Renter's Insurance

While homeowner's insurance is almost an assumption for anyone buying a home and auto insurance is mandated by law, renter's have never sought insurance protection in large numbers. Studies have shown that as few as 40 percent of all tenants are covered by renter's insurance. With tenancy rates once again on the rise, now is a good time to examine the benefits of renter's insurance.

Why Consider Renter's Insurance?

Many renters know little about renter's insurance, from cost to coverage. Here are a few of the reasons to consider buying a renter's insurance policy.

You're unprotected without it – Tenants often make the mistake of assuming that their possessions are protected by the homeowner's insurance of their landlord or condo association. But the policy owned by the landlord will almost certainly only protect structural damage to the building itself – your belongings are not covered.

You own more than you know – One of the most common misconception that renters have is over the value of their possessions. Many tenants assume that a hand-me down couch or outdated TV is evidence that they really don't have many "valuables". But the truth everything you own has value, from used furniture to your computer, movies, music and clothing. The typical renter owns roughly $30,000 worth of possessions – a figure that is completely unknown to them. In the event of a disaster, that's a lot of "junk" to replace.

It's relatively inexpensive – While policy pricing varies based on a number of factors, renter's insurance often costs between $10-20 a month. $200 dollars a year is a relatively low cost to protect $30,000 worth (or more) of your possessions. Many insurance companies will offer a discount if you bundle your renter's policy with an auto insurance policy.

What Does Renter's Insurance Cover?

Personal Possessions – In general, your personal possessions will be covered when lost to fire or smoke, lightning, vandalism, theft, explosion, windstorm and water damage (caused by broken pipes, etc). Items usually covered include:

- Stereo systems, VCRs, and television sets
- CDs, DVDs, videos, and tapes
- Cameras and other photography equipment
- Movable appliances, including microwave oven
- Furniture
- Sports equipment
- China and glassware
- Clothing
- Books

Items that are usually covered with limitations:

- Home computers
- Cash, including coin collections
- Checks, traveler's checks, and securities
- Jewelry and watches
- Precious and semi-precious stones
- Comic books, trading cards, and stamps, including collections
- Antiques and fine art
- Goldware and silverware (theft)
- Rugs, wall hangings, and tapestries
- Firearms (theft)
- Furs or clothing trimmed in fur

Liability – Most renter's insurance policies include some degree of liability protection. Liability protection covers you (up to your policy's limits) in the even that your negligence causes damage to the property, or if someone is injured inside your home. For example, if you leave the sink plugged and running, liability protection would cover the ensuing water damages.

Loss of Use/Temporary Housing – If your home or apartment is rendered unlivable by a fire or other disaster, you will have lost your place of residence in addition to your possessions. Most policies cover "additional living expenses" in the event of disasters specifically listed in the plan. Generally this means they will pay for you to live somewhere else while your residence is repaired, rebuilt or you locate new housing. There are limits on this type of coverage – the replacement housing must usually be of similar quality to your original residence, the coverage limit is typically a percentage of the policy's total value, and there may be a maximum length of time that the insurance company will continue paying for your housing costs.

Car Interior – Many renter's insurance policies also cover possessions that you keep within your car (CD's, books, portable computer equipment). Note that the car's value itself is not covered, and typically installed stereo equipment (which is often considered "part" of the car's systems) is not insured either.

Vacation Coverage – Some policies even go so far as to cover items within your possession while you traveling. This kind of coverage extension varies greatly, but is worth investigating.

What Isn't Covered?

Renter's insurance is not without its gaps, however. Most policies do not cover damage or loss of possessions related to three very common (and thus, hated by insurance adjustors) disasters: earthquakes, floods and landslides. Coverage for these disasters must be purchased as add-ons (known as "riders") to your rental policy or via separate insurance policies altogether.

Inventory

If you haven't made an inventory of your possessions, now is the time to do so. Make a list of all items you own including appliances, furniture, electronic equipment, art, clothing, books, music and movies. Take photos or video of as much as possible, indicating where in your home the items are kept. Store this inventory and any additional files in a safe, offsite location as a backup (online storage makes for a quick alternative to a safety deposit box or the like).

Replacing Lost Items

One major thing to check when shopping policies is the whether the company will be writing "actual cash value" (ACV) or "replacement cost coverage". Actual cash value only pays you for the item's worth on the current market, while replacement cost coverage reimburses you for your actual costs when replace lost or damaged items. For example, if you bought a $1000 laptop computer 3 years ago, ACV would pay for the laptop's current (depreciated) value. Replacement cost coverage will cover your expense for replacing the laptop

In most cases, under replacement cost coverage you will have to pay for the items out of pocket and then submit the cost for reimbursement. Replacement cost policies also tend to have higher premiums, but pay out more should you need to file a claim.

