How Long is Too Long to Live at Home?

Once you've graduated from college, how soon should you be out of your parents' house and living on your own? Well, the younger your parents are, the more time they're willing to give you.

A new study by Coldwell Banker Real Estate finds that younger parents are more forgiving of their kids living at home post-college than older parents. Overall, 20 percent of Americans say it's OK for adult children to live at home as long as they want, while 13 percent said it's never OK to live at home with mom and dad after college, according to the study.

But Millennial parents — those ages 18 to 34 — say it's acceptable for adult kids to live at home for up to six years after college. Parents ages 55 and older say kids should be out of the house by no more than three years after college.

“In terms of transitioning into independent adulthood, it’s almost as if 27 is the new 18,” said psychotherapist Dr. Robi Ludwig, who serves as Coldwell Banker's lifestyle correspondent. “Living at home can be a great opportunity for young adults who need some time to get on their feet, but it’s only beneficial if the time is used wisely. Our twenties are a very crucial time because the decisions we make and the lessons we learn then influence who we become as adults.”

Despite the leniency among some parents, 65 percent of Americans say they believe adult kids living at home are overstaying their welcome, according to the study. That sentiment is stronger among parents 55 and older (73 percent) than Millennial parents (58 percent).

Source: Coldwell Banker Real Estate

Is It Time for Baby Boomers to Downsize?

By Tom Sightings 

For many reasons, a lot of baby boomers have been delaying retirement. One reason is that we have been unable to sell our homes. We've been trapped in our old houses, in our old, high-tax communities, handcuffed to our jobs by a lofty cost of living. We couldn't afford to retire until we could move to cheaper digs.

But now the real estate market is improving. According to the Standard & Poor's/Case-Shiller home-price index, the number of existing homes sold is up more than 8 percent from a year ago, and average prices have climbed 12 percent since this time last year. In some markets, such as Dallas and Denver, prices have regained all of what they lost during the Great Recession. Even in Detroit, prices are up by a third from the bottom (although still well below their peak in 2005).

Now the question is: If you can finally sell your home and move to the retirement destination of your dreams -- whether across town or across country -- should you rent your new place, or should you buy again?

Let's remember that despite the lousy real estate market of the recent past, most boomers have made a lot of money owning their own homes over the past 30 years. For most of our lives -- and our parents' lives before us -- owning a home was the American dream. A house centered you in a stable community, provided a school for your kids, and in the long run, was a good financial decision as well. The mortgage and taxes were subsidized by the tax code, and the value of your house increased -- some years more than others, but except for a few brief recessionary periods, always on an upward trajectory.

The rule of thumb was that it was better to own than to rent, as long as you planned to stay in your house for at least five years. But that was then. What about now?

What we've all learned since 2006 is that owning a home can be an albatross as well as an opportunity. Many people now seem more interested in mobility than stability. You can't retire and you can't take that new job if you can't sell your house. And maybe you just no longer want the responsibility of taking care of a lawn and doing maintenance on the roof and the plumbing and the heating system.

Many of us know -- and are a little jealous of -- a friend or relative who was renting an apartment or a condo and was able to take a new job or jump on an early retirement package, then wave goodbye and start the new life they wanted. Now that we homeowners have the chance to move, do we really want to be saddled with another place we may not be able to sell? Especially in a volatile market like Florida or Nevada or Arizona?

Certainly, if you're experimenting with your retirement, shopping for a new place to live, you should not buy a place right away. Remember, buying and selling a house costs a lot of money -- not just the down payment, but the mortgage, the lawyer, the insurance and taxes.

If you're not sure, rent for a year or two. But eventually, you'll probably begin to feel like you're "throwing away" all that rent money, contributing to the wealth of your landlord rather than building your own equity. The people in your complex are transient, and while you might not have to worry about maintenance, you might find your landlord often does a "quick fix" instead of doing the job right. Plus, maybe you want to put your own stamp on a place -- fix up the kitchen the way you want it, rather than the way the landlord has it.

Also, be careful: You might find that you need to buy a place quick, before prices run up again and leave you behind, unable to afford what you'd like.

Above all, the choice of whether to rent or buy is a lifestyle decision: What kind of home and neighborhood you want to live in, whether you want to feel like a part of the community and how long you are you going to stay there. In other words, the new rule of thumb is the same as the old rule of thumb. Rent if you're going to be moving on. Buy if you want to settle down and stick around for at least five years.

What Would YOU Do to Get That House? [INFOGRAPHIC]

by THE KCM CREW on AUGUST 9, 2013 · 0 COMMENTS

in INFOGRAPHIC

Fla.’s housing market continues positive trends in 2Q 2013

ORLANDO, Fla. – Aug. 8, 2013 – Florida’s housing market gained strength in second quarter 2013 with more closed sales, higher median prices, more pending sales and a shrinking supply of homes for sale compared to the same quarter in 2012, according to the latest housing data released by Florida Realtors®.

