10 Markets Where Housing Equity is Going Strong

By Gino Blefari
President & CEO
Intero Real Estate Services, Inc.
 
For quite a few years during and after the economic downturn, negative equity – when more is owed on a mortgage than a home is worth - was a real problem for homeowners. And while some markets in the U.S. haven't quite crawled completely out of the situation, others certainly have.
 
In fact, the National Association of Realtors this week released datashowing the 10 markets in the U.S. where equity has improved the greatest since the fourth quarter of 2010. They are:

1. San Jose, Calif.
2. San Francisco
3. Anaheim, Calif.
4. Los Angeles
5. San Diego
6. Boulder, Colo.
7. Honolulu
8. Riverside, Calif.
9. Cape Coral-Fort Myers, Fla.
10. Sacramento, Calif.

 It's true that in Silicon Valley and San Francisco, we've seen some of the largest increases in home prices in the last year alone, boosted by a soaring tech economy and an overall lack of inventory.
 
This is great news for homeowners and the local economies that inevitably benefit from a strong housing market. But what many watch with caution is the long-term impact on housing affordability – especially for first-time home buyers and other classes of workers that are at risk for being priced out.
 

 
 The interesting thing about these markets is that many of them are concentrated in the hardest hit areas from the housing downturn. For instance, Los Angeles, Riverside and Sacramento were all hit hard by the market decline, but have since seen sharp improvements in the last four years.
 
On the other end of the spectrum, NAR says in a blog post about the report, a number of markets that were in the bottom 10 for equity appreciation in 2006 did not see the same strong appreciation. These included Reno, Nev., Las Vegas and several Florida markets.
 
This is sort of telling about some of the ultimate truths about real estate – location and jobs are and always will be inextricably tied to the long-term health of local markets.
 
It will be interesting to see where these numbers lie at this time next year.
 

What You Can Do to Improve Your Credit

Credit scores, along with your overall income and debt, are big factors in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:

1. Check for and correct any errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.
2. Pay down credit card bills. If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.
3. Don’t charge your credit cards to the maximum limit.
4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.
5. Don’t order items for your new home on credit — such as appliances and furniture — until after the loan is approved. The amounts will add to your debt.
6. Don’t open new credit card accounts before applying for a mortgage. Too much available credit can lower your score.
7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.
8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation.

Why to Own Your Own Home!!!

7 Reasons to Own Your Home

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.
2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.
6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.
7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.