Archive for September, 2008
All this and no gas too?
September 29th, 2008 categories: My Market Opinions
 
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Lordy, Lordy, what a week! Between all the financial meltdowns, the Presidential debate that almost didn’t happen and lack of gas reminiscent to the mid-70’s, my head is swirling in a popular term known as “shock and awe”. Actually, the gas situation is easing up now, I didn’t see any lines and gas prices were around $3.99. People who know that I’m a Realtor are asking me now more than ever “How’s the real estate market”? People just want to know, even if they’re not in the market to buy or sell, they want to know the answer from someone who’s close to it all. Afterall, the housing market is the “Big” story isn’t it?
I’ve been reporting detailed statistics here on my blogsite, and the numbers are definitely down in no uncertain terms. But the fact of the matter is this,  if you didn’t buy your home at the peak of the market, meaning in the last 2-3 years, you’re probably still ahead of the game in equity. I think it’s important to remember that there was a HUGE runup in house values over the last several years.  The market is finally settling down from that craziness, and I think we can all admit that it was crazy fun while it lasted, but it’s back to reality and the reality is the Asheville area is holding up pretty well in contrast to many other areas who also experienced the upward volatility.
As a buyer you’ve got to be wondering what to do and how to do it, meaning what kind of mortgages are out there? Rates have been low for quite awhile and since the takover of Fannie Mae and Freddie Mac there has been a decrease in rates, along with excellent inventory and deep reductions in asking prices, the buyer is King! There’s the First Time Buyer Tax Credit (which I’ll go into detail on one of my next posts), which helps the buyer with a $7500 federal tax credit. For those of you who want or need to refinance, FHA is coming out this week with the FHA Replacement Mortgage plan. If you’re home is your primary residence, you may qualify to refinance up to 90% of your mortgage at TODAYS CURRENT VALUE! So, for those owners who’s current value is LESS than when you first purchased, it will allow you to refinance to a lower payment. HERE’S THE CATCH – but it’s not a bad one. Once you sell the home, if you make a profit you’ll be splitting the profit with FHA. As far as I’m concerned, this is going to help a ton of people. Better to share a profit than be foreclosed on, right?
If you’re in the market to buy a home, you’ll be able to take advantage of some of the best home bargains in years!! And I have one of the best Mortgage men in the field here at Beverly-Hanks, Cameron Lewis! Call or email me anytime and I’ll pass his information on to you.
I hope you’re not sitting on the fence worrying if the market has bottomed out? Like I always say: try to time the market and the market will win every time! If Warren Buffet is buying, so should you . . .!!!
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Do you know your Asheville “Green Building” certifications?
September 17th, 2008 categories: Building Green
 
As awareness grows on the impact we make on this earth and it’s environment, I think many of us are more interested in what we can do to make a difference. The Green Building business is booming, no, exploding! So today I’m going explain what some of the terms mean. A recent wave of certification programs has emerged to prevent greenwashing, and to provide a marketing edge for builders who are willing to make human health and enviroment top priorities.
In Asheville, there are three certification programs for green building:Â Energy Star Homes, North Carolina Healthybuilt Homes and Leadership in Energy and Environmental Design for Homes.
Let’s begin with a name I think most people know, Energy Star. It’s become a very common household name for appliances, but what is an Energy Star Home? Similiar to Energy Star appliances, the standards are created by the Department of Energy and inspected by a third party. Energy Star home go beyond just efficient appliances: Each house is built to be at least 15 percent more energy efficient. Each home is first computer-modeled to determine its energy useage, then inspected by a nationally trained home-energy rater to ensure it will perform as planned. Energy Star homes are more comfortable, durable and energy efficient. A plus for the homeowner, Progress Energy and Duke Energy currently offer utility-rate discounts for certified Energy Star homes.
The N.C. HealthyBuilt Homes Program was created in 2004 through a collaboration between the N.C. State Energy Office, the N.C. Solar Center and building professionals throughout the state. Every HealthyBuilt home is also an Energy Star home. These homes are divided into seven sections: site; water; building envelope; comfor systems; appliances; lighting and renewables; indoor air quality; and materials. Three years since it’s inception, there are approximately 100 HealthyBuilt homes certified, and 492 currently under construction in Western North Carolina.
