Realty Reality: May 2005

Tuesday, May 31, 2005

Credit Scores: More Debt May Raise; Late Payments May Lower [reprise]

"The national average credit score for consumers with debt above the national average is higher than the average credit score for those with debt below the national average, according to a new study released by Experian Consumer Direct[SM]. By contrast, another study found that half of all consumers have at least one delinquency on their credit file, and consumers with one missed payment in the last year have an average credit score about 160 points lower than the average of those with no delinquent payments.

The national average Experian PLUS Score[SM] for consumers is 677."

Higher credit is not necessarily bad as long as it is property managed and payments are made on time. However, if even one payment is late, it can have significant negative impact on credit scores.
The average Experian PLUS Score[SM] for consumers with one delinquency in the last year is 598 versus 759 for those with no delinquent payments.

Paying off problem credit cards and bills, while sound financial advice limiting your exposure to future credit problems, is not a guarantee that your credit scores will immediately improve significantly, if at all. This is a long term solution. The key is to avoid the situation in the first place or at least correct the situation and focus on avoiding late payments in the future.

Source: OrginatorTimes, Gerri Detweiler, Author

Visit my web site for additional resources and services: http://LawrenceYerkes.com

or visit http://BestHomes-NJ.com for the latest property listings (residential, commercial, multi-family, farm, land)

Monday, May 30, 2005

What Is Your Flood Risk?

Flooding can happen anytime, anywhere.

Knowing your risk profile—whether you live in a low-to moderate-risk or high-risk flood zone—will help you understand your risk of financial loss.

Find out your relative risk level of flooding right now, online, at FEMA's FloodSmart.gov web site. When you enter your property information in the form on the corresponding web page, this is what you can expect:

After a few moments of processing, a page will appear that displays:
- Your relative risk level of flooding
- Links to flood maps, community ratings, FAQs
- Flood insurance resources

Click here for web page.

Sunday, May 29, 2005

Origin of TAPS - 24 Notes That Tap Deep Emotions

"Of all the military bugle calls, none is so easily recognized or more apt to render emotion than the call Taps. The melody is both eloquent and haunting and the history of its origin is interesting and somewhat clouded in controversy. In the British Army, a similar call known as Last Post has been sounded over soldiers'graves since 1885, but the use of Taps is unique with the United States military, since the call is sounded at funerals, wreath-laying and memorial services."

Click below to links detailing the above quote, discussing the orgins and history of taps, and the audio of it being played:

http://www.usmemorialday.org/taps.html

http://www.west-point.org/taps/Taps.html

http://www.usmcvta.org/tidbits/tankertidbits4.htm

http://www.geocities.com/Heartland/Ranch/8262/taps.html

http://www.sgaus.org/tap1.htm

arlingtoncemetery.org-taps

http://www.battleofthebulge.org/taps.html

http://www.tapsbugler.com/

http://bensguide.gpo.gov/3-5/symbols/taps.html

Visit my web site for additional resources and services: http://www.LawrenceYerkes.com

or visit http://www.BestHomes-NJ.com for the latest New Jersey Real Estate property listings (residential, commercial, multi-family, farm, land)

FEMA's National Flood Insurance Program

The Mitigation Division , a component of the Federal Emergency Management Agency (FEMA), manages the National Flood Insurance Program.

The three components of the National Flood Insurance Program (NFIP) are:
Flood Insurance
Floodplain Management
Flood Hazard Mapping

Nearly 20,000 communities across the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes Federally backed flood insurance available to homeowners, renters, and business owners in these communities. Community participation in the NFIP is voluntary.

Flood insurance is designed to provide an alternative to disaster assistance to reduce the escalating costs of repairing damage to buildings and their contents caused by floods. Flood damage is reduced by nearly $1 billion a year through communities implementing sound floodplain management requirements and property owners purchasing of flood insurance. Additionally, buildings constructed in compliance with NFIP building standards suffer approximately 80 percent less damage annually than those not built in compliance. And, every $3 paid in flood insurance claims saves $1 in disaster assistance payments.

In addition to providing flood insurance and reducing flood damages through floodplain management regulations, the NFIP identifies and maps the Nation's floodplains. Mapping flood hazards creates broad-based awareness of the flood hazards and provides the data needed for floodplain management programs and to actuarially rate new construction for flood insurance.

The National Flood Insurance Program, Program Description (619 KB) offers a more detailed overview and history of the program.

Buying flood insurance is the best thing you can do to protect your home, your business, family, and financial security.

Source: FEMA NFIP

Saturday, May 28, 2005

What Is Flood Insurance?

Unlike a standard homeowners policy, flood insurance covers losses to your property caused by flooding.

Some of the things a standard flood policy will cover include:

- structural damage
- furnace, water heater and air conditioner
- flood debris clean up
- floor surfaces such as carpeting and tile

You can also buy a flood insurance policy to cover the contents of your home, such as furniture, collectibles, clothing, jewelry and artwork.

Policies are available in three forms: Dwelling (most homes), General Property (apartments and businesses), and Residential Condominium Building Association (condominiums).

It's important to know that if you have a federally backed mortgage on a home located in a high-risk area, federal law requires you to purchase flood insurance. Also, if you've received a federal grant for previous flood losses, you must have a flood policy to qualify for future aid.

Source: FloodSmart.gov

Benefits of Flood Insurance

Buying flood insurance is the best thing you can do to protect your home, your business, family, and financial security.

When you're a flood insurance policyholder ...

Flood insurance compensates you for all covered losses.

Coverage is relatively inexpensive.

You can depend on being reimbursed for flood damages even if the President decides not to declare a Federal disaster.

