Rising Rents Making Many Renters to Re-Examine Homeownership — 2012 Portends Strong Rental Market for Multifamily Property Owners

Source: Ted C. Jones, Stewart Title Guaranty Company

Apartment asking rents increased 2.8 percent last year according to Rents Marcus and Millichap   https://www.marcusmillichap.com/services/research/reports/National/MarcusMillichap_2012_NAR.pdf while effective rents (after consideration of all discounts, giveaways and specials) jumped 4 percent.  At the same time, median U.S.home values declined 3.9 percent.  Marcus and Millichap expects 2012 to see even added increase in rental rates with a forecast  85,000 new unit deliveries but with demand for at least 120,000.  Apartment vacancy rates, which nationwide declined from 6.6 percent in 2010 to 5.4 percent in 2011, are expected to drop to 5 percent in 2012.  The bottom line is that rents are going up once again 2012-and depending on where you live, buying may become a better economic decision.

Again I invoke the TINSTAANREM clause-There Is No Such Thing As A N ational Real EstateMarket, as every market is different.

To examine the relative favorability of buying versus renting, typical rents were gathered from 141 different markets and compared to median home prices.  Rental information was taken from ApartmentRatings.com  http://www.apartmentratings.com/   which compiles online reviews and rental rates for more than 1.2 million units across the U.S.  The rental data are for two bedroom units with any number of baths.  These monthly rents are annualized by multiplying times 12.  This annualized rent is then divided by the median home price (actually, the median home price average from the first three quarters of 2011) as reported by the National Association of Realtors®.   I believe all would agree they would rather live in the typical median priced home than a two bedroom apartment.  Never-the-less, the ratio does have a usefulness in assisting in the decision to buy or rent.  The cost of owning a home with 30-year interest rates at 4 percent (actually, a little less), and property taxes, insurance, homeowner association fees and maintenance residing in the 3 to 4 percent range, is 7 to 8 percent of the value of the property per year.  This very simplified analysis ignores many obvious negative and positive factors such as the down payment, closing costs, the tax benefits of interest and property taxes and any increase or decline in the property value.

This first table shows the rents, median home prices and the ratio of annualized rents to median home values sorted alphabetically by market.  The ratio of annualized rents to median property value ranges from a high of 15.92 percent to a low of 3.27 percent with an average of 6.99 percent.  Renters in markets with high ratios should give homeownership a serious consideration.  Is the sample of rents a true representative random and representative listing of rents?  Probably not.  But the sample is large and the comparison consistent.  Click Here to view table.

The following table ranks the Metropolitan Areas from the largest to the smallest ratio between annualized rents and median home prices.   The larger the ratio, the more favorable it is to own rather than rent.  Click Here to view table.

The bottom line is that rental rates are going up, and may that are renting today could reduce their housing costs today and at the same time hopefully upgrade their housing environment.

Feel free to search for Albuquerque Homes Here!   If you want to know the value of your home click Here!

If you are interested in looking more into home ownership, contact Joe Brooks you real estate Expert.

• FHA has a loan program that the financial industry has lovingly labeled: The “Kiddie-Condo”
Loan (although, they are not limited to the purchase of a condominium … it can be a standard
single-family home.)
• Essentially, here are the highlights:
1. The maximum FHA loan for Sandoval, Bernalillo, and Valencia Counties for a single
family dwelling is $271,050.00. (This mode of financing might also be available for duplex,
triplex, and a four-plex … please check with a loan officer for verification.)
2. The min. down payment on single family dwelling is approximately 3.50% of the purchase
price. (You may be able to qualify & the funds are available, for the MFA program which
includes 3.5% grant money in combination with this FHA  Loan type.  If the purchase
agreement is orchestrated correctly and the buyers closing costs were shifted to the seller
… the minimum contribution required by the buyer is only $500.00.) Call to find out more
… as this program … as is all programs are subject to change.
3. Parents can purchase the home and place their son or daughter in it. (The reverse can
happen too. Let’s say the children have some elderly parents with a fixed income, they …
the children … can qualify for the home … adding whatever income and debt that the
parents have … and qualify based upon the combination thereof.)
4. They all will be on title for FHA purposes. Different for FHA/MFA which only the owneroccupant would be on title and the only eligible property is a single-family dwelling.
5. Qualifying is based on the strength of the buyers’ and parents’ credit scores, debt to
income ratios, etc. 
6.  The child is not required to have taxable income, however, credit must be
acceptable with at least 1 credit score.  If the child is a student with no income, non
traditional credit is NOT allowed.   FHA will no longer allow alternative sources of
credit for borrower’s who have no credit or taxable income at all.  
7. Borrower’s must have 2 months cash reserves for total PITI monthly payment of their own
funds.  No gift of reserves is allowed.
8. This program is used many times by families who choose, while their child goes to college,
to have them in a house … rather than in a dorm. Sometimes the program is used to help a
young family get a head-start.
9. During that time, everyone in the family is benefiting from home ownership and the
appreciation associated with it, while not wasting money for housing for the student (if
applicable).
10. The child also benefits, as he or she is establishing a credit rating of their own.
11. The parent benefits in as much as the normal down payment on “investment” property
can be as much as 30% and the interest rate would be higher as well. This would be
considered “owner-occupied” as the son or daughter is living in the home.

