Monthly Archives: July 2015

FOR RENT!! ONLY $1300

Beautiful 1 story home with separate family room, two way fireplace, formal living/dining room, eat in kitchen, spacious master bedroom with walk in closet, double sinks with separate tub and shower, covered patio in guard gated community.

One of our BCRE Rental Specialists can assist & represent you in finding your next home for FREE!

Black and Cherry Real Estate Group 702-795-4663

CONTACT US HERE!!!

 

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Our Francine Willis shares new information on Water Heater Requirements!

I’m sending you this brief video explaining how the new energy efficiency standards for water heaters may impact your clients. Feel free to pass it along to anyone who might find it helpful!

The video features a conversation between Dirk Doud, Regional Vice President for Old Republic Home Protection (ORHP), and Scott Warga, General Contractor and owner of ACSI Inspections.

The video covers:

  • 2015 Department of Energy requirements
  • What’s covered by ORHP’s Platinum Protection Plan

When it comes to water heaters, we’ve got your clients covered. Our Platinum Plan includes $1,000 per Plan for construction/carpentry or other related costs necessary to effect a covered repair or replacement (including the correction of code violations); up to $500 per Plan for repair/replacement of vents/flues; and all coverage provided in the Ultimate Protection Plan, including an additional $250 per Plan to correct code violations.

Click here to view the Home Warranty Plan and the complete coverage details.

As always, I’m here to help! If you have any questions, feel free to contact me directly.

Wishing you continued success,

Francine Willis

Sr. Account Executive
(800) 282-7131 Ext: 1151
francinew@orhp.com

 

https://orhp.wistia.com/medias/ggw5xg5soq

Read about the Mid-Year Economic Updates.. And some expectations for 2015 and 2016!

The Economy

  • GDP growth was slightly negative in the first quarter but will pick up in the second half.  For the year as whole, GDP will expand at 2.1 percent.  Not bad but not great.  A slow hum.
  • Consumer spending will open up because of lower gasoline prices.  Personal consumption expenditure grew at 2.1 percent rate in the first quarter.  Look for 3 percent growth rate in the second half.
    • Auto sales dropped a bit in the first quarter because of heavy snow, but will ramp up nicely in the second half.
    • Spending for household furnishing and equipment has been solid, growing 6 percent in the first quarter after clocking 6 percent in the prior.  Recovering housing sector is the big reason for the nice numbers.
    • Spending at restaurants was flat.  That is why retail vacancy rates are not notching down.
    • Online shopping is up solidly.  That is why industrial and warehouse vacancy rates are coming down.
    • Spending for health care grew at 5 percent in the first quarter, marking two consecutive quarters of fast growth.  The Affordable Care Act has expanded health care demand.  The important question for the future is will the supply of new doctors and nurses expand to meet this rising demand or will it lead to medical care shortage?
  • Business spending was flat in the first quarter but will surely rise because of large cash holdings and high profits.
    • Spending for business equipment rose by 3 percent in the first quarter.  Positive and good, but nothing to shout about.
    • Spending for business structures (building of office and retail shops, for example) fell by 18 percent.  The freezing first-quarter weather halted some construction.  This just means pent-up construction activity in the second half.
    • In the past small business start-ups spent and invested.  It was not uncommon to experience double-digit growth rates for 3 years running for business equipment.  Not happening now.  But business spending will inevitably grow because of much improved business financial conditions of lower debt and more profits and rising GDP.
    • What has been missing is the “animal spirit” of entrepreneurship.  The number of small business start-ups remains surprisingly low at this phase of economic expansion.
  • Residential construction spending increased 6 percent in the first quarter.  Housing starts are rising and therefore this component will pick up even at a faster pace in the second half.
  • Government spending fell by 1 percent.  At the federal level, non-defense spending grew by 2 percent, while national defense spending fell by 1 percent.  At the state and local level, spending fell by 1 percent.
    • The federal government is still running a deficit.  Even though it is spending more than what it takes in from tax revenue, the overall deficit level has been falling to a sustainable level.  It would be ideal to run a surplus, but a falling deficit nonetheless does provide the possibility of less severe sequestration.
    • U.S. government finances are ugly.  Interestingly though, they are less ugly than other countries.  That is why the U.S. dollar has been strengthening against most other major currencies.  It’s like finding the least dirty shirt from a laundry basket.
  • Imports have been rising while exports have been falling.  The strong dollar makes it so.   Imports grew by 7 percent while exports fell by 6 percent.  The net exports (at minus $548 billion) were the worst in seven years.  Fortunately, with the West Coast longshoremen back at work, the foreign trade situation will not worsen, which means it will help GDP growth.
  • All in all, GDP will grow by 2.5 to 3 percent in the second half.  That translates into jobs.  A total of 2.5 million net new jobs are likely to be created this year.
    • Unemployment insurance filings have been rising in oil-producing states of Texas and North Dakota.
    • Unemployment insurance filings for the country as a whole have been falling, which implies a lower level of fresh layoffs and factory closings.  That assures continuing solid job growth in the second half of the year.
  • We have to acknowledge that not all is fine with the labor market.  The part-time jobs remain elevated and wage growth remains sluggish with only 2 percent annual growth.  There are signs of tightening labor supply and the bidding up of wages.  Wages are to rise by 3 percent by early next year.  The total income of the country and the total number of jobs are on the rise.

