Home prices climb in December, best yearly gain since 2006

NEW YORK (Reuters) – U.S. home prices picked up in December,
closing out 2012 with the biggest yearly gain in more than six years as the
housing market got back on its feet, a closely watched survey showed on
Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.9
percent in December on a seasonally adjusted basis, topping expectations for a
gain of 0.5 percent.

Prices in the 20 cities jumped 6.8 percent year-over-year, ahead of
expectations for 6.6 percent and the best yearly gain since July 2006.

“I expect the home price rise to persist in 2013,” said Michelle
Meyer, senior economist at Bank Of America Merrill Lynch in New York.

For the final quarter of the year, prices gained 2 percent on a seasonally
adjusted basis. On a non-adjusted basis, prices were up 0.2 percent in
December.

Last year housing contributed to economic growth for the first time since
2005 as the sector began to recover from its far-reaching collapse. Still, the
market is far from fully healed, with over 20 percent of mortgages underwater
and foreclosure rates still elevated.

Prices have been rising since last February as the supply of available homes
for sale tightened in 2012, helping to stabilize home values. Investors buying
cheap homes to be converted into rentals also supported the market and some
hard-hit areas saw a sharp bounce back in prices. Phoenix, for example, saw
gains of 23 percent compared to December 2011.

“While the economy faces challenges from the fiscal cuts, the housing
market is on a good footing due to low inventory, slow clearing of foreclosure,
steady household formation and more easing of mortgage credits,” said
Meyer.

Atlanta and Detroit racked up their biggest yearly increases since 1991,
when they were first tracked. Prices in the cities climbed 9.9 percent and 13.6
percent, respectively. New York was the only region to decline on a yearly
basis, down 0.5 percent.

U.S. stock index futures saw little reaction to the data, with Wall Street
set for a higher open, while the dollar extended losses against the euro.

 

DELRAY BEACH INTERNATIONAL TENNIS CHAMPIONSHIPS

If you are into tennis court action, the Delray Beach
International Tennis Championships
are for you – because it’s two
tournaments in one locale. High-caliber professional Delray Beach International Tennis Championshipstennis and more
than a week’s worth of parties and special events are all happening blocks away
from the excitement of the Delray Beach Atlantic Avenue District. One volley
event comes from past champs as top professionals such as International Tennis Hall of Famers, Davis Cup and Grand
Slam winners compete in the round-robin ATP Champions Tour event. The second set
faces current tennis professionals in the singles and doubles elimination play
of the ATP Champions Tour event.Delray Beach International Tennis Championships

Throughout the week enjoy the hospitality of ITC and Delray Beach with special
happenings to entertain fans of any age. Sign up for the Ultimate Experience
Clinic and learn with Grand Slam legends. With Kidz Day, VIP Parties, multiple
events for charity, Pro-Am matches and more. You are sure to ace a good time.

Are you ready for the next Sandy?

The  recent hurricane on the East Coast may be over, but the cleanup process  is just now beginning. Beyond debris pickup, property managers and  owners across the area are learning what preparations worked well, and  what they can do better next time.

Photo credit: S. Shepherd. Click on the image for more from this photographer.

Regardless  of your location, this is a good time to ask yourself if you would have  been ready to handle Sandy. Disasters such as these should move us to preventative action.

Thankfully, the fourth edition of Before and After Disaster Strikes: Developing an Emergency Procedures Manual from the Institute of Real Estate Management (IREM) has arrived on the  scene just in time to help property managers and other owners get  started on this vital, yet daunting process.

Far  from just counting fire extinguishers and first aid kits, this book  offers checklists of the more obvious risk management activities (broken  out by both disaster and building types), and a comprehensive look at  the more esoteric, easily forgotten elements of disaster planning. Are  you storing the right types of information backups, so you can get back  to normal business operations ASAP? Do you have the right kind of  insurance? How will you get the word out to tenants, as well as  outsiders and the media?

However,  the main purpose of this book is to help you establish an emergency  procedures plan, including considerations such as how tenant profiles  can change the nature of your plan, how incident reporting procedures  should work, and more. This handbook also includes a helpful overview of the  key emergency management players whose knowledge and specialization you  should tap to create your plan. Also, this book covers  federal laws governing your emergency response, so you can plan in  compliance.

