Flashing Yellow Lights on Affordability – Chuck Barberini

Flashing Yellow Lights on Affordability – Chuck Barberini

Chuck Barberini Real Estate – Barberini Robinson Real Estate Group

A thought on affordability in the current and upcoming market. Low interest rates and record high rent rates seems to be the perfect storm for first time buyers. Unfortunately, the rapid rise in housing prices makes the transition from renter to owner is becoming more difficult and that trend looks to continue. Check out this article by Lawrence Yun and let me know what you think. Chuck

Yun: ‘Flashing Yellow Lights on Affordability’

DAILY REAL ESTATE NEWS | MONDAY, JUNE 27, 2016

The median price of an existing home reached a new record last month at $239,700. That price increase was primarily driven by repeat buyers trading up or downsizing from their current home, according to data from NAR. First-time buyers, meanwhile, continue to be held back by affordability issues.

Rent to Own
Rent to Own

Read moreHomes Getting Less Affordable for Many

“We are seeing flashing yellow lights on affordability,” says Lawrence Yun, NAR’s chief economist. “People who are currently renting and want to convert into ownership — major difficulty. Home prices are rising way too fast compared to people’s income and wage growth. … We are facing housing affordability challenges already with low mortgage rates, but what happens when the rates begin to rise?”

Affordability issues are the primary reason why housing hasn’t had a stronger recovery. “While housing should be pushing overall economic growth, it is not, due to the meager activity in home construction, says Diana Olick, CNBC’s real estate correspondent. “Rental demand has been fueling most of the construction activity, but multifamily housing starts are starting to slow, as most of the activity was in higher-priced, urban rentals, where supply is now high.”

“The tight supply of homes on the market continues to constrain sales, while low mortgage rates and job growth help fuel healthy demand,” notes Andrew LePage, research analyst at CoreLogic. “This results in a pressure cooker effect, and the market’s traditional pressure release valve — new home construction — isn’t helping much, given that new home sales are running more than 40 percent below historically normal levels.”

Source: “New Warning Lights for Rising Home Prices,” CNBC (June 23, 2016)

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 Flashing Yellow Lights on Affordability – Chuck Barberini

Mortgage Rates in Free Fall – Chuck Barberini

Mortgage Rates in Free Fall – Chuck Barberini

Chuck Barberini Real Estate – Barberini Robinson Real Estate Group

Well, if you’ve been sitting on the fence, now is the time to make a move. Rates are down, but inventory is still tight. It seems that the only homes still on the market are overpriced. The lower end of all areas are still moving fast. Because of the slow growth of our economy the loan rates were already hanging around at record lows, when you add in the uncertainty of Brexit, rates are really reflecting the need for a strong housing market. One part of the article that really stands out is the reluctance of the lenders to loan money by stricter underwriting standards. Check out this article and let me know what you think. Chuck

Brexit

Mortgage Rates in Free Fall Since Brexit Vote

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 28, 2016

Ever since Britain’s surprising vote to leave the European Union, U.S. home buyers and home owners have been reaping an expected benefit — mortgage rates that are quickly dropping. Mortgage rates are now at the lowest average in more than three years, and economists expect them to head even lower.

Read more‘Brexit’ Could Give US Real Estate Brief Boost

On Monday, the 30-year fixed-rate mortgage averaged 3.46 percent, near the lowest average since late 2012, realtor.com® reports.

“Lower rates produce lower monthly payments and greater buying power—those who are well qualified can afford a home that’s 8 percent more expensive than at the beginning of the year,” Jonathan Smoke, realtor.com®’s chief economist, writes in a recent column. “That’s more than enough to offset the rise in prices during that time.”

That said, low mortgage rates can prompt lenders to get more strict with underwriting standards, Smoke says.

“As mortgage rates declined this year, we’ve seen that credit access has gone down too,” he notes. “That’s because lenders have become more risk-averse as their profit margins have been whittled down by the double whammy of lower rates and higher origination and servicing costs.”

