Monday, October 27, 2008

Forty years and counting...
You may have noticed that we edited our profile a bit over the weekend.
It used to read "married almost forty years."
It became forty years last Saturday.
Quite a milestone!
I am now looking forward to forty more.
Our children who live locally, Scott and Amy along with her husband Alan had planned to treat us to dinner at our favorite restaurant in Norcross.
What they had not told us was that they had planned a surprise by inviting my brother Jimmy and his wife Kathy and their daughter Ashley, Dale's sister Joyce, several of our close friends Luke Greene and Celia Harmon and Tom and Mikal Kitchens.
It was a great surprise and made it even better by our son Adam flying in from Colorado for the occasion.
Thank you Scott, Amy and Adam for all your planning and a wonderful dinner and thank you to all our family and friends for sharing this special evening with us.
And thank you Dale for forty great years!

Friday, October 24, 2008

Existing-Home Sales Rise on Improved Affordability...
WASHINGTON, October 24, 2008 Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate¹ of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. “The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,” he said. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. “This is the first time since November 2005 that home sales have been above year-ago levels,” he said. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun said there may be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners,” he said. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”
Total housing inventory at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply² at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
The national median existing-home price3 for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500. “Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices,” Yun explained. “The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
Single-family home sales increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price4 was $199,400 in September, down 10.2 percent from a year ago.
Regionally, existing-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. The median price in the West was $253,600, down 18.5 percent from a year ago.
In the Midwest, existing-home sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. The median price in the Midwest was $152,500, which is 7.9 percent lower than September 2007.
Existing-home sales in the South rose 2.2 percent in September to a pace of 1.90 million but remain 7.8 percent below September 2007. The median price in the South was $167,200, down 4.1 percent from a year ago.
the Northeast, existing-home sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. The median price in the Northeast was $246,800, down 5.4 percent from September 2007.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
© Copyright NATIONAL ASSOCIATION of REALTORS®


US Home Sales Rise 5.5%, Signaling a Possible Bottom...
Sales of existing homes rose 5.5% in September, a real estate trade group said, offering a glimmer of hope that the housing slump may be starting to bottom.
The National Association of Realtors said the rise in September from the month before was the best showing since July 2003, during the five-year housing boom.
Even with the gain in sales, prices kept falling. The median sales price has dropped to $191,600, down by 9 percent from a year ago.
The report came a day after the Federal Housing Finance Agency said US home prices fell 0.6 percent in August versus July.
The drop, however, was slightly less than the 0.8 percent fall in July, which is perhaps a glimmer of hope for the hard-hit U.S. housing market as it may indicate that the precipitous drop in home prices could be abating.
A huge supply of unsold homes, tighter lending standards and record foreclosures have pushed down home prices.
For the 12 months ending in August, U.S. home prices fell 5.9 percent, and the cumulative decline since the April 2007 peak is 6.5 percent, according to the Federal Housing Finance Agency's House Price Index.
By region, seasonally adjusted monthly price changes ranged from a decline of 1.8 percent in the Pacific Division states of Hawaii, Alaska, Washington, Oregon and California to an increase of 0.4 percent in the New England states of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and Connecticut, the report said.
The FHFA monthly index, formerly called the OFHEO monthly house price index, is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.
FHFA regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.The index was introduced in the Office of Federal Housing Enterprise Oversight's fourth quarter 2007 House Price Index, or HPI, report and has shown less severe price declines than other reports.
© 2008 CNBC

Thursday, October 16, 2008

What’s Next for Mortgages, Consumers...
By Chris Kissell RISMEDIA, Oct. 13, 2008-(Bankrate.com)
-When the Federal Reserve meets, we all have questions: What does it mean to me? Will my mortgage rate go up or down? Is this a good time to refinance? Bankrate offers help. We’ve looked at five categories-mortgages, home equity loans, auto loans, credit cards and certificates of deposit-to determine if the Fed’s moves made you a winner or a loser. Here’s a look at mortgages:
Winner: Homeowners with adjustable-rate mortgages
The Federal Reserve’s half-point emergency rate cut may not have any affect on mortgage holders. Changes in the federal funds rate do not directly influence the direction of mortgage rates.
However, Fed rate cuts may have more indirect impacts on some mortgage rates, particularly those associated with adjustable-rate mortgages.
Many ARMs are closely pegged to the London Interbank Offered Rate, more commonly known as LIBOR. When the Fed cuts the federal funds rate, LIBOR rates usually decline correspondingly.
During times of financial stress-such as we are experiencing now-this relationship often breaks down, and the spread between the federal funds rate and LIBOR actually tends to widen.
If that trend reverses-and LIBOR rates drop back closer to the federal funds rate-the Fed’s latest rate cut would be a boon to many homeowners with ARMs. Homeowners with these mortgages could expect to see their monthly mortgage payment decline the next time it resets.
Loser: Consumers looking for instant discounts on fixed-rate mortgages

