As I mentioned early, though FHA has no minimum credit score requirement for FHA loans, many loan providers (remember FHA itself doesn’t issue loans. The loans come from private lenders) do impose a minimum score limit, usually starting at 580, on borrowers.

One of the reasons Fannie Mae decided to increase the minimum credit score is to “support prudent risk management and better ensure sustainable homeownership.” The revised requirement is clearly the response to the financial crisis that Fannie Mae, and Freddie Mac, had gone through last year (both Fannie and Freddie had to be bailed out by the government). While the increased minimum score is still much lower than what a private mortgage provider requires for a conventional loan, it’s a reminder for anybody, especially first-time homebuyers, that a good credit score is needed even if you want to buy a home with a FHA loan.

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Now taking another look at the three offers we got last week, they all have a few things in common: First, the offers are all pretty low, lower than our already reduced list price. Second, the buyers are all buying their home for the first time. Finally, they all will get a FHA loan. When we bought our house five years ago, all I knew was to get a  mortgage from a private lender and make 20% down payment. I didn’t know there are federally insured FHA loans (not that we needed one). Now all the sudden, all three potential buyers need to get a FHA loan in order to buy our house. So what is FHA loan and how is it different from a conventional loan?

What Is FHA Loan?

Well, FHA stands for Federal Housing Administration and FHA loan isn’t exactly a loan. Rather, it is a loan guarantee program insured by FHA. The borrower still has to obtain the loan from a commercial lender who qualifies for issuing a FHA loan. According to Wikipedia, the program started during the Great Depression to provide private lenders insurance for the loans they issued. Now FHA loans mostly serve low-income homebuyers who can’t afford a down payment required by private mortgage insurance companies or otherwise don’t qualify for a conventional mortgage from a private lender. Since each lender sets their own rates and terms, FHA loans will different rates, though most loans carry fixed rates throughout the term (FHA also insures adjustable rate loans).

FHA Loan Requirements

Since FHA loan is primarily to help low-income homebuyers to realize their homeownership, there are certain requirements in order to get a FHA loan. These requirements include:

• Credit score: Though FHA does not require a minimum credit score, many lenders have their own requirement on the borrower’s credit that are usually less strict than what lenders impose on conventional loans. Usually, before underwriting a FHA loan, the lender examines the borrower’s credit with more attentions on the overall pattern of how the borrower uses his/her credit to assess the risk. As long as the borrower shows that he or she has managed previous payments responsibly, past minor mistakes in the credit history will not prevent the borrower from getting a FHA loan. Even people with no credit history can borrow a FHA loan.
• Down payment: Another feature that makes FHA loan attractive to first-time homebuyers with little savings is that the down payment can be as little as 3% of the purchase price of the house. On the other hand, private lenders usually require 3 – 5% down payment and for a down payment that’s less than 20% of the home’s value, the borrower is required to get a private mortgage insurance (PMI).

There are some other requirements for FHA loan, but I found the above two are most related to many of first-time homebuyers, making FHA loan a good choice to help them own their own home

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In truth, real estate as an investment choice is a complex enterprise and is definitely not for the fainthearted. For one, you need to understand how the whole system works so that you can be able to maximize the potential returns on your investments. And someone said information is power. That’s the starting point. Seek out all the information that you can find. There are numerous sources of information. With the growth and development of the internet, an electronic real estate investment guide will pop up on your screen at the click of the mouse if you know where to look. And good old magazines are also available with insightful tips on how to make it in real estate investing.

Now that iron sharpens iron, you also need to interact with other real estate investors and learn their tricks of success. This is because once you understand fully the workings of the business; a world of opportunities is wide open before you. For example you need to know the best time to buy property and the ideal time to sell so as to make the most out of it. And always network well with other market players in the industry to ensure a steady supply of business. It is more prudent to deal with property on a wholesale basis other than on single units, as this way you make more in a short time.

Though not necessarily, it might also be a good idea to specialize in a particular kind of properties as this will help you in creating a market niche for yourself and thus be able to customize your deals to a particular target. Just be able to think outside the box and use every legal trick in the game to confine the negative recession news to television bulletins.

