Good News From Hanley Wood Market Review Dec. 11th

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Holiday Consumer Cheer
Consumers became more optimistic and loosened up their wallets in November which helped boost retail sales figures and consumer sentiment data released on Friday.  U.S. retail sales jumped 1.3% in November driven by a strong start to the holiday shopping season.  Retail sales in November posted its strongest monthly gain since August when retail sales surged 2.4% due to the government’s Cash for Clunkers program.  It will be important to watch December retail sales figures when they are released next month to see if there was sustained consumer activity throughout the holiday shopping season or if November retail sales were just boosted by bargain-hunters capitalizing on early holiday deals.  The University of Michigan/Reuters Index showed consumer sentiment increasing to its highest level since September which enforces the notion that consumer strength has reemerged.
Generally positive economic data provided support for stocks over the past week.  Although initial weekly unemployment claims reported a surprise increase on Thursday, most of the economic data released in a relatively quiet week have been good.  The Commerce Department reported on Thursday that the trade gap was narrowed to $32.9 billion in October due to a rise in exports which benefitted from a weaker dollar.  The broader S&P 500 index is on pace to close higher for the week, up a marginal 0.4% to 1,106 in early afternoon trading on Friday.

The Economy
The Commerce Department reported on Friday that November retail sales increased 1.3% which is the strongest increase in sales since August.  Retail sales also posted a 1.9% increase from November of last year which is its first year-over-year gain since August 2008.  Auto sales increased 1.6% while retail sales excluding automobile sales rose 1.2% which is its largest gain since January.
The University of Michigan/Reuters Index for consumer sentiment jumped 8.9% in December to a reading of 73.4 from 67.4 in November.  This is the highest reading for the index since September.  Consumer sentiment regarding the current economy increased to a reading of 79.1from 68.8, which is the highest it has been since April 2008.
Initial unemployment claims posted an unexpected rise this past week by 17,000 to a seasonally-adjusted figure of 474,000.  Initial weekly unemployment claims have fallen in the past five consecutive weeks before this week’s increase.

Housing Market
National average mortgage rates increased from the previous week to 4.81% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on December 10th.  This was the first weekly increase in average fixed-rates since the beginning of November.  Rates last week were at their lowest levels since Freddie Mac started the survey in 1971.  This is also the sixth straight week that fixed-rates have averaged lower than 5.0%.  In the week ending December 4th, the MBA’s seasonally-adjusted purchase index increased 4.0% from the previous week but was still down 16.3% compared to the same time last year.  This was the third consecutive weekly gain for purchase applications which have been unseasonably high due to the extended homebuyer tax credit and record-low mortgage rates.
New home sales rebounded in October after posting its first monthly decline since March in September.  Seasonally-adjusted new home sales increased 6.2% from the previous month to an annual rate of 430,000 units.  New home sales for the previous three months were also revised higher by 7,000 units.  The seasonally-adjusted annual rate of new home sales is at its highest levels since September 2008.
In October, the median new home price increased to $212,200 from an upwardly revised figure of $210,700 in September.  Median new home prices are up 0.7% from the previous month but still 0.5% lower than they were this time last year.  The median new home price has now recorded ten straight months of year-over-year declines.  Competition from lower priced existing homes along with foreclosures and short sales have dragged on new home prices.
In October, new home inventories declined to 240,000 from a September figure of 252,000 on a non-seasonally adjusted basis.  Seasonally-adjusted inventory of unsold new homes have declined for 30 straight months to 239,000 units.  Seasonally-adjusted months of new home inventory dropped to 6.7% in October which is the lowest it has been since December 2006.
Existing home sales in October jumped due to the anticipated expiration of the original homebuyer tax credit.  The seasonally-adjusted annual rate of total existing homes sold surged 10.1% in October to 6.1 million units.  Existing single-family home sales increased 9.7% from last month to 5,330,000 units while condo and co-op sales were up 13.2% from last month to 770,000 units.  Existing home sales are at their highest annual rate since March 2007.
The median existing home price in October declined to $173,100 from $176,000 in September.  This is the fourth straight month that existing home prices have declined and the lowest they have been since April.

Existing home inventory declined for the third straight month in October, falling 3.67% to a preliminary 3,574,000 units from an upwardly revised 3,710,000 units in September.  This is the lowest level of existing home inventory on the market since January 2007.  Months of existing home inventory dropped significantly due to a jump in sales activity along with the drawdown in units for sale. At the current sales pace, there are 7.0 months of supply of existing homes on the market compared to 8.0 months in September.  The market is approaching the 5-6 months supply of inventory level that is considered typical in a healthy housing environment.
Pending home sales rose for the ninth straight month in October, according to the National Association of Realtors.  The trade group’s Pending Home Sales Index, which is a forward-looking indicator based on sales contracts in October, increased 3.7% to a reading of 114.1.  The index is at its highest levels since March 2006.