You don't have to repay a loan, as you might have to with many Federal disaster relief packages. Your covered losses are paid in full.

You can count on your claim being paid in the event of a flood loss because National Flood Insurance Program (NFIP) flood insurance is backed by the Federal government.

Your agent can help you handle your claim quickly, so that you won't have to put your life on hold if your property is damaged by a flood. You can even request a partial payment immediately after the flood, which can help you recover even faster.

Your flood insurance claims are paid by policyholder premiums, not taxpayer dollars.

Source: FloodSmart.gov

Friday, May 27, 2005

RE/MAX = Little League Baseball + Softball

(Greenwood Village, Colo., May 27, 2005) - In an agreement announced today, global real estate franchisor, RE/MAX International has become the official real estate partner of Little League Baseball and Softball in the United States and Canada. The arrangement affords RE/MAX offices and associates the opportunity to become involved in a wide variety of sponsorships of an array of Little League programs at the local, league and district levels as well as RE/MAX participation in five regional finals and the Little League Baseball World Series scheduled for August 19-28, 2005 in Williamsport, Pa.

"Those of us who played on Little League teams while growing up still remember the experiences and the valuable lessons learned," said Mike Reagan, RE/MAX senior vice president, brand marketing. "For more than 65 years, Little League programs have engrained values like courage, loyalty, character and sportsmanship into young people’s lives. We are hopeful that this relationship touches millions of families and demonstrates that RE/MAX understands the present and future value of instilling healthy and sound principles in our youth."

As part of the new relationship, RE/MAX is encouraging local offices and sales associates to become active supporters of local and regional Little League programs in any way possible, through cash contributions for equipment, sponsorship of local teams or financial support of playing fields and venues. Numerous Little League programs offer a variety of youth participation - tee ball, baseball, softball and more.

At its core, the purpose of Little League is to provide a safe, fun, wholesome combination of recreation and competition to players ages 5-18 through regular season play among local teams. For those players whose skills are more advanced, the Little League International Tournament provides the largest sports tournament in the world, with more than 40,000 games played each summer on the road to the various World Series tournaments.

Little League leaves no one out - it has a Challenger Division for physically and mentally challenged players, giving every child a chance to be a Little Leaguer. The Little League Urban Initiative is a vigorous attempt to provide access to the benefits of the program to boys and girls within urban communities. Little League offers a variety of easy-to-implement programs for local leagues that help keep children safe, and make the game more fun for everyone: A Safety Awareness Program (ASAP), and the Little League Manager/Coach Education Program, just to name two. The innovative Little League Child Protection Program was the first for any national youth sports organization (and remains the ONLY national youth baseball/softball organization) mandating background checks on managers, coaches and other key volunteers. But it doesn’t stop with a mandate. Little League provides leagues with advice on how to perform the checks simply, and affordably.

The words "Little League" have symbolized the very best in youth sports for more than six decades. Little League is played in more than 70 countries, and all 50 U.S. states. This year, 42 Little League Baseball and Softball games of the International Tournament will be televised nationally on ESPN, ESPN2, or ABC.

A true World Series is played in four divisions of baseball and four divisions of softball, with four other tournaments advancing to state level. And, making it to the granddaddy of all youth sports world championships, the Little League Baseball World Series in Williamsport, Pennsylvania, happens for 16 communities around the world each year.

Little League Baseball, founded in 1939 in Williamsport, Penn., is the world’s largest youth sports program, with more than 2.8 million children and 1 million volunteers. More than 30 million people have played in Little League programs.

For more information on Little League, visit the Website www.littleleague.org.

FEMA Updates Status of Flood Maps

FEMA officials told representatives of the National Association of Realtors (NAR) that 80 million people will be receiving either preliminary or final revised flood maps by September.

The agency has also said its goal to remap every community that needs a new map in five years may not be possible.

Inaccurate flood maps make it difficult to determine whether a home is located in a floodplain and can lead homeowners to have inadequate flood insurance.

Thursday, May 26, 2005

American Red Cross Water Safety Advice For The Summer

American Red Cross Lifesaving Water Safety Advice: Have Fun This Summer Without Taking a Vacation From Safety

WASHINGTON, Thursday, May 26, 2005 — Summer time is a wonderful time of year; children and parents look forward to outdoor activities at the pool, lake and beach. Yet accidents can happen if families take a vacation from safety. The good news is that most water tragedies can be prevented, if everyone remembers the basic rules of water safety.

The American Red Cross reminds families to follow these safety tips for staying healthy and safe in or around the water:

Learn to swim and swim well. One of the best things anyone can do to stay safe in and around the water is learn to swim. No one, including adults, should ever swim alone. Adults should practice "reach supervision" which means to be within arm's length of a child in case an emergency occurs.
Outfit everyone with the proper gear. Kids – and even adults – who are not strong swimmers or who appear to rely on inflatable toys for safety should use U.S. Coast Guard approved personal flotation devices (PFDs) whenever they are in or around the water. This lifesaving lightweight plastic equipment when used properly can help save lives. Everyone, including strong swimmers, should use an approved PFD when boating. Each person should have the appropriate personal flotation device for his or her weight and size, which is found clearly marked inside the label near the Coast Guard stamp.

