Archive for November, 2007
Homeownership Is Good For Literacy
November 18th, 2007 Categories: Real Estate News
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Homeownership Is Good For Literacy
Usually when I say that homeownership is good for literacy the first reaction is. Oh boy this guy is a salesperson and I can’t wait to hear this. In fact homeownership is good for many things in society. It lowers unplanned teenage pregnancy, lowers high school dropouts.
This isn’t about being a salesperson. This is about being a real estate professional and having a heart for single moms and the things I come across while online.
The Impact of Homeownership on Child Outcomes
Donald R. Haurin, Toby L. Parcel, and R. Jean Haurin
Abstract
Does homeownership affect the outcomes of resident children? Using a national data set, we observed that children of homeowners have better home environments, high cognitive test scores, and fewer behavior problems than do children of renters. We find that these results hold even after controlling for a large number of economic, social, and
demographic variables. Owning a home compared with renting leads to 13 to 23 percent higher quality home environment, ceteris paribus. The independent impact of
homeownership combined with its positive impact on the home environment results in
the children of owners achieving math scores up to nine percent higher, reading scores up to seven percent higher, and reductions in children’s behavior problems of up to three percent. These findings suggest homeowners support programs should be targeted at households with young children.
Excerpts
“to investigate the effect of parental homeownership on the probability that a 17-year-old remains in school and that a 17-year-old female has given birth to a child. They find that parental homeownership reduces the probability of resident 17-year old children dropping out or giving birth”.
“Another argument is that homeowners tend to stay for a longer time in a dwelling than do renters and this greater stability increases the social capital of the household. Higher levels of social capital positively influence child outcomes.”
My three pound brain knows that children thrive on stability.
Have you ever tried fixing a sandwich for a three year old different then your spouse does or use a different dish? Or have you ever tried giving a two year old a different Sippy cup.
Now imagine changing schools every year or two. Children will spend more time trying to fit in and not being the new kid more than their grades. Then once a kid is even slightly behind it gets even more difficult.
How do single moms fit in this? Easy single moms tend to rent more than their married couples.
I work with single mother support groups. I have a program that where myself and my preferred lender work with a single moms and help them achieve homeownership. We get all the fees as low as we can and use our commissions to pay the already reduced cost and other moving related cost. Other scenarios are if the home needs carpet or other things like appliances. We will work the closing cost in the loan and then use our money after closing for these items.
So if you are a single mom or know of one, we can help. The mom still has to qualify for the loan, we can help with a plan for getting qualified and some other basic budgeting help. There are grant programs and other programs we are familiar with that can buyers, not just single moms.
| Discussion: 2 Comments »
Salt Lake County Mayor Peter Corroon
November 16th, 2007 Categories: Salt Lake County
Click Photo For Bio
I had the great pleasure of seeing Salt Lake County Mayor Peter Corroon talk at our company’s quarterly meeting. Just like the counties web site says “You might be surprised at the number of services we provide. Take a look around SLCo.org to learn more about current events, community programs, or rewarding volunteer opportunities.”
I was surprised at the scope of Salt Lake County Government, I always thought of it as the caretaker to those areas that have not incorporated yet.
Salt Lake County’s Budget for 2008 is $800 Million Dollars, which is a lot of money. Salt Lake County has 40% of the State’s Population and 60% of the jobs, 20 Libraries handling 1 Million items per month, while proudly boasting over 30,000 volunteers. As I see it, Mayor Corroon handles most of the work and leaves some for the Governor 
Utah has enjoyed 6 straight quarters of job growth and is outpacing the country, although it is slowing down.
Transportation is still an issue especially on the west side of the county. Vehicle miles have doubled over the population. There are four new light rails in the works and the Mountain View corridor to help deal with the growth.
Salt Lake’s is a small business economy. There are over 30,000 business licenses with 72% of them with ten or fewer employees, with 80% of the new jobs from small businesses.
| Discussion: No Comments »
Mortgage Rates In Salt Lake City
November 16th, 2007 Categories: Mortgage
The new “FHASecure Progam” may be coming out soon according to my Wells Fargo Bank Lender Reps reports that I have been receiving this week.
This will be a benefit to those who have adjustable ARM mortgages that are not currently an FHA loan and the interest rate has adjusted. If your interest rate has adjusted and you were delinquent on your loan due the adjustment, you may qualify for this special refinance program.
More information to come as it is officially released.
Conforming mortgage rates mentioned below are considered with loan amounts up to $417,000 for a single family residence and is owner occupied. It is with proving your income and a “full document borrower”.