Questions to Ask:

While renter's insurance is almost always a wise investment, you should shop around to find the policy that best fits with your situation. Below are some sample questions to ask when looking for the right coverage:

- Will your insurance cover any property shared by your roommates? - Which items should you take photographs or videotapes of?
- What are the limits on specific categories of personal possessions?
- What circumstances are covered in your personal liability?
- What circumstances are covered in the medical coverage for others?
- What is the price and protection difference between "replacement cost coverage" and "actual cost coverage"?
- Will you be notified before any rate increases because of policy changes or inflation?
- If your building were damaged or destroyed, would you be compensated for interim housing?
- How much protection would you have if your home were damaged or destroyed because of an action by yourself or a guest?
- Will your personal liability include defense costs in the case of a lawsuit filed against you?



Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

July Existing-Home Sales Show Gain

WASHINGTON - Existing-home sales rose in July to the highest level in five months, although sales have hovered in a relatively narrow range over the past 11 months, according to the National Association of Realtors®(NAR).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3.1 percent to a seasonally adjusted annual rate¹ of 5.00 million units in July from a downwardly revised level of 4.85 million in June, but are 13.2 percent lower than the 5.76 million-unit pace in July 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the up-and-down pattern may break soon. “We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead,” he said. “Buyers who’ve been on the sidelines should take a closer look at what’s available to them now in terms of financing and incentives. Given some of the inventory on the market, we also strongly encourage buyers to get a professional home inspection.”

The national median existing-home price3 for all housing types was $212,400 in July, down 7.1 percent from a year ago when the median was $228,600.

Lawrence Yun, NAR chief economist, said home prices in some regions could soon increase. “Sales have picked up significantly in several Florida and California markets. Home prices generally follow sales trends after a few months of lag time,” he said. “Still, inventory remains high in many parts of the country and will require time to fully absorb. We expect more balanced conditions in 2009 and will eventually return to normal long-term appreciation patterns.”

Analysis of NAR price data since 1968 shows home prices normally rise 1 to 2 percentage points above the overall rate of inflation, building wealth over the typical period of homeownership.

Total housing inventory at the end of July rose 3.9 percent to 4.67 million existing homes available for sale, which represents an 11.2.-month supply² at the current sales pace, up from a 11.1-month supply in June. The rise in supply results from a sharp increase in condo inventory; the single family supply declined.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.43 percent in July from 6.32 percent in June; the rate was 6.70 percent in July 2007.

Single-family home sales rose 3.1 percent to a seasonally adjusted annual rate of 4.39 million in July from 4.26 million in June, but are 12.4 percent below the 5.01 million-unit level a year ago. The median existing single-family home price was $210,900 in July, down 7.7 percent from July 2007.

Existing condominium and co-op sales increased 3.4 percent to a seasonally adjusted annual rate of 610,000 units in July from 590,000 in June, but are 18.6 percent below the 749,000-unit pace in July 2007. The median existing condo price4 was $223,400 in July, which is 2.7 percent below a year ago.

Regionally, existing-home sales in the West jumped 9.7 percent in July to a level of 1.13 million and are 0.9 percent higher than July 2007. The median price in the West was $273,200, down 22.2 percent from a year ago.

In the Northeast, existing-home sales rose 5.9 percent to an annual pace of 900,000 in July, but are 11.8 percent below a year ago. The median price in the Northeast was $278,700, which is 4.9 percent lower than July 2007.

Existing-home sales in the Midwest increased 0.9 percent to an annual rate of 1.12 million in July, but are 17.0 percent lower than July 2007. The median price in the Midwest was $175,400, up 1.0 percent from a year ago.

In the South, existing-home sales slipped 0.5 percent to an annual pace of 1.85 million in July, and are 18.1 percent below a year ago. The median price in the South was $179,300, down 3.5 percent from July 2007.

# # #

¹The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

²Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).

3The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Existing-home sales for August will be released September 24, and the next Forecast/Pending Home Sales Index is scheduled for September 9.

For more information on data tables visit: http://www.realtor.org/research/research/ehsdata

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

What To Do When facing an ARM Reset

The ARM's Race of 2008

This August, some homeowners have been feeling a little more than the usual heat. By the end of this summer, over 300,000 subprime adjustable rate mortgages will "reset" from lower introductory rates to current market rates. The change in rate can equate to a tough-to-stomach bump in monthly payments, especially for loans that feature extra-low "teaser" rates.

The Refinancing Option

Choosing to refinance has two main benefits :

Lock into a Fixed Rate – Why worry about periodic rate resets and rising mortgage rates if you don't have to? Refinancing gives owners the chance to lock into a fixed rate for the long term.

Lower Rates – While current rates are higher than they were a few years ago, from a historical perspective they are still considered low. Most economists believe that national averages of long-term rates will hover within a point or two of 6 percent through the end of the year.

Who Qualifies for Refinancing

Tightening requirements for new home loans have to some degree extended to refinancing as well. The best candidates for refinancing are owners with good credit, income documentation and solid equity in their homes. Refinancing is typically a better option for owners who plan to stay in the home for at least several more years.

Who Doesn't

Owners With Low Credit Scores – In recent years some buyers were able to obtain subprime loans with credit scores in the mid 500's. Owners who haven't raised their credit scores into at least the mid to high 600 range will find it hard to obtain refinancing. Even scores in the high 600's, which in the near past had been considered fairly good, are no guarantee of smooth sailing (Fannie Mae and Freddie Mac announced in the spring that borrowers with rates below 680 will need to pay a surcharge on top of the price of the loan).

Owners With Little Equity – To protect their investments, many lenders have been increasing the amount of equity an owner must have in their home. Many buyers may have purchased their homes with little or no money down, or perhaps opted for an interest only loan. In either case the amount of equity in the home may be below lender's acceptable levels. Homes that have either not appreciated or that have lost some value will be even harder to refinance.

How to Survive the Reset

Consolidate other debt – Consider seeing a credit counselor if you have multiple sources of high-interest debt in addition to your home loan. You may be able to re-structure these into one lower-interest loan, enabling you to more easily make the higher home-loan payments

Cut expenses – While it may not be in our nature, we can often make do with less. Look first for monthly expenses that qualify as luxuries (cable or satellite TV, high-speed internet, etc.). Cut down on meals away from home and look for other ways to shave unnecessary spending from your budget.

Start an Extra Savings Account – Even if you can afford to make payments after an initial reset, the best way to prepare for potential rate increases in the future or unforeseen circumstances is to start setting aside a little additional money, just in case.

The article is taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site.



Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

Grill Tips for Your Backyard Barbeque

Summer time or any nice warm day is the right time to head out of the kitchen and into the backyard for a little cooking al fresco. Whether a quiet evening at home with the family or a full-fledged block party, there's nothing quite like a meal freshly cooked and hot of the grill. Here are some grilling tips for novices and BBQ pros alike!

The All Important Grill

Gas vs. Charcoal: This one can spark heated debates between even the closest of friends. Gas cooks at an even temperature, is easy to use, and requires little clean up. Propane/gas grills are also healthier than charcoal grills

(charcoal-grilled meats contain more carcinogens). Charcoal is generally considered better for smoking and searing food, and many prefer the taste of food cooked on a charcoal grill. Charcoal grills are also less expensive that gas grills, and are somewhat more portable.

Material: For gas grills, stainless steel is the way to go. Grade 304 stainless steel is more durable than the cheaper grade 430, which will rust.

Cooking Area: If you're typically grilling for just your family or a small group of friends, a surface area of 600 to 900 square inches should be adequate. If you're planning on hosting larger events or keeping the grill fired up all summer, you will want to look for cooking areas of 1,000 square inches and up.


Gas Grill Tips

- Look for models with a built-in thermometer.

- Choose a grill with two or more distinct burners. This is crucial for times when you're cooking many different types of food at once, as well as for "indirect grilling".

-Weatherproof covers will extend the life of the grill.


Charcoal Grill Tips

Direct Heat vs. Indirect Heat –
There are two main ways of cooking when usng a grill, each suited to specific dishes. Cooking with food squarely over the heat source is known as "direct heat" grilling. The food is cooked for shorter time spans, typically with the lid open. This type of grilling is appropriate for thin cuts of meats, kabobs, fillets and veggies.

Cooking larger, thicker portions of meat such as steaks, whole fish and roasts calls for grilling with indirect heat. With this technique, food is grilled just off of the heat source at temperatures around 350 degrees Fahrenheit. On a gas grill this typically involves leaving the outside burners on with the food centered over the dormant inside burner(s). With charcoal grills, the coals are bushed to the sides of the grill leaving a cooking area in the center. Cooking times with indirect heat are usually longer, and the lid is typically closed.

Fire it up –
You'll want to fire up the grill fifteen to twenty minutes before you start cooking to ensure that it reaches optimal temperature and kills any bacteria. Your grill should be 250 – 300 degrees Fahrenheit for low heat, 300 – 350 degrees Fahrenheit for medium, 350 - 400 degrees Fahrenheit for medium-high and 400 - 450 degrees Fahrenheit.

Don't Stick With It –
Expertly prepared foods can still end up stuck to your grill if you don't take proper precautions. Brush the grill vigorously at the end of the preheating period (the surface will be easier to clean when hot). Lightly coat the grill in vegetable oil (the easiest method is to soak a paper towel or dish towel in vegetable oil, then brush it along the grill using tongs). You can also lightly oil your food, although avoid overdoing it. Keep both a grilling spatula and barbeque tongs handy.

