Rising Mortgage Rates Cause 'Rush to ARMs'

interesting article from cnbc.com on rising rates...

After hovering around record lows for the past few years, mortgage rates are rising dramatically. That has consumers not only shopping more but also considering adjustable rate mortgages, which offer lower rates and lower monthly payments.
These ARMs, many requiring interest payments only, were popular during the latest housing boom but quickly fell out of favor when safer, fixed-rate loan rates fell to record lows. ARMs accounted for 36 percent of mortgages in 2006 but just 4.5 percent today, according to Lender Processing Services.
The shift to ARMs is not visible on a grand scale yet, but it is beginning.
The average contract rate on the 30-year fixed rate rose to 4.46 percent from 4.17 percent, the Mortgage Bankers Association said Wednesday. At the beginning of May, rates were as low as 3.5 percent. Concern that the Federal Reserve will begin to pull back on its purchases of mortgage-backed bonds, which pushed rates so low in the first place, caused the most recent spike.

"Mortgage rates increased by the most in a single week since 2011, and refinance application volume dropped to its lowest level in almost two years. However, applications for conventional purchase loans picked up by more than 3 percent over the week," the MBA's Michael Fratantoni said.
Mortgage applications to purchase a home are rising for two reasons: Buyer demand is increasing, and those buyers are afraid rates will go up dramatically, so they want to lock in fast.

Alicia and Ryan Diederichs say they are in a race against time. A job transfer recently sent them and their three young children to Oceanside, Calif. Now crammed into a small rental apartment, they are hoping to buy a house quickly.

"I'm afraid we're going to miss the boat," said Alicia Diederichs. "I feel like we might get priced out of the market in a few months, and just depending on the mortgage payment whether we could afford it if the interest rates go up more."

The Diederichs need a large house to fit their family, but home prices are rising fast on the California coast, and they have not yet locked in a mortgage rate.

"Ideally we would do a 30-year fixed, but it's all going to be dependent on the end mortgage payment, what we can afford, so we would have to look at an ARM potentially if rates continue to rise," she said.

The combination of sharply higher home prices and rising rates is squeezing buyers who are already facing tighter underwriting standards. In order to qualify for loans, they must fit into strict debt-to-income calculations, and those calculations change with every increase in mortgage rates.

"I think you're seeing much more intense shopping where people are comparing rates between lenders, but also looking at different less conventional products," said Glenn Kelman, CEO of Redfin. "They're getting teaser rates, they're buying it down, they're trying different things to try to get back to the rate they saw last week."

Some buyers are also being forced into adjustable rate loans in order to save deals that may have blown up in the past few weeks due to the rise in rates.

"Funny, people are rushing into higher-risk loans to save deals as rates spike. What happens in five years when their rate starts adjusting upward 2 percent per year? They blow up!" said Mark Hanson, a California-based mortgage and housing analyst.

Hanson cautions that this may not be a "return to ARMs," in general, but more of a "rush to ARMs" in the past four weeks. ARMs are harder to qualify for, and the rate on the 30-year fixed, while higher, is still historically low.

Rising rates will push some into riskier, adjustable-rate products, "whereas others will view rising rates as a sign that they need to lock in to a 30-year fixed now before rates move higher," said Craig Strent, CEO of Maryland-based Apex Home Loans.
 

BREAKING: Home Prices See Record-Breaking Increase in April; New-Home Sales Highest Since 2008; Consumer Confidence Surges to 5-Year High

all re-affirming reports from RIS Media...

A wave of positive housing news flooded financial newswires this morning.

Data through April 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, a leading measure of U.S. home prices, showed average home prices increased 11.6 percent and 12.1 percent for the 10- and 20-City Composites in the 12 months ending in April 2013.

From March to April, the 10- and 20-City Composites rose 2.6 percent and 2.5 percent. All 20 cities and both Composites showed positive year-over-year returns for at least the fourth consecutive month. Atlanta, Dallas, Detroit and Minneapolis posted their highest annual gains since the start of their respective indices.

“The 10- and 20-City Composites posted their highest monthly gains in the history of S&P/Case-Shiller Home Price Indices,” says David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “Thirteen cities posted monthly increases of over two percentage points, with San Francisco leading at 4.9 percent.” The recovery is definitely broad based. The two Composites showed the largest year-over-year gains in seven years.

In more positive housing news, the Commerce Department said today that new-home sales increased 2.1 percent to a seasonally adjusted annual rate of 476,000 units – the highest level since July 2008. It was the third straight month of gains in new-home sales, reflecting a continued resurgence in the U.S. housing market.

In more record-breaking news today, The Conference Board said consumer confidence in June rose to a more than five-year high. The index rose to 81.4 from 74.3 in May, marking the best level since January 2008. The Conference Board Consumer Confidence Index® now stands at 81.4 (1985=100), up from 74.3 in May. The Present Situation Index increased to 69.2 from 64.8. The Expectations Index improved to 89.5 from 80.6 last month.

