In recent weeks, several of our buyers have found a great property at a great price, then they tell us "We are going to wait for prices to come down even further."My advice to buyers who are sitting on the fence: "Get off the fence. You're in danger of getting a picket stuck in a very uncomfortable place."
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Palm Springs (Coachella Valley) monthly home sales jumped 16.4 percent in October from September, a positive sign for the dragging real estate market but not enough to indicate the slump is over. Though officials are optimistic, the valley's home sales are 30.1percent lower than this point last year. But that's better than the statewide sales figures, which have dropped 40.2 percent compared to October 2006.The exact number of homes sold in October was not available late Tuesday, according to the monthly information released by the California Association of Realtors."You can't call it a trend, but if it's moving, it's moving in the right direction," said Greg Berkemer, executive vice president of the California Desert Association of Realtors."That's the most encouraging news."The Realtors association's October data also show:The median price of a Coachella Valley home is $323,440 - a 6.5 percent drop since September and a 5.1 percent decline since this time last year.While the median price is used as a benchmark for tracking homes, it can be misleading when several high-end, multimillion-dollar homes sell in a single month.The Coachella Valley continues to be affordable by California's standards, where the statewide median price is $497,110.While roughly 24 percent of Californians can afford the median priced home in their communities, 33 percent of valley residents can afford homes here.At the "height of the market," the local figure was as low as 11percent, Berkemer said.Nearly 9,200 Coachella Valley homes were on the market in October and 9,593 were on the market last month, according to the local figures.That's about a 1,000 more homes than were for sale in November 2006.A typical home on the market - three bedrooms, two baths, spanning 1,766 square feet - is listed at $379,000 and has been on the market 81 days."This market is not fully recovered," Berkemer said."September was a poor sales month. We're moving into our season. Hopefully that will help."
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Several of our readers and clients have commented about or questioned the high number of homes currently available in the Coachella Valley.
When most buyers new to the area think of Palm Springs, they think of only the City of Palm Springs. Our real estate market and our Multiple Listing Service (MLS) include a HUGE geographical area, extending from 29 Palms/Joshua Tree to Idyllwild to La Quinta and all the way down the valley to the Salton Sea and Coachella.
There are some other factors to consider when looking at the unsold inventory.
The 5 major contributors to the increased inventory:
1. The market slowdown itself causes homes to remain listed on the MLS longer;
2. Developers are now listing their remaining unsold inventory in the MLS;
3. Homeowners who previously were trying to sell their own homes are now listed with Realtors and at prices adjusted to reflect the current market and now back in the MLS;
4. Homes built or purchased for speculation (not to live in by the 1st owner) are now listed by Realtors and listed in the MLS;
5. Homeowners with loans that they can no longer afford and who are unable to refinance have listed their homes with Realtors and now in the MLS.
Here are some of the positive signs for the desert:
· Sales in October rose by 16.4% over last month – strongest gain in So. Calif.
· Year over year drop in sales was 30.1% -- smallest drop is So. Calif.
· Year over year price drop was 5.1% -- statewide the price drop was 9.9%
. Current affordability rate for desert is 33% -- at the height of the market it was 11- 13% range
Although these signs are encouraging, some Sellers still remain in a market where only the serious minded belong; successful seller’s homes must show well, and be priced to reflect their neighborhood – not necessarily the median price reduction.
For Buyers, when you find the home and area you want, this may be the best time to act.
** Although we know now when the market began to change there was so much activity in the pipeline that we were into 2006 before it revealed itself. Accordingly, we will be out of this current market as well before it is documented.
In recent weeks, several of our buyers have found a great property at a great price, then, after talking to their brother-in-law or their son who works at Best buy, they tell us "We are going to wait for prices to come down even further."
The next week, that same great home at a great price has sold. Our client insists that there will be others at even better prices.
Other, more realistic clients see that prices have come down significantly here in the Coachella Valley and realize that the Real Estate market is cyclical. They know that even if prices do come down a little more, they will eventually come back up. They are not trying to make a quick buck, they are looking for either a primary or second home that they can live in and enjoy for more than three or four years. They know that the tax advantages of owning a home for those three or four years will still be significant.
They know what we know: Whatever you buy today will be a GREAT deal in three to five years.
Those who sit on the sidelines and wait for the bottom of the market may be left just waiting.
The problem with waiting for the bottom is that we only know where the bottom was in hindsight. We never know in real-time that we have hit the bottom of the market.
Greed is what got us into this mess. Greed will keep otherwise good buyers out of the market while they wait for a chance to be greedy and "steal" a property.
The Coachella Valley is a market significantly different from others in the state and country. We have a HUGE resort property market. A greater percentage of the homes here are second homes owned by relatively high-income and financially stable owners. These are people who are in a position to wait out any downturn in the real estate market and not at any risk of foreclosure.
The appreciation in the area has been not only due to the overall housing boom seen throughout the country, but also driven greatly by the tremendous growth we see occurring here. The population in the Coachella Valley is expected to DOUBLE its 2006 number by 2012.
Buyers who can afford to pay cash now or who qualify for a conventional fixed-rate mortgage or 30 year fixed with a ten year interest only period are in a good position to buy a great home at a great price.
My advice to buyers who are sitting on the fence: "Get off the fence. You're in danger of getting a picket stuck in a very uncomfortable place."
Gary Drake
The Thomas and Drake Group
December 5, 2007 The Desert Sun
Valley Realtors cheer progress of slumping market
Erica Solvig
Coachella Valley monthly home sales jumped 16.4 percent in October from September, a positive sign for the dragging real estate market but not enough to indicate the slump is over. Though officials are optimistic, the valley's home sales are 30.1percent lower than this point last year. But that's better than the statewide sales figures, which have dropped 40.2 percent compared to October 2006.
The exact number of homes sold in October was not available late Tuesday, according to the monthly information released by the California Association of Realtors.
"You can't call it a trend, but if it's moving, it's moving in the right direction," said Greg Berkemer, executive vice president of the California Desert Association of Realtors.
"That's the most encouraging news."
The Realtors association's October data also show:
The median price of a Coachella Valley home is $323,440 - a 6.5 percent drop since September and a 5.1 percent decline since this time last year.
While the median price is used as a benchmark for tracking homes, it can be misleading when several high-end, multimillion-dollar homes sell in a single month.
The Coachella Valley continues to be affordable by California's standards, where the statewide median price is $497,110.
While roughly 24 percent of Californians can afford the median priced home in their communities, 33 percent of valley residents can afford homes here.
At the "height of the market," the local figure was as low as 11percent, Berkemer said.
Nearly 9,200 Coachella Valley homes were on the market in October and 9,593 were on the market last month, according to the local figures.
That's about a 1,000 more homes than were for sale in November 2006.
A typical home on the market - three bedrooms, two baths, spanning 1,766 square feet - is listed at $379,000 and has been on the market 81 days.
"This market is not fully recovered," Berkemer said.
"September was a poor sales month. We're moving into our season. Hopefully that will help."