If you would like additional info give Joe Brooks Realtor a call at 505 977 3474

We have reported that almost six million adults between the ages of 25 to 34 are currently living with their parents. That number reflects an almost 50% increase since 2003. These young adults are now being advised to jump into homeownership.

Who are the people selling them on the American Dream? Their parents! It seems that parents of some adult children are strongly suggesting that their children take advantage of the low cost of homeownership available today. Some moms and dads are helping financially and are even co-signing for the mortgage. Middle age parents who have owned a home understand its true value. A home has always been a good long term financial investment. However, homeownership also has many other benefits.

In Fannie Mae’s most recent National Housing Survey, they asked the question directly:Is this a major reason to buy a home?

The study broke up the answers into financial and non-financial reasons. The top four reasons and six of the top ten reasons were NON-FINANCIAL. The top four are below:

1. It means having a good place to raise children and provide a good education.
2. You have a physical structure where you and your family feel safe.
3. It allows you to have more space for your family.
4. It gives you control over what you do with your living space (renovations & updates).

Should this surprise us? Aren’t these the same reasons our parents bought their home? Aren’t these the same reasons we purchased our home? These are the same reasons parents have suggested their children buy a home. They want the same things for their grandchildren that they believed to be important for their children.

And today, the cost of homeownership is at all time lows:

J.P. Morgan

“The numbers on housing have an important message for American families today, and particularly younger families setting out on life’s great adventure: Five years ago, at the peak of the home-buying euphoria, it was emphatically a time to rent. Today, when home ownership is depreciated more than ever before, the numbers tell us it is a time to buy.”

MSNBC.com

“Someone who plans on staying put for seven years would come out ahead by about $9,000 if they bought a median-priced home rather than being a tenant in a median-priced rental.”

HUD

“Homes today are more affordable for average families than they have been since 1971. Median-income families today have nearly double the funds needed to purchase the average home.”

Bottom Line

Now that the economy is beginning to show signs of stabilizing, people are getting back to the core values that families have always embraced. Homeownership is definitely high on that list. And today, from a financial standpoint, it may be the opportunity of a lifetime.

If you are interested in looking more into this option Contact Joe Brooks your trusted Realtor to get you on the right track.

“Who was Dale Carnegie?” you may wonder. Well, he was a guy that was born 110 years ago. He died in 1955. He was a rich man, a very successful man.

He wrote a little book called “How to Win Friends and Influence People”. It went on to sell over 30 million copies. It still sells today and is probably one of the best books on how to improve your social skills.

Carnegie then continued to write more books and to create courses on how to interact with people, on how to make friends and on how to gain influence.

Here are 10 of my favourite tips from Dale Carnegie. And as the opening quote says, these tips have been time-tested for the last few hundreds or thousands of years. They are pretty solid.

1. Create your own emotions.

“If you want to be enthusiastic, act enthusiastic.”

Emotions work backwards too. You can use that to your advantage. If you are stuck in a negative emotion then you can often shake it off. Change your body – how you move, sit and stand – and act as you would like to feel. Enthusiasm and other positive emotions are much more useful and pleasurable for everyone in an interaction. Because…

2. It’s not so much about the logical stuff.

“When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.”

This is so key. Logic is good but in the end, in interactions and in life, we are emotional creatures. We send and receive emotions from other people. That is one reason why body language and voice tonality is often said be up to 93% of communication. Now, those numbers were for some specific situations but I still believe that these two ways of communication are very, very important.

The body language and the voice tonality is a bit like the rest of the iceberg, the great mass below the tip of the words we use. Those two things communicate how we are feeling and give indication to what we are thinking. And that’s why it’s important to be able to change how you feel. To be in a positive mood while interacting. Because that will have a great impact on how you say something and how you use your body. And those two things will have a big impact on your results and relationships.

