marketclick february 2012

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House- Hunting App!page 3

2 GREATER GREENVILLE ASSOCIATION OF REALTORS FEBRUARY 2012

Families are on the move again, and according to Allied Van Lines, South Carolina was the third most popular destination for relocations behind Texas and Florida in 2011.

South Carolina offers job growth in many areas, affordable housing prices, coastal and mountain living, some of the most beautiful cities in the South.

A recent MarketWatch story by Washington-based correspondent Ruth Mantell found that the Greenville-Mauldin-Easley metropolitan area had a 7.7% jobless rate,

compared to the U.S. rate of 8.2%.

Greenville Mayor Knox White was quoted saying, “In Greenville there is more of an air of optimism and that things are on the right track locally.”

In January, several companies showed their love for Greater Greenville.

BMW announced plans to invest $900 million and hire 300 people in the Spartanburg plant to produce a new X4 sports utility vehicle. The upstate plant added a new assembly line in 2010 and

is already building the X3, X5 and X6 models. Production will be boosted to 350,000 cars annually. BMW is already the number one luxury car producer in the U.S.

Crown Casting Industries, a modern iron and bronze foundry, plans to invest $16 million into a new Greenwood County plant, bringing 50 new jobs.

Greater Greenville Housing Market As the economy improves, so does housing. In November 2011, South Carolina had the second-highest increase in home prices in the U.S., up 2.8% over October. Excluding distressed sales – foreclosures, short sales – home prices appreciated 4.9%.

[GGAR ctd pg 14]

GGAR Market OverviewWhile the national economy struggles to its feet, South Carolina is making news with strong pockets of recovery.

GREATER GREENVILLE ASSOCIATION OF REALTORS 3 FEBRUARY 2012

Try GGAR's New Mobile House-Hunting App!

ContentsMarket |


Fall in Love with the Right House!

Cupid may strike with his bow when you least expect it, causing you to fall in love - with the wrong house.

"Oh, that won’t happen to me!" you say. But it can, if you don’t do your homework.

Get prequalified for a loan

One of the best ways to make sure you’re buying the right home is to shop in an affordable price range. Your lender will give you a price limit that you can comfortably afford based on your income and debts. These are time-tested formulas that allow some wiggle room in your finances in case your circumstances change. You want to be able to put money aside, in case you change jobs, have a baby, or fall ill.

Work with a real estate professional

Share your wish list with a real estate professional, and let him or her preview homes for you. She knows many homes and neighborhoods firsthand. You’re welcome to look at homes online, but stay in your price range. If you look at homes that are more expensive than you can afford, you’re bound to fall in love with more luxuries and space than you can comfortably afford. If you ask your real estate professional why she didn’t show you a particular home, she may be willing to do so or she may have a good reason for eliminating it from the list.

When you go shopping for homes this month, remember that love is in the air.

LLoovvee


LLoovvee

Shop for the right size home, not the biggest

While conventional wisdom says buy the most home that you can for the money, buying the biggest home you can isn’t necessarily the best idea. Think about the operating costs of heating and cooling space you’ll rarely use. This is money wasted that could be spent on other things you may need such as a new car or furniture. Instead, think about how you actually use a home. One guest room may be plenty, while two may go unused unless you need a home office or you’re planning to add to your family.

Think about your lifestyle

Most people buy a home because they want a new lifestyle, and certain types of housing are more compatible. If you’re single or travel a lot, you may consider a condominium, or gated community. If you have kids, you may be more interested in the neighborhood amenities, such as nearby schools, playgrounds, and swimming pools.

Consider the commute

Many of the newest homes offer the most amenities, but they’re also far from city centers. How long would you spend commuting to your job every day to live in that particular community?

Look at the bones of the home

Appliances, wall colors, and flooring can easily be updated, but the basic floorplan has to flow well for the way you live. Look at the traffic flow in the home. Is it easy to let the dog outside and clean muddy paws when he comes back in? Where do the kids put their backpacks when they come home from school? Do you have the space you need for your home office or art studio? Are there enough bathrooms for the morning rush?

