The National Federation recently reported that the Small Business Optimism Index was up 2 points for the month of April – this is the highest level since February of 2011. The index is currently at 94.5 and while companies have added employees at a slower rate in April than in March, the economy is still showing improvements. Our economy is improving but remains fragile, pointing towards the improvement in Bonds.

Bonds and home loan rates continue to improve as Europe is experiencing continued uncertainty in politics and the financial sector.

Forecast

Next week will see many economic reports that will touch on many aspects of the economy including consumer spending and inflation.

The Retail Sales will be released this Tuesday and will focus on the current state of consumer spending. The Consumer Price Index, also being released this Tuesday, will report the inflation at the consumer level.

Housing Starts as well as Building Permits data will be coming this Wednesday. The Weekly Initial Jobless Claims will be released this Thursday – last week’s numbers were the lowest in a month.

The important point to take away from the recent market news reports is that now continues to be an excellent time to purchase or refinance a home as home loan rates continue to remain near historic lows. If we can help answer any questions for you please contact us as we would be glad to help you.

Housing Starts as well as Building Permits data will be coming this Wednesday. The Weekly Initial Jobless Claims will be released this Thursday – last week’s numbers were the lowest in a month.

Graph: Data source: Haver Analytics courtesy of www.bloomberg.com

Here are some strategies that can help you add value to your Myrtle Beach property without breaking the bank:

1. Maximize Curb Appeal

A property that delivers a great first impression can positively change the way a potential buyer will approach the rest of the home. Great curb appeal also has the potential to add as much as 5 to 10% to the value. Aged siding, stained driveways and walkways, and unattractive or unkept front yards all detract from the overall experience and ultimate value of a home. Be sure to focus on the following areas:

• Landscape. Trim and manicure the lawn and spruce up your landscape with plants and other greenery.
• Siding and wall exterior. Old siding and cracked bricks can cause a home to appear tired and distressed, which will lower the property value.
• Repair and repaint. Consider repainting your front door and repair any small cracks, rusted railings or other areas that may have been neglected over time. A new paint job can turn an older home into a fresh newer-looking one and greatly increase the curb appeal.
• Don’t forget the Mailbox. If your mailbox is rusty and dusty, use some extra house trim paint to give it a lift.

2. Paint and Touch Up

Painting is one of the least expensive ways to add value to your home. Marks and scratches can easily be covered up and removed from the walls completely with just a little touching up. In most cases, a fresh coat of paint will reenergize your home and go a long way towards impressing potential buyers.

If you are painting an entire room or multiple rooms, consider researching the do’s and dont’s of choosing a paint color. The right color will complement an entire room, but just remember to stay away from colors that are too bright if you selling any time soon.

3. Update Your Kitchen

To most families, the kitchen is the heart of the home. An outdated kitchen with old appliances, aged countertops, and a general tired feel will hurt your home’s value. There are some things you can do to give an updated look and feel to this important space, without having to spend large amounts of money. Here are some things you can do to spruce up the kitchen:

• Add color with a fresh coat of paint.
• Install molding for some architectural interest.
• Update old or out-of-style lighting. A bright and modern fixture gives an instant facelift.
• Replace the faucet and sink.
• Replace the cupboard and drawer pulls.

Ideally you might consider new countertops, but they can get pricey, depending on the materials used. Granite is always popular with buyers, but you may consider granite tile instead, for an updated and modern look but at a more affordable price.

4. Update the Bathroom

Bathrooms are equally important to prospective buyers if you are planning to sell. New fixtures and lighting also add a great deal of value in this space. Adding a fresh coat of paint and a new shower curtain are other ideas to making this room look fresh and clean.

5. Install New Windows

While they can be a bit more expensive than repainting your walls or updating your kitchen, installing new windows not only contributes to reducing energy costs but also demonstrates to new buyers that the current homeowner has kept up with the necessary updates and repairs of the home. Updating your windows can have significant, positive effects on your energy bills, but they also provide your home with a stylish update that is attractive to potential buyers. If possible, you may also want to consider adding shades or blinds, which can add value as well as increase the overall appeal to buyers.

Whether you are selling or staying for awhile, even inexpensive updates can make a big impact to the value of your home.

