Adding Value by Dennis O'Hagan

INTERESTING Stats on which age group(s) own & which ones rent...

The Ownership Generation Is Aging...

RISMEDIA, Monday, March 03, 2014— Seniors are still the age group with the greatest homeownership rate, far exceeding the national rate for all age groups even into their eighties.

According to a new report from Employee Benefit Research Institute (EBRI), Americans age 50 and over are predominantly homeowners, and are less likely to rent until they hit their seventies.

At age 50, almost 73 percent of households report living in houses they own, a rate that increases to 81.2 percent by the age of 65 and then declines slightly to 77.7 percent by age 75, at which point ownership rates decline steadily.

At age 85, almost 70 percent of households live in their own houses, but that drops to about 59 percent and 54 percent at ages 90 and 95, respectively, according to the analysis, based on data from the University of Michigan’s Health and Retirement Study (HRS), which is sponsored by the National Institute on Aging. The report was based on data from the period 1998–2010.

Rental trends show the exact opposite pattern. Renting reaches a relatively high mark at age 50 (almost 23 percent), but drops to 15.5 percent by the age of 65. After age 75, renting steadily increases. Also, the percentage of elderly living with friends or family increases from 8.7 percent at age 80, to 17.9 percent at age 95.

For more information, visit www.realestateeconomywatch.com.

Did You Know???

Does a landlord have to rekey the locks for his own home when he moves out and Leases it to a tenant?

I listed a house for lease where the owner just vacated that house and moved to a new home. The owner thinks he doesn't have to rekey the locks since he has been the only occupant of that house since it was built. Is the landlord required to rekey the locks when we lease the property?

Yes. The Texas Property Code requires that a landlord rekey the locks no later than the seventh day after each tenant turnover date. "Tenant turnover date" is defined as the date a tenant moves into a dwelling under a lease after all previous occupants have moved out. The term does not include dates of entry or occupation not authorized by the landlord. This means that your client, as the landlord and last occupant of the property, would have to rekey the locks no later than the seventh day after a new tenant moves into the home.

Economics 101 with "The Real Estate Guy"...

QUESTION:  What drives the economy?

ANSWER:  The Real Estate Market.  If people aren't buying big ticket items like a home then the economy isn't moving.

QUESTION:  If interest rates are still slow why aren't people buying homes?

ANSWER:  There is too much unemployment and those that are employed are concerned that they will be the next one laid off.

QUESTION:  How can we fix this?

ANSWER:  If our current administration would focus on what is important to the American Public and help create more jobs here in the US things would improve.

All that said below is a recent article about the current state of employment...

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January Job Growth Remains Anemic

Author: Tory Barringer February 7, 2014 0

 

The Bureau of Labor Statistics’ (BLS) Friday jobs report shows another disappointing month of growth in January—and this one can’t all be blamed on the weather.

According to the government’s latest data, total nonfarm payroll employment rose by 113,000 last month, adding more bleak numbers to December’s barely revised growth of 75,000.

The unemployment rate edged down slightly to 6.6 percent. Since October, the jobless rate has fallen more than half a percentage point, largely thanks to declines in the number of people counted as being part of the labor force.

There’s a little bit of good news, though: After falling in December the civilian labor force participation rate inched up slightly to 63 percent, with 499,000 people entering the work force.

With the next Federal Open Market Committee (FOMC) meeting to be held in March, it remains to be seen how January’s data will influence the Federal Reserve’s stimulus program.

In its last meeting, the committee brushed aside December’s dismal report as an anomaly in the midst of otherwise active economic growth. However, with the latest data indicating weakening, Fed officials may feel compelled to hold off on future cuts to asset purchases.

Despite the cold conditions, the construction sector fared particularly well last month, growing by 48,000 jobs to offset a decline of 22,000 in December. Residential building jobs grew by 13,000.

Growth also occurred in manufacturing (+21,000), wholesale trade (+14,000), and professional and business services (+36,000).

Meanwhile, federal government employment continued to trend down, losing 12,000 jobs throughout the month.