Be willing to update

Many homes are affordable because they’re older and need work. Many times, cosmetic updates can turn a so-so home into a treasure. No home is perfect.

Fall in love with the right house

The right house may not be the prettiest, biggest or the newest, but it will be the one that most suits the various needs of your household. When you’re comparing homes think about your wish list and which home comes closest to meeting your price, number of bedrooms, condition, space, features and the amenities of the neighborhood.

Once you move in, there’s no falling in love like knowing you made the right choice.

Fall In Love With The Right House!


People who were perhaps unable to afford to buy a home, or who believe it’s not a good time to buy may find themselves pleasantly surprised by how much home they can actually afford to buy.

.................................................... Affordability Hits New Records.........................................................


.........................................................................................................................................................................................

Affordability Hits New Records

People who were perhaps unable to afford to buy a home, or who believe it’s not a good time to buy may find themselves pleasantly surprised by how much home they can actually afford to buy.

Homes are more affordable to buy than they’ve been since 1971, according to the U.S. Department of Housing and Urban Development. Homebuyers are making close to double the median income needed to buy an average home.

In November, 2012, the median priced home was $164,100. With a median family income of $60,876, a fixed rate loan at 4.33%, and a down payment of 20%, the median monthly principle and interest payment on a $131,280 mortgage was only $652 – a low 12.9% of income, charts the National

Association of REALTORS® (NAR). Qualifying income was only $31,296.

To put these figures into perspective, Federal Housing Administration qualifying averages are recommended to be no higher than 28% or 29% of gross annual income.

According to Freddie Mac, annual fixed mortgage rates in 2011 were 4.55% - the lowest on record since 1971.

Since then, mortgage interest rates dipped below 4%, making the

monthly payment closer to $626.75 or lower on a $131,280 mortgage.

Low prices are stimulating the market. The NAR reported that seasonally-adjusted housing sales were up 12.2% for the year in November.

But one thing that is constant is change. Record lows and record affordability don’t last long.

By January 6, the Mortgage Bankers Association reported that mortgage applications rose 4.5% , with requests for home purchase loans up 8.1%. This was despite a slow climb in mortgage interest rates from record lows to a weekly average of 4.11%, up from 4.07% the last week of December 2011.

The good news in these figures is timing. People who were perhaps unable to afford to buy a home, or who believe it’s not a good time to buy may find themselves pleasantly surprised by how much home they can actually afford to buy.

To learn more, talk to your real estate professional and mortgage lender. Your real estate professional can show you which homes are in your income qualifying range. Your mortgage professional can help you determine what income and documentation you will need to qualify for a mortgage loan.

[AFFORDABILITY ctd pg 14]


Should You Give Square Footage?The square footage of a home can work for or against sellers.

What you don't want to do is measure your home yourself.

Buyers tend to think bigger is better, but your smaller home may actually feel more spacious than one that has a bigger footprint. How do you get that across to your buyers?

There are a couple of ways. You can supply both exterior and interior footage through a third party, such as a bank appraisal, or through tax records. And you can showcase your floorplan to advantage through photos, staging and lighting.

What you don’t want to do is measure your home yourself.

One reason is that there is no standard way to measure a home – a laser or a measuring tape may yield different numbers for different people, which could open you to liability.

Another is that the purposes for knowing square footage vary greatly. A lender or an appraiser is interested in living space, as only

one means to determine value. A buyer is interested in getting the most home for the money compared to other similar homes. They also want to know if their furniture will fit, or how much replacement carpet they need to buy.

Living space is defined as space that is roofed, enclosed and finished for human occupancy; heated and cooled; and directly accessible from another living

Should You Give Square Footage?


What you don't want to do is measure your home yourself.

space. It is actually measured from the exterior of the home, length times width.

That’s why the interior may seem much smaller than exterior square footage. Living space measurements do not subtract the thickness of the exterior walls, insulation and wall boards or for the floorplan. Further, a lot of living space is simply unusable for actual

living, such as empty space beneath stairwells, or the access space required around water heaters and other systems required by code.

