Time's have really changed, for the better! This is such a good news for home owners and Realtors/Investors anew. The housing market is gaining grounds. Nowhere but up!

"Without a doubt, the U.S. housing market has been the most successful sector of the economy this year, and Wednesday’s Case-Shiller home-price index report— which showed a fifth consecutive month of year-over-year increases in home prices nationwide — was a late Christmas present for homeowners across the country."

"The housing-market “bottom” was one of the biggest business stories of 2012. After years of falling home values, the data clearly showed that the bleeding stopped somewhere in the first part of 2012 and that home prices have actually begun to slowly rise since then. In addition, other indicators like housing starts, new home sales and foreclosurestatistics all point toward a healing housing sector."

It's common for sellers to consider offering and buyers might find it an incentive, but a growing number of homeowners are purchasing the home warranties themselves to limit the unexpected expenses of repairs and replacements.

A home protection plan is a renewable service contract that covers the repair or replacement of many of the components in a home. Some homeowners especially like the convenience that it organizes a qualified service provider as well as the cost of the items.

There are a variety of companies that offer home warranties and the coverage may differ but the majority of things will include heating, air conditioning most built-in and some free-standing appliances, as well as other specific items. Additional specific coverage may be available for other things like pool and spa equipment.

Some investors are even placing this coverage on their rental properties to limit the amount of maintenance repairs during the year. It is a viable alternative to managing the financial risk and the stress dealing with unexpected expenses.

If you're interested in home warranties, I'll be happy to send you more information.

Hilton Head Island Area Market Stats (MLS)*

• Closed Sales YTD: 3,058 (+24.1%)
• Pending Sales YTD: 3,289 (+20.5%)
• Median Price - Area wide YTD: -1.3%
• Average Price - Area wide YTD: -3.2%
• Median Price - Hilton Head Island Villas/Condos YTD: +9.7%
• Median Price - Hilton Head Island Detached Homes YTD: -3.1%
• Median Price - Mainland Detached & Villas/Condos YTD: +3.2%
• Housing Inventory: 2,507 Homes for Sale - 8.6 Months Supply (-33.8%, trending down)

      *Current as of November 2012. Next update for December to be released mid- to late-January

To see both reports in full, complete with graphs, click on

• Monthly Indicators
• Housing Supply Overview

Monthly Indicators

This November, there was a lot to be thankful for. Home buyers were thankful for historically low mortgage rates and still-affordable prices. Sellers were thankful for increased sales, less competition and faster market times. Both parties can be thankful for the slow yet steady economic recovery. Challenges persist, to be sure, going into 2013, but there's more reason for optimism than pessimism. Here's the local scoop.

New Listings in the Hilton Head region decreased 10.8 percent to 330. Pending Sales were up 27.6 percent to 287. Inventory levels shrank 19.8 percent to 2,507 units.

Prices moved higher. The Median Sales Price increased 1.3 percent to $233,000. Days on Market was down 7.7 percent to 122 days. Absorption rates improved as Months Supply of Inventory was down 33.8 percent to 8.6 months.

There are three primary avenues to housing recovery: better market fundamentals, improved market composition and more jobs. Many communities are enjoying better fundamentals, such as higher demand and less supply. But many areas are also experiencing a lower overall share of distressed sales activity. In the month ahead, continue to watch hiring and unemployment trends.

House Supply Overview

There was a lot to be thankful for this November. Home buyers can be thankful for ultra-low mortgage rates while sellers can be thankful for a slow yet steady recovery. For the 12-month period spanning December 2011 through November 2012, Pending Sales in the Hilton Head region were up 21.1 percent overall. The price range with the largest gain in sales was the $225,001 to $375,000 range, where they increased 30.4 percent.

The overall Median Sales Price was down 2.3 percent to $225,000. The property type with the largest price gain was the Condo segment, where prices increased 2.0 percent to $158,100. The price range that tended to sell the quickest was the $100,000 and Below range at 88 days; the price range that tended to sell the slowest was the $650,001 and Above range at 195 days.