Mind the Flames –
It may look impressive to have flames bursting up through the grill to kiss your food, but flare ups are actually bad news. Flare ups cause carcinogens to accumulate on your food, char the outside of the food before the inside as fully cooked, and alter the taste of the grilled item. Flare ups occur when fat drips down into the heat source and catches fire. Help prevent flare-ups by choosing lean cuts of meat and by trimming off excess fat before you grill. When the heat is on, keep a squirt bottle of water handy to help you tame the flames.

Grill Baskets –
Grill baskets are ideal for small food items or food that is difficult to flip. There are two main styles of grill baskets, each with a different ideal use. The first is a deep set open-angled bowl (think a square-ish wok with vented holes), a design that is ideal for veggies and other small items that might otherwise slip through the grill grating. The other design is a thin wire basket with a long handle. The food (typically fish) is placed in the tray of the basket and the wire basket closed and latched around it. With this setup, you can now easily turn the item for even cooking.

Grill Master(s) –
Barbequing (BBQ) can be rewarding, but truth be told it ain't easy running the grill all by your lonesome. Set up a rotation to man the grill so that everyone gets a chance to enjoy the barbeque and no one person spends the whole afternoon feeling the heat.

Cross Hatching –
Line the meat up on the grill at a 45-degree angle away from yourself. In other words, if you think of the grill surface as a clock, point the meat towards 2 o'clock. Cook until a set of grill marks appears on the meat (use a spatula to gently lift the meat and look underneath). Once marks have appeared, turn the meat 45 degrees without flipping it over (using our clock analogy again, point the meat towards 10 o'clock). Flip the meat and repeat this process on the other side.

The article is taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site.



Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

Improved VA Benefits Aid Disabled Veterans in Adapting Homes

WASHINGTON – The Department of Veterans Affairs (VA) will use a locality-based approach in raising ceilings on its no-downpayment home loans from the current $417,000 to as much as $729,000.

The increases are effective immediately under legislation recently enacted with President Bush signing the Housing and Economic Recovery Act of 2008 (HUD FAQ) (GovTrack.US).

That law also improved VA's Specially Adapted Housing Program. It raises primary grants from $50,000 to $60,000 toward constructing a new home or modifying an existing home to meet adaptive needs of veterans or active duty servicemembers with certain service-connected disabilities.

One new feature is a provision in the law that will assist burn victims. It will allow veterans with certain service-connected disabilities resulting from severe burns to receive the adaptive housing grants. The new law also makes future increases in ceilings on the Specially Adapted Housing Program automatic.

The increased limits in the general home loan program for all veterans' home purchases or construction will be based on local housing costs, tied to the similar locality adjustments of the Federal Home Loan Mortgage Corp., Freddie Mac.

VA home loans are available for veterans to purchase or construct single-family homes, and to purchase condominiums or cooperative apartments. There are about 2.3 million existing VA home loans, more than 90 percent made with no down payment.

More information about VA home loans and adaptive grants is available from VA at 877-827-3702 or www.homeloans.va.gov.

Source: VA

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

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Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

Leading Commercial Real Estate Index Weakening

The softening of economic conditions in recent months should impact commercial real estate markets in the months ahead, according to a forward-looking index for the commercial real estate sectors published by the National Association of Realtors®(NAR).

The Commercial Leading Indicator for Brokerage Activity¹ slowed 0.9 percent to an index of 117.9 in the second quarter from a reading of 119.0 in the first quarter, and is 2.1 percent lower than the record 120.5 in the second quarter of 2007; NAR’s track of the index dates back to 1990.

Lawrence Yun, NAR chief economist, said commercial real estate activity, as measured by net absorption and the completion of new commercial buildings, is projected to weaken over the next six to nine months. “The pace of decline has intensified due to job cuts and very sluggish economic activity since the beginning of the year, particularly in those industries requiring commercial building spaces,” he said. “We anticipate the weakest commercial brokerage activity in nearly three years as a result.”

Members of the Society of Industrial and Office Realtors® (SIOR) indicate in their SIOR Commercial Real Estate Index, a separate attitudinal survey of approximately 600 local market experts,² that they anticipate a lower level of business activity in the upcoming quarters.

Analysis of the SIOR index implies that office and industrial market conditions are excellent for tenants and purchasers, but significantly less favorable for landlords and sellers.

NAR’s commercial leading indicator is a tool to assess market behavior in the major commercial real estate sectors. That index incorporates 13 variables that reflect future commercial real estate activity, weighted appropriately to produce a single indicator of future market performance, and is designed to provide early signals of turning points between expansions and slowdowns in commercial real estate.