The rates quoted are based on a purchase price of $200,000 on a 30-day lock. On these conforming loans, there are no prepayment penalties involved.
|
Program |
Rate |
APR |
| 95% | 6.125 | 7.304 |
| 100% With Mort Insurance | 6.25 | 7.656 |
| 100% No Mort Insurance | 6.625 | 6.810 |
| My Community 100% | 6.625 | 7.559 |
| VA 100% | 6.0 | 6.816 |
| FHA 97% | 6.0 | 6.176 |
If you would like any additional scenarios done, please call for that information at 801-747-1233 and ask for Cindee or email to Cindee@CindeeStone.com
The above figures are deemed reliable but not guaranteed. This advertisement is being provided for informational purposed only and is not to be construed as a loan commitment of any kind. Actual loan qualifying is subject to verification and approval of income, credit, property, appraisal and other factors. Rates, fees, and programs are subject to change at any time without prior notice. A detailed good faith estimate will be prepared upon your application for a loan.
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Average Home Sales For Salt Lake County
November 14th, 2007 Categories: Real Estate News
This graph tells some good things, the number of listings, number of sales and the average home sales for Salt Lake County by quarters.
Number of listings shown by the green line has maintained a pretty consistent with seasonal ups and downs, till 3rd quarter of ‘06, then the inventory started to climb to an all time high.
Total number of sales shown by the red line has stayed pretty consistent also with it’s seasonal ups and downs.
The Price of the Average Home Sales For Salt Lake County have consistently rose since the 3rd quarter of ‘03 with two minor drops, one for a $100 dollars and another time dropped $500 dollars.
Remember when you want real estate information seek out a real estate professional, someone that has been in the business for a complete cycle.
Average Home Sales per Quarter
Salt Lake County
Last Updated: October 20 2007 02:09:13
| Discussion: 2 Comments »
Salt Lake Real Estate Absorption Rate
November 14th, 2007 Categories: Real Estate News
Here is the Salt Lake Real Estate Absorption rate.
We have some segments that are doing well and others that are not moving.
To understand the Salt Lake Real Estate Absorption Rate, you simply divided the number of active listings by the number of homes that have sold in the previous month. For example the $120,000-139,999 range. There are 122 active listings and in the month of October there were 53 closings. Divide 122/53 and you get 2.3 months supply. Mean if no other homes came on the market it would take 2.3 months to absorb the current inventory.
The key is, the ones that are priced right are selling and the rest are not. See the graph for The Tale of Two Markets Based on the data from a prior post. The days on the market for priced correctly and that are in good condition is fairly short.
|
List Price Range |
# Listings Active |
# Listings Sold in October |
Months Supply |
||
|
$0 |
- |
$9,999 |
3 |
0 |
??? |
|
$10,000 |
- |
$19,999 |
4 |
0 |
??? |
|
$20,000 |
- |
$29,999 |
5 |
4 |
1.25 |
|
$30,000 |
- |
$39,999 |
6 |
4 |
1.50 |
|
$40,000 |
- |
$49,999 |
12 |
2 |
6.00 |
|
$50,000 |
- |
$59,999 |
8 |
3 |
2.67 |
|
$60,000 |
- |
$69,999 |
6 |
6 |
1.00 |
|
$70,000 |
- |
$79,999 |
12 |
3 |
4.00 |
|
$80,000 |
- |
$89,999 |
9 |
5 |
1.80 |
|
$90,000 |
- |
$99,999 |
12 |
4 |
3.00 |
|
$100,000 |
- |
$119,999 |
53 |
16 |
3.31 |
|
$120,000 |
- |
$139,999 |
122 |
53 |
2.30 |
|
$140,000 |
- |
$159,999 |
225 |
79 |
2.85 |
|
$160,000 |
- |
$179,999 |
399 |
87 |
4.59 |
|
$180,000 |
- |
$199,999 |
520 |
97 |
5.36 |
|
$200,000 |
- |
$249,999 |
1,226 |
207 |
5.92 |
|
$250,000 |
- |
$299,999 |
1,179 |
157 |
7.51 |
|
$300,000 |
- |
$349,999 |
854 |
91 |
9.38 |
|
$350,000 |
- |
$399,999 |
677 |
52 |
13.02 |
|
$400,000 |
- |
$449,999 |
462 |
25 |
18.48 |
|
$450,000 |
- |
$499,999 |
423 |
22 |
19.23 |
|
$500,000 |
- |
$599,999 |
560 |
27 |
20.74 |
|
$600,000 |
- |
$699,999 |
351 |
17 |
20.65 |
|
$700,000 |
- |
$799,999 |
228 |
7 |
32.57 |
|
$800,000 |
- |
$899,999 |
120 |
8 |
15.00 |
|
$900,000 |
- |
$999,999 |
99 |
3 |
33.00 |
|
$1,000,000 |
- |
$1,249,999 |
88 |
6 |
14.67 |
|
$1,250,000 |
- |
$1,499,999 |
76 |
0 |
??? |
|
$1,500,000 |
- |
$1,749,999 |
28 |
0 |
??? |
|
$1,750,000 |
- |
$1,999,999 |
41 |
1 |
41.00 |
|
$2,000,000 |
- |
$2,499,999 |
28 |
1 |
28.00 |
|
$2,500,000 |
- |
$2,999,999 |
18 |
1 |
18.00 |
|
$3,000,000 |
- |
$3,999,999 |
14 |
0 |
??? |
|
$4,000,000 |
- |
$4,999,999 |
5 |
0 |
??? |
|
$5,000,000 |
- | and over |
12 |
0 |
??? |
| Discussion: No Comments »
Craftsman
November 14th, 2007 Categories: Architecture
Popularized at the turn of the 20th century by architect and furniture designer Gustav Stickley in his magazine, The Craftsman, the Craftsman-style bungalow reflected, said Stickley, “a house reduced to it’s simplest form… its low, broad proportions and absolute lack of ornamentation gives it a character so natural and unaffected that it seems to… blend with any landscape.”
