Homebuilders are learning what single women have known intuitively for years, single women are purchasing new homes and condos at increasing rates, and are now the second-largest segment of homebuyers. (In 2005, single women accounted for 21 percent of all homebuyers, second only to married couples.)

These statistics have homebuilders taking notice and are now designing their homes to be appealing to women. Features like skylights, laundry rooms upstairs, upscale kitchens easy-clean floors and better security options are being included to attract this growing share of the home-buying market.

Homebuilders are so intent on reaching out to this venerable market force that one of the nation’s largest homebuilders recently partnered with domestic diva to Martha Stewart to create an entire housing community featuring homes with features that appealed to female buyers. The community, co-branded between KB Home and Martha Stewart Omnimedia in Cary, North Carolina, just outside of Raleigh was completed in March, 2006. The homes features some of the interior and exterior touches Stewart boasts in her homes, including large closets, spa-like bathrooms and shelving in the bathrooms.

Their initial offering of 650 homes, which ranged from $180,000 to more than $400,000, proved to be extremely popular, according to Bruce Karatz, chief executive of KB Home “Within a few weeks of offering the homes in Cary, we sold all the lots we could sell in the grand opening phase,” Karatz said. In fact, KB Home and Stewart are currently planning on building similar housing communities in Atlanta, Charlotte, Houston, Las Vegas, Florida and California.

There may be many reasons for the upsurge in single females purchasing homes, including women staying single longer, their increased access to better paying jobs and a higher divorce rate.

But whatever the reasons, it seems certain that the trend will continue indefinitely, and homebuilders will continue to provide amenities that cater to them.

By David Plowman

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A reverse mortgage can be a way for senior citizens who own their own home to pay for daily expenses, medical bills, or in some cases, even a vacation. The program works by allowing these homeowners to borrow against the equity in their home without having to repay the loan so long as they continue to live in their house.

To qualify for a Home Equity Conversion Mortgage (or HECM, a reverse mortgage insured by the government), participants must meet the following requirements:

• All of the homeowners must be 62 years old or older and live in the house as the primary residence.
• Have a fully-paid mortgage, or a small mortgage that can be paid off with at the loan’s closing with the proceeds from the reverse mortgage.
• Applicants must attend a counseling session with an approved counselor.
• Applicants must live in a single-family house, a townhouse, be the homeowner in an owner-occupied two to four unit dwelling, or in a planned unit development. Some types of manufactured housing is eligible, however most mobile homes or co-ops are not.
• The qualifying dwelling must be at least one year old, and it must meet HUD’s minimum property standards. However, if repairs are needed, they can be funded through the loan.

For more information, or to find out if you qualify for a reverse mortgage, call 800 559-4287 to find an approved HECM counselor.

By David Plowman

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If you are 62 years or older and own your own home with a fully-paid mortgage, you may be eligible for a Reverse Mortgage, a program that allows you to borrow against the equity in your home without having to repay the loan so long as you continue to live in your house.

There are several types of reverse mortgages offered by banks and lending institutions, but perhaps the most popular program is the Home Equity Conversation Mortgages, and is the only program insured by the Federal Housing Administration.

If you qualify under specific eligibility requirements, you may be able to receive a lump sum payment, a monthly installment payment, a credit line that you can use as needed, or a combination of these options. The total loan amount is based upon you age, the value of your home and the loan’s interest rate and miscellaneous loan fees.

The loan is not payable until sell your home, no longer live in your home, or die. The loan and its costs are paid when you (or your heirs) sell your home. You or your heirs will receive the selling price of the home, minus the load and its costs of the loan costs.

By David Plowman

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A home equity line can be a good alternative to a home equity loan. With a home equity line, you are given a line of credit and issued blank checks. You are charged only on amount you use, not on how much your line of credit is.

This may provide you with a much greater flexibility if you don’t know how much a particular project, like a home renovation, will cost you over an extended period of time.

Additionally, your pay back options may be more flexible. With a home equity loan, you will have to make established monthly payments over the term of your loan. With a line, your payment is based on the amount of credit you used, so you have greater control of your payback amount.