This is a guest post from Matt Leitz. He is the owner of RealEstateInvestor.com, a website he created to interact with like-minded groups and individuals which finally helps them in increasing their business.

photocredit: Remoto13

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Five years later, we are still in the same house, but the fixed rate period of our ARM is about to come to an end. Several friends who bought their houses around the same time as we did recently refinanced to lock in a fixed rate that’s at record low. We, on the other hand, didn’t do anything and don’t plan to do anything because:

1. We still plan to buy a bigger house within a year or two, so it doesn’t make too much sense to refinance and pay the closing cost;
2. With mortgage rate this low, our rate won’t be too high even if it’s adjusted;
3. We have been paying additional principal every month the past few years, so we have saved enough to offset any increase in principal and interest in the short-term should the rate go up.

Now it seems that we made a good decision not to refi, despite getting letters and calls from Countrywide all the time about the expiration of our fixed rate.

Yesterday, another letter, the Home Loan Payment Change Notice, from Countrywide arrived, and, not surprisingly, our new rate, which will take effect on May 1, 2009, will be 3.50%. That’s 0.875% lower than our current rate. As a result, the monthly principal and interest (P&I) payment will be reduced from $848 to $683 Pretty good, isn’t it?

But I am not going to settle with the lowered payment. This morning I called Countrywide to tell them that from next month, I will be paying the same amount of P&I as I am paying now. That’s another $165 a month toward the principal. Hopefully, we can move out of here before next adjustment which is one year away.

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The Justice Department yesterday announced that it has reached a tentative settlement with the National Association of Realtors on an antitrust lawsuit that accused NAR of discrimination against online real estate agents by denying them the access to MLS databases. A key allegation of the lawsuit is that current NAR rules “obstructed real estate brokers who use innovative Internet-based tools to offer better services and lower costs to consumers.” And one of the “innovative” tools is rebates offered by the buyer’s agent.

According to a USA Today article which quoted Deputy Assistant Attorney General Deborah A. Garza of the Justice Department’s antitrust division as saying that the settlement

really does free brokers generally to engage in whatever they feel is the most efficient and effective way to compete.

because it can lower the cost of buying a house. The Justice Department’s antitrust division also has an online rebate calculator to help home buyers figure out how much money they can save if the buyer’s agent does offer a cash rebate, as well as a list of stats currently banning such rebate (New Jersey, unfortunately, is one of them ).

As the internet has changed our shopping experience and saved us money at the same time, the new settlement, if approved by the court, can be expected to bring fresh ideas into the way we buy/sell homes. So if you are buying a home, make sure to check if there’s any online realtor operating in your area and don’t forget to ask whether the agent you choose offers rebates.

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Recently, there has been an awful lot of talk about Reverse Mortgage Loans. There is also an awful lot of confusion surrounding this new mortgage-lending concept. Problem is, the confusion so far is not being diminished. The very individuals targeted are vulnerable. Swindles come and go. Unfortunately, the majority of these frauds are directed at those individuals least able to protect themselves. I have a ninety-three years young mother. I try to make sure she is protected and nothing happens to her. However, she still maintains and demands her independence. Because of this, I want to become more aware of the advantages and disadvantages to the Reverse Mortgage Loan.

Let us first look at what they are and what they can do for the senior citizen. There are three types of reverse mortgage loans available:

• The Home Equity Conversion Mortgage (HECM) – offered by the Department of Housing and Urban Development, the HECM is insured by the FHA. Right now, this type reverse mortgage is the most popular. Approximately ninety five percent of the targeted market is using the HECM.
• The Fannie Mae Home Keeper Loan – The loan limit on this type reverse mortgage is at a higher level. Therefore, borrowers can receive more money for those unplanned expenses.
• The Financial Freedom Cash Account Loan – Available to those senior citizens who own homes valued at more than $600,000. Since there is no maximum limit to these loans, the homeowners with the most expensive homes benefit from the FFCAL loan.

Before rushing into either of the three offered, take some time to consider which is more advantageous for you needs. Not everyone will need to consider a reverse mortgage loan. Generally, the reverse mortgage loan is recommended for those individuals who may require assistance on a regular basis due to long-term health issues. Or, those individuals who will need to at some point move from their home into an assisted living facility. Consider a reverse mortgage loan only if your home is the only major asset you have at your disposal in a time of need.