As the unemployment rate dropped to 8.1% last week, the lowest since January 2009, the Labor Force Participation rate (the ratio between the labor force and the overall population size between the same age range) fell to 63.6, it’s lowest levels since December of 1981. It remains difficult to pay down debt with a weak labor force. Additional Bond buying (Quantitative Easing) will have a limited effect on spurring additional job growth with the recent underwhelming Jobs Report.

Forecast

After the last two weeks of economic reports, the upcoming week will seem quiet in comparison. The week’s first report, the weekly Initial Jobless Claims report, will be released this Thursday. With claims falling by nearly 30,000 last week, the largest decline since May of 2011, this report will be closely watched.

The Producer Price Index (PPI), which reports the level of inflation at the wholesale level, will be released this Friday along with the Consumer Sentiment for May.

The underwhelming Jobs Report, in addition to the continued debt news coming out of Europe, means that home loan rates are remaining near historic lows. Remember, weak economic news normally causes money to flow out of stocks and into bonds, helping bonds and mortgage loan rates to improve. Strong economic news normally has the adverse affect.

The bottom line is that now continues to be an excellent time to purchase a new home, as home loan rates still are near historic lows. If we can answer any questions for you please contact us, we would be glad to help you.

Graph: Data source: Haver Analytics courtesy of www.bloomberg.com

Less vs More

Making a Small Down Payment

The down payment you make on a home can range from as little as 3.5% (FHA loan) to as high as 20% of the sales price or greater. Naturally, putting down as little as possible will give you some breathing room for cash emergencies as well as additional funds to repair and improve your home. However, if you can afford putting 20% down on a house you escape the cost of private mortgage insurance (PMI) and avoid higher monthly mortgage payments.

The Benefits to a 20% or Greater Down Payment

Putting down 20% of the sales price is huge accomplishment for most home-buyers and is quite difficult, especially for those seeking to purchase their first home. A higher down payment will allow you to pay less interest over the life of the loan and avoid having to pay for private mortgage insurance, which can run anywhere from $45 to as high as $60 per $100,000 in purchase price.

Here are some of the advantages to making a down payment of at least 20% of the sales price of a home:

• Less likely to default on the mortgage.

• Reduces the size of your monthly mortgage payments.

• May qualify for lower interest rate.

• No need to acquire and pay for Private Mortgage Insurance. A lender will require PMI if your loan-to-value ratio is greater than 80% of the home value or purchase price, whichever is less. Your monthly PMIamount is affected by several factors, depending on the type of residence you are purchasing, your credit score, and several other determinants you can discuss with your realtor.

Your agent will be able to walk you through each step of the home-buying process and discuss the down payment amount you are comfortable making.

We also saw Bernanke report last week that inflation is higher in the short run due to higher energy costs, but prices are expected to remain moderate in the long run. While rising inflation could prevent home rates from remaining near record best levels, the upcoming Core Personal Consumption Expenditure (Core PCE) report (the Fed’s favorite measure of inflation) will shed light on current inflation levels.

Forecast
On this coming Monday we will see the Personal Income and Spending Data be released in addition to the much anticipated Core PCE report which will reveal the current inflation levels after Ben Bernanke’s comments last week suggested inflation levels will remain in check in the long-term.

The Initial Weekly Jobless Claim report will be coming this Thursday and will be closely watched by investors due to the last few weeks of elevated Jobless Claims. An ongoing trend of weak economic news will cause money to flow out of Stocks and into Bonds, helping bonds and mortgage home loan rates to improve, while strong economic news normally has the reverse result.

The important point to take away from the recent market news reports is that now continues to be an excellent time to purchase or refinance a home as home loan rates continue to remain near historic lows. If we can help answer any questions for you please contact us as we would be glad to help you.

An offer consists of three basic parts:

1. The property address and legal description.
2. Consideration, which is the price you are willing to pay.
3. The closing date.

It’s easy to become overwhelmed when viewing and considering the purchase of a potential home, but it’s critical to be as objective as possible throughout the entire home-buying process to ensure you buy the home that is right for you.

Getting the Most Out of Your Offer

Generally, the offer will be proposed in a “Contract to Purchase” form or “Offer for Purchase” form. Whatever the case, there are a few issues you must address before completing the offer.

