Thursday, July 21, 2011

Gilbert is 5th in U.S. in site's safety ranking

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Gilbert is the nation's fifth-safest city, says businessinsider.com, a 2-year-old U.S. business news site that looked at 2010 violent-crime rates across the country.

VIOLENCE LOW
The site said Gilbert had 95 violent crimes per 100,000 people in 2010. It also said Gilbert's average of 28 robberies per 100,000 people was almost 10 times less than the national average. Violent crime includes murder and non-negligent manslaughter, forcible rape, robbery and aggravated assault.

ONLY 2 IN VALLEY
Gilbert was the only Arizona community in the site's top 10 safest cities and one of only two in the top 15. The other was Surprise, which ranked 13th, with 115 violent crimes per 100,000 people and no homicides last year.

OTHER SAFE PLACE
The safest community in America, businessinsider.com said, is Irvine, Calif., which had 55 violent crimes per 100,000 people, no homicides and 30 robberies per 100,000 people.

Other communities ahead of Gilbert in the list include, in descending order, Temecula, Calif.; Cary, N.C.; and Murietta, Calif.

Rounding out the top 10 were Round Rock, Texas (6); Frisco, Texas (7); Simi Valley, Calif. (8); Bellevue, Wash. (9); and Orange, Calif. (10).

SAFER GENERALLY
Violent crime nationwide fell 5.5 percent in 2010 from the previous year's levels, business inside.com noted. The FBI's yearly report on crime in America for 2010 indicates that while murders were up in the Southeast Valley generally last year, other violent crime either stayed the same or declined.

Even though businessinsider.com called Gilbert the nation's fifth-safest city based on violent-crime rates, the FBI report indicates violent crime was up by 3.5 percent in Gilbert last year over 2009. Read more about that story.

TOWN'S REACTION
"For our local public-safety heroes and our entire community, we are honored to receive this national recognition as the fifth-safest community in the country," said Mayor John Lewis, "Public safety has always been and will continue to be a Gilbert priority."

Calling the ranking "an important honor at a time when Gilbert is becoming known for its biomedical industry," town spokeswoman Beth Lucas said, "Gilbert has long been honored for its safe, family-friendly atmosphere."

Residents participating in the 2010 Heads of Households Survey list safety as one of the reasons they continue to rate the town high, with a current approval rating of 98 percent. In the survey, 95 percent of residents said they felt safe from crime while driving or in their homes in Gilbert.

Tuesday, July 12, 2011

First Person: Why We're Pumped About Our Underwater Home

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After we purchased our new home in 2005, we spent the first year stunned by the $68,000 increase in the house's value. Little did we know that in just six short years the value would turn the other direction. Our house value has since slid an almost identical, but negative, $70,000.

Even though we owe more money on our mortgage than our house is now worth, we have discovered a positive side to plummeting house values, including a huge reduction in our property tax bill.

Contrary to reports that the only people who are underwater homeowners are those who put little or no money down, we saved and put down a full 20 percent on our home.

According to Zillow.com, half of homeowners who purchased their home in 2006 owe more than their home is currently worth. For people like us who purchased in 2005, the percentage of people who are underwater in their homes is 42 percent.

If you like your house, and don't have to relocate for work-related reasons, staying put can be a wise financial move. Here are some of the surprising advantages of staying in our underwater home in Florida:

Affordability of payment
Since we did not overextend ourselves when purchasing the home, we are still able to afford to make the monthly payment. In fact, it's affordable enough to pay off the mortgage in half the time.

Decrease in property taxes
By visiting Zillow.com I was able to plug in my address and get a quick summary of how much we paid in property taxes each year. I was pleased to see our property taxes have gone down. We paid $3,764 in 2006, but only $1,930 in 2010.

Low-interest fixed rate loan
We started with a low interest rate of 5.99 percent, but because of the housing crisis our mortgage company offered a free refinance a few years ago. We were able to lock in at an even lower rate for a 15-year fixed rate mortgage.

Security of one home for life
I love the fact that we can enjoy our house for what it was meant to be: our lifelong home. It was not intended to be an investment we could flip in a matter of a few years. According to Thomas J. Stanley, the author of "The Millionaire Next Door," most millionaires own the same home for more than 30 years. Being "forced" to stay put means you can focus on paying off your mortgage instead of worrying about fluctuating values and the high costs of moving.

Anticipation of a housing recovery
If there is one thing I bank on in life, it's the fact that history always repeats itself. Yes, we purchased our new home for about $101 a square foot, and now it's only worth an estimated $62 a square foot. However, I know we will be financially ahead by staying in our starter home for the long haul. Housing values do change. A friend's home was worth only $119,000 a year ago, but shot up to $150,000 recently because of expensive new homes being built in the area.

Fixing it up just for ourselves
Pumping money into a home that is underwater may sound like financial suicide, but I'm not afraid to fix it up. We opted for the sub-$10,000 kitchen remodel that fit our budget. It also happens to be that our budget-friendly improvements won't outprice other homes in our subdivision when we do decide to sell. We also spent $2,000 on landscaping, which increased our home value by $20,000, according to a local Realtor.

Perhaps the biggest reason I'm pumped about our house is its rental value. If we had to move for a job transfer, we could rent out the house at an amount that is more than our monthly mortgage. Renting here has now become more costly than owning, even when what you own is an underwater house.

Friday, July 8, 2011

From tragedy, a fairytale wish comes true (July 7, 2011)

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At just 6-years-old, Diamond Marshall has stalwartly endured more than her share of tragedy. Her vivacity inspires not only her father, step-mother and sister, but also her caregivers at the Alberta Children's Hospital, and the dream-makers at the Children’s Wish Foundation.

On Thursday, Children's Wish granted this young Calgary girl her wish of meeting a real '‘princess': as the Duke and Duchess of Cambridge arrived in her city, Diamond -who is named after Princess Diana – will present the Duchess a bouquet of flowers.

Diamond's challenges began long before she was diagnosed with Stage 4 cancer last December, at age 5. When Diamond was just 18-months-old, the life of her mother, Memory, was claimed by the same unforgiving disease.

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Phoenix area housing market gaining ground, new data show

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Frenzied home-sales activity in June proved earlier speculation about a third dip in metro-Phoenix home prices to be untrue.

The median price of an existing home in the region climbed to $118,950 last month, after hovering at a real-estate crash low of $115,000 for six straight months, according to the Information Market, a realty-data company.

The rate of home sales also rose, with a nearly record 9,450 used and new homes sold in Maricopa County in June, the largest monthly number since the end of housing boom in December 2006. And that number doesn't include the more than 1,300 homes sold at foreclosure auctions by lenders.

The home-sales market has been dominated by foreclosure homes, but foreclosures also declined. The region had 2,000 fewer active foreclosure filings in June than May. At the same time, the number of homes for sale was down nearly 10 percent from May.

The combination means a decrease in inventory, as more foreclosure homes are resold and fewer homes come on to the market to replace them. That drop in supply helps trigger an uptick in prices.

Market indicators started to show signs of a recovery in March. The recent numbers are a further confirmation.

"Supply continues to drop while demand is extremely strong," said real-estate analyst Mike Orr, who publishes the online daily "Cromford Report."

He said there are still some market watchers who believe there is a large "shadow inventory" looming over Phoenix. These homes, which aren't in foreclosure but could soon be taken back by lenders, could flood the market and drive prices down again. But his figures show Phoenix's shadow inventory has been steadily falling since November 2010 and won't impact prices.

Who's buying in Valley
Most of the buyers of Valley homes continue to be investors, according to public records.

More than 1,300 foreclosure homes sold in June at what are known as trustee-sale auctions, the Information Market said. Those sales aren't included in the overall tally for metro Phoenix's home sales because public documents record them differently. But those auction sales definitely contribute to a shrinking inventory and higher home prices.

Many auction buyers are paying cash, and bidding wars are typical now as people try to buy the houses on the courthouse steps, hoping either to turn them into rentals or flip them for a quick profit.

The new-home market continues to struggle. Housing analyst RL Brown, who publishes the "Phoenix Housing Market Letter," said the wide disparity between foreclosure resales and new-home prices will continue to hurt the homebuilding market.

Short sales in the Valley climbed almost 50 percent in June from May, according to the Arizona Regional Multiple Listing Service. In these sales, lenders agree to let distressed borrowers sell a home for less than they owe, ensuring the bank gets some money rather than having to foreclose. The increase in these sales signals that more lenders are working with buyers to avoid foreclosure.

Some real-estate agents are finding it more difficult to find homes for clients to buy because listings are steadily falling.

Julie Bieganski, a Phoenix real-estate agent and investor, tracks the drop in listings every day and said it's much tougher to find deals on homes for herself and clients.

On July 1, Orr's data showed 28,827 active listings across metro Phoenix, down 8 percent from June 1 and down 30 percent from July 1, 2010.

The forecast for July
June has traditionally been a strong month for the housing market as more families look for homes before the school year starts. But investors are motivated differently, more by the timing of the short sale or foreclosure auction they are interested in.

Last year, a federal tax credit spurred many home sales, but that incentive is gone. Now, because of tighter lending guidelines, it can be more difficult for traditional buyers who are trying to obtain mortgages.

However, if the sales activity on June 30 is any sign of what is to be expected of July, the Valley's housing market could be in for another strong month. A record 2,216 homes sold on that day, more than any other single day in history.

"I was not surprised the median home price increased. It was something we were expecting," said Tom Ruff, a real-estate analyst with the Information Market. "July could very well be a landmark month as some buyers start to realize what the investors have known for quite some time. Historically low prices coupled with historically low interest rates make a very strong tonic."

Thursday, July 7, 2011

9 Items Homebuyers Desire in 2011

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Today's homebuyers want it all.

Some items on the shopping list: a home in great condition with rooms that can do double duty. Areas that mingle indoor and outdoor living -- patios, porches, decks and outdoor rooms -- are always a plus. And so are those features that offer a little luxury, like garden tubs, first-rate appliances and high-dollar countertops.

They're also going back to basics: searching for solid, well-maintained properties that will give them their money's worth.

"I think this year they're buying properties that are in good mechanical condition that have inherent value," says Ron Phipps, president of the National Association of Realtors.

But more than anything, buyers want to drive a hard bargain.

They want "great deals," says Patricia Szot, president of the MetroTex Association of Realtors. "And no matter where a seller prices their property, they're looking to negotiate."

Here are nine items popular with buyers this year:

Homes in Good Condition
Buyers demand homes that are well maintained, Phipps says. "There's not a lot of flexibility in that." The attitude is: "I'd rather spend the money getting into the house" and not have to spend more money later, he says. Buyers don't want an unknown expense hanging over their heads.

Pat Vredevoogd Combs agrees. "I'm not working with too many people who want a fixer-upper," says Combs, past president of the National Association of Realtors and vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich.

One big reason: With most transactions, "buyers have limited amounts of cash," Phipps says. "Even if they want to do a fixer-upper, they don't have the money to do it."

"Buyers have enough money to buy," he says. "They don't have enough money to buy and improve. And the lenders make it really difficult."

Rock-Bottom Bargains
Buyers "are more focused on negotiating, drawing limits in their mind and focusing on the strategy," says Justin Knoll, president of the Denver Board of Realtors.

Some of it is a point of pride, he says. "They want to tell their friends and family that they really got a smokin' deal."

They "want value," says Alice Walker, president of the Greater Nashville Association of Realtors. "They are very picky. They're just a lot more critical. They are not going to settle because they know they don't have to."

Her advice to sellers: Repair, update, clean and stage. "You have got to remove every obstacle possible for the buyers," Walker says.

The more-for-less approach even holds when buyers consider bank-owned properties, says Joan Pratt, real estate broker, Re/Max Professionals in Castle Pines, Colo. "They want the short sales and the foreclosures and they want them to look like they're owner-occupied," she says. "They don't want to paint. They don't want to put carpet in. They don't want to clean."

And they're surprised when they don't find it, Pratt says.

Outdoor Living Areas
"The thing that we've seen over the past couple of years is more outdoor living areas," says Laurie Knudsen, president of the Charlotte Regional Realtor Association. Some popular features: Screen porches, outdoor kitchens, two-way fireplaces.

"It's a selling point if a house already has it," she says. And "it's going to make it more competitive on the market."

Incentives
Call it "Rock-bottom deals, part two."

Along with pricing, "it's all about incentives," says Mabel Guzman, president of the Chicago Association of Realtors. To pique buyer interest, sellers offer everything from gift cards for new furniture and paint to financial assistance at closing.

Szot agrees, and laments that it's made the road more difficult for sellers.

"Not only are (buyers) asking them to lower the price, but they are asking for a lot more," Szot says. "So negotiations are a lot more difficult now."

Practical Green Features
Call it "Yankee frugality," says Phipps. But what he sees on buyer shopping lists is a home that is easy on the planet because it's easy on the wallet.

Buyers are looking for things like triple-glazed windows, high-efficiency boilers and energy-efficient appliances. "The buyer of today wants to make sure that the ongoing operating costs of the house are as controlled and economical as possible," he says.

Another popular item: nontech green features. Buyers are looking at the sun exposure in relation to energy efficiency, he says. And that's something that will vary with the area and region, he says. "In some areas, you want larger overhangs to minimize the sun," Phipps says. "In my area (New England), lots of windows on the southern side to maximize the sun would be smart."

Open Kitchens
"The wall between the kitchen and the family room is evaporating," Phipps says.

"The kitchen is becoming part of the gathering space," he says. "And it's ironic -- it's the way it was 300 years ago. We've come full circle."

Repurposed Materials
Buyers like a material that looks or feels natural, even if it's not the genuine article, Phipps says. For example, "granite (for counters) is still popular, but it doesn't have to be granite," he says. "It can be stone, another natural material or something that looks like stone."

"We're seeing lots of different materials and lots of reusable materials, which is interesting," he says. "Also a lot of unusual uses of hardwood -- like pine flooring (reclaimed and) reused for counters," or terra cotta slabs -- beautifully glazed -- used for countertops, he says.

Smaller, Less-Formal Homes
Buyers are buying smaller homes, but they want to be able to use and reuse every inch of space, Phipps says. "They are being much more strategic and efficient with how they use it."

Formal spaces that might only be used three or four times per year are disappearing. "The slipcover rooms are gone," says Phipps.

That's "led to a repurposing of space," he says. Formal living rooms have been added to great rooms or converted into home offices or entertainment rooms.

"Three to five years ago, if they could get a loan that would get them into a McMansion with stone and tile and brick and more rooms than they needed, they would do it," says Jeff Wiren, president of the Portland Metropolitan Association of Realtors. "Now they're saying 'I don't know if I want to heat that place and clean it.' They're being much more realistic."

Touches of Luxury
Buyers like luxury. And sometimes the amenities that convey that feeling of living large are relatively simple or inexpensive.

One example: coffee bars in the master bedroom. "It's like a butler's pantry in your bedroom," Pratt says. "An area for your coffee pot and accoutrements and a little fridge."

The feature has been popular, especially in high-end homes, for about five years, she says.

Another luxury touch: high-dollar finishes in less-expensive homes, Knoll says. Granite counters and stainless steel appliances, marble tiles in the bathrooms and vessel or undermount sinks continue to impress, he says.

Buyers also like "a living space where you can have barstools and do some entertaining," he says.

Says Knoll, "There is a sex appeal about housing, and they do get excited about those kinds of things."

Sellers Brace for New Mortgage Caps

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October Change Is Meant to Reduce the Government Footprint in Housing, but Industry Fears It Could Lead to Lower Prices.