Closing cost on a RML can reach or exceed five percent of the total mortgage. Using the home equity over time will decrease the inheritance for your remaining family. If you are the only borrower, remember the loan will not become due as long as you are residing in the home. However, if you must move into an assisted living facility or some other residence for a year or longer, the loan becomes due. Remember, one of the main reasons some take advantage of these loans is to provide in home care when needed.

These loans do not close as quickly as others. The period between the initiation of the process and closing usually is somewhere between forty five to ninety days. Issues regarding maintenance needs and any questions based on discovered title issues will slow the process.

Before beginning the loan process to accept a reverse mortgage, do some investigation. The more you are aware of, the better. There are numerous issues to be considered. Make sure you have reviewed and are aware of all advantages and disadvantages to a reverse mortgage loan.

Most individuals purchase property as an investment with hopes of leaving something to their heirs. Tying up all equity in a reverse mortgage loan can greatly reduce the amount left to your family. There are quite a few resources available for any questions you may have and for those you may not have considered. The National Reverse Mortgage Lenders Association offers publications and a website is available. Contact this association by dialing (866) 264-4466 or at www.reversemortgage.org.

AARP offers Home Made Money: A brochure providing a detailed overview of the reverse mortgage with a calculator. Contact the AARP by calling (800) 424-3410 or at www.aarp.org.

The Financing Long Term Care is a website established to provide facts, education and recommendations your family may need to consider. Review their information and recommendations at www.financinglongtermcare.umn.edu.

In addition, for free programs to help seniors identify public assistance available and where this information can be obtained, the Benefits Checkup Website is available at www.benefitscheckup.org.

Please remember, educated consumers are an awesome force. When provided with the resources necessary, you are guaranteed your money will work for you and your family will reap the rewards as planned.

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• No Application Fee
• No Closing Fees
• No Private Mortgage Insurance Required
• Close-On-Time Guarantee
• Best Value Guarantee

According to a CNNMoney report yesterday, BoA also “won’t charge for private mortgage insurance – often required for borrowers who put less than 20 percent down.” However, the no-fee program is only applicable to buying a home, not refinancing.

While it’s good to have a loan without all the fees, they have to be put in the context of the overall costs of buying a home and the dominant factor is not the fees, but the interest rate of the loan. So how does BoA’s rate compare with its rivals? I run a quick check on Bankrate.com and found that for a $250K loan, the rate of 30-year fixed mortgage from BoA, currently at 6.625%, is in fact the highest among dozens of banks offering the same product in the area close to where we live. The lowest rate is 5.375% from VirtualBank. That works out about $200 difference in monthly mortgage payment! During the lifetime of the loan, the total interests for the BoA loan is $326,279.86 while the interests for VirtualBank loan is $253,974.11. Can the savings on fees offset the $72,306 more on interests?

I don’t see BoA become my first of choice of mortgage products, unless their rates are really competitive.  Fee isn’t the only factor to consider when shopping for a mortgage.

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Savvy stock market professionals know that the best time to buy is when everyone else is selling. The same holds true for real estate investing. A strategic mortgage refinance plan can help you take advantage of opportunities in the current buyer’s market by freeing up the money needed to snag property at bargain prices.

Going against the trend can make you a winner; but it takes tremendous courage to step up and buy when others are running for the exits. The philosophy of jumping on the wagon while others are hopping off is referred to as “contrarian,” because it runs contrary to conventional wisdom.

But markets function because of the simple principle of supply and demand. Those who have enough cash to buy while others are desperate to sell, come out on top in the long run. The easiest way to manifest cash in the real estate business is through a mortgage refinance of property that can take advantage of attractive rates and leveraging of home equity.

Home refinance for a golden opportunity

Many homeowners used adjustable-rate mortgages or interest-only loans to buy into the last real estate bull market. Now they face substantial increases in their monthly payments. At the same time, the value of their homes has plummeted. They’re stuck between a rock and a hard place, and many are defaulting on their mortgages. Their bursting bubble represents a golden opportunity for foreclosure buyers; but it’s impossible to capitalize on bargain basement prices unless you have a source of funds.

Refinancing can free up cash and put it to work at times like these, for high yield returns. Even those with no professional experience with real estate investment can tap the equity in their homes through mortgage refinancing or second mortgages. Then, they can buy houses that others are frantic to sell, reaping the rewards of low prices and built-in equity. Such investments can pay off in another contrarian way – as leased property – because the demand for rentals increases during hot foreclosure markets.