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Mortgage Rates in Free Fall – Chuck Barberini

Western Home Values Higher – Chuck Barberini

Western Home Values Higher

This is very interesting; values are going up higher then home owners even realize. In my last article we talked about 92% of homes in the country now have equity. What this article is saying is even more interesting, in metro areas houses are appraising higher then home owners are even aware of. Check this short article from Quicken Loans, published by the National Association of Realtors in Realtor Magazine and let me know what you think.

Chuck

Chuck Barberini Real Estate – Barberini Robinson Real Estate Group

Western Home Values Higher Than Owners Realize

DAILY REAL ESTATE NEWS | WEDNESDAY, JUNE 15, 2016

Home owners in western states may have more equity than they may realize. A new report shows that homes in the region’s metro areas are appraising higher than owners’ estimates.

“The hot housing markets along the West Coast are growing quicker than owners realize, giving way to higher-than-expected prices for buyers and more home equity for existing owners,” says Quicken Loans Chief Economist Bob Walters. “On the other hand, the housing markets are more balanced in the East and Midwest, leading owners to be slightly overenthusiastic about their home’s appreciation.”

Nationwide, home appraisals in May were, on average, 1.89 percent lower than what home owners say their home was worth, according to Quicken Loans’ Home Price Perception Index (HPPI). Appraised values continue to climb.

Denver had the highest HPPI value in May. Appraisals showed home values there averaged 3.28 percent higher than what home owners thought their home was worth.

On the other hand, in may Eastern and Midwestern cities, home owners may have been a little too optimistic about their home’s value compared to appraisers’ estimates. For example, in Philadelphia, Detroit, and Baltimore, appraisals were more than 3 percent lower than what home owners expected.

may16_DN_QuickenLoans_chart

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Western Home Values Higher

92 Percent of Mortgaged Properties Have Equity – Chuck Barberini

92 Percent of Mortgaged Properties Have Equity. Here in California we have witness the rapid rise in the housing market, spurred on by the low interest rates and the lack of inventory. More specifically in the Bay Area we are spurred on by the tech industry. This information from CoreLogic shows that the rise in home prices is not just in California but is extending over most of the country. The numbers below are very interesting especially when compared to the housing market 5 short years ago. The home owners that held out are reaping the rewards for sticking with their investment. Because of the rise in home prices and low interest rates many of those that did stay the course have been able refinance into a solid low interest fixed rate loan. The information below also notes that all indications are that it appears that the trend will continue. In my opinion the wild card in the deck is the presidential election, I believe that the economy, which is still bumping along, can go either way, depending on who our next president will be. Let me know what you think.

Chuck

Chuck Barberini Real Estate – Barberini Robinson Real Estate Group

DAILY REAL ESTATE NEWS | MONDAY, JUNE 13, 2016

fb_top_5_equity_1616
92 Percent of Mortgaged Properties Have Equity.

More home owners now have equity. About 46.7 million residential properties with a mortgage had equity at the end of the first quarter of 2016, according to data from CoreLogic. Home equity rose year-over-year by $762 billion.

In the first quarter alone, 268,000 home owners regained equity, which boosted the percentage to 92 percent of all mortgaged properties with equity.

“In just the last four years, equity for home owners with a mortgage has nearly doubled to $6.9 trillion,” says Frank Nothaft, chief economist for CoreLogic. “The rapid increase in home equity reflects the improvement in home prices, dwindling distressed borrowers and increased principal repayment. These are all positive factors that will provide support to both household balance sheets and the overall economy.”

More than 1 million home owners have escaped the negative equity trap over the past year, adds Anand Nallathambi, president and CEO of CoreLogic.

“We expect this positive trend to continue over the balance of 2016 and into next year as home prices continue to rise,” says Nallathambi. “If home values rise another 5 percent uniformly across the U.S., the number of underwater borrowers will fall by another one million during the next year.”

Still, 4 million — or 8 percent of all homes with a mortgage — remain in negative equity territory. But the number of negative equity properties has been steadily dropping. In comparison to the fourth quarter of 2015, negative equity properties dropped 21.5 percent year-over-year.

Read more1 Million Borrowers Regained Equity Last Year

Five states accounted for 30.2 percent of negative equity in the U.S. The states with the highest percentage of homes in negative equity are: Nevada (17.5%); Florida (15%); Illinois (14.4%), Rhode Island (13.3%); and Maryland (12.9%).