Cuts in the federal funds rate do not directly impact fixed-rate mortgages. So if you’re shopping for a fixed-rate mortgage, don’t expect the Federal Reserve’s surprise rate cut to send mortgage rates lower.
They may fall. Then again, they may rise.
Take action
The Federal Reserve’s emergency rate cut will not directly impact mortgage rates. Fed actions change the federal funds rate, which is not directly correlated to mortgage rates.
As a result, consumers should not make decisions about their mortgages based on the hope that the Fed’s latest emergency rate cut will send mortgage costs plummeting. Mortgage rates often rise after a Fed rate cut. But they could fall just as easily.
For more information, visit www.bankrate.com.

Friday, October 10, 2008

Warren Buffett's Reassuring Words On the Future...
As the stock market's wild moves downward have average Americans worried about their financial futures and looking for leadership, it's important to keep Warren Buffett's reassuring words about the long-run in mind.
Here's what he said live on CNBC just a few weeks ago:
"You know, five years from now, ten years from now, we'll look back on this period and we'll see that you could have made some extraordinary (stock market) buys. That doesn't mean it won't get more extraordinary a week or a month from now. I have no idea what the stock market is going to do next month or six months from now. I do know that the American economy, over a period of time, will do very well, and people who own a piece of it will do well.
"Just don't borrow money to buy your piece.
Three Buffett-style tips for dealing with Wall Street's ongoing turmoil.
1. "Cash combined with courage in a crisis is priceless"
2. "Dont invest in things you don't understand"
3. "Don't try to catch a falling knife until you have a handle on the risk"

Sunday, October 5, 2008

Good kids...
Our daughter and her husband are both Physics teachers at Norcross High School in Norcross, Georgia. On her Blog, Hayes Habits, Amy published a post this morning entitled "Why I love
teaching"
about a group of students in one of her classes and their class Physics project that was performed last week.
She also wrote about her kid's participation in a MDA walk to raise money and to support one of their classmates.
Amy is obviously very proud of this group of kids, and from what I read, rightly so. Check it out. Nice job kids!



Smart Moves For Real Estate Owners in Turbulent Times...
by John Adams, Copyright 2008.
Recent gyrations on Wall Street and beyond have muddied the financial waters. It’s hard to know just what to do or how to react. And if your largest investment is your home, your course is even less clear.
Here are several moves that I believe are rational and appropriate for the homeowner in today’s economic times:
1. Take a deep breath and relax. Because that is exactly what the Georgia housing market has done.
Over the years, residential real estate has proven to be one of the safest of all investments. And all the predictions of dramatic drops in home values in Georgia have been wrong. While there are some parts of the country where home values have taken a dive, Georgia is not one of them, according to federal regulators at OFHEO.gov.
On average, home prices in Georgia are higher today than ever before. And although appreciation has taken a year off, we have yet to see any decline in average home prices on a year-over-year basis. So it’s OK just to relax.
2. Now is a great time to consolidate your debt and refinance your home loan.
If you carry a balance on credit cards, or you carry a balance on a home equity line of credit, or you owe on a car loan or any type of consumer loan, you may be better off paying these balances to zero and loading up your house with debt.
Rates are low, and the interest may be tax-deductible, lowering your overall interest expense even more. This may be your chance to get a fresh start.
3. If you do refinance, make sure you select a thirty-year fixed-rate loan.
I used to tell clients that it was OK to select a 3 or 5 year ARM if they were sure they were moving from Atlanta within that time period. But I found out that many were so happy living in our fair city that they refused to relocate at the appointed hour, finding a way to stay here. I am persuaded that rates will be higher in years ahead, and those who lock in a low fixed rate today will be glad they did. In addition, if rates happen to go lower, you can always refinance again, although I believe this to be the bottom.
When the stock market stumbles, billions flow from equities to bonds, driving down mortgage rates. When the market recovers, and it will, look for a reverse flow and rates to tick upward.
4. Stop paying extra principal on your home loan, at least temporarily.
If you are one of the financial fundamentalists who oppose all debt, I encourage you to consider this: borrowing against your home is likely the cheapest source of cash you can get, and cash may be king in the months and years ahead.
In my view, if you have extra cash monthly to apply to home loan balances, you are better off to put it in a FDIC insured high yield CD and save it for a rainy day. If you pay it to the mortgage company, it doesn’t lower your monthly payments, and it may be difficult to get it back if you need it.
I know that debt can be dangerous, but it can also be used to improve our lives. In this regard it’s like electricity. We all know that there is danger in the electric socket, yet we tolerate the danger for the benefits it brings us. In addition, your house neither knows or cares that you have a mortgage balance against it.
5. After you have finished refinancing, look for a Home Equity Line of Credit.
In fact, you may be wise to not only put the HELOC in place. It may benefit you to also draw the full balance out, and put that cash in a safe place as well.
This may also prove to be good advice if you have a home equity line with a zero balance. There are disturbing reports of major lenders who are notifying borrowers of seldom-used HELOCs that their lines of credit have ben canceled. This is a bank reaction to perceived lower values for their collateral.
In addition, if you have a line of credit buy rarely use it, the bank probably loses money on your account. Drawing your line out assures you that the bank won’t unexpectedly close the account, and puts you in a stronger cash position.
As with all money moves, it’s smart to discuss them in advance with your financial advisor. Next week, several more ideas for homeowners in today’s market.
This article first appeared in the Atlanta Journal-Constitution.

