Finding the Perfect Neighborhood: As Important as Finding the Perfect Home

Children

Do you have children or are you planning to have them in the future? If children are a factor, be sure to learn about the schools in your neighborhood. Even if you don't have children, buying a home in a neighborhood with good schools and a child-friendly atmosphere will give your home price a boost. 
Location

The old real estate adage "location, location, location" is important for several reasons. 
Do you want to be able to walk or ride your bike to work? Or do you not mind commuting further to be able to live in an area where you can escape from the hustle and bustle? 
Do you want to be able to walk to restaurants and shops? Or do you not mind having to drive to go out or go shopping? 
Access to public transportation or freeways is important to consider when choosing a neighborhood that accommodates your lifestyle preferences. 
Type of Home

Do you want a large house with a yard to accommodate guests and children? Or do you want a condo where most maintenance is taken care of for you (and you don't mind paying HOA fees)? Drive through the neighborhood and take note of the patterns in the layout of the homes, for example, bungalow, ranch, Tudor or Victorian. Does the type of home offer the amount of space and storage you will need? 
Do you like the character of old homes and neighborhoods, or do you want a brand new home? An old home can have more charm, but may also require more maintenance. In addition to the age of the home, investigating the demographics of the neighborhood may also offer insight about the average age of your neighbors. Your new community may end up better fitting your lifestyle if you know you'll be surrounded by families of similar ages to your own. 
Noise

Do you not mind noise or do you want peace and quiet? If you want a lower-key neighborhood, avoid living near a college or an area with a hopping nightlife. When visiting neighborhoods you are interested in, take note of the amount of traffic and how close it might be to a major thoroughfare; both factors would impact volume levels, even during non-peak traffic hours. 
Safety

In most cities, safety is also a factor. Evaluate whether a transitional neighborhood where you can get more bang for your buck is an option for you, or if a secure, established community is more your style. Local police departments will be able to provide you with information on recent crime rates in the area you are considering. 
Economy

Find out how long homes are on the market and if sellers are forced to reduce their price to find a buyer. Also look around to make sure the retail isn't struggling. If you see abandoned buildings and "for rent" signs, you may want to keep looking. On the other hand, if you think the neighborhood is about to turn around, you may be able to get a great deal. 
Hit the Pavement

Once you've identified several neighborhoods that are up to your standards, go investigate them. Hang out at the coffee shop or knock on some doors, and ask current residents why they love where they live. Walk around the neighborhood during the day to see what people are up to. Similarly, be sure to check out the neighborhood at night, and make sure you feel safe and secure about where you are. 
Finally, if there is a neighborhood association, check if there are any construction restrictions or other similar guidelines that could hinder future plans for your home.

California Dual-Tracking Ban Leads to Spike in Cancelled Foreclosures

A specific provision in California’s Homeowner Bill of Rights may have led to a surge in foreclosure cancellations, according to a report from ForeclosureRadar.

Foreclosure cancellations in California spiked 62.1 percent from September to October and 36.7 percent over a one-year period, data from ForeclosureRadar revealed.

The jump from September to October is the largest monthly increase since the data provider began tracking foreclosures in September 2006.

ForeclosureRadar observed the increase may be due to a particular provision in the Homeowner Bill of Rights that places a ban on dual-tracking. Dual-tracking occurs when a loan is being pushed through the foreclosure process while also being considered for a mortgage modification or short sale.

Even though the Homeowner Bill of Rights doesn’t take effect until the start of next year, ForeclosureRadar says it appears lenders have begun the process of canceling foreclosures that are being considered for short sales or modifications.

“The California Homeowner Bill of Rights that takes effect in January 2013 is beginning to impact foreclosure trends,” said Sean O’Toole, founder and CEO of Foreclosure Radar. “This is another example of where changes in foreclosure trends are driven by government intervention, and not necessarily economic recovery.”

The impact of dual-tracking is still uncertain, but O’Toole speculated, “the elimination of dual tracking may avoid some unnecessary foreclosures, but will lengthen the foreclosure process and delay ultimate recovery. Expect further impacts to foreclosure trends in the months ahead.”

In addition, the $25 billion mortgage settlement placed a ban on dual tracking, which took effect October 3, but the restrictions were for the five largest servicers involved—Bank of America, Citi, JP Morgan Chase, Wells Fargo, and Ally.

“Much of the California Homeowner Bill of Rights codifies for California what was in the National Mortgage Settlement, but it applies to all lenders,” Susan Sierota, chief marketing officer at ForeclosureRadar, added.

Fewer California properties also entered the foreclosure process last month. In October, foreclosure starts fell 8 percent month-over-month. Foreclosure sales increased monthly by 9.3 percent, but fell 38.9 percent from last year.

Two other states in the West saw monthly declines in foreclosure starts during the same time period. In Arizona and Washington, October foreclosure starts fell 15 percent and 4.1 percent, respectively.

Two other West coast states, Nevada and Oregon, saw foreclosure starts increase 32.2 percent and 58.5 percent, respectively.

Foreclosure sales in Nevada came close to matching starts, increasing 33.8 percent, while foreclosure sales in Oregon fell 55.3 percent.

In September, all five Western states saw monthly declines in foreclosures starts.

