half-a-point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.
Q: I have $10,000 to invest. Should I put that money in the stock market or buy a home?
A: Purchasing a home is by far the best long-term investment. For example, say you use that $10,000 to purchase a $250,000 home, and the house appreciates a modest 3 percent during the first year. That means after one year, the house would be worth $257,500 – a gain of $7,500. By contrast, putting the same $10,000 in the stock market and posting a similar 5 percent gain would only net a $500 return on investment.
And don’t forget the tax incentives. In most instances, all of the mortgage interest and property taxes you pay in a given year can be fully deducted from your gross income to reduce your taxable income. These deductions can result in thousands of dollars of tax savings, especially in the early years of the mortgage when interest makes up most of the payment.
Q: I’m a first-time buyer and still can’t afford the type of home that I want. Is it best to wait, keep renting, and hope that prices will get even lower?
A: If you continue to wait, you may never be able to afford to get into the housing market. Even as home prices are currently moderating or falling, depending on where you live, rents continue to climb. When you buy a home, you are also purchasing price stability, knowing that you will pay the same monthly payment for the life of your 30-year, fixed-rate mortgage.
Once you become a home owner, you are able to take advantage of the tax deductions that homeownership offers, and you begin to build equity in your property.
With so many homes on the market to choose from, your best strategy may be to scale back expectations for your dream starter-home. After a few years, you can use those equity gains to sell your starter home and move into a bigger house. The sooner you make the jump from renter to home owner, the quicker you begin to create and build up wealth for your family.
Wednesday, January 14, 2009
Housing Stimulus Legislation Is Great News for Area Home Buyers
On July 30, President Bush signed into law what is by far the most important housing legislation this nation has seen in the last 50 years. Passed by Congress with widespread bipartisan support, the landmark housing bill should help restore confidence among prospective home buyers, stop the erosion of home values, provide a lifeline to borrowers facing foreclosure, and help repair an ailing housing finance system.
One important component of the bill is a $7,500 tax credit for first-time home buyers. This credit is available to anyone who has not owned a home in the last three years and meets certain income requirements. Specifically, singles who earn less than $75,000 or married couples earning less than $150,000 qualify for the full credit. It’s only available for those who close on a home between April 9, 2008 and June 30, 2009, so you can’t wait forever to take advantage of this once-in-a-lifetime opportunity. For details on how the tax credit works, including its refundable character and recapture requirements, go to www.federalhousingtaxcredit.com
As a home builder, I believe that the stimulative effect of the temporary first-time home buyer tax credit is likely to ripple throughout the entire housing market. For one thing, 40 percent of all home buyers are first-timers. But also, you have to understand that the marketplace functions like a ladder, where someone has to make it onto the bottom rung before someone else can trade up to a bigger, better home on the next rung. So helping first-time buyers should make it easier for everyone to move up a notch.
In addition to the tax credit, another key provision of the new law permanently raises the conforming loan limits for Fannie Mae and Freddie Mac, which account for about 70 percent of all home mortgages being written today. Loan limits are also increased for FHA-insured loans, and that agency’s programs are substantially modernized and expanded to allow it to once again play a valuable role in the affordable mortgage market. This last element is especially important since the fallout of the subprime mortgage mess has caused credit for lower-income borrowers to all but evaporate.
Of course, the latest housing legislation is not going to turn around the national housing downturn overnight. But it does represent a critical turning point for all of us, and the promise of a much brighter and healthier marketplace on the horizon.
Wednesday, October 15, 2008
The President of the United States has signed a bill into law that will give many home shoppers the extra push they need to get off the fence and into a home of their own. If you are a first-time home buyer, you should definitely investigate the possibilities.
The Housing and Economic Recovery Act of 2008 provides a tax credit of up to $7,500 if you buy a home. A new Web site, www.FederalHousingTaxCredit.com, explains how this important incentive works. Here are the provisions in a nutshell:
• Qualifications. The tax credit is available for first-time home buyers, which under the Act also includes people who have not owned a home for at least three years.
• Income limits. The credit can be as much as $7,500 but is decreased depending on how much money the potential home buyer makes. To receive the full tax credit amount the income limits are $75,000 a year for single tax payers and $150,000 for married taxpayers filing joint returns. For partial credit the upper limit is $95,000 and $170,000 respectively.
• Time limits. To qualify, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs – the date when title transfers.
• The way credits work. Qualified home buyers claim the credit when they file their income tax return – no additional application or certification is required. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. A taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.
• Payback. You can look at this tax credit as an interest free loan with up to 15 years to pay it back. For example, a home buyer claiming the full $7,500 credit would repay the loan at a rate of $500 a year. There are exceptions, of course, but all that is explained on the Web site.
Www.federalhousingtaxcredit.com also includes links to the resources you need to help make buying a home easier, including information on the home buying process, financing and new home listings.
Homeownership has always been the cornerstone of the American dream, and it remains the best way for a family to build wealth over the long term. The Housing and Economic Recovery Act of 2008 is also designed to help struggling home owners avoid foreclosure and keep their homes and provide a boost to the housing market and economy overall.
