Jacksonville NC Resource for Real Estate Info

  Weekly GungHo Real Estate E-Zine   

  

   February 11, 2010   

 

  In this Issue:

Walter’s World: Only 8 Steps to a Home in Jacksonville NC

Special Report: A shift in payment priorities

Featured Article: Still part of the dream?

Recommendations & Resources: Rent vs. buy

 

Walter’s World – Only 8 Steps to a Home in Jacksonville NC

 

If you are renting and have a stable job with some savings, and a credit score in the 620 or more, you can likely qualify for a VA, FHA, or conventional financing for a home in the Jacksonville NC area.

The First Step towards buying a home is è Decide to Buy

There might be some fears you face when thinking about buying your first home

·       I can’t afford to buy my dream home – the best way to get closer to buying your dream home is to buy your first home.

·       I haven’t saved enough for a down payment – there are several programs that require little or no down payment

·       I can’t afford to buy a home – buying a home in most cases is a better deal for a family than renting especially over a 2 to 3 year time period – call a mortgage lender to determine if you are eligible

 

Step 2 is Finding a Qualified, Professional Real Estate Agent – for full article, “Only 8 Steps to Home”

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Special Report

A Shift in Payment Priorities

U.S. News & World Report recently published an article that indicated a pretty dramatic change in the way homeowners are now tackling their debt.

According to the article, a study released by Transunion showed that Americans are increasingly more likely to make payments on their credit cards before payments on their mortgages. The data shows that roughly 6.6 percent of borrowers paid credit cards first in the third quarter of 2009, up from just 4.3 percent in the first quarter of 2008.

This is a shift in the historical norm; which has long been slanted toward house payments as a priority ahead of other bills. Credit the housing bust nationwide for the change.

As homeowners struggle with unemployment and drops in their homes’ value, they have perhaps become reluctant to commit more money into an asset that might not be worth what they owe on it. Whereas keeping up with credit card payments continues to give them access to necessities such as gas, clothing and groceries.

It also probably signifies part of the issue that caused the housing bust. Access to no-money down or low-down payment loans that proliferated the market during the housing boom allowed buyers to get into homeownership without much “skin in the game.”

In the days of 20-percent down payments, homeownership was something you worked for, saved up for and therefore something you were less likely to give up so easily. It’s a lesson that you can bet banks are heeding.

Featured Article

Still Part of the Dream?

 

The U.S. Census Bureau recently revealed that home ownership in the fourth quarter of 2009 had dropped to 67.3 percent, about the level before the housing boom the nation experienced early in the past decade.

The percentage of home owners reached a peak of about 69 percent in 2004, during the height of the housing frenzy. It started dropping in 2006, as homes began being lost to foreclosure.

So the question: Is home ownership still part of the American dream?

Where you land on that important question might depend on whom you listen to. Many “experts” are saying that home ownership is overrated, and most people should be renting. Congressman Barney Frank, Financial Services Committee chairman, recently said that lower-income Americans should probably rent, not buy, their homes.

While Frank’s comment was made in the context of criticizing the government’s push for – and subsidies of – home ownership for everybody, a philosophy that probably led to the subprime mortgage mess, it’s not a comment that’s going to sit squarely with everyone.

Let’s face it, despite the declining number of home owners, more than 2 out of every 3 American adults fall into that group. Two out of three of us must consider it part of the dream, because as even as it becomes increasingly difficult to maintain ownership – unemployment, foreclosures, etc. have taken their toll – only a small percentage of us are readily giving it up.

Is home ownership for everybody? Probably not, as the big push for home ownership for all helped get us into a recession. But as the debate rages on about how involved the government should be in providing home ownership opportunities, let’s not just chuck away home ownership’s role in the American Dream.

Sure, there are financial advantages to owning a home. Tax breaks and equity build-up, for example. Paying rent gives you neither. But there are other components of home ownership with value that can’t be measured in dollars and cents.

There is a social component of owning your own home. Pride of ownership, while an abstract concept, has merit. The feeling of being part of a community, a school district, is rewarding to many. Home owners also enjoy freedoms that renters do not.