A great idea is to make a family day out of learning the rules of water safety and shopping for durable safety equipment together at a local pool supply store or mass distributor.
Always keep basic lifesaving equipment by the residential pool and know how to use it. A first aid kit, cordless phone, phone list with emergency contact information, a reaching pole and a ring buoy with a nylon line attached are recommended. First aid kits should contain plastic face shields, which can help prevent disease transmission. Cordless phones allow you to make that 911 call and to receive calls without leaving the area.
Plastic makes the ring buoy so light even a child can save a life if the need arises. These items coupled with a pool emergency action plan—similar to a fire drill—help the whole family breathe a little easier. In addition, the Red Cross recommends that pools be surrounded on all sides by a fence that is at least 4 feet high. It should not provide any footholds, which would allow a child to climb over or spacing to climb through. The fence should have a self-closing, self-locking gate that is locked when the pool is not in use.
Pack a "safety" bag for a day at the beach or lake. The properly packed safety bag will help ensure a fun day in which everyone comes home safe and sound. Water-proof sunscreen with an SPF 15 or higher, water shoes to keep feet safe from the heat and sharp objects on land and plenty of water are musts. All containers should be plastic to prevent injuries from breaking glass. Also, a hat and sunglasses keep eyes safe from dangerous UV rays.

Learn Red Cross first aid and CPR. While the above tips can help prevent emergencies, it is important to know what to do if a situation arises. And all caregivers, including grandparents, older siblings and babysitters should have these lifesaving skills.

For more information on staying safe in and around the water visit http://www.redcross.org/services/hss/aquatics/ or contact your local American Red Cross chapter.

Mortgage Rates Have Fallen Again

Source: Bankrate.com 5/26/05

Mortgage rates spiked in March and have fallen slowly since then. Rates on 30-year, fixed-rate mortgages have fallen eight of the last nine weeks, including this week.

The benchmark 30-year fixed-rate mortgage fell 6 basis points to 5.72 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.31 discount and origination points. One year ago, the mortgage index was 6.35 percent. The 15-year fixed rate mortgage, popular for refinancing, declined from 5.35 percent to 5.3 percent.

...The Fed certainly sent an inflation-fighting message this week when it released the minutes of the May 3 meeting of the Federal Open Market Committee. That's the panel that decides interest rate policy, and it raised the federal funds rate by one-quarter of a percentage point at that meeting. The Fed had telegraphed its intentions, and the rate hike was no surprise at all.

...In other words, more short-term rate hikes are coming. That message reassured bond investors, and kept bond yields and interest rates down. They believe that higher short-term rates will keep the economy from overheating, inflation will remain shackled, and long-term interest rates will remain low.

For more information and full article, visit http://www.bankrate.com/

Visit my web site for additional resources and services: http://LawrenceYerkes.com

or visit http://BestHomes-NJ.com for the latest property listings (residential, commercial, multi-family, farm, land)

Wednesday, May 25, 2005

Welcome Summer by Heading to a Fabulous Festival

Welcome Summer by Heading to a Fabulous FestivalWith such a vast world, deciding where to go can be quite overwhelming. That's why sometimes starting with a specific agenda makes things easier. You can't go wrong by choosing a fab festival that interests you and planning a getaway around it. Whether your passion is garlic, scrabble or jazz, there's bound to be a festival that celebrates it. A few favorite upcoming festivals include Chuck Wagon Gathering and Children's Cowboy Festival, Bean Blossom Bluegrass Festival, and Kutztown Festival. Enjoy!

Chuck Wagon Gathering and Children's Cowboy Festival
May 28-May 29, 2005
Oklahoma City, Oklahoma
Kids of all ages are guaranteed to have a ball making like real-life cowboys and cowgirls at this two-day festival where the Wild West lives on. Activities range from wood sculpturing to weaving, make-your-own bandanas to rope making. And the horse-drawn stagecoach, and wagon and pony rides are sure to provide big thrills for the little cowpokes. The grub is great, too--hardy cowboy fare like biscuits and stew, beans and cobblers are served up from authentic chuck-wagon crews. And lots of stage entertainment--from live bands to storytelling--are held throughout the festival. No wonder more than 10,000 visitors are expected to attend. Check out http://www.nationalcowboymuseum.org/e_wago_sche.html.

Bean Blossom Bluegrass Festival
June 11-June 18, 2005
Bean Blossom, Indiana
Bluegrass lovers, get thee and your toe-tapping shoes to Bill Monroe's Bean Blossom Bluegrass Festival. This bluegrass nirvana is the oldest, continuous such festival on the planet and was founded in 1967 by Bill Monroe, a high-mountain tenor and unique mandolin player. Indeed, the hillbilly music tradition was brought to the fore because of this event, which debuted as the "Big Bluegrass Celebration." And, today, it is even bigger and bluegrassier, thanks to more than 45 bands, along with artist and music workshops, and children's activities and workshops (storytelling, music and dance). Located at the Bill Monroe Music Park and Campground, the main draws of the eight-day event are the featured performers. This year's roster includes a range of acts including Jimmy Martin, Marty Raybon, Ralph Stanley, IIIrd Tyme Out, Larry Sparks, James Monroe and many others. And whether you're just learning to play an instrument or you're quite accomplished, be prepared to join the Bill Monroe Sunset Jam, starring Jimmy Martin and several other stars. Along with all the various events and workshops, a flea market and food concessions are also featured. For schedule go to http://www.beanblossom.com/.

Kutztown Festival
July 2-July 10, 2005
Kutztown, Pennsylvania
Pure Americana awaits at the 55-year-old Kutztown Festival in Pennsylvaina Dutch country. Held at the Kutztown Fairgrounds (from 9am to 6pm), the country's largest folklife festival is guaranteed to be fun for the whole family. Live entertainment on five stages, fine folk art, traditional crafts and a special children's area (including baby farm animals, puppets, make-and-take crafts, haystacks, mazes, story time and singalongs) are featured. The Quilt Sale and Auction, featuring more than 2,500 locally handmade quilts and wallhangings, is another highlight of the festival. Quilt lovers from around the country and abroad make the trip for the famous auction. Also, make sure to check out the quilting demonstrations and Festival Quilt, which you can contribute to. Along with all the fun, food, farming, garden, spinning and weaving, country cooking, blacksmithing, and candlemaking, woodcarving, tinning, etc., is the underlying desire to educate visitors about the people and culture of the Pennsylvania Dutch in Berks County. As far as food, don't miss out on all the delicious treats for which the Pennsylvania Dutch are known. Buy a fresh loaf of bread from an 18th century oven, visit the farmer's market to purchase local meats, cheese and baked goods. Also, make sure to sample local specialties like potpie and shoofly pie. For more info go to http://www.kutztownfestival.com/.