Eventually, we’ll enter another economic cycle, and a fresh bull market in real estate will ensue. Those who enjoy making money by taking the path less traveled will sell some of their holdings, convert a portion of their real estate portfolio into cash for a significant profit, pay off their second mortgage, and giggle all the way to the bank.

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Savannah, Georgia: $1.35M, 2 and 3 halfs baths, and 4778 sq ft. 

Cranston, Rhode Island: $1.6M, 5 bedrooms, 3 and 2 halfs baths, and 4243 sq ft.

 Oak Park, Illinois: $1.55M, 5 bedrooms, 3.5 baths.

Santa Fe, New Mexico: $1.02M, 5 bedrooms, 5 baths, and 3400 sq ft.

Bonsall, California: $1.587M, 4 bedrooms, 3.5 baths, and 4300 sq ft. 

Plantation, Florida: $1.049M, 5 bedrooms, 3.5 baths, and 4700 sq ft.

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Morgan Quitno Press, a private research and publishing company specializing in state and city reference books, just released its 13th annual "City Crime Rankings." This year's report, compiled with FBI crime data of 2004 and 2005, put St. Louis, MI (did they just win the world series?), as the most dangerous city in the nation, followed by Detroit, MI, Flint, MI, Compton, CA and Camden, NJ. And the honor of the safest goes to Brick, NJ, followed by Amherst, NY, and Mission Viejo, CA.

In the past couple of years (2004 and 2005), Camden, NJ, which is about 60 miles from where we live and also has a Rutgers University campus in town, topped the list of most dangerous cities and because of the ranking, the campus saw a sharp decline in enrollment. Officials of the city complained that the list failed to recognize the improvement made by the city and left people with very bad impression. This year, Camden is off the hook, though not by far.

So how safe is your city? Here's the complete list from WCBS:  

