October 23, 2019

WE ARE LESS DISTRESSED . . .

In what may be a signed that market conditions are improving, the PMI (private mortgage insurance) Group removed 105 metropolitan areas from its Distressed Markets List effective June 18th. Among those areas are several major cities, including Los Angeles, San Diego, Chicago, Boston, SEATTLE, Indianapolis, New York City and Washington, DC. Homebuyers in these markets will find it easier and less expensive to obtain mortgage insurance, PMI concludes. Other major cities that remain on the Distressed Markets List include Atlanta, Detroit, Baltimore, Oakland and Newark, NJ.

10 Reasons To Buy a Home

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.

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.

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.

More on the Developments Blog
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In Monaco, the ‘Most Expensive’ Home
House of the Day: Private Maine Island

.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.

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Associated Press

A house for sale in Shelby, Ohio.
.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.

Write to Brett Arends at brett.arends@wsj.com

CONSIDERING A CONDO?

In sometimes-complicated relationships between residents and their condo or homeowner associations, neighborly love can go only so far. When it comes to association decorum, the more you know about the CC&Rs (covenants, conditions and restrictions), the better. It’s the homeowner’s job to reinforce these governing rules and regulations, which can easily pit residents against association members. Here are a few hot-button issues that, according to Realty Times and Condobenefits.com, are important to keep in mind:

    Pets. Many condominiums restrict the permitted size and number of pets, if they allow them at all. Check in with the head of the association before bringing any four-legged friends home, and take note of any restrictions — such as the proper way to clean up after your pets and whether they’re allowed to stay outside for any period of time.

    Parking. Take note that beyond your four walls, the land is not all yours — including your driveway. What are the parking restrictions for residents? For guests? Have the conversation before guests arrive to ensure that vehicles are out of fellow residents’ way. Keep in mind that many condos limit the number of cars to reflect the number of residents in the home.

    Maintenance. There are two areas to consider: What does the association take care of, and what are your responsibilities? Typically, condo owners can rely on workers hired through the condo association to help maintain the exterior of their home, including painting, roof repairs, lawn maintenance and trash collection. But depending on association rules, sweeping your porch by Tuesday afternoon each week or setting the trash on the curb (not the end of your driveway) before Monday morning might be mandatory. Find out the specifics to avoid future headaches.

   Fees. All associations have monthly or annual fees that residents must pay, but dig a little deeper and find out what happens if you accidentally break a rule. The last surprise you want is a letter stuck to your door telling you to pay up or risk eviction. Additionally, keep in mind if your building is due for a code  upgrade — every five, 10 or 20  years, condo associations can charge residents large fees  written into the minutiae of the CC&Rs.

DID YOU KNOW THAT FRANCE IS THE WORLD’S BEST PLACE TO LIVE?

 

Your first stop on your tour of France!

Based on health care, culture and leisure, France offers the best quality of life.  Australia is second, followed by Switzerland and Germany.  For the entire list, go to http://InternationalLiving.com (Click “Annual Quality of Life Index”).

Does international living hold an interest for you?  Perhaps I can help.  I have just completed my year-long class study and credentialing to become a Certified International Property Specialist (CIPS) through the National Association of Realtors.  This designation provides me with access to worldwide real estate information, associations and local experts.
 
 
 

INDOOR POLLUTION . . .

Possible source of indoor pollution.

Air pollution can be up to 10 times worse inside your home than outside.  Fumes from paint, cleaning products, and solvents can all add to  indoor pollution, even when you can’t  smell them.

MY NETWORK FURTHER EXPANDS . . .

COLDWELL BANKER ANNOUNCES NEW MASTER FRANCHISOR IN FRANCE, COLDWELL BANKER ALSO WILL EXPAND BRAND INTO MONACO 

PARSIPPANY, N.J., (June 28, 2010) – Coldwell Banker Real Estate LLC today announced the signing of a master franchise agreement with Demeure S.A.  to expand the Coldwell Banker® brand in France and into Monaco.  With the addition of Monaco, the Coldwell Banker network now extends to 50 countries and territories worldwide on a combined basis.

Led by Laurent Demeure, president and chief executive officer, Coldwell Banker France and Monaco is based in Paris.  Previously known as Demeure Immobilier with a luxury homes department Demeure Prestige, Demeure S.A. was founded in 1920. The group played a major role in the development of real estate in France, notably with the creation of one of France’s premier networks of estate agents.

 “We are thrilled that Laurent and his talented team have joined the Coldwell Banker system to give us a renewed presence in France,” said Jim Gillespie, chief executive officer of Coldwell Banker Real Estate LLC.  “Obviously gaining a presence in Monaco, one of the world’s most desired destinations, is a major addition to Coldwell Banker Previews International®, our luxury marketing division that caters to the affluent.  We believe Laurent’s firm aligns very well with the Coldwell Banker brand, combining a  rich history with outstanding core values.”  

“We think the Coldwell Banker brand has great potential for growth in France and Monaco,” said Demeure.  “The France and Monaco property market is holding steady, despite the recent economic crisis.   In France, relatively low home prices, culture and ‘love for all things French’ continue to drive interest from foreign investors while Monaco obviously attracts interest from the affluent around the globe.

“We are very enthusiastic to further develop the Coldwell Banker brand in France and enter a new market in Monaco.  We believe that because we are in the same business as our potential franchisees this will allow us to develop unparalleled business relationships with partners that understand each other’s needs and expectations. All the team is highly motivated in making the Coldwell Banker system a highly innovative and highly consumer focused brand in the two countries and becoming the leader in the luxury properties market through Coldwell Banker Previews International.”