Many Real Estates markets have seen the bottom

A new report finds that 183 of 252 markets recently surveyed have “hit bottom” and are on their way up. AOL Real Estate recently highlighted housing markets where prices are projected to rise the most next year, based on a new housing report from Zillow. Some of those “hot” housing markets on their list include:

Los Angeles
Projected bottom in home value: First quarter of 2012

Third quarter 2012 home price: $397,000

Miami-Fort Lauderdale, Fla.
Projected bottom in home value: Fourth quarter of 2011

Third quarter 2012 home price: $149,700

San Francisco
Projected bottom in home value: First quarter of 2012

Third quarter 2012 home price: $497,600

San Jose, Calif.
Projected bottom in home value: Second quarter of 2009

Third quarter 2012 home price: $599,800

Sacramento, Calif.
Projected bottom in home value: First quarter of 2012

Third quarter 2012 home price: $210,900

To see the full list of “hot” housing markets, visit AOL Real Estate.

September sees Biggest Yearly Price Gain Since 2006

Home prices in September posted their biggest yearly gain in more than 6 years, but prices displayed a typical seasonal slowdown and fell month-over-month, according to the Home Price Index (HPI) report from Core logic.

When including distressed sales, the report showed home prices moved higher by 5 percent from September 2011, the seventh straight month of yearly increases and the biggest annual gain since July 2006.

From August to September, prices decreased by 0.3 percent.

CoreLogic’s pending HPI projects continued yearly gains into October, with prices expected to rise by 5.7 percent from October 2011. As the winter season sets in, prices are expected to continue moving downward and drop 0.5 percent month-over-month.

“While prices on a month-over-month basis are declining, as expected in the housing off-season, most states are exhibiting price increases. Gains are particularly large in former housing bubble states and energy-industry concentrated states,” said Mark Fleming, chief economist for CoreLogic, in a release.

Anand Nallathambi, president and CEO of CoreLogic added, “Home prices are responding to better market fundamentals, such as reduced inventories and improved buyer demand.”

Out of the 50 states, all but seven saw prices increase over a one-year period.

The five states that led with the biggest yearly increases in home prices were Arizona (+18.7 percent), Idaho (+13.1 percent), Nevada (+11.0 percent), Hawaii (+8.9 percent) and Utah (+8.7 percent).

The five states that saw prices fall the furthest during the same period were Rhode Island (-3.5 percent), Illinois (-2.3 percent), New Jersey (-1.8 percent), Alabama (-1.3 percent) and Delaware (-0.5 percent).

Among the largest metros, Phoenix held a huge lead compared to others with its 22.1 percent year-over-year gain. The next top four metros posted single digit gains. Houston’s 6.6 percent increase made it second, followed by Riverside (5.2 percent), Los Angeles (4.8 percent), and Washington D.C. (4.8 percent).

Industry Weighs in on the Shadow Inventory Debate

After raising the question of how the election might impact the housing market’s shadow inventory, it was obvious to see we had touched on a key issue near and dear to many voters’ hearts, minds, and wallets. Responses to the initial installment of our special election series poured in, and while we can only share some of the reactions here, we’d like to thank all of you who took the time to put your perspectives into words and join in the conversation.

One REO broker from Indiana issued a markedly pro-Romney proclamation, stating, “I feel strongly that Mitt Romney is the best choice by far. His leadership will inspire greater confidence on the part of both buyers and sellers, lenders, and other professionals in the industry.”

This particular broker went on to address the question of shadow inventory specifically. “I feel that if a new administration is elected, the shadow inventory will hit the markets because we will see the banks feel some relief from the pressure [caused by] this administration.”

Barbara Mancovsky, division manager for Nationwide REO Brokers, Inc. in Massachusetts, said, “I couldn’t disagree more with the premise that the inventory has somehow been affected by the presidential campaign.”

Mancovsky explained, “The reality is that banks and servicers have been dealing with a lot of change since the crisis began, including the AG settlement which left the field open for future lawsuits. In addition to the changes, default professionals are trying to catch up on the backlog since the pipeline locked in August of 2010. Add to that the challenges associated with new regulations, which seem to come out faster than adjustments can be made and the never-ending list of potential risks associated with foreclosure, and it starts to get slightly more complicated. It’s getting harder and harder to move anything to REO, especially if you are one of the bigger banks.”

She added, “If we see inventory post election, it’s just reflective of the timeline it took to get there and not based on the fact that an election happened to be scheduled at the same time.”

Beth Acton, a licensed Realtor for ERA Colonial Real Estate in Texas, also chimed in, saying, “My hope is that Mitt Romney will be elected and he will loosen the constraints the government has put on the banks and lenders which will allow them to release their backlog of inventory.”

Acton further described what she’s seen result from the previous election. “I have been in the REO business for the last five years and I have seen a steady decline in inventory since Obama was elected,” she said.

Tackling the issue of employment was Rob, a mortgage lender from Northern California. Rob made the distinction between the two candidates, saying, “Romney’s focus is on supporting growth in the private sector, while the president’s focus for new jobs is in the public sector.”

Rob further explained, “Although a Romney presidency will probably result in a short-term pause in our recovery and possibly quicker turn to inflationary measures, that is what we need to see the recovery take a long-term foothold and turn us onto the path of true prosperity once again.”

