Thursday, October 21, 2010
Monday, October 4, 2010
Looking for Investment Property???
Interested in buying foreclosures as investment properties??
Search HERE for a list of over 1.5 million foreclosures!
and call us.. we can help you every step of the way. Whether looking for property, selling your own property, or needing someone to manage your properties, we can help!
Russ Darby
RE/Max Accord
925-362-0460
Is Mortgage Relief in Your Future?
Is Mortgage Relief In Your Future?
By Peter G. Miller
There's a little voice you might have heard, the one which says it's great that the government is trying to help people facing foreclosure but what about you and me? After all, we'd like lower monthly mortgage payments too.
For instance, in July the typical borrower helped by the Making Home Affordable program was paying $513 less for their mortgage, a 36 percent decline. That's good, it means there will be fewer foreclosures in the neighborhood and therefore less pressure to force down the price of local homes.
And yet there's that little voice. As much as I like my fellow citizens, why can't the government help you and me save some mortgage money each month? In fact, such an idea is now on the table.
Mr. Gross
They just had a big meeting in Washington to discuss the future of housing finance and there it was suggested that the government should have a program to refinance all mortgages — including those which are performing — down to current rates, about 4.42 percent as this is written.
According to Shahien Nasiripour with the Huffington Post, the suggestion comes from Bill Gross, head of the $239 billion Total Return Fund and a well-respected financial observer.
The government could do this. For example, in 2008 Washington set up the $700 billion TARP rescue plan to assure the stability of the financial system. The government says $194 billion spent under the program has been repaid, $190 billion remains outstanding and $316 billion was never spent. Huge sums remain available under the program, even more if the GM IPO goes through and Uncle Sam gets a fat check from the proceeds.
Higher Home Prices
According to Reuters, a general refinancing such as that proposed by Gross would have the potential to raise home values by 5 to 10 percent. Does anyone see anything else on the immediate horizon which might generate such results?
“A program which would produce a general increase in home values has enormous importance,” says Jim Saccacio, Chairman and CEO at RealtyTrac.com. “Across the country home values have been down more than 12 percent since April 2007 and far more in the major foreclosure areas. It's hard to imagine a more popular federal effort at this time.”
Higher real estate prices are not only a big deal to homeowners, they're also important to lenders. Right now we have huge numbers of mortgages on lender books that if valued on the basis of real-world property sales would represent massive losses. To stop this problem the government literally changed the accounting rules to keep up the appearance of higher asset values.
Why? Because the mortgage inventories in most cases are not actually being sold. If they're valued at today's discounted levels lenders would have to increase capital reserves and reduce lending. Share values would fall. Higher real estate values would resolve the asset problem without accounting sleight-of-hand.
But wait, there's more....
The gross domestic product at this time is about $14.5 trillion annually. If interest rates are lowered on millions of home loans consumers will have more money to spend (and more money to pay down household debts).
More than 70 percent of all economic activity ($10.3 trillion) is in the form of personal consumption. By lowering mortgage interest costs, personal income would increase and that's good because personal consumption is the major engine which powers the economy. The money added to the economy — about $50 to $60 billion according to Reuters — would not be just the dollars saved from lower mortgage rates, it would be more because of what economists call the “multiplier” effect. The result of cutting home mortgage rates would be a magnified economic stimulus, something that would create more jobs, disposable income and tax revenues at precisely the time when they're needed.
Higher Taxes
One of the oddities of a general mortgage relief program is that it would increase federal revenues. This would happen because mortgage interest is generally deductible. Lower mortgage rates would create smaller interest costs and that would mean less to write off. Uncle Sam would see bigger tax payments in April, money that could be used to replace TARP funds used for mortgage relief.
The Taking Clause
Let's imagine that with a wave of the federal wand all mortgages in the US are re-set to 4.45 percent, fixed, for 30 years — or fewer years if individual borrowers prefer.
Unfortunately the government cannot simply order loans to be refinanced. Mortgages are assets owned by institutions, pensions, insurance companies and individuals. Lowering the interest rate means less income to mortgage owners and therefore a reduction in the market value of the loans.
This is where the “taking” clause of the Fifth Amendment comes in. It says private property cannot be taken for public use without just compensation. In other words, the government can take private property — the excess contract interest rate in this case — but only if it pays fair market value for what it grabs. Given the unused portion of the 2008 TARP account this should not be a problem.
Political Reality
The idea of a massive government program to lower mortgage rates nationwide seems unlikely if only because it's never been done. That said, three or four years ago the idea of a Wall Street Reform Act and the establishment of a federal agency to represent consumers would have been regarded as equally implausible. Perhaps with elections looming someone in Washington will hear a little voice.
To read whole story click here
Friday, October 1, 2010
Downsizing is BOOMING!