The style, which was also widely billed as the “California bungalow” by architects such as Charles Sumner Greene and Henry Mather Greene, featured overhanging eaves, a low-slung gabled roof, and wide front porches framed by pedestal-like tapered columns. Material often included stone, rough-hewn wood, and stucco. Many homes have wide front porches across part of the front, supported by columns.
Source: Realtor.org
| Discussion: No Comments »
Have Salt Lake Home Prices Gone Too Far
November 13th, 2007 Categories: Real Estate News
Well it depends, that answer seems to be the normal answer. The median price in Salt Lake County is $230,000. The national median price for existing homes is $211,700. Below is a chart of price ranges for Salt Lake County that have been reported so far this year.
List Price Range |
Units |
Average Days On Market |
||
$140,000 |
- |
$159,999 |
1,023 |
26 |
$160,000 |
- |
$179,999 |
1,401 |
31 |
$180,000 |
- |
$199,999 |
1,545 |
31 |
$200,000 |
- |
$249,999 |
3,096 |
34 |
$250,000 |
- |
$299,999 |
2,213 |
41 |
$300,000 |
- |
$349,999 |
1,426 |
42 |
10,704 |
34 |
|||
The total volume reported so far this year for all Salt Lake county is 15,116 with an average of 37 Days on Market. The above chart represents two thirds of the market.
There were another 2,552 units sold with an average of 48 days on marketin the price rangeof $350,000-799,999
Other Counties Median Price
Davis $219,900
Utah $219,900
Tooele $184,900
Weber $154,00
Below is a list I quotes I found on a Blog in Seattle.
“The price of houses seems to have reached a plateau, and there is reasonable expectancy that prices will decline.” (Time Magazine, December 1, 1947)
“Houses cost too much for the mass market. Today’s average price is around $8000, out of reach for two-thirds of all buyers.” (Science Digest, April 1948)
“If you bought your house since the war, you have made your deal at the top of the market. The days when you couldn’t lose on a home purchase are no longer with us.” (House Beautiful, November 1948)
“The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs $28,000.” (Business Week, September 4, 1969) ”
“Be suspicious of the ‘common wisdom’ that tells you to buy now because continuing inflation will force home prices and rents higher and higher.” (NEA Journal, December, 1970)
“The median price of a home today is approaching $50,000. Housing experts predict that in the future price rises won’t be that great.” (National Business, June 1977)
| Discussion: 3 Comments »
Contemporary
November 11th, 2007 Categories: Architecture
You know them by their odd-sized and often tall windows, their lack of ornamentation, and their unusual mixtures of wall materials–stone, brick, and wood, for instance. Architects designed Contemporary-style homes (in the Modern family) between 1950 and 1970, and created two versions: the flat-roof and gabled types. The latter is often characterized by exposed beams. Both breeds tend to be one-story tall and were designed to incorporate the surrounding landscape into their overall look.
Source: Realtor.org
| Discussion: 1 Comment »
How To Evaluate An Income Property
November 11th, 2007 Categories: Investing
Cap Rate
We hear many different ways to evaluate rental property. The one method that is the most effective is called the Capitalization Rate, affectionately called the Cap Rate.
I have heard many variations of the cap rate, things like 100 times the rent. That is called the rent multiplier, takes the rent and times it by say 120. The problem with that approach is it doesn’t account for expense variations. It is a good rule of thumb measure to see if it is worth drilling down.
Are you ready for the unequivocal simple version of the Cap Rate, drum roll please?