On the other hand, the states with the highest percentage of homes with positive equity in the first quarter are: Texas (98.1%); Alaska (97.8%); Hawaii (97.8%), Colorado (97.5%); and Washington (97.2%).

Source: CoreLogic

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92 Percent of Mortgaged Properties Have Equity

Women in Combat Roles – Chuck Barberini

Women in Combat Roles – Chuck Barberini

I read this article on line today regarding women in combat roles and it really got me thinking, is our quest or gender equality so pressing that that are willing to put our young women in harms way? I really question the powers at be who seem to be putting their political agenda ahead of common sense. There is a lot of talking going on now regarding the government imposing gender neutral public restrooms, agenda above common sense? Besides the fact that the thought of young American women in combat being captured, tortured and mistreated then splashed all over the internet would lead to a national outcry. I also believe that the men in battle would be adversely affected by their natural instinct to protect women and put themselves in unnecessary danger. Finally, by dumbing down the proven qualifications standards for infantry soldiers to accommodate women we are getting inferior soldiers. Check out this article and let me know what you think.

Chuck

Chuck Barberini Real Estate – Barberini Robinson Real Estate

Deshauna Barber - Miss USA
Deshauna Barber – Miss USA

Retired female Marine drops TRUTH BOMB on newly-crowned Miss USA

Written by Jude Eden on June 8, 2016

Deshauna Barber is a first lieutenant in the Army Reserves and is getting a flurry of attention for her comment during the Miss USA pageant about women in combat roles. Her statements demonstrated little forethought on the issue, but, hey, why let the reality of direct ground combat against the likes of ISIS ruin a good “I am woman, hear me roar” moment? And hey, getting on the women-in-combat feminist bandwagon may have clinched her the Miss USA crown.

When asked about her thoughts on women in combat roles, the IT analyst from North Washington D.C. said, “As a commander of my unit, I am powerful. I am dedicated and it is important that we recognize that gender does not limit us in the United States Army.” And “I think it was an amazing job by our government to allow women to integrate to every branch of the military … We are just as tough as men.”

I confess that I don’t know what being an IT analyst in the weekend-warrior Army Reserves is like. I do know about IT in the Marines, and both being a Marine and supporting communications for deployed Marines is much harder, but it still ain’t direct ground combat. I’ve no doubt that Lt. Barber is powerful and dedicated, and a valuable — not to mention beautiful — addition to our Armed Forces. But she hasn’t trained and competed with male infantry. Her job in the Army reserves does not include orders to serve with men in the combat arms, and she knows nothing about it.

We have ample empirical data on the question of women in combat roles from recent testing, not to mention hundreds of years of experience learning what helps and what hinders victory in battle.

Barber will never bear the consequences of what she so mindlessly advocates. She’d be the one they shoot first as an easy target. And so beautiful, in her bikini and dangly earrings, or her be-makeuped soft-focus selfie in uniform. Not distracting at all. ISIS is not just laughing at us. They’re licking their chops at our self-imposed weakness. But we have our Charlie’s Angel delivering the Obama party line. She’s won the beauty pageant; just wait ‘til she starts her acting career.

Firebrand Gunnery Sergeant (Ret) Jessie Jane Duff, who served two decades in the Marines and advocates strongly that we should not diminish our combat readiness, had some choice tweets for the young LT:

Jessie Jane Duff @JessieJaneDuff

The irony of being judged in a bikini and stating women are just as tough as men escapes Miss USA. I’m sure ISIS will fear her shiny crown.

3:16 AM – 6 Jun 2016

Jessie Jane Duff @JessieJaneDuff

Win for Obama Administration: Army officer is sexualized in a beauty pagent & promotes agenda she is equal to men in brutal ground combat.

3:49 AM – 6 Jun 2016

Jessie Jane Duff @JessieJaneDuff

Miss USA says women “are just as tough as men” & is glad women will serve in ground combat. I think her bikini competition drove that home.

