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Property owners who have flood insurance through the National Flood Insurance Program will see their insurance premium rates increase due to changes that took effect April 1, 2016.
The NFIP, which is administered by the Federal Emergency Management Agency, works with private insurance companies to offer flood insurance at rates that are set nationally.
Here are a few highlights of the changes:
Premiums, surcharges, and fees will increase.
Premium rates will increase an average of 9%; however, some premiums will increase as much as 25%.
Premium rates will vary according to where the property is located. Flood maps are being revised, so a property may be located in different NFIP zone now. Use FEMA's Flood Map Service Center to find flood maps by address.
Basic economics didn’t hold in February. Sales of existing homes were down a surprising 7.1% to 5.08 million units on an annualized basis. At the same time, the median price of an existing home dropped 1.4% to $210,000 for February, while supply, the lack of which has been an issue for the past two years, was up 3.3% to 1.88 million units.
So, for last month, we had more supply and lower prices, yet sales tanked.
As for new homes, we saw a different dynamic at play. Sales of new homes rose 2% to 512,000 units on an annualized basis. Sales were up, but so too were prices. The median price of a new home was up a strong 6.2% to $301,400 for February. Supply is also on the rise. There’s a 5.6 months’ worth of supply at the current sales pace. This is the highest sales-to-supply multiple since December 2008.
Other factors, like weather, played a part in the anomalous February sales data. Now that spring is here, we expect to see less variation in monthly sales numbers. We also still expect to see good things for sales and housing activity through 2016.
If you are thinking of becomeing a homeowner this year, here are a few tasks you can work on now to help make the process a lot smoother for you:
Get your finances in order. Talk with a mortgage broker or banker to assess your financial situation, and check your credit for any issues you can resolve before a lender scrutinizes your file. This will also help you determine a realistic price range for your budget.
Figure out your criteria. Start thinking about neighborhoods you may like to live in, what size property you need, and which amenities are must-haves. These options may change during your house hunt, but at least you'll have a starting point.
Talk with a Texas REALTOR®. Even if you won't be ready to move for a few months, he or she can help you take steps now to ensure you present a strong offer later, like getting a prequalification or preapproval letter from your lender.
Buying a home is exciting. You saved for the down payment, scheduled the move, and are dreaming of planting new roots. Closing is right around the corner… unless a scammer gets your settlement fees first.
The Federal Trade Commission and the National Association of Realtors® are warning home buyers about an email and money wiring scam. Hackers have been breaking into some consumers’ and real estate professionals’ email accounts to get information about upcoming real estate transactions. After figuring out the closing dates, the hacker sends an email to the buyer, posing as the real estate professional or title company. The bogus email says there has been a last minute change to the wiring instructions, and tells the buyer to wire closing costs to a different account. But it’s the scammer’s account. If the buyer takes the bait, their bank account could be cleared out in a matter of minutes. Often, that’s money the buyer will never see again.
If you’re buying a home and get an email with money-wiring instructions, STOP. Email is not a secure way to send financial information, and your real estate professional or title company should know that. If it’s a phishing email, report it to the FTC.
Here are some ideas to help you avoid phishing scams:
Don’t email financial information. It’s not secure.
If you’re giving your financial information on the web, make sure the site is secure. Look for a URL that begins with https (the "s" stands for secure). And, instead of clicking a link in an email to go to an organization’s site, look up the real URL and type in the web address yourself.
Be cautious about opening attachments and downloading files from emails, regardless of who sent them. These files can contain malware that can weaken your computer’s security.
Keep your operating system, browser, and security software up to date.
Housing starts came in strong for February, rising 5.2% month over month to 1.178 million units when annualized. Single-family starts were especially robust, rising 7.2%.
That said, at least a few commentators were down on permits, a useful gauge for estimating future activity. Overall, permits were down 3.1% in February. However, single-family starts were actually up 0.4%. Year over year, growth in single-family permits has been healthy, up 6.3%. This suggests that new-home activity should remain elevated heading into the spring season.
But the news on new-home activity isn’t all good. NAR data show that inventory for homes priced below $250,000 dropped 8.2% in January compared to a year earlier. When supply falls, prices usually rise. Trulia data show that starter-home buyers on average need to devote 38%, up from 32% four years ago, of income to housing costs.
While some in housing are saying a coming drop in home prices will stymie the market for a while, that same drop in housing prices will allow Millennials to enter the housing market in the long term.
Visit crimereports.com, a website that provides visitors with free up-to-the-minute crime maps and crime reports for specific areas. This site also offers a free mobile download and, if you choose, will send free crime alerts on a regular basis. You may also want to make the time to speak with the community offer if there is one or the local police station.