The 13 series in the index are industrial production, the NAREIT (National Association of Real Estate Investment Trust) price index, NCREIF (National Council of Real Estate Investment Fiduciaries) total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service.

More than 80,000 NAR members offer commercial services, and 60,000 of those are currently members of the Realtors® Commercial Alliance, NAR’s commercial division.

# # #

¹NAR reviewed a wide variety of indicators, examined the relationships of indicators that demonstrated a historical impact on commercial real estate, and modeled a forward-looking index based on historic trends. Although individual indicators sometimes move in opposite directions, together they offer a better indication of future market activity.

Quarterly data for 13 selected series were reviewed back through the first quarter of 1990. The modeling demonstrated a change in commercial brokerage activity that could be seen two quarters later as measured by net absorption in the industrial and office sectors, and the completion of new commercial buildings as measured by the value of building construction put-in-place of office, warehouse, retail and lodging structures. An index of 100 is defined as the level of commercial real estate market activity during the first quarter of 1990, the first period to be analyzed.

²The SIOR Commercial Real Estate Index, conducted by SIOR and analyzed by NAR Research, is a diffusion index based on market conditions as viewed by local SIOR experts. For more information, contact Richard Hollander, SIOR, at 202/449-8200.

The next commercial real estate market report and forecast is scheduled for release on September 17, and the next commercial leading indicator index will be released November 20. Click here for details.

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

WASHINGTON –– The Internal Revenue Service (IRS) released the revised instructions that tax-exempt organizations will need to fill out the redesigned Form 990, which must be filed starting with tax year 2008 (filed in 2009).

Most charities and other tax-exempt organizations must file an annual informational return with the IRS to maintain their tax-exempt status. Information reported on Form 990 is made available to the public.

“These instructions are the final step in a tremendous effort to bring the Form 990 up to date and to reflect the diversity and complexity of the tax-exempt community,” said IRS Commissioner Doug Shulman. "The revised form will give the IRS and the public a much better view of how exempt organizations operate. The improved transparency provided by these changes will also benefit the tax-exempt community.”

Form 990 had previously not seen major revisions since 1979. The revised instructions and redesigned Form 990 can be found on this Web site.

The revised instructions feature several new tools that make it easier to answer questions line-by-line and that facilitate uniform reporting. Input from the tax-exempt community played a major role in how the new instructions were designed.

“We were gratified by the amount of help the IRS received from the tax-exempt community through public comments to redesign the Form 990 and revise its instructions,” said Steven T. Miller, Commissioner of the Tax Exempt and Government Entities Division. “This input helped us achieve our goal of improving compliance while minimizing burden. We will now begin working with the tax-exempt sector to help organizations complete the form and prepare for the 2009 filing season."

The IRS expects to release instructions to the 2008 Form 990-EZ, Short Form Return of Organization Exempt from Income Tax, in the next few weeks.

As part of the phase in of the redesigned Form 990 over a three-year transition period, many organizations not eligible to file the Form 990-EZ for 2007 will be eligible to file Form 990-EZ or Form 990 for 2008. A summary of the transition period filing requirements for Form 990, 990-EZ, and 990-N is also now available.

Source: IR-2008-98


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Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

2008 IRS Report of Foreign-Controlled Domestic Corporations

WASHINGTON — The Internal Revenue Service(IRS) ay released the summer 2008 issue of the Statistics of Income Bulletin, which features tax year 2005 data on the growth in profits and tax liability reported by foreign-controlled domestic corporations.

According to 2005 data, there were 61,820 foreign-controlled domestic corporations (FCDCs), accounting for 1.1 percent of the total of all U.S. corporations. However, FCDCs generated $3.5 trillion of total receipts with $9.2 trillion of total assets, accounting for 13.7 percent of receipts and 13.9 percent of assets reported on all U.S. corporation income tax returns.

Profits, or net income less deficit, reported by FCDCs for tax purposes were $165.2 billion, an 81.9 percent increase from $90.8 billion reported in 2004. The U.S. tax liability for FCDCs, total income tax after credits, was $42.4 billion for 2005, a 41.7 percent increase since 2004.

The Bulletin also features articles on the following:

* Foreign corporations controlled by U.S. multinational corporations: For tax year 2004, these controlled foreign corporations held $9.2 trillion in assets and reported $3.8 trillion in receipts.

* Corporations that claimed the foreign tax credit on their U.S. tax returns: For tax year 2004, corporations claimed foreign tax credits worth $56.6 billion, representing an all-time high and a 13.2 percent increase over the previous high amount in 2003. Use of this credit reduced their U.S. tax on worldwide income by 30.2 percent, from $187.5 billion to $130.9 billion.