Thursday, October 2, 2008

Mortgage aid program begins...
Lenders can take loss on loan to help borrowers make payments
From AJC.COM-The Associated Press Thursday, October 02, 2008
WASHINGTON — The government kicked off a program Wednesday that aims to prevent foreclosures by letting an estimated 400,000 troubled homeowners swap their mortgages for more affordable loans.
Lenders, rather than borrowers, will decide whether to participate in the program, which requires them to take a loss on the initial loan. The $300 billion, three-year program is designed to help borrowers who owe more on their loans than their homes are worth. Enlarge this image The Associated Press About 400,000 homeowners are eligible for a program that aims to refinance troubled mortgages.
To qualify, borrowers must be spending more than 31 percent of their income on mortgage payments. Loans made this year are excluded, except for those completed on Jan 1. Borrowers must have made six months of payments on their loans.
“For homeowners in trouble, this may be the help that they need,” Housing and Urban Development Secretary Steve Preston said Wednesday. Officials did not have an updated estimate of how many homeowners were likely to qualify, beyond the Congressional Budget Office’s projection from earlier this year that 400,000 borrowers would participate.
The program, dubbed ‘Hope for Homeowners,’ was passed by Congress this summer as part of a massive housing bill. It is one of several government efforts to stem the mortgage crisis.
Critics, however, call the government’s actions sluggish and inadequate. Earlier action to modify loans, they say, might have prevented a $700 billion financial industry bailout now being debated in Washington.
Executives from Citigroup, JPMorgan Chase, Bank of America and Wells Fargo told lawmakers last month they have been hiring additional workers to put the new program in place.
Still, it is unclear whether the industry will embrace the plan fully. One concern is that investors in mortgage securities must take an immediate loss and can’t recoup their lost money if home prices turn upward again.
Investors would rather modify loans in ways that maintain the ability to “share in future appreciation,” JPMorgan Chase executive Marguerite Sheehan said in written testimony submitted to House lawmakers last month.
On Monday, a group of state banking and law enforcement officials released a report that said nearly 80 percent of borrowers with subprime loans were not on track for assistance to avoid foreclosure as of May.
The report by the State Foreclosure Prevention Working Group criticized the lending industry for making only small changes to loan terms and noted that about one in five loans that were modified over the past year became delinquent again.
“While banks and Wall Street firms continue to report record write-downs of mortgage loan portfolios and securities, the losses do not appear to be flowing down to homeowners in the form of sustainable loan modifications,” Iowa Attorney General Tom Miller, a founder of the state effort, said in a statement.

Wednesday, October 1, 2008

Atlanta home prices rising slightly...
By KEVIN DUFFY The Atlanta Journal-Constitution Tuesday, September 30, 2008
Has Atlanta’s home price decline bottomed out?
For three months now, resale prices of single-family homes in the metro area have been inching up, according to new data from the Standard & Poor’s/Case-Shiller Home Price Index.
“Atlanta, Dallas, Minneapolis and Tampa showed improvements in their annual and monthly returns, but all four are still too close to their recent lows to determine if the markets have stabilized,” S&P says.
Over a year’s time, prices in metro Atlanta are down 8.2 percent, much less than the 20-city composite average of 16.3 percent. That index and S&P’s 10-city index both show record annual declines, but the month-to-month change has slowed.
From May to June home prices fell 2.2 percent, whereas from February to April the pace of decline was 6 percent.
“There are signs of a slowdown in the rate of decline across the metro areas, but no evidence of a bottom,” said David Blitzer, chairman of S&P’s index committee.
Atlanta’s prices have increased 1.3 percent since April.
The June to July change was an increase of 0.4 percent. Home prices nationwide peaked in June 2006. Las Vegas, Phoenix and Miami have been the worst performers over 12 months. Prices have fallen 28-30 percent in those cities.