1. Earnest Money

 Also known as a good faith deposit, earnest money represents a buyer’s seriousness and intent to purchase a property. Typically buyers offer as little as $1,000 in a slow market to as much as 10% of the sales price in a hot market.

2. Contingencies

While problems can sometimes arise during a buying process, contingencies allow you to back out of a contract for a specific reason. Here are a few examples of possible contingencies that you may want to consider including in your offer:

• Sale of your current residence
• Inspections satisfactory
• Financing secured
• Appraisal
• Insurance

3. Miscellaneous Requests

You should consider listing any fixtures or additional items that you want to be sure are included with the purchase. These items can include window coverings, hot tubs or even appliances and furniture if you are interested in including it in the purchase price. It is best to be clear what will be staying with the property and what will be leaving with the seller, in order to avoid misunderstandings or surprises on either side.

It’s important not to rush through the process of making an offer. If you have questions about the contract or property – don’t sign until your questions are answered. You want to be sure that you are presenting the best offer possible before going forward, and have the best chance of having your offer accepted. Your agent will be a valuable resource to answer your questions and to help make the home-buying process as smooth as possible.

A good sign for the economy was the news from Retail Sales which rose in March by a healthy 0.8 percent. This showed us that consumers purchased all kinds of products and is a growing trend looking back at January and February reports.

The glee ends though in the manufacturing sector where both the Empire State Manufacturing Index and the Philly Fed Index came well below market expectations. Many financial analysts attribute this to a global slowdown. These same analyst remain cautious but optimistic and feel manufacturing will soon begin to be positive.

In the housing sector, things weren’t pretty either as both Existing Home Sales and Housing Starts fell in March.

And things in the labor market were ugly as well. Initial Jobless Claims rose sharply higher. There were 386,000 fresh claims this past week, above the 375,000 that was anticipated.

News in Europe was all roses either. There is growing concern about Spain’s ability to paid down the debt as well as meet new budget deficit targets. This has spurred the G-20 to push the European Central Bank to do more to contain their debt crisis as it threatens global growth. Let’s also not forget France, Portugal, Ireland, and Greece to deal with in the future. At best it’s a mess.

So what does this mean if you are buying a home? Likely good news for home purchasers. Investors will keep their money in relative safe places like U.S. bonds, which will benefit mortgage bonds, to which mortgage home loan rates are tied to. So as the economy has it’s good and bad, bonds will rally on bad news and stocks will rebound on good news. Bad news generally helps mortgage home loan rates while good news is the opposite.

Forecast

There is plenty of economic news on the calendar for this week. Tuesday Consumer Confidence will be released as well as New Home Sales for March, followed by Pending Home Sales for March on Thursday.

On Wednesday, Durable Goods Orders will be released. This report is about products that are supposed to last at least three years.

Jobless Claims will be released on Thursday. We have seen a steady rise of new claims the past month, which is not very encouraging to the labor markets.

On Friday, we will get the Employment Cost Index, which measures the costs of hiring and paying the American workforce. Higher costs could lead to inflation pressures, which could affect mortgage home loan rates.

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Buying a home may be intimidating but finding your dream home is well worth the effort. Here are 4 tips that can make your home-buying process a little easier:

Existing and new home sale transactions in 2011 show investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year, from 749,000 in 2010. Vacation homes also rose 7 percent to 502,000 in 2011 from 469,000 in 2010. In Myrtle Beach, this trend does not appear to be short-lived as somewhat brisk sales continue during the first quarter of 2012.

Vacation home sales accounted for 11 percent of all transactions last year, which was up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

The National Association of Realtors Chief Economist, Lawrence Yun said real estate investors with cash are taking advantage of incredible market conditions the last few years. These conditions going into 2012 are still present with even the most recent economic news pointing towards mortgage interest rates remaining at or near record lows and ample inventory being available at bargain home prices. Yun even said, “Rising rental income easily beat cash sitting in banks as an added inducement. In addition 41 percent of investment buyers purchased more than one property.”

Nearly half of investment buyers said they were likely to purchase another property within two years.