Turning back to Sandy and friends, Before and After Disaster Strikes notes  that, in the U.S., 63 million permanent residents live in  hurricane-prone zones, with more arriving as tourists. Here are some  tips for how to prepare for the next Sandy from IREM’s chapter on  hurricanes:

  • Consider  purchasing permanent storm shutters for windows. If that investment  turns out to be too costly, have ⅝-inch marine plywood pre-cut for all  of your windows ahead of time, so that this protective barrier is on site  and ready to install.
  • Get  flood insurance. Most property and weather-related insurance does not  include this in flood-prone zones. Don’t assume you can pick this up last-minute, either; most flood  insurance has a 5-day waiting period before it goes into effect.
  • Consider purchasing back-up systems, including:
    • portable water-removal pumps
    • battery-powered emergency lighting
    • gasoline-powered generators

Tips for finding the perfect home!

“I’ll know it when I see it.” “This doesn’t feel like home to me.” “Someday the
right one will come along; I’ll keep looking until it does.” “It’s
going to be my home; it has to feel special.”

These comments are typical of buyers who’ve looked for a while but haven’t committed to buying. The
objections sound sensible. Yet, they could be excuses not to buy.

Homebuying is not for everyone. It’s a major commitment and is often the most expensive purchase most
people will make in their lifetime. It’s understandable that some buyers approach the home search with reservations.

You’ll save a lot of time and energy if you can determine if homebuying is for you before you start
looking. Then for the best result, approach the house hunt methodically and with the understanding that it will take time.

The first step is to make a list of all the features you need and want in a home. Think about your current
home, and others that you’ve lived in. Consider what you liked and disliked about them.

The next step is to prioritize the list distinguishing what you must have and what you’d like to
have. You’re unlikely to find all of the items on your list in one home.

HOUSE HUNTING: It will help to prioritize your list if you look at some homes for sale in your price range
and in the areas where you’d like to live. Visiting Sunday open houses or looking at listings online can help you to familiarize

yourself with the local inventory if you haven’t already selected a local real estate agent.

You may find that some of the items you’d like to have in your home don’t exist in your target area. For
example, let’s say you want to live in a neighborhood of charming older homes that are close to shops and transportation.

You also want a two-car attached garage. Smaller homes built in the 1920s or earlier usually don’t have two-car garages.

This is where compromise comes into play. If the older, conveniently located neighborhood is high on
your wish list, you will need to be willing to settle for a one-car garage, or perhaps no garage. If the two-car garage is a must,

you may need to consider homes that were built more recently, and are not as conveniently located.

As you’re looking at homes for sale, try to see beyond the seller’s décor and the staging. A well-staged
home can mask floor plan defects. It can be misleading in terms of what you
need in a home. For instance, a first-time buyer made the mistake of buying a
home that was staged so well that she didn’t realize that there was no formal
dining room and no eating area in the kitchen.

On the other hand, you may be tempted to turn down a home that’s staged to appeal to the widest audience
but appears not to suit your needs. Let’s say a home has three bedrooms but no
home office. If you need only two bedrooms, you could use the third bedroom as
an office, even though it’s not represented that way.

The best way to see a home
you’re really interested in is with your agent. Many buyers aren’t good at
visualizing a home any other way than how it’s shown. An experienced agent
should be able to show you how you can adapt a home to your needs.

It’s often hard to make a good assessment of a home you’re serious about at a Sunday open house. Have
your agent take you back for a second or third look.

THE CLOSING: Bring your wish list and discuss the pros and cons before you make a final decision

 

FINANCING YOUR HOME PURCHASE

Improving Your Credit Score

FICO scores are based on specific credit history, with hundreds of inputs used to find your score.

There are 5 main parts of your credit score:

1. Payment History: 35% of your credit score

Payment history measures how you’ve paid on your debts. Payment history is the largest part
of your credit score because if you’ve recently missed payments your creditors, it’s likely those
missed payments will continue, and may lead to default.

Payment history also measures how “severe” a missed payment has been. An item in
collection is worse than an item paid 30 days late.

Tip to improve: Make payments on time, all the time — even items in dispute. Pay the bill and worry
about refunds later.

 

2. Amounts Owed: 30% of your credit score

Amounts owed measures how “maxed out” you are. It is the second-largest part of your
credit score because a person that is maxed out has no safety valve in the event of a crisis.
Amounts owed is not about the dollar amount you’re borrowing — it’s about the dollar amount
you’re borrowing relative to the amount available to you.

Tip to improve: Don’t close out “old” credit cards, and don’t lower your available credit limits.
Having access to credit is good.

 

3. Credit History Length: 15% of your credit score

Your credit history is your track record with respect to managing credit. It matters in
the FICO model because “experienced users of credit” areviewed differently from new users. Similar
to the hiring process for a job, the credit bureaus want to see that this isn’t your first experience.