The new legislation combined with current market conditions gives home buyers the opportunity of a lifetime to get into the home of their dreams. Interest rates are still at near-historic lows, and due to the housing downturn, there is a large selection of homes on the market to choose from, and prices are more competitive than they have been in years.
But this opportunity won’t be around forever.
Remember that you need to purchase and settle on your new home before July 1, 2009. As homes currently on the market sell, there won’t be a lot to choose from for the next couple of years. And as fuel and material costs and demand for homes goes up, so will prices.
More than two and half million home owners and home buyers will benefit from Housing and Economic Recovery Act of 2008. To find out if it can help you, visit www.FederalHousingTaxCredit.com today. Learn about home buying opportunities in Colorado Springs by visiting our website at www.campbellhomes.com
Top Reasons you shouldn't wait to buy a new home
1. $7,500 FEDERAL TAX CREDIT.
For a limited time only, qualified first-time buyers can receive a tax credit. www.federalhousingtaxcredit.com
2. LOW INTEREST RATES.
Rates remain at near-record lows; you can lock in a payment that fits your budget.
3. UNBEATABLE INVESTMENT.
Even in down markets, over the long term home prices still appreciate more than the stock market.
4. AVAILABLE LOANS.
Lenders are still eager to make loans to borrowers with good credit.
5. GREAT SELECTION.
With so many homes on the market, you can get the features you want!
6. ENERGY EFFICIENCY.
New homes have advanced technology and environmentally-friendly features that can help you save money.
Is it really easy being green?
Is it hard to build green? Is it a lot more expensive? Do you have to live in a straw-bale cottage or some other strange building to say you’re a green home owner? No, no, and most decidedly no!
The National Association of Home Builders’ (NAHB) Model Green Home Building Guidelines are about to celebrate their second birthday. Designed to help bring residential green building into the mainstream, the Guidelines also demystify the process and debunk the myths of green building for consumers – and for home builders.
Using the Guidelines, local home building associations are creating regionally appropriate green building programs for interested builders, and that interest is growing rapidly. Twelve state and local associations have launched voluntary green building programs, with another dozen on the way.
The Guidelines include an easy-to-follow checklist to make sure the builder is incorporating all aspects of green building into each project. That makes it easier to build green – and that’s the beauty of the voluntary Guidelines.
Is it more expensive to build green? Experienced builders say it doesn’t have to be. Guidelines-based programs award points for resource efficiency, and if you’re using fewer materials, you’re saving money, they point out. And some green building ideas – like positioning a home’s windows to best take advantage of natural light – don’t cost any more than conventional building – and save money for the homeowner.
Nor does green building consist of neighborhoods filled with yurts, underground bunkers or geodesic domes. When a house is green but looks like other houses in the neighborhood – and can be replicated by large-scale building companies – then we know green is mainstream. We’re seeing that happen right now.
There are more green building products than ever. Easier to use insulation, chemically neutral paints and flooring and natural landscaping products are no longer difficult to find. Most home-improvement stores carry a full line of compact fluorescent bulbs, which use 70 percent less energy, and advances in solar roof panels and shingles, wind turbines, and efficient appliances make green technology less expensive than even a few years ago.
But there are scattered gray clouds on a mostly green horizon. Efforts to mandate green building are the perfect example of good intentions gone awry. Green building needs to stay voluntary to continue to allow for market innovation and to make sure that the additional money spent to build ‘green’ goes to building improvements, not excessive certification fees. NAHB discourages efforts to dictate and legislate what constitutes acceptable green building practices because the building science in this area is still evolving. We don’t want to see this dynamic process frozen in place.
Homebuyers don’t have to wait that long to learn more about being green: download a free guide at www.nahb.com/greeninnovation – or contact your local home builders association to find a green builder near you [www.cshba.com]. To sign up for NAHB’s free consumer e-newsletter, visit www.nahb.org/housekeys.
Thursday, August 14, 2008
If you haven’t heard now is a fantastic time to buy a new home! The federal government has just made it easier for first time homebuyers to purchase a new home with the Housing and Economic Recovery Act of 2008 which essentially gives an interest free loan of up to $7,500 for qualified first-time homebuyers purchasing a home on or after April 9, 2008 and before July 1, 2009.
Any homebuyer, who has not owned a home in the past 3 years, is an American citizen and files taxes are eligible for the tax credit. Even some non-citizens may be eligible for the credit.
Common consumer questions:
Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
Why must the money be repaid?
Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
For more information about this program visit www.federalhousingtaxcredit.com
Wednesday, July 30, 2008
Best Cities to Live, Work and Play
Best Cities to Live, Work and Play
These ten great places will only get better.
From Kiplinger's Personal Finance magazine, July 2008
No. 1: Houston,Texas
No. 2: Raleigh, N.C.
No. 3: Omaha, Neb.
No. 4: Boise, Idaho
No. 5: Colorado Springs, Colo.
No. 6: Austin, Texas
No. 7: Fayetteville, Ark.
No. 8: Sacramento, Calif.
No. 9: Des Moines, Iowa
No. 10: Provo, Utah
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