3. Three things you are better off avoiding.

“Any fool can criticize, condemn, and complain but it takes character and self control to be understanding and forgiving.”

Now these things may not be easy to avoid all together. Much of our interactions and perhaps even bonds are created and maintained through those three negative C’s. There is a sort of twisted pleasure in criticising, condemning and complaining. It might make you feel more important and like a better person as you see yourself as a victim or as you condemn other people’s behaviour.

But in the end these three C’s are negative and limiting to your life. Bringing up negative stuff and wallowing in it will lower your mood, motivation and general levels of wellbeing. And this can trap you in a negative spiral of complaining, complaining with other complainers and always finding faults in your reality.

You will also be broadcasting and receiving negative emotions. And people in general want to feel good. So this can really put an obstacle in the way for your interactions or relationships.

4. What is most important?

“The royal road to a man’s heart is to talk to him about the things he treasures most.”

Classic advice. Don’t talk too much about yourself and your life. Listen to other people instead. However, if they ramble on and on, if they don’t reciprocate and show and interest in your life then you don’t have to stay.

Some things people may treasure the most include ideas, children, a special hobby and the job. And…

5. Focus outward, not inward.

“You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.”

A lot of people use the second, far less effective way. It is appealing because it’s about instant gratification and about ME, ME, ME! The first way – to become interested in people – perhaps works better because it make you a pleasant exception and because the law of reciprocity is strong in people. As you treat people, they will treat you. Be interested in them and they will be interested in you.

I would like to add that one hard thing about this can be to be genuinely interested in the other guy/gal. Your genuine interest is projected though your body language and tonality. So, just waiting for the other person to stop talking so you can talk again isn’t really genuine interest. And that may shine through. And so your interactions will suffer.

6. Take control of your emotions.

“The person who seeks all their applause from outside has their happiness in another’s keeping.”

It wrote about this problem a few days ago in 9 Great Ways to Make Yourself Absolutely Miserable. And it basically consist of being too reliant or dependent on external validation from other people. External validation is something someone communicates to you that tells you that you are person of value. That you, for example, are pretty, smart or successful.

This leaves much of your emotions in the hands of other people. It becomes an emotional rollercoaster. One day you feel great. The next day you feel like just staying in bed.

But if you fill that inner cup of validation for yourself instead then you take over the wheel. Now you’re driving, now you control how you feel. You can still appreciate compliments of course, but you aren’t dependent on them.

This will make you more emotionally stable and enables you to cultivate and build your emotional muscles in a more controlled way. You can for instance help yourself to become more optimistic or enthusiastic more of the time. This stability and growth can be big help in your relationships.

7. No, they are not holding you back.

“Instead of worrying about what people say of you, why not spend time trying to accomplish something they will admire.”

Caring too much about what people think will create and feed imaginary monsters within your mind. You may for instance think that people will condemn you if you try something. Maybe they will. But most of the time people are thinking about their own challenges and ups and downs. They just don’t care that much about what you do.

This may feel disappointing. It can also be liberating. It helps you remove inner obstacles that are you holding yourself back.

As you, bit by bit or in one big swoop, release those inner brakes you become more of yourself. You become more confident, you have a better chance at success, and you will feel more positive feelings and less negative ones. All these things can give a big boost to your interactions and help you sharpen those social skills.

8. So, what’s in it for me?

“There is only one way… to get anybody to do anything. And that is by making the other person want to do it.”

If you want someone to do something then will they care about your motivation for getting this thing done? Perhaps. Often they will not have that great of an interest in what you want out of something.

They want to know what they will get out of it. So, for the both of you to get what you want out of something tell that person what’s in it for him/her. And try to be genuine and positive about it. A reason for them to do it delivered in a lame, half-assed manner may not be so persuasive. And so you both lose.

9. How to win an argument.

“The only way to get the best of an argument is to avoid it.”

Getting two egos wrapped up in an argument, having two sides defending their positions desperately, will not improve relationships. You are more likely to feel negative feelings towards each other long after the argument is over. And so you both wallow in negativity and you both lose. When possible, just avoiding unnecessary arguments is a win-win situation.

10. It’s about more than your words.

“There are four ways, and only four ways, in which we have contact with the world. We are evaluated and classified by these four contacts: what we do, how we look, what we say, and how we say it.”

I often feel that there is a bit too much emphasis on the third way of contact (what we say). Don’t forget about the rest. Most people stereotype people at their first meeting. They might not want to but it is a way for their – and perhaps your – mind to organize impressions and people. So think about how you look. Think about how you make first impressions. Think about your body language. And how you are saying your sentences.