Tip to improve: Don’t close cards with“history”. You need them to show you’re experienced
with credit.

 

4. New Credit: 10% of your credit score

This category accounts for your recent attempts to secure new credit. In general, themore credit for which you’veapplied, themore damage it will do to your credit
score. This is more true for credit cards than for mortgage applications. A consumer in search of new credit cards is presumed to
“need” more credit lines.

Tip to improve: When you shop for a mortgage, multiple credit checks can count
as a single credit inquiry, protecting
your credit score.

 

5. Types of Credit: 10% of your credit score

The type of credit you carry matters and not all credit types are the same. Installment loans such as mortgage loans and studentloans, for example, are considered
“better” than credit cards and charge cards. This is because installments loans eventually pay down to zero. Consumer cards, by contrast, can only go up.

Tip to improve: Don’t carry an abundance of store charge cards. Interest rates are high
and the FICO model looks
unfavorably upon them.

Financing Your Home Purchase

5 Steps to Save for a Down Payment

One of the greatest hurdles to home buying is coming up with the down payment. Here are a few softer
practical strategies to help you clear the hurdle and come up with the cash you need.

 

1. Plan for progress –
Your Dream Budget

Saving isn’t all dollars and cents, it’s a little emotional. That’s why we recommend finding
a few visuals to remind you why you’re saving. They could be photos or a list of features of
your dream home. Whatever your focal point, store it  close to your budget, wallet, or in the place you
pay bills to remind you of what you’re working for.

 

2. Slow your Spending –
The 10-day Rule

The biggest enemy of spending is the impulse buy. For purchases over $25 exercise self discipline and give yourself 10-days to decide

if this purchase is for a real need or a want?

 

3. Avoid the Convenience

From coffee on the go to lavish meals out, consumers pay quite a bit for convenience. Avoid your local convenience stores and

become friends with your kitchen to help your bottom line.

 

4. Track Expenses – Face Your Truth

We scoured the net and all the experts agree, the only thing more powerful than creating
a budget is tracking it. Schedule time with yourself each week to face the truth about your spending and find new ways to save.

 

5. Eliminate the Excess Spending

Locate the excess in your budget and slash it. Trade the gym for home workouts, movie nights out for rentals at home, and keep an

eye out at the end of each month for services.

Serious Sources for a Down Payment

Payroll Deductions:

One of the best ways to save money is to hide it from yourself. Payroll deductions or allocating a piece of your direct deposit
to a special savings account can be a great way to trick yourself into saving.

 

Tax Refund:

You know it’s coming, why not use it toward your down payment? If you’re really serious about home ownership, talk to an accountant

about tax planning to make sure there is a little green at the end of the year to help
you with your down payment.

 

Borrow from the 401k:

It’s not losing your retirement, it’s more so using a piece of one investment to make another. First-time homebuyers can one-time

borrow up to $10,000 from their Individual Retirement Accounts (IRAs) without paying the early withdrawal fees. Be sure to talk
to your 401k or IRA administrator to find out how it will impact your retirement.

 

More Work:

Yes, we said it; more work. If you’re serious about reaching your down payment goal, consider spending a few hours working
parttime. 10 hours/ week at $10/hour all year will get you $5200 closer to your goal.

First Annual Delray Beach Wine & Seafood Fest

The Greater Delray Beach Chamber of Commerce is proud to announce the

First Annual Delray Beach Wine & Seafood Fest

November 10 & 11, 2012

With a fifty year history of running successful events in the city including the much heralded Delray Affair, The Delray Beach Chamber of Commerce looks to extend its economic impact on the city by producing an event in the beginning of our traditional tourist season. The event takes place on the East end of Atlantic Avenue and is the result of merchant requests for an event to highlight the businesses in that area.

For more info check out www.dbwineandseafood.com

 

BUILDING AND MAINTAINING A GREAT CREDIT PROFILE

Your credit report represents how well you manage your financial
responsibilities. The good news is that your negative information drops off over
time but the positive information remains. Building a strong and consistent
history of responsibly using credit is the foundation to building a great credit
profile. Although it’s relatively easy to gain access to new credit such as
credit cards, there are many best practices to use and common traps to avoid.
Here are a few easy tips for effectively building your credit history.