Tony Youngs, a full-time real estate investor in the Atlanta area, thinks the shadow inventory is probably bigger than we realize. “I feel the market is appearing to get better because the administration does not want anyone to know about the shadow inventory,” he said. “[T]here are millions of people behind on their payments and some have not made a payment in over two years but foreclosure has not been started yet. The back payments to bring these loans current are so high it would be impossible to catch up. ... The current president had come up with all sorts of plans and programs to help, but lenders would not cooperate so all these plans failed.”

Ron Sullivan, an REO agent with Sully and Associates Realty, Inc., in Bakersfield, California, addressed the market’s foreclosure crisis, first and foremost. “I have done REO for the past six years and seen the inventory drop drastically year-to-year, but yet on every street there is a vacant home, or three or four, underwater mortgages. I can’t help to think that the Obama administration has been a big influence on the [slowing of the] foreclosure process.”

Toni Moss, founder and CEO of EuroCatalyst BV, called attention to what she sees as the real issue at hand. “Comparisons between conservative and liberal parties’ future plans to remediate the housing market are impossible because one candidate is unwilling or unable to offer any specifics on his economic plan overall, including plans for the housing market,” Moss said.

“Romney has basically said, ‘Let’s have a fight—and if I’m not there in 5 minutes, go ahead and start without me!’ What Romney has discussed about the housing market is very broad and simplistic, with potential remedies that everyone already agrees on, i.e., let’s streamline foreclosures and restructure the GSEs. As we say in Texas, it’s all hat, and no cattle,” according to Moss. “Therefore, there is really nothing to compare or contrast between potential administrations, just a lot of political rhetoric and aspirational hypothesizing.

10 High impact home improvements you can do for $10K or less

For all the focus we put on transactions – buying and selling – the truth is that for most of your life as a real estate consumer, you’ll be a homeowner.  And because your home is so much more than just a transactional asset, a widget to be traded and tweaked only for financial reasons, it makes sense to spend some portion of your time, energy and money making it really work for you.
Unfortunately, what too many of us do is wait until we can save up or pull out tens or hundreds of thousands of dollars to make a major move: build on an addition, gut and remodel the kitchen, turn the basement into a media room extraordinaire.  And many times, that means we never do the project, or we only do it when it’s time to sell and move.
The fact is, there are numerous remodeling projects that can crank up your enjoyment factor at home, for the much more accessible sum of $10,000.  Here’s my hit list of the top 10 things you can do for 10K, if you’re in your home and planning to stay put for a while:

1.      Crank up the curb appeal.   We usually talk about curb appeal in the context of sprucing your home up to prep it for sale, but I say that it’s also one of the most cost-effective home improvement projects for homeowners who are staying put in terms of life-improving bang for the home improvement buck. There’s just something about loving the way your home looks when you drive up to it day after day, or when you have people over, that dramatically increases your enjoyment of home. 

Depending on which projects you’d like to do and whether you’re interested in doing any of the work yourself, you can crank up your curb appeal for just a few hundred dollars or a few thousand. Here are a few vision-starting curb appeal-boosting projects to consider:

• Exterior paint or power wash
• Paint or install a new garage door
• Paint or install a new front door
• Paint or install new trims (shutters, eaves, etc.)
• New exterior hardware (door kickplate, mailbox, house numbers, etc.)
• Exterior or landscape lighting
• Front yard landscaping spruce-up or makeover

 2.     Get rid of a wall. You might be a homeowner now, but hearken back to your days as a house hunter.  You might remember seeing homes and wishing for what is easily the #1 remodel fantasy of homeowners to be: knocking down a wall.  In my experience the wall home buyers-cum-owners love to hate the most is the one between kitchen and dining room, far and away.  Opening a kitchen and dining room into one larger, brighter space holds particular appeal for those who enjoy gathering family and friends to entertain at their homes, without isolating the cook/host.

The next most common wall people crave to eliminate is a wall between two small bedrooms. 

Now, agents and appraisers will tell you that turning two small bedrooms into one poses the potential to decrease the resale value of a home – and that’s true. But if you’re not planning to sell anytime soon, it might be worthwhile doing it anyway, especially if it renders two barely usable rooms into one user-friendly space.  And in fact, this wall is often relatively inexpensive to remove – and to replace, if you decide to do so.

In fact, removing walls, even structural walls, is highly feasible and much less expensive than many home owners assume.  (If a load-bearing wall is removed, the structural component can often be preserved and finished, by simple leaving a beam at the ceiling.) What can jack the price up is the relocation of plumbing or wiring contained in the wall being removed. Reconnecting interruptions in flooring and adding in things like an island or the other remodeling line items that can go along with opening a kitchen up (e.g., adding an island, new cabinets and counters, etc.) can also add up. Check with a reputable local contractor to consult on how such a project can be planned and executed efficiently.

 3.    Swap out the old windows for dual-paned.  This is one of those $10K-ish projects that actually can pay for itself over time. Switching out your old single paned windows for new dual-paned ones might make your home look better, but it will definitely make your home operate more efficiently – and more comfortably.  Dual-paned windows minimize heat-loss in the winter and keep the cool air in, in the summer, so you’re not trying to heat up and cool down the whole outdoors through the leaks in your windows. They’re also a must if you have street noise or other noise challenges around your home; the extra insulation traps noise before it can get to you, inside your home.