 

Pros and Cons of Living Within a Homeowners Association...

Ask two different homeowners what they think about living in a community with a homeowners association and you may see one of them scowl and another one smile.

The difference of opinion on homeowners associations, or HOAs, depends on several factors, including individual personalities and preferences and the quality of the particular HOA. Rules and dues vary but, in general, homeowners who live in an HOA must abide by its regulations and pay a monthly, quarterly or annual fee that pays for management and maintenance of the community.

HOA Benefits

Many homeowners prefer to live in an HOA for several reasons, including:

• Community appearance: Homes within an HOA must meet the standards set by the association or face a fine, so you’re less likely to see unkempt lawns, peeling paint or a garishly painted house. Some HOAs have a design review board with the power to approve any changes to your home’s exterior, and which establishes a color palette for exterior paint and trim. Many HOA’s have rules about how many cars or even what type of vehicles can be parked on your property. For example, they may ban commercial vans or RVs.
• Low maintenance: Depending on the HOA, services such as trash and snow removal and lawn care are handled by the association, leaving less work for the homeowner. Typically, common areas are maintained by the association.
• Recreational amenities: While not all HOAs have swimming pools and tennis courts, many offer a range of amenities such as a community center, walking trails, sports courts and playing fields reserved for residents.
• Association management: If you have a problem with your neighbor’s dog barking, loud parties or a dispute over a tree, you can ask the management to handle the issue rather than getting directly into a spat with the homeowner next door.

Living Within an HOA

For some buyers, the idea that a management association can tell you when you can put out a decorative flag or that you can’t park your truck in front of your property is a deal-breaker. If you have a concern that something that’s important to you, such as your ability to run a business from your home, could be banned by HOA rules, then be particularly careful to read all the regulations before you buy a home in a community with a homeowners association. This doesn’t mean you can’t buy at all within an HOA, but you’ll have to find one with regulations that meet your requirements.

HOA regulations are usually set by a committee or board of directors and then enforced by a paid management company or a group of volunteers. You can become involved with the HOA in order to have a voice in the decisions being made. Homeowners can request a rule change or an individual waiver, but there’s no guarantee that your request will be granted.

HOA Fees

HOA fees vary as much as HOA regulations and depend on multiple factors such as the amenities in the community and which services are covered by the fees. When you’re buying a home, you need to compare HOA fees from one community to another based on what they cover. You may find that the HOA fee includes a gym membership so you can spend less on a private gym. You should also decide if you’ll use the amenities you’re paying for, such as tennis courts or a swimming pool. Keep in mind, however, that the presence of these amenities can add to your home’s value, even if you don’t directly take advantage of them.

Many homeowners appreciate that HOAs often maintain higher standards for a neighborhood’s appearance, but there’s no question that you need to understand the regulations and costs in every community where you’re considering buying a home.

Study Finds Real Estate Pros Are True to Their Occupational Creed...

It stands to reason that if real estate professionals believe homeownership is a good idea, then they would practice what they preach and own their own homes instead of renting. But do they? Trulia’s chief economist, Jed Kolko, has crunched the numbers from Census data between 2007 and 2012, and it turns out, the answer is “yes.”

Kolko discovered that 84.5 percent of real estate agents owned their own homes during the 2007-2012 period. By comparison, the homeownership rate for people in other professions and in the same age and income demographic as the agent population observed was 80 percent. The national average for homeownership across all ages, incomes, and occupations stood at 70.1 percent over the time period studied.

Furthermore, homeownership rates were higher than presumed for other real-estate-related occupations, such as appraisers, construction managers, and architects—all of which claimed a rate at least two percentage points higher than expected based on their demographics, income, and

location, according to Kolko’s assessment. Real estate appraisers and assessors actually beat the agents in terms of homeownership, with a score of 87.9 percent.

Why is homeownership higher among real estate pros? Kolko suggests two possible reasons.

First, real estate professionals probably believe in the value of homeownership more than others do, and they apply that belief to themselves. And second, real estate professionals have the advantage of knowing the ins and outs of their local markets, which makes buying and selling easier (or more profitable) for them than for people in other occupations.