Downsizing is booming
Smaller homes trendy again as baby boomers look to shed excess room and recession makes large homes too costly
BY TANYA MANNES
Goodbye, McMansion. Hello, bungalow, condo or suburban split-level.
The Great Recession may be over, but many people’s lifestyles will never be the same. They are saving more, spending less, simplifying their lives and — increasingly — downsizing their homes.
This trend, which began with the economic downturn but has dovetailed with demographic changes, has given way to a trickle-down effect for local businesses offering services to live gracefully in tight surroundings.
There are benefits to letting go of those supersized showpieces, from the lower upfront cost to smaller electric bills and less yardwork.
Median home size has dropped 6 percent since 2007, in large part because cash-strapped Americans can’t afford to buy, heat or maintain larger homes, according to the National Association of Home Builders.
But people are still investing money in making their homes as comfortable as they can be. The trend means work for organizers, interior designers, home-furnishings stores, carpenters with tricks to maximize shelf space and, of course, self-storage businesses for those who can’t bring themselves to part with their 1980s designer clothes or collection of African masks.
Why they’re downsizing
Colleen Cotter, a broker with Keller Williams Realty, said that her six-member team specializes in helping people relocate to downtown San Diego, and “downsizers” make up 60 percent to 70 percent of her clients. “Most people aren’t buying these Dallas-size houses anymore,” Cotter said.
“They have to short-sell the big place they’ve got, and they have to rent or buy a small place in the interim.”
Clients find Cotter through the website mysandiegoagent.com. In some cases, they are older, empty-nesters who don’t need five or six bedrooms anymore. “We try to get them to sell their house in the suburbs and move downtown into a smaller footprint,” she said.
In other cases, clients are young, just starting out and can’t afford a large home.
Cotter downplays the space constraints and touts urban amenities — from wine bars to farmers markets — where they can relax or entertain friends. “You don’t have to feel like you have everything in your house,” she said.
Stephen Melman, director of economic services for the National Association of Home Builders in Washington, D.C., said that home size appeared to peak during the building boom. Since then, the trend toward smaller homes seems to be lasting longer than in previous recessions. The median floor area of new homes dropped from 2,309 square feet in the first quarter of 2007 to 2,169 square feet in the second quarter of 2010, according to the group’s analysis of Census data.
In the organization’s most recent survey, 95 percent of homebuilders said they were building smaller and less-expensive homes than in the past because that’s what consumers want.
Melman said the U.S. consumer consistently cites affordability and operating costs — mainly energy — when asked about concerns in buying a home. Small homes cost less to heat and cool.
Demographic changes play a role. As baby boomers age, they are transitioning to smaller homes that need less upkeep. Other factors in downsizing include the difficulty of qualifying for a large mortgage and the fact that many people have smaller amounts of equity in existing homes to roll into a new home.
Adding to the trend, there is a crop of first-time homebuyer, lured to the market by tax credits, who are seeking affordable small homes, he said.
Which businesses benefit?
Storage: What to do if there’s more stuff than closets? That’s where storage companies, such as Solana Beach Self Storage and its sister location, Morena Self Storage in San Diego, see an opportunity. The two facilities, online at mystorageroom.com, are locally owned with more than 20 employees, and offer help with moving for customers trying to downsize.
“Our warehouse guys are here to help them move in trucks, and we offer that for free,” said manager Chris Meehan. “That results in a lot of referrals.”
Meehan said the firm has seen business grow steadily in the past few years. Occupancy at his facility is at 90 percent, up from 82 percent in January. Recently, a client moved from a 3,000-square-foot home to a 1,000-square-foot home, putting excess stuff in storage. Monthly rates for storage spaces — which start as small as 4-feet-by-4-feet — range from $46 to $350.
DECLUTTER: For those who aim to get rid of excess belongings instead of paying to store them, there are de-cluttering experts such as Cheryl Hughes, who established her San Diego organizing business, “Allow Me,” in 2005.
Hughes specializes in helping clients downsize and gets leads through her website, allowmesolutions.com. Frequently, her customers are seniors moving into assisted living or those who have lost a spouse.
Hughes used to be a mental health nurse, which helps her address the emotional ties people have with their possessions, she said.
“I work with people who sometimes have a lot of pain around what they have to get rid of,” she said.
She charges $40 per hour, with discounts for seniors.
She helps her clients pare down to the basics, encouraging them to donate items or sell them.
Recently, she worked with a couple in their 60s who were tired of the upkeep of their 2,400-square-foot house with a swimming pool near Balboa Park. They decided to move to a small, two-bedroom condo on the bay.
Hughes helped the couple sell things on Craigslist, donate bulky items such as an antique loom and host a yard sale. “They are loving their new place,” she said.
