FROM our economist
Good News in Home Sales
On January 3, 2012, in Breaking News, Economics, by Robert Freedman

NAR released its latest pending home sales index figure last week and for the second month in a row the index is up. But more than that, the index has broken 100. This is significant because the only time since the housing boom collapsed that the index has broken 100 is when the home owner tax credit was in effect. The fact that the index has returned to that level a year since the credit has been in effect means the housing market is strengthening completely on its own, without any stimulus.

NAR Chief Economist Lawrence Yun is upbeat about 2012 because in a number of areas indicators are pointing upward. Not only are home sales up but housing starts are up and home prices are stabilizing in many markets and heading up in some. In areas where they’re still down, the declines aren’t that great. More fundamentally, broader U.S. economic signs are looking positive, including the all-important jobs picture. About 100,000 job are being created a month, and that could rise to 150,000—still not a quick enough pace to get us back to where we were before the downturn but the headwinds are in the right direction.

One of the key drivers of homes sales, the employment rate, is beginning to show promising signs of a turnaround. The four-week average for jobless claims, as of November 19, was 394,250, a drop of 3,250 from the previous four weeks, and at the lowest levels since April. Consumer confidence also rose 15 points in the last month, and is now at its highest point since July of this year. Eric Green, Chief Market Economist at TD Securities Inc. said, “The trend remains very constructive. Jobless claims are back below 400,000, which seem to be the pivot point in terms of a strengthening labor market as opposed to a weakening one.”

In addition to improving employment conditions, home affordability also improved as interest rates fell further, opening the door for more first-time home buyers who accounted for 34% of the sales in October, an increase from 32% last month and last year. The western United States saw the greatest increase in home sales, which were up 4.4% month to month and up over 15% from last year.

A strengthening job market, along with encouraging signs from the housing sector, including a 10% jump in pending sales for October, are strong economic forces. While mortgage lending still remains a challenge, these forces may send a signal to banks to relax lending regulations and allow for a more rapid recovery.

A licensed real estate professional provides much more than the service of helping you find your ideal home. Realtors® are expert negotiators with other agents, seasoned financial advisors with customers, and superb navigators around the local neighborhood. They are members of the National Association of Realtors® (NAR) and must abide by a Code of Ethics and Standards of Practice enforced by the NAR.

A professional Realtor is your best resource when buying your home.

Let A Realtor Be Your Guide

·      A knowledgeable Realtor can save you endless amounts of time, money, and frustration.

·      A knowledgeable Realtor knows the housing market inside and out and can help you avoid the “wild goose chase.”

·      A knowledgeable Realtor can help you with any home, even if it is listed elsewhere or if it is being sold directly by the owner.

·      A knowledgeable Realtor knows the best lenders in the area and can help you understand the importance of being preapproved for a mortgage. He or she can also discuss down payments, closing costs, and monthly payment options that suit you.

·      A knowledgeable Realtor is an excellent source for both general and specific information about the community such as schools, churches, shopping, and transportation—plus tips on home inspections and pricing.

·      A knowledgeable Realtor is experienced at presenting your offer to the seller and can help you through the process of negotiating the best price. By bring objectivity to the buying transaction, he or she can point out the advantages and the disadvantages of a particular property.

And the best thing about your Realtor is that all this help normally won’t cost you a cent. Generally speaking, the seller pays the commission to the Realtor (but this may vary from province to province and state to state).

KNOW ANYONE BUYING OR SELLING NOW?

The finest compliment I can ever receive is a referral from my friends and clients

Darlene- 281-796-1697

DO YOU WANT TO USE A BIG BANK WITH ALL THE “BELLS AND WHISTLES” OR DO YOU WANT TO GO BACK TO LOCAL BANKS WITH THE SERVICE?

I was invited to attend a lunch hosted by Chocolate Bayou Credit Union so they could explain why they state “Big Bank on local service."  As I listen to them speak, I started asking questions and was surprise with what I learned. I use a big bank for the convenience, like 24/7 telephone customer service. I do recall the last time I called a big bank on the 800 number and it was not pleasant, put on hold and believe I was talking with someone that was reading from a script?

I grew up with enjoying going to the bank and as I walked in, I was treated like a person, not just a profit opportunity, when I called my bank, I got somebody on the phone immediately who is in-state and sounds like they value my business and if I ask to speak with a branch manager, that had real decision-making authority, a real person would come out and speak with me.

One of the main reasons I went to this lunch, (besides the free lunch) was to find out about their home loans. I found out they don’t sell their loans to investors, they hold the loans. That means that they’re not going to make a home loan they know a customer can’t afford. That’s why they aren’t affected by mortgage defaults and foreclosures as the big banks and small bank customers are still able to afford their mortgages and stay in their homes.

So let’s compare ……….

Chocolate Bayou Credit Union offers a variety of Real Estate Loans

·         Mortgage Loans

·         Home Equity Loans

·         Home Improvement Loans

·         Land Loans

 Check out the benefits of small town banking

·         Service

·         Convenience

·         Online Access

·         Affordable

·         Payment Protection

·         No early payoff penalties

“Banks are owned by groups of stockholders whose interests include earning a healthy return on their investments and Credit Unions are not-for-profit and are member-owned, earnings are returned to the members in the form of higher dividends, lower rates and low fee.”

SO NOW, who has the Bells and Whistles and Service?  Please take time to go by and check out Alvin’s local Credit Union.

Thanks go to:

Roy Waldrep, VP of Marketing

Brandy Pollard, Loan Officer

Gayleen Supak, SCMSA-Chief Operations Officer

http://soldbydarlene.housingtrendsenewsletter.com/

By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance

Does the new health-reform law affect any of my flexible spending account decisions during this year’s open-enrollment season?

Contributing money to a health-care flexible spending account continues to be a great way to stretch your dollars. The money you contribute to these payroll-based savings accounts escapes both federal and Social Security taxes (and in most cases, state and local income taxes, too). You can use the tax-free funds to pay out-of-pocket medical expenses throughout the year.

Every fall, you need to make some key decisions about your flex plan, including how much to contribute to next year’s account and how to use the money remaining in this year’s account before the cutoff date (if you don’t use it, you lose it). In most cases, you have until March 15, 2011, to use your 2010 funds, but some employers still adhere to the old December 31 deadline for using the money or forfeiting the balance. Check with your employer to verify your plan’s deadline.

Health-care reform has made some key changes to flexible spending accounts starting in 2011. The changes will affect how much you can contribute to these tax-advantaged accounts, how you can spend the money, and which of your family members can benefit. Here are three new rules that may affect the amount of money you decide to set aside in your account for next year -- and how you use any money left over in the last few months of 2010.

1. No more non-prescription drugs. Starting in 2011, you’ll no longer be able to use FSA money for non-prescription drugs (except insulin). And even if your employer gives you until March 15, 2011, to use up the money in your account from 2010, you still won’t be able to spend it on over-the-counter drugs without a prescription after December 31, says Sunit Patel, senior vice-president of Fidelity Investments Benefits Consulting. Keep this in mind as you plan your FSA spending for the last few months of the year.

Also, ask your doctor if you can get a prescription for any over-the-counter medications you use regularly, such as pain relievers, allergy medications, anti-fungals, and cough and cold medicines, says Jody Dietel, of WageWorks, which administers FSAs for employers. Starting in 2011, you’ll need to submit a prescription along with a receipt (or a receipt listing the Rx number) to your FSA provider in order to get reimbursed for the medication from the account. And there are penalties for skirting the rules. If you use your FSA money to buy non-qualifying medical expenses, the amount will be included in your gross income and subject to an additional tax of 20%.

2. New rules for adult children’s expenses. FSAs have always allowed liberal coverage for children -- you could use the money for any dependent child’s medical expenses, even if that child was not covered by your health-insurance plan. So even if your child had coverage through your spouse’s plan or another insurance provider, you could still use the money in your FSA for their out-of-pocket costs (but not to pay for health-care premiums). In the past, you could use the FSA money only if your child was considered a dependent for tax purposes. But most employers have expanded the definition of dependent to include any child who is younger than 27 at the end of the year, even if he or she isn’t claimed as a dependent and doesn’t live at home.

Before deciding how much to set aside for next year’s medical expenses, ask your employer which of your family members are eligible to use FSA money in 2011. And find out whether this change applies in 2010, too. A few plans have already implemented the new rules, which means you may have more options for putting your money to use by this year’s deadline.

3. Lower FSA limits in the future. FSA limits aren’t changing in 2011 -- many employers will allow contributions up to $3,000 or $4,000 in the account. But the maximum limit will shrink to $2,500 in 2013. So if you’re considering a costly elective medical procedure that isn’t covered by insurance -- such laser eye surgery or a major dental procedure -- you might want to schedule it in 2011 or 2012 so you can stockpile more pretax money in your FSA account.

If your employer offers a grace period until March 15 of the following year to use up the previous year’s FSA money, there’s a sweet spot in the first few months of the year when you can double up your available funds, using any money left over from the previous year combined with the current year’s FSA allocation. See Saving Grace Period for Flex Account for details.

For more information about the upcoming changes to FSAs, see What Health Reform Means to FSAs and HSAs. And for a preview of how your health-insurance options may be changing in 2011 and for advice on open enrollment this fall, see Health Insurance Changes for 2011.