As with everything, costs vary by location and by the quality of window you choose, but you can use $200-300/window, installed, as a rough rule of thumb.  Some older homes can require wood repair of rotted out window frames, in the course of switching to dual-paned, which can increase the project cost significantly. Also, many cities and states offer rebates for installing dual paned windows (and making other energy-efficient upgrades, by the by), which can dramatically defray the costs of this particular remodeling project. 

4.      Extend your living areas outdoors. The National Outdoor Kitchen and Fireplace Association pegs the average cost of an outdoor kitchen at $12,000 to $15,000 on average – so, if you can cut costs, find appliances on sale or do some of the work yourself,  you might just be able to get one in your own backyard for the $10,000 price point. Outdoor kitchens can be as simple as a table and grill, or as complex as having wood-burning ovens, refrigerators and big-screen televisions.  Whatever route you go, the appliances are likely to be the single most expensive line-item of an outdoor kitchen. If you can tolerate the high-class problem of bringing your food from indoors, you can very cost-effectively create an outdoor living room complete with weather-proof furniture and lighting, in your backyard instead.

The major remodeling return-on-investment indices don’t track the return on outdoor living spaces, but experience tells me that well-executed outdoor kitchen and living rooms are both extremely fun to live with – and extremely desirable to the buyers to whom you will eventually be marketing your home.

5.      New kitchen appliances.  In terms of sheer functionality, new kitchen appliances can create an overwhelming upgrade to your family’s everyday life. A new fridge will run you anywhere from $350 to $2,000 on average (though French door, custom and commercial versions can cost upwards of $10,000 or more); a new stove/oven range can run anywhere from $300 to $6,000 (with the commercial, 40-inch ranges running from $9,000 to $20,000+) and an appliance store dishwasher will cost you somewhere around $250 to $1,600.

 6.    Swap out your carpet.  Listen, you might LOVE carpet.  And if you do, that’s fantastic.  But many Americans are living with carpet they really, really dislike, whether because of its color, its condition or the upkeep and maintenance it requires.  If you have $10K and you can’t stand your carpet, you can estimate that it’ll run you about $300-$500 per room to replace it with new carpet, or $1500-$2000 per room to replace it with hardwood, depending – obviously – on where you live, how large your rooms are and what specific materials you choose in terms of the replacement floors. 

 7.     Bring a bathroom into this millennium.  The average cost of a bathroom remodel in America is right around $16,000, according to Remodeling Magazine, but that lumps master bathrooms in with powder rooms and the like. I say there are dozens of things you can do to your hall or other bathrooms to bring them into the 21st century for well under the $10,000 mark.  For example, my Jacuzzi tubs are probably the most-used “appliances” in my home – homewyse.com pegs the average cost of swapping your tub for a jetted one at somewhere between $1500 and $3500.

And last year, I traded up my hall bathroom sink and faucet for top-of-the-line versions for right around $1,000, installed.

In fact, there are a number of thousand-dollar-or-less bathroom power-tweaks suggested by Consumer Reports – if you’re committed and smart, you can group a number of them into a bathroom that feels like new for well under $10,000:

• Replace the vanity with a new wood model that has a stone counter.
• Add a new mirror and faucet. Alternatively, keep your current vanity but replace your toilet and faucet and add a new vinyl floor.
• Improve lighting and ventilation with a new combination light and exhaust fan. One with a heat setting will keep you from getting chilled when you get out of the shower.
• Add a set of sconces on either side of the mirror or medicine cabinet.
• Update towel bars, hooks, toothbrush and toilet paper holders, and cabinet hardware. Add matching shelves for your towels and toiletries.
• Switch your standard showerhead to one with multiple settings, including a pulsating or massage setting.
• Keep your towels toasty with a heated towel bar, some of which cost $100 or less.

 8.     Build in organizing systems.  Clutter is an energy vampire – there’s nothing like having a place for everything and everything in its place to create the sense that your life is in control. And one of the most significant advantages to owning your own home is that you can customize it to manage your stuff and your activities, rather than being forced to fit your things into someone else’s system. If you have $10K in hand to make your home more ‘you,’ consider having custom organizing systems built into your closet, office, pantry or garage, tailored to your family’s stuff and needs. 

The range of pricing here is vast, depending on whether you buy an off-the-shelf closet organizer at the home improvement store and install it yourself or call California Closets out to measure your shoes and sporting goods and input them into a custom design, complete with hydraulics. 

 9.    Paint.  A few years back, there was a study on what home improvements actually could be linked to an increase in happiness and well-being.  One of the most affordable was to simply paint the rooms of your home in colors that fostered the target emotions that map to the function of the room. For instance, painting a bedroom a soft blue or green fosters tranquility and rest, while painting a kitchen or dining room a warmer shade might promote the cozy fuzzy feelings of family togetherness.  Painting can be very affordable, depending on your home’s size and details, and is a great starter do-it-yourself project, to boot.

My personal cost-cutting tip: pick your colors from the designer paint swatches, but have the paint department staff use more affordable paint when they custom-mix the colors to mix.