MSNBC
NEW YORK - The Bush administration is working behind the scenes with industry on a plan to extend lower, introductory interest rates on home loans before they reset at higher levels amid hints by Fed Chairman Ben Bernanke of another cut in a key interest rate to keep the economy from falling into recession.
Treasury Secretary Henry C. Paulson and other top regulators met Thursday with loan servicing companies — firms that collect and distribute loan payments — and other industry executives. No formal agreement was announced, but an accord on this issue could be be revealed in the next week or two.
“We’ve all agreed that there should be some sort of standardized approach to reaching more homeowners faster,” Treasury Department spokeswoman Jennifer Zuccarelli, who declined to name those at the meeting, said in response to questions.
A story published Thursday by American Banker named Washington Mutual Inc., Countrywide Financial Corp., Wells Fargo & Co. and JPMorgan Chase & Co. as companies participating in the briefing.
The mortgage industry and federal regulators have been under intense pressure from activists, lawmakers and consumer groups to help borrowers stave off foreclosure, particularly as adjustable-rate mortgages begin to reset, meaning much higher payments.
Last week, California officials announced a deal with four major loan servicing companies. That agreement with Gov. Arnold Schwarzenegger includes Countrywide, GMAC Financial Services, Litton Loan Serving and HomEq Servicing.
Meantime, Bernanke, in a speech Thursday night to business executives meeting in Charlotte, N.C., suggested that another general rate cut might be needed to bolster the economy. The worsening credit crunch, a deepening housing slump and rising energy prices probably will create some “headwinds for the consumer in the months ahead,” he said.
Bernanke said he expects consumer spending will continue to grow and suggested the country can withstand the current problems without falling into a recession. But he indicated that consumers could turn more cautious as they try to cope with all the stresses.
On Oct. 31, Bernanke and all but one of his colleagues agreed to lower the federal funds rate by one-quarter percentage point to 4.50 percent at the end of a two-day meeting.
The odds have grown that the country could enter a recession. A sharp cutback in consumer spending could send the economy into a tailspin. Against this backdrop, Fed policymakers will need to be “exceptionally alert and flexible,” he said.
That comment probably will be viewed as a sign the Fed may lower interest rates when it meets on Dec. 11, its last session of the year. Twice this year the central bank has trimmed rates to keep the housing collapse and credit crunch from throwing the economy into a recession. Those cuts came in September and late October.
In the October meeting, Bernanke and his Fed colleagues signaled that further cuts might not be needed. Since then, however, financial markets have endured more turmoil. The housing slump has deepened, consumer confidence has plummeted and consumer spending “has been on the soft side,” Bernanke said in a speech Thursday night to business people in Charlotte, N.C.
Bernanke spoke hours after the White House lowered its economic growth projection for 2008 due to the deteriorating housing market. The White House also raised its estimate for unemployment next year, but said inflation should moderate.
The Commerce Department reported that the economy grew at a 4.9 percent rate from July through September, the fastest pace in four years. The impressive performance, though, was not expected to carry into the final three months of the year, when analysts expect growth of 1.5 percent or less.
So you have decided to stay in your home instead of trying to sell right now - or you are trying to think of ways to make your home more attractive to buyers.
An open-air "room" adds inexpensive living space that may come in handy at resale. And it needn't have a price tag as big as the great outdoors.
By Sarah Max, Money Magazine contributing writer
June 21 2007: 6:57 PM EDT
NEW YORK (Money Magazine) -- Pam and Mark Elmore weren't in the market for a home last summer. But when the Bend, Ore. couple happened to stop by a newly built house with a 1,000-square-foot patio, a fully equipped outdoor kitchen - fridge and range included -and a fire pit, they immediately realized they had to have it.
Now the Elmores cook dinner outside about four nights a week. "It opened up a whole new space in our house," says Pam. "We are constantly entertaining out here."
Good-bye, flipping houses. Hello, flipping burgers.
Americans, it seems, are rediscovering the pleasures of their own backyards. For many what was once a place for casual barbecues with friends has now become a full-fledged room with all the amenities of the indoors: gourmet appliances, light fixtures, cushioned furniture and even flat-screen televisions.
In colder parts of the country, homeowners are putting in heat lamps and fireplaces so they can lounge outside almost any time of year.
"The whole standard for outdoor space has changed," says Stephen Melman, director of economic services for the National Association of Home Builders.
A recent NAHB survey of builders and other industry professionals found that outdoor fireplaces are fast becoming standard in upscale homes, and almost two-thirds of architects surveyed by the American Institute of Architects last year reported an increase in demand for outdoor kitchens, patios and decks.
The most compelling reason to build an outdoor room is the pure pleasure of it. But you can reap practical benefits too: It's a relatively inexpensive way to expand your living space.
"The outdoors is basically a second living room for many of our clients," says Stefan Thuilot, a landscape architect in Berkeley.
In many regions Mother Nature will heat and cool the space so it won't increase your utility bills.
Property tax assessors typically base their valuations on "livable" (that is, indoor) square footage, so outdoor additions shouldn't raise your tax bill.
And though you probably won't recoup your full investment when you sell, you may get back a good chunk.
"In the upper end of the market, houses that have outdoor rooms sell faster and at the higher end of the price range," says Teri Herrera, a real estate broker in Bellevue, Wash.
But a back-deck remodel can easily morph into a six-figure extravaganza. You could spend $500 for a basic stainless steel grill - or $100,000 or more for a kitchen with granite countertops and luxury appliances; a fireplace can cost anywhere from a couple thousand bucks to $50,000 for a custom-built stone version.
But spending too much on a souped-up backyard isn't smart, especially in a weak housing market. Before you order an open-air home theater and invite your friends over for the barbecue of the century, you need to figure out what makes sense in your yard and match your dreams to your budget.
At mortgage conference, lenders push back-to-basics theme for industry in coming years.
By Jeanne Sahadi, CNNMoney.com senior writer
October 15 2007: 5:49 PM EDT
BOSTON (CNNMoney.com) -- If your credit is weak or your savings anemic, here are two phrases you're likely to hear from mortgage loan officers in the next few years: FHA and mortgage insurance.
They're part of a back-to-basics theme that was emphasized Monday at the annual conference of the Mortgage Bankers Association in Boston.
For those who entered the business in the past five years, they've only known the good times and will need to be re-educated, said Paul Bibb, CEO of National City Mortgage, who was on a panel of leading mortgage industry executives.
"You probably have a lot of loan officers who can't spell FHA," said Bibb.
Bibb and David Lowman, CEO of Chase's Global Mortgage, which is a top 10 originator and servicer, said that during the go-go days of the housing boom, loan officers would steer home buyers with weak credit to subprime loans. And they would advise them to finance part of their down payment with a home equity loan.
"We probably all wish we had trained our sales staff to sell mortgage insurance," Lowman said. "The reason we're in this crisis is that we got away from the basics."
Now with the subprime market eviscerated, loan officers will be steering more borrowers with weak credit to loans insured by the Federal Housing Administration and advising those with little savings to get private mortgage insurance in cases where they can't put down 20 percent.
The FHA program is intended for home buyers and homeowners with weak credit. Borrowers with FHA-insured loans - which they get from private lenders as they would any other mortgage - pay a small premium to the FHA every month.