Source: Dollar Rent-A-Car Newsletter

For a list of local music festivals, see our previous blog entry:
Music Festivals In and Around New Jersey.

Tenant-in-common (TIC) Boom Creates Commercial Opportunities

Tenant-in-common (TIC) interest transactions, in which investors purchase fee-simple fractional shares in properties, reached $4 billion in sales in 2004. While that represents just a small part of the $180-billion commercial sales market, it marks a 330 percent growth over TIC sales in 2003.

“TICs are small, but they are definitely a structural shift in real estate investing," Dan Fasulo, director of market analysis for Real Capital Analytics, told attendees at the Economic Issues & Commercial Business Trends Forum Thursday.

The forum was part of the 2005 REALTORS® Midyear Legislative Meetings & Trade Expo, being held May 9-14 in Washington, D.C.

Fasulo, whose company tracks real estate investment, including TICs, says that within a year or two investments in TICs and private REITs could equal the market capitalization of public REITs.

At present, the TIC industry is dominated by relatively few players. Rick Brown, CCIM, senior vice president of Scheer Partners offered these tips to attendees:

Look for properties that are in good condition and have curb appeal. TIC buyers are small investors who want to point to their investments with pride.

Select properties with 7-to-10 year leases. Lenders will require too many reserves for tenant improvements if you have leases that expire in three or four years.

Have a good relationship with your lender. Then you can have your financing in place and will be able to compete with all-cash buyers.

Have enough money on hand to close. Especially in TICs that involve 1031 investors, some prospective buyers may back out. Brown advises lining up a mezzanine loan to cover this contingency.

“TICs are a great way to bring smaller investors into commercial investment and providing an avenue for diversification,” said Brown.

Source: NAR 5/13/05

Tuesday, May 24, 2005

Supreme Court Clarifies Constitutional Property Rights

Upholds Key Legal Theory Used By Home Builders

In a victory for property rights, the U.S. Supreme Court clarified on 5/23/05 the circumstances under which land owners are due just compensation from the government for a “taking” of their property as defined by the Fifth Amendment.

The affirmation of key property rights precedents came in the case of Lingle v. Chevron, U.S.A., the first of the Supreme Court’s three expected takings decisions this term. Justice Sandra Day O’Connor wrote the opinion for a unanimous Court.

“This decision provides much needed clarification for property owners who litigate takings claims and deserve monetary compensation when they are subject to excessive land use regulations,” said Jerry Howard, executive vice president and CEO of the National Association of Home Builders (NAHB).

While the court reversed some prior decisions, the Lingle decision took pains to preserve major precedents that are often used by home builders to challenge excessive impact fees, exactions, and other unconstitutional conditions to development approvals. The Court affirmed the “essential nexus” and “rough proportionality” tests, which require that impact fees and other exactions be used to pay for some specific, stated public service and that they be proportional to the cost of the public service provided.

NAHB had weighed in with an amicus brief to persuade the Court to maintain the “essential nexus” and “rough proportionality” tests – which the Lingle decision preserves.

Lingle clarifies that there are four independent tests that a property owner can use to obtain compensation from the government for a taking:

1. A physical invasion by the government, such as an appropriated public easement demanded from a property owner;

2. A “total,” categorical taking where a regulation deprives a property owner of all economically beneficial uses of property, such as requiring a parcel to be set aside in its entirety as open space;

3. A balancing analysis, to be conducted where government regulations restrict the use of property to a degree (but do not eliminate all uses), that considers the land owner’s expectations for investment and development, and the economic impact of the regulation on the land owner; and

4. A governmental imposition of unconstitutional conditions for approval of a development project in exchange for a permit. Under the doctrine of unconstitutional conditions, “the government may not require a person to give up a constitutional right – here, the right to receive just compensation when property is taken for public use – in exchange for a discretionary benefit (that is, a permit) conferred by the government where the benefit” is not connected or proportionate to the condition imposed.

The Lingle decision did remove one test from the takings landscape. In its own past decisions, the Court stated that a regulation that “fails to substantially advance a legitimate government interest” amounts to a taking. The Court declared that the “substantially advance” test is no longer appropriate for a takings analysis. However, Justice O’Connor made clear that a property owner could still assert a due process violation when government fails to advance its own interests through regulation.

While elimination of the substantially-advance test is not a victory for Chevron, it is the clarification of takings law and the preservation of the essential-nexus and rough-proportionality tests that is important to the home builders, Howard said. “The Supreme Court’s affirmation of these precedents is a significant victory for property rights.”

The facts of Lingle did not concern the uses of real estate. At issue was a Hawaii statute that imposed limits on rents that oil companies may charge to dealers who lease service stations owned by the companies. Chevron sued for a taking, arguing that the rent cap statute failed to “substantially advance a legitimate state interest” in controlling retail prices. Chevron won at the 9th Circuit Court of Appeals.

With the Lingle decision, the Supreme Court reversed the 9th Circuit. Justice O’Connor believed that the “substantially advance” test is an improper takings test because it does not address the effect of a regulation on property, but rather solely concerns whether the underlying regulation itself is valid. Because Chevron couched its takings claim under the substantial advancement theory – which the Court said is no longer a valid takings test – the Court dismissed Chevron’s claim.

