Your Home – March 2010

Living Color

Тhe leading expert in color, Pantone, Inc., has made it official: Turquoise is the “it” color for 2010. But before you deck the house from top to bottom in the gemstone hue, consider the other latest color trends.

Behr paint company says neutral is still in — think light colors such as grays, camels and off-whites. Experts suggest buying bigger furniture such as sofas or armchairs in these safe colors, which never truly go out of style. Complement neutrals with aqua and gold tones, but stay away from darker browns, which are becoming passé.

While monochromatic schemes are still versatile and dependable, HGTV says the real winners in the color game right now are bold jewel colors such as ruby red or emerald green, and the brighter the better — especially if it’s a purple hue. Experts advise pairing these daring tones with a smoky charcoal or a softer black to give a room a vintage feel.

Going green and getting back to nature is a major trend, too. Earthier tones, such as sand or yellow-greens, are perfect for living rooms or kitchens. But going back to your roots doesn’t just mean dipping into Mother Earth’s favorite colors. Decorators say Asian-inspired or tribal patterns are adorning decorative elements as consumers look to get the most bang for their buck. Think pillows, area rugs or murals as key items this season.

App Orchard

Buying or selling your house? There’s an app for that. Well, not exactly, but there’s plenty of high-tech help available to guide you through the process.

The iZillow app gives you access to data on more than 80 million homes, including square footage and an estimate of fair market value. Take a drive around your possible new neighborhood and see home values pop up on your phone with real-time real estate info.

Get real-time mortgage rates from hundreds of lenders nationwide with the Mortgage Marvel app. Use it to compare rates and fees — prices reflect transaction-related pricing adjustments, such as loan amount, loan-to-value ratio and property type — and view disclosure information for all rates. When you’re ready, you can select a lender, fill out an application and be approved.

The RulerPhone app lets you use your iPhone as a tape measure to see if your couch will fit in your prospective new home. Place any credit-card-sized card next to an object, take a picture with the phone and align your image with the card placeholder displayed on-screen. A ruler will be displayed, allowing you to adjust the measurements with the drag of a finger.

The ExpertVideo: Home Repair app brings valuable home repair how-to videos to the palm of your hand. More than 20 videos are available, covering how to repair concrete steps, paint kitchen cabinets or patch a drywall hole. Still have questions after watching? A moderated discussion panel gives you the answers.

Keep home improvements and routine maintenance tasks organized with the Homeowner Calendar app, featuring a calendar of monthly tasks, such as checking smoke alarms, cleaning air filters or cleaning your gutters. Alerts let you know when tasks are coming up, and the application allows for custom additions.

Find all these apps at www.apple.com/iphone/appstore.

Fast Fact

The Labrador Retriever has held the top spot for Most Popular Dog in America for the past 18 years.

Hidden Treasure

Tax day is just around the corner, and many homeowners forget that they’re sitting on a wealth of potential savings — in their home. Tax deductions for homeowners are plentiful, so keep these guidelines in mind as you prepare your return this year.

First, know that if you deduct home expenses, you have to file form 1040 (also known as the long form) and itemize your deductions on Schedule A. While it can be a headache, the rewards might be worth it.

Remember that the mortgage on your home is deductible — at least the real estate taxes, qualifying interest and premiums, for a loan up to $1 million, according to the IRS. Note that fire or homeowner’s insurance premiums and the principal mortgage amount are not deductible. Here’s how to calculate what’s deductible: Enter your total real estate taxes for the year, and enter the number of days in the property tax year that you owned the property. Divide the number of days by 366, and multiply that number by your total real estate taxes for the year.

Paid off your mortgage early? The penalty you might have received is tax deductible as home mortgage interest, as long as it’s not for a specific service performed or a cost connected with your mortgage loan.

You may have heard that home repairs can qualify for tax deductions, but home improvements are the real winners. An improvement is classified as anything that adds to the value of the home — for instance, making a room handicapped accessible or adding a deck to the back of your home. Always keep receipts and records — and remember, if you borrowed money for that improvement, the interest on the loan is tax deductible, just as it is with the mortgage payments.

Another item many homeowners forget is deductions for loan origination fees, better known as “points.” One point is equal to 1 percent of your loan. Depending on how many points you’ve accumulated, you may be eligible to deduct them. There are rules about deducting points, but a financial professional can help you sort through them.

And finally, don’t forget that if you upgraded to energy-efficient Energy Star windows, stoves or water heaters, those may be eligible for a tax credit. Check www.energystar.gov to see if your improvements are included.

Did You Know?

March is National Caffeine Awareness Month. Approximately 80 percent of the world’s population consumes caffeine on a daily basis.

Brought to you by Jerry Long, a member of the Council of Residential Specialists.

Topeka Market Report – January, 2010

There were 94 closed sales in the month of January, up from 84 for January of 2009, or an increase of about 12%.  We’re still down from 134 (-29.9%) in 2008 and 199 (-52.8%) in 2007.  The absorption rate (number of months to exhaust current supply, given current number of sales) for single family units (all price ranges) was 13.7 months at the end of January, compared to 14.0 in 2008, 9.3 in 2008 and 6.2 months in 2007.  Our average and median list and sale prices are down a bit, and the best showing is in days on the market.  From listing date to contract date, DOM at the end of January was 62, compared to 89 in 2009, 93 in 2008 and 72 in 2007.

What do I think of this?  I’m not sure.  We have property listed that all-of-a-sudden there is a huge increase in interest; other properties are showing no activity whatsoever.  I do see buyers scrambling to get the extended & expanded tax credit.  I’m not sure what to expect when that ends – we won’t have the incentives, but we’ll have a market that has hopefully continued to improve, and it will be great weather, I hope.

Should You Rent Or Buy?

I read yet another article today that stated “Well, if you ask a Realtor, then it’s always a good time to buy.” 

Not so with us.  It’s not always a good time to buy, and buying isn’t for everyone.  We’ll tell you that.

There are many things to consider before buying a home, rather than just “the home will appreciate” vs “why pay for someone else’s property.”

There are a number of good rent vs buy calculators (just Google it) on the internet that consider some (but not all) of the dizzying number of things to consider:

—What is the average appreciation of a home in your target market?
—What kind of down payment to do you have?
—What is your credit score?  (just a small glitch in your credit can cause a drop in your score and cost you thousands more over the life of a loan if you are unable to someday refinance).  You don’t want to end up with a predatory lender.  Work on repairing that credit score before applying for a loan.
—Will the mortgage interest and taxes allow you now itemize on your tax return?  If so, perhaps there are other items you’ll be able to now itemize, whereas previously you had to just take the standard deduction.
—What is the local rental market like?  It’s likely that over time, your rent will increase, while with a fixed-rate mortgage, your mortgage payments will stay the same – though your property taxes, insurance and maintenance costs could very likely increase.
—Are you “handy” or willing to learn how to be “handy?”  If you cannot perform minor (or major) repairs yourself, you will have to pay someone to do these things for you.
—How secure is your job?  Are you likely to be fired or laid off?  If it happens, how likely is it that you can find another job at comparable pay?  Is it likely you might have to relocate within the next 3-5 years?   If so, selling costs, could more than eat up any gains you may have made.
—Just because a lender gives you an amount that you can “afford” or qualify for, you need to decide for certain whether you really can or not.  Be sure to consider maintenance, property taxes, homeowners insurance and any homeowners insurance fees  in your monthly budget vs. gains you will have in potential appreciation, tax deductions, etc.  Don’t forget to include more longer-term items and make sure you’re able to start setting aside money in a fund for those things so they don’t cripple you when they occur:  some day your home will need a roof, or a paint job, or a water heater, or a furnace, or an air conditioner.
—After your acquisition costs (downpayment, loan and document fees, etc.), do you still have a rainy day fund?
—Do you generally manage your money well?

In some markets currently (and possibly for the forseeable future), it would make much better sense to rent than to buy.  For example:

In Austin, Texas, a $230,000 single-family house would rent for approximately $1,250 per month; in Irvine, California, a $587,000 single-family home would rent for $2,832, on average, per month. On those numbers, renting in Austin saves $94,800 over buying that same house over a 10-year period.

The present value of the benefits of owning that house in Austin is approximately $47,000 using these calculations. In Irvine, the renter saves a whopping $144,000 over a 10-year period over buying the same house; the present value of the benefit of ownership is about $142,000.

Fortunately, in Topeka, we have seen very few areas that have experienced price declines during this past recession, and even then, they are very minimal.  We are fortunate to have a boringly stable economy in Topeka – while we haven’t seen the high appreciation during the boom years, we haven’t seen the high depreciation during the recession.

If you can afford to purchase a home, and you do it in a practical and educated manner, buying a home in Topeka can make great economic sense and be one of the smartest moves you can make.  Home ownership builds wealth in two ways: through the forced savings of paying down a mortgage, and through appreciation — the rise in the homes value over time.

There is much to consider, and we can help you through that process – whether it’s professional representation in a purchase or fee-based consulting.  But if we think it may be best that you don’t purchase a home at the current time, we’ll be the first to tell you .

Top 9 Scams Of 2009

 

1. Fake Checks 42.01%
2. Internet: General Merchandise 24.87%
3. Prizes/Sweepstakes/Free Gifts 9.57%
4. Phishing/Spoofing 7.17%
5. Nigerian Money Offers (not prizes) 2.88%
6. Business Opportunities/Franchises/Distributorships 2.02%
7. Advance Fee Loans, Credit Arrangers 1.82%
8. Internet: Auctions 1.17%
9. Friendship & Sweetheart Swindles* 1.00%

Copyright 2010 The Consumerist.  THE CONSUMERIST™ and CONSUMERIST™ trademarks are owned by Consumer Media. Reprinted with permission.

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