* Growth trends in the number of partnership and sole proprietorship returns: While the number of partnership returns filed between 2002 and 2005 increased by 23 percent, the number of sole proprietorship returns increased by 1.9 percent.

* Federal gift tax returns filed for gifts given in 2005: Americans reported $38.5 billion in cash and other asset transfers. Almost 3 percent of gift tax returns were taxable with $1.7 billion in reported tax liability.

* Use of business credit for research activities: Corporations claimed almost $6.4 billion in these credits for tax year 2005, and corporations in the manufacturing industries claimed more than 70 percent of this amount.


The Summer 2008 Statistics Of Income Bulletin is available at IRS.gov.


The Statistics of Income Bulletin is also available from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. The annual subscription rate is $53 ($74.20 foreign), single issues cost $39 ($48.75 foreign).

For more information about these data, write the Director, Statistics of Income (SOI) Division, RAS:S, Internal Revenue Service, P.O. Box 2608, Washington, DC 20013-2608; call Statistical Information Services at (202) 874-0410; or send a fax to (202) 874-0964.

Source: IRS IR-2008-97

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

Home Buyers Responding to Lower Metro Prices

Existing-home sales rose from the first quarter in 13 states, largely from buyers responding to discounted home prices, according to the latest quarterly survey by the National Association of Realtors®(NAR). Nearly one-quarter of metropolitan areas showed rising home prices in the second quarter from a year ago, with greatly mixed conditions continuing around the country.

In the second quarter, 35 out of 150 metropolitan statistical areas1 showed gains in median existing single-family home prices from the second quarter of last year, while 115 had price declines. NAR’s track of metro area home prices dates back to 1979.

NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said foreclosures are distorting the price data. “In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values,” Gaylord said. “Many buyers with long-term expectations are getting exceptional value in the current market. Once the inventory is drawn down, price pressure will return because the costs of construction are rising – today’s buyers are very well positioned to build wealth over time.”

A separate recent study by the National Bureau of Economic Research(NBER), “Housing Supply and Housing Bubbles,” shows construction costs in 2007 were higher than home prices in 33 out of 79 metro areas studied.

Because foreclosures and short sales are accounting for about one-third of transactions, there is a downward pull to the national median price. In the second quarter, the median existing single-family home price was $206,500, down 7.6 percent from the second quarter of 2007 when it was $223,500. The median price is where half of the homes sold for more and half sold for less.

Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate2 of 4.91 million units in the second quarter, down 0.8 percent from 4.95 million units in the first quarter, and were 16.3 percent below a 5.87 million-unit pace in the second quarter of 2007.

According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage rose to 6.09 percent in the second quarter from 5.88 percent in the first quarter; the rate was 6.37 percent in the second quarter of 2007.

Lawrence Yun, NAR chief economist, said a clear cause-and-effect response has developed in the housing market. “The biggest home-sales gains over the previous quarter have been in some of the markets with the steepest and fastest price drops,” Yun said. Compared with the first quarter, existing-home sales increased 25.8 percent in California, 25.0 percent in Nevada, 20.5 percent in Arizona and 10.1 percent in Florida. “Buyers in these areas are responding to deeply discounted home prices.”

The largest sales gain during the second quarter was in Idaho, up 51.7 percent; Virginia sales rose 10.5 percent.

The steepest declines in single-family home prices in the second quarter were in the Sacramento-Arden-Arcade-Roseville area of California, where the median price of $229,500 dropped 35.6 percent from a year ago, followed by Cape Coral-Fort Myers, Fla., at $178,100, down 33.1 percent from the second quarter of 2007, and Riverside-San Bernardino-Ontario, Calif., where it dropped 32.7 percent to $265,200. “Each of these areas has seen a strong buyer response in recent months to the big cuts in home prices,” Yun said.

Sharp price declines, in excess of 20 percent, also were reported in the Los Angeles-Long Beach-Santa Ana area; the Anaheim-Santa Ana-Irvine, Calif., area; Las Vegas-Paradise; and Phoenix-Mesa-Scottsdale.

“Areas with affordable housing and healthy local economies continue to see price growth,” Yun said. In the second quarter, the largest single-family home price increase was in the Yakima, Wash., area, where the median price of $162,300 rose 8.9 percent from a year ago. Next was the Binghamton, N.Y., area, at $120,900, up 8.7 percent from the second quarter of 2007, followed by the Amarillo, Texas, area, where the second-quarter median price increased 7.2 percent to $124,600.

Yun said home price conditions reflect comparisons from 12 months ago. “Prices having fallen sharply and quickly in very distressed markets, but most or all of the price declines may have already occurred in these areas since buyers have now returned to those markets,” he said. “Furthermore, the momentum of buying is likely to continue in light of the housing stimulus package that was recently enacted. About 2.5 million first-time buyers are expected to take advantage of the $7,500 tax credit between now and the middle of next year.”