LEED is a green-building rating system created by the U.S. Green Building Council. The LEED Rating System is a nationally recognized standard for green building, but has until recently primarily focused on commercial construction. After years of development, pilot runs and review, LEED for Homes is a voluntary rating system, similar to the statwide N.C. HealthyBuilt Homes program. As of October 2007, 134 homes were certified and 336 were registered across the United States.
For more detailed information about the certification programs:
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MORTGAGE WEEK IN REVIEW
September 15th, 2008 categories: Real Estate News
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The first week of government control of Fannie Mae and Freddie Mac passed with little disruption in the mortgage market. Mortgage rates fell early in the week on the takeover news and then held at the lower rates for the rest of the week.
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Somewhat overlooked, this week’s economic data was generally favorable for mortgage markets. The August Producer Price Index (PPI) inflation data reflected the drop in oil prices and showed a large decline from July. Core PPI, which excludes food and energy prices, matched the consensus forecast with a small increase. August Retail Sales were much weaker than expected, and Jobless Claims remained at elevated levels. Mortgage investors liked the signs that inflation may have peaked and considered it favorable news for mortgage markets that the economy and labor market are displaying weakness.
The main event this week will be Tuesday’s Fed meeting. No change in rates is expected, but investors will be very eager for fresh news on the economy and financial markets. The most important economic data will be the Consumer Price Index (CPI) inflation report on Tuesday. CPI looks at the price change for those finished goods which are sold to consumers. Industrial Production, an important indicator of economic activity will come out on Monday. Housing Starts will be released on Wednesday. The Empire State and Philadelphia Fed regional manufacturing indexes will round out the schedule. Investors will also be watching for fresh news about the condition of the investment banks.
Contributed by:
Cameron M. Lewis, Beverly-Hanks Morgage Services
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Many will profit from the Fannie-Freddie failure – Will you!
September 11th, 2008 categories: Market Updates
Mortgages are in the news again today . . . but this time, the news is good! Especially for people looking to buy or refinance a home, as interest rates have dropped to the lowest levels see since April.Â
You’ve probably heard that Fannie Mae and Freddie Mac were taken over or “bailed out” by the Federal Government over the weekend. The announcement came as the government felt that both of these institutions were potentially unable to meet their obligations. These agencies must pay off maturing Bonds every month, and they do so by selling new Bonds. But during the last twelve months, investor appetite to purchase new mortgage-backed security Bonds has deteriorated. As such, it has become more difficult for Fannie and Freddie to replenish capital to fund more loans. If both Fannie and Freddie became insolvent, the housing market as well as the mortgage market would come under further pressure.Â
With the Treasury stepping in to provide a “backstop” for the mortgage giants, investors now have the confidence to purchase Mortgage Bonds. The greater interest has helped lower interest rates today.
As always, if you want to discuss this news further and what it means to you and how you can benefit, my mortgage man at Beverly-Hanks is ready and available to meet with you in person, or have a friendly phone conversation. Cameron Lewis, Mortgage Consultant, (828)258-1945 – clewis@beverly-hanks.com
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What to do when facing ARM loan reset?
September 9th, 2008 categories: Real Estate News
Through the end of this summer, over 300,000 subprime adjustable rate mortgages will “reset” from lower introductory rates to current market rates. The change in rate can equate to a tough-to-stomach bump in monthly payments, especially for loans that feature extra-low “teaser” rates.
The Refinancing Option:
Choosing to refinance has two main benefits :
Lock into a Fixed Rate – Why worry about periodic rate resets and rising mortgage rates if you don’t have to? Refinancing gives owners the chance to lock into a fixed rate for the long term.
Lower Rates – While current rates are higher than they were a few years ago, from a historical perspective they are still considered low. Most economists believe that national averages of long-term rates will hover within a point or two of 6 percent through the end of the year.
Who Qualifies for Refinancing
Tightening requirements for new home loans have to some degree extended to refinancing as well. The best candidates for refinancing are owners with good credit, income documentation and solid equity in their homes. Refinancing is typically a better option for owners who plan to stay in the home for at least several more years.