The Housing Market

  • Existing-home sales in May hit the highest mark since 2009, when there had been a homebuyer tax credit … remember, buy a home and get $8,000 from Uncle Sam.  This tax credit is no longer available but the improving economy is providing the necessary incentive and financial capacity to buy.  Meanwhile new home sales hit a seven-year high and housing permits to build new homes hit an eight-year high.  Pending contracts to buy existing homes hit a nine-year high.
  • Buyers are coming back in force.  One factor for the recent surge could have been due to the rising mortgage rates.  As nearly always happens, the initial phase of rising rates nudges people to make decision now rather than wait later when the rates could be higher still.
    • The first-time buyers are scooping up properties with 32 percent of all buyers being as such compared to only 27 percent one year ago.  A lower fee on FHA mortgages is helping.
    • Investors are slowly stepping out.  The high home prices are making the rate of return numbers less attractive.
  • Buyers are back.  What about sellers?  Inventory remains low by historical standards in most markets.  In places like Denver and Seattle, where a very strong job growth is the norm, the inventory condition is unreal – less than one month supply.
  • The principal reason for the inventory shortage is the cumulative impact of homebuilders not being in the market for well over five years.  Homebuilders typically put up 1.5 million new homes annually.  Here’s what they did from 2009 to 2014:
    • 2009: 550,000
    • 2010: 590,000
    • 2011: 610,000
    • 2012: 780,000
    • 2013: 930,000
    • 2014: 1.0 million
    • Where is 1.5 million?  Maybe by 2017.
  • Building activity for apartments has largely come back to normal.  The cumulative shortage is on the ownership side.
  • Builders will construct more homes.  By 1.1 million in 2015 and 1.4 million in 2016.  New home sales will follow this trend.  This rising trend will steadily relieve housing shortage.
  • There is no massive shadow inventory that can disrupt the market.  The number of distressed home sales has been steadily falling – now accounting for only 10 percent of all transactions.  It will fall further in the upcoming months.  There is simply far fewer mortgages in the serious delinquent stage (of not being current for 3 or more months).  In fact, if one specializes in foreclosure or short sales, it is time to change the business model.
  • In the meantime, there is still a housing shortage.  The consequence is a stronger than normal home price growth.  Home price gains are beating wage-income growths by at least three or four times in most markets.  Few things in the world could be more frustrating and demoralizing than for renters to start a savings program but only to witness home prices and down payment requirements blowing by past them.
  • Housing affordability is falling.  Home prices rising too fast are one reason.  The other reason is due to rising mortgage rates.  Cash-buys have been coming down so rates will count for more in the future.
  • The Federal Reserve will be raising short-term rates soon.  September is a maybe, but it’s more likely to be in October.  The Fed will also signal the continual raising of rates over the next two years.  This sentiment has already pushed up mortgage rates.  They are bound to rise further, particularly if inflation surprises on the upside.
  • Inflation is likely to surprise on the upside.  The influence of low gasoline prices has been bringing down the overall consumer price inflation to essentially zero in recent months will be short-lasting.  By November, the influence of low gasoline prices will no longer be there because it was in November of last year when the oil prices began their plunge.  That is, by November, the year-over-year change in gasoline price will be neutral (and no longer a big negative).  Other items will then make their mark on inflation.  Watch the rents.  It’s already rising at near 8-year high with a 3.5 percent growth rate.  The overall CPI inflation could cross the red line of above 3 percent by early next year.  The bond market will not like it and the yields on all long-term borrowing will rise.
  • Mortgage rates at 4.3% to 4.5% by the year end and easily surpassing 5% by the year end of 2016.
  • The rising mortgage rates initially rush buyers to decide but a sustained rise will choke off as to who can qualify for a mortgage.  Fortunately, there are few compensating factors to rising rates.
    • Credit scores are not properly aligned with expected default rate.  New scoring methodology is being tested and will be implemented.  In short, credit scores will get boosted for many individuals after the new change.
    • FHA mortgage premium has come down a notch thereby saving money for consumers.  By the end of the year, FHA program will show healthier finances.  That means, there could be additional reduction to premiums in 2016.  Not certain, but plausible.
    • Fannie and Freddie are owned by the taxpayers.  And they are raking-in huge profits as mortgages have not been defaulting over the past several years.  The very high profit is partly reflecting too-tight credit with no risk taking.  There is a possibility to back a greater number of lower down payment mortgages to credit worthy borrowers without taking on much risk.  In short, mortgage approvals should modestly improve next year.
    • Portfolio lending and private mortgage-backed securities are slowly reviving.  Why not?  Mortgages are not defaulting and there is fat cash reserves held by financial institutions.  Less conventional mortgages will therefore be more widely available.
  • Improving credit available at a time of likely rising interest rates is highly welcome.  Many would-be first-time buyers who have been more focused about getting a mortgage (even at a higher rate) than with low rates.
  • All in all, existing and new home sales will be rising.  Combined, there will be 5.8 million home sales in 2015, up 7 percent from last year.  Note the sales total will still be 25 percent below the decade ago level during the bubble year.  Home prices will be rising at 7 percent.  For the industry, the business revenue will be rising by 14 percent in 2015.  The revenue growth in 2016 will be additional 7 to 10 percent.

READ ARTICLE HERE!!

Looking to buy a home? Read more on the steps to saving for your dream home!

Even if your not a Grad, Start saving for your dream house! Read below the steps to save:

Congratulations, new grads: You’re free! After four long years at college, it’s time to move on to the next stage of your life: adulthood.

That means you get to start thinking about exciting things like your first job, a 401(k), and—sexiest of all—homeownership. And while you might still be sleeping off those Jell-O shots from last night, it’s time to wake up, chug some water, and start preparing yourself financially—if buying a house happens to be one of your long-term goals.

Start preparing now, and buying a house won’t be a struggle. “If you make good money, you have a clean credit rating, and you’ve got enough money set aside for the down payment, buying a house is not really a big hassle,” says Stewart Koesten, the chief executive and executive chairman of KHC Wealth Management inOverland Park, KS.

Sounds easy, right? Make money, save money, have good credit. Ta-da, a house! Not so much: Getting your finances in order for homeownership can be a challenge, even if your goal isn’t a luxury mansion. Here are seven ways to start achieving those goals right now.

1. Get your credit score in order

Sure, your mailbox may be overflowing with credit card offers and the idea of “paying the bills” still seems a bit confusing, but now’s the time to start getting your credit score in shape. One simple way to start building a history: Get your first credit card, because the credit bureaus consider the average age of your accounts when evaluating your score—and you’ll want a great score when it’s time to buy a house.

But if you have a history of overspending, this may not be the right solution for you. A long credit history with a high balance and poor on-time payment record will do more damage. One option might be a secured credit card, which is backed by a cash deposit that’s usually equivalent to your limit. That way, you can never spend more than what you have available.

“There’s not too much difference between a good and a great credit score, in terms of buying a home,” Koesten says. The maximum score is 850, but once you get above 700, the only major advantage a better score will get you is a few points difference on your interest rate. “A bad credit score will hurt you. If you have a credit card or debts you didn’t honor, and you messed up your credit in the process, it will be detrimental to the whole process,” he says.

If you have student loans, a credit card may not be necessary. They also contribute to your score, so focus on paying them down regularly (and on time) to improve your rating.

2. Consider jobs with homeownership in mind

It might be a little too late to change your major, and we’d never suggest passing up your dream job just for money. But if you’re still evaluating your career path (i.e., you really have no idea what you want to or can do for the rest of your life) and homeownership is your dream, make sure to keep finances in mind when you’re searching.

Please, Mr. Postman

Send me news, tips, and promos from realtor.com® and Move.

 

It’s not just about the salary: Does the company match your 401(k) contributions? That will save you tens of thousands of dollars down the line. Are there career opportunities in the cities where you’d like to eventually purchase a home? Everyone should do what they love—but first, make sure that the career you crave is aligned with the lifestyle you dream of.

The easiest way to start saving is to smart small: Put away $10 a week, or use an app like Digit or Acorns to invest your small change.

3. Pay off that debt

If you’re like most young Americans, you’ll be coming out of college with a mound of debt. (The national average for a 2015 grad is $35,000!) It’s easy to ignore it, but balancing a mortgage and your student debt payments is a big burden, even with a generous salary.

Make paying off your debt your No. 1 priority, even if it means sacrificing other goals in the short term. For instance, if you have the opportunity to live at home while working for a few years, do it! (Seriously, we’re not judging—just know what you’re getting yourself into.) Or give up smaller pleasures, like Starbucks and gym membership, until you’ve paid down your debt. Short-term independence is a worthy sacrifice for long-term freedom. Plus, making regular payments will help improve your credit score.

If you’ve graduated college with credit card debt, make that the priority: The super-high-interest rates that come with most student credit cards can make them a crippling financial burden for years to come.

4. Decide what kind of home you want

You’re young—it’s OK if you don’t know a ranch home from a Colonial. (Unless you were an architecture or urban planning major, in which case, uh, maybe brush up on Design 101 before graduation.) But you should start thinking about where you want to live and how you want your future lifestyle to look. Would you feel lost without a yard? Or are you more of a city person, dreaming of a pristine rowhouse?

Even if you’re just looking to buy a starter home or studio apartment and save the dream home for your future, it’s important to keep in mind how you’d like to live.

First, make sure your financial future matches up with your ideal location.

“If you have a modest income in an area that requires higher incomes to live well, you have to adjust your expectations and live where you can afford,” Koesten says. “Don’t try to be too aggressive with your finances.”

Don’t worry if you haven’t mapped out all of the specifics yet. Even a general idea of your goals can help you develop a financial plan that meets your future needs.

5. Start saving your money

No one’s surprised that homes are expensive—you can see the price right there on the listing! Your dream home might cost more than four years’ tuition, but you just need to save up for the down payment, right?

Not so fast. What can be surprising is how much is due upfront: In addition to your down payment, you’ll have to pay for a home inspector, any relevant taxes, and a bevy of closing costs. Together, they can add up to 5% (or more) of the home’s price.

“Make sure you have sufficient reserves, so when you do eventually buy a home you’re not tapping all your resources,” Koesten says. “You want enough money left over after you buy the home to give yourself a little cushion.”

Sure, it seems like a lot of money—it is a lot of money!—but the sooner you start socking money away, the sooner you’ll be able to start looking for your dream home.

6. Don’t play games with your savings

Don’t treat the housing market like a casino and gamble with your future home.

As tempting as it might be, dumping your home savings into the stock market willy-nilly could lead to major trouble if there’s an upset right before you’re looking to buy. Either hire a financial adviser or stick to high-interest savings accounts and CDs.

“You want to make sure that in 10 years, the money you’ve saved has a high probability of being there,” Koesten says.

7. Don’t fall for lifestyle inflation

It’s fun to make money: More nights on the town! A bigger apartment! You can finally get a dog!

Rein in your impulses, and never change your lifestyle because of your salary. A big jump in income is a huge temptation to spend more on eating out or entertainment or weekly happy hours, especially if you’ve been living on a college student budget.

Our advice? Ignore the impulse. The No. 1 way to throw off your financial goals is to fall prey to lifestyle inflation. Raises and bonuses serve you best tucked away in your savings—even if that’s not as much fun.

8. Start small

Your first home doesn’t have to be your forever home. You may love the idea of a white picket fence and multiacre lawn—but it’s OK to start saving with a smaller home or apartment in mind. If you’re planning on staying in one place, purchasing a modest house or studio apartment can be an excellent beginner home. Don’t feel bad if you can’t afford your dream home off the bat: You’ve got many years left to save.

So, are you ready to get out there and start saving for a house now? We sure hope so. After all, you’re not getting any younger.

http://www.realtor.com/advice/buy/tips-for-new-college-grads-on-buying-a-home/

CONTACT US HERE FOR HELP!!