Time magazine is being overly pessimistic in its recent cover piece that called into question the benefits of homeownership. In fact, now is a great time to buy. And, what’s more, tomorrow will be a great time to own, because the fundamental strength of homeownership hasn’t changed.
Why is now a great time to buy? Here are 10 reasons:
2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.
3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.
4. It’ll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?
6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.
7. It’s risk capital. If the economy picks up, you stand to benefit from that, even if you’re goal is just to have a nice place to live.
8. It’s forced savings. A part of your payment each month goes to equity.
9. There is a lot to choose from. There are some 4 million homes available today, about a year’s supply. Now’s the time to find something you like and get it.
10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.
Shocking news from the Department of the Obvious: California leads the nation in foreclosures. How does this effect you?
Here’s September’s “This Month In Real Estate”.
SOURCE: The New York Times
The Federal Housing Administration was established in 1934 to help combat the effects of the Depression, and it has provided mortgage insurance for millions of home buyers. The agency helps lower-income and first-time buyers purchase homes. The agency does not itself issue mortgages but it insures lenders that do, and its insurance pool is financed by premiums paid by homeowners who use its programs.
During the subprime mortgage boom of the 2000s decade, the F.H.A. all but sat out the party. Borrowers abandoned it in favor of conventional loans that were both easier to qualify for and less expensive.
But as credit tightened in 2008, the F.H.A. became the sudden star of the nation’s housing market. In September 2008 alone, it endorsed over 96,000 new home loans, more than triple the number it approved in the same month in 2007, federal data shows. But the number of F.H.A.-insured loans that were in bad shape also soared. A year after the nation’s largest mortgage buyers, Fannie Mae and Freddie Mac, teetered in October 2008, industry executives and Washington policy makers expressed fear that the F.H.A. could be the next housing domino. Problems at the agency have become so acute that some experts have warned that the agency might need a federal bailout.
Some housing industry experts have also worried that F.H.A. could be hit by a wave of mortgage-related fraud and abuse that it is ill prepared to deal with. Over the years, the Department of Housing and Urban Development, which oversees F.H.A., has been slow to weed out mortgage lenders that abuse or defraud the agency and profit through means like certifying unqualified borrowers.
On Nov. 12, the agency said that its cash reserves had dwindled significantly since 2008 as more borrowers defaulted on their mortgages. The agency released an audit that spelled out the rapid deterioration of its finances.
A CRUCIAL LENDER IN A CREDIT CRISIS
Since the bottom fell out of the mortgage market, the F.H.A. has assumed a crucial role in the nation’s housing market. The agency insures roughly 5.4 million single-family home mortgages, with a combined value of $675 billion.
These loans are bundled into mortgage-backed securities and guaranteed through the Government National Mortgage Association, known as Ginnie Mae. That means the taxpayer is responsible for paying investors who own Ginnie Mae bonds when F.H.A.-backed mortgages hit trouble.
The government is giving as many people as it possibly can the chance to buy a house or, if they are in financial difficulty, refinance it. The F.H.A. is insuring about 6,000 loans a day, four times the amount in 2006. Its portfolio is growing so fast that even F.H.A. backers express amazement.
For decades it was an article of faith that helping people of limited means get a house was good for the new owner, good for the neighborhood and good for American capitalism. Then came the housing bust, which demonstrated that when lenders allowed people to buy houses they ultimately could not afford, it hurt the parties — while putting the economy itself in a tailspin.
In the aftermath of the housing crash, there is wide divergence on how easy, or how hard, it should be to become a homeowner. Skittish lenders are asking for 20 percent down, which few prospective borrowers have to spare. As a result, private lending has dwindled.
The government has stepped into the breach, facilitating loans with down payments as low as 3.5 percent and offering other incentives to stabilize the market. Real estate agents in some hard-hit areas say every single one of their clients is using the F.H.A.
A YEAR OF RISING DEFAULTS AND WORRIES
While the government’s actions have helped avert full-scale economic disaster, there is growing concern that it might have doled out its favors too generously. Many of the loans the F.H.A. insured in 2007 and 2008 are turning delinquent, agency officials acknowledge. The loans made in those two years are performing ”far worse” than newer loans, dragging down the whole portfolio, Mr. Stevens of the F.H.A. said in an interview.
The number of F.H.A. mortgage holders in default is 410,916, up 76 percent from a year ago, when 232,864 were in default, according to agency data.
Despite the agency’s attempt to outrun its fate by insuring ever-larger amounts of new loans to borrowers — the current rate is over a billion dollars a day — 7.77 percent of the portfolio is in default, up from 5.6 percent in 2008.
Its November 2009 announcement that its cash reserves had dwindled considerably over the last year with the rise in defaults comes after the F.H.A. said that even under the bleakest economic forecast its cash cushion would quickly recover. On Nov. 12, it abandoned that position.
The agency is tightening loan standards so it can avoid becoming another drain on the United States Treasury. But it is reluctant to clamp down so much that it snuffs out the tentative recovery in housing.