Says Lynn Franco, director of Economic Indicators at The Conference Board: “Consumer Confidence increased for the third consecutive month and is now at its highest level since January 2008 (Index 87.3). Consumers are considerably more positive about current business and labor market conditions than they were at the beginning of the year. Expectations have also improved considerably over the past several months, suggesting that the pace of growth is unlikely to slow in the short-term, and may even moderately pick up.”

When Determining Home Values Online

a snippet from industry newsletter that I fully agree with to be aware of....

 

Large nationwide websites offering home value estimators can be a great starting point for a conversation about values in a particular area.  However, the resulting figures are frequently skewed in highly unique real estate markets where values can vary by millions within just one block.  Also of note, properties listed for sale  on these sites can be outdated and occasionally display homes that actually sold months prior. The most reliable real estate information always comes from those who have their finger directly on the pulse of a particular market.

Report: Jennifer Lopez Buying $10 Million Mansion in Hamptons

Just a small house near the ocean...

from zillowblog.com

Jennifer Lopez might just be “Jenny from the Block,” but her newest block is a stretch of three acres in exclusive Water Mill, NY.
According to the New York Post, Lopez has toured the estate several times with her twins and current boyfriend, 25-year-old Casper Smart. Lopez reportedly paid $10 million for the home, which previously demanded $425,000 as a summer rental. Lopez has been looking for a Hamptons-area estate for years; there were previous rumors that she picked one up back in 2011, shortly after her divorce to Marc Anthony.
The singer and actress’ new place is not only luxe — a must-have for someone who brought in $52 million last year and is ranked above Oprah on Forbes’ Most Powerful List — but also incredibly private. Situated on its own cul-de-sac, the updated but classic estate is made up of two lots, with room for plenty of celebrity musts, like guest houses and tennis courts.
Built in 2004, the 8-bed, 4.5-bath measures 8,500 square feet. The landscaped grounds include a large pool, patio area and plenty of hedges to keep paparrazi at bay.
Lopez hasn’t purchased a home in quite some time. The entertainer still owns an enormous spread in Hidden Hills that she purchased with Anthony in 2010, as well as two homes in Glen Head, N.Y. The star previously owned a waterfront estate in Miami Beach and another home in Beverly Hills.
Coincidentally, Anthony also bought a home this week — but on the other coast. His new home is in Encino, CA and he spent about $2.5 million on it.

Colorado housing market: Buyers caught in price squeeze

Good time to sell your home...Denver Post Article...

And it's happening. The timing of cheap mortgages, coupled with a slim inventory that can't meet demand, has created even more of a seller's market, since many homes have three or more bids to choose from.
Homes priced from $200,000 to $350,000 are the hottest on the market, according to several real estate experts, often drawing multiple offers within 24 hours of listing — most over the asking price.
If a seller can't close on the first offer, the next one is likely at or near the offer price of the first, putting even more pressure on the buyer with the highest bid.
Some buyers who have worked hard to find and land a house are surprised to find that their offer is higher than the amount at which the property appraises — sometimes by thousands of dollars.
When that happens, formulas used by a bank or mortgage broker to determine down payments are skewed, leaving would-be homeowners on the hook for more money at the table than some can afford.
Real estate agents, bankers, mortgage brokers and appraisers each have a tale or two of a client who had to either walk away from a deal or come up with the extra cash.
One of them was Jeremy Brown, a construction-management consultant who bumped into a bidding war when he looked to buy in Denver this year.
The house he eventually purchased with his fiancée in the city's Baker neighborhood appraised at $10,000 lower than the couple's offer. It wasn't the first time he had bumped into an appraisal coming in lower than his offer. It happened a year ago in Virginia, where he moved from.
"Either you bring more cash to the table, which is what the seller tried to get us to do, or you renegotiate the sale price," said Brown, 32. "Having to bring more cash to the deal can be a big shock. Had it not happened once before, I'd have been reluctant to draw a hard line."
In the end, Brown still had to come up with half the difference.
The reason is that a bank loan is reliant on the appraisal. (Cash buyers don't run into the same problem since an appraisal isn't needed unless they ask for one.)
Conventional loans rely on a down payment of 20 percent and a loan value based on the appraisal. So a $200,000 offer would require a $40,000 down payment. But if the appraisal is under the offered amount — say, $180,000 in this example — then down payments and numbers are derived from that point.
The buyer would have to come up with the $20,000 difference between the offer and the appraisal, on top of the 20 percent.
Thus, the $180,000 appraisal lowers the 20 percent to $36,000, and the loan covers the remaining $144,000. But the difference between appraisal and offer ($20,000) is the buyer's obligation and is added to the 20 percent ($36,000), resulting in an initial cash outlay of $56,000.
"Buyers have a couple of options," said Craig Wildrick at Zions Bancorp, which owns Vectra Bank. "They can increase their down payment, reducing the amount of the loan, negotiate a lower price ... or decide to look for a different property."
That becomes even harder for a buyer relying on a Federal Housing Administration loan, where a 3.5 percent down payment could reflect the limits of a savings account.
There was little concern 10 years ago and a strong belief that real estate values would always increase. Then the bubble burst and market values collapsed.
Though the market rebounds, the scars remain.
"Lenders are very nervous right now. It's very difficult," said appraiser Jo Stinett of Peak View Real Estate Appraisals. "And even if the appraiser is able to show the market is strengthening and that values are increasing, some underwriters simply won't take it."
She added: "The market is almost working against itself, and we have to be really, really careful that we don't create another bubble."
Colorado and its Front Range are part of a multistate area where the Federal Reserve Bank on June 5 said the phenomenon is happening.
Banks reported that "low inventories have slowed sales and put upward pressure on prices in some areas," giving concern "that appraisals were not keeping pace with price increases," the Federal Reserve said in its commentary on current economic conditions, commonly called the Beige Book.
Bidding wars have sometimes forced buyers to be more competitive than they should be, some Realtors say.
"One seller had a buyer who literally wrote an escalation clause into their offer, beating any other offer up to $30,000 over the list price," said Jolon Ruch, president-elect of the Colorado Association of Realtors and a Realtor with Keller Williams Preferred Realty in Westminster.
"Sometimes it's just about the win, about the competition, and that's not very responsible," she said.
And there are buyers who have simply had enough and are "desperate to obtain a house," said Lisa Desmarais, an appraiser at Peak to Peak Appraising in Broomfield.
"One buyer had been through losing three other homes due to being outbid and opted to bid above market just to avoid any more emotional turmoil," Desmarais said.
For the challenged appraiser, it's simply a matter of doing the job well.
"Our job is not to justify the 'winning bid' of a specific buyer, who may not be acting in their own best interest," Desmarais said, "but to determine what the typical buyer would pay based on current market conditions."
For homebuyer Brown, the solution is simple: "Don't be too emotionally attached. People's excitement and a low inventory can make things crazy."