Source: NAHB 5/23/05

Young Buyers Are Setting Trends In The New-Home Marketplace

Households headed by Generation X-ers and members of the so-called “echo-boom” purchased 55 percent of all newly built homes sold in 2003 and are fast becoming the trendsetters in U.S. housing markets, according to Census reports and newly analyzed buyer preferences data from the National Association of Home Builders (NAHB).

“A new generation is viewing the housing market from an entirely different perspective than the baby boomers who’ve traditionally dominated industry trends,” said NAHB Executive Vice President and CEO Jerry Howard. “They’re techno-savvy and are more likely to be house-shopping on the Internet. They have a strong awareness of all their options.”

Gen-Xers in particular are wielding their buying power to shape today’s new-home characteristics and market trends. “They and younger buyers were responsible for more than half of all new-home purchases in 2003, and are twice as likely to purchase new homes in the immediate future as baby boomers and seniors,” Howard said.

American Housing Survey (AHS) data from the U.S. Commerce Department shows that, while households headed by those aged 27-40 (the “Gen-X” generation) accounted for 28 percent of all U.S. households in 2003, they were responsible for fully 49 percent of new-home purchases that year. Another 6 percent of newly built homes were purchased by echo-boomers (born after 1979), 33 percent were purchased by baby boomers and 12 percent were purchased by seniors aged 60 and up.

Meanwhile, NAHB research on consumer preferences indicates that 37 percent of Gen-Xers and 27 percent of echo boomers intend to buy homes in the next two years, compared to just 13 percent of baby boomers and 6 percent of seniors.

What does this mean for the next generation of home building? “Previously there was speculation that younger buyers would be more thrifty than their parents with respect to their housing choices, but our research shows just the opposite is true,” said NAHB Director of Research Gopal Ahluwalia.

In fact, many overwhelmingly favored options support the idea of a “move-up mentality” for younger buyers. For example, both echo boomers and Gen-Xers say they would like to have a home that is about 50 percent larger than their current residence. This compares to seniors and baby boomers, who want only 17 percent and 22 percent more space, respectively.

Similarly, 91 percent of echo-boomers say they would like their next home purchase to be a single-family detached home, versus the 46 percent who currently live in that kind of house. Seniors, on the other hand, are more likely than any other group to want to buy a townhouse rather than a single-family home – though most still prefer the detached option.

Other housing preferences of younger buyers also show the inclination for a more luxurious lifestyle. For example, 61 percent of echo-boomers and 67 percent of Gen-Xers say they would prefer to have four or more bedrooms in their next house, compared to 40 percent of baby boomers and 26 percent of seniors. Similarly, younger buyers show a much greater preference for high ceilings that lend a greater sense of volume and spaciousness to a home.

Fully 73 percent and 77 percent of echo-boomers and Gen-Xers, respectively, say they want nine-foot or higher ceilings on the first floor, compared to 65 percent of baby boomers and just 54 percent of seniors. In terms of high-tech amenities, echo-boomers are more likely than any others to want a home theater, automated lighting controls and a built-in security system.

“In all, we find that the preferences of younger buyers tend toward greater space and more sophisticated amenities than those of their forebears,” said Howard. “Incorporating these preferences in homes that new buyers can afford will be our industry’s challenge going forward, just as tracking these evolving trends will be an ongoing challenge for NAHB.”

Source: NAHB 5/19/05

Visit my web site for additional resources and services: http://LawrenceYerkes.com

or visit http://BestHomes-NJ.com for the latest property listings (residential, commercial, multi-family, farm, land)

Monday, May 23, 2005

Investors Going into Debt to Buy Real Estate

The amount of home equity extracted by U.S. property owners surged to $705 billion in 2004 from $266 billion in 1999, with most of the money put toward buying new residences, repaying credit-card debt, and funding home-improvement projects, Economy.com reports.

And more homeowners are using the cash to purchase investment properties--2.2 million in 2004 compared to 1 million in 1994, says SRI Consulting Business Intelligence.

Experts say investors are betting that residential prices to continue their uphill climb and that demand from baby boomers and immigrants will bolster the market, but some buyers are running into difficulty unloading their properties and have posted losses in some cases.

Source: NAR 5/23/05

Building With Brick - Why Should You Choose Brick For Your Home?

Brick is a popular building material, and with good reason. The Brick Industry Association's website provides a wealth of information about applications, industry standards and other pertinent building issues.

Click Here For More Details and Additional Brick Building Resources

Saturday, May 21, 2005

Tax Information - Online From The IRS

Now is the time to prepare for your next tax filing -- when you can still do something to effect your tax liabilities.

Here are general IRS tax links, as will as some more specific to property buyers and sellers:

T ax Information - Online from the IRS (main)

Online Publications (General)
Online FAQs (General)

More specific to homeowners, buyers and sellers:
First-time homeowners
Homeowner deductions information
How to report moving expenses
Selling your home

Friday, May 20, 2005

Keeping On Top Of Vulnerability Weakness In Your Computer

To keep tabs on how vulnerable your software is, here are some sites (which also offer software and service solutions) to monitor and/or that provide related resources to combat vulnerability:

Secunia - Stay Secure

Spyware Warrior

eEye Vulnerability - Upcoming Adviseries

SearchSecurity - Security News and Tips

Thursday, May 19, 2005

Guide Prepares Homeowners For Emergencies

The National Association of REALTORS® (NAR) collaborated with the U.S. Department of Homeland Security and the Homeownership Alliance to develop an Emergency Preparedness Guide for homeowners. The Guide, intended as a resource for homeowners, provides practical measures such as effective communication plans, identifies emergency supplies, and other resources that can prepare families and their homes for different types of emergencies.