Market-wide, inventory levels were down 19.8 percent. The property type that lost the least inventory was the Single-Family segment, where it decreased 17.8 percent. That amounts to 8.4 months supply for Single-Family homes and 9.0 months supply for Condos.

To see both reports in full, complete with graphs, click on

• Monthly Indicators
• Housing Supply Overview

(All data provided by Multiple Listing Service of Hilton Head Island - powered by 10K Research and Marketing and sponsored by the South Carolina Association of REALTORS.)

In his 2013 forecast, Freddie Mac’s chief economist, Frank Nothaft, sees more than a million new households bolstering housing starts, driving apartment vacancy rates down to ten year lows and outpacing the boom in new apartment construction.

“The last few months have brought a spate of favorable news on the U.S. housing market with construction up, more home sales, and home-value growth turning positive. This has been a big change from a year ago, when some analysts worried that the looming ’shadow inventory’ would keep the housing sector mired in an economic depression. Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery,” Nothaft says.

Here’s how Nothaft sees the coming year:
• Next year some regions will post faster house price gains, while some will be stagnant or see value loss fof the year, but overall, the housing recovery continue to strengthen property values and most U.S. house price indexes will likely rise by 2 to 3 percent, according to 2012 forecast from Freddie Mac’s chief economist,
• Look for fixed-rate mortgage rates to remain near their 65-year record lows for the first half of 2013 then begin rising a bit in the tail end of next year, but staying below 4 percent. In the single-family market, this means homebuyer affordability should remain very high in 2013 for those with good credit history, stable income, and sufficient savings.
• Household formation will be up. Unemployment, while still high, will likely drift down toward 7.5 percent; the resulting job and income gains will facilitate household formations - meaning that more members of the boomerang generation who have been living in their parents’ basements should start to move out. Look for net growth of 1.20 to 1.25 million households in 2013. These gains will help drive more housing construction and reduce vacancy rates further. Housing starts should be up around the 1.0 million pace (seasonally adjusted annual rate) by the fourth quarter of 2013.
• Vacancy rates have been trending lower for much of the past three years because household formations have outpaced new construction. To illustrate, in 2012, net household formations through the third quarter totaled 1.15 million but completions of newly built homes (both rental and for sale) were just under 700,000; the difference is made up by a reduction in vacancies. This trend will continue in 2013 and could bring total vacancy rates down to levels last seen a decade ago. While this is good news for property owners, tenants will likely see rents rise a bit faster than prices on all other goods.
• Refinance activity accounted for the bulk of residential lending in 2012 and will account for the bulk of it in 2013, too. But, simply put, we’ve seen the peak in refinancing. Homeowners who obtained a loan with a low mortgage rate in 2012 or refinanced through the Home Affordable Refinance Program are unlikely to refinance in 2013. Next year’s likely pickup in home sales won’t be enough to offset the coming drop in refinance activity. Consequently, total single-family originations will probably drop by about 15 percent in 2013. On the other hand, permanent financing on newly built apartment buildings, a pickup in property transactions, and refinancing of loans exiting “yield maintenance” terms are expected to increase multifamily lending by about 5 percent.

For more information, visit www.realestateeconomywatch.com.

U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced today that four communities will receive a combined $108.9 million to redevelop distressed housing and bring comprehensive neighborhood revitalization to blighted areas.

HUD’s Choice Neighborhoods Initiative (Choice) will help transform distressed communities in Cincinnati, Ohio; San Antonio, Tex.; Seattle, Wash.; and Tampa, Fla. This landmark initiative promotes a comprehensive approach to transforming areas of concentrated poverty into viable and sustainable mixed-income neighborhoods. The $108.9 million federal investment of Choice Neighborhoods has generated $393 million in private investments and commitments from local jurisdictions and partners, a more than 300 percent leveraging.

“HUD’s Choice Neighborhoods Initiative supports local visions for how to transform high-poverty, distressed communities into neighborhoods of opportunity,” says Donovan. “We’re emphasizing a comprehensive approach to revitalizing neighborhoods by considering the totality of a community with regard to health, safety, education, jobs and quality housing in mixed-income neighborhoods.”

The communities announced today were selected from nine finalists HUD announced in August. Each of the finalists completed a comprehensive local planning process and ready to move forward with their plan to revitalize the housing and redevelop their target neighborhoods. Building on the successes of HUD’s HOPE VI Program, Choice links housing improvements with a wide variety of public services and neighborhood improvements to create neighborhoods of opportunity.

The Choice Neighborhoods Initiative is one of the signature programs of the White House Neighborhood Revitalization Initiative, which supports innovative and inclusive strategies that bring public and private partners together to help break the cycle of intergenerational poverty. It encourages collaboration between HUD and the Departments of Education, Justice, Treasury and Health and Human Services to support local solutions for sustainable, mixed-income neighborhoods with the affordable housing, safe streets and good schools all families need.

Congress approved the Choice Neighborhoods Initiative with the passage of HUD’s Fiscal Year 2010 budget. Funding is provided through two separate programs – Implementation Grants and Planning Grants. In 2011, HUD awarded its first Choice Implementation grants for Chicago, Boston, New Orleans, San Francisco and Seattle, a combined $122.27 million investment to bring comprehensive neighborhood revitalization to blighted areas in these cities. With this announcement, HUD has awarded a total of $231,250,000 in Choice Implementation Grants in eight cities. See past Implementation grantees list here.

For more information, visit www.hud.gov.

On a single night last January, 633,782 people were homeless in the United States, largely unchanged from the year before. In releasing HUD’s latest national estimate of homelessness, U.S. Housing and Urban Development Secretary Shaun Donovan cited as hopeful that even during a historic housing and economic downturn, local communities are reporting significant declines in the number of homeless veterans and those experiencing long-term chronic homelessness. Click here to read HUD’s 2012 Point-in-Time Estimates of Homelessness, including community-level data.

HUD’s annual ‘point-in-time’ estimate seeks to measure the scope of homelessness over the course of one night every January. Based on data reported by more than 3,000 cities and counties, last January’s estimate reveals a marginal decline in overall homelessness (-0.4 percent) along with a seven percent drop in homelessness among veterans and those experiencing long-term or chronic homelessness.

Donovan says, “We continue to see a stable level of homelessness across our country at a time of great stress for those at risk of losing their housing. We must redouble our efforts to target our resources more effectively to help those at greatest risk. As our nation’s economic recovery takes hold, we will make certain that our homeless veterans and those living on our streets find stable housing so they can get on their path to recovery.”

“This report continues a trend that clearly indicates we are on the right track in the fight to end homelessness among Veterans. While this is encouraging news, we have more work to do and will not be satisfied until no Veteran has to sleep on the street,” says Secretary of Veterans Affairs Eric K. Shinseki. “What success we have achieved is directly attributable to the strong leadership from the President and hard work by all of our federal, state, and community partners who are committed to ending Veteran homelessness.”

During one night in late January of 2012, local planners or “Continuums of Care” across the nation conducted a one-night count of their sheltered and unsheltered homeless populations. These one-night ‘snapshot’ counts are then reported to HUD as part of state and local grant applications. While the data reported to HUD does not directly determine the level of a community’s grant funding, these estimates, as well as full-year counts, are crucial in understanding the scope of homelessness and measuring progress in reducing it.

The Obama Administration’s strategic plan to end homelessness is called Opening Doors – a roadmap by 19 federal member agencies of the U.S. Interagency Council on Homelessness along with local and state partners in the public and private sectors. The plan puts the country on a path to end veterans and chronic homelessness by 2015; and to ending homelessness among children, family, and youth by 2020. The Plan presents strategies building upon the lesson that mainstream housing, health, education, and human service programs must be fully engaged and coordinated to prevent and end homelessness.

The plan, and its success, hinges on widespread implementation of an approach to preventing and ending homelessness known as Housing First: a strategy whose fundamental premise is that homeless assistance programs must respond, first, to the most urgent need of every homeless household—permanent housing. Then, around this housing must be provided the supports the individual or family needs to address other challenges in their lives. The reductions today are the result of two elements of the Housing First approach.

First, the decline in veteran homelessness in particular is attributed to the close collaboration between HUD and the U.S. Department of Veterans Affairs on a joint program called HUD-VA Supportive Housing (HUD-VASH). Research has demonstrated that for those who have been homeless the longest, often living on our streets for years at a time, permanent supportive housing—housing coupled with supportive services to address mental illness, substance addiction, and other challenges—not only ends homelessness for these vulnerable individuals, but also saves the taxpayer money by interrupting a costly cycle of emergency room visits, detoxes, and even jail terms. To date, HUD-VASH has provided more than 42,000 homeless veterans permanent supportive housing through rental vouchers provided by HUD along with supportive services and case management by VA. The national estimate announced today reveal a particularly large decrease in the number of homeless veterans – more than 7 percent.

The reductions reported today are also attributed in part to the impact of HUD’s $1.5 billion Homeless Prevention and Rapid Re-housing Program (HPRP), a program designed to assist individuals and families confronted by a sudden economic crisis. Funded through the Recovery Act, HPRP spared more 1.3 million persons from homelessness by offering them short-term rent assistance, security and utility deposits, and moving expenses. HPRP—and the SSVF program whose grants VA is announcing today—reflect a Housing First approach inasmuch as it epitomizes the notion that the best interaction a family can have with the emergency response homeless system, such as shelters, is none at all, and if they have to enter the homeless system, the goal of that system should be to get them back into permanent housing as quickly as possible.

Key Findings of HUD’s estimated count
On a single night in January 2012, local communities or ‘Continuums of Care’ reported:

• 633,782 people were homeless. This is largely unchanged (-0.4 percent) from January 2011, and a represents a reduction of 5.7 percent since 2007. Most homeless persons (62 percent) are individuals while 38 percent of homeless persons are in family households.
• Veteran homelessness fell by 7.2 percent (or 4,876 persons) since January 2011 and by 17.2 percent since January 2009. On a single night in January 2012, 62,619 veterans were homeless.
• Persons experiencing long-term or chronic homelessness declined 6.8 percent (or 7,254) from last year and 19.3 percent (or 23,939 persons) since 2007.
• Homelessness among individuals declined 1.4 percent (or 5,457) from a year ago and 6.8 percent since 2007. Meanwhile, the number of homeless families increased slightly (1.4 percent) from last year though declining 3.7 percent since 2007.
• Street homelessness (“the unsheltered homeless population) was unchanged since January 2011 yet declined 13.1 percent (or 36,860 people) since 2007.
• Five states accounted for nearly half of the nation’s population in 2012: California (20.7 percent), New York 11.0 percent), Florida (8.7 percent), Texas (5.4 percent), and Georgia (3.2 percent).

For more information, visit www.hud.gov.

The Survey of Market Absorption of Apartments (SOMA) indicated an increase in rentals and sales of newly built apartments during the third quarter of 2012. The SOMA tracks completions and market absorption rates (units rented or sold after construction of the property is complete) for multifamily rental and for-sale housing in 5+ unit properties. The most recent release of absorption rates covers properties that were completed during the second quarter of 2012.

In terms of unfinished apartments, the three-month absorption rate increased to 70 percent in 2012Q3 after posting a reading of 59 percent during the second quarter. Over the past four quarters the absorption rate has averaged nearly 63 percent –the best performance since mid-2005. Completions picked up significantly from the previous quarter, totaling 26,600 units, which was the highest level of newly-built units since mid-2010.

The condo and co-op sector has seen the 3-month absorption rate trend higher from the cyclical lows observed between late 2008 to mid-2010. The three-month absorption rate for units completed during the second quarter of 2012 and sold during the third quarter inched higher from 65 percent to 66 percent. Over the past four quarters the absorption rate has averaged nearly 64 percent, marking the highest reading in five years. Despite the improved absorption rate, the condo/co-op market continues to struggle as completions reached a new recorded low as only 1,100 units were completed during the second quarter of 2012. This represents a 96 percent drop in production compared to the peak. Leaner inventories should bolster condo and co-op construction activity going forward, but we expect these units will maintain a diminished share of overall 5+ multifamily production.

In addition to these data, SOMA allows one to track the particular types of multifamily units that are completed in a given quarter. After making up an average of nearly one-third of completions in the previous four quarters, Low-Income Housing Tax Credit (LIHTC) and other types of affordable housing units accounted for approximately 17 percent of completions during the second quarter.

The SOMA data illustrate the importance of the LIHTC program in terms of supporting multifamily construction activity, job creation, and providing affordable housing during the housing market downturn. Two policy changes helped to ensure that LIHTC-related production did not suffer during 2009 and 2010.

First, the LIHTC exchange program, enacted by the 2009 American Recovery and Reinvestment Act stimulus legislation, ensured equity was available for the LIHTC program. Second, the 2008 Housing and Economic Recovery Act temporarily fixed the LIHTC new construction credit at a 9 percent rate (absent the legislation, the credit rate would be at approximately 7.4 percent today, resulting in less affordable housing investment funding).

This second item is important to note because the fixed 9 percent rate has effectively expired and efforts are underway to ensure that it is extended and prevents a drop-off in LIHTC multifamily construction activity.

View this original post on the NAHB blog, Eye on Housing.

Looks like buyers are ready to spend again in Beaufort County, specailly on the High-end residential real estate property. This is a great news for the community as Beaufort County is one of the fastest growing counties in the south. Steady growth is always a good sign.

"High-end residential real estate is making a comeback in parts of Beaufort County, as more buyers are purchasing lots and constructing custom homes in upscale communities."

Read More here: islandpacket.com

So much of what goes on In Washington gives me a headache. But, in my opinion, there is one legislative item that could be of great benefit to consumers and homeowners. This bill, introduced into the Senate and in committee now, seeks to extend tax deductions for building upgrades, make it easier for taxpayers to get deductions, and give more money back.

The bipartisan legislation is called the Commercial Building Modernization Act (S.3591) and it would reform the existing Energy Efficient Commercial Building Tax Deduction, which is widely known by its federal tax code section: 179D.

According to the Alliance to Save Energy, Section 179D is a federal tax deduction for the costs of installing energy-efficient systems in commercial and multi-family buildings, and it was introduced as a part of the Energy Policy Act of 2005. Section 179D is set to expire at the end of 2013, but the Commercial Building Modernization Act aims to extend it to Dec. 31, 2016.

The 179D offers up to $1.80 per square foot in deductions for a 50 percent reduction in total annual energy and power costs, and partial tax deductions are also available for improvements to a building envelope, HVAC or lighting systems.

The Commercial Building Modernization Act offers deductions from $1.00 per square foot for a 20 percent source energy savings, up to $4.00 per square foot for an improvement of 50 percent or more in energy savings.

To lower some of the costs for upgrades upfront, building owners would be able to receive up to 60 percent of the deduction based on expected energy savings. And to ensure the energy savings are achieved, the remaining 40 percent of the deductions would be disbursed after the applicant proves the upgrades actually save the claimed amount of energy.

The bipartisan legislation would also simplify the process of applying for the deduction.

An added bonus to achieving greater national energy security, the legislation also would help strengthen the American economy by generating an estimated 77,000 new jobs in construction, manufacturing, and service, according to a 2011 analysis by Real Estate Roundtable, Natural Resources Defense Council, U.S. Green Building Council, and others.

Most people have lots of things to save for but not always enough discretionary income after the family essentials have been met.

A relatively small investment in a rental home can control a good home that will easily rent, generate positive cash flows and pay for itself. The borrowed funds create leverage that earn a return on the total value of the home and not just the amount of cash you have invested.

The strategy is simple. Find a slightly below average priced home that will rent well. It will appeal to a larger group of people while it's rented and when it's ready to be sold.

Rent the home and maintain its condition over the years. As the loan amortizes and the value increases, the equity will grow. When your student is ready to start college, you'll actually have several options.

You can sell the property; pay the tax on the gain at the reduced capital gains rate and fund the education. Another option would be to refinance and take the proceeds to pay for the tuition. This would allow you to continue to own the asset but would free your equity and under current tax laws is a non-taxable event.

Regardless of whether you're trying to plan for your children's education or your own retirement, rental property offers many solid investment opportunities. Contact me if you want more information.