The FHA, in turn, uses those premiums to cover the lender in the event of foreclosure and requires lenders to pursue viable ways to help borrowers avoid foreclosure if they become delinquent.
Bibb can remember a time when FHA loans made up 30 percent of National City Mortgage's business. A few years ago, however, FHA loans had shrunk to about 3 percent of the business. Now, he said, they currently account for as much as 12 percent.
The call to go back to basics comes amid a sobering forecast for home price growth. Patricia Cook, executive vice president and chief business officer of Freddie Mac, who was also speaking on the MBA panel, expects price declines on a nationwide basis this year and next and then only a slow recovery thereafter.
Some markets are holding up and will continue to do so, Bibb said. But he's less optimistic for markets such as Arizona and Nevada where home-price gains were driven by heavy speculation. "[In those markets] the correction could be quite severe and last into 2009, if not 2010," Bibb said.
Lawmakers have been working on legislation to reform the FHA to modernize its standards so that they reflect changes to the housing market in the past 30 years. Among the changes on tap, lawmakers want to:
Raise loan limits. Today the FHA won't insure loans above $362,790 for single-family homes, and even less in lower-cost areas. Lawmakers are considering raising that ceiling to at least 100 percent of the conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac, currently $417,000.
Reduce down payment requirements. Homeowners would no longer be required to have 3 percent equity or the cash equivalent. They could get an FHA-insured loan with 0 percent down.
Reduce complexity. Lenders have been complaining about the time and expense it takes to make an FHA loan.
Separately, the Department of Housing and Urban Development, which oversees FHA, may move to introduce risk-based pricing. Riskier borrowers would have to pay higher premiums than less risky borrowers.
From "Green Construction" to Mixed Use Developments, Engineering Firm Giffels-Webster Engineers identifies some of the most robust trends in Real Estate Development.
Green building and design. Increased pressure on communities and businesses to promote environmentally sound designs has led developers to incorporate green elements into their projects. A plan to develop a parcel of land for retail might include green roofs, rain gardens, or gutter water retention and irrigation systems. LEED-certified environmental experts soon will become "must-have" team members as demand for energy efficient, healthy spaces grows stronger.
Assisted living centers. Assisted living developments are on the rise due to higher life expectancies and the influx of aging baby boomers. By helping seniors lead independent lives in non-institutionalized environments, these projects are designed to incorporate nature trails, community dining, exercise facilities, music rooms, libraries, salons, and game rooms. Opportunities exist to work with both private developers and public government-funded projects.
Hospital expansions, education campus additions. The hospital and education expansion trend is fueled by institutional projects being funded privately though corporate gifts and individual endowments. These "recession-proof" resources mean even during economic downturns, the market segment moves forward with plentiful building and capital improvement projects.
Mixed-use developments. Mixed-use developments are growing popular today because they reduce risk. Retail and residential can adjoin each other, and it's common to see large, national retailers combined with smaller, boutique-type stores, as well as housing varying by size, budget, and amenities. With this approach, the developer's investment is spread across the spectrum so it remains viable even if one segment does not perform as expected.
Urban revitalization. To attract and keep people in their communities, municipalities and townships are working to make their downtowns, retail hubs, and central business districts more inviting and accessible. Streetscape improvements, including attractive landscaping, decorative streetlights, brick sidewalk pavers, and strategically planned parking areas, are examples of how municipalities are proactively transforming their space to appeal to potential and current residents.
What does this mean to you? By looking at these trends and spotting areas where any one of them is begining to take place, you may have the opportunity to purchase a property in an area rip for revitalization, for example. In such a case, your investment may increase in value both during and after revitalization. If you are considering building a home, integrate "green" technology to increase its desirability, efficiency and potential resale value.
The Thomas and Drake Group in Palm Desert has provided services to clients who operate Senior Assisted Living homes. The real estate itself is typically a five bedroom home in a quiet residential area with no steps or stairs. A small group of seniors live at the property and continue to lead independent lives with the help of a live-in caregiver. From a real estate investment standpoint, the property and its expenses are paid for by the income from the business. From a business standpoint, owning multiple smaller units is a more affordable capital outlay than purchasing a larger facility.
Since the temperatures in the California Desert can be extreme, the use of Green Technology and energy efficient design in construction is not only eco-friendly, it also can make a huge difference in heating and cooling costs. Super-insulated homes, for example, can cut summertime electric bills by as much as 90% - sound unbelievable? The Palm Springs and Palm Desert areas are known for their mid-century architecture. These beautiful homes were built as winter-time seasonal retreats - not year-round residences - and as such were not well insulated and were built in the 1950's when the technology for energy efficiency did not exist. A typical summertime electric bill for one of these mid-century homes can be as much as $1800.00. The same sized home built today with super-insulation, tight construction, radiant heat barrier, double-paned low-e windows has a typical monthly summertime electric bill of about $200.00.
Both Palm Springs and Palm Desert now have mixed-use developments under construction. Port Lawrence in Downtown Palm Springs is combining retail, office and residential in one project. Residential lofts and condos will be situated above retail, restaurant and other commercial space, and the interest is huge. Since Palm Springs is a resort destination, many visitors want to be in the middle of everything - as close to the restaurants, shops and casinos as possible. This project does just that.
What could a hospital or college campus possible have to do with your residential real estate investment? Rental Properties. As both The College of the Desert and the UC San Bernardino / UC Riverside campuses expand, students will need housing. A time-tested simple investment strategy is to own rental properties around college campuses.
If you would like more information on any of the Real Estate Trends in this article or on commercial or residential properties in the California Desert, including Palm Springs, Palm Desert, Rancho Mirage, Indian Wells, La Quinta, Desert Hot Springs, Cathedral City and Indio, please contact the Thomas and Drake Group or visit our website at www.ThomasAndDrake.com .
Team spirit turns hockey star into real estate czar
By Noelle Knox, USA TODAY
WASHINGTON — Lenders are collapsing, home sales and prices in many markets are falling and lots of investors are panicking. Not Warren Buffett. He told a group of his real estate managers late last month in Omaha that he sees this as a time of opportunity.
The man who will try to seize some of those opportunities for him is Ron Peltier, CEO of HomeServices of America, the real estate arm of Berkshire Hathaway (BRKA, BRKB) and the nation's second-largest residential brokerage firm. It's Peltier's task to scope out deals with high-quality, but beaten-down, realty firms that might be ripe for acquisition.
"We want to be in the top 60 markets in America in the next five years," Peltier says. "And we want to be the No. 1 or No. 2" real estate company in those areas.
Since Buffett bought HomeServices seven years ago, the Minneapolis-based company has shot up from about 4,000 agents in three markets to 20,000 agents in 20 markets, including Prudential California and Edina Realty in Minneapolis. HomeServices also offers homeowners insurance and title services, and it runs a mortgage venture with Wells Fargo.
In keeping with Buffett's conservative approach, Peltier's lending division, which accounts for about 15% of the company's profits, avoided offering the kind of risky adjustable-rate loans that have burned many lenders.