Trulia’s study also revealed a few other surprises regarding homeownership percentages among other occupations. For instance, police officers and firefighters are much more likely to own homes than expected, partly because of help from credit unions and programs like Homes for Heroes.

Homeownership is also higher than expected for hairdressers, hairstylists, cosmetologists, and miscellaneous personal appearance workers. Many of them see customers at home, which might be easier for those who own rather than rent.

On the other hand, the study also uncovered certain occupations where practitioners are less likely to own a home than one would expect considering their demographics, income, and location.

It turns out that chefs, writers, and software developers are below the curve in terms of homeownership. Oddly, economists were found to be almost two percentage points less likely to own a home than expected.

Fixed Mortgage Rates Drop to Four Month Low...

RISMEDIA, Monday, October 28, 2013— Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates hitting their lowest levels since this summer amid market speculation that the Federal Reserve will not alter its bond buying purchases this year.

• The 30-year fixed-rate mortgage (FRM) averaged 4.13 percent with an average 0.8 point for the week ending October 24, 2013, down from last week when it averaged 4.28 percent. A year ago at this time, the 30-year FRM averaged 3.41 percent.

• The 15-year FRM this week averaged 3.24 percent with an average 0.6 point, down from last week when it averaged 3.33 percent. A year ago at this time, the 15-year FRM averaged 2.72 percent.

• Survey shows the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.00 percent this week with an average 0.4 point, down from last week when it averaged 3.07 percent. A year ago, the 5-year ARM averaged 2.75 percent.

• The 1-year Treasury-indexed ARM averaged 2.60 percent this week with an average 0.5 point, down from last week when it averaged 2.63 percent. At this time last year, the 1-year ARM averaged 2.59 percent.

"Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “The weak employment report for September added to this expectation. The economy added just 148,000 jobs, which was below the market consensus forecast and less than the 193,000 jobs increase in August."

For more information, visit www.FreddieMac.com.

Are Housing Freebies Really Free???

RISMEDIA, Saturday, October 19, 2013— The housing market has been making positive strides over the last year, but with rising mortgage rates and higher prices, some are worried about maintaining the market. To attract new buyers, some home builders have started to offer cash incentives, upgrades and mortgage perks. Don Frommeyer, housing market expert and president of the Association of Mortgage Professionals (NAMB), offers his insights with a cautionary tone for potential home buyers.

“Monetary incentives and physical perks are very appealing to the customer. Who doesn’t want free appliances or part of their down payment covered?” says Frommeyer. “However, you have to make sure these costs aren’t being hidden elsewhere in the mortgage contract.”

According to Frommeyer, home builders can work directly with banks and loan institutions to move costs and fees. For example, banks and home builders often promote mortgages without any closing fees. While this seems like a great steal for home buyers, in reality the bank most likely increased the interest rate to cover the closing cost and in the end the home buyer will pay much more over the course of the mortgage. Alternatively, through federal regulations mortgage brokers must directly disclose of every fee and cost.

“There are closing costs on every loan and someone has to pay them, it’s just a matter of who is paying them and where the money is coming from. Mortgage brokers don’t have the capability to remove closing fees and rearrange costs elsewhere in the contract, which gives the impression that our loans are more expensive,” continues Frommeyer. “While upfront this may hold some truth, there are no hidden costs with a mortgage broker and in the long run home buyers end up saving thousands of dollars.”

For more information, visit www.namb.org.

5 Reasons Investing in Outdoor Space Pays Off...

RISMEDIA, Tuesday, October 15, 2013— Increasingly, homeowners around the nation are investing in their outdoor living space. In fact, the majority of homeowners surveyed by American Express revealed that they have plans to engage in some sort of home improvement project in the next year. The outdoor living and landscape sector has grown into a $60 billion per year industry, according to IBISWorld, a market research firm. Investing in outdoor living provides a good return on investment for most people, making it an ideal home improvement project.