For market-level data and analysis please visit our website at http://www.hwmarketintelligence.com.

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Mortgages to Help Make Your Home Energy Efficient

The Energy Star logo is placed on energy-effic...
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These Mortgages Are Efficient

If you’ve been putting off making energy-efficient upgrades to your home because you are worried about the cost and think you can’t afford them, now is the time to stop procrastinating and take advantage of the energy-efficient mortgage (EEM) program and a new tax credit for upgrades.

What Is an EEM?

>> An EEM helps home buyers or homeowners save money on utility bills by enabling them to finance the cost of adding energyefficiency features to new or existing homes as part of their Federal Housing Administration (FHA)-insured home purchase or refinancing mortgage.

EEMs are one of the most beneficial and under-utilized programs that a homeowner can capitalize on in today’s market. Although they have been around since the ’80s, their use receded when subprime loans took the stage, explains Jana Maddux, program manager for California Home Energy Efficiency Rating Services (CHEERS ® ). “This is the best kept industry secret.”

Why Now?

>> Recent developments make this the best time for homeowners to give serious thought to making the upgrades that will lower utility bills while increasing the value of the home. Earlier, the maximum amount the FHA allowed for upgrades was $8,000. That stipulation was recently modified, so now the maximum amount of the portion of the EEM for energy improvements is to be the lesser of 5 percent of the value of the property or:

115 percent of the median area price of a single family dwelling; or  150 percent of the conforming Freddie Mac limit.

Also, under the stimulus plan, upgrades are eligible for a tax credit of 30 percent of qualifying costs up to $1,500, but this is only through 2010.

Who Offers It and How Can You Qualify?

>> EEMs are sponsored by federally insured mortgage programs (FHA and Veterans Affairs) and the conventional secondary mortgage market (Fannie Mae and Freddie Mac). Lenders can offer conventional EEMs, FHA EEMs, or VA EEMs. For instance, anyone eligible for the FHA section 203(b) mortgage insurance can apply for an EEM, once the cost of improvements and estimated savings are determined by a home energy-rating system consultant.

The first step is to have a CHEERS® rater or another approved energy rater complete an analysis of your home and obtain a report, which you then submit to the lender. The main criterion is that your savings after upgrades should exceed their cost.

“The CHEERS® report will show the existing condition of the house after conducting several tests, all of which determine how much air leakage there is and the estimated savings and future utility bills after improvements are made,” Maddux says. Raters are independent, and some may also be able to coordinate the entire upgrade process for you, for a fee.

Which Upgrades Qualify?

>> Insulation, new furnaces, air-conditioning and heating units, dual-pane windows, duct system and air leakage repairs, water heaters, and lighting.

More Info:

ENERGY STAR: www.energystar.gov/

To find out more about the FHA requirements and search for EEMs: http://portal.hud.gov/.

For an FHA lender list: www.hud.gov/ll/code/llslcrit.cfm.

Padma Nagappan is a freelance real estate writer.

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Chevys Night for Bijou Community School 1st Graders

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Tonight  , November 6th, is a benefit at the South Lake Tahoe Chevys  restraunt supporting Bijou Community School 1st Graders.  Chevys is donating 25% of the check to the Bijou 1st grade program.  The money will be used for field trips, supplies, and other 1st grade activities.  Recently Chevys had a kinder night that did net $600 for the program.  It would be a great time to take the family and friends out to dinner and support a great cause.

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Senate and House Pass Legislation to Expand Home-buyer Tax Credit

On Wednesday the Senate voted, 98-0, to extend and expand the current first time home-buyer tax credit that is scheduled to expire at the end of November.  The house voted today 403-12 in favor. 

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6500.  Anyone who has not owned a home in the last 3 years (including first time home-buyers) would still get up to $8000.   This tax credit is only good for primary residences costing less than $800,000.  There is a phase out for individuals with incomes of greater than $125,000 and $225,000 for joint filers. 

To qualify one must sign a purchase agreement by April 20, 2010 and close by June 30, 2010.  As always, consult your tax professional before making any tax related decisions.

Bijou Community School

Bijou Community School in South Lake Tahoe is very unique.  Bijou has the only 2 way immersion language program at the elementary level in South Tahoe.  Both of my kids attend this program.  They are learning to speak, read, and write in Spanish.  My son is in second grade and is fluent in 2 languages.  My daughter is in Kinder and is already forming sentences in Spanish.  A truly amazing program.  If you ever get a chance to observe the program in action please do.