If you don’t think your square footage measures up, talk to your real estate professional about ways to make what you have more attractive to buyers.

Bright, sunny spaces appear

larger than dark closed spaces, so open the curtains and let the light in. Keep the lights on for showings.

Clear out all clutter. Clutter takes up room and a messy room is distracting. Remove and store excess furniture and belongings, so that each room functions well with a minimum of furniture and accessories.

[SQ FOOTAGE ctd pg 14]

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Don't Miss These Homeowner Tax Benefits

If you’re ready to prepare your income tax filing for 2012, it’s best to save your previous tax records up to seven years, says Dr. Jerrold Stern, professor of accounting in the Kelley School of Business at Indiana University and a fellow at the Texas A & M Real Estate Center.

“Expenses need to be documented to support deductions in the event of an IRS audit,” says Stern. “Documentation can be in the form of a cash receipt, credit card statement or cancelled check. Interest and penalties may be levied if deductions are disallowed for lack of records.”

He adds. “For most people, tax records other than those pertaining to assets, such as real estate and securities, could be discarded after three years,” says Stern. “Even so, a longer period— seven or more years — is prudent.”

One area where you want to keep meticulous records is any tax deduction that relates to your home. Keep good records and you can put your hands on what you need when you need it.

Tax deductions are a welcome gift from the government, but they’re only as useful as the records you keep.

GREATER GREENVILLE ASSOCIATION OF REALTORS 11FEBRUARY 2012

Your records for 2012 might include:

Property sales deductions: If you sold a home in 2011, you may be eligible for some capital gains exclusions up to $250,000 if you’re single, $500,000 if you’re married and lived in the home at least two years out of five years of ownership. Some allowances and special circumstances apply, so before taking this exclusion, talk to your tax professional.

Property tax deduction: Any money you paid during 2011 to local state, county and city property tax assessors is deductible. You should be able to go online and print your receipt from the local taxing authority to put with your tax records, or it will come in the mail.

Mortgage interest deduction: Your mortgage interest on both first and second liens is tax deductible. Private mortgage insurance is also deductible. Advance interest that you paid on your home at closing is also deductable. Your lender will provide your accounting online or through the mail.

Closing costs: Some fees to the mortgage lender are sometimes deductible. Ask your tax professional for guidance. You can deduct some moving expenses, such as items for home offices. Save your Hud-1 form and show it to your tax professional.

Home office deductions: If your home is your principle place of business, and you meet other IRS guidelines for home businesses, you can take a deduction on workspace dedicated to

your business and no other purpose. You can also depreciate that portion of your home over 39 years. All improvements to the workspace are tax deductible. In addition, your security expenses, phones, internet, computers, insurance, and utilities can be deducted or depreciated according to IRS allowances. Percentages and limits apply, so talk to your tax professional.

Energy Star: If you purchased an energy efficient system or appliance for your home and it meets government Energy Star standards, you may deduct a portion of your expenses. Save your receipts.

See:http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

There may be many other deductions out there for you to take advantage of that are associated with your home. Make sure you take deductions and depreciation only for legitimate items. For more information, talk to your tax preparer.

Don't Miss These Homeowner Tax Benefits


According to researchers at the Federal Reserve Bank of New York, real estate investors known as “flippers” were more responsible for the collapse of the 2004-2006 housing market than previously thought.

Lax credit standards including the notorious “no-doc” and “no-down-payment” loans of the day allowed many investors to buy homes without investing much of their own money, pushing home values up.

Between 2000 and 2006, the percentage of investors as

homebuyers more than doubled. At the peak of the housing boom in 2006, over a third of all U.S. home purchases were made to people who already owned at least one house. In the four states with the most severe housing correction, California, Nevada, Florida and Arizona, investors were as many as 45% of homebuyers.

What attracted these types of investors was the abnormal appreciation of homes during the period, which allowed them to capture quick percentages of profit without investing their own capital.