 10.  Connect your home. When so-called “smart home” systems first came out, they were the stuff of an MTV Cribs episode, costing tens of thousands of dollars to put various home systems on a remote control.  But as with all technologies, costs of connecting your home have come down – a lot. For anywhere from $200 to $2,000, you might be able to have your home’s systems wired so that you can:

• Control lighting, heating and AC remotely
• Have your HVAC systems and window coverings, for example, work in sync
• Monitor your home via video and sensors for security and other home crises (e.g., flood, etc.), no matter where you are.

The best part? Even the least expensive of these systems now is able to be run via a smartphone app.  Home security providers are increasingly offering these options, and even some home internet/telephone providers have also gotten into the business of affordably connecting your home.

If you’re considering making a modest investment in a home you plan to own for a while, you’re increasingly in the norm. Studies show that over 50% of homeowners are now focusing on smaller home improvement projects that increase their enjoyment of their homes - even if they don't increase its value. 
All:  Do you fall into this group? What $10,000-or-less projects have you done at home that boosted your enjoyment?

Inventory of new homes down to lowest level in 50 years

The U.S. housing market “has entered a sustainable period of improving conditions,” Pro Teck Valuations CEO Tom O’Grady says in the company’s most recent Home Value Forecast.

Pointing to “very low mortgage rates, stable to rising home prices, declining unemployment, declining housing inventories and a strong rental market,” O’Grady says housing is in a good position to continue growth. Those positive trends should lead to growth in the overall economy, he adds.

“As real estate has historically been one of the most important leading indicators of economic activity, this has positive implications for the economy,” he says in the report. “This is particularly true for the new home market. Even though new homes represent only a small percentage of the overall housing market, they have a disproportionate effect on the economy since data shows that on average, three new jobs are created for a year for every new home built.”

Each of the company’s forecasts picks a housing trend and studies its influence on the market. This particular update shines a spotlight on months of remaining inventory (MRI) of new homes listed for sale and examines how that statistic affects median single family home price changes. The report also examines why there has been a divergence between new and existing home prices in the recent down-cycle.

According to recent data, the inventory of new homes for sale has fallen dramatically since 2008 to 4.5 months, closing in on its lowest level in 50 years.

“The primary reason for the low months of remaining inventory for new single family homes is the historically low number of new homes for sale,” O’Grady writes. “In recent years, new housing supply has been running at the lowest levels since the 1960’s due to the slow down in new home construction, the size of homes being built, and the complicated process for selling/buying distressed properties.”

The drop in MRI is expected to be a blessing for new home prices, however. Data going back to 1972 shows an inverse correlation between changes in median price on new single family homes and changes in MRI.In short, whenever MRI starts to drop, the median price starts to spike a year or two later.

With new housing supply at its lowest level in almost 50 years,MRI will continue its steady decline, leading to another likely pickup in prices.

Of course, the drop in new homes for sale brings its own problems. Recent drops in distressed sales indicate homebuyers are more interested in new homes—a market that isn’t ready for a spike in demand.

“Many potential buyers of [distressed] homes become frustrated with the elongated acquisition times in the short sale and foreclosure sale markets and turn to the new home market, if possible, where they know they can transact a home at a well-define closing time and price,” the report says. “The problem is that the number of homes available in this channel is typically far below normal levels, which puts added pressure on what new inventory is for sale.”

Given that data, “it should not be a surprise that nationwide, new home prices have held up much better than existing home prices.”

While new and existing home prices have tracked each other closely since the late 1960s, there has been a more noticeable gap between the two in recent years. The most recent monthly median new single family price of $256,900 is down less than 1 percent from its peak in 2006. Meanwhile, the nationwide median existing single family price of $183,900 is down 20 percent from its peak in the same year.

While the report acknowledges that median prices are being distorted by the geographical distribution of new sales, it asserts “it is a fact that the new and existing home markets have performed quite differently in recent years due to the underlying supply-demand situations.”

Geographically speaking, Texas and Oklahoma were home to five of October’s top 10 metros in terms of market conditions, confirming “the strength of the real estate market in this part of the country,” said Michael Sklarz, principal of Collateral Analytics and contributing author to the Home Value Forecast. Sklarz also noted that all of the top markets experienced significant declines in active listing counts over the past year, leading to smaller MRI and tighter markets.

The bottom-ranked metros were hurt most by “local, not regional, economic issues,” according to Sklarz. Those markets were more spread out across the country, ranging from Oregon (the Portland area) to South Carolina (Greenville and the Richmond County area). Many of those areas are plagued with high MRI—some in the double digits. However, the news for the bottom 10 wasn’t all bad.“We are seeing positive trends in the bottom ranked list—such as the declining number of days for sale on the market in some areas,” Sklarz said.

Foreclosure Activity Falls to Five-Year Low

Foreclosure filings — including default notices, scheduled auctions, and bank repossessions — were reported on 180,427 U.S. properties in September, according to RealtyTrac. The total number of filings last month was down 7 percent from August, down 16 percent from September 2011, and was the lowest monthly total recorded by RealtyTrac since July 2007.

The foreclosure tracking company says the decrease in September helped pull Q3 2012 numbers down to make it the lowest quarterly reading since the fourth quarter of 2007.

Foreclosure filings were reported on 531,576 properties during the third quarter of this year, a decrease of 5 percent from the second quarter and a decrease of 13 percent from the third quarter of 2011. It marks the ninth consecutive quarter of annual declines in foreclosure activity.