Applying for new credit
  • Don’t apply every time you see an offer. Getting too much credit too quickly
    can hurt your credit profile.
  • Don’t build your credit profile through trial and error. Consult an expert
    such as a credit coach to develop a plan based on your short- and long-term
    needs.
  • Print clearly when applying for credit. If your application information is
    entered inaccurately it can create variations of reported information on your
    credit report.
  • Consistently use your complete name without any variations. Providing
    complete, accurate and consistent identification on your credit applications
    helps set up your credit history correctly from the beginning. It also minimizes
    the chance that your credit file will be incomplete or mixed with another
    consumer’s file.
Once you have credit
  • Pay your bills on time. Most lenders look at the most recent information on
    a report. So if you’ve paid your accounts on time for the last two to three
    years, the lender may weigh that more heavily than a series of late payments
    from five years ago.
  • Set up a budget, and follow it. This is so much easier said than done! A
    credit coach can help provide you guidance on creating and managing a budget
    based on current income and debt as well as your short- and long-term credit
    needs. In the age of self-help and empowerment, managing your finances should
    top your list. The key is not to over-extend yourself.
  • Develop and follow a plan for the type of credit you have, how you use it,
    and the type of credit you may need in the near future.
  • Review your credit report periodically throughout
    each year.

    • At least 60 to 90 days before making a major purchase (such as a home, car
      or large household goods) you should prepare by reviewing your credit profile to
      help ensure it is optimized.
    • Continual evaluation of your credit profile is necessary to ensure you are
      not paying unnecessary interest expenses (i.e., you could qualify for lower
      rates and better terms). The average homeowners spend an estimated $300,000 in
      their lifetimes on unnecessary interest expenses.
    • Ensure no fraudulent or erroneous activity has occurred related to credit
      profile. An estimated one in eleven families was a victim of identity theft last
      year.
Getting help

A personal credit coach can be incredibly valuable whether you understand
credit or not. Having a credit coach is similar to an asset manager except it’s
for your liabilities. A coach will work closely with you to explain your credit
profile, provide you guidance with ways you can more effectively manage it, and
can help you evaluate it on an ongoing basis. Changes continually occur for all
of us. Jobs change, unforeseen expenses happen and so on. If you begin to fall
behind on your payments.

  • Contact your lenders. Ignoring the situation will only add to your problems.
    Many lenders will work with you to set up a different payment schedule or
    interest rate. It never hurts to ask.
  • Pay your bills when they’re due. If you have an overdue bill, unpaid debt,
    tax lien or judgment, pay it off. You may find it easier to pay one affordable
    consolidation loan rather than several separate accounts. Your credit coach can
    help identify what options may be available to you.
  • Stop using credit, if possible, until your finances are under control.
    Consider going to cash purchases only based on your budget. This will STOP the
    financial bleeding while you pull your credit management plan back into place.
  • Look to professionals like the ApprovalGUARD Service. Your credit coach is
    experienced in explaining your credit and indentifying ways to optimize and
    manage debt.
  • AVOID credit repair agencies. “If it’s too good to be true then it often
    is!” Most credit repair agencies typically charge you high prices to
    artificially “fix” your credit. This unfortunately often amounts to “band aid”
    work that manipulates loopholes in the system and often results in the credit
    issue returning to your credit report within months after it was supposedly
    fixed. If you have inaccurate information on your report, your ApprovalGUARD
    credit coach can help you identify it and specifically provide you with the
    proper methods for getting it addressed.

READY TO BUY?

Are you looking to buy a home? Following are 5 steps to take that will help make the process smoother.

Step 1. Find a Local Lender You Can Talk To in Person
Local lenders
understand your market and know of loan programs that might be beneficial to
you.

Check with your lender on any local programs that might help with
closing costs or in other ways. Even though the media have pronounced the
100-percent-financing option dead, this is not always the case. Check it out for
yourself and then get preapproved for a loan so you know how much house you’re
able to buy.

Step 2. Be Specific in the Area You Want To
Live

Educate yourself. Familiarize yourself with the neighborhoods you’re
interested in, the taxes and school districts. This not only helps you narrow
down your search when you need to move fast, but also helps you figure out
potential mortgage payments. Find a home in your desired neighborhoods.

Step 3.
Find an Agent Specializing in the Area You Want to Live

This will save
you time and effort. Once you’ve identified a real estate agent,
trust him or her to do the job. Agents who are thriving in this challenging
market have proven their worth. They have the resources and skills to help you
find your next home.

Step 4. Don’t Shy Away From Houses That Need Some
Work

Just because a house needs some paint or
cosmetic fixes doesn’t mean it’s not a good buy. Most real estate agents have an
address book full of trusted businesses they work with to help you fix up your
new home. There’s an HUD program known as 203(k) that enables you to fold repair
money into a primary mortgage; ask a RE/MAX agent in your market about the
program.

Step 5. Be Prepared To Act
Sometimes the first
home you see is the right one for you. Don’t discount it. Remember, good deals
still go fast. Take advantage of the electronic tools your real estate agent has
to offer. In many instances, real estate agents have access to better
information than what you can find in a standard Internet search.

The advice offered here comes from sales associates affiliated with
independently owned and operated RE/MAX offices and may not be applicable to all
areas.

Property Values Going Up

Property values are growing again, even it it’s by the smallest amounts, and some local officials hope it could be the beginning of a noticeable recovery. Preliminary numbers from the Palm Beach County Appraiser’s Office show that the decline in property values in Boca Raton and Delray Beach has turned around.  For the first time in a number of years, there’s the smallest increase-a fraction of a percent. In Boca Raton, values increased nearly a half-percent and, in Delray Beach, the city’s taxable property value grew by .15 percent, according to the county’s preliminary estimates.

This year, Boca Raton raised its property-tax rate 4.3 percent and increased fire fees in order to generate more revenue. Higher property values mean the same tax rate next year will raise about $245,000 more, according to prelimary projections, Assistant City Manager Mike Woika said.

“I’m glad to see it stop going into the red,” Delray Beach Mayor Woodie McDuffie said, pointed out that property values had been dropping every year since 2007. “I’m hoping it’s the end of an era,” he added.

Anne Geggis SunSentinel May 18th 2012

 

Add Real Estate To Your Retirement Account

Spooked by the stock market? Wondering what kind of
return you’ll get with bonds? Getting minimal return in your money market
fund?

Here’s an option you may not know about: The U.S. Internal Revenue
Service allows you to have real estate investments in a self-directed IRA
retirement account.

“It’s a wonderful way
to increase your retirement fund,” says RuthAnn McBride (CDPE, CIAS), a real estate agent with RE/MAX
Estates in Estero, Fla. “You can take any or all of the money that you currently
have in an investment fund and buy real estate.”

You can invest in any type of real estate – single-family homes or
condos, multi-unit properties, commercial real estate, even vacant land –
through your retirement account.

The critical factor is that the investment must be in the name of your IRA –
not your own name.

Taxes are deferred
As with any tax-deferred
retirement account, income and capital gains accumulate tax-free until you tap
into the funds. Once you do so – you can begin withdrawing funds with no penalty
at age 59½ – you pay taxes on the gains. Rent or lease payments, then, flow
directly into the retirement account. Expenses – maintenance and repair, costs
for finding new tenants and so on – are taken directly from the
IRA.

“This is for your retirement,” McBride says. “Not for income that
you can use right now.”

Restrictions on real estate investments in
retirement
.

  • The limit on the amount of new money you can invest ($5,000 annually if
    you’re under 50, $6,000 if you’re 50 or older) applies to real estate, just as
    it does to any other tax-deferred retirement investment.
  • The property must be a true investment. Neither you nor your spouse can live
    or vacation in it, nor can lineal family members (parents, grandparents,
    children, grandchildren, great-grandchildren) or their spouses.
  • You can’t write off expenses or losses on your taxes.
  • The investment must be in care of a
    government-approved custodian, which holds the investment. (Only a small number
    of such custodians exist in the U.S.; a RE/MAX real estate
    agent
    experienced in investing can help you find one.) And a separate
    administrator must handle record-keeping and tax reporting.
  • If you sell the property and make a profit, the gains go into the IRA, not
    to yourself. If you choose to re-invest the profits in real estate, you can do
    so – but still in the name of the retirement account

Such investments aren’t for everyone, McBride
cautions.

“Liquidity might be an issue if you’re concerned about needing
your money before retirement,” she says. “Like any other real estate investment,
it may take time to sell. Your money is not liquid.”

McBride
enthusiastically endorses real estate investments in an IRA.

“It’s the
best of all worlds,” she says. “The beauty of it is, even when you begin
withdrawing funds, you still have the underlying asset – the property – which
can continue to appreciate in value. Over the long-term, real estate
traditionally has been more reliable and made more money for investors than more
traditional retirement investments. Another advantage is this: Suppose I buy
stock in a company that folds. That money is gone. But real estate will always
be there.”

Realtors aren’t qualified or authorized to offer tax advice,
so you should consult an accountant or other tax expert before deciding whether
real estate makes sense as a retirement investment – and how to structure the
transaction.

When you do decide to invest in real estate, contact a RE/MAX real estate
agent
experienced in investing to help you find and purchase the right
property.

The advice offered here comes from sales associates affiliated
with independently owned and operated RE/MAX real estate
offices
and may not be applicable to all areas. Contact an independent
RE/MAX agent near you for expertise tailored to your locale.