We keep going round and round on this house search business. Not even two weeks ago, I pulled the plug and thought it was best to wait to buy. Sell our house and go shopping with cash, even if we lose out on the tax break and the great interest rate. Honestly, I’ve felt like a dog chasing my tail - and that’s never pretty.

But the other night, Jason saddles up to me with the lap top. There’s an MLS listing on it and I immediatly bristle. “Come on, just look at it,” he says with the smoothness of a coke dealer. I do - and of course, there’s a lot to like. I and get the rush all over again. It has a loft with a high-ceiled livingroom making it a pool of light. I’m just a sucker for light.

Buying a house is a balance of trade-offs. (Well, actually all of life is a balance of trade-offs but as this is a real estate blog, I’ll try to limit it to just that.) Twice now, we’ve found adorable homes with some huge pluses. Mostly being in our price range with an open-floor plan, storage and a garage. Where we live there are nearly no garages with properties so to be looking at a house with a 2-car attached PLUS a bonus 2-car in the back for storage is like porn. (Jason says that when it’s a one-car detached it’s only soft core.)

But they’ve all had location issues - not bad ones, not “I don’t want to walk the streets at night issues,” but issues none the less. Too far from town or neighbors with the 40 year-old RV parked in the front yard sort of issues.

And am lucky to have Tom, my Webdigs Realtor, helping me remember to keep my eye on the prize. Do I want to rush into a house in an adrenalin pumped love affair (Yes! Yes! I swoon) …OR do I want to buy a home with long term value in downturn economies like the people in Edina who actually saw growth in 2008. (Oh Yeah, you’re right, Tom.)

The City of St. Louis Park wants its employees nearby. And there’s actual cash behind it. $2,500 bucks towards a home purchase and another cool grand if you pick out something from their foreclosed housing stock. Add that to the $8 K tax incentives right now …and Lordy if you’re a first time buyer and can get in on some of those programs - WOW!  We’re talking real money. (A Webdigs agent could help you shake the sugar tree and see what goodies fall out.)

There are some income guidelines. Two-person households must make $77K or under and $97K for a family of four.

Laurie Blake of the Star Tribune wrote that while there are other communities offering incentives right now, “an outright grant that is available to most buyers and can be used on any home in the city is an unusual incentive.”

If buyers sell before 3 years have elapse, the money will be treated like a loan that must be paid back, but the city is guessing you’ll love it in St. Louis Park.

Presently there are 25 grants available, so if you want to live where you work, get searching in St. Louis Park HERE. And read the community profile of St. Louis Park HERE.

St. Louis Park is offering people who work in the city a $2,500 grant to buy a home there.

For the purchase of a foreclosed house, the city will chip in another $1,000.

A couple weeks ago, I shared with the blogsophere that we bid on a house. (Then my computer took a turn for the worse.) Anyway it’s a house we looked at before and liked, but not loved. We bid exactly the amount we could afford. Not a penny more — and… someone else was looking at the house and put in a higher offer before us.

How do I feel about that? Pretty good actually. I’m happy for the owner to sell the house for closer to his price. And maybe the things that irked us about the house do not bother the new owners in the least.

And how cool is it that we were OUTBID on a house in this market? To me, it means that things are getting better. That has been the word in a broader sense, too. According to the realtor.org website February housing sales INCREASED.

The press release states: “Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.1 percent to a seasonally adjusted annual rate¹ of 4.72 million units in February from a pace of 4.49 million units in January…”

I’m sure the good deals in mortgages has a lot to do with it. I heard a report yesterday that some lenders were giving rates in the 4% range. Wow.

So our patient hunt continues…

President Obama has instructed the Treasury secretary to try
to stop the faltering insurance giant American International
Group from paying out hundreds of millions of dollars in
bonuses to executives, as the administration scrambled to
avert a populist backlash against banks and Wall Street that
could complicate Mr. Obama’s economic recovery agenda.

Read More:
http://www.nytimes.com/?emc=na

 While this has little to do with RE - I have to say,  that I applaud this.  If they didn’t ask for TARP money - great, pay your bonuses…but not on the tax payer’s dime. 

“Most of the biggest real estate fortunes were not made in good times, but in bad times like this” Barbara Corcoran reminds us in this talk with NBC. 

It’s important perspective for Americans wondering how to invest in foreclosed properties without losing their cash or their credit rating.

In the 4-minute interview, Corcoran quips on the basics and the essentials of foreclosure investing,

1. “Everyone who loses their shirt loses it somewhere else.”
2. “Every big shark started small.”
3. “The house on the corner sets the tone for the block.”

She also lends some personal perspective to rent rolls, the cost of losing a tenant, and finding a good business partner.

Banks are anxious to sell their foreclosed homes and that makes this an ideal time for shrewd real estate investors.  If you’re new to the game, watch the video and take good notes.

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com

You know you’re in the middle of an economic crisis when an accounting issue become Front Page News, and that’s exactly where we’re at today.