"I don't want to sound holier-than-thou, but it was irritating when there were all kinds of players out there in the market offering all kinds of products that were questionable," says Peltier, 58.
HomeServices has a broad reach
HomeServices of America is the nation's second-largest real estate brokerage firm, with about 20,000 agents in 20 markets across the country.
For the Complete article, go to: USA Today
August 27, 2007
What credit crunch? Home buyers with solid credit and money for a down payment are now better positioned than they were a few weeks ago.
The average 30-year fixed mortgage rate is at a three-month low. Home prices in many areas have fallen. And despite the meltdown in non-traditional mortgages, many community banks still offer jumbo loans (above $417,000), though rates have risen.
"If you want to move up to a bigger house or buy a home for the first time, and you have the credit and qualifications to do so, it's an excellent time to buy," says Gerri Detweiler of FreeRateSearch.com.
Contributing to a Buyer's Market:
•Lower long-term mortgage rates. The average 30-year fixed rate reached 6.52% last week, the lowest since May 31, according to Freddie Mac (FRE). Frank Nothaft, Freddie Mac's chief economist, says declining yields for Treasury securities and the housing slowdown helped produce lower mortgage rates.
•Falling home prices. Nationwide, median home prices fell 1.5% in the second quarter, according to the National Association of Realtors. In addition, sales were down in most states, the NAR said.
That's given buyers with sound credit a lot of bargaining power. James Aberle, 38, of Phoenix recently paid $288,870 for a home originally listed at $350,000. The builder, through its mortgage arm, arranged 100% financing and paid for private mortgage insurance, which typically kicks in for buyers who put down less than 20%. The builder also paid $7,400 toward closing costs, Aberle says.
And for some buyers, real estate appraisals are producing lower home values, allowing them to renegotiate the price, says Kyle Kilpatrick of LendingTree.com.
•Available jumbo loans. Many lenders have abandoned non-traditional loans, including jumbos. That's because investors, fearful that the crisis in the subprime market is spreading, are reluctant to buy jumbos and other loans that mortgage investment giants Fannie Mae and Freddie Mac won't buy. But now, many community and national banks have stepped in to offer jumbo loans. They're better positioned than some other lenders to make those types of loans because they can fund them with customer bank deposits, says James Chessen of the American Bankers Association.
•Lower rates on adjustable-rate mortgages. Rates on ARMs are often based on Treasury yields, which have fallen, notes Keith Gumbinger of HSH Associates.
For the complete article, go to USA Today
MSNBC.com
Separate data show big-ticket factory orders jumped in July
The Associated Press
Updated: 10:34 a.m. PT Aug 24, 2007
WASHINGTON - Sales of new homes perked up, while factory orders took off in July, raising hopes that the economy can safely weather financial turmoil that has shaken Wall Street.
The Commerce Department reported Friday that new-home sales rose 2.8 percent in July, after falling 4 percent in June. The increase in July lifted sales to a seasonally adjusted annual rate of 870,000 units. A second report showed that orders to factories for big-ticket goods jumped 5.9 percent in July, the most in 10 months.
Both reports were better than analysts expected. They were forecasting home sales to fall and were calling for a much smaller, 1 percent gain in factory orders.
In the housing report, the improvement in sales reflected gains in the West and the South, where sales went up by 22.4 percent and 0.6 percent respectively. Sales, however, tumbled 24.3 percent in the Northeast and were down 0.9 percent in the Midwest.
For the complete article, go to www.msnbc.com
We talk a lot about ways to increase your home's efficiency here, and here we talk some more. Nice information, but if we don't put it into practice, it means nothing. During one of the driest and hottest years on record here in the Desert, it's time to put all this good information into action.
You know August is approaching when temperatures are heating up and air conditioners seem to be constantly humming — and staying cool is on everyone's mind.
But many home owners are equally concerned about how they can cut down on their energy consumption and reduce their monthly cooling bills.
The American Council for an Energy Efficient Economy (ACEEE) has a few suggestions:
The basics are rather simple: You currently own a business or investment property and you are considering selling this property in order to purchase another investment property. Don’t just sell one, buy the next; utilize what is perhaps the Feds best program ever available for deferring your taxes on real estate capital gains, the 1031 Like-Kind Exchange.
This option gets its name from section 1031 of the United States Internal Revenue Code, which allows capital gains taxes on an investment asset to be deferred if the asset is traded for one of “like-kind.” And what, exactly, are “like-kind” assets? Like-kind simply means that they’re of the same nature or character. All real estate is considered to be of like-kind, even if one parcel is an undeveloped plot and the other is a newly built retail complex. The caveat here is that both MUST be business or investment properties. The money that you save by not paying taxes today may even be used to purchase a higher-priced and more valuable property than you might otherwise have considered. You don’t actually pay the capital gains tax until you sell the new replacement or like-kind property.
A 1031 exchange doesn’t need to be limited to a single property. With guidance from The Thomas and Drake Group and a qualified intermediary, you may be able to trade one property for two, or even swap multiple properties in what is known as a “multi-asset exchange.” The Thomas and Drake Group can help you determine what types of property can be exchanged for the one you currently own. One stipulation is that all real estate involved in the exchange exists within the United States. Another is that all properties involved are solely for business or investment purposes and do not serve as the owner’s primary residence.
While simple in concept, the 1031 exchange has some very specific details, which is why having professional guidance is imperative. Strict rules detail when the properties can be exchanged and how the exchange will be reported to the IRS. Once you relinquish your property to the new owner, for instance, you have just 45 days in which to either: (1) take possession of the new property, or (2) create a legal document that lays out the terms of the exchange, identifies each property by its official name, and is signed by the parties involved. In either case, all exchanged properties must be officially closed within 180 days or the tax benefit may be disallowed. Making sure that everything takes place within the time restraints can be tricky–especially when a multi-asset exchange is involved. This is where our professional services and the “Qualified Intermediary” come in.
The IRS says if you touch the money you pay the tax. However, if you use a qualified intermediary to transfer the money from the sold property into the purchased property, you qualify for a tax free exchange. The IRS does not permit your accountant, attorney, Realtor, Broker or escrow company to be your qualified intermediary. As a professional qualified intermediary, 1031 Exchange Advantage is a member of the Federation of Exchange Accommodators and bonded. No matter which intermediary you choose, they should be members of this important trade organization and should be bonded. Ask to see proof of both before doing business with any intermediary.
The benefits of a 1031 exchange may well be worth the time and effort. The Thomas and Drake Group can even help you come up with some creative ideas to roll the perks of a 1031 exchange into other aspects of your life. For instance, you might be able to buy a rental property in a place where you’d like to vacation; or purchase a condominium or an apartment building that can generate income. The possibilities are almost limitless.
Take time to read the information provided by 1031 Exchange Advantage on their website (click on the link to the right), and if you ask for additional information, here is our gift to you: send us a quick email first and ask us for a rewards code. This may qualify you for discounted services from 1031 Exchange Advantage.
First-time home buyers have a lot to think about, and sometimes they don't consider all of the factors that will impact their enjoyment of their new home.
A handful of recent home buyers in St. Louis say what they wish they would have asked before buying a property. The issues they raise are valid concerns for anybody buying a home practically anywhere:
Source: St. Louis Post-Dispatch, Sarah Casey Newman (06/23/07)
For more homebuyer tips and information for home buyers, visit http://www.thomasanddrake.com/ and click on "Buyer/Seller Info".
Builders are hungry and that means great savings for you! With many builders discounting new homes and offering incentives to buyers, now could be a perfect opportunity to buy a BRAND NEW HOME.
Unfortunately, many new home buyers may not know what the house next door sold for or what may have been included in the final sale price. Here is where you NEED to be professioanlly represented by a qualified Realtor who has a good working relationship with the builders in the area and who keeps track of the new neighborhoods' sales.
Cost to You
Nothing! Any compensation given to us is recognized by the builder as a marketing fee and has no impact on the final cost of the home. In fact, most builders do not even see the referral fee (commission) agreement until AFTER all negotiations have been completed. Builders desire, expect and encourage us to show their homes to our clients.
Savings to You
Are you getting what you're entitled to have ... both in quality and value? The Thomas and Drake Group knows what you should receive and what "extras" might be available.
Since we have already representated so many of our clients at so many of the new home developments in the Desert, we have learned (from both past transactions as well as from the relationships we maintain with the on-site sales teams) just how much we can help negotiate in to your new home! Overall price discounts, interest rate buy-downs, floor coverings, countertops, window coverings, ceiling fans, patios, decks, pools and spas, landscaping, even appliances and furninshings can often be negotiated into your purchase if you know how to ask and from whom!.
Resale...Appreciation & Profit
Give your investment the best opportunity for appreciation at resale. Questions concerning site location, builder, design and decor are important. We know you are building not only for today ... but for tomorrow.
You Are Represented
With The Thomas and Drake Group, YOU are represented! Our experience, knowledge, and reputation represents strength and leverage on your behalf. Several builders in the Coachella Valley now see us with a client and simply say "OK, tell us your final deal will be" because they KNOW we work hard and help to negotiate the best possible deal for our buyers and then KEEP working hard for our clients up to and beyond the day they get their keys!
Why Us?
The Thomas and Drake Group has a very strong working relationship with most of the New Home builders throughout the Coachella Valley and we even maintain a library of brochures from many of them. We have represented clients with these builders and are recognized for our professionalism and significant follow-up throughout the process.
We make sure that you are kept informed of what to expect from your first visit to the property until the day escrow closes and beyond. We will guide you through the process and keep you up-to-date on your transaction and we will gladly coordinate any third-party inspections you may need, take photographs of your new home as it is being finished - something our out of town clients find especially beneficial.
Contact Us
We will be happy to help you in your new home search!
Just a few years ago, I was getting my hair cut when the barber told me she was buying a new home. Since I had already helped others in her salon, I said “Great! Have you already picked out a neighborhood?” She let me know that she was already in the transaction and that her neighbor was a real estate agent and was working for her. I asked the agents name and found it was no one I had ever heard of, someone with a small brokerage who was offering a discount.
It seemed at the time that everyone was an agent. My friends’ wife’s ex-boyfriends brother-in-law; my plumber-and-real-estate-agent; my sisters’ old college roommate. Everyone jumped into the business when the market was hot and made a quick buck, even though they really didn’t know what they were doing, didn’t know a basic contract and had no idea what to look out for in property disclosures.
Today, now that the market has cooled and leveled off, I look around and see some of those same old agents at the home improvement center selling me my dishwasher. It’s not a bad place to work – it’s air conditioned, out of the sun, no continuing education requirements, no licensing fees or insurance costs, and the customers come to them.
The costs of maintaining a real estate license are quite significant: Association dues to the California Association of Realtors, the National Association of Realtors and to the local Boards, the costs of Errors and Omissions Insurance, additional automobile liability insurance, the time and money to meet continuing education requirements, marketing and advertising costs…the list goes on.
When the easy money faded away, many agents decided not to renew their memberships to the National Board of Realtors, meaning they were no longer “Realtors”, just “agents”. They no longer had the National Association backing them. No longer being “Realtors”, the could no longer belong to the California Association of Realtors – no backing on the state level, no free contracts or forms, no online forms, no legal hotline. Next, lower the auto liability coverage – no more taking clients around in the car. Put off getting those continuing education requirements met, wait a while on the marketing and, finally, don’t pay the E&O insurance – no broker will carry them without it and *POOF*, they are no longer active agents, they no longer have an active license.
It’s the Tortoise and the Hare all over again. The quick money falls by the wayside, the steady workers are in it for the long haul. In the Desert, everyone slams on their breaks for a tortoise; on the sad side of the same coin, how many dead rabbits do we keep seeing alongside the roads?
As a friend who has been in this business for over 30 years keeps telling me, “In a neutral market, this business is the toughest way to make an easy buck.”
The lesson here is to look for a Realtor who works full-time in Real Estate and works even when business is slow, even when the weather is hot, even when the market is not. At least you will know that your agent will be there for you after his or her commission check clears the bank; otherwise, hunt them down at your local super-center.
-Gary Drake
The Thomas and Drake Group
Palm Desert, CA
1. SHOP AROUND Ask friends, check the phone book, call your state insurance department, check consumer guides, insurance agents and online quote services.
2. RAISE YOUR DEDUCTIBLE Most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25%.
3. BUY YOUR HOME & AUTO POLICIES FROM ONE INSURER Some companies will take 5% to 15% off your premium if you buy two or more policies.
4. MAKE YOUR HOME MORE DISASTER-PROOF See what steps you can take to make your home more resistant to natural disasters.
5. DON'T CONFUSE YOUR PURCHASE PRICE WITH REBUILDING COSTS Don't include your land value when deciding how much insurance to buy.
6. IMPROVE YOUR HOME SECURITY Some companies will discount as much as 15% to 20% if you install a sprinkler system and a fire and burglar alarm that notifies police, fire or other monitoring stations.
7. SEEK OUT OTHER DISCOUNTS Ask your agent or company representative about any discounts available to you.
8. SEE IF YOU CAN GET GROUP COVERAGE Professional, alumni and business groups often work out an insurance package with an insurance company, which includes a discount for association members.
9. STAY WITH THE SAME INSURER If you've kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder.
10. REVIEW THE LIMITS IN YOUR POLICY AND THE VALUE OF YOUR POSSESSIONS AT LEAST ONCE A YEAR
11. LOOK FOR PRIVATE INSURANCE IF YOU ARE IN A GOVERNMENT PLAN You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.
12. WHEN YOU'RE BUYING A HOME, CONSIDER THE COST OF HOMEOWNER'S INSURANCE Choosing wisely could cut your premiums by 5% to 15%.
All across America, communities have been faced with increased demands on existing water supplies. Consequently, there is a greater focus on water conservation, not just in times of drought, but in anticipation of future population growth. Water can no longer be considered a limitless resource. A philosophy of conservation of water through creative landscaping has created the new term, xeriscape.
The term xeriscape is derived from the Greek word xeros meaning dry, combined with landscaping, thus xeriscaping. The term was coined by the Front Range Xeriscape Task Force of the Denver Water Department in 1981. The goal of a xeriscape is to create a visually attractive landscape that uses plants selected for their water efficiency.
Properly maintained, a xeriscape can easily use less than one-half the water of a traditional landscape. Once established, a xeriscape should require less maintenance than turf landscape.
The eight fundamentals of water-wise landscaping illustrate the concepts and principles of Xeriscape landscaping and other water-efficient approaches.
Proper landscaping techniques not only create beautiful landscapes, but also benefit the environment and save water. In addition, attractive, water-efficient, low-maintenance landscapes can increase home values.
Water-efficient landscaping offers many economic and environmental benefits, including:
In short, plan and maintain your landscape with these principles of water efficiency in mind and it will continue to conserve water, as well as be attractive.
The temperatures are rising and the snowbirds have all gone home. Those with faint hearts have made their vacation plans for somewhere cool.
Still, 40 families a day are moving to the Desert and homes don’t sell themselves.
Last summer, we held our listings open nearly every weekend. The record-hot summer days of 122 degrees were especially uncomfortable thanks to a monsoonal flow bringing uncommon moisture up from the Gulf of Mexico. Shorts, lightweight silk shirts, comfortable shoes and it was still hot.
Soaking with sweat, panting and pulling up open house signs, we saw a car suddenly stop, back up and motion for us to come over. She needed some information and couldn’t find an agent. We sighed, looked at each other and said with a forced smile ”Sure!”
People thought we were crazy, our competitors laughed and our co-workers scratched their heads.
We met many interesting people, most of them nice, who were either looking for homes and didn’t see very many open houses or who had been vacationing here for years and were just curious. I think we even met a few who wanted to soak up someone else’s free air conditioning.
Did we sell all the houses we held open? No. We did meet people who were looking for a Realtor and liked the fact that we worked no matter what. We also met three different couples who said they were just looking around getting ideas. We did find houses for all three of those couples.
We got a phone call on one of the very hottest days from an out-of-towner who found a $600,000 home online and needed more information. She couldn’t find the listing agent (whom we found out later was on a cruise for the summer) and just happened to call us. We got the information she needed. She didn’t buy that house; she bought a house for $850,000.
It’s the Desert. It’s hot for 3-4 months out of the year. For the remaining 8-9 months, this is the place where people from all around the world travel to for their vacations. We get to live in the desert year round; we get to play in the desert year round and we GET to work in the desert year round.
What is Too Hot for a Cool Market?
One of the most frequently asked questions we have received lately from buyers is “if I wait until the weather gets hot, will I get a better deal?” Likewise, the most frequently asked question from sellers is “If I wait until after the summer, will I get a higher price?”
The answer in most cases is No and No. First a little background on the housing market in the Desert.
For quite some time, we saw record appreciation in home values. Prices were increasing at an unprecedented rate. Buyers drove the prices higher and higher through flipping and overbidding, property owners began to expect that such increases would never end and sellers chased the price curve up.
When the housing market began to level out, sellers continued to expect that their properties were increasing in value at the same pace as they had been just a few months earlier. Sellers continued to try to price their homes above the most recent comparable sale, and the offers did not come as expected. Very slowly, some sellers began lowering price and the eventually began to chase the price curve down. Their homes stayed on the market for 6 months, 9 months…a year, but they were stale. On the other hand, a few savvy sellers saw that prices were not going up, priced their properties lower than the last comparable sale, sold at a good price in a reasonable period of time and made out like bandits again.
We now are seeing many of the less motivated sellers remove their stale listings from the market, thereby cleaning out the deadwood and unreasonable listings. Those properties that continue to remain on the market or come on the market as new listings are a little more in line with what the market is actually doing. We have turned down a number of listings recently because the sellers just wanted more than what the current market conditions will allow. Now is the time to price a property right from day one (see the April 30 article “The Importance of Pricing Right From Day One” in the Newsletter at ThomasAndDrake.com).
For our buyers, we try to explain that there are ready and motivated sellers and there are those sellers who have listed their home, have no motivation to sell and will only sell if they get a certain price.
For our sellers, we try to explain the same thing. There are investors making ridiculous, low-ball offers on properties, hoping to hit on one or two who are desperate enough to sell at their offering price. There are also buyers who are buying homes because the timing is right for them and still others who are buying because they have recently relocated to the area and need to buy a house.
So, here is the answer to our questions above:
Although summertime in the Desert brings fewer shoppers overall, the ones who are out tend to be more serious and ready buyers. Although many sellers take their homes off the market during the summer, others hope to attract the buyer who is on a time line and can’t wait until the same old stale listings that didn’t sell all winter hit the market again in September.
Overall, it is still a great time to buy: interest rates are still near historic lows, there are many homes to choose from and real estate remains one of the best long-term investments available.
-Gary Drake
The Thomas and Drake Group
May 24, 2007
City officials from Desert Hot Springs have been attending the International Council of Shopping Centers convention, hoping to attract more businesses to DHS.
Since this is the first time the City has participated in the event, I am sure the response will be overwhelming for what they have been accustomed to - namely "sit back and do nothing and hope it changes". I applaud the City for finally taking some steps to help this dusty little Desert outpost - a city separated by geography and attitude from its sisters on the other side of I-10.
With new full-time residents moving to "Outpost Freedom", the demographics are changing. Now that the city is getting an influx of residents who will be voting in DHS rather than those seasonal residents who only vote in their home states, the City will be changing. That's a good thing.
The beautiful views will not change, the worlds best hot mineral springs will not change nor will the outstanding weather that Desert Hot Springs is known for.
What will change is the City Council. Already, new council member Scott Matas seems to be making a difference. He brings a more professional and growth-oriented approach to what had for years been called the "Hillbilly Council". A fresh breath of pro-development and growth means new life for a tired city.
Now that D.R. Horton and Century Vintage Homes have broken the ice by developing the West side of town, with nothing but more new and fresh plans in the works, new businesses are coming. People who once scoffed at the idea of living in Desert Hot Springs now entertain the possibility or have jumped in with both feet, and they are demanding new retail services. New roads and traffic signals, new commercial development and new money are coming to this last secret of the Desert.
With the City taking action steps to attract new businesses, more commercial development and better police and city services, the town is making a very good start. Many spas and resorts such as Two Bunch Palms are in the process of updating and revamping to attract a younger, hipper clientele (and it's working). Just keep the momentum going and this Dusty Little Desert Outpost will soon be the Gem of the Desert it once was.
Biggest gain in 14 years as median prices fell by record amount
Updated: 9:33 a.m. PT May 24, 2007
WASHINGTON - Sales of new homes surged in April by the biggest amount in 14 years, but the median price of a new home dropped by the largest amount on record. The mixed signals left no clear picture of whether the worst of the nation’s housing slump is over.
The Commerce Department reported that sales of new single-family homes jumped by 16.2 percent in April to a seasonally adjusted annual rate of 981,000 units. That was far better than the tiny 0.2 percent gain that economists had been expecting.
However, the median price of a new home sold last month fell to $229,100, a record 11.1 percent decline from the previous month. The big price decline indicated that builders are slashing prices in an effort to move a huge overhang of unsold homes.
The jump in sales was the biggest increase since a 16.4 percent surge in new home sales that occurred in April 1993.
However, analysts cautioned against reading too much into the big gain, especially in light of other surveys showing that builder confidence has sunk in recent months over worries that troubles in the subprime mortgage market will further crimp demand in coming months.
The strength in sales was led by a 27.8 percent surge in the South. Sales were also up in the West by 8.5 percent and in the Northeast, where they rose 3.8 percent.
Sales fell in the Midwest, dropping by 4 percent.
The drop in median prices in April compared to March was a record one-month decline. If the April sales price was compared to the sales price a year ago, the decline was 10.9 percent, the biggest year-over-year drop since 1970.
In other economic news, the Commerce Department said that orders to U.S. factories for big-ticket manufactured goods posted a moderate 0.6 percent increase in April, helped by a continued rebound in business investment.
In a third report, the Labor Department said that the number of newly laid off workers filing applications for unemployment benefits rose to 311,000 last week, an increase of 15,000. But even with the gain, claims remain at a level indicating a healthy labor market.
While the increase in orders for durable goods was less than had been expected, the government sharply revised the March performance to show a 5 percent surge, much stronger than the 3.7 percent gain previously reported.
Analysts believe that U.S. factories, which have been buffeted by the weakness in housing and slumping demand for autos, are starting to stage a moderate rebound, helped by reviving interest on the part of businesses to spend money to expand and modernize.
The overall economy slowed in the first three months of this year to an annual growth rate of just 1.3 percent, the weakest performance in four years, as a steep slump in housing continued to weigh on the economy’s performance.
Analysts are hoping that spending by consumers and businesses will be able to overcome the weakness in housing and keep the country out of a recession.
The report on durable goods offered encouragement in the area of business investment. It showed that demand for capital goods excluding airplanes, considered a good proxy for business investment, rose by 1.2 percent in April following, the second solid monthly increase.
The 0.6 percent rise in total durable goods orders came even though demand for transportation products fell by 1.3 percent. This reflected a drop of 10.7 percent in demand for commercial aircraft and a 1.9 percent fall in orders for motor vehicles.
Excluding transportation, orders would have been up by 1.5 percent, the same performance as in March.
There was strength in orders for primary metals such as steel which rose by 4.3 percent and orders for electronic equipment and appliances, which rose by 3.8 percent.
But demand was weak for computers, which fell by 7.8 percent, and communications equipment, which dropped 5 percent.
Should a buyer get a home inspection for a home they are buying? Should a seller order a home inspection prior to putting the property on the market? There are advantages for both.
Simply put, a home inspection is a visual examination of both the physical structure and major systems of the entire home including: walls, ceilings, floors, decks, exterior covering, the roof, foundation, insulation and ventilation, plumbing, electrical, heating and air conditioning. It is not an appraisal to validate the value of a home, nor a pass/fail exam. A third-party inspector will give a report on the physical condition and suggest repairs.
Buyers
For buyers, a home inspection clause in the written offer that makes the purchase contingent upon the findings can provide peace of mind. If a serious problem is found, it allows room to renegotiate the purchase price or “opt-out” of buying the home altogether. However, this is usually uncommon. Typically, the seller will already have told the buyer about any known major problems (as is required in California).
More often, inspections reveal less serious defects that aren’t enough to warrant backing out of the transition. However, knowing about these minor problems can prevent major disasters down the road. In addition, if specified in the inspection clause, the cost of the repairs can be at the seller’s expense.
Another advantage to having a home inspection is it offers buyers an opportunity to become familiar with their new home and learn about maintenance to help in its upkeep. Although not required, it’s recommended that buyers be present during the inspection. This allows them to observe the inspection; ask questions about the condition of the home; and receive an objective opinion.
Sellers
For sellers, conducting a home inspection (or pre-inspection) before listing their homes puts the control back into their hands.
When the buyers inspection finds problems, it can impede negotiations and cost the seller more in repairs. By having a pre-inspection, the seller can help eliminate any surprise findings after an offer has been made. The seller can make repairs before placing the home on the market and possibly even increase the value of the home.
A pre-inspection can also serve as a great marketing tool. Sellers are required by law to disclose any known defects in the home. Having a pre-inspection report available for buyers tells them that the seller has nothing to hide. It also gives them a clearer picture of the condition of the home.
If there are major problems found during the pre-inspection, it gives the seller an opportunity to disclose the condition up-front, making it less likely for the buyer to pull out of the deal or try to renegotiate the price.
Knowing the true condition of a home can bring peace of mind to buyers and sellers; and be one less hurdle in the home buying and selling process. Ask the Thomas and Drake Group for a list of certified independent home inspectors in your area.
The Thomas and Drake Group can be reached at (760)799-0320 or email to info@ThomasAndDrake.com .
The Desert Sun
May 15, 2007
Planning group has many things it must weigh
The Palm Desert Planning Commission is set to vote today on a new ordinance that would set regulations for converting rental apartments to condominiums.
The law seeks a middle ground between the financial interests of developers and the city's interests in protecting tenants and buyers, and ensuring adequate levels of rental housing, said Lauri Aylaian, director of community development.
If the commission approves the law, it will then go to the City Council probably in June, Aylaian said.
The proposed law would create the following requirements for condo conversion projects:
Vacancy rates in the city would have to be more than 5 percent for two years in a row before a conversion is allowed.
Newly built apartments would have to remain as rental units for a year before they could be converted to condominiums.
Apartment inspections would be required before a conversion. They would have to be performed by a licensed architect or structural engineer, rather than a certified home inspector.
Tenants would have a 90-day option to agree to purchase their units, and they would be provided with relocation referrals and financial assistance if they decide not to buy.
Apartment buildings with four units or less would be exempt from the requirements.
Aylaian estimated the city's current vacancy rate at about 10 percent. No applications have been made for condo conversions, she said.
Fed chief also promises a crackdown on abusive lending practices
Updated: 8:42 a.m. PT May 17, 2007
WASHINGTON - Federal Reserve Chairman Ben Bernanke said Thursday that he did not believe the growing number of mortgage defaults would seriously harm the economy.
Facing criticism from members of Congress about lax regulation, Bernanke also promised that the Fed would do everything possible to crack down on abuses that have put millions of homeowners in jeopardy of defaulting on their mortgages.
“We at the Federal Reserve will do all that we can to prevent fraud and abusive lending and to ensure that lenders employ sound underwriting practices and make effective disclosures to consumers,” Bernanke said in remarks prepared for a financial conference in Chicago.
However, Bernanke in his remarks did not detail any specific tightening of regulations, saying only that the Fed would hold hearings in coming weeks on the matter.
Bernanke said while it was likely that there would be further increases in mortgage delinquencies and foreclosures this year and in 2008, he did not believe this problem would be enough to derail the overall economy.
“We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system,” Bernanke said.
In answering questions, Bernanke said he believed the financial system would be able to “absorb the losses from this subprime mortgage problem” without difficulty.
Bernanke, who served as President Bush’s chief economic adviser before taking over the Fed post in February 2006, said regulators needed to be sure that any rules they imposed did not stifle the market for legitimate loans.
“We must be careful not to inadvertently suppress responsible lending or eliminate refinancing opportunities for subprime borrowers,” he said in his remarks, copies of which were distributed in Washington.
Sen. Charles Schumer, D-N.Y., said it was good news that Bernanke was suggesting possible new rules that could be issued this summer to crack down on abusive practices. But Schumer said help was needed sooner for homeowners facing foreclosures.
“We must take action today to stem the tide of foreclosures sweeping through our neighborhoods,” he said in a statement. “I hope Chairman Bernanke is right when he says that a slumping housing market will not affect the broader economy, but I would not bet the house on it.”
Schumer has introduced legislation to help homeowners avoid foreclosures by boosting funds to community groups that provide financial counseling.
Bernanke’s comments to a banking conference sponsored by the Federal Reserve Bank of Chicago marked his most extensive review of the troubles in the subprime market since the Fed and other banking regulators came under criticism from members of Congress.
Senate Banking Committee Chairman Christopher Dodd said a “chronology of regulatory neglect” allowed the problems in the subprime market to go unchecked.
Banks and other lenders loosened their standards for making riskier mortgages during the five-year housing boom.
The problems in subprime mortgages — higher-priced home loans for people with weaker credit histories — have roiled financial markets in recent months and raised concerns about possible spillover effects to the larger economy.
But in his speech, Bernanke said that the “vast majority of mortgages, including even subprime mortgages, continue to perform well.”
He said that past gains in home prices have left most homeowners with significant amounts of equity in their houses and the growth in jobs and incomes should allow most households to keep their financial obligations in a manageable range.
© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
URL: http://www.msnbc.msn.com/id/18719012/
In summertime, the living isn’t always easy for our animal friends. Dogs and cats can suffer from the same problems that humans do, such as overheating, dehydration and even sunburn. By taking some simple precautions, you can celebrate the season and keep your pets happy and healthy.
- A visit to the veterinarian for a spring or early summer check-up is a must; add to that a test for heartworm, if your dog isn't on year-round preventive medication. Do parasites bug your animal companions? Ask your doctor to recommend a safe, effective flea and tick control program.
- Never leave your pet alone in a vehicle—hyperthermia can be fatal. Even with the windows open, a parked automobile can quickly become a furnace in no time. Parking in the shade offers little protection, as the sun shifts during the day.
- Always carry a gallon thermos filled with cold, fresh water when traveling with your pet.
- The right time for playtime is in the cool of the early morning or evening, but never after a meal or when the weather is humid.
- Street smarts: When the temperature is very high, don’t let your dog standing on hot asphalt. His or her body can heat up quickly, and sensitive paw pads can burn. Keep walks during these times to a minimum.
- A day at the beach is a no-no, unless you can guarantee a shaded spot and plenty of fresh water for your companion. Salty dogs should be rinsed off after a dip in the ocean.
- Provide fresh water and plenty of shade for animals kept outdoors; a properly constructed doghouse serves best. Bring your dog or cat inside during the heat of the day to rest in a cool part of the house.
- Be especially sensitive to older and overweight animals in hot weather. Brachycephalic or snub-nosed dogs such as bulldogs, pugs, Boston terriers, Lhasa apsos and shih tzus, as well as those with heart or lung diseases, should be kept cool in air-conditioned rooms as much as possible.
- When walking your dog, steer clear of areas that you suspect have been sprayed with insecticides or other chemicals. And please be alert for coolant or other automotive fluid leaking from your vehicle. Animals are attracted to the sweet taste, and ingesting just a small amount can be fatal. Call your veterinarian or the ASPCA Animal Poison Control Center at (888) 426-4435 if you suspect that your animal has been poisoned.
- Good grooming can stave off summer skin problems, especially for dogs with heavy coats. Shaving the hair to a one-inch length—never down to the skin, please, which robs Rover of protection from the sun—helps prevent overheating. Cats should be brushed often.
- Do not apply any sunscreen or insect repellent product to your pet that is not labeled specifically for use on animals. Ingestion of sunscreen products can result in drooling, diarrhea, excessive thirst and lethargy. The misuse of insect repellent that contains DEET can lead to neurological problems.
- Having a backyard barbecue? Always keep matches, lighter fluid, citronella candles and insect coils out of pets' reach.
- Please make sure that there are no open, unscreened windows or doors in your home through which animals can fall or jump.
- Stay alert for signs of overheating in pets, which include excessive panting and drooling and mild weakness, along with an elevated body temperature.
You've never had more homes to choose from
Interest rates haven't been this low for nearly 40 years
MAY 2007: Fiesta Days in Indio, May 5-6; Evening Under the Stars, May 5; Jammin’ With the Animals, May 6; Film Noir Festival, May 31-June 3.
JUNE 2007: Palm Springs Power Baseball season begins, June 1; Firemen’s Annual Fish Fry, June 2.
JULY 2007: Independence Day celebrations, July 4; Pets on Parade Awards Luncheon, July 15.
AUGUST 2007: Idyllwild Jazz in the Pines, Aug. 25-26; Palm Springs Short Film Festival, Aug. 23-30.
OCTOBER 2007: American Heat/Palm Springs Motorcycle and Hot Rod Weekend, Oct. 5-7; dates TBA: Samsung World Championship (LPGA Golf); Tram Road Challenge; Desert Heart Walk; Living Desert’s Howl-O-Ween; Desert AIDS Walk; The Fabulous Palm Springs Follies season opening.
NOVEMBER 2007: Greater Palm Springs Pride Festival and Parade, Nov. 2-4; Rancho Mirage Art Affaire Nov. 3-4; LG Skins Game Nov. 23-25; dates TBA: The Art of Food & Wine; Jacqueline Cochran Air Show, WildLights at The Living Desert.
DECEMBER 2007: Dates TBA: Indio International Tamale Festival; Palm Springs Festival of Lights Parade; Greater Palm Springs Celebrity Golf Classic; Twenty-Nine Palms Band of Mission Indians Winter Gathering Powwow; Dennis James Golf Classic; City of Palm Springs Holiday Concert; Senior Class season opening.
JANUARY 2008: 48th Annual Bob Hope Chrysler Classic, Jan. 14-20; dates TBA: 19th Palm Springs International Film Festival; Palm Springs National Short Play Festival; Kennel Club of Palm Springs Dog Show; Desert Paws/Petco 5K Winter Run/Walk; Palm Desert Golf Cart Parade; Southwest Arts Festival.
FEBRUARY 2008: Dates TBA: Steve Chase Humanitarian Awards; Tour de Palm Springs; Palm Springs Modernism Show; Riverside County Fair and National Date Festival; Frank Sinatra Countrywide Celebrity Golf Invitational.
MARCH 2008: Dates TBA: Walk With the Animals; Pacific Life Open; La Quinta Arts Festival; Fashion Week El Paseo; Crossroads Old World Renaissance Festival; Kraft Nabisco Championship; Indian Wells Art Festival; Ron Baron’s Home Expo.
Events.org