RESIZING: Sometimes people find that their old furniture is too big, said Mike McAllister, managing partner of the locally owned Hold It Contemporary Home in Mission Valley. The store, online at holdithome.com, specializes in European contemporary and modern home furnishings, which tend to be smaller in scale than American styles.
“We see people moving from a home in Scripps Ranch to a loft or condominium building, and the scale of their furniture is too large,” McAllister said.
Customers often visit the store looking for its signature European sleeper sofas, which range from $499 to $1,595.
“The hottest seller we have is a compact love seat, just 58 inches wide,” he said. “It opens into a bed that sleeps two adults.”
The Hold It store also features a “100-square-foot living area” display.
REORGANIZE: Those who downsize sometimes need help arranging their belongings in a way that doesn’t feel cramped. That’s why they call Maryann Traficante, who started her design business, Interiors by Maryann, 25 years ago. She specializes in downsizing.
“I get clients all the time,” she said. “They’re moving, and typically these days they don’t move to a larger space. They’re just moving to something more manageable financially.”
She charges about $200 for an initial two-hour consultation; customers can find her online through interiorsbymaryann.net.
She visits the new home to take measurements, and plans where everything, from the sofa to the TV, will go. She makes suggestions for layouts, colors and paint, After she and the client agree on what’s needed, she will often shop at The Container Store for storage solutions.
One of her clients, an elderly woman who had traveled the world, had a large collection of African masks scattered throughout her large house and couldn’t imagine giving them up. Traficante helped her group them together on one wall in her new, smaller home.
“You have to be very diplomatic, sensitive and caring about what their needs are,” she said.
Since most clients end up getting rid of lots of items, Traficante has a source who will hold a garage sale or estate sale for clients, and split the proceeds with them.
REDESIGN: Contractors benefit from downsizing when they are hired to make the most of small spaces.
Troy LaCoursiere, a San Diego contractor, recently opened a local business as an affiliate of ShelfGenie, a national company headquartered in Georgia.
Shelfgenie.com provides “glide-out shelving solutions” to improve access to hard-to-reach cabinet areas. “People are always frustrated with their pantry space and not being able to get to items in the back,” he said.
Typically, a client will end up spending $1,000 to $2,000 to redo shelving, he said.
LaCoursiere takes custom measurements and orders a prefabricated product, which he installs. “We look for underutilized spaces,” he said. “Some kitchens have a blind corner if it’s an L shape, and you can use that space. You’re able to declutter.”
Click here to read full story
Smaller homes trendy again as baby boomers look to shed excess room and recession makes large homes too costly
BY TANYA MANNES
Goodbye, McMansion. Hello, bungalow, condo or suburban split-level.
The Great Recession may be over, but many people’s lifestyles will never be the same. They are saving more, spending less, simplifying their lives and — increasingly — downsizing their homes.
This trend, which began with the economic downturn but has dovetailed with demographic changes, has given way to a trickle-down effect for local businesses offering services to live gracefully in tight surroundings.
There are benefits to letting go of those supersized showpieces, from the lower upfront cost to smaller electric bills and less yardwork.
Median home size has dropped 6 percent since 2007, in large part because cash-strapped Americans can’t afford to buy, heat or maintain larger homes, according to the National Association of Home Builders.
But people are still investing money in making their homes as comfortable as they can be. The trend means work for organizers, interior designers, home-furnishings stores, carpenters with tricks to maximize shelf space and, of course, self-storage businesses for those who can’t bring themselves to part with their 1980s designer clothes or collection of African masks.
Why they’re downsizing
Colleen Cotter, a broker with Keller Williams Realty, said that her six-member team specializes in helping people relocate to downtown San Diego, and “downsizers” make up 60 percent to 70 percent of her clients. “Most people aren’t buying these Dallas-size houses anymore,” Cotter said.
“They have to short-sell the big place they’ve got, and they have to rent or buy a small place in the interim.”
Clients find Cotter through the website mysandiegoagent.com. In some cases, they are older, empty-nesters who don’t need five or six bedrooms anymore. “We try to get them to sell their house in the suburbs and move downtown into a smaller footprint,” she said.
In other cases, clients are young, just starting out and can’t afford a large home.
Cotter downplays the space constraints and touts urban amenities — from wine bars to farmers markets — where they can relax or entertain friends. “You don’t have to feel like you have everything in your house,” she said.
Stephen Melman, director of economic services for the National Association of Home Builders in Washington, D.C., said that home size appeared to peak during the building boom. Since then, the trend toward smaller homes seems to be lasting longer than in previous recessions. The median floor area of new homes dropped from 2,309 square feet in the first quarter of 2007 to 2,169 square feet in the second quarter of 2010, according to the group’s analysis of Census data.
In the organization’s most recent survey, 95 percent of homebuilders said they were building smaller and less-expensive homes than in the past because that’s what consumers want.
