Improving Housing Market Driving U.S. Economy: JP Morgan

The US housing market is very close to a bottom and there are already signs its improvement is giving a boost to the overall economy, JPMorgan Chase CEO Jamie Dimon told CNBC Wednesday.
“I believe we`re very close to the inflection point. People look at prices that are still coming down but all the other signs are flashing green,” Dimon said during a job fair in New York for hiring veterans.
Housing is more affordable and “the shadow inventory everyone talks about is lower today than it was 12 months ago. It will be a lot lower 12 months from now,” he said.
Distressed inventory “is actually coming down, not going up. Homes for sale are about half what they were four years ago. You could come up with a pretty bullish case. If the economy grows, housing gets better, quicker.”
He said the US economy is “getting stronger all the time. It`s broad-based, companies are in great shape…Consumers are in great shape.”
So are the banks – JPMorgan was one of those that passed the Federal Reserve`s latest round of stress tests. The bank was so pleased by this it jumped the gun and announced it was raising its dividend and buying back shares before the official release of the test results.
Dimon believes the threat of a double-dip recession is behind us.
“No one can forecast the economy with certainty,” Dimon said, “but most of us in business [have] got growth plans that have nothing to do with the actual state of the economy. We`re going to always open new branches,” do more marketing, hire more people and work to bring in more customers.
Europe`s financial problems, at least for now, have been “put to bed,” he said, and while he expects China to have a “soft” economic landing, it will still have 7.5 percent growth, he said.
Meanwhile, the U.S. has had 24 straight months of job increases. JPMorgan, he said, has “never stopped expanding,” opening branches in the U.S. and around the world even during the financial crisis, and it wants to add 3,000 veterans to its banking and call center staff under the “Hiring our Heroes” jobs program.
If the economy is doing so well why is the Federal Reserve holding interest rates down until late in 2014?
“I think they want to see 300,000 to 400,000 jobs a month for six months before they declare victory” and raise rates, the JPMorgan CEO said. “If that actually happened, I think they might reverse course.”
As for the stock market, he said American companies are “enormously valuable, and you can buy them at very good prices. They are among the best companies in the world… You could buy a good piece of America at a very good price.”
SOURCE: MoneyControl.com

6 Rules Of Curb Appeal

6 rules of curb appeal

Paul Bianchina hits on just the right points in this Inman News article.

How to beat out competition when selling your home

It's that time of year again, when I take a moment to talk to all of you who are thinking of putting your home on the market this spring. If real estate's favorite old adage is "location, location, location," then it's got to be followed closely by, "You get only one chance to make a first impression."

You can't change your home's location, but you can certainly do everything within your power to make that first impression a strong one, so let's go over the basics of that all-important must-have for a successful sale: curb appeal.

Start with a step back

You've seen the outside of your house so many times that you don't really see it anymore. So now's the time to look at it with new eyes, from the perspective of a prospective buyer. And if you can't do it objectively, get a friend, a neighbor or your real estate agent to do it for you.

Put yourself in the buyer's shoes, and make a written list of those things that might raise some concerns for you if you were thinking of buying it. And while the front of the house is the primary focal point, don't overlook the sides and rear of the house as well. Here are some things to keep in mind:

Exterior paint: The color and condition of your home's exterior paint job is one of the single most important things to a prospective buyer. The color makes a visceral impact the moment a buyer walks up, and while you might have thought that the hot pink siding with neon purple trim was a great showcase of your individuality when you painted the house, it's going to severely limit the home's appeal.

And no matter what color the house is, if the paint job is faded and peeling, it's an immediate warning sign to buyers that the house hasn't been maintained, so they'll have their magnifying glass out to look for other defects.

If you're handy with a brush and an airless sprayer, you might just want to undertake a repainting project yourself. A long weekend and a few hundred dollars in paint can make a world of difference in how well the home shows and how quickly it sells.
If you don't want to paint the entire house -- or if it doesn't really need it -- just painting the trim, exterior doors, garage door or window shutters can make a big difference as well.

Roofing: A bad roof is another indicator of a general lack of maintenance, and may point a finger at potential structural and even mold problems resulting from leaks. Roofs are expensive to replace, but depending on your market and your desire to reap top dollar from the sale, you may want to take a hard look at the economics of re-roofing.
Talk with your agent about the pros and cons of re-roofing now versus crediting the cost of a new roof to the buyer in escrow.

Driveway and walkways: Driveways are a pretty dominant feature in most homes. Clean any oil-stained concrete, and repair small cracks before they get larger. For asphalt driveways, a seal-coat can often make a big difference in appearance and help prolong the asphalt as well.
For concrete or asphalt that's badly damaged, it's time to be thinking about replacement. You can replace the driveway with the same material as before, or consider an updated look by using paving stones instead -- they hold up well in all types of weather, and can even be a very satisfying do-it-yourself project.

How about walkways? When someone arrives, is there a clear and safe path to your front door? You may not mind walking across your front lawn, but guests and prospective buyers would definitely prefer a walkway. There are lots of options for creating a new front walkway or replacing an existing one, so check out your home center or some landscaping magazines for ideas.