“Data from the second quarter of 2013 shows that Florida’s housing market is continuing to improve and the growth is boosting the state’s economic recovery,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “We are experiencing an extended run of year-over-year gains in existing home sales (18 months as of June) and Realtors across the state are reporting increased activity in their markets. At 7.1 percent, Florida currently has a lower unemployment rate than the nation. As more jobs are created, it’s providing a stable foundation for future growth in the state’s housing market.”

Statewide closed sales of existing single-family homes totaled 63,173 in 2Q 2013, up 14.7 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts signed but not yet completed or closed – for existing single-family homes rose 28.5 percent in the second quarter compared to the 2Q 2012 figure. The statewide median sales price for single-family existing homes in 2Q 2013 was $170,000, up 14.1 percent from the same quarter a year ago.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 31,829 units sold statewide in the second quarter, up 7.9 percent from the same three-month period in 2012. Pending sales for townhouse-condos in 2Q 2013 increased 18.8 percent compared to a year ago, while the statewide median for townhouse-condo properties was $129,000, up 16.7 percent over the same quarter last year.

In 2Q 2013, the median days on market (the midpoint of the number of days it took for a property to sell that month) was 51 days for single-family homes and 57 days for townhouse-condo properties.

The inventory for single-family homes stood at a 5-months’ supply for the second quarter; inventory for townhouse-condos was at a 5.2-months’ supply for the same period, according to Florida Realtors.

Florida Realtors Chief Economist Dr. John Tuccillo said, “For those who have been following the Florida real estate market, there’s not much new in these numbers. The market continues its gradual improvement and return to stability. While investors have been the major driving force in the market, we are beginning to see more owner-occupants enter the market. This is an encouraging sign.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.69 percent for 2Q 2013, down from the previous year’s average of 3.80 percent, according to Freddie Mac.

To see the full statewide housing activity reports, go to Florida Realtors Media Center  and look under Latest Releases, or download the 2Q 2013 data report PDFs under Market Data.

Related: NAR: Home prices pick up steam in most metros during 2Q

© 2013 Florida Realtors®

Financial considerations for homebuyers over 40

LOS ANGELES (AP) – Aug. 7, 2013 – It’s often the most daunting and emotionally taxing item on one’s financial to-do list: Buying a home.

Most people wade into homeownership for the first time in their 20s and early 30s, when they still have the bulk of their working years ahead of them and a long runway to build equity – a key asset for eventually moving up to a bigger home.

But what if you’ve reached midlife and still envision buying a home one day? Tackling that first home purchase after 40 can be easier in some ways than when you’re just staring out in your career, but it also brings its own set of financial factors.

“It’s important to consider the financial work you have left,” says Eleanor Blayney, consumer advocate for the Certified Financial Planner Board of Standards based in Washington D.C. “The financial hurdles you still have over the rest of your life and how homeownership and debt in particular are going to impact that.”

A National Association of Realtors survey of people who bought a home between July 2011 and June 2012 showed that nearly 80 percent of first-time homebuyers were 32 years old or younger.

In the next age bracket, those age 33-47, 36 percent were first-time buyers; between the ages of 48 to 57, only 19 percent were first-time buyers. The rates of first-time homeownership generally declined as buyers got older, according to the survey, which featured 8,500 respondents.

Even so, the last decade’s economic downturn and housing crash has forced many to put off that first home purchase.

Here are some things to consider if you’re over 40 and eyeing homeownership:

Lending rules don’t change for older buyers

Good news: Being closer to retirement age than someone in their 20s and 30s can’t legally be held against you by a lender when they consider you for a home loan, regardless of the loan period.

“So if somebody was to walk in today, and they’re 114 years old, and they ask for a 30-year mortgage and qualify for it, we have to give it to them,” says Tom Jarboe, regional manager at lender Primary Residential Mortgage Inc.

The decision on whether one qualifies for a loan hinges on the borrower’s income, assets, credit history and other factors.

Banks generally look back two years to establish a borrower’s income history and also look to evaluate the likelihood that the borrower will continue to make the same level of income for at least another three years.

If you’re in your late 50s or early 60s and disclose that you’re planning to retire within three years, a lender will evaluate your projected earnings from Social Security, retirement accounts, dividends on investments and other sources.

Consider benefits of paying off loan

Most banks operate under the assumption that even a 30-year fixed mortgage will be swapped out for another loan within eight years, if not sooner. That’s because many homebuyers often end up refinancing, or moving for work or due to family considerations.

But paying off a home and owning it free and clear by the time one retires is a smart play, particularly as the cost of housing is a significant expense for a person relying on a fixed income.

That can be tougher for someone who puts off that first home purchase two decades into their prime working years, assuming they haven’t saved up money to make a hefty downpayment – think at least 30 percent.

But it’s doable.

Blayney recommends that even older borrowers who take on a 30-year mortgage take steps to pay off the loan or lower the monthly payment significantly by the time they retire.

That could mean making extra payments during the early years of the loan, or putting up more than the minimum downpayment so the borrower is financing a smaller amount. A 15-year mortgage, which typically translates into lower interest, but higher monthly payments, is another route to a quicker loan payoff.

Look into first-time buyer assistance

One of the biggest obstacles to homeownership is coming up with a downpayment to qualify for a loan.

Federal and state housing agencies offer assistance for first-time homebuyers, including in many cases former homeowners who haven’t owned a home for at least three years. You can find a list of some programs by state at www.hud.gov.

Remember though, while some loan programs allow homebuyers to make a downpayment of as little as 3.5 percent of the purchase price, experts say you’ll need to save enough for at least a 20 percent downpayment in order to get the lowest interest rate and avoid having to pay private mortgage insurance, or PMI.

And they can come with hefty fees and restrictions.

Ask yourself if this is the right time to buy?

You may want to own a home, but are you financially ready to take on the financial commitment that comes with a home loan?

Experts recommend borrowers consider the implications of buying a home in their later years, as well as taking on a large loan.

“This isn’t the situation where if you happen to time your purchase incorrectly when you’re 25 and you buy at the top of the market, you still have most of your life left to recover financially,” says Rick Sharga, executive vice president at home auction site Auction.com.

Consult with a financial planner

Buying a home in midlife or beyond has direct implications on retirement.

Homeownership can bring stability to one’s monthly housing costs, versus rental housing, as well as tax benefits, but it also carries with it a trove of costs, including property taxes, insurance and maintenance.

A good way to evaluate all the ways to buy a home, whether in cash or through financing, will affect one’s retirement finances is to enlist a financial planner to go over one’s retirement goals.

“You have to sharpen your pencil, sit down and do all the math,” Blayney says. “There’s no one answer.”
 Copyright © 2013 The Associated Press, Alex Veiga, AP business writer.

3 Reasons to Buy that House NOW!

by THE KCM CREW on JULY 30, 2013 

Here are three great reasons to consider buying a home today instead of waiting.

1.) Prices Will Continue to Rise

The Home Price Expectation Surveypolls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released last week projects appreciation in home values over the next five years to be between 12.3% (most pessimistic) and 32.8% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes any sense.

2.) Mortgage Interest Rates Are Increasing

As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about one full percentage point over recent historic lows.

The National Association of Realtors, the Mortgage Bankers Association, Freddie Macand Fannie Mae, in their July forecasts, have all projected 30-year-fixed mortgage interest rates to be between 4.8 and 5.1% by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3.) It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Home prices to stabilize or fall in 6 Fla. cities

IRVINE, Calif. – Aug. 1, 2013 – CoreLogic released an analysis of home price trends during the first quarter of 2013 in more than 380 U.S. markets based on the CoreLogic Case-Shiller Indexes and data from the Federal Housing Finance Agency (FHFA).

In the report, home prices increased 10.2 percent in the first quarter of 2013 compared to the first quarter of 2012. It’s the first double-digit gain since the peak of the housing bubble seven years ago.

However, the analysis also predicts that prices will stop rising as quickly in 2014 as an increase in mortgage interest rates make demand and supply more balanced. As more homeowners consider selling to lock in capital gains, upward price pressure will subside.

In four of six Florida cities included in the analysis, price increases in the first quarter of 2013 beat the national average. The year-to-year increase in Orlando was 14.6 percent; in Miami it was 14.2 percent; Tampa was 11.9 percent and West Palm Beach was 11.4 percent.

The remaining two Florida cities in the study still had year-over-year price increases in the first quarter, however. Jacksonville recorded a 9.9 percent increase, while Fort Lauderdale logged 9.5 percent.

The report goes on to predict what will happen to home prices by the first quarter of 2014. Nationwide, CoreLogic foresees an increase of 6.5 percent.

However, all six Florida cities would fall short of that forecasted price rise by 2014’s first quarter, according to CoreLogic. Tampa tops the list with a 2.6 percent price growth predicted, but only two other cities are expected to see price increases: Jacksonville at 1.4 percent and West Palm Beach with 0.6 percent.

The report predicts the three remaining cities’ home prices will drop slightly in value by the first quarter of next year: Miami by 2.7 percent, Fort Lauderdale by 2.6 percent and Orlando by 1.6 percent.

“Although double-digit gains usually indicate unsustainable appreciation and, possibly, bubbles in some metro areas, there is less need for concern now since home prices remain 26 percent below their peak nationally and are even lower in many metro markets,” says Dr. David Stiff, chief economist for CoreLogic Case-Shiller.