Housing Weighs on Growth Forecast

Troubles in the U.S. housing market will weigh on economic growth this year even more than earlier estimated.   According to a forecast of economists released recently, real gross domestic product, the government's broadest measure of economic output, is expected to advance 2.3 percent in 2007.  That is down from an earlier estimate in February for 2.8 percent growth.

However, growth in 2008 is expected to pick up to 3.1 percent after the housing market bottoms out.

The survey of 48 economists taken between April 19 and May 8, found that housing market troubles, particularly those in the risky subprime mortgage lending market, will drag out through this year.  Almost half of those surveyed expect the bottom in housing will not be reached until the fourth quarter.

All of this bad news about housing and how bad the real estate market is right now equates to there being no better time than now to find the best value for your money when shopping for a home.  Savvy investors have always known to "buy when the market is down".. that's when the best return on the investment is usually realized.  To find out whether now is the best time for you to own a home, give us a call.  There is no obligation for us to talk with you about your options.

Relocation - Housing Markets are Causing Hesitation

Relocation experts say common reasons job candidates hesitate to uproot often has to do with people's reluctance to leave their comfort zones, their families and their friends.

A relocation survey on mobility trends found that family issues were still the dominating reason employees turned down a job that would require relocation — 65% of those surveyed believed that to be a top concern.  Sixty-one percent named cost-of-living and housing concerns as a top issue, while 22% said that selling the home, specifically, was a top concern.

For many employers, the addition of these housing-market hurdles for job seekers is coming at a bad time. 

If you do find yourself facing a relocation decision, consider these tips:

• An employee considering a move for a job should be clear on the details of the company's relocation policy before accepting the job.  Any concerns should be directed to the human-resources professional.  Don't be afraid to ask for what you want.
• Know the tax implications involved.  The majority of a relocation package can be considered taxable income; "if a company chooses to cover the tax liability for that benefit, you come out much further ahead."
• Flexible relocation policies might allow an employee to substitute one expense for another, customizing the package to suit the individual's needs.  If, for example, you don't need temporary housing, you might be able to substitute those dollars for the expense associated with storing household goods.  Candidates might negotiate a lump-sum package if they'd rather hold on to the home until the local real-estate market improves.
• If you're selling a house to relocate, realize it's unlikely you'll "make a killing" in many of the current markets.  To ensure a quicker sale, make the cosmetic changes that are necessary before listing the home and price it correctly from the start.

Are you facing a possible job relocation?  If so, we'd love to hear your comments about how the real estate market may or may not affect your decision to relocate.

FHA Loans - Help for First-Time Buyers

If you have little or no money for a down payment, iffy credit and too many bills, an FHA loan could be what you need to buy a house.

The Federal Housing Administration, a part of the Department of Housing and Urban Development, was created 70 years ago to help first-time buyers, especially low-to-moderate income families and minorities, get the financing they need. 

You can apply for an FHA-backed loan from most banks and mortgage companies.

For more on this story, go here…

Lenders Moving to Stem Foreclosures

So far the housing slump, precipitated in part by overzealous borrowing and subprime lending, continues its downward slope.  In discouraging news for homeowners and home sellers nationally, a Standard & Poor's report recently said "the deceleration and declines in home prices are showing no signs of turnaround."

Even when the economy and the housing market are strong, some borrowers run into financial difficulty because of events such as job loss, divorce or illness.  Over the past year, two other factors have driven the rise in past-due loans and foreclosure filings:

One is known as "payment shock," when adjustable-rate loans reset sharply upward.  Lenders in recent years failed to consider whether the borrowers will be able to afford their loans once initial "teaser" rates adjust, critics charge.

The other is simply that a decade-long housing boom stalled out.  Some who bought homes near the market peak — often with no down payment — owe more than their houses are now worth.  So selling it offers no sure escape route from foreclosure.

Housing advocates say to beware of "rescue" scams, outfits that charge big fees and then fail to help people stay in their homes.  As more and more people face foreclosures, it's almost a given that scam artists will come out of the woodwork to prey on un-suspecting homeowners.

Impelled by financial and political pressure to try to curtail foreclosures, lenders are taking action on several fronts:

Hurricane Season: Are You Prepared?

Hurricane season is just around the corner (there's already been one named tropical storm in the Atlantic already!) which means greater potential for flooding and/or flood damage to your home.  It doesn’t matter where you live, flooding can occur almost anywhere.  If you live along the coast or near a body of water, particularly, protection against and preparation for this type of disaster is necessary to ensure your finances are protected.  Have you purchased flood insurance?

The Federal Emergency Management Agency (FEMA) reports that flooding is America’s #1 natural disaster.  From snow melts and flash flooding to tropical storms and dams that have reached capacity, the potential for flooding should always be considered, regardless of where your home is located.

With hurricane season just around the corner (June 1st) its prime time to be considering flood insurance. 

Why should you purchase flood coverage?  Well, the important fact to be aware of is that homeowner’s insurance policies do not cover flood damage or ground water damage from heavy rain.  So, even if you’ve purchased a significant amount of homeowner’s insurance and your area experiences heavy flash flooding, damage to your dwelling will not be covered unless you have purchased flood insurance.

Check with your insurance agent now, don't wait for a storm to be approaching.  Most insurance companies will not amend or add to insurance policies once a named system is alive, and Federal flood insurance takes several weeks to process.