3:09 AM – 6 Jun 2016

In a recent interview Duff added this:

This was an ideal opportunity for her to stand up and stand for the enlisted women who will die in mass quantity in combat … She’s missing the entire data … Yes, we’re as mentally tough as men, but all data demonstrates that the women are performing at the bottom 25th percentile with men in infantry units. We’re setting them up for failure. Her speech, what she said was perfect if she had just closed with, “We should not lift a blanket policy without evaluating this closer because this isn’t about equality … this is about combat readiness and the mission is first.” That would have gotten just as much applause and people would have celebrated her for defending the women that have to go out there and perform with these men … Hand to hand combat? There is no equality in it. The men will decimate women in hand-to-hand combat.

This week we commemorated the 72nd anniversary of D-Day. Our reflections on young men storming the beaches of Normandy should remind us of the importance of defining precisely what is involved in “direct ground combat.” It’s great that Barber feels powerful, but the truth is that physically she’s a twig, and ISIS, or Iran or North Korea would make mince-meat out of her in five seconds.

She may be as tough as other keyboard commando Army Reservists, but she has no credibility on killing our enemies at point-blank range. She is no authority in comparison to three years and over 50 documents’ worth of scientific testing data submitted by the Marine Corps to the Pentagon, which showed that integrated units underperform on 69% of tasks and women get injured more than twice as much as men. Dedication has little relevance against these realities, which would severely degrade the lethality and survivability of our most elite fighting units.

In our upside-down “now,” where the Left is trying to hammer at us that one’s biological sex is meaningless, Nature simply will not comply, especially in the most violent activity known to mankind. As we’re fighting the most barbaric enemy we’ve ever faced, we need the manliest, most powerful, aggressive, testosterone-laden American alpha males that our taxpayer dollars can buy in order to destroy our enemies and come home quickly and in one piece. Miss USA is a beautiful stick who’d have no chance killing ISIS fighters in hand-to-hand combat.

Deshauna Barber makes a great poster, and now we all know what she looks like underneath her uniform. It’s Combat Barbie Miss USA. But direct ground combat is not a beauty pageant stage. Barber is the media’s latest darling for being a satisfactorily diverse and pretty package delivering the government-approved party line. Meanwhile technology has not alleviated the need for brute strength and speed that women simply don’t provide, and they bring with them serious additional risks that men simply don’t.

Meanwhile, the Senate is voting on whether to subject America’s young daughters to mandatory registration for the draft as combat replacements. The girl next door will not have stunt doubles to fill in for the bloody parts, and for her it won’t be about “a few women who want to.”

[Note: This article was written by Jude Eden and was first published atStream.org]

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Retired female Marine drops TRUTH BOMB newly-crowned Miss USA

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Women in Combat Roles – Chuck Barberini

Rent-to-Own Home Purchase – Chuck Barberini

Rent-to-Own Home Purchase – Chuck Barberini

Chuck Barberini Real Estate – Barberini Robinson Real Estate

I saw this article today and thought that it was very interesting. Although not real common, I have come across rent to own situations from time to time and quite honestly have not considered many of these down sides. Take a minute to go through this article, the author points out some real interesting points. If nothing else it is viable food for thought.

Chuck

house2

How Things Can Go Very Wrong in a Rent-to-Own Home Purchase

Many people who want to buy homes can’t quite qualify for a mortgage. Maybe they don’t have enough money for the down payment — even a super-small FHA down payment. Or their credit scores, while not horrific, aren’t good enough to get a mortgage, at least one that’s affordable.

An alternative way to buy

When it’s hard to get credit, buyers sometimes use an alternative method of buying a home called a “contract for deed” — otherwise known as a “lease with option” or “rent to own.” The seller, not a bank or mortgage company, finances the home purchase. But these agreements are different from the usual seller-financed mortgage. Buyers have few protections, and sellers keep most of the control.

Contract-for-deed agreements vary a great deal, but, unlike in a more common property sale, the buyer doesn’t buy the home right away but instead pays a fee for the right to purchase it at some later point. Until the purchase is complete the buyer can live there and pay rent, some of which is applied to the purchase price of the home.

Rent-to-own contracts have attractions for both buyers and sellers.

Buyers:

  • get a chance at home ownership, even with a lower credit score.
  • get time to gather a down payment and improve their credit scores.
  • get a locked-in purchase price, even if local home prices are rising.