According to RealtyTrac’s report, one in every 248 U.S. homes received a foreclosure filing during the July-to-September period. The company says U.S. foreclosure starts in the third quarter decreased both from the previous quarter and a year ago, reversing the rise seen in new foreclosures during the second quarter.

“We’ve been waiting for the other foreclosure shoe to drop since late 2010 … but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market —- at least at a national level,” said RealtyTrac VP Daren Blomquist.

“Make no mistake, however,” Blomquist added, “the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.”

A number of judicial foreclosure states — including Florida, Illinois, Ohio, New Jersey, and New York –- registered substantial year-over-year increases in foreclosure activity, whereas non-judicial foreclosure states such as California, Georgia, Texas, Arizona, and Michigan posted sizable declines.

Blomquist says states where foreclosures were not so dammed up last year could still see a roller-coaster pattern in activity going forward because of regulations and court rulings that have substantively changed the rules for proper foreclosure processing. He contends a backlog of delayed foreclosures will likely build up in those states as lenders adjust to the new rules.

Residential Real Estate Bright Spot in Fed Report

The nation’s economy “generally expanded modestly” from mid-August until the end of September, the Federal Reserve said in its periodic Beige Book report issued Wednesday.

The report, the last Beige Book to be issued prior to Election Day, painted a mixed regional picture, with a “leveling off” of economic activity in New York and a “slowing in the pace of growth” in Kansas City. Meanwhile, the remaining 10 federal reserve districts reported that “growth continued at a modest pace.”

The Beige Book is prepared by the Federal Reserve eight times a year, issued about two weeks before each meeting of the Federal Open Market Committee. The FOMC is scheduled to meet next on October 23. The Beige Book, which is compiled on the basis of anecdotal rather than statistical evidence, is closely watched on its release, though not usually cited in the minutes of the Federal Open Market Committee meeting for which it is prepared.

Consumer spending, which represents about 70 percent of the economy, “was generally reported to be flat to up slightly since the last report,” according to the book.

Residential real estate proved to be a bright spot amid an otherwise pedestrian report. The book noted “all twelve Districts reported that existing home sales strengthened, in some cases substantially,” since the last report.

“Most districts reported strengthening in existing home sales, while prices were described as steady to increasing, with declining inventories noted in the Boston, Atlanta, Minneapolis, Dallas, and San Francisco districts,” the report went on to say.

The report said “selling prices were steady or rising” Boston, Atlanta, Minneapolis, Dallas and San Francisco “noted declining or tight inventories” putting upward pressure on prices, tracking both the Federal Housing Finance Agency and Case Shiller Home Price Index reports.

“Modest price increases were reported in the New York, Richmond, Chicago, and Kansas City Districts. New York and Richmond reported relatively strong demand at the high and low ends of the market,” according to the Beige Book, “whereas Philadelphia and Kansas City noted relative strength for mid-range homes.”

“New home construction and sales,” the report said, “were more mixed but still mostly improved” with the report noting “increased construction and/or new home sales” in the Atlanta, Chicago, St. Louis, Kansas City, Dallas and San Francisco Districts. Multi-family construction, in particular, was described as robust in the Boston, New York, Atlanta, Chicago, and Dallas Districts.

Residential rental markets “continued to be characterized as strong, even in the New York and Atlanta Districts where rents increased somewhat less strongly than in recent months,” the report said.

Commercial real estate markets were described as mixed. “Office markets, the Beige Book said, “showed signs of softening in the northeastern Districts-Boston, New York and Philadelphia.” New York, the report noted, has “substantial new supply coming on the market in early 2013.” Atlanta, Minneapolis and San Francisco noted “some improvement,” the Beige Book reported, while “most other Districts reported stable or mixed market conditions.”

Overall loan demand increased slightly since the last report, the Beige Book said. “New York, Philadelphia, Cleveland, Richmond, Atlanta, St. Louis, and San Francisco reported stronger loan demand on balance, while Kansas City and Dallas reported flat demand and Chicago reported somewhat weaker demand.”

Most Districts, the book said, “reported an increase in mortgage lending, especially for refinancing purposes.”

Demand for consumer credit, particularly for auto loans, was reported as “strong in the Cleveland, Atlanta, St. Louis, Dallas, and San Francisco Districts, while consumer loan demand was more limited in New York, Richmond, Chicago, and Kansas City.”

Credit standards, the report said, “were little changed since the last report. However, New York noted some tightening for consumer loans and residential mortgages, while Richmond and Chicago reported some easing for commercial and industrial loans.”

Loans were described as “difficult to obtain for many small businesses in the Cleveland, Richmond, and Chicago Districts,” though “Philadelphia, Cleveland, Dallas, and San Francisco Districts reported stiff competition among lenders.” Loan quality, the Beige Book said, “improved in Philadelphia, Kansas City, and Dallas,” and “delinquency rates generally held steady or declined in the New York, Cleveland, and Dallas Districts.”

The Beige Book was prepared before the Employment Situation report-which showed an improvement in the national unemployment rate in September-and found employment conditions were “little changed since the last report.”

The New York and Chicago Districts, the report said, “noted weaker labor market conditions, and conditions were described as mixed in Richmond” while companies “in the St. Louis District reported an increase in hiring plans.”