In a typical market, historical appreciation for homes is closer to 1 or 2 percent above inflation, not enough of a margin to attract “flippers” – investors who buy homes with the intention of putting them back on the market quickly to sell at a profit. But during the housing boom, home prices rose in the double and triple digits in many areas.

In California, according to VisualizingEconomics.com, home prices between 2000 and 2006 rose an astonishing 120% to 160%, depending on the area. Since then

No More Flipping

GREATER GREENVILLE ASSOCIATION OF REALTORS 13FEBRUARY 2012

No More Flipping

prices dropped 40% to 60% between 2006 and 2010.

Yet the correction spread like a flu across all states, including those that skipped the housing boom. South Carolina, for example, saw zero to 40% price gains between 2000 and 2006, yet the state has been punished along with the rest of the country with zero to 20% in price declines between 2006 and 2010, again depending on the area.

When prices began to fall, those who leveraged mortgage credit to purchase multiple properties simply walked away from their investments, making the housing collapse deeper and longer and more painful for the entire nation.

The Fed researchers found that non-occupying home buyers are more likely to default on an underwater mortgage loan than an occupying

home buyer. An underwater loan is one in which the value of the home is below the amount the borrower owes the lender.

In 2006, Arizona, California, Florida, and Nevada investors originated nearly 20% of mortgages – triple the share they had in 2000. By 2007-09, investors were responsible for more than a quarter of seriously delinquent mortgage balances nationwide, and more than a third in the “boom” states.

What makes this report so interesting is that investors have come back, but they’re no longer intent upon “flipping” homes. Ownership rates for homes in 2006 averaged six years. In 2010, the average rose to nine years.

With home price appreciation expected to be below historical averages, today’s investors, who

number 19% of the market, according to the NAR, are “buy and hold” investors. They’re taking advantage of record low rates, distressed sellers, low prices, record affordability and a tight lending market for ordinary homebuyers.

In addition, lenders are tying occupancy to mortgage interest rates. Non-occupying homebuyers are required to put as much as 25% down, or to have 25% equity to refinance. Their interest rates may be a point or two higher than an occupying borrower’s rate.

When they put their own skin in the game, investors are more likely to hold for the long term, and that’s good for all homeowners.


Stage the home for optimum traffic flow around uncrowded tables and chairs.

Help your real estate professional stage your home for all photos that will appear online. Take the computer off the dining room table. Clear off countertops and tabletops, make sure furniture and lamps are right-sized for each room, and that each room is represented as advertised.

Last, put a disclaimer in your mandated seller’s disclosure. “All third-party measurements are approximate. Buyers must rely solely on their own investigation of the property and satisfy themselves that this property is suitable for their needs.”

To put the improvements into context, U.S. home prices dropped 1.4% for the same period.

Housing sales volume and prices improve with the economy, but they are a lagging indicator. Year over year, sales volume in Greater Greenville was over 2% lower than in 2010, but prices held firmly. Average prices and median prices were 0% and 0.6%.

Improvements in both transaction volume and prices were noticeably stronger in November and December 2011. From December 10, 2011 to January 10, 2012, sales volume was up 7.6% over the previous year. The median price of a home was $132,000 a year ago, and today it stands at $135,000.

Sellers are less anxious as sales volumes rise, causing a nearly 16% drop in the number of active listings year-over-year. The median price for homes for sale is 1.3% higher than a year ago.

Take advantage of this improving market. With mortgage interest rates at all-time lows, it’s a great time to buy a home.

SQ FOOTAGE ctd from pg 9

GGAR ctd from pg 2

In addition, they may also know of national and local programs that can help you qualify to buy a home.

For example, you may not have 20% to put down on a home, but your income and credit history may qualify you to buy a HUD foreclosed home with zero percent down. You may also qualify for special incentives such as those for workforce home buyers - police, firemen, and teachers.

Explore all options, and you may find that 2012 is your year

AFFORDABILITY ctd from pg7

marketclick february 2012

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