Home loan payoffs in Colorado surge in the first quarter of 2013

the market is busy....Denver Post Article.

The number of home loans paid off in Colorado was up 31.4 percent from the first quarter of 2012 to the first quarter of 2013, according to a report released Tuesday by the Colorado Division of Housing.
According to the report, public trustees in Colorado released a total of 98,321 deeds of trust during the first quarter of 2013, which was the highest quarterly total recorded in any quarter since the division began collecting quarterly totals in 2008.
By comparison, 74,809 deeds of trust were released during the first quarter of 2012.
Typically, a release of a deed of trust occurs when a real estate loan is paid off whether through refinance, sale of property, or because the owner has made final payment on a loan.
Increases in release activity occur as refinance and home-sale activity increases, and rising release totals typically indicate increases in the demand for home loans and real estate.
Release activity also increased from the fourth quarter of 2012 to the first quarter of 2013, rising 13.3 percent. There were 86,816 deeds released during the fourth quarter of 2012.
"From early 2011 to late 2012, the average 30-year fixed mortgage rate fell for seven quarters in a row," said Ryan McMaken, an economist for the Colorado Division of Housing. "We're not surprised to see refi and purchase activity increase sharply as a result."
However, trends in release activity were not uniform across the state. although all the 21 counties surveyed reported increases in release activity from the first quarter of 2012 to the first quarter of this year.
The largest increases were reported in Adams and Arapahoe counties where release activity increased 62.1 percent and 55 percent respectively.
The smallest increases were found in Eagle and Jefferson counties where activity increased 3.7 percent and 12.5 percent, respectively.
"We still see some hot spots in some higher-income counties," said McMaken. "But with most counties reporting sizable increases in release activity, we can say that home loan activity has been increasing generally across Colorado."

6 tips to win a bidding war for your next home

interesting msn real estate article...these are standard techniques, yet I have quite a few others that are lesser known, yet highly effective...

Do you have what it takes to beat competitors for the house you want?

The bidding wars are back. While not every local real-estate market is experiencing bidding wars, some homebuyers find themselves competing for houses because not many are for sale in their markets. For example, in Phoenix, it would take just 2.3 months to sell all the homes currently on the market, says Susan Paul, owner of Better Homes and Gardens Real Estate Move Time Realty in Scottsdale, Ariz. The result? Many homes have 10 to 15 offers the day they go on the market, she says.
To compete in a bidding war, buyers need to prepare financially for the home purchase. They have to be familiar with property values in their target neighborhoods. And they must know what they want.
While offering the most money might seem like the best way to win a bidding war, sellers don't always choose the highest offer. Instead, sellers often prefer offers that are most likely to go through and that meet their conditions. Here are six tips to increase your chances of making the winning offer in a bidding war for the house of your dreams.

1. Have a lender on speed dial
"Too many buyers talk to a lender and start looking at homes at the same time," says Eldad Moraru, a real-estate agent with Long & Foster Real Estate Inc. in Bethesda, Md. "You need to have everything (financial) done before you begin to look." Then you are more likely to win a bidding war.