“Several Districts, the report said, “continued to report that employers were having difficulty filling highly skilled positions,” and “in response, a few Districts noted that firms were starting to increase training programs to meet their staffing needs.”

Top Ten Things You Need to Know About the 3.8% Tax

1)When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will NOT be subject to this tax.

2)The 3.8% tax will NEVER be collected as a transfer tax on real estate of any type, so you’ll NEVER pay this tax at the time that you purchase a home or other investment property.

3) You’ll NEVER pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.

4)If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will NOT pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.

5) The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents after expenses).

6) The tax goes into effect in 2013. If you have investment income in 2013, you won’t pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.

7)In any particular year, if you have NO income from capital gains, rents, interest or dividends, you’ll NEVER pay this tax, even if you have millions of dollars of other types of income.

8)The formula that determines the amount of 3.8% tax due will ALWAYS protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would NEVER be imposed on more than $1000.

9)It’s true that investment income from rents on an investment property could be subject to the 3.8% tax. BUT: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.

10) The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. NAR strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.

Home prices up again!

U.S. home prices continued to increase in July, according to Case-Shiller, with its 20-city index up 1.6 percent from June and the 10-city index up 1.5 percent. The 10-city index rose to its highest level since November 2010 and the 20-city index to the highest level since October 2010. Prices rose month-over-month in all of the 20 cities.

Year-over-year, the 10-city index was up 0.6 percent, and the 20-city index rose 1.2 percent. U.S. home prices continued to increase in July, according to Case-Shiller, with its 20-city index up 1.6 percent from June and the 10-city index up 1.5 percent. The 10-city index rose to its highest level since November 2010 and the 20-city index to the highest level since October 2010. Prices rose month-over-month in all of the 20 cities.

Year-over-year, the 10-city index was up 0.6 percent, and the 20-city index rose 1.2 percent. 

New lower interest rates!

The Federal Reserve’s announcement confirming a third round of quantitative easing sent long-term mortgage rates tumbling to all-new record lows this week.

Freddie Mac’s Primary Mortgage Market Survey showed a drop in both the 30-year and 15-year fixed. According to the survey, the 30-year fixed-rate mortgage (FRM) averaged 3.49 percent (0.6 point) for the week ending September 20, down from 3.55 percent the week before.

The 15-year FRM also fell this week, averaging 2.77 percent (0.6 point). The previous survey showed an average of 2.85 percent.

Adjustable-rate mortgages (ARMs) saw so slippage, however. The 1-year ARM saw no change from last week, averaging 2.61 percent (0.4 point). The 5-year ARM actually increased, rising to 2.76 percent (0.6 point) from 2.72 percent before.

The Fed’s announcement adds to the other good news the housing market has been seeing, said Frank Nothaft, VP and chief economist at Freddie Mac.

“Following the Federal Reserve’s announcement of a new bond purchase plan, yields on mortgage-backed securities fell, bringing average fixed-mortgage rates to their all-time record lows, which should aid in the ongoing housing recovery,” Nothaft said. “New construction on one-family homesrebounded in August, rising by 5.5 percent to the fastest pace since April 2010. In addition, existing home sales increased by 7.8 percent in August to its strongest pace since May 2010.”

Bankrate’s weekly survey showed drops in all categories. The 30-year fixed plummeted to 3.70 percent from 3.81 percent last week, while the 15-year fixed fell to 2.95 percent from 3.04 percent. Meanwhile, the 5/1 ARM dropped to 2.69 percent from 2.75 percent.

While the new stimulus may be good for housing, Bankrate wondered if the Fed’s plan will be able to achieve its intended goal.

“Unhappy with the pace of economic recovery or job growth, the Fed felt compelled to take additional measures, even if those measures will be more effective at boosting the stock market and reducing interest rates than the stated intentions of lifting economic output and aiding job growth,” Bankrate said in a release.

5 Surprising Home Buyer turnoffs

The prospect of selling your home effectively makes you a marketer. And effective marketing requires that you understand the mind and priorities, likes and dislikes of your target buyer. In real estate, we all know that buyers like to see homes that are pristine, huge and well-located. Sometimes, though, it’s much harder to recognize when our own homes might actually be triggering buyers’ distaste - or disgust. 

Earlier this year, I gave you some critical insights into what specific things turn buyers off - and now I’m back with a handful more! Whether you’re preparing to sell your home, or you’re in the market to buy a home and want to be aware of what the property’s resale prospects might be, here are five home features and characteristics that are big-time turn-offs for today’s home buyers.

1.  Pools. Twenty years ago, having a pool was seen as a luxurious amenity - almost a status symbol that you had made it, if your home had one. Fast forward a couple of decades, though, and many home buyers are turning down homes specifically because they have a pool.

There are a couple of core buyer subgroups who love pools: people who live in places where summers are super hot and people who really like to swim. But those buyers are vastly outranked in number by these other subgroups: 

• people who know they won’t swim enough to use a pool, and think that maintaining one would just be a waste of their time, energy and money
• people who would rather have a yard, and are looking for homes in areas where they either have a pool or a backyard - but not both, and
• people who have young children and see a pool as a safety hazard.