Click here for the Emergency Preparedness Guide

New Guide Helps Small Business Prepare For Disasters

Small business is big business in this country – accounting for 99.7% of all employers in the United States, according to the United States Small Business Administration. But unlike their larger counterparts, small businesses are especially at risk from disaster, since few have the resources or knowledge to develop full-scale property protection and continuity plans. That's why the Institute for Business & Home Safety (IBHS) created Open for Business, a comprehensive disaster planning toolkit in booklet and CD-Rom formats. The easy-to-use guide helps business owners reduce the potential for loss should disaster strike, and reopen quickly should they be forced to close. This creates a savings for the business, and also benefits the employees and customers who rely on it.

Click here for more details and Open for Business Toolkit

Wednesday, May 18, 2005

IRS Announces Improvements to Tax Stats Web Pages

IR-2005-60, May 18, 2005

WASHINGTON — The Internal Revenue Service today announced improvements to “Tax Stats” on IRS.gov. Tax Stats includes a wealth of statistical information on individuals, businesses, charities, and IRS operations.

The new design features an expanded home page that allows users to directly access the most frequently requested statistical information. Popular publications and products are featured prominently. Many more detailed offerings are available from easily accessed “all topics” pages.

In addition to improving the structure of the site, the Statistics of Income Division (SOI) has added helpful information to each page so that users will better understand the sometimes complex products available on the site. Newly organized pages expand offerings to include more archival data, as well as new products. SOI is also introducing revised table formats — nearly all in Microsoft Excel format and offered with a free Excel Reader — and updated report formats, offered with a free Adobe Reader.

To minimize inconvenience, new pages are assigned existing Web addresses whenever possible; if not, users are automatically redirected to new menu pages.

Visit the revised Tax Stats pages on IRS.gov today and learn more about America’s tax system.

Links:
Tax Statistics

1031 Exchange Expense Inclusions

Here are expenses that are often encountered at closing, and included on the "HUD-1" Settlement Statement, which generally are considered by experts to be included as part of the 1031 Exchange calculation:

RELINQUISHED PROPERTY
Escrow for Repairs
Commission
Loan Fees
Title Charges
Recording Fees
Additional Charges
Termite
Courier Fees
Exchange Fees

REPLACEMENT PROPERTY
Title Charges
Title Insurance
Recording Fees
Additional Charges
Exchange Fees
Termite
Courier Fees
Survey

EXCLUSIONS: Expenses relating to debt relief, taxes, insurance, prepaids, interested, association fees, etc., while a part of the settlement transaction, are generally NOT included in the 1031 Exchange calculation.

As with all information of this type, you need to consult competent 1031 Exchange tax professionals for specific guidance relating to your particular needs.

[Update: See also article "1031 Exchange - Past Myths"]

Monday, May 16, 2005

REALTORS® Required to Take Quadrennial Ethics Training

According to the National Association of Realtors® (NAR), nearly all of the nation’s 1.1 million Realtors® have taken a refresher training course and passed an examination on the Realtor® Code of Ethics and Standards of Practice. Realtors® must now take the ethics training at least once every four-year cycle to retain their membership.

The Code, which addresses relationships between Realtors® and their customers, clients, colleagues and the public, is constantly reviewed and amended to ensure it addresses changing business conditions.

To complete the required quadrennial ethics training takes at least two hours and thirty minutes of instructional time. Failure to complete the required periodic ethics training is considered a violation of a membership duty for which Realtor® membership is suspended until the required training is completed. Compliance with the quadrennial requirement is nearly universal, according to reports from the nation’s 1,600 Realtor® boards and associations. Few, if any, other professional organizations in the nation have put in place such rigorous ethics training requirements for their members.

“All Realtors® must know and comply with the Code. It sets Realtors® apart from other real estate licensees and assures clients and customers that we will go beyond what’s required by law to win their trust. We are committed to making the Code as effective as possible,” said Al Mansell, NAR president.

NAR adopted a strict Code of Ethics in 1913 with the “Golden Rule” as its theme. NAR became the second business group in the nation to follow the professions of medicine, law and engineering in the formation and enforcement of a code for its members. All Realtors® must subscribe to the Code when they join NAR, and Realtors® are subject to disciplinary action and sanctions if they violate the duties imposed by the Code.

Source: NAR 4/11/05

Sunday, May 15, 2005

Profiting From Real Estate Ventures Part 1 - Strategies for Smart Investment

Real estate investments are popular for three main reasons: they offer diversification from other investments, they provide relative stability, and they are fairly likely to return a profit. Investing in properties can be an exciting way to add to your portfolio.

In this first of a 3-part series that was published in full in our May Newsletter and e-mailed to all our registered subscribers, via our RE/MAX of New Jersey web site. We will look at three aspects of investment:

Part 1: Strategies For Smart Investment
Part 2: The Truth About Fixer Uppers
Part 3: Foreclosures As Investment Opportunites

Strategies for Smart Investment

As with any form of investment, the higher the stakes, the larger the risk. Starting off small is a smart move if you're new to real estate investing.

Renting out a room

A nice option for those looking to get their feet wet is to rent out a room in their own home. This can be done on an annual lease or on a month-to-month basis. Check with your homeowner's insurance policy to see if you are covered in the event of a tenant accident or injury. You may need to purchase an umbrella policy to protect yourself.

Before you ever decide to rent out a room or area of your home, carefully weigh how this may affect your life. A new tenant brings their habits, history, and personal life into your home. Provided that you're comfortable with that, such an arrangement can be a nice way to ease into the world of real estate investing.

Buying to rent

Many investors buy homes for use as rentals, with tenants paying rent as the home's value appreciates. Some owners even decide to leave their properties as rentals indefinitely; comfortable with the flow of income that tenants provide. If you want to purchase a property for use as a rental, keep these things in mind:

Rental markets are different from home buying markets. Hot areas for home sales may not be the destination for the more "transient" populations that rent.
Certain areas, such as those near colleges or military bases, are premium rental neighborhoods.
Renters' needs are different than those of buyers. A large yard may be important to a typical family with kids or pets, but may not matter to singles or young couples.
You should set rent at least five percent above your monthly costs. Your costs include monthly principal payment, interest, taxes, insurance, and yard/maintenance services. Studying the "For Rent" section in the paper is a good way to compare rents of similar homes nearby.
You will need an emergency slush fund for any problems that may come up and to cover gaps between tenants.

Buying to sell

If you're buying a home but don't have plans to rent it out, you're probably either buying a "fixer-upper" or you intend to live in the home until its sale (or both). By living in the home for two "aggregate" years out of five preceding the sale of the home, you will receive a $250,000 capital gains tax exemption if single, and a $500,000 exemption if married. Other things to consider:

As always, single-family homes with good floor plans are the safest bet.
Hot markets may indicate appreciation that won't be present by the time you sell the home. Look instead for steadily rising markets to maximize profit.
Condominiums do not appreciate as quickly as single-family homes, but they're not a bad investment if in a high-demand market.
As always, avoid overpaying!

Investing in land

Vacant land is the least liquid property asset, and in general has the weakest potential for short-term profit. If you are interested in land investment, extensive research is absolutely essential. Check any and all zoning information and potential public projects. Areas that you project as future "hot" zones may never warm up, or even worse may undergo changes that cause their value to plummet. Undeveloped land is easy to maintain, but takes longer to appreciate and generally is more difficult to sell than land in developed areas.

Saturday, May 14, 2005

How Vulnerable Are Your Personal and Business Computers?

You may be more vulnerable than you think.

According to most advisors that we have come across, and so far has been verified by personal use, there are at least 5 required measures or elements that need to be implemented in order to effectively minimize vulnerability for any of your computer(s) that access(es) the Internet or are part of a network:

1. Hardware Firewall, such as those offered by Linksys, Belkin, D-Link, etc.

2. Software Firewall, the current best being Zonealarm (a free, but limited featured, version is available), Zonealarm Pro (full featured software firewall), Zonealarm Security Suite (firewall, antivirus and antispam filter all-in-one). [Zonealarm is owned by Check Point Software, with US headquarters in California and main headquarters in Ramat-Gan, Israel.]

3. AntiVirus Program, pick-one: Trend Micro's PC-cillin (headquarted in Tokyo), Symantec AntiVirus (headquartered in California), McAfee VirusScan (headquartered in California), Panda Anti-Virus (headquartered in Bilboa, Spain), Kaspersky Anti-Virus (headquartered in Moscow).

4. AntiSpam Program, depending on your email program (for example: Outlook, Outlook Express or Eudora): Cloudmark SafetyBar (headquarted in California) for use with Outlook and Outlook Express. If you use Eudora (by Qualcomm, headquartered in California) for your email program, it comes with a very effective built-in email spam program and which can also by used, for increased protection, with a free anti-spam add-in: SpamPal (additional plug-ins available, also works with Outlook and Outlook Express). SpamPal provides anti-spam protection, maintains whitelist and blacklist, etc.

5. AntiSpyware Program, pick one or more: Sunbelt Software CounterSpy 1.0 (main headquarters in France), Microsoft Windows Defender (beta version, currently free). Also, Ad-Aware (free version available), SpyBot Search & Destroy (free, but donations appreciated) along with Spyware Blaster (free). [Suggest having several of these and running them frequently. Make sure that you have SpyBot S&D's Resident protection feature turned on (accessed via "Tools" option.]

Thursday, May 12, 2005

How To Become Wealthy Through Real Estate Investing

A new book, The Millionaire Real Estate Investor, written by Gary Keller along with Dave Jenks and Jay Papasan, looks at the models, strategies and fundamental truths that millionaires use to become wealthy through real estate investing.

“The book does a superb job of helping the readers understand the importance of investing in real estate and explains it in a realistic manner,” says Keller. “We have read a lot of books in this category, and they all say, ‘I did it; let me tell you how you can too.’ My personal motivation for writing this book was my 13-year-old son, Jay. I wrote it thinking if I died tomorrow, would this book have everything he needed to be taken care of. This book is not a ‘get-rich-quick’ plan. It shows you how to invest properly overtime using examples from real life millionaire real estate investors.” [Source: REIS Media]

Click here for more Recommended Real Estate Books

Tuesday, May 10, 2005

Housing To Stay Healthy As It Recedes From Its Peak

May 10, 2005 - Despite some softening in U.S. economic growth, the Federal Reserve’s ongoing interest rate hikes and rapid price gains in the nation’s hottest housing markets, economists appearing at a forecasting conference held by the National Association of Home Builders (NAHB) last week said housing should remain healthy through next year even as it recedes from peak levels.

Driven by ongoing population growth and household formations, an expanding market for second homes and the need to replace aging units, demand for housing should hold up well in the foreseeable future, said panelists. Also, further growth in the nation’s job force and rising incomes should help offset the negative impact of higher mortgage rates, which are still expected to be at affordable levels by historic standards.