Melman said the U.S. consumer consistently cites affordability and operating costs — mainly energy — when asked about concerns in buying a home. Small homes cost less to heat and cool.
Demographic changes play a role. As baby boomers age, they are transitioning to smaller homes that need less upkeep. Other factors in downsizing include the difficulty of qualifying for a large mortgage and the fact that many people have smaller amounts of equity in existing homes to roll into a new home.
Adding to the trend, there is a crop of first-time homebuyer, lured to the market by tax credits, who are seeking affordable small homes, he said.
Which businesses benefit?
Storage: What to do if there’s more stuff than closets? That’s where storage companies, such as Solana Beach Self Storage and its sister location, Morena Self Storage in San Diego, see an opportunity. The two facilities, online at mystorageroom.com, are locally owned with more than 20 employees, and offer help with moving for customers trying to downsize.
“Our warehouse guys are here to help them move in trucks, and we offer that for free,” said manager Chris Meehan. “That results in a lot of referrals.”
Meehan said the firm has seen business grow steadily in the past few years. Occupancy at his facility is at 90 percent, up from 82 percent in January. Recently, a client moved from a 3,000-square-foot home to a 1,000-square-foot home, putting excess stuff in storage. Monthly rates for storage spaces — which start as small as 4-feet-by-4-feet — range from $46 to $350.
DECLUTTER: For those who aim to get rid of excess belongings instead of paying to store them, there are de-cluttering experts such as Cheryl Hughes, who established her San Diego organizing business, “Allow Me,” in 2005.
Hughes specializes in helping clients downsize and gets leads through her website, allowmesolutions.com. Frequently, her customers are seniors moving into assisted living or those who have lost a spouse.
Hughes used to be a mental health nurse, which helps her address the emotional ties people have with their possessions, she said.
“I work with people who sometimes have a lot of pain around what they have to get rid of,” she said.
She charges $40 per hour, with discounts for seniors.
She helps her clients pare down to the basics, encouraging them to donate items or sell them.
Recently, she worked with a couple in their 60s who were tired of the upkeep of their 2,400-square-foot house with a swimming pool near Balboa Park. They decided to move to a small, two-bedroom condo on the bay.
Hughes helped the couple sell things on Craigslist, donate bulky items such as an antique loom and host a yard sale. “They are loving their new place,” she said.
RESIZING: Sometimes people find that their old furniture is too big, said Mike McAllister, managing partner of the locally owned Hold It Contemporary Home in Mission Valley. The store, online at holdithome.com, specializes in European contemporary and modern home furnishings, which tend to be smaller in scale than American styles.
“We see people moving from a home in Scripps Ranch to a loft or condominium building, and the scale of their furniture is too large,” McAllister said.
Customers often visit the store looking for its signature European sleeper sofas, which range from $499 to $1,595.
“The hottest seller we have is a compact love seat, just 58 inches wide,” he said. “It opens into a bed that sleeps two adults.”
The Hold It store also features a “100-square-foot living area” display.
REORGANIZE: Those who downsize sometimes need help arranging their belongings in a way that doesn’t feel cramped. That’s why they call Maryann Traficante, who started her design business, Interiors by Maryann, 25 years ago. She specializes in downsizing.
“I get clients all the time,” she said. “They’re moving, and typically these days they don’t move to a larger space. They’re just moving to something more manageable financially.”
She charges about $200 for an initial two-hour consultation; customers can find her online through interiorsbymaryann.net.
She visits the new home to take measurements, and plans where everything, from the sofa to the TV, will go. She makes suggestions for layouts, colors and paint, After she and the client agree on what’s needed, she will often shop at The Container Store for storage solutions.
One of her clients, an elderly woman who had traveled the world, had a large collection of African masks scattered throughout her large house and couldn’t imagine giving them up. Traficante helped her group them together on one wall in her new, smaller home.
“You have to be very diplomatic, sensitive and caring about what their needs are,” she said.
Since most clients end up getting rid of lots of items, Traficante has a source who will hold a garage sale or estate sale for clients, and split the proceeds with them.
REDESIGN: Contractors benefit from downsizing when they are hired to make the most of small spaces.
Troy LaCoursiere, a San Diego contractor, recently opened a local business as an affiliate of ShelfGenie, a national company headquartered in Georgia.
Shelfgenie.com provides “glide-out shelving solutions” to improve access to hard-to-reach cabinet areas. “People are always frustrated with their pantry space and not being able to get to items in the back,” he said.
Typically, a client will end up spending $1,000 to $2,000 to redo shelving, he said.
LaCoursiere takes custom measurements and orders a prefabricated product, which he installs. “We look for underutilized spaces,” he said. “Some kitchens have a blind corner if it’s an L shape, and you can use that space. You’re able to declutter.”
Click here to read full story
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