When shopping for a equity credit line, compare the “draw period,” or the length of time you can write checks against your equity. In many cases, banks offer a draw period of up to 10 years, and offer a repayment window of an additional five years.

Make sure to check your credit line checks secure. Since any amount written goes against the equity in your home, the consequences of having them fall into the wrong hands could be great.

Depending on your financial needs, a home equity line may be a flexible alternative to a home equity loan.

By David Plowman

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Need a way to pay off credit card debt, pay for home improvements, or wedding? If you need cash for whatever reason, a home equity loan may be the answer.

These loans are based on the amount of equity, or the difference between the value of your home and the amount you owe, you have in your home. Many packages enable you to borrow up to 70 to 90 percent of your equity.

Compared to mortgages, home equity loans generally offer lower interest rates, and are a “hot product” offered by several competing banks and lending institutions. Shop around to make sure you are getting the best deal.

When shopping for a home equity loan, be aware of the following:

• Many institutions will offer low “teaser rates” for the first year of the loan. Make sure you
  calculate the interest rate for the full term of the loan .
• Include any fees the lender may tack on to the loan.
• Remember, the loan with the lowest monthly payment may not be the least expensive one.
• Know how many payments you will need to make, the total amount you are borrowing, and the total amount you are repaying.

By comparing different loan quotes and doing your homework before you sign an application, you will be better informed and will be more likely to get the best deal on a home equity loan.

By David Plowman

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Buying a home is a tremendous investment. You will be able to receive tax breaks, and if home values continue to appreciate, you will likely make a profit if you re-sell your home down the road.

But you don’t need to sell your home in order to take advantage of its value. In fact, there are several options, including re-financing, home equity loans, home equity credit lines, debt consolidation and reverse mortgages.

Below is a brief description of these loans:

• Home Equity Loan: Many people take out these types of loans to make renovations on their home, consolidate debts, pay off medical bills, or even to help send children to college. Whatever the purpose, these loans work in much the same way. They borrow against the equity in your home (the difference between your home’s current value and the money you owe on it).

You will receive the loan amount in one lump sum, and will pay the balance, interest and other fees over a specified time.

• Home Equity Line: This works in much the same way as a home equity loan, However, rather than receive a lump sum payment, you are issued blank checks which you write as needed (up to a pre-approved amount.) Your loan balance is for only the amount of the checks you’ve written, plus interest and fees. This may be preferable to a lump sum payment if you don’t know the exact amount you will need to borrow, or if you will be completing a project where you will be making payments over time.

The advantage to these loans is the interest rate is generally much lower than other lines of credit such as credit cards, and the interest paid is usually tax deductible.

Remember a Home Equity Loan or a Home Equity Line is not a source of “free money” Like any other type of loan, it must be repaid. Failure to repay these loans could result in foreclosure of your home. However, if used wisely, these home equity loans can be a tremendous way to tap into your home’s value.

By David Plowman

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By David Plowman

Buying a home can be one of the biggest purchases most of us will ever make in a lifetime.

In fact, for many people, the task can be so daunting that you don’t know where to begin. But like any other major goal, the process can be made more manageable by breaking the tasks up smaller steps. Complete one goal at a time, and soon you’ll see yourself on the road to home ownership.

Below are some of the major steps toward owning your own home:

1) How much can you afford?
2) Learn about your rights, such as fair housing and fair lending.
3) Find and pre-qualify for a loan.
4) Find out if there are any home-buying programs.
5) Shop for a home.
6) Make an offer.
7) Get a professional home inspection.
8) Get a homeowners insurance policy that suits your needs.
9) Come to the closing prepared.
10) Enjoy your new home!

Of course, most of these steps can in turn be broken down into other smaller steps. And in the coming weeks, we’ll take a closer look at those steps. Stay tuned.

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With the recent news that the Fed is raising interest rates, and the improving general health of the economy, we have begun to see a rise in morgage rates. As such, economics dictates that the real estate market should become a bit more of a buyers market. Therefore, potential homebuyers may have more choices to make in the coming year when they look to buy.

When buying a home, you will first have to determine the price range of houses you will be considering for your purchase. Consider how much of a downpayment you will be making and how much of a monthly payment you can afford to determine your budget.