Mark-to-market accounting is having its day in the sun and people in need of mortgage sometime soon would do well to pay attention. 

If you’ve never heard of mark-to-market accounting, don’t worry. Not many people have.  Mark-to-market is a method of valuing an asset based on its what-if-it-was-sold-today value.  Mark-to-market is officially known as FASB Statement 157.

Mark-to-market is one reason why bank balance sheets look so awful right now.  Banks have to assign firesale-like values to their mortgage-backed assets even if those loans are performing, and even if there’s no plans to sell them.  Assigning low values to assets, then, in turn, forces the banks to seek TARP funds and take other measures to solidify their mandated capital requirments. 

Wall Street and Washington are taking notice of mark-to-market’s impact on banking and, by extension, the economy.  Even Fed Chairman Ben Bernanke has expressed an interest in opening a dialogue about the matter.

So, today, starting at 10:00 AM ET, the House Committee on Financial Services meets with key members of the Securities and Exchange Commission, the Treasury, and the Financial Accounting and Standards Board to talk about mark-to-market accounting and whether it should be modified.

It’s unlikely that change will come immediately, but if enough evidence shows that mark-to-market is unduly damaging to the economy, expect changes to the way we value banks to happen soon. 

For homeowners and home buyer, a reversal in mark-to-market rules would be a bad thing.  Almost overnight, bank balance sheets would recapitalize and the economy would spring forward.  This would reverse most of the pressures that have held mortgage rates low for so many months.

A healthy economy, in other words, may be bad for mortgage rates.

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com

The basis of most mortgage lending is credit scoring.  In general, the higher a person’s credit score, the lower his offered mortgage interest rate.

Despite the many credit scoring models in use today, however, just 3 are relevant to American homeowners:

1. The Equifax BEACON^® score
2. The Experian Fair Isaac Risk Model
3. The TransUnion EMPIRICA^®

Generically, these scoring models generate what are commonly known as “FICO” scores.

FICO scores are measurements of probability.  The higher a person’s credit score, by definition, the less likely a person is to default on his home loan.  This is one reason why credit scoring has added importance lately — mortgage lenders are very careful about what they’re lending and to whom.

Notably, minimum FICO thresholds have been added to all types of mortgage loans.

FICO scoring has 5 main components as listed above.  Payment history and credit capacity are two of the largest pieces, but a myriad of other factors contribute to a credit score, too.  For example, the longer your reported history of managing credit, the more favorably your credit score will respond.

The myFICO.com website does a terrific job with credit education, explaining in plain language the ins-and-out of credit scoring and ways to boost your score.  It also makes a free, 20-page PDF available for download. 

Whether you’re a homeowner or lifetime renter — consider it required reading.

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com

USA Today ran this 2008 Foreclosures By State heatmap last week, reminding us of a simple truth: Headline statistics can be misleading.

According to data compiled by RealtyTrac, 1 in 8 U.S. homes were in various stages of default or delinquency at the end of 2008.  This is a fact and it was widely reported by the press. 

However, as the heatmap plainly shows, in stripping out just 35 of the nation’s 3,232 counties, we can decrease the number of foreclosures nationally by half. 

In other words, yes, 1 in 8 U.S. homes face mortgage trouble.  In your neighborhood, though, the ratio is likely much, much lower.  Real estate is a local phenomenon.  National statistics rarely apply.

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com

Changing your air filters regularly keeps your household energy costs down and extends the life of your HVAC unit(s).  It’s important, however, to use air filters that actually work. 

Walk into any hardware store and you’ll see a host of filters at various price points, starting at 99 cents.  Before you reach for the cheapest products, though, watch the 1-minute video above.

A mesh filter isn’t going to stop most airborne particles.

Because buying the recommended pleated air filters can be expensive, consider purchasing in bulk from a store like Home Depot, or from Amazon.  Air filters don’t “go bad”, you can store your discounted filters until they’re ready for use.

Experts recommend changing air filters quarterly at minimum.  If your home has shedding pets or is dust-prone, consider changing them monthly.

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com

If you asked an economist why home prices have broadly fallen over the past 2 years, you’d get a short lesson in Supply and Demand.

Too many homes for sale and not enough people to buy them pushed values lower until a balance point can be reached. Looking at the chart at right, that balance point may be fast approaching.

According to data compiled by ZipRealty, the total number of homes listed for sale fell in February 2009 in 23 of 24 major housing markets. 

This is an especially important data point because home inventories typically rise in February, ahead of the Spring Home-Shopping Season. 

Since 1982, February home inventory has been up 3 percent on average. Last month, it fell.

So, in support of the Supply and Demand Theory, we shouldn’t be surprised that the rate of price decline as shown by the Case-Shiller Home Price Index is easing in a lot of markets, too.

We may not have reached the housing market bottom yet, but if we haven’t, the data shows us we’re likely very close.

Source
Home Listings for February Stayed Steady
James Hagerty
The Wall Street Journal, March 5, 2009
http://online.wsj.com/article/SB123620588396833321.html

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com