While some experts voiced concerns regarding speculative investment activity in a few of the nation’s frothiest housing markets – including California, Las Vegas, South Florida, Washington, D.C. and the New York-Boston corridor – by and large, they expect to see a slowdown in the rate of price appreciation in most parts of the country rather than an actual decline in house prices

The news report goes on and discusses the expected increases in the prime rate and various economic issues that effect real estate.

The final remark is from one of the panels, Jim Glasman of J.P Morgan Chase, stating his believe that with the exception of a few boom markets, higher prices largely reflect the real estate market catching up with the lagging prices of the 1990s. “Worry if you want to,” he told audience members. “But I think I would take most of the worries with a grain of salt and just get back to business.”

Source: HAHB News Release 5/10/05
For the full NAHB News Release click here.

Visit my web site for additional resources and services: http://LawrenceYerkes.com

or visit http://BestHomes-NJ.com for the latest property listings (residential, commercial, multi-family, farm, land)

Monday, May 09, 2005

How High Can We Go Before Gas Prices Do Major Damage To The Economy?

The Wall Street Journal conducted a recent survey of leading economists who believe that the economy may be able to handle higher oil costs than many previously thought. Before the economy can be seriously undermined, approximately 31 percent of the economists believe prices will have to reach $80 to $89 a barrel, while approximately 48 percent believe it will have to go over $90.

Home Improvement Cost vs. Value Report

According to their annual Cost vs. Value report published at the end of 2004 by Realtor Magazine, remodeling of 25 year or older bathrooms received the highest percentage recoup of costs at time of sale (90.1%), followed by addition of a deck and then by window replacements.

For the top 10 improvements nationally and their average costs, see http://www.realtor.org/rmomag.NSF/pages/costvaluedec04b?OpenDocument

Click here for the 2005 Cost vs. Value Report (and later)

Sunday, May 08, 2005

Federal Reserve Beige Book April 2005 Report

The April 20, 2005 Federal Reserve’s Beige Book Report states that business activity continued to expand from late February through early April in all 12 Federal Reserve Districts. Manufacturing activity was described as “ahead of year-earlier” levels, and about half the districts reported that retail was up. Residential real estate remained strong in most areas. Commercial real estate conditions varied. Price pressures have intensified in a number of districts, and most report that high or rising energy prices are a concern across sectors.

Federal Reserve Biege Book 2005 - Summary and Districts (with prior year archives): http://www.federalreserve.gov/FOMC/BeigeBook/2005/

Saturday, May 07, 2005

Hankerin' For A Hefty Dose of Cowboy Musical Culture?

If you're longin' for the wide open range and ridin' your horse under that ol' prairie moon while strummin' and yodeling away... well... sorry, we can't help you there -- but, with a little imagination and the right listening atmosphere we offer the next best thing to get you in a cowboy frame of mind: The Cowboy Cultural Society Radio Channel.

Yessiree, it's all there for yer listenin' edification -- the early, classic and modern cowboys and western artists: their songs, yodels, recitations, a few suprises and its 24/7 at high quality continuous streaming stereo audio (RealAudio, WinAmp, 128 Kbps and 24 Kbps).

(iTunes/Mac listeners can tune in or link to CCS at SHOUTCAST.)

Saddle up buckeroos and buckerettes! Giddy-up and go to The Cowboy Culteral Society.

Wednesday, May 04, 2005

Real Estate Organization Links

American Hotel & Lodging Association

American Institute of Architects (AIA)

American Land Title Association (ALTA)

American Real Estate and Urban Economics Association (AREUEA)

American Real Estate Society (ARES)

American Resort Development Association (ARDA)

American Society of Association Executives (ASAE)

Appraisal Foundation (AQB)

Appraisal Institute (AI)

Association of Commercial Real Estate (ACRE)

Association of Construction Inspectors

Association of Foreign Investors in Real Estate (AFIRE)

Association of Real Estate License Law Officers (ARELLO)

Association of University Real Estate Officials (AUREO)

Building Owners & Managers Association (BOMA)

Building Owners & Managers Institute (BOMI)

CCIM Institute

Centeprise

Commercial Mortgage Securities Association (CMSA)

CoreNet Global

Corporate Facilities Advisors (CORFAC International)

Counselors of Real Estate (CRE)

Crew Network

Environmental Assessment Association

FIABCI: International Real Estate Federation

Institute of Real Estate Management (IREM)

International Council on Shopping Centers (ICSC)

International Economic Development Council (IEDC)

International Facility Management Association (IFMA)

International Real Estate Institute (IREI)

MAPIC: The International Market for Retail Real Estate

MIPIM International Property Market

Mortgage Bankers Association of America (MBAA)

National Apartment Association (NAA)

National Association of Industrial and Office Properties (NAIOP)

National Association of Real Estate Investment Managers (NAREIM)

National Association of Real Estate Investment Trusts (NAREIT)

National Association of Review Appraisers and Mortgage Underwriters

National Auctioneers Association (NAA)

National Council of Real Estate Investment Fiduciaries (NCREIF)

National Multi Housing Council (NMHC)

National Property Management Association (NPMA)

National Real Estate Investors Association (NaREIA)

Pension Real Estate Association (PREA)

Real Estate CyberSpace Society (RECYBER)

Real Estate Educators Association (REEA)

Real Estate Investment Association (REIA)

Real Estate Research Institute (RERI)

Real Estate Roundtable (RER)

REALTORS Land Institute (RLI)

Royal Institution of Chartered Surveyors (RICS)

Society of Industrial and Office REALTORS (SIOR)

TIC Real Estate Association (TICRE)

Urban Land Institute (ULI)

Visit my web site for additional links, resources and services: http://LawrenceYerkes.com

or visit http://BestHomes-NJ.com for the latest property listings (residential, commercial, multi-family, farm, land)