In a plan that avoids a direct taxpayer bailout, the agency would borrow from the Treasury, under authority previously granted by Congress. In the worst case, involving a protracted recession, the audit said the F.H.A. would run out of capital in 2011 and have to borrow $1.6 billion from the Treasury to pay insurance claims, a relatively small sum.
In line with many analysts, the agency expects the housing market to turn down again through the summer of 2010 and then to recover. Under this projection, foreclosures would be manageable and the reserves would quickly grow.
The wave of foreclosures appears to be subsiding slightly. According to data from Mortgage Bankers Association’s National Delinquency Survey:
• The percentage of loans on which foreclosure action were started during the second quarter was 1.11 percent, down 12 basis points from last quarter and down 25 basis points from one year ago.
• The percentage of loans in the foreclosure process at the end of the second quarter was 4.57 percent, a decrease of six basis points from the first quarter of 2010, but an increase of 27 basis points from one year ago.
• Loans that were 90 days or more past due or in the process of foreclosure was 9.11 percent, a decrease of 43 basis points from first quarter, but an increase of 114 basis points compared to the second quarter of last year.
“The good news is that foreclosure starts are down, and the inventory of homes anywhere in the process of foreclosure fell for the first time since 2006 and had the largest drop since 2005,” says Jay Brinkmann, MBA’s chief economist.
The bad news is that the percent of loans one payment behind had peaked in the first quarter of 2009 at 3.77 percent and fell to 3.31 percent by the end of 2009. Now that rate has risen to 3.51 percent.
“Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers,” Brinkmann adds.
Source: Mortgage Bankers Association (08/26/2010)
This is so straightforward and simple, yet so useful. If you’re wondering what your house is worth, even after getting all the competitive analysis you can gather, here’s the bottom line.
Jay Papasan is the vice president of publishing and executive editor at Keller Williams Realty, Inc., an Austin, Texas-based, real estate franchise company with over 74,000 real estate agents, operating in more than 650 market centers (offices) across the United States and Canada. In 2003, with the release of The Millionaire Real Estate Agent, co-authored by Gary Keller and Dave Jenks, Papasan became a best-selling author when the book spent time on BusinessWeek’s best-seller list. In 2005, they co-authored their second book, The Millionaire Real Estate Investor, which reached The New York Times best-seller list, as well as BusinessWeek’s best-seller list.
“California Fish Grill, fresh seafood eatery takes pride in serving the best tasting, freshest fish, by selecting only the highest quality seafood, having fish delivered daily and only using pure vegetable oil. Come enjoy the warm atmosphere for which California Fish Grill is known, as well as its exceptional seafood.”
Their words, not mine. That said, they pretty much nailed it both in description and in taste at the California Fish Grill in Irvine. Located at the corner of Culver and Barranca in the Crossroads Center, California Fish Grill stands out from the crowd, and that’s a good thing, since the crowds at lunch can quite often leave lines significantly out the door. The draw? Fresh fish and fair portions at a price that doesn’t leave you feeling like you took the bait for a sucker deal. How fair? The entire menu has only two items that are over $10. At a seafood restaurant. Fresh seafood, not Long John Silver’s.
The menu has a little something for everyone.
Charbroiled platters include White Roughy (I was told that’s the most popular), Salmon, Trout, Ahi Tuna (served medium or Cajun seared rare), Mahi Mahi, Catfish, Swordfish, Halibut and Giant Shrimp. All charbroiled items are topped with garlic butter source or served Cajun style (the way Denise and I prefer) and include rice or fries along with a small portion of coleslaw and bread.
More of a fried fish fan? Deep fried frenzies await you then. Choices include Shrimp, Scallops, Catfish and Calamari.
Fan of Wahoo’s or Rubio’s? Get ready to change teams after trying their burritos or tacos. Cajun Mahi, Grilled Shrimp and for you landlocked types, Chicken Burrito wraps can tie you over. A personal favorite of ours are the Cajun Salmon Tacos. Other taco options include Battered Fish, Shrimp, Mahi and Chicken.
Salads are on the menu as well. Cajun Salmon, Seared Ahi Tuna, Asian Shrimp and Crab Salads are all very tempting and eye pleasing options offered.
Sides include fries and sweet potato fries, a pretty solid New England clam chowder and the highly recommended Grilled Zucchini.
The restaurant is a fast-casual concept. You walk in, place your order, take your number, fill your drinks and grab a seat (if you can, remember it’s very, very busy around the lunch hour). Drinks come with unlimited refills and there’s a salsa bar which features a couple of surprisingly strong offerings for a fish restaurant. Cocktail and tartar sauces along with lemons and cilantro are offered as well for taste.
When the restaurant originally opened in late 2005, it was the chain’s 3rd or 4th location. They now have 6 locations. While not exclusive to our area, it’s been a welcome addition and has not seen many (if any) lonely days since arriving. We highly recommend it and we look forward to hearing your thoughts and feedback.
CALIFORNIA FISH GRILL
3988 Barranca Parkway #B
Irvine, California 92606
Mon. – Sun. 11:00 a.m. – 9:00 p.m.
Some other reviews of California Fish Grill: