Attention Home Buyers & Sellers You are not Alone!

Thin Ice

10 Markets at Highest Risk for Declining Prices
PMI Mortgage Insurance Co. reports that its Market Risk Index scores have increased for 34 of the nation’s 50 largest metropolitan statistical areas.

The scores measure the risk that home prices will decline in the next two years. Nineteen MSAs face a greater than 50 percent chance that home prices will fall, up from 18 last quarter.

The risk of price declines continue to be concentrated in California and along the Eastern Seaboard. In fact, eight of the riskiest markets are located in California, eight are in the Northeast, and two are in Florida.

The 10 markets with the highest risk of declining prices are:

1. Sacramento-Arden-Arcade-Roseville, Calif.
2. San Diego-Carlsbad- San Marcos, Calif.
3. Oakland-Fremont-San Marcos, Calif.
4. Santa Ana-Anaheim-Irvine, Calif.
5. Nassau-Suffolk, N.Y.
6. Riverside-San Bernardino-Ontario, Calif.
7. Los Angeles-Long Beach-Glendale, Calif.
8. Boston-Quincy, Mass.
9. Providence-New Bedford-Fall River, R.I.-Mass.
10. San Jose-Sunnyvale-Santa Clara, Calif.

— REALTOR® Magazine Online

Trends

What's Hot and What's Not in Home Design
A nationwide survey of 923 real estate professionals by Mark Nash, real estate author of 1,001 Tips for Buying and Selling a Home (Thomson/South-Western, 2004), includes a list of home features that are popular among buyers and those that are so 2006.

For example, practitioners surveyed reported that the inability to keep stainless steel appliances, glass-front cabinets, and vessel-style sinks clean has caused them to fall out of favor with buyers. Also, spiral staircases have become less popular, particularly among buyers with young children.

According to the survey, here are what home buyers want in 2007:

• Glass tile. When retooling the bathroom or the kitchen, trendy remodelers choose glass tile over ceramic because of its reflective qualities.

• Engineered stone compounds. Engineered stone compound is this year’s kitchen must-have and best of all it’s less expensive than granite.

• Wrought iron. Make the back yard look classy with a wrought-iron fence.

• Colorful trim. When repainting trim around shutters, doors, and window frames, go for bright and bold.

• His-and-her home offices. Complete with fiber-optic cables for Internet connectivity.

• Extra storage space. This extra space buyers prefer in the form of linen closets, pantries, and luggage rooms.

Home trends that were strictly 2006:

• Bowl-shaped, above-the-counter sinks. Nobody can keep them clean.

• Glass kitchen cabinet doors. They look great in magazines, but lousy in real life.

• Bamboo wood. It dents and scratches easily and warps in humid weather.

Source: MarketWatch, Marshall Loeb (1/14/07) and Washington Post, Kirstin Downey (01/06/07)

PMI tax deductible in 2008!

New tax deduction created for mortgage insurance
By Holden Lewis • Bankrate.com

Mortgage insurance will be tax-deductible in 2007. For some homeowners, the new law means it will cheaper to get mortgage insurance instead of getting piggyback loans.

The 109th Congress passed the tax law in its final hours. Hundreds of thousands of homeowners will save a total of $91 million when they file their tax returns in 2008, according to estimates prepared by the mortgage insurance industry.

"This is really going to help close to a million Americans who will buy a home next year using mortgage insurance," says Kevin Schneider, president of U.S. mortgage insurance business for Genworth Financial.

Bottom line for consumers: Don't get a piggyback loan without taking a serious look at mortgage insurance, because mortgage insurance is likely to be cheaper in the long run, and it might even cost less in the short run.

According to an analysis by Bankrate, a homeowner with a $180,000 mortgage would save about $351 in taxes per year because of the law. That assumes that the borrower has good credit and is in the 25 percent tax bracket.

Where to buy in 2007

The Best Places to Own Real Estate in 2007
The housing market looks particularly healthy in the Southeast, according to Fortune and Moody’s Economy.com.

The top market, McAllen, Texas, is predicted to rise 8.5 percent in 2007, and another 9.8 percent in 2008. In all, four of the magazine’s hottest U.S. home markets forecast for next year are in Texas.

Also on the list are two markets in upstate New York: Syracuse and Rochester.

Here are the 10 housing markets projected to rise the most in 2007 and 2008:

• McAllen-Mission, Texas
• El Paso, Texas
• Albuquerque, N.M.
• Salt Lake City
• Syracuse, N.Y.
• San Antonio
• Rochester, N.Y.
• Baton Rouge, La.
• Fort Worth-Arlington, Texas
• Birmingham, Ala.

Source: Fortune (12/21/06)