Think about how you feel because that will be reflected out into the world. And the world will often reflect back something similar.

Saturday, October 1

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, presented by Route 66 Casino Hotel, more…
6:45 – Krispy Kreme Morning Glow
7:00 – Opening Ceremonies & Mass Ascension, more…

EVENING SESSION:
2:00 – 5:45 – America’s Challenge Gas Balloon Race Inflation, more…
6:00 – Twilight Twinkle Glow™, more…
8:00 – America’s Challenge Gas Balloon Race Launch, more…
*AfterGlow™Fireworks Show, presented by Albuquerque Journal, more…

Sunday, October 2

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, presented by Route 66 Casino Hotel, more…
6:45 – Krispy Kreme Morning Glow
7:00 – Mass Ascension, more…
11:00 – Fiesta of Wheels Car Show & Balloon Fiesta Pin Trading (Balloon Discovery Center)

EVENING SESSION:
5:45 – Balloon Glow, more…
8:00 – AfterGlow™Fireworks Show, presented by Albuquerque Journal, more…

Monday, October 3

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, more…
7:00 – Flying Competition – Sandia Resort & Casino $100,000 Challenge

EVENING SESSION: No Events

Tuesday, October 4

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, more…
7:00 – Flying Competition – Sandia Resort & Casino $100,000 Challenge

EVENING SESSION: No Events

Wednesday, October 5

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, presented by Route 66 Casino Hotel, more…
6:45 – Krispy Kreme Morning Glow
7:00 – Flight of the Nations Mass Ascension Flying Competition

EVENING SESSION: No Events

Thursday, October 6

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, more…
7:00 – Special Shape Rodeo™, more… & Flying Competition – Sandia Resort & Casino $100,000 Challenge & Prize Grab

EVENING SESSION:
5:45 – Special Shape Glowdeo™
8:00 – AfterGlow™Fireworks Show, presented by Albuquerque Journal, more…

Friday, October 7

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, more…
7:00 – Special Shape Rodeo™, Key Grab Competition & Sandia Resort & Casino $100,000 Challenge more…

EVENING SESSION:
5:45 – Special Shape Glowdeo™
8:00 – AfterGlow™Fireworks Show, presented by Albuquerque Journal, more…

Saturday, October 8

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, presented by Route 66 Casino Hotel, more…
6:45 – Krispy Kreme Morning Glow
7:00 – Mass Ascension, more…
11:00 – Balloon Fiesta Pin Trading (Balloon Discovery Center)

EVENING SESSION:
5:45 – Night Magic™Glow, more…
8:00 – AfterGlow™Fireworks Show, presented by Albuquerque Journal, more…

Sunday, October 9

MORNING SESSION:
5:45 – 6:30 – Dawn Patrol Show, presented by Route 66 Casino Hotel, more…
6:45 – Krispy Kreme Morning Glow
7:00 – Farewell Mass Ascension, more…

Allowing a faucet to drip will keep water flowing and will help keep pipes from freezing.

If a pipe on your property bursts and you need an emergency water shut-off, please call the Water Authority’s dispatch office at 857-8250. Do NOT call 911.  Remember: Call volume is typically very high (as much as six times normal during the last cold spell) in extremely cold weather, so you may experience long on-hold times.

Help During Gas Outage EmergencyDisruptions in gas service have been reported state-wide.

Below are resources for assistance.

Safety Tips & Important Information

•Limit gas usage to preserve service across the state.
•Turn your thermostat down, dress in layers and, if possible, use alternate sources of heat.
•Do NOT use unvented heaters, grills, propane or kerosene heaters or camp stoves inside homes or enclosed spaces.
•Check on neighbors and friends especially elderly, sick or homebound.
Updates will be posted on the New Mexico Department of Homeland Security and Emergency Management Website.
 
Hospitals and Emergency Medical Care: Please be assured that all hospitals in affected areas are operating on diesel back-up and are open. This includes Gila Regional Medical Center in Silver City, Holy Cross Hospital in Taos, and Presbyterian Hospital in Espanola. All emergency 911 services are also available and fully operational in all areas.

For concerns, questions and further information, please contact your local non-emergency services.

Important information from New Mexico Gas Company regarding updates and resources. Click Here

Shelter

An emergency shelter has been set up at the following location for residents unable to safely remain at home. These heated facilities will have cots, blankets, food and water, and other emergency relief in coordination with the Red Cross and/or National Guard. Anyone who plans on seeking shelter should bring pillows and blankets, prescription medications, special dietary foods and supplements, and personal hygiene items. **Do not bring pets to shelters – If you have a pet that you need sheltered, please call 311 and Animal Welfare will shelter your pet once you sign a release.**

Updates will be posted on the New Mexico Department of Homeland Security and Emergency Management Website.