Median second-quarter metro area single-family home prices ranged from a very affordable $71,700 in the Youngstown-Warren-Boardman area of Ohio and Pennsylvania, to nearly 11 times that amount in the San Jose-Sunnyvale-Santa Clara area of California, where the median price was $755,000. The second most expensive area was San Francisco-Oakland-Fremont, at $684,900, followed by Honolulu at $636,000.

Other affordable markets include Elmira, N.Y., at $76,400, and the Saginaw-Saginaw Township North area of Michigan with a second-quarter median price of $80,300.

In the condo sector, metro area condominium and cooperative prices – covering changes in 54 metro areas – showed the national median existing-condo price was $220,000 in the second quarter, down 3.0 percent from $226,900 in the second quarter of 2007. Seventeen metros showed annual increases in the median condo price and 37 areas had price declines.

The strongest condo price increases were in the Syracuse, N.Y., area, where the second quarter price of $144,900 rose 17.8 percent from a year earlier, followed by the New Orleans-Metairie-Kenner area of Louisiana, at $192,100, up 15.9 percent, and the Houston-Baytown-Sugar Land area of Texas, where the median condo price of $141,100 rose 9.9 percent from the second quarter of 2007. Areas where condo prices declined mirrored the pattern seen with single-family homes.

Metro area median existing-condo prices in the second quarter ranged from $107,500 in the Wichita, Kan., area to $523,500 in the San Francisco-Oakland-Fremont area. The second most expensive condo market reported was Honolulu at $330,000, followed by Los Angeles-Long Beach-Santa Ana at $327,800.

Other affordable condo markets include Greensboro-High Point, N.C., at $109,600 in the second quarter, and the Indianapolis area at $113,500.

Regionally, the median existing single-family home price in the Northeast fell 9.6 percent to $269,000 in the second quarter from the same period in 2007. After Binghamton, the strongest price increase in the Northeast was in Elmira, N.Y., up 6.6 percent from the second quarter of 2007, followed by Buffalo-Niagara Falls, N.Y., with a median price of $108,200, up 4.7 percent.

The median existing single-family home price in the Midwest declined 0.9 percent to $161,500 in the second quarter from the same period in 2007. The strongest metro price increases in the Midwest were in the Decatur, Ill., area, where the median price of $94,200 was 6.0 percent higher than a year ago, and Des Moines, Iowa, at $156,600, also up 6.0 percent, followed by Peoria, Ill., at $124,800, up 3.7 percent from the second quarter of 2007.

In the South, the median existing single-family home price was $177,000 in the second quarter, down 4.1 percent from a year earlier. After Amarillo, the strongest price increase in the South was in the Charleston, W.V., area, at $136,600, up 7.1 percent from a year ago, followed by Corpus Christi, Texas, with a 6.2 percent gain to $144,400, and Greenville, S.C., at $160,300, up 5.1 percent.

In the West, the median existing single-family home price was $290,600 in the second quarter, which is 17.4 percent below a year ago. After Yakima, the strongest metro price increase in the West was in the Salt Lake City area, at $234,200, up 0.5 percent from a year ago; all other metro areas reported for the West were down from the second quarter of 2007.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Data tables for both metro area home prices and state existing-home sales are posted at: http://www.realtor.org/research/research/metroprice.

1 Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. A list of counties included in MSA definitions is available at: http://www.census.gov/population/estimates/metro-city/0312msa.txt.

Regional median home prices include rural areas and samples of many smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter-to-quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

NAR began tracking of metropolitan area median single-family home prices in 1979; the metro area condo price series was launched at the beginning of 2006, with several years of historic data.

Because there is a concentration of condos in high-cost metro areas, the national median condo price sometimes is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes. As the reporting sample expands in the future, additional area will be included in the condo price report.

Data tables for both metro area home prices and state existing-home sales are posted at:
http://www.realtor.org/research/research/metroprice. For areas not covered in the tables, contact your local association of Realtors®.

2 The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co-operative housing. NAR began tracking the state sales series in 1981.

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

Third quarter metro area home price and state resale data will be released November 18.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

Summer Olympics Online Coverage - Beijing 2008

Here are the major web sites providing online coverage of the XXIX Summer Olympics games, including reporting of results and standings, that are underway in Beijing, China...

Beijing 2008 - Official web site

NBC Olympics / MSNBC

ESPN - Beijing 2008

Sports Illustrated

CBS Sports Online

U.S. Olympic Team - offical site of United States Olympic Team

BBC Sports Online Summer Olympics 2008

Additional Beijing Olympics 2008 Information Site

Note: In additional to news updates, lastest statistics, medals won and standings, many of these sites provide live streaming video coverage, video (including HD) clips and photo galleries. Enjoy!