He suggests selecting a lender and a loan, completing everything the lender requires and having a preapproval letter in hand — all before submitting an offer.
"You need to make sure your lender is ready to issue an approval letter specific to the property at the drop of a dime," Moraru says.
Paul recommends keeping a file folder constantly updated with your most recent pay stubs, all pages —even blank pages — of recent bank statements and any other documentation the lender may need to make a quick loan approval. Then you are ready to make an offer.
A strong preapproval is essential, especially if you are competing against buyers with cash to offer, says Alan T. Aoyama, vice president of Century 21 M&M Associates in Cupertino, Calif. Any hint that you might have trouble qualifying for financing could eliminate you from the seller's choice of buyers.
2. Cash in your pocket plus the paperwork to prove it
"An all-cash buyer can even waive the appraisal," Aoyama says. "If you're a noncash buyer, you need to have a copy of your proof of funds with your offer, along with a strong preapproval. At a minimum, you should offer a down payment of 20% if you know you'll be competing against other buyers. You need to show you have the funds to close and the ability to make up the difference if the appraisal comes in too low.

Moraru says that in Washington, D.C., and Maryland, it's common to supplement your offer with a financial information sheet detailing your job history, salary and bonuses, 401(k) balance, how much you have for a down payment and where the money is saved.
A higher-than-customary earnest money deposit can sometimes impress sellers when there is a bidding war, Moraru says. Just make sure you fully meet all deadlines and terms of the contract so you don't lose your deposit.

3. Make a fast, personalized offer
To compete against other buyers in a potential bidding war, make sure you see a home the day it goes on the market, so you can move quickly, Paul says.
"Your buyers agent should talk to the listing agent to find out what is motivating the sellers and what they need — such as a quick settlement or a post-settlement rent-back," Paul says. "Be flexible, and work that into your offer. Make it as easy on the sellers as possible so your offer is chosen above 15 others."

Paul says buyers should offer to help the sellers in any way they can, such as helping them find a home for their pet if they can't take it with them.
Moraru says while price is important, sellers want to know the buyer can finance the property and meet any other conditions. If you don't know the date when the sellers want to settle, you can write "will settle on seller's schedule" into the offer.
Aoyama suggests offering 30 days of free rent if the sellers want to stay in their home after settlement.

4. Keep your home inspector on alert
Most real-estate agents don't recommend buying a home without an inspection, but making your offer contingent on an inspection can weaken your position if other buyers are waiving an inspection contingency. Aoyama says buyers should carefully read all disclosures and reports that are available, because some sellers provide a home inspector's report for buyers. You can also have an home inspection done after your offer has been accepted that can provide information on the home's condition.

"If you're serious about a particular house, you can have a home inspection before you make an offer, and then make a noncontingent offer if you're satisfied with the report," Moraru says. "You'll need to move fast, though, and have a home inspector ready almost the day the home goes on the market."
Paul says you can bring a home inspector along when you first look at the home and say the inspector is a friend, just to get a feel for the condition of the home without an in-depth checkup.
"If the inspector says the house looks OK, you can feel better about waiving the home inspection contingency," Paul says.

5. Eliminate or reduce contingencies
One of the best ways to make your offer stronger is to eliminate contingencies regarding home inspection, financing or appraisal, Aoyama says. That puts you in a more solid position to win a bidding war. If you have cash reserves to cover the gap between a low appraisal and your offer, you can waive the appraisal contingency, he says, but leave your financing contingency in place to protect yourself.

"If you can't waive these, you can at least shorten the time frame, such as (by) reducing the loan contingency to 10 days if you know your lender can provide you with proof of financing quickly enough," Aoyama says.

Offering to buy the home as is can be tempting, but make sure you have an accurate idea of the home's condition with an informational inspection for safety.
Paul says buyers need to make their offer as strong as possible, so if you don't need a home warranty or help with closing costs, don't ask for them.

6. Try an escalation clause — maybe
An escalation clause is an addendum to a purchase offer that authorizes your agent to offer a specified amount above the best offer the seller receives. It's a powerful way to wage a bidding war.
"Buyers are offering escalation clauses a lot less often than when the housing market was booming, unless the home is priced way below market value," Moraru says. "I recommend that buyers who want to offer an escalation clause be very careful when choosing to go as high as they can with the understanding that they can live with the price if it goes to the maximum amount. They also need to feel that if someone else gets the house at a higher price, that buyer overpaid."

10 Best-Kept Secrets for Buying a Home

solid article from hgtv.com

Buying Secret #10: Keep Your Money Where It Is
It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you’re going to have a hard time getting a loan.Buying Secret #9: Get Pre-Approved for Your Home Loan
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can't afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.
Buying Secret #8: Avoid a Border Dispute
It’s absolutely essential to get a survey done on your property so you know exactly what you’re buying. Knowing precisely where your property lines are may save you from a potential dispute with your neighbors. Also, your property tax is likely based on how much property you have, so it is best to have an accurate map drawn up.
Buying Secret # 7: Don’t Try to Time the Market
Don’t obsess with trying to time the market and figure out when is the best time to buy. Trying to anticipate the housing market is impossible. The best time to buy is when you find your perfect house and you can afford it. Real estate is cyclical, it goes up and it goes down and it goes back up again. So, if you try to wait for the perfect time, you’re probably going to miss out.
Buying Secret # 6: Bigger Isn’t Always Better
Everyone’s drawn to the biggest, most beautiful house on the block. But bigger is usually not better when it comes to houses. There’s an old adage in real estate that says don’t buy the biggest, best house on the block. The largest house only appeals to a very small audience and you never want to limit potential buyers when you go to re-sell. Your home is only going to go up in value as much as the other houses around you. If you pay $500,000 for a home and your neighbors pay $250,000 to $300,000, your appreciation is going to be limited. Sometimes it is best to is buy the worst house on the block, because the worst house per square foot always trades for more than the biggest house.

Buying Secret #5: Avoid Sleeper Costs
The difference between renting and home ownership is the sleeper costs. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes, utilities and homeowner-association dues. New homeowners also need to be prepared to pay for repairs, maintenance and potential property-tax increases. Make sure you budget for sleeper costs so you’ll be covered and won’t risk losing your house.Buying Secret #4: You’re Buying a House – Not Dating It
Buying a house based on emotions is just going to break your heart. If you fall in love with something, you might end up making some pretty bad financial decisions. There’s a big difference between your emotions and your instincts. Going with your instincts means that you recognize that you’re getting a great house for a good value. Going with your emotions is being obsessed with the paint color or the backyard. It’s an investment, so stay calm and be wise.
Buying Secret #3: Give Your House a Physical
Would you buy a car without checking under the hood? Of course you wouldn’t. Hire a home inspector. It’ll cost about $200 but could end up saving you thousands. A home inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. It’s really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home. It’s better to spend the money up front on an inspector than to find out later you have to spend a fortune.
Buying Secret #2: The Secret Science of Bidding
Your opening bid should be based on two things: what you can afford (because you don’t want to outbid yourself), and what you really believe the property is worth. Make your opening bid something that’s fair and reasonable and isn’t going to totally offend the seller. A lot of people think they should go lower the first time they make a bid. It all depends on what the market is doing at the time. You need to look at what other homes have gone for in that neighborhood and you want to get an average price per square foot. Sizing up a house on a price-per-square-foot basis is a great equalizer. Also, see if the neighbors have plans to put up a new addition or a basketball court or tennis court, something that might detract from the property’s value down the road.
Today, so many sellers are behind in their property taxes and if you have that valuable information it gives you a great card to negotiate a good deal. To find out, go to the county clerk’s office.
Sellers respect a bid that is an oddball number and are more likely to take it more seriously. A nice round number sounds like every other bid out there. When you get more specific the sellers will think you've given the offer careful thought.
Buying Secret #1: Stalk the Neighborhood
Before you buy, get the lay of the land – drop by morning noon and night. Many homebuyers have become completely distraught because they thought they found the perfect home, only to find out the neighborhood wasn’t for them. Drive by the house at all hours of the day to see what’s happening in the neighborhood. Do your regular commute from the house to make sure it is something you can deal with on a daily basis. Find out how far it is to the nearest grocery store and other services. Even if you don’t have kids, research the schools because it affects the value of your home in a very big way. If you buy a house in a good school district versus bad school district even in the same town, the value can be affected as much as 20 percent.

Converted Victorian Windmill Home For Sale

great article from Wall Street Journal.com

Converted Victorian Windmill 02/25/13 Price: $1,500,000 Location: Brighton, United Kingdom
This four-bedroom converted windmill built in 1885 is a landmark on the English south coast and retains many of its original working parts.—Nick Clayton

12 Reasons Why You’ll Be Happier in a Smaller Home

interesting article from becomingminimalist.com

 

Recently, my parents bought a smaller house. And this past week, while on vacation in South Dakota (yeah, I vacation in South Dakota), I got to see it for the first time. During our stay, I was surprised at how often my mother commented that “they just love their smaller house.” I wasn’t so much surprised that she felt that way (I am a minimalist after all), but I was surprised at the frequency. It was a comment that she repeated over and over again during our one-week stay.

Toward the end of the week, I sat down with my mom and asked her to list all of the reasons why she is experiencing more happiness in her smaller house. And this post was written… my first post co-authored with my mother.
12 Reasons Why You’ll Be Happier in a Smaller House by Joshua and Patty Becker (I get top billing because it is my blog).
People buy larger homes for a number of reasons:

• They “outgrow” their smaller one.
• They receive a promotion and raise at work.
• They are convinced by a realtor that they can afford it.
• They hope to impress others.
• They think a large home is the home of their dreams.

Another reason people keep buying bigger and bigger homes is because no one tells them not to. The mantra of the culture again comes calling, “buy as much and as big as possible.” They believe the lie and choose to buy a large home only because that’s ”what you are supposed to do” when you start making money… you buy nice, big stuff.
Nobody ever tells them not to. Nobody gives them permission to pursue smaller, rather than larger. Nobody gives them the reasons they may actually be happier in a smaller house.
So, in an attempt to break the silence, consider these 12 reasons why you’ll actually be happier in a smaller house:

1. Easier to maintain. Anyone who has owned a house knows the amount of time, energy, and effort to maintain it. All things being equal, a smaller home requires less of your time, energy, and effort to accomplish that task.
2. Less time spent cleaning. And that should be reason enough…
3. Less expensive. Smaller homes are less expensive to purchase and less expensive to keep (insurance, taxes, heating, cooling, electricity, etc.).
4. Less debt and less risk. Dozens of on-line calculators will help you determine “how much house you can afford.” These formulas are based on net income, savings, current debt, and monthly mortgage payments. They are also based on the premise that we should spend ”28% of our net income on our monthly mortgage payments.” But if we can be more financially stable and happier by only spending 15%… then why would we ever choose to spend 28?
5. Mentally Freeing. As is the case with all of our possessions, the more we own, the more they own us. And the more stuff we own, the more mental energy is held hostage by them. The same is absolutely true with our largest, most valuable asset. Buy small and free your mind.
6. Less environmental impact. A smaller home requires less resources to build and less resources to maintain. And that benefits all of us.
7. More time. Many of the benefits above (less cleaning, less maintaining, mental freedom) result in the freeing up of our schedule to pursue the things in life that really matter – whatever you want that to be.
8. Encourages family bonding. A smaller home results in more social interaction among the members of the family. And while this may be the reason that some people purchase bigger homes, I think just the opposite should be true.
9. Forces you to remove baggage. Moving into a smaller home forces you to intentionally pare down your belongings.
10. Less temptation to accumulate. If you don’t have any room in your house for that new treadmill, you’ll be less tempted to buy it in the first place (no offense to those of you who own a treadmill… and actually use it).
11. Less decorating. While some people love the idea of choosing wall color, carpet color, furniture, window treatments, decorations, and light fixtures for dozens of rooms, I don’t.
12. Wider market to sell. By its very definition, a smaller, more affordable house is affordable to a larger percentage of the population than a more expensive, less affordable one.

Your home is a very personal decision that weighs in a large number of factors that can’t possibly be summed up in one 700 word post. This post was not written to address each of them. Only you know all the variables that come into play when making your decision.
I just think you’ll be happier if you buy smaller… rather than the other way around.

What Does Your House Style Say About You?

fun interesting article from aol.com

What Does Your House Style Say About You?

Bungalow: Natural and Adaptable

People who live in Bungalow homes appreciate things that are rugged, adaptable and economic in design. "For these people it's all about comfort that is organic and natural," says Rikki Nyman, editor of AntiqueHomeStyle.com. "Bungalow dwellers are practical and choose their home because it’s easy to live in and very efficient." Bungalows are designed to blend into the environment in which they're built and are all about ease between indoor and outdoor spaces. "Artists, architects, teachers, someone who has a more liberal approach to things, or even an outdoors person are the types you typically see living in a bungalow home," says Nyman.

Where to find it: Bungalows are in abundance in California and across the Midwest.

Colonial: Traditional and Iconic

Colonials are the iconic family home. One of the most popular styles in the United States, Colonials are square and stable. "People who live in Colonial homes are solid, grounded, successful, and sensible," says Nyman.

"They like symmetry, formality and propriety, and they value tradition." The style of Colonials is light, airy, and clean, which is another reason people are drawn to this classic style.

Where to find it: Colonial homes can be found across the country.

Cape Cod: Quaint and Simple

The Cape Cod style of house is similar to the Colonial but it's a bit more casual. "It's a simple style of house. People who live in a Cape Cod house are unpretentious, more casual, probably a little more creative and not deadline-driven," says Nyman. Since Cape Cods can be efficient and economical, they can be the perfect starter home for young couples, creating a bit of a romantic quality to this type of home as well.

Where to find it: This home originated in Massachusetts (Cape Cod!) and continues to be a popular style of home in New England -- mostly in New York, New Jersey, Pennsylvania, Connecticut and Massachusetts. But it's also a style that has spread across the country.

Spanish: Colorful and Welcoming

Spanish style homes are spirited and are all about making entertaining comfortable and relaxed. "These homes are casual and pleasant to live in. They offer lots of color and a lot of different textures and often feature large patios or other uncovered outdoor spaces for socializing," says Nyman.

People who have an appreciation for Mediterranean style and warm-weather architecture will gravitate toward the Spanish style of home, which can be sprawling and rambling or tiny and cozy.

Where to find it: These houses are very popular in the southern tier of the United States, from Texas to California, and then again in Florida.

Ranch: Unpretentious and Practical

The Ranch style of home is long, low and asymmetrical in layout, with private space separated from living space. "Ranch type houses offer a more modern layout, with multipurpose spaces, very functional interiors and a logical, flowing layout," says Nyman.

The ranch style of home is a great choice for those who are economical, practical and looking for easy living features.

Where to find it: ranch style of house isn't concentrated in one area of the country. You can find them sprinkled throughout.

Cottage: Casual and Charming

The Cottage style of home represents a completely different flavor of lifestyle. "Cottages are, by definition, all about comfort, right sizing, and scaling to conform with your real self and not the Joneses," says Nyman.

"Cottages are on the small side with a high cuteness factor." People who choose to live in Cottages opt for a charming, easy way to live.

Where to find it: Cottages are more prominent in areas of the Northeast.

Craftsman: Artistic and High-Quality

The Craftsman style of home is down-to-earth, with simple yet strong designs. "People drawn to these homes are often artistic individuals who appreciate handmade products, high quality craftsmanship, and slow design," says Nyman.

These homes are not opulent - rather they're simple, clean, and well designed. Craftsman homes are all about the design principles, balance, harmony, contrasts and shaping everything in relationship to each other. Everything in the place has meaning.

Where to find it: Craftsman homes can be found across the country.

Tudor: Storybook and Enchanting

Of the Romantic style of houses, the Tudor home is the most popular. "Owners love that they're rich in design with mixed patterns and unique characteristics," says Nyman.

"People who live in Tudor-styles are drawn to their fairytale-like appeal, and this traditional style often resonates with people with a connection to English, Scottish or Irish heritage."

Where to find it: You’ll find Tudor style homes mostly on the East coast.

Prairie: Stylish and Airy

The Prairie style of home is all American! When it first emerged, it moved residential architectural style in a new and very modern direction. "Like the Bungalow and Craftsman styles, the Prairie home incorporates the environment into the design," says Nyman. "It's characterized by harmonious geometry."

People who choose to live in these types of homes enjoy open spaces, many built-ins and a home that's grounded in its environment.

Where to find it: Prairie style homes are more prominent in the Midwest.

Contemporary: Nontraditional and Distinct

Contemporary homes represent an evolution of home design that came as city-dwellers made their way to the suburbs. The hallmark of a Contemporary home plan is its “simplistic distinctiveness," according to MonsterHousePlans.com. "Contemporary homes tend to be a little grander and more modern. They aren't quite so ground hugging as, for example, a Ranch style of home," says Nyman.

People attracted to this type of home like newer construction and all that comes with it, including more
energy and cost efficiency as well as more space.

Where to find it: Contemporary homes can be found throughout the country, with more populated states like California, Texas, and New York boasting a higher volume of this type.

Italian: Elegant and Symmetrical

The Italianite home is similar to the Spanish style, but it's a bit more formal, more classical and more symmetrical. The materials used are often the same, and these types of homes also have a focus on gardens or patios. These homes are symmetrical, clean, exquisitely proportioned, and the materials are top of the line.

"Owners of these homes appreciate elegance. Their homes are European, with kind of a more classical style," says Nyman.

Where to find it: Italianite houses can be found in most areas of the U.S. with the exception of the south.

Foursquare Box: Plain and Spacious

This home style evolved because it was easy to build, inexpensive, big and could accommodate families of just about any size. The major selling point in the Foursquare or Box style was the size-to-price ratio. With a Foursquare, you get a lot of house in a compact footprint for a relatively low price.

"A Foursquare is going to appeal to practical people who value space and a functional layout but also want a lot of bang for the buck," says Nyman.

Where to find it: This style of home can be found across the country.

French: Rustic and Restrained

The French style of home conveys a sense of rustic elegance and range from modest farmhouse designs to estate-like chateaus. “These homes have steeply pitched hip roofs and stone exterior, and are very restrained,” says Nyman. This style of home has been consistently popular, though never to the extent of the Colonial Revival or bungalow styles.

People who desire these homes are drawn to their ability to pay homage to the past while forging ahead to the future.

Where to find it: Like the Colonial and Bungalow styles, you can find the French style of home throughout the country.

Log Cabin: Relaxed and Sweet

"Log cabins harken back to an earlier period when life was more casual," says Nyman. People fall in love with this style of home because they bring a relaxed vibe and are "very rustic, charming, adorable and sweet" adds Nyman. They can be grand or very tiny and casual.

The materials used are rough and ready, and it takes work to put them together, bringing a gritty quality to them as well.

Where to find it: Log cabins are found in many parts of the country, and have a higher concentration in certain states like New Hampshire and Kansas.

Loft: Industrial and Artistic

Typically, lofts were built into old factories and only available in downtown business districts or outskirts of town, where there is little support for domestic life and an edgier, more bohemian life is expected. “This is part of the allure. Artists first colonized these spaces and then developed a style and an attraction for living in them, which others then coveted,” says Maxwell Ryan, CEO and Founder of ApartmentTherapy.com.

“Lofts typify the modern person's tremendous attraction to big, expansive spaces that have no walls, tall ceilings and let in lots of light. They are an escape from the traditional homes our parents and grandparents lived in and strove for.”

Where to find it: Lofts can be found in urban settings so think states with major metropolitan areas like New York, New Jersey, California, Texas, and Arizona.

Colorado business-outlook index hits 2-year high

more positive news...

Denver Business Journal

A monthly index of expected Colorado business activity from Denver economist Ernie Goss rose in May to its highest level in two years, with Goss citing the improving construction sector.
Goss' monthly Business Conditions Index for the state was 62.8 in May, the highest level since May 2011.
That reading was up from 58.2 in April, 60.8 in March and 58.9 in February. (See the table at the end of this report for index readings since July 2009).
The index — based on a monthly survey of business supply managers in the state — ranges from 0 to 100. An index reading greater than 50 indicates expectations of an expanding economy over the next three to six months; 50 is "growth neutral" and below 50 is considered negative.
"Businesses tied to the state's rapidly advancing construction industry continue to experience very healthy business conditions," Goss said.
He added that "new orders and production are growing faster than jobs in [Colorado's] manufacturing sector. To accommodate this growth, manufacturers in the state are expanding the hourly work week for current employees much faster than jobs."
Goss is director of the Denver-based Goss Institute for Economic Research and research director of Creighton University’s Economic Forecasting Group.
The overall index averages individual readings for new orders, production or sales, employment, inventories and delivery lead time.
Goss said that his Colorado index for last month broke down this way (with indexes for recent months given):

• New orders: 59.1 (55.8 in April, 57.3 in March, 60.0 in February, 53.3 in January).
• Production/sales: 52.8 (55.6 in April, 62.3 in March, 49.6 in February, 49.3 in January).
• Delivery lead time: 74.5 (49.1 in April, 63.6 in March, 68.4 in February, 53.4 in January).
• Inventories: 72.7 (70.3 in April, 65.7 in March, 56.3 in February, 62.7 in January).
• Employment: 55.0 (59.9 in April, 54.5 in March, 58.9 in February, 51.2 in January).

Goss also released a three-state Business Conditions Index that covers Colorado, Utah and Wyoming combined.
Across the three-state region, the index rose to 61.0 in May from 58.3 in April, 56.2 in March, 54.9 in February and 54.8 in January.
"Durable and non-durable goods manufacturers in the region, particularly those linked to the region’s rapidly expanding construction industry, pushed the overall index higher. [And] even though agriculture prices have softened recently, companies with ties to agriculture continue to experience healthy but somewhat reduced economic growth," Goss said of the three-state area.
The Goss Institute uses the same methodology for its survey as the Institute for Supply Management in its national survey of its members.
Goss is Jack A. McAllister Chair in Regional Economics at Creighton University in Omaha.

Inventory of homes rises in metro Denver

The number of homes for sale in metro Denver increased by 18 percent from April to May, a situation that will help homeowners and buyers, independent real-estate analyst Gary Bauer said Wednesday.

"The more inventory we have available helps the market," said Bauer. "Prospective home sellers who have been sitting on the fence now are coming off the fence and putting their homes on the market. The homebuyers who are out there every day facing multiple offers and price increases, they have more homes to look at," he said.

Bauer said the metro Denver home market is "strong, fast, and the buyer demand is continuing."

"The homes are flying off the shelf almost as fast as they are coming on the market," he said.

Bauer's analysis is based on data from Metrolist, the region's multiple-listing service.
seeing the same myself....

Denver Post article

In April, there were 6,945 homes for sale; in May, there were 8,214.

Ryan McMaken, an economist for the Colorado Division of Housing, said that after a few quarters of 10 percent growth in home prices year-over-year, people who were on the verge of being underwater believe they see prices that justify selling their homes.

"They start to see those prices increase and think, 'Oh, I guess I can sell now and get what I need,' " said McMaken. "If more homes are coming on line, that would be an improvement from the buyer's perspective because recently it has been so difficult to find a property you want."

But McMaken said much of the homebuying is being fueled by highly paid people moving to the metro area from other states who bring wealth with them.

In metro Denver, wages are not keeping up with home prices, and that is why McMaken thinks price increases will be "short term."

"What we are seeing is a situation where home prices are increasing substantially faster than wages are increasing," he said. "I don't think this is a long-term trend. The fact that the underlying economic situation doesn't have a lot of people with real increases in wages does not point to a huge economic boom that drives huge price increases indefinitely."

Metrolist said the Denver market remains undersupplied because home sales are increasing faster than the inventory levels.

But Kirby Slunaker, president and CEO of Metrolist, said the "inventory crunch" is easing.

"We're thrilled to see some inventory relief and matching strong sales numbers in the Denver market. We're taking those figures as signs of both homebuyer and seller confidence," said Slunaker.

Bauer predicts home prices will rise 5 percent in metro Denver by early September.

During May, said Bauer, 8,093 homes came on the market; 7,252 homes went under contract; and 5,865 homes closed for a volume of $1.7 billion.