National Sex Offender Database
I get asked this question a lot. To ensure my clients are well informed, I advise them, when asked, to contact the police station. The police will be able to provide information about registered sex offenders living nearby. I also recommend they go online to FamilyWatchdog.us, which is a free database that allows you to search by street name or city. The site provides information that often includes a photograph and about offenders living in the neighborhood. According to researchers at Longwood University in Farmville, VA, living within one-tenth of a mile of a sex offender will lower your home's value by 9 percent. So, find out before you buy.
Noise and traffic
When client ask me about noise and traffic in a particular neighbor, I recommend they visit the neighborhood during the morning, mid-day, evening and night. This way they can observe the traffic patterns during various times of the day also observe the neighborhood activity. I also recommend talking to a few neighbors to find out what they thing about the noise and the traffic.
Some people may think because they do not have kids, the school does not matter, but it should to some degree. For example, while you do not have any kids at the moment, what happen if that changes? You may have children in the future, and good schools ensure consistent demand for properties in addition to higher resale prices. Take a look at Websites such as Education.com and GreatSchools.net, these sites allow you to search schools by ZIP code, city, district or school name.
The information they provide include test scores, student-to-teacher ratios, student demographics and a lot more. Keep in mind private schools are not required to release test scores, so you will not find much information about them. One of my favorite suggestions to clients is to speak to a neighbor or two. Get their thoughts on area schools as part of your research.
Is the city you plan on moving in having financial trouble? Pay attention to the streets, are they clean and well maintained? What about the parks, is the grass cut, is there trash everywhere clean? Are there sidewalks badly damaged? Is public transportation available nearby? Where are the nearest police and fire stations? Are there any open libraries or have they all been closed or is operating on reduced hours?
Property Up Keep
Look for signs of property disrepair and neglect. Make sure you look at all the homes surrounding up, down the street and behind your potential home. You are looking for homes that are well kept and indicate pride of ownership. If what you find are uncut grass, garbage and other clutter left in the yard, and weedy flowerbeds, this may be a red flag to move on and look elsewhere.
Your Potential Neighbors
Most people overlook this part of the research when buying or renting a home. They often look at physical characteristic of potential neighbors and forget about the very loud 2 am party, still blasting Thursday morning. Remember, bad neighbors don't just neglect their property; they also have no consideration for other people in the neighborhood. Would it be a problem for you to wake up every morning to several loads of dog poo on your lawn? Would you be ok with homes that have cars that spill onto the street and lined the street? What about unleashed and neglected pets rooming the street? Make the time to Inspect the neighborhood during the day, and make sure to drive around during the evening and at night. And talk to as many neighbors as you can. Remember, be nice. You goal is not to offend anyone.
Homes in Foreclosure and Vacant Buildings
Absent neighbors and empty buildings can bring down property values in the neighborhood. Search online to find foreclosed homes for sale in the area, and then drive by the homes to inspect their condition. Also make sure to look for vacant commercial buildings that are close by as well. Neighborhoods with stores that have gone out of business and schools that have closed do not reflect a prosperous community. In addition, vacant buildings encourage a variety of nefarious activities that you do not want in your neighborhood.
For home buyers, remember, you are not only buying a home for you and your family to live and enjoy, you are also making an investment and all good investments, must have a good rate of return and all of the above mention contributes to that.
Expectations are mixed for the housing market in 2016. More Americans are viewing home ownership as part of their personal American Dream than in recent years, and some industry observers believe those elusive millennials will finally start to make an impact next year.
Spurred mostly by new construction, total home sales could top 6 million for the first time in a decade, Jonathan Smoke, chief economist for Realtor.com, predicted recently. But next year may ultimately be more about re calibrating a new normal than rocketing past a pre-downturn benchmark.
Existing home sales are expected to grow moderately, as would-be buyers grapple with rising interest rates and slumping wages. Consumer confidence in income growth remains rocky, while about one in five Americans believe it'll be tougher to land a home loan next year compared to this one, according to a Trulia survey from November. Here's a look at four key trends that could shape home buying in 2016 and beyond.
1. Rising Interest Rates
After a sustained stretch of record-low interest rates, buyers will see borrowing costs rise next year. The Federal Reserve raised a key interest rate in mid-December for the first time in a decade, with as many as four "gradual increases" expected for 2016. To be sure, they're not likely to skyrocket anytime soon. But even gradual increases can eat into your purchasing power. Through November of this year, the average rate on a 30-year fixed mortgage was about 3.84%, according to data from Freddie Mac.