Landscaping: Are things overgrown? Dead or dying? Obviously neglected? Landscaping is a huge part of that first impression, so remember to take a critical look at it.

• Fertilize and water the lawn regularly to green it up, and run an edger along sidewalks and driveway edges.
• Rake up leaves and pine needles.
• Repair sprinkler systems.
• Prune back or even remove those wild shrubs, and trim overhanging tree branches.
• Use bright flowers to create borders and accent areas that add both color and hominess to the yard.
• Consider adding new shade trees in front, which help a home look more established and appealing. Trees look best planted in odd numbers -- a grouping of three or five for example -- and the folks at your local nursery can help you with proper spacing.

Clean and organize: Finally -- clean! If you're not going to paint, wash down the siding to remove dirt and stains and get it looking fresh and clean. Wash driveways, walkways and patios. If you have a wood deck, consider a complete cleaning to restore the wood to a fresher look.
Wash all the windows, inside and out, and wash the screens as well. Polish doorknobs and light fixtures. Stow all of your garden tools and kids' toys away to remove clutter and potential tripping hazards. Take a trip to the local landfill and dump all the stuff that's accumulated in and around the yard.

Check the night view

One last thing: Check the night view as well. A home that shows well at night really creates an impression. Replace any burned-out lightbulbs, and consider adding a timer or two to keep the lights on a little longer into the evening.
Consider some low-voltage or solar lights to accent front walkways, and maybe provide up-lighting to accent trees and larger shrubbery. Keep a light or two on in the front windows as well, to add to the feeling of coziness and comfort.
SOURCE: INMAN NEWS...Paul Bianchina

Even a 14-Year-Old Knows It’s Time to Buy

Even a 14-Year-Old Knows It’s Time to Buy.....

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Willow Tufano is a 14 year old who lives in Florida. One thing that differentiates her from her friends is that she just bought her first house, a rental property. She bought it with her mother, but anted up her fair share with money she saved for over a year by selling free items she had previously found and fixed up.
The area was hard hit by the housing crisis and Willow and her mother were able to buy the home which was once valued at $100,000 for just $12,000. Why would a 14 year old even consider buying a property?
She is using her half of the rent they charge ($700) to pay back her mom for the second half of the house and the renovations they put into the house. Willow says she’ll have it all paid off in six years. Then she’ll keep the house as a source of income.
“It was definitely a lot of inspiration from my mom and my grandma,” Tufano said. Her mom is a successful real estate agent who owns several investment properties.

SOURCE: KCMBLOG.COM

Is the Housing Market Actually Recovering?

by The KCM Crew on March 13, 2012

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Everyone wants to know if the housing market is truly showing signs of a recovery. There are conflicting headlines every day. One day, we hear sales are up. The next day it is reported that prices are down. Is the real estate market coming back? The answer is ‘yes’ and ‘no’.
There are two aspects that must be evaluated: house sales and house prices. They will not recover at the same time. Sales are already increasing rather nicely while prices will still soften in many markets through 2012.

Home Sales

The National Association of Realtors (NAR) issues a Pending Home Sales Report each month. We can see by the graph below that sales have been increasing nicely over the last twelve months. Real estate professionals across the country are reporting that activity has increased compared to last year. The sales side of the recovery is starting to show great promise.

Home Prices

Many price indices have shown that national home prices are continuing to stumble. Even with demand increasing, we must look at where the supply of housing stock stands. Though ‘visible’ inventory (homes currently on the market) is shrinking, there is still a large overhang of ‘shadow’ inventory (foreclosures about to come to market as a result of the National Mortgage Settlement). This increase in inventory will outpace the increase in demand and thereby cause prices to continue to soften in many parts of the country.

Bottom Line

Housing is coming back. However, sales will come back before prices. We will not see prices appreciate until we work through the oversupply of homes on the market.

SOURCE: KCMBLOG.COM

10 Things to Know About Mortgage Debt Forgiveness

Real Estate Tax Talk

Inman News®

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Over the past several years, millions of homeowners have had billions of dollars in mortgage debt forgiven, either through foreclosure, refinancing or short sales. It's important for real estate professionals and homeowners to understand that mortgage debt forgiveness has significant tax consequences.

Here are 10 things the Internal Revenue Service says you should know about mortgage debt forgiveness:

1. Normally, when a lender forgives a debt -- that is, relieves the borrower from having to pay it back -- the amount of the debt is taxable income to the borrower. Thus, a homeowner who had $100,000 in mortgage debt forgiven through a short sale would have to pay income tax on that $100,000, as an example.

Fortunately, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from your taxable income up to $2 million of debt forgiven on your principal residence from 2007 through 2012. This means you don't have to pay income tax on the forgiven debt.

2. The limit is $1 million for a married person filing a separate return.

3. You may exclude from your taxable income debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

5. The Mortgage Forgiveness Debt Relief Act applies to home improvement mortgages you take out to substantially improve your principal residence -- that is, they also qualify for the exclusion.

6. Second or third mortgages you used for purposes other than home improvement -- for example, to pay off credit card debt -- do not qualify for the exclusion.