ACCESS TO WORLDWIDE REAL ESTATE

Some time ago I was approached by a company dealing in international real estate and invited to become a member.  They informed me that I had been recommended by my colleague, Mallina Wilson from Bellingham.  Flattered by the recommendation, I did considerable research and discussion, I partnered with Jenny Hill (who will handle the Eastside while I work the Greater Seattle area) and I joined their growing network.

The company is called Associated Realty of the Americas (AREA) and is headquartered in Arizona.  The company concept is a simple one:   select quality real estate professionals in major urban and resort areas around the world, tie them together and market their listings to all.

What makes the program unique is that we market to those who represent Buyers, not to the Buyers themselves.  (We don’t know anyone else who uses this paradigm.)

What I have come to learn from this is that my “reach” has grown in an extraordinary fashion.  By that I mean, instead of having to research who I will use as a referral agent outside the world of Seattle, this is already done for me.  

My expanded service reaches from the tip of Cabo to shores of the Carolina’s; from Panama to Palm Springs; from Vancouver to Toronto; from the U.S. to Europe and Asia:  I am connected.

When someone who is important to you is considering a transfer within the U.S., a foreign purchase or is a foreigner interested in owning residential or commercial property in Seattle, please let me know.  

Best of all, there is no cost to Buyers and Sellers to receive this first class service.

COLOR CORRECT . . . “Painting weather” is just around the corner!

The look of your home’s exterior can make a strong first impression, enhance curb appeal and help boost resale value, but choosing the right color can be tricky. The paint experts at Sherwin-Williams offer several helpful hints for selecting the best color for your home’s exterior.

First, examine homes in different neighborhoods to get an idea of how residents apply color to their own homes. Note the most appealing color schemes in the area and consider adapting them to your home. Choose a scheme that blends well with homes in your current neighborhood or subtly stands out.

Landscaping elements, such as flower gardens, flowering shrubs and trees that change color, can affect your color choice. For example, heavily wooded lots will make colors appear darker due to the shade, and the foliage tends to camouflage the home.

Elements of your home, such as roofing shingles, brick or stone accents, often have varying shades and hues that can serve as the foundation of your paint color choices. For example, a charcoal gray shingle could have flecks of gray-blue or gray-green that you can incorporate into the color scheme.

Be sure to examine color samples outdoors at various angles and at different times of the day. Consider buying small quantities of paint in desired colors and paint a section of the house where the body, trim and accent colors can be seen together.

Pay attention to the direction and intensity of the sun. Intense sunlight can wash out colors. While brighter colors may be suitable in Sunbelt cities, lighter, neutral tones often work better in other locales. Tinted and mid-tone neutrals are popular because they play off landscaping and other building materials.

White or light colors make a large home on a small lot appear even larger, while dark colors tend to make the same home look smaller but more substantial. Remember, light colors advance in space while dark colors recede. So if a home is located far from the curb, painting it a light color will make it look more prominent.

Easy Fixes for 4 Household Problems

Problems like squeaky stairs and oil stains on the garage floor are common household troubles and they’re relatively easy for a do-it-yourselfer to fix.

Lynda Lyday—carpenter, professional contractor, and a featured expert on the DIY cable network—provides dozens of simple fixes for common household problems in The Homeowner’s Manual (Que Publishing, 2006).

 While it’s always best to bring in an expert to correct big problems, Lyday provides these tips for capable home owners who want to try their own hand at a solution.

PROBLEM: Oil Stains on Garage Floor
Lyday’s solution: “You can remove most of a stubborn stain with a bit of elbow grease and scrubbing. First, remove the surface oil by sprinkling some cat litter on it to soak it up. Then clear away the cat litter and focus on the stain.

Make a paste of hot water and dry dish or laundry detergent. Use a stiff bristle scrub brush to scrub the area with the paste. Hose the area and let it dry. Another method is to use a product such as Spray ’n Wash on the stain for 10 minutes, along with a dry detergent.

Your last option is to spray on some oven cleaner. Use this sparingly, wash it down thoroughly, and keep children and pets away from it.”

PROBLEM: Leaky Faucets
Lyday’s solution: “Most faucet leaks can easily be fixed with a rubber washer, an O-ring, or seals—depending on what type of faucet it is. By fixing the problem yourself, you can save a good bit of money since plumbers can be expensive and will charge you a standard fee even if it takes only 10 minutes to fix the problem.”

PROBLEM: Nail Pops
Lyday’s solution: “Nail pops are a problem across the country. The term comes from the nails that hold the drywall to the studs actually popping out through the face of the drywall. This is from either a house settling or the wood studs drying out over time, squeezing the nail out of the wood and pushing it through the drywall.

The fix for this isn’t terribly hard, but it’s tedious because there are up to 32 nails in a 4-foot by 8-foot sheet of drywall. My suggestion is to pound the nail through the drywall to the stud. Then, just above it, place a drywall screw to hold the drywall to the stud, and finish it off with a few coats of spackle or joint compound. Finally, seal and paint it.

Most home-improvement stores also sell nail pop kits that can make this job easier.”

PROBLEM: Squeaky Stairs
Lyday’s solution: “The most common problems that occur in a staircase are the treads (horizontal surface of the steps) coming loose, which causes squeaking. Also common are the spindles or balusters coming loose. If you can get underneath the staircase, fixing the treads is easy.

You will need to attach an L bracket from the underside of the tread to the stringer (the long piece of wood that connects the treads and runs diagonally up the wall). If you can’t get underneath the staircase, you’ll have to make the repair from above.

Squeaky stair kits are available that allow you to make this fix even through carpet. Otherwise, you can secure the tread to the stringer with a trim screw.”

READY FOR PRODUCTIVE EXERCISE?

Care on the ladder required!