Bijou has recently started after-school clubs for their students.  Clubs such as bike club (soon to be cross country ski club), dance club, book making club, cooking club, and many others are available for students to try.  The clubs are lead by volunteers, both parent and school employees.  These clubs give students and parents an alternative to regular daycare or babysitting for a couple of hours a week.  The kids love it.  My kids enjoy the bike club and book making club.  Tomorrow we are riding through the meadow area near the campus (hopefully not in the snow).

Bijou Community School an outstanding school with outstanding staff , parents, and most of all outstanding students… At Bijou the emphasis is on COMMUNITY.

Halloween Fun

HALLOWEEN FUN FOR THE YOUNG
OCTOBER 31ST
 
Halloween Carnival Celebration at Kahle Community Center
Kahle Community Center
236 Kingsbury Grade
Stateline, NV 89449
Phone: (775) 586-7271
Everyone is invited to come and celebrate the spirit of make-believe, a sense of community, and “spooktacular” happenings all under one roof at Kahle Community Center on Halloween. The free event is sponsored by Kiwanis of Lake Tahoe Sunrisers and will take place from 4 to 7 p.m. Oct. 31 at Kahle Community Center, 236 Kingsbury Grade. Festivities include carnival games, a haunted hunt and lots of treats to guarantee a “bootiful” fun, safe and ghoulishly good time for all ages.
Located in: Kahle Community Center 
 
 
 
Treat Street 2009
Pine Cone Acre Motel
735 Emerald Bay Road
South Lake Tahoe, CA 96150
Phone: (530) 541-0375
The 7th annual KRLT/ KOWL TREAT STREET HALLOWEEN is a great place for your children to Trick or Treat in a safe, controlled setting! Treat Street will once again be held at the Pine Cone Acre Motel and admission is FREE! From 5 to 8 pm, kids can Trick or Treat and meet local businesses & merchants who will hand out candy & coupons…. Bring your kids in their spookiest and craziest costumes for this night of fun! The Pine Cone Acre Motel is located next The Burger Lounge on Highway 89 in South Lake Tahoe. Treat Street 2009 is proudly co-sponsored by: The South Tahoe Chamber of Commerce and the Pine Cone Acre Motel.
Located in: Pine Cone Acre Motel
 
 
 
Hallow-Kid Fest at the Haunted Horizon Casino
Horizon Casino Resort
Stateline, NV 89449
Phone: (775) 588-6211
Horizon Convention Center, 1-5pm. Free admission, free face painting, free balloon animals, free candy and more! Drop off pumpkins by 11am for the pumpkin carving contest. Costume contests for ages 0-12 at 4pm.
Located in: Horizon Casino Resort & Spa
 
 
 
Halloween Costume Party at Tahoe Tot Spot
800 Emerald Bay Rd.
Bldg. D (next to 7-11)
South Lake Tahoe, CA 96150
Phone: (530) 541-5994
Halloween day from 10:00 AM – 2:00 PM (Please call to make an appointment)12:00 PM – 5:00 PM. Come Dressed in a Non-scary Costume. Costume Photo Booth Monster Mash Dance Off! Teeth Friendly Goody Bags! Professional Halloween face painting for kids and adults. Refreshments and Cookie Decorating!! LOTS OF FUN!!!!!!! (Admission is $10.00 per family).
 
 
 
 
 

   

 

 

 

Short Sale vs Foreclosure for me?

Short sales can occur if a lender (or multiple lenders) agrees to accept an amount less than what is currently owed against a home.  The more lenders there are on a home the harder it is to conduct a short sale.  It is often best if your real estate agent or lawyer contacts the lenders loss mitigation department to help in the process.  One common misconception is that when you proceed with a short sale there is not a “ding” on your credit record.  This is not true.  There is a hit to the credit score often 200 to 300 points.  Although unlike a foreclosure you may be able to buy another house in a little a 2 years.

 

A foreclosure usually starts when a homeowner stops making payments for whatever reason.  This ends with the mortgage holder selling the home at auction. If there are not any bids high enough the bank will bid and take control of the property.  Many times the homeowner can stay in the house for up to a year before being forced to move.  Like the short sale this can be a hit of 200-300 points on ones credit score.  It takes much longer (in some cases 7 years) before you can buy another home.

 

Neither of these options should be taken lightly.  If, as a homeowner, you are considering one of these options please consult an attorney, tax professional, and a real estate professional before signing any paperwork.  One reason you should contact a professional is because many times (not always) you are still obligated to pay the difference between what your mortgage company gets for your property and what your loan amount was.