Miscellaneous information on Summer Olympics 2008: Wikipedia

Also, don't forget to check your local cable TV listings for coverage (including live coverage throughout the night) on NBC, CNBC, USA, MSNBC, CNBC, OXYGEN, TELEMUNDO, UNIVERSAL HD and others (NBC Olympics Basketball and Soccer channels). (Full NBC Broadcast Schedule.)

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

Pending Home Sales Rise

Wider Gains Anticipated as Buyers tap Housing Provisions

WASHINGTON: Some improvement is projected for existing-home sales in the months ahead, with broader gains seen by the fourth quarter as buyers take advantage of new provisions provided through the recently passed housing stimulus bill, according to the latest forecast by the National Association of Realtors®.

The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in June, rose 5.3 percent to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3 percent below June 2007 when it stood at 101.4.

Lawrence Yun, NAR chief economist, said sales have been in a pattern of rising and falling within a fairly narrow range. “The vacillation of data from one month to the next indicates a housing market in transition,” he said. “The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009.”

The PHSI in the South jumped 9.3 percent to 92.4 in June but is 16.6 percent below June 2007. In the West, the index rose 4.6 percent to 101.0 in June but remains 1.7 percent below a year ago. The index in the Northeast increased 3.4 percent to 79.6 but is 15.4 percent below June 2007. In the Midwest, the index rose 1.3 percent in June to 79.6 but is 13.3 percent below a year ago.

Sales gains have been consistently strong in recent months in Sacramento, Calif.; Las Vegas; and Ft. Myers, Fla., where affordability conditions have greatly improved.² The pickup in contract signings appears to be broadening with many affordable markets in mid-America now showing year-over-year gains, including Columbus, Ohio; Charleston, W.V.; Oklahoma City; and Colorado Springs, Colo. Pending sales have fallen significantly in Texas markets and in the Pacific Northwest - two regions with very strong local economies.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the housing stimulus package will provide long-term relief. “Provisions to stem foreclosures are helpful, but a greater lift to the economy should come from higher mortgage limits, enhancements to the FHA loan program and the first-time home buyer tax credit,” he said.

“These are excellent tools that will help buyers get into the market to take advantage of the unprecedented drop in home prices in many areas, as well as a wide selection of inventory, to make an investment in their future,” Gaylord said.

With roughly 2.5 million first-time home buyers taking advantage of the temporary tax credit, existing-home sales are likely to rise 7.0 percent to 5.51 million in 2009 from a expected total of 5.15 million this year.

Yun said home prices did not fall as much as anticipated in the second quarter. “Buyers entering the hardest-hit markets, in some cases with multiple-bid offers, may have put a floor on prices,” he said. “ In addition, rising commodity prices and higher construction costs have resulted in a very unusual market today with existing-home prices being less than replacement building costs in some areas. Home prices are projected to increase 3 to 6 percent in 2009.”

“Builders need to further cut production to help trim inventory. However, new-home sales are expected to bottom around the second quarter of next year with slight gains in the second half of 2009,” Yun said. New-home sales are forecast to drop 8.8 percent to 464,000 in 2009 from 509,000 this year. Housing starts, including multifamily units, should fall 8.8 percent next year to 795,000 from 960,000 in 2008.

The 30-year fixed-rate mortgage, which also has been vacillating, is likely to trend up to 6.5 percent by the end of 2008, and then hold at that level for most of next year. NAR’s housing affordability index is forecast to remain favorable this year, averaging 13 percentage points higher than in 2007.

Growth in the U.S. gross domestic product (GDP) is expected to be 1.7 percent this year and 1.5 percent in 2009. The unemployment rate is projected to average 5.5 percent in 2008 and 6.0 percent next year.

Inflation, as measured by the Consumer Price Index, is seen at 4.1 percent in 2008 and 2.6 percent next year. Inflation-adjusted disposable personal income is estimated to grow 1.7 percent this year and 1.1 percent in 2009.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

¹The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

²Market information is from unpublished snapshot data; please contact your local association of Realtors® for more information.

Second quarter metropolitan area home prices and state home sales will be published August 14. Existing-home sales for July will be released August 25; the next Forecast / Pending Home Sales Index will be released September 9.

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.

Real Estate Cyber Tips - August 2008

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The information contained in Real Estate CyberTips is believed to be true and correct but no warranties or guarantees are provided and readers should rely solely on their own information and advisors in connection with any sites, services or products reviewed. All content Copyright 2008, RECS. All rights reserved.




Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Copyright 2008 by Lawrence Yerkes. All Rights Reserved.