Sellers:

  • earn a nice income stream on a property.
  • may earn a higher-than-market purchase price or interest rate (or both).
  • avoid high real-estate agent sales fees and other expenses like closing and settlement costs.
  • find a way to sell a property when the local real-estate market is slow.

Watch the video of ‘How Things Can Go Very Wrong in a Rent-to-Own Home Purchase’ on MoneyTalksNews.com.

It could be a scam

The devil, as they say, is in the details. If you are considering signing one of these contracts, be super careful. Although some consumer housing agencies use contracts for deed to help low-income clients get homes, they often are associated with cons and scams. To be sure, not all contracts for deed are scams. But scammers do often use them to fool people yearning to own a home.

Here are a few of the many things that make this type of deal hazardous for buyers, according to the Minneapolis Federal Reserve:

  • These are complex contracts. Everything is up for negotiation. Buyers have few protections.
  • The home you buy may have hidden problems, including building and safety code violations, and you could be held responsible for repairs you can’t afford, forcing you to lose the entire investment.
  • The seller may be able to put a lien on a home under contract and leave the buyer responsible for it.
  • Sometimes sellers are hit with foreclosure or bankruptcy, canceling the deal.
  • Buyers violating any provision of the contract — making just one late payment, for example — may lose their home.
  • Buyers often have to pay for property taxes, home insurance and home repairs or risk losing the property.
  • Your payments probably won’t improve your credit score since few sellers report buyers’ payments to credit bureaus.

The contract

In a contract for deed, buyers pay a nonrefundable fee for the option to buy the home later at a certain price. Depending on the contract, this fee may be applied to your purchase when you buy. These option fees run about 5 percent of the purchase price, plus or minus a few percentage points, says About.com’s banking expert Justin Pritchard. Don’t pay more because you’ll probably lose the money if you don’t buy the home.

The contract sets a time frame for closing the purchase — one to five years is typical, experts say. At that date the buyer must produce the entire purchase amount — a “balloon” payment — to buy the home, usually by obtaining a mortgage.

But some contracts run as long as 40 years, the New York Times reports. Unlike with a standard mortgage, you’ll have no ownership stake (equity) in the home and won’t get the deed until you have paid it off completely. If you don’t buy the home you forfeit the money you’ve paid.

Dilapidated fixer-uppers

According to the Minneapolis Federal Reserve, poorer buyers and those whose cash incomes make it hard to qualify for a mortgage are typical big users of contracts for deed. Thousands of cheap, run-down homes, many of them foreclosures, were purchased by investors who now sell them to buyers through contracts for deed, especially in the Midwest and South, says the Times, adding:

“They (investors) do not take care of the code violations with these properties, which is why they are trying to pass them off to other people,” said Jill Steele, city attorney for Battle Creek, Mich.

Ms. Steele said Battle Creek has had a number of code violation issues with Harbour Portfolio Advisors, a firm out of Dallas that is one of the larger national players in the contract for deed business.

If you are considering using a contract for deed, it’s well worth the cost to get advice from an experienced real-estate attorney. Trulia, a real-estate marketplace, has tips for finding and hiring one. Check an attorney’s credentials with the bar association in your state (or find your state and search here).

What’s your experience or impression of buying or selling homes with a lease-to-buy option? Share with us in comments below or on our Facebook page.

This article was originally published on MoneyTalksNews.com as ‘How Things Can Go Very Wrong in a Rent-to-Own Home Purchase’.

By Marilyn Lewis

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Chuck Barberini Real Estate – Barberini Robinson Real Estate

Rent-to-Own Home Purchase – Chuck Barberini

Should Millennials Even Bother With A Starter Home? – Chuck Barberini Real Estate

Should Millennials Even Bother With A Starter Home?

Chuck Barberini Real Estate – Barberini Robinson Real Estate Group

Check out this article that I found this morning, Neale Godfrey Forbes on-line. It is a real comprehensive look at buying a home, the market and the life cycle of home ownership. Check it out and let me know what you think.

Chuck

Housing

Neale Godfrey Contributor

The financial voice for Baby Boomers, Millennials, and their offspring

Opinions expressed by Forbes Contributors are their own.