“Many people are finding that they want to get back to spending more time outdoors,” explains Bob Dallas, the chief executive officer at UltraOutdoors.com. “People also want to put money into their home improvement projects where it is going to pay off. Outdoor living is a logical choice that fulfills both of these needs.”

Here are 5 reasons investing in outdoor space pays off:

Resale value. HGTV claims that homeowners recoup 65 - 90 percent  just by adding a deck. Experts agree that investing in your outdoor living space will add to the value of your home. When you put money into this area, a lot of it will come back to you, when and if you decide to sell your home. Buyers will like the fact that your home includes nice outdoor living features and spaces.

Personal enjoyment. Most people could use a place to unwind and de-stress. Having a relaxing outdoor living space will create an environment where the family can relax together and enjoy each other’s company.

Save money. Consider how many times a family leaves home in order to seek out something that could have been in their backyard. This includes leaving to use a swimming pool or going to the park. Create the environment you are seeking in your own backyard, and save the gas and fees of taking your recreation elsewhere.

Entertaining opportunities. Having an ideal outdoor living space creates an oasis for entertaining. Whether hosting a holiday gathering, Friday night s’mores around a bonfire, or an outdoor picnic-style potluck, you will have a great place to pull it off.

Benefits of nature. There are mounds of research demonstrating the many benefits of spending more time outdoors. These include such things as reducing stress, improving mental clarity and mood, improving concentration, and more. Many people find that spending time outdoors is the cheapest form of therapy there is, and it’s good for all ages.

“The pay-off from investing in an outdoor living space comes in many forms,” added Dallas. “Not only is it good for the value of your home, but it’s a solid investment for creating great recreation and entertainment spaces, and giving your family a relaxing area where they can re-charge their batteries.”

There are many outdoor living options to choose from, including outdoor fireplaces, kitchens, pools and water features, patios and decks, gazebos, sitting areas, and landscaping. The key to having the outdoor oasis that fits your needs is to work with a professional to design a custom plan.

Source: www.UltraOutdoors.com

DFW pre-owned home sales up 20 percent in 2013...

Through the third quarter, pre-owned home sales in North Texas are up 20 percent from 2012 levels. And median sales prices are 10 percent higher than they were in the first nine months of last year.  This year’s increase in home sales and prices has propelled the Dallas-Fort Worth pre-owned home market to above where it was before the recession.  But with mortgage rates rising, analysts wonder how much longer the large double-digit gains will continue.  “I keep thinking it’s going to slow down, but it hasn’t so far,” said Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University. “Yes, the rates are higher and the builders may be feeling it a little, but really, the rates are still very good and don’t seem to be hindering sales much.  “Also, if people expect the rates to continue to increase, they’ll buy now rather than wait.”

- Dallas Morning News, October 8, 2013

Young Americans Positive About Home Buying...

Housing market trends are showing that younger Americans, specifically those who are part of Generation Y, are becoming interested in owning their own home or condo; however, whether or not their finances can handle the additional burden is another situation.

According to a study conducted in May by Harris Interactive, 41 percent of Americans aged 18-34 display an interest in purchasing a home. A subset of that group, 17 percent men and 6 percent female, say it’s their “shaky finances” due to large student loan debt and a poor job market that are preventing them from pursuing their dream at this time.

With mortgage interest rates at record lows, only 5 percent of those who actually planned to buy a home or condo this year opted to wait, feeling that they just couldn’t afford the monthly mortgage and taxes after carefully reviewing their financial situations.

Those members of Generation X, the group just ahead of the Millennials, are seeing a ore mixed reaction on home buying desires, fueled mostly by their current arital status and family obligations. Only 20 percent of Gen Xers who were eparated, divorced or widowed expressed an interest in purchasing a home, hile 31 percent of married respondents expressed an interest.

So what do these rowing percentages of home buying interest of these two groups mean? As the
housing market continues to rebound and dormant, unpurchased houses, which have een sitting for months, begin to see life as members of these two generations once again begin purchasing homes, market confidence will continue to grow and the overall housing market will continue to strengthen.