Income, Minus Expenses, Divided By The Sales Price, Equals Rate of Return. It really is that simple. Always use annual numbers.
| Gross Income | $18,000 |
| Minus Expenses | $3,600 |
| = Net Income | $14,400 |
| Divided By Sales Price | $200,000 |
| = Rate Of Return | 7.2% |
Property evaluations are based on cash purchases. When you leverage a property that is a different equation and has more factors than evaluating just the property, remember we are evaluating the property. If you are going to leverage a property, the property must perform at a higher interest rate than what you can borrow at.
Click for full functioning Excel Spread Sheet
Now the trick is getting real income and expenses on a piece of property you don’t own. Remember the seller’s motivation is the highest price. So based on the above formula, they like to overstate income and understate expenses.
When purchasing an income property the surest way to get the most accurate information is, for income use a tenant landlord estoppel letter. This letter is signed by both parties stating the basic terms of the lease, start date, end date, monthly payment, how much security deposit and where is it, that the tenant is current. Compare the letters to the leases and now you have your income.
As for expenses, if you really want to know how much a property owner has spent ask for a copy of the Schedule E of their tax returns. You know they didn’t leave anything out there.
Here are some things to consider when looking at the expenses.
How Many Utility meters are there?
How old is the-
Roof
Furnaces
Water Heaters
| Discussion: 6 Comments »
Salt Lake Real Estate Market’s Dirty Laundry
November 10th, 2007 Categories: Real Estate News
Is the Salt Lake Real Estate Market Good Or Bad? The answer is Yes.
I figured since people insist on getting their Real Estate News from TV Reporters I figure I might as well stop fighting it and give it to them that way. So this morning my daughter and I had fun making me a TV Reporter.
Well there certainly is no shortage of depressing news about the Real Estate Market, even the real estate agents will tell you that the market is bad. The problem I find with TV and newspapers is they are not always about the truth or should I say the whole truth and nothing but the truth. They are more concerned with readers and viewers, so they can charge more for their advertising.
When the national media reports how bad the Real Estate Market is, they are selling advertising and people don’t watch the news when the market is good. I find it amazing that people even consider national news networks as a source for local financial information.
On the other hand, things like trust, truth are all I can offer. I do not sell advertising on my space, I do report and write for business, and I believe that if I give away my knowledge to people I will be an asset and people may consider me when it is time to buy or sell or invest.
Let’s get a little clarity on things. First and foremost Real Estate Is Local In Nature, what is happening in Florida, Michigan has nothing to do with the Utah market. Markets can be different between counties and neighborhoods, between price ranges in the same zip code. Now there are some ties like interest rates and such, but my goodness rates are below 6.5% so we know that is out.
Now for real estate agents about two thirds of the agents in Utah got their license in the last five years, so most do not know what is going on. People and agents alike compare everything to last couple of years, where prices were going up 1,2 and 3 percent per month, people with bad credit and they did not have to verify their income were getting large loans, that is not normal.
So the big question is, how is the Salt Lake Market? The answer is depends. The overall residential market is fairly healthy and normal. There are some factors that are waiting to be played out. For example how much of the current inventory is from speculators and the over building in the South West part of the county.
September’s volume was down 20% over the month of August, but it usually is. The same time frame last year when the market was abnormal the volume difference was 12%.
Remember September’s closings are August contracts. There is a natural seasonal slowdown in August because families have already made their purchase.
So what’s hot and what’s not.
Hot-Sandy $300,000 and under, three bedrooms together in the main bedroom area (not 2 on the main and 3 in the basement). Age of kitchen and bath is more important than the age of the home. If they are updated clean and well maintained, then they will sell fairly quickly and usually can draw multiple offers.
Not-The boat load of the speculator properties, where they bought an older not updated home and slapped a coat of paint along with a medium grade carpet and call it updated. There are plenty of those out there and some bargains can be found that make great rental properties.
Hot- New Ramblers with a small yard, main floor laundry 2 car garage. The empty nesters have nice family homes and now want to have a house that suits their lifestyle. They are not necessarily downsizing, they really don’t want smaller houses, they want smaller yards and less rooms.
Super Hot- Condos with a 2 car garage main floor one level living. The updating applies also. The other factor in a condo is the amenities. They come at a premium. There are a lot of mature single people, that are a single income and do not want to pay for the amenities, face it fifty percent of marriages end in divorce.
Super Not- New Construction in the Southwest section of Salt Lake County except for starter price ranges if you can find them. Also Super not are Starter Mansions in Draper, there are over 200 active listings in Draper above $600,000.
Here are some lyrics from a Don Henley song Dirty Laundry that explain how I feel about TV reporters giving real estate news.
We got the bubble-headed-bleach-blonde who
Comes on at five
She can tell you bout the plane crash with a gleam
In her eye
Its interesting when people die-
Give us dirty laundry
We can do the innuendo
We can dance and sing
When it’s said and done we haven’t told you a thing
We all know that crap is king
Give us dirty laundry!
| Discussion: 1 Comment »
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