The next step in choosing a home lies in choosing the neighborhood you wish to live in. Narrow down your choices to 3 or 4 different neighborhoods using these criteria:

property values
quality of local schools
traffic
crime rate
commuting time (if applicable)
closeness of shops, cultural activities, parks, schools, and public transportation

Once you have zeroed in on a few neighborhoods, consider the type of home you will be purchasing. Most buyers search for single family homes, but there are other options, such as multifamily homes, condominiums, and co-ops which you may wish to consider.

After you have settled this issue, then you must determine the number of bedrooms your home will have. Of course, this will be determined by your personal needs, however you may want to consider that generally, houses with three or more bedrooms have greater potential for appreciation than two bedroom houses. Similarly two bedroom condos resell much easier than single bedroom condos. In addition, consider the costs of renovations or repairs you may wish to make.

Once you have found your dream house, be prepared to make an offer right away. This is especially important if the property is underpriced or newly listed. There is nothing more disappointing then having your dream house slip through your fingers.

Happy Househunting!

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By Suzie Bridgham

According to the FDIC (Federal Deposit Insurance Corporation), 54 Regional Housing “booms” occurred (defined as appreciation over 30% in under 3 years) over the past 25 years. Of these 54 Regional Booms, 21 markets “busted” (defined as at least a 15% decline over a 5 year or less period.)
… Moral of the story: Most “Booms” do not lead to “Busts.”

The last “bust” that California experienced was from 1990 to 1996. Why? Well, because 750,000 jobs vanished from our region due largely to the elimination of Aerospace and Defense needs. Remember the “Star Wars” program? Well, that crumbled with the Berlin Wall and so did a lot of jobs.
… Moral of the story: Don’t bet on rising interest rates to burst the bubble. Follow the business sector instead.

Experts, forecasters, economists, study groups, think tanks and students alike have been predicting a bubble burst for the past 4 years. And although Greenspan has raised interest rates over a dozen times since the “boom” started, we still have not heard the “pop.”
… Moral of the story: Only hindsight is 20/20.

Homeowners can afford their homes. In the early 80’s, owners spent 30% of their household income on the mortgage payments. With interest rates as low as they are, that figure has been reduced to under 20%. Two thirds of the market is comprised of repeat buyers. These repeat buyers have a lot of cash to put down on their homes. A lot of equity buffers higher interest rates. Add that to the 61% increase in per capita earnings since the early 80’s, and you have a hearty pool of homeowners out there.
… Moral of the story: Huge foreclosure market unlikely.

Demand still exceeds supply. Currently, Los Angeles only holds a 2.6 month housing supply. A 6 month supply starts to balance demand. Equilibrium is highly unlikely considering that since the year 2000, 1.1 million immigrants have relocated to our beautiful state. We are not only a landlocked region, but our building regulations are among the strictest in the country. Homes here are a very hot commodity.
… Moral of the story: With the exception of a national plague occurring, home prices are likely to keep going up over the long run.

All numbers, figures and statistics taken from The 2006 Real Estate Outlook’s “Why the Housing Bubble is Bogus!” presented by Gary Watts.

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I, for one, am looking forward to Bernanke succeeding Greenspan as Federal Reserve Chairman in January. Why? Well, real estate junkies may recall a lull in the market during the ’04 presidential election. People tend to sit tight and hold their breath when a political shift occurs. I feel that happening right now. Add that to the end of the year holiday season and the overall market exhaustion… and we have ourselves a real estate respite. I love it! We needed a break!
So… why do I look so devotedly at Bernanke? Well, I don’t think much is going to change in the long run. Rates will probably tick up another 3 or 4 times throughout the first few quarters in ‘06. I will certainly not go belly up from the $75 monthly increase on my adjustable rate mortgage when those rates go up. Most homeowners won’t. Come on, I sprained my ankle a few months ago and was out $700. S— happens and you have to blow some extra bucks, right? Now, rates can’t go up too much because if consumer spending slips then we’re right back where we started when the Fed started to drop rates in the first place. Also, lenders are always coming up with new loan programs and borrowing power is still strong. If inventory does not pick up, then I predict a balanced Bernanke for ’06.

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