7. If you qualify, claim the special exclusion by filling out Form 982: Reduction of Tax Attributes Due to Discharge of Indebtedness , and attach it to your federal income tax return for the tax year in which the debt was forgiven.

8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax-relief provision. In some cases, however, other tax-relief provisions -- such as bankruptcy -- may be applicable. IRS Form 982 provides more details about these provisions.

9. If your debt is reduced or eliminated, you normally will receive a year-end statement, Form 1099-C: Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

The IRS has created a highly useful Interactive Tax Assistant on its website that you can use to determine if your canceled debt is taxable. The tax assistant tool takes you through a series of questions and provides you with responses to tax law questions.

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, see IRS Publication 4681: Canceled Debts, Foreclosures, Repossessions and Abandonments. You can get it from the IRS website at irs.gov.

SOURCE: INMAN NEWS

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.

Short Sales: The Long and Short of It

Short Sales: Answers for First-Time Buyers

Many people in the market today are first-time home buyers who would not have been able to buy when home prices were higher. Enticed both by lower prices and bank promotions, these eager hopefuls are have taken the signs of deals as the best chance to make their first real estate move .
While all home buyers need help with the short sale process, it’s especially challenging to address the needs and concerns of a first-time home buyer who has decided a short sale is the home for them. Here’s how to get answers to first-time home buyers’ top three questions about short sales.

1. How long does it take for a bank to approve a short sale?

This is the million-dollar question. While it takes an average of three to six months, the timeline – and the process – vary quite a bit from one bank to another.
Short sale approval timelines depend on the bank (some just take longer than others). While each bank has different short sale guidelines, the short sale has to make sense to the bank. The more sense the short sale offer makes to the bank, the faster the approval process.
Here are some things that slow down the process by several weeks or more – these usually involve more people or more factors:

• Multiple liens on the property
• A third party negotiating the short sale on behalf of a seller. Some states allow third parties to do this, for a fee; some states, like Virginia, limit this to real estate licensees, attorneys, and employees of attorneys.
• Private Mortgage Insurance (PMI) on the property
• Additional investors

Action: To make an accurate prediction about the short sale timeline for a particular property, research the bank’s general timelines, the property’s liens, and whether there is PMI before writing the offer.

2. Will the bank make repairs to the property?

The short answer is, probably not.
Here’s why:

• The bank does not have possession of the property and has no authority to make repairs on behalf of the seller.
• Many short-sale sellers do not have the financial means to make repairs.
• Many banks require the short sale to be sold strictly “as-is” and do not allow the seller to pay for any repairs.

Why wouldn’t a bank allow the seller to make repairs? your buyer may ask. A short sale is a sticky situation for a bank, and that the bank wants to avoid potential liability. For example, if the bank allowed the seller to make repairs and the repairs proved to be faulty, the buyer might potentially hold the bank liable, since the seller doesn’t have money (which is how the short-sale situation came about in the first place).
Action: Find out how the bank and the seller feel about making possible repairs. A short-sale buyer needs to understand that the home will most likely be sold strictly “as-is” and all repairs will be at their expense.

3. How do other types of debt affect the short sale outcome?

Many short-sale sellers are more than just “house-poor.” Many have additional debts that place a cloud on title. These include tax liens – income and property, medical liens, mechanic’s liens, and child support judgments.
Depending on your state, some creditors can try to collect debt by going to civil court and getting a judgment lien placed on the property against the homeowner. These liens must be cleared before the short sale transaction can be closed.

• Surprisingly, tax liens are probably the easiest to clear off the title. The IRS has several avenues to collect back taxes, and doesn’t want to become a real estate holding company. Removing a tax lien can take up to 120 days, so it is imperative that this process is started well in advance of the short sale.
• Medical liens can usually be negotiated and a payment plan worked out. However, this is a time-consuming process and needs to be started as soon as possible.
• Mechanic’s liens are a little harder to get removed. There is not much recourse for tradespeople and bad debts.
• Child support judgments are also difficult to remove because they usually involve government agencies.

In short, additional debts can tie up the short sale process.
Action: Make sure to ask the listing agent if a preliminary title search has been performed on the property so you can advise your buyer about possible obstacles.
The more information you can offer your first-time home buyer, the more confident they can be about the transaction. The more confident they are about the transaction, the more likely they will see the transaction through to the closing table.

SOURCE: TRULIA.COM

House Prices: Window of Opportunity Beginning to Close

There have been conflicting opinions as to where housing prices are headed. We want to give our opinion on this subject for the short term. We believe sellers have a window of opportunity for the next 90-120 days in most parts of the country in which to sell their homes for maximum price. We believe there will be increased downward pressure on home prices throughout the rest of the year.
Why renewed downward pressure?
Any item’s price is determined by ‘supply and demand’. In many parts of the country, existing housing inventory has dropped to historic norms in the last few months. However, an inventory of distressed properties (foreclosures and short sales) will be coming to market this year. This inventory has been delayed for over a year as the Federal and state governments crafted an agreement with the five largest banks and mortgage servicers to establish a roadmap for how a foreclosure must be properly completed. That agreement, the National Mortgage Settlement, was reached two weeks ago.

SOURCE: The KCM Blog