If you happen to have a pool, your best bet is to market your home as best you can to those buyers who truly want one, and to mitigate the perceived negatives of pool ownership by being both pragmatic and creative:

• ensuring the pool has a well-functioning fence and cover, 
• staging the rest of the backyard in a way that maximizes the non-swimming activities a buyer will see as possible in the outdoor space, and/or 
• offering to pre-pay for a year of the buyer’s pool maintenance as an incentive of the home sale transaction.

2.  Your stuff.  Yes - your taste is immaculate. But it’s your taste. What buyers are really looking for when they come to view a home is a palate on which they can envision easily applying their tastes. Accordingly, a primary goal of smart home preparation is depersonalization or neutralization, simply removing most or all of the personalized touches that make your home reflect you unless they are also neutral enough that any buyer, from any age group or cultural background can step in and put their mind’s eye to work at filling in what the place would look like if they lived there.

That said, it’s also entirely possible that your things might not be as attractive, nice or tidy in the eyes of a buyer as you perceive them to be. In the same vein, the tchotchkes, knickknacks and memorabilia that you see as cozy and warm are highly likely to be seen by buyers as dumpy clutter. I have personally been in homes with a number of buyers where the fact that the sellers still had so much stuff or such bad stuff throughout the home distracted the buyers from appreciating the property’s true potential, and what it might be like if they simply made some cosmetic edits and redecorated.

We’ve talked a lot over the years about the idea of simply pre-packing, staging by boxing up everything but the very most basic daily essentials and get them ready to move - some sellers find that to be a much more effective way to think about the project of decluttering.  Also, you can reset your own perspective on what you need to get rid of or move out to put your home on the market by visiting professionally staged Open Houses, hiring a stager just for an hourlong consult or even asking your agent to walk through your home and stick mini-Post It notes on things that need to be moved out before the listing goes live.

3.  Carpet.  Obviously, old, dirty, pet-impacted and bizarrely colored carpets (red?!) are not a draw for buyers. But this generation of home buyers takes the carpet conundrum even further, exhibiting a distaste for carpet - period. Concerns about the relative difficulty and expense of cleaning carpets, to the cost of replacing them when you want a decor change, to the tendency of carpets to hold pet hair, mites and other allergens that may impact family members with respiratory issues are, collectively causing carpet to fall out of favor with today’s home buyers. 

The majority of home buyers express a desire to have hardwood floors in their next home; other hard floor surfaces, from bamboo to tile to concrete to cork, are rapidly outpacing the popularity of carpets (though some buyers do still prefer the softness and warmth of carpets in their bedrooms). 

If you were thinking about replacing your carpets before you put your home on the market, consider replacing at least the living and dining areas with hard wood or a similar finish.  And if your home has carpet over hardwood, talk with your agent about exploring the idea of ripping it up - it might not be as expensive to repair or refinish as you think, and in many areas, buyers prefer even an imperfect hardwood floor over nice carpets.

4.  Gold bathroom fixtures.  Gold bathroom fixtures are part of a larger category of buyer turn-offs perhaps best described as things that are old, but not old enough to be vintage, retro, classic or historic. As a general rule, this includes household appliances, finishes and decor that dates from the ‘70s and ‘80s, give or take a decade, depending on where you’re at. For instance, the popularity of Mad Men has driven a massive amount of interest in all things mid-century modern, bringing the 50’s and 60’s decor and design aesthetics that just seemed plain and old when I was a child back into vogue - but somewhat more in urban than suburban taste zeitgeists.  

This means that those goldenrod refrigerators and wallpapers with marigold, orange and avocado floral patterns are decidedly passe. Similarly, gold bathroom and lighting fixtures, popular in the 80s and 90s are seen as dated by buyers, who much prefer sleeker, matte-er stainless, brushed chrome and even bronze or white finishes where metal finishes are necessary.  Is this just another trend? Yes.  But replacing gold bathroom finishes and recessed lighting can covers is relatively inexpensive to do; touch base with your stager or agent regarding whether they think these micro-home improvements will make much of a difference with buyers in your area and your home’s price range.

5.  Elaborate gardens and/or vast landscaping.  A huge backyard seems like it’d be a big draw.  So do the flower and botanical gardens that the seller obviously spent hour upon hour designing and tending to. But they also seem like a lot of work to today’s time-strapped and cash-conscious buyers. Not long ago, a buyer I know actually de-prioritized a home they otherwise loved, because it was surrounded by an enormous Japanese garden, bonsais and all, that the buyer admired, but knew they could and would never be able to care for.  Same can go for elaborate, high-maintenance food gardens or even super-large front and backyards: some buyers simply know they don’t or won’t put the time, money and water into their care, so would rather not take them on.

Nothing about this should stop you from creating such an outdoor space if that is part and parcel of the lifestyle you want to live in your home. But it should be a factor you consider if you are concerned about reselling your home in the near future, and it might impact how you market your home if it has any of these sorts of features. If you have a miniature botanical garden at your home, why not find out if the local botanical garden or garden society has a newsletter you can place an ad in? If you have bees and chickens in the middle of Chicago or the heart of L.A., is there an urban farming club or blog that reaches that audience?  

Work with your agent to research where local buyers who would love your home’s unique or high-maintenance features, then market your home to them via publications, websites or organizations in which they already participate.  Once you understand that the average buyer might find these features to be less-than-desirable, it’s time to get creative about finding the buyer who will find them to be just what they’ve always wanted.