If you own your own home, you can paint the walls pink if you want. Have a dog. Blast your stereo at 2 a.m. You don’t answer to a landlord.

Does home ownership make 100-percent sense for everybody? No. Has pushing it on those who are not ready caused problems? Yes.

But no matter what the “experts” say, no matter how many have somehow decided home ownership is less desirable than it used to be, it remains part of the American Dream.

 

Recommendations & Resources

Rent vs. Buy

A real estate agent worth his or her weight should be able to help you figure out whether renting or buying makes financial sense for you. Each person’s situation is different, and should be considered carefully with a professional.

However, for a quick, online general assessment you can visit Ginnie Mae’s “Rent vs. Buy” calculator.

Rent vs. Buy

 

Have a great week!

Walter Whitehurst, Broker

Keller Williams Realty

Jacksonville NC Home Search

 

  Weekly GungHo Real Estate E-Zine

 

 January 26, 2010

 

In this Issue:

Walter’s World: Jacksonville NC Renters, You Should Be Buying!

Analysis: Good and bad signs in December housing report

Featured Article: A lesson about timing

Recommended Resources: Really? A 740 credit score?

 

Walter’s World

Jacksonville NC Renters, You Should Be Buying!

 

Just finished a closing with a buyer today, where he purchased a home in a Jacksonville NC neighborhood and had less than $500 into the purchase and his first mortgage payment is not due until March 1^st.

If he had tried to rent the same house, he would have to pay $850 for security deposit, partial month’s rent of about $170 plus first month’s rent of $850 starting February 1^st plus $150 non-refundable pet fee per pet. Total upfront to rent: $1700 to $2000.

And we are not even considering the $8,000 tax credit, tax deductible mortgage interest and real estate taxes, appreciation in home value, living in your own place, being able to decorate as you please, and fixed mortgage payment of principal and interest.

Then, why do people rent instead of buy? Most of the time they do not know the facts – it is financially better for you to buy over the long run as we just showed. Here in Jacksonville NC, being a military market, there are 3 main reasons I hear and this is what my reply is:

1)      The uncertainty of how long am I going to be stationed here – if you know you will be here at least 2 years, then it is better to buy

2)      Am I going to re-enlist? – This is one I can’t help you with, but once you make that decision, then we can talk about buying a home

3)      I think my credit is not good enough – I have several mortgage lenders that will work with you and provide a FREE Pre-Approval – it only takes about 15 minutes on the phone or in their office.

 

To learn more about the Home Buying Process, you can receive your own FREE e-book called “8 Steps to Home Ownership”. This e-book takes the confusion out of the home buying process.

 

Analysis

Good and Bad Signs in December Housing Report

Maybe you’ve seen by now the statistics for nationwide home sales in December, released by the National Association of Realtors.

The grim-sounding data show that home sales dropped almost 17 percent in December from November. It represents the largest monthly decrease in 40 years, according to the Associated Press.

Of course, a great deal of the decrease can be attributed to the extension of the first-time home buyer tax credit. November’s sales were boosted by a number of first-time buyers scrambling to get the credit, for which they originally had to close by the end of the month.

Once the credit was extended, the emergency was off. Buyers now had time, which was bound to lead to a decrease in December sales. The situation does leave a couple of questions, however, regarding the overall housing market:

1.      Are most of the first-time home buyers now out of the market, having already purchased their home?

2.      What’s going to happen to the market when the government’s tax credit enticements – now pushed to “move-up” buyers, too – expire at the end of April?

 

These certainly are big question marks hovering over the market. However, December’s data also shows some signs of further stability:

The NAR stats show that while the volume of sales dropped, the median price of single-family homes rose for the month of December, about 1.5 percent from the year before. This marked the first month since August of 2007 that saw a year-over-year increase in prices.

The other sign of stability is in the existing inventory of unsold homes, which fell about 7 percent. That, the NAR is reporting, is now at about a 7.2-month supply. A six-month supply is considered healthy, and the market is creeping toward that number.

With the tax credits set to expire this spring; mortgage rates likely to rise around the same time; and a consistently shrinking inventory of homes on the market, sales could take a big jump. That leaves the possibility that home buyers will have to be ready to move fast this spring when they find a home or investment property that suits them.

Keep in mind that this time of year is traditionally a good time to buy, as winter often means fewer buyers and therefore more flexible sellers.

Featured Article

A Lesson about Timing

You always hear about trying to time the market's bottom when it comes to buying a property.

You've heard the phrase "buy when there's blood on the street" and probably have taken note of expert investor Warren Buffet's advice, "Be greedy when everyone else is fearful, and fearful when everyone else is greedy."

Those lessons are being taken advantage of by real estate investors in today's real estate market, as distressed properties are available at bargain prices and have made up a large percentage of real estate sales in the past year.

There's another lesson in today's news, however, about the flip side of that equation: selling at the top of the market, being fearful when others are greedy.

The lesson is about MetLife Inc. According to an Associated Press article, Metlife sold a pair of giant apartment complexes in New York in 2006, near the height of the real estate boom. It was a record sale -- $5.4 billion for 110 buildings and 11,000 apartments overlooking the East River.

Things were going great at the time, with real estate prices in New York (and just about everywhere else) soaring. Instead of holding on to the property, which had been built by MetLife in the 1940s when there was a demand for housing for returning World War II veterans, and seeing what additional appreciation it might bring, though, MetLife sold. It might not have been fearful, but it was at least a cautious move at a time when everyone else was greedy.

The buyers of the property at the time had big plans. They were going to convert some of the rent-controlled units to luxury apartments and capitalize on the huge demand for high-priced digs at the time. However, as the real estate market deteriorated, the investors ran into problems.

A state court ruled that some of the rent increases were improper, according to the AP article. The value of the property, analysts pointed out, dropped to $2 billion, less than what the more than $4 billion owed on the property. The article states that now, facing bankruptcy, the investors will turn the property over to their lenders.

On the surface, the bankruptcy and forfeiture of the properties to lenders make it look like a poor investment for the group who purchased the apartment complexes in 2006. But the real lesson is how good MetLife's investment was.

It built the properties into the demand of World War II veterans. It held the properties for 60 years, enjoying the cash flow and -- you can bet -- paying down debt while the properties appreciated. And when others were greedy, it sold them near the height of the market.

How many similar stories will there be to come out of this current market, when investors are buying low and into the demand for affordable housing?

This story is a great example of knowing when to buy. And when to sell, which is one we don't always see. 

Recommended Resources

Really? A 740 Credit Score?

It used to be that if you had a credit score of 720, you were in on the best financing rates, prices, etc. of the credit world. Now, some are reporting, you need to have a 740 in this age of tightened credit. To learn why and how to get there, visit this informative and interesting article/tip list at MSN.com:

MSN Money: Raise Your Credit Score to 740

 

Have a great week!

Walter Whitehurst
Keller Williams Realty

(910) 340-5524 Direct

walter@HomeSearchJacksonvilleNC.com

www.HomeSearchJacksonvilleNC.com

 

Weekly GungHo Real Estate E-Zine

January 19, 2010

In this Issue:

Walter’s World: New Construction off Ramsey Road in Jacksonville NC

Special Report: New IRS Form released for home buyer tax credits

Featured Article: How to stay motivated and stick to your goals

Recommended Resources: Financial Resolutions for the New Year

Walter’s World

If you have been by the Carolina Forest Elementary School on Ramsey Road in Jacksonville NC, you may have noticed some new construction. The Village at the Glen Townhomes and the Ivy Glen Patio Homes are starting to be framed up and some units should be finished in April.

The 2 bedroom townhomes are listed at $116,900 and have about 1000 sq ft of heated space, while the 3 bedroom townhomes are listed at $144,900 with over 1500 sq ft.