Citing data from the Bureau of Labor Statistics, Generation Progress, a national progressive advocacy and action network for young people, portrayed a positive view of the Millennial labor market, especially those between the ages of 25 and 34. “For older Millennials, labor force participation is far higher than the national average.”

With many Millennials seemingly back at work and earning better salaries, buying a first home could be a reality for many. If you are a Millennial fitting this description, you may have already created your Pinterest board of awesome house pictures and binge-watched a zillion episodes of House Hunters. You know what that dream house looks like. You have saved for the down payment. Now you must ask yourself: Is it time to take the plunge?

The process is more complicated than it looks and it can be overwhelming to even think that the home you can afford now may not be ideal as your “forever home.” The quaint two-bedroom bungalow seems like the perfect space today, especially coming from a one-bedroom apartment, but what happens if you want kids or more room or a more desirable area? There is lots of potential to outgrow your first love-nest quickly.

Starter Home Now Or Keep Saving?

You may have guessed that I would advise you to weigh your options. Before you panic, just consider your cohorts. According to the National Association of Realtors, “…for the last three years… Generation Y/Millennials (buyers 18 to 35) is the largest share of home buyers at 35 percent.” So, many of you Millennials are actually purchasing homes. And, if you’re worried about what to buy or how long to save, consider that “The most common type of home purchased continues to be the detached single-family home.”

The Positive Side

Housing prices are now coming off of their lows and should continue to rise through 2016. Mortgage rates are also still low, but if you listen closely to Janet Yellen, they will not be low forever.

Bankrate reports the mortgage rates as of June 1, 2016 as follows: “30-year fixed, 3.81%; 15-year fixed, 3.05%; 5/1 ARM, 3.22% and 30-year jumbo, 3.76%.” According to Dan Green of The Mortgage Reports, “It’s a terrific time to buy a home. Sales are rising, supply is dropping, and prices have increased in many cities and neighborhoods. As compared to next year, today’s market may look like a bargain.”

If you guess right on that home and location, you may be making a wise investment that will build future value.

The Negative Side

Do the math. You may have saved enough for that down payment, but that is only the beginning. Closing costs, property taxes, maintenance, homeowners insurance, utilities, yard care, and painting are just some of the expenses that need to be accounted for. Shall I continue?

Redfin Corporation estimates that, “Maintenance and repairs, which homeowners can expect to [pay] total one to two percent of their mortgage costs annually.” These extra costs may not be that easy to calculate. If you are moving to the ‘burbs, for instance, you now may need one or two cars. The point is that most Americans spend about half of their income on housing and transportation, according to the Location Affordability Index.

Take A Deep Breath

The first step is to try to match your expectations with your budget. When I say, “budget,” it is your budget now and in the future. That is tough to calculate, but you have real costs to consider. If you and your partner, for instance, want to have kids and one of you will drop out of the job market to care for the child for a few years, your income will be reduced. Or, even if you both work and will need childcare, again, your budget will be affected.

Suppose your dream has been to stop working for a corporation and to become an entrepreneur? Are you willing to forego the pressure of fixed payments for a house, or your career? Only you can answer these questions.

There are tools to help you make the financial decisions. Realtor.com has a calculator to help you analyze the decision to buy or rent. They “…compare the total amount of money you would be spending over time, minus the potential value you might receive if you someday sell the property.”

The Starter House Myth

Baby Boomers can chime in on this one. Most of us got our “starter homes” and intended to live in them for only five years. In my case, five years turned into ten years and included an addition to the house. We were willing to go further out in the country to get a better deal. That meant commuting. My commute was over three hours a day. I would have made other choices if I could rewind my life, but I loved the community.

Millennials are making different life choices. Many young buyers today are looking for the proximity to urban areas. According to the Home Buyer and Seller Trends Report, many Millennials are buying older homes on the outskirts of urban areas.

The decision to buy a house is not easy. I am a believer in homeownership; however, that being said, I have cried at every loan closing when I thought about locking myself up for 30 years. (And, I came from the banking world!)

Mark Twain may have unintentionally described the plunge into home ownership best when he said, “Twenty years from now, you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” Now, buy that starter home.

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Should Millennials Even Bother With A Starter Home?