Who Doesn’t – Owners with low credit scores
In recent years some buyers were able to obtain subprime loans with credit scores in the mid 500’s. Owners who haven’t raised their credit scores into at least the mid to high 600 range will find it hard to obtain refinancing. Even scores in the high 600’s, which in the near past had been considered fairly good, are no guarantee of smooth sailing (Fannie Mae and Freddie Mac announced in the spring that borrowers with rates below 680 will need to pay a surcharge on top of the price of the loan).
Owners With Little Equity – To protect their investments, many lenders have been increasing the amount of equity an owner must have in their home. Many buyers may have purchased their homes with little or no money down, or perhaps opted for an interest only loan. In either case the amount of equity in the home may be below lender’s acceptable levels. Homes that have either not appreciated or that have lost some value will be even harder to refinance.
How to Survive the Reset
Consolidate other debt – Consider seeing a credit counselor if you have multiple sources of high-interest debt in addition to your home loan. You may be able to re-structure these into one lower-interest loan, enabling you to more easily make the higher home-loan payments
Cut expenses – While it may not be in our nature, we can often make do with less. Look first for monthly expenses that qualify as luxuries (cable or satellite TV, high-speed internet, etc.). Cut down on meals away from home and look for other ways to shave unnecessary spending from your budget.
Start an Extra Savings Account – Even if you can afford to make payments after an initial reset, the best way to prepare for potential rate increases in the future or unforeseen circumstances is to start setting aside a little additional money, just in case.
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Fall 2008 Color Forecast for the Blue Ridge Mountains
September 5th, 2008 categories: Area Attractions
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As I sit here writing this post, it’s an absolutely ideal day weather-wise and I’m looking out over a very green view that still looks like we’re in the middle of summer! Well, that’s certain to change in just a few short weeks and it’s good news for color hunters this year.
Foliage experts are reporting favorable conditions for beautiful, spectacular color for this 2008 Fall season. In fact, it could be the brightest leaf color show in recent history! According to Dr. Gary Walker, a biology professor at Appalachian State University, we are still in drought conditions in the western part of the state (which is suprisingly good for fall color), although there was enough rainfall this spring to keep the trees healthy. “Slight drought tends to improve the vibrancy of leaf color in the fall, so we should see spots of very nice color this year,” said Dr. Kathy Gould Mathews, assistant biology professor at Western Carolina University. “A sharp cooling of temperatures in September and October would really cause the colors to burst, as this stimulates anthocyanin (red pigment) production.”Â
With elevations that range from 1,500 feet in the valleys to 6,684 at Mount Mitchell, the highest peak east of the Mississippi River, the Asheville area is a fall leaf kaleidoscope from late September through early November as the foliage color beginning at the highest elevations slowly creeps down the mountainsides. Color hunters hoping to find the perfect “peak”? time for fall foliage are surprised to learn that Western North Carolina boasts one of the most extended fall foliage seasons in the nation due to varying elevations, microclimates and nearly 100 species of deciduous trees.
To help you locate the perfect autumn vista, weekly fall color reports for the mountains of Western North Carolina are posted by the Asheville Convention & Visitors Bureau at FallintheMountains.com and a toll-free hotline 800-257-1300. ENJOY!
ps – Photo taken by my good neighbor and retired Superintendant of the Blue Ridge Parkway – Dan Brown!
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Capital Gains formula
September 3rd, 2008 categories: Interesting Tidbits
Here is the formula used to calculate the capital gains tax on a home that is now being occupied as a primary residence, but was previously non-owner occupied:
CAPITAL GAINS EXCLUSIONÂ =Â PROFIT FROM SALE OF HOMEÂ Â * NUMBER OF DAYS THE HOME WAS PRIMARY vs NUMBER OF DAYS THE HOME WAS OWNED.
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 So for example: I have owned my home for 4 years. However, I have only occupied it as my primary residence for the past 2 years. If upon selling my home my profit was $100,000 then here is the calculation to determine the percentage of my profit that is taxable: $100,000  * 730/1460 =   $50,000 Thus, $50,000 of my $100,000 in profit would be subject to the capital gains tax.
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