•National Guard Armory at 4001 NW Loop NE, Rio Rancho (North of Rio Rancho off Highway 550 and Northwest Loop).
•State Fair Grounds, 300 San Pedro NE, Albuquerque
•Mountain Springs Fellowship Baptist Church, 414 Charleston St SE, Albuquerque
•Highland High School, 4700 Coal Avenue SE, Albuquerque
•Manzano High School, 12200 Lomas NE, Albuquerque
Bernalillo County is providing the following facilities as “warming centers” (which are not Red Cross designated shelters):

•Los Padillas Community Center in the South Valley
•Paradise Hills Community Centers on the Westside
•Raymond Sanchez Community Center in the North Valley
•Vista Grande Community Center in the East Mountains
Non-Emergency Phone Numbers

For information on shelters and resources in your area, please call the non-emergency number for your community:

Albuquerque Non-Emergency #
505-242-2677
 
Alamagordo Non-Emergency #
575-439-4300

Angel Fire Non-Emergency #
575-377-3347

Belen Non-Emergency #
505- 866-2470
 
Bernalillo Non-Emergency #
505-891-7226

Carlsbad Non-Emergency #
575-885-2111
 
Chama Non-Emergency #
505-756-2213
 
Clovis Non-Emergency #
575-769-2335

Deming Non-Emergency #
505-546-8848

Espanola Non-Emergency #
505-753-5555
 
Farmington Non-Emergency #
505- 325-7547

Gallup Non-Emergency #
505-863-9365

Grants Non-Emergency #
505-287-2985
 
Las Cruces Non-Emergency #
575- 526-0795

Las Vegas Non-Emergency #
505-425-7504

Los Alamos Non-Emergency #
505-667-4055

Los Lunas Non-Emergency #
505-866-2470

Moriarty Non-Emergency #
505- 832-6060
 
Placitas Non-Emergency #
505-867-5080
 
Pojoaque Non-Emergency #
505-455-2446
 
Portales Non-Emergency #
575-356-4408
 
Questa Non-Emergency #
575-586-0694

Raton Non-Emergency #
505-445-2704

Red River Non-Emergency #
575-754-6166
 
Rio Rancho Non-Emergency #
505-867-2304

Roswell Non-Emergency #
575-624-6770

Ruidoso Non-Emergency #
575-258-5607
 
San Idelfonso Pueblo Governor’s Office #
505-455-2273
 
Santa Fe Non-Emergency #
505- 428-3720
 
Santa Rosa Non-Emergency #
575-472-3711
 
Silver City Non-Emergency #
575-574-0100

Socorro Non-Emergency #
575-835-4222

Taos Non-Emergency #
575-737-6480

Tucumcari Non-Emergency #
575-461-2720
 
Tularosa Non-Emergency #
575-585-2704
 
Valencia County Non-Emergency #
505-866-2470

1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as: Refinancing your loan at a lower interest rate; providing a different payment plan to help you get caught up; or providing a forbearance period if your situation is temporary. When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if:

• Your property is worth less than the total mortgage you owe on it.
• You have a financial hardship, such as a job loss or major medical bills.
• You have contacted your lender and it is willing to entertain a short sale.

2. Hire a qualified team. The first step to a short sale is to hire a qualified real estate professional like Joe Brooks and a real estate attorney who specialize in short sales. Interview at least three candidates for each and look for prior short-sale experience. Short sales have proliferated only in the last few years, so it may be hard to find practitioners who have closed a lot of short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won’t try to take advantage of your situation or pressure you to do something that isn’t in your best interest. A qualified real estate professional can:

• Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).
• Help you set an appropriate listing price for your home, market the home, and get it sold.
• Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).
• Ease the process of working with your lender or lenders.
• Negotiate the contract with the buyers.
• Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyers can get clear title.

3. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include: 

• A hardship letter detailing your financial situation and why you need the short sale
• A copy of the purchase contract and listing agreement
• Proof of your income and assets
• Copies of your federal income tax returns for the past two years

4. Prepare buyers for a lengthy waiting period. Even if you’re well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Some experts say:

• If you have only one mortgage, the review can take about two months.
• With a first and second mortgage with the same lender, the review can take about three months.
• With two or more mortgages with different lenders, it can take four months or longer.

When the bank does respond, it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one. (Your real estate attorney and real estate professional, with your authorization, can work your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.)

5. Don’t expect a short sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind:

• You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options.
• Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify.
• Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy.