Homeowner Associations: Good or Bad?

 

Often times home buyers don't fully realize the trade-off they're making when they move into communities that involve becoming association members.  More than 57 million people belong to associations governing everything from large and small condominium developments to subdivisions of single-family homes.

 

Associations provide valuable benefits including, say, landscape maintenance and access to a fitness room, and their rules often help protect property values. But it's the horror stories that make the news: full-blown fights over a homeowner flying a flag, stringing a clothesline or owning a large dog. And in some states, associations are within their rights to foreclose on homeowners who refuse to pay their dues.

 

Before You Buy
Do your homework before signing with an association.

 

Explore the building or neighborhood and talk to the community manager to assess whether the rules will adversely affect your lifestyle.

 

Potential conflicts include restrictions on: 

• The size, type and number of pets.
• Exterior antennae, clotheslines, flags, fence types and paint color.
• Running a home-based business, including restrictions on parking commercial vehicles.

 

Ask what the monthly dues cover, whether the association hiked dues substantially in the past and, if so, why? Ask about additional fees, such as move-in fees.

 

Homeowner Associations can be good, but if you get into one that doesn't fit your lifestyle, it can seem bad as well.  If in doubt, do your homework!

 

Do you have an experience with a homeowner's association, good or bad?  We'd love to hear your comments.  Just use the comment link below and tell us your thoughts.

 

 

 

The Subprime Mess: What it Means to You

 

The bad news about the housing market seems never ending:  Foreclosures have more than doubled over the past year.  Whether you're a home seller, owner or buyer, by this point you've got to be feeling a little rattled.

 

All that has happened before problems in subprime lending expanded throughout the mortgage market and beyond, creating what's being referred to as ''the credit crunch.''

 

The immediate future is clear:  As lenders tighten their borrowing standards, fewer people qualify for mortgages.  Fewer qualified buyers can only mean that housing prices will slump further.  Worst of all, economists don't see much chance for a turnaround until mid- 2008 and possibly into 2009.

 

Ready for some good news?

 

First, remember that all real estate is local, and some markets are doing just fine.  In fact, more than half of the major housing markets in the country have yet to see prices drop.  Homeowners who plan to stay put for a while may not have anything to worry about.  And if you're a buyer - well, this market may be the opportunity of a lifetime.

 

Sure, it's harder to get approved for a mortgage these days.  But if you can clear that hurdle and have enough money set aside for a down payment (count on needing at least 10 percent, and increasingly as much as 20 percent), you're golden, with more listings to choose from, at better prices and with a lot less competition.

 

Remember, prices may continue to fall for another year or two, so once you have a handle on the market, bid low.  If the seller won't budge, walk away.  There's no shortage of homes for sale.  Sellers, you need to be keenly aware of this fact and remain realistic about today's market.  Unlike a few years ago, sellers can't call the shots all the time now.

 

Don't be afraid to press for noncash concessions.  Sellers may be willing to pay a portion of your closing costs or provide a home warranty covering repairs for the first year.

 

If you're buying a new home, your builder may give you a cash rebate, plus free upgrades such as granite countertops, a Sub-Zero refrigerator, hardwood flooring or a big-screen TV.

 

Builders are also more willing to pay closing costs or buy down the rate.  For them this is a desperately tough market.  But that's not your problem, is it?

 

 

 

Real Estate: No Light in Sight

 

For those in the real estate industry and for those looking to buy or sell a home, it could take until 2009 to catch a break.

 

That's the forecast from Doug Duncan, chief economist for the Mortgage Bankers Association (MBA).   Duncan expects national median home prices to fall between 2 percent and 4 percent both this year and next. Prices will be held back by an oversupply of homes for sale, an increase in foreclosures and continued uncertainty among mortgage investors.

 

For this year, Duncan is predicting a 22 percent drop in new home sales and a 12 percent drop in existing home sales, followed by a 10 percent drop in each next year.

 

What? No good news?

 

There's one group of home buyers, home sellers and loan originators who will have an easier time of it than everyone else: those dealing with "anything that's conventional and conforming," Duncan said. In other words, 30-year fixed rate mortgages for borrowers with good credit under the "jumbo" cutoff of $417,000.

 

Home Heating Bills Will Increase

 

No matter how you heat your house, this year will cost you more than last, according to a government report issued recently.

 

Americans will spend $977 to heat their homes this year, averaging for all fuels across all sections of the country, according to the Energy Information Administration.

 

That's nearly 10 percent higher than the $889 spent last year and the highest amount ever, not adjusted for inflation.  The previous record was $948 in 2005-2006, according to EIA.

 

Those heating with oil can expect to pay $319 more this year compared to last.  Natural gas users, accounting for more than half of U.S. households, can expect to pay 10 percent, or $78 more this winter.

 

In addition to citing higher fuel prices, EIA said this winter is projected to be 4 percent colder than last - although still about 2 percent warmer than the 30-year average. Colder temperatures this winter compared to last account for some of the rise in heating costs.

 

Home Builders vs Home Buyers in Los Angeles 

 

The National Association of Home Builders reports that the confidence of United States homebuilders in the market for new single-family homes fell in October to its lowest levels since the series began in Jan. 1985.  The reason: continuing problems in the mortgage market, large inventories of unsold units, and the perceived effect of negative media on potential buyers.

 

NAHB Chief Economist David Seiders said in a statement recently that "consumers are still trying to get the best deals they can and many may have unrealistic expectations as to prices for new homes as well as what they can get for their existing homes.

 

The good news Seiders said is that builders expect sales conditions to remain stable in the next six months instead of decline further.  NAHB’s housing forecast indicates the second half of the year will show significant improvement.

 

Federal Reserve Chairman Ben Bernanke said recently that the weak housing market will be a “significant drag” on economic growth into next year.

 

What do you think?  We'd love to hear your opinion on the future of the real estate market.  Leave us your comment below.