The Mortgage Bankers Association projects average rates to be 4.8% by the end of 2016. To put that in perspective, let's say you're comfortable spending no more than $1,200 a month for a principal and interest payment. With rates at 3.8%, your buying power taps out around $258,000. Bump the rate to 4.8% and your purchase ceiling falls to about $230,000. First-time buyers and others with finances more toward the margins may struggle to get off the sidelines in a rising rate environment. A way to curb the impact of interest rates on home affordability is to ensure you have a great credit score. The best rates go to home buyers with great credit, so improving yours can make a major impact.
2. Cooling Prices & Inventory
Rising home prices have been great for many homeowners in recent years, less so for those hoping to crack the market. The CoreLogic Home Price Index has increased 6% over the past 12 months. Most estimates for 2016 put price growth in the 3.5% to 5% range. The cool down in home price gains could help open the door to new buyers.
Homeowners who've benefited from higher home values may decide now's the time to sell. "Because of the price appreciation they have experienced, you will have more sellers put homes on the market next year," Smoke told CNN earlier this month. But other housing insiders aren't so sure. Higher interest rates may push some homeowners to reinvest in their current homes rather than sell and buy new.
The American Institute of Architects expects spending for home improvement projects in 2016 to eclipse this year's record tally. In addition, housing inventory remains in short supply in many markets, especially in more affordable price ranges. Total housing inventory in October was 4.5% lower than the year prior, according to data from the National Association of Realtors.
3. Buying vs. Renting
Buying a home remains cheaper than renting in nearly all of the major housing markets, and that's still likely to be the case for most communities in 2016, according to Trulia housing economist Ralph McLaughlin. At a national level, average interest rates would need to hit about 6.5% to tip the balance, according to McLaughlin. But rates would need to push into the double-digits for renting to make better financial sense in many metro areas. At the same time, more than two-thirds of property managers surveyed by Rent.com said rental rates will likely jump by 8% next year on average.
4. Will Millennials Enter the Market?
Few topics inspire more breathless coverage in housing circles than the millennial generation. There are countless predictions about when and where they'll start buying houses.
Smoke, the Realtor.com economist, is bullish on millennials and their impact in 2016. He expects them to account for nearly a third of all existing home purchases. But familiar obstacles like student loan debt and consistent employment may force some younger buyers to keep their home buying plans on hold.
Trulia's recent survey shows only 13% of 18- to 34-year-olds who plan to buy a home say they'll do so in the next year. The figure rises above 35% if the time frame stretches to 2018.
"What would make more millennials take the leap from renting to home ownership? More money," McLaughlin, the Trulia economist, wrote in his 2016 forecast. "Jobs and down payments are keys to turning these renters into homeowners within the next 12 months."
You’ve gone to the open house. You’ve had a private showing. You’ve read the disclosures. You’ve decided this is the house for you, and you’re ready to make an offer. Before you take that step, though, you should fully check out the neighborhood. After all, this is where you’re going to live for years. Is there something you don’t know about that could negatively affect the resale value later? Is there a neighbor who comes roaring home late at night on a muffler-free motorcycle? Is the next-door neighbor operating a day care for pre-schoolers?
Given the high stakes of homeownership, it pays to do your homework before making an offer. For example, a potential buyer was ready to sign on the dotted line for a home in San Francisco, a city famous for its microclimates. The buyer had only been to the home during the day, when it was sunny and warm. On his real estate agent’s advice, the buyer returned at night — to find the house blanketed by cold, windy fog. He continued his home search elsewhere, relieved he hadn’t unknowingly bought into the city’s “fog and wind belt.”
Here are five ways to investigate a neighborhood before you buy.
1. Talk to the neighbors
Without being intrusive, look for an opportunity to chat with your potential neighbors. What’s their opinion of the block and the neighborhood? Do they know of any problem neighbors? Are they aware of any recent car or home break-ins? Is anyone planning a big remodel that could impact other homes or their values? Do they know of someone on the block who might be getting ready to sell? An even more desirable home could be coming on the market.
2. Visit day and night, weekday and weekend
As the San Francisco example shows, don’t just visit the house during the day. Check it out at night to get a sense of what’s going on in the neighborhood after hours. Is it noisy or calm? Visit on the weekend and early morning, too. The more times of day you go, the more chances you’ll have to get the feel for the neighborhood.
3. Check out the local newspaper and the neighborhood blog
Some neighborhoods still have their own newspapers. If there’s one published for the neighborhood you’re considering, check it out for local stories. Pay particular attention to the “police blotter,” which typically lists crimes reported in the area. Also, some neighborhoods have blogs where locals ask for tips and advice, or post issues or concerns affecting the neighborhood. A Google search should help you find out whether there’s a blog for the neighborhood you’re considering.