Yun indicated the shift in investment buyer patterns in 2011 indicate the market, for the large part, is able to absorb foreclosures hitting the market. “Small-time investors are helping the market heal since REO (bank owned real estate) inventory is not lingering for an extended period. Any government program to sell REO inventory in bulk to large institutional companies should be limited to small geographic areas. Even where alternatives are needed, it’s best to rely on the expertise of local businesses, nonprofit organizations and government,” he said.

All cash purchases have become more common in the investment and vacation home market the last several years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation home buyers. Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes.

“Clearly we’re looking at investors with financial resources who see real estate as a good investment and who are not hesitant to use cash,” Yun said. For buyers who financed their purchase with a mortgage, typical down payments in the Myrtle Beach area were anywhere from a low of 10 percent and up to 35 percent for condotel type properties. The median down payment for both investment and vacation home buyers nationwide in 2011 was 27 percent.

The median investment home price in the nation was $100,000 in 2011, up 6.4 percent from $94,000 in 2010, while the median vacation home price was $121,300, down 19.1 perent from $150,000 in 2010.

Investment home buyers in 2011 had a median age of 50, earned $86,100 and purchased a property that was relatively close to their primary residence.

82% of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat.

The typical vacation home buyer was 50 years old, had a median household income of $88,600 and purchased property that was a median distance of 305 miles from the primary residence. 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers said they planned to own their recreational property for at least 10 years on average.

Lifestyle factors have been the primary motivation for vacation home purchasers, while the desire for rental income drives investment purchases. Vacation homes purchased last year were more likely to be in suburban locations.

Eight-two percent of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat. Thirty percent plan to use the property as a primary residence in the future, and only 22 percent plan to rent to others.

Half of investment buyers said they purchased primarily to generate rental income, and 34 percent wanted to diversify their investment portfolio or realized a good investment opportunity.

Sixteen percent of vacation buyers and 14 percent of investment buyers purchased the property for a family member, friend or relative to use. In many instances the home is intended for a son or daughter to use while attending school.

Fort-two percent of vacation homes purchased last year were in the South, 30 percent in the West, 15 percent in the Northeast and 12 percent in the Midwest; one percent were located outside of the United States.

Eight out of 10 second home buyers said it was a good time to buy. Nearly half of investment buyers said they were likely to purchase another property within two years, as did one-third of vacation home buyers.

If you would like to take advantage of great mortgage rates, great prices, and ample inventory in the Myrtle Beach area, click the button below and we will connect with you to help you realize your opportunities for investment and vacation properties in Myrtle Beach.

Bonds and home mortgage loan rates were also supported last week by inflation data from the Consumer Price Index (CPI). The figures for March were right in line of expectations. The Feds are still reiterating that inflation remains subdued. What’s raising eyebrows though is the year-over-year rise of the Core CPI which continues an ever so slightly rise and will dampen mortgage home loan rates and bonds from improving very much.

A key factor which we always keep our eye is the labor market. Last weeks Initial Jobless Claims increased 13,000 to 380,000 for the week ending April 7. This marks the highest levels since January. It is not only a concern with the market but the Feds are even now acknowledging that job creations are well short of their goals. In fact, the Federal Reserve Vice Chairman Janet Yellen said that weakness in housing, the European debt crisis, and government spending cuts are likely to slow the pace of recovery and expansion. She did iterate that there was plenty of stimulus tools at the Feds disposal if needed — i.e. Quantitative Easing.

The bottom line is that many factors will impact the direction in which bonds and home mortgage rates move in the coming weeks. The great news for homebuyers is that mortgage interest rates are near historic lows and now is a great time to consider purchasing a home.

Forecast

This Monday we get the Retail Sales figures. This will help investors determine how consumer spending is holding up.

On Tuesday, Housing Starts and Building Permits will be reported. These reports will be followed the the Existing Home Sales report for March, which will be released Thursday morning.

The weekly Initial Jobless Claims report will be released on Thursday as well. This report last week showed jobless claims rose to their highest levels since the week ending January 28. So this report will be closely watched by investors.

In addition to those reports, we will continue to get Corporate Earning reports that could sway opinion and influence the stock and bond markets.

Remember weak economic news generally causes money to flow out of stocks and into bonds, helping bonds and mortgage home loan rates to improve, while strong economic news normally has the reverse result.  So for now things seem to be spinning favorably in the direction of bonds. We shall see what the week ahead has in store.