The federal government is readying its first retreat from the mortgage market, with the size of loans eligible for government backing set to decline in October.

As an emergency measure three years ago, Congress raised to as high as $729,750 the maximum loan amount that Fannie Mae, Freddie Mac and federal agencies could guarantee.

That made it easier — and cheaper — for borrowers in pricey housing markets to obtain mortgages, because the government guarantees that investors receive payments on those mortgages even if homeowners default.

Now those limits are set to decline modestly in hundreds of counties across the U.S. as the government attempts to reduce its outsized footprint in the mortgage market and create room for private investors to compete. Government-related entities stand behind more than nine of 10 new mortgages, and taxpayers have sunk $138 billion into Fannie and Freddie, underscoring the eagerness to dial down the government's share.

The new limits will vary widely by location, but will drop to $625,500 in top-tier markets such as New York, Los Angeles and Washington, D.C.

Even though the new limits won't take effect until Oct. 1, some lenders are already warning borrowers that they will stop accepting applications for loans that exceed the new limits much sooner, to ensure the loans are funded before the cutoff date.

Industry groups are making the case on Capitol Hill that reducing current limits in some of the largest markets is "the exact wrong way to go," said Jerry Howard, president of the National Association of Home Builders. But Obama administration officials say the limits should fall as scheduled, and Republican lawmakers have introduced measures to shrink the Federal Housing Administration's reach more aggressively.

Had the lower limits been in place last year, Fannie and Freddie would have backed 50,000 fewer loans, according to the Federal Housing Finance Agency. The bulk of the affected loans — about 60% — are in California, with another 20% in Massachusetts, New York and New Jersey.

Parts of the country with less expensive homes also would be affected; their limits are scheduled to fall as low as $417,000 for Fannie and Freddie loans and as low as $271,050 for FHA loans.

Limits for Fannie and Freddie-eligible mortgages will fall in 250 counties, and FHA limits will drop in about 600 counties. While that is a fraction of the nation's 3,000 counties, economists at the National Association of Home Builders say those densely populated areas account for 27% and 59% of the nation's housing stock, respectively.

The possibility of lower loan limits is causing considerable anxiety in coastal California and other high-end housing markets that will serve as test cases for how the government's withdrawal from housing will affect the market and local economies.

Homeowners whose mortgages are too big to qualify for a government-backed mortgage must seek a so-called jumbo loan, which often carry higher interest rates as well as larger down-payment requirements, sometimes more than 20%.

"Sellers are going to have to reduce their prices if borrowing costs rise," said Scott Sheldon, a loan officer with First Cal Mortgage in Petaluma, Calif.

One of Mr. Sheldon's clients, Ed Barr, has been pre-approved for a $662,000 loan backed by the FHA, the largest mortgage the agency can insure in Sonoma County, Calif. He is racing to close a sale before the limit drops to $520,950.

Mr. Barr, who owns a wine-making machinery company, said he has excellent credit but a recent divorce left him with little cash for such a purchase. "I don't have any other alternative," the 48-year-old said. Without the loan backed by the FHA, which allows for down payments as low as 3.5%, "the sale won't happen."

Scaling back loan limits underscores a broader challenge facing the government: It wants more private players to hold mortgage risk, but it doesn't want to destabilize fragile housing markets.

Craig Van Sant is looking to pay $500,000 for a home with a $20,000 down payment in Rancho Cucamonga, Calif. Once the FHA limit drops to $335,000, he would need to more than double his down payment. The only upside, he said, is that "home values slide even more, allowing us to buy more house, if we can pull together all the cash."

Investors and some academics say the government needs to shrink its footprint if private markets are to re-emerge, and that big loans for pricey homes are a reasonable place to start. "Credit unions, small banks, and hedge funds are all eager to buy these loans," said Brian Brady, a mortgage banker at World Wide Credit Corp. in San Diego.

For now, interest rates for jumbo loans are relatively low, which could cushion the impact of changing loan limits. Rates on 30-year fixed-rate jumbos averaged 5.07% last week, compared with 4.62% on government-backed loans, according to financial publisher HSH Associates. The jumbo rates are near the lowest mark since HSH began its count in 1986, and the spread is the lowest since mortgage markets seized up four years ago.

But rates are only part of the equation. Because jumbos aren't being securitized, banks must keep them on their balance sheets and are generally requiring larger down payments and stringent income qualifications."It'll be a real test of private lenders and their ability to fill the void," said Mark Zandi, chief economist of Moody's Analytics.

Monday, July 4, 2011

Happy 4th of July

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The 15 Worst Housing Markets For The Next Five Years

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If you bought a home in Miami in 2005, we're sorry: over the following six years it depreciated in value by more than 54.3%.
And the rebound -- if there is a rebound -- won't come soon.

Between Q2 2011 and Q2 2016, Miami home prices will decline at an annualized rate of 0.7%, according to data provided by Fiserv Case Shiller.

Fiserv identified 15 housing markets that will appreciate at an annualized rate of less than 1.5% -- a pretty lousy investment. If you stay out of these markets, the national average is slightly better at 3.7%.

Here are the 15 Worst Housing Markets For The Next Five Years

The worst place to invest: Miami, Florida
Cumulative growth from 2005 to 2011: -54.3%
Annualized growth from 2011 to 2016: -0.7%
Trough: Q3 2012

The second worst place to invest: Atlantic City, New Jersey
Cumulative growth from 2005 to 2011: -34.05%
Annualized growth from 2011 to 2016: 0.2%
Trough: Q3 2012

3. Nassau County, New York
Cumulative growth from 2005 to 2011: -27.3%
Annualized growth from 2011 to 2016: 0.7%
Trough: Q4 2011

#4 (tie) Fort Lauderdale, Florida
Cumulative growth from 2005 to 2011: -52.9%
Annualized growth from 2011 to 2016: 0.8%
Trough: Q4 2012

#4 (tie) Midland, Texas
Cumulative growth from 2005 to 2011: -40.95%
Annualized growth from 2011 to 2016: 0.8%
Trough: Q1 2009

#4 (tie) Washington, D.C.
Cumulative growth from 2005 to 2011: -28.1%
Annualized growth from 2011 to 2016: 0.8%
Trough: Q1 2009

#7 Abilene, Texas
Cumulative growth from 2005 to 2011: -18.9%
Annualized growth from 2011 to 2016: 1.0%
Trough: Q1 2009

#8 Morgantown, West Virginia
Cumulative growth from 2005 to 2011: -4.15%
Annualized growth from 2011 to 2016: 1.1%
Trough: N/A

#9 (tie) Austin, Texas
Cumulative growth from 2005 to 2011: 2.63%
Annualized growth from 2011 to 2016: 1.2%
Trough: Q4 2012

#9 (tie) Waterloo-Cedar Falls, Iowa
Cumulative growth from 2005 to 2011: -2.73%
Annualized growth from 2011 to 2016: 1.2%
Trough: N/A

#11 (tie) Baton Rouge, Louisiana
Cumulative growth from 2005 to 2011: -14.48%
Annualized growth from 2011 to 2016: 1.4%
Trough: Q1 2012

#11 (tie) Amarillo, Texas
Cumulative growth from 2005 to 2011: -10.5%
Annualized growth from 2011 to 2016: 1.4%
Trough: Q4 2012

#11 (tie) Lancaster, Pennsylvania
Cumulative growth from 2005 to 2011: -5.15%
Annualized growth from 2011 to 2016: 1.4%
Trough: Q2 2012

#11 (tie) Monroe, Louisiana
Cumulative growth from 2005 to 2011: -11.31%
Annualized growth from 2011 to 2016: 1.4%
Trough: N/A

#11 (tie) Shreveport, Louisiana
Cumulative growth from 2005 to 2011: -10.38%
Annualized growth from 2011 to 2016: 1.4%
Trough: Q3 2011


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