4. Get an app
Some smartphone apps, such as CrimeReports for iPhone, provide information about crime based on your location or address. Among the problems you may see displayed on a map are noise nuisances, sex offenders and vehicle break-ins. The CrimeReports app gives you some specifics, such as when and where each incident occurred.
Zillow’s real estate apps allow you to see estimates of properties on the block. They also allow you to search recent sales or see rentals, a good indication of whether your neighbors are renters or homeowners.
5. Google the street address
If you Google the home’s street address, you might be amazed at what you find. You might, for instance, discover a nearby home-based business with employees (which could reduce street parking spaces). Using Google’s Street View, where photos can be months if not years old, you might discover that the ground-floor bedroom window once had bars on it.
Be a sleuth before the sale
The Internet is an amazing resource of information. Too often, though, potential home buyers don’t fully use it to find out everything they can before entering into a contract on a home. As soon as you’ve identified a home you want to buy, get online and do your homework. You might be pleasantly — or unpleasantly — surprised by what you learn.
Most of the homes I lease are new home so I do hope you will find this helpful. The process is not different from leasing an existing home.
First you will need to choose the area you want to live in. If you find the perfect house in the wrong location, you may have wasted your time. It is always best to know what is most important to you (school, distance between work and home, shopping, etc) before you begin your search.
Let your agent know up front if you have pets. Some properties will accept pets, but only certain breeds. Others will not accept any pets. Pet deposit amount will vary, so you will want to know how much you will have to pay for your pet deposit. If the owner is asking for $500 per pet and you have 3 pets, you may want to keep looking if you think that amount would be too much.
Choose a home. Keep in mind you may not be the only one looking at the same home, and in some cases, by the time you sleep on it, someone will have submit the application, pay the application fee and possible get an approval, thereby, removing the property from the market.
Submit all your necessary documents and pay the (nonrefundable) application fee once you find the property you like. Most property management companies will not process your application without the application fee.
Requirements will vary based on each property or the property management. All will run credit and do background check. If you have broken lease let your agent know up front. Also, you will want to let your agent if you have any felonies, and if you have been at your place of employment for less than one year. In all cases your income will need to meet or exceed 3 times the monthly rent. For example if the rent is $1500, your monthly income will need to equal $4500. Also, please note, every member of your family or person who will be living in the home over the age of 18 years old and older will need to fill out an application and pay the application fee.
Within 24-48 hours in most cases you will know if you have been approved for the home. You want to make sure you submit all your required documents and fill out the application completely to avoid delays.
Once you get confirmation that you are approved for the home, you will need to pay the security deposit in most cases within 24 hours to remove the property from the market.
Once you pay your security deposit, you choose your move in date. Sign your lease; pay your first month’s rent, pet deposit if apply; provide proof of utilities accounts if apply, proof of rental insurance if apply, and collect your keys.
Find a good realtor to work with. One that will look out for you best interest, not his or hers.
Don’t jump into a home purchase blindly. Get your Realtor to explain the step by step process. Do your own research. In addition to the information I provide my clients about the area they want to live in, I always advise them to learn more about the area on their own as well. Like driving the neighborhood different times on different days, and talk to a few of the neighbors.
Buy properties with traditional 30- or 15-year fixed loans – and know what your mortgage payment will be each month for the entire mortgage term. Leave creative financing out of it.
Put 20% down if you can, you will save thousands of dollars, and your mortgage payment will be lower.
Whatever the bank says you can afford, subtract 20%, and you’ll never be house poor.
Remember, you’re not just buying a house, you’re buying a neighborhood.
Be patient with the mortgage process.
Do not overpay for a house you can’t really afford in hopes of market appreciation making up the difference. Not a good Idea!
Less is more. A smaller, practical, easy-to-maintain house is the new, big, rambling mansion.
Stay on top of your credit, excellent score is above 750.
Plan to stay in your home at least 5 years. If you think you’ll need to sell before then, keep renting until you know you can stay put for a while.
Budget for all the ongoing costs of home ownership – not just the monthly mortgage payment. Be sure you have the funds for property taxes, insurance, maintenance, upkeep, and even an emergency repair fund.
If you are questioning your job security and your ability to get a new job quickly in the event of a layoff – don’t buy yet.
To a generation who saw risking everything and buying homes with zero down as the norm, these rules may seem new. But, as they say, everything that’s old eventually becomes new again. In this new era, Millennials simply need to look back to get ahead and buy safely, sanely, and securely in the current housing market.