The Ivy Glen Patio Homes come in 4 models: The Woodbine, The Ivy, The Parker, and The Riverwood. All the models have over 1250 sq. ft. with The Woodbine model listed at $147,900, The Ivy at $149,900, The Parker at $151,900, and The Riverwood at $159,900. Each of the floor plans have 3 bedrooms, 2 baths, fireplace, and a 2-car garage.

This townhome and patio home development is part of the Carolina Forest Community and is located between Western Blvd. and Ramsey Road in north part of Jacksonville NC. 

Special Report

New IRS Form released for home buyer tax credits

There’s some good news for those who purchased homes after Nov. 6, taking advantage of the extended first-time homebuyer tax credit or the new “move up” tax credit: You can now file for the credit.

The IRS has released its new Form 5405, which is what is used to claim the credit. It took two months, however, for the agency to get the new form to the public, which left those who closed AFTER the deadline was extended unable to claim the credit.

You can download the new form at the IRS Website.

Reports say, however, to expect delays if you are filing for a home buyer tax credit. According to a CNNMoney.com report, it could be up to four months before you receive your credit.

Also keep in mind that as you get ready to file your 2009 federal return, if you are claiming the home buyer credit, you will have to file a paper return. The IRS e-file system cannot be used if you are claiming a home buyer tax credit.

Featured Article

How to Stay Motivated and Stick to Your Goals

It's hard to believe, but we're now closer to February 1 than January 1, which means the New Year's resolutions that were so easy to be excited about at first are probably losing steam. It happens every year.

Everybody tells you to set goals, so you've probably gotten good at that over the years. The problem is, it's easier to set them than to stick with and ultimately achieve them. But there are a few tricks you can use to stay motivated and on track to achieve your goals.

It may be too late already, as you probably have already set your goals for 2010, but hopefully, you set realistic goals. Your goals don't have to be easy -- but they should be realistic.

It is extremely difficult to stay motivated when your mind knows you really have no shot at achieving whatever benchmark you have set for yourself. If you want to lose 50 pounds by the end of the year, for example, but the most weight you've ever lost in 12 months is only 10 pounds -- you might want to re-adjust your goal. You cannot trick yourself into staying motivated to accomplish something that, deep down, you know is nearly impossible.

Once your goals are in line with reality, here are some other mechanisms you can use to stay motivated:

Visualize: Try to see yourself not just having achieved the goal, but also enjoying whatever REASON you had for the goal. This is big-picture focus, and it will require you to think deeper. But sometimes our goals are not really THE goal, but part of a larger plan we have. Visualize the result. For example, if your goal is to invest $10,000 toward retirement this year, picture your ideal retirement, lying on the beach or playing golf...whatever. That will motivate you more than watching zeros on bank statements.

Share: Make your objectives public. Tell people what your goals are. It's no secret we hold ourselves more accountable when we have broadcast to others our intentions. If you want to run a marathon this year, tell everyone you know. You're much more likely to push yourself when you know that you've made your commitment public.

Measure: Keep track of your progress diligently. That which we measure improves. Get on the scale regularly. Write down every dollar you spend. When you track results constantly and consistently, you are more likely to stay on the right path. When your measuring gets lazy, so you will your commitment.

Piece it together: Instead of one big goal, figure out all the little goals that might lead you to a larger goal. We humans stay engaged when we can take action in many small steps rather than a couple of big steps. Lose a pound every two weeks throughout the year, and you'll lose 25 pounds. And a pound every couple of weeks is more manageable than the bigger, more abstract goal of 25 pounds.

As you head into February, keep in mind that 2010 is still young. You have time to accomplish the things you want to accomplish this year, and it doesn't hurt to take a few moments to figure out if you can use a few tricks to stay more motivated! 

Recommended Resources

Online: Ways to Help Haiti

As you know, a huge earthquake devastated the island of Haiti, leaving hundreds of thousands dead and even more homeless. If you’d like to help with the relief efforts, here is a good site that explains how you can:

http://www.google.com/relief/haitiearthquake

Have a great week!

Walter Whitehurst
Keller Williams Realty

(910) 340-5524 Direct

walter@HomeSearchJacksonvilleNC.com

www.HomeSearchJacksonvilleNC.com

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