    1. Brick, N.J.
    2. Amherst, N.Y.
    3. Mission Viejo, Calif.
    4. Newton, Mass.
    5. Troy, Mich.
    6. Colonie, N.Y.
    7. Irvine, Calif.
    8. Cary, N.C.
    9. Greece, N.Y.
    10. Coral Springs, Fla.
    11. Thousand Oaks, Calif.
    12. Orem, Utah
    13. Round Rock, Texas
    14. Dover, N.J.
    15. Lake Forest, Calif.
    16. Sterling Heights, Mich.
    17. Simi Valley, Calif.
    18. Roswell, Ga.
    19. Lee's Summit, Mo.
    20. Broken Arrow, Okla.
    21. Chino Hills, Calif.
    22. Gilbert, Ariz.
    23. Edison, N.J.
    24. Cranston, R.I.
    25. Port St. Lucie, Fla.
    26. Sandy, Utah
    27. Nashua, N.H.
    28. Danbury, Conn.
    29. Huntington Beach, Calif.
    30. Orange, Calif.
    31. Hamilton, N.J.
    32. Parma, Ohio
    33. Overland Park, Kan.
    34. Santa Clarita, Calif.
    35. Stamford, Conn.
    36. Cheektowaga, N.Y.
    37. Livonia, Mich.
    38. Sunnyvale, Calif.
    39. Murrieta, Calif.
    40. Canton, Mich.
    41. Plano, Texas
    42. Warwick, R.I.
    43. Torrance, Calif.
    44. Clifton, N.J.
    44. Newport Beach, Calif.
    46. Woodbridge, N.J.
    47. Fargo, N.D.
    48. Norman, Okla.
    49. Olathe, Kan.
    50. Boca Raton, Fla.
    51. Livermore, Calif.
    52. Centennial, Colo.
    53. Fremont, Calif.
    54. Clinton, Mich.
    55. Vacaville, Calif.
    56. Tracy, Calif.
    57. Bellevue, Wash.
    58. Carlsbad, Calif.
    59. Pembroke Pines, Fla.
    60. Farmington Hills, Mich.
    61. Richardson, Texas
    62. Rancho Cucamon., Calif.
    63. Boulder, Colo.
    64. McKinney, Texas
    65. Rochester, Minn.
    66. Beaverton, Ore.
    67. Santa Clara, Calif.
    68. Daly City, Calif.
    69. Lewisville, Texas
    70. Napa, Calif.
    71. Burbank, Calif.
    72. Arvada, Colo.
    73. Alexandria, Va.
    74. Virginia Beach, Va.
    75. Ann Arbor, Mich.
    76. Quincy, Mass.
    77. Glendale, Calif.
    78. Ventura, Calif.
    79. Provo, Utah
    80. Fullerton, Calif.
    81. Lawrence, Kan.
    82. Scottsdale, Ariz.
    83. Carrollton, Texas
    84. Hillsboro, Ore.
    85. Somerville, Mass.
    86. Kenosha, Wis.
    87. Davie, Fla.
    88. Chino, Calif.
    89. Sunrise, Fla.
    90. Cape Coral, Fla.
    91. Henderson, Nev.
    92. Billings, Mont.
    93. Cedar Rapids, Iowa
    94. Plantation, Fla.
    95. Costa Mesa, Calif.
    96. San Mateo, Calif.
    97. Garland, Texas
    98. Madison, Wis.
    99. Corona, Calif.
    100. Clovis, Calif.
    101. Yonkers, N.Y.
    102. Alhambra, Calif.
    103. Buena Park, Calif.
    104. Odessa, Texas
    105. Chandler, Ariz.
    106. Norwalk, Conn.
    107. Upper Darby, Pa.
    108. Peoria, Ariz.
    109. Westminster, Calif.
    110. Roseville, Calif.
    111. Lakewood, Calif.
    112. San Jose, Calif.
    113. Honolulu, Hawaii
    114. El Paso, Texas
    115. Santa Barbara, Calif.
    116. Temecula, Calif.
    117. Cambridge, Mass.
    118. Pasadena, Texas
    119. Brownsville, Texas
    120. Boise, Idaho
    121. Garden Grove, Calif.
    122. Mesquite, Texas
    123. Westminster, Colo.
    124. Manchester, N.H.
    125. Whittier, Calif.
    126. Westland, Mich.
    127. McAllen, Texas
    128. Lincoln, Neb.
    129. Pasadena, Calif.
    130. Columbia, Mo.
    131. Midland, Texas
    132. Chesapeake, Va.
    133. Santa Rosa, Calif.
    134. Spokane Valley, Wash.
    135. Anaheim, Calif.
    136. Athens-Clarke, Ga.
    137. Green Bay, Wis.
    138. Irving, Texas
    139. Fort Collins, Colo.
    140. Escondido, Calif.
    141. Miramar, Fla.
    142. Concord, Calif.
    143. West Covina, Calif.
    144. Hampton, Va.
    145. New York City
    146. Denton, Texas
    147. Palm Bay, Fla.
    148. Sioux City, Iowa
    149. Sioux Falls, S.D.
    150. Thornton, Colo.
    151. Salem, Ore.
    152. Hialeah, Fla.
    153. Baldwin Park, Calif.
    154. Erie, Pa.
    155. San Angelo, Texas
    156. Oxnard, Calif.
    157. Oceanside, Calif.
    158. Austin, Texas
    159. Evansville, Ind.
    160. Lakeland, Fla.
    161. Laredo, Texas
    162. Raleigh, N.C.
    163. El Monte, Calif.
    164. Waterbury, Conn.
    165. Vista, Calif.
    166. Murfreesboro, Tenn.
    167. Fontana, Calif.
    168. Grand Prairie, Texas
    169. Fort Wayne, Ind.
    170. Santa Ana, Calif.
    171. Santa Monica, Calif.
    172. Lexington, Ky.
    173. Colorado Springs, Colo.
    174. Suffolk, Va.
    175. Hollywood, Fla.
    176. Eugene, Ore.
    177. Norwalk, Calif.
    178. Santa Maria, Calif.
    179. Downey, Calif.
    180. Abilene, Texas
    181. Chula Vista, Calif.
    182. Ogden, Utah
    183. Melbourne, Fla.
    184. Clarksville, Tenn.
    185. Sparks, Nev.
    186. San Diego, Calif.
    187. Carson, Calif.
    188. Vancouver, Wash.
    189. Greeley, Colo.
    190. Springfield, Mo.
    191. Mesa, Ariz.
    192. Moreno Valley, Calif.
    193. Tyler, Texas
    194. Dearborn, Mich.
    195. Des Moines, Iowa
    196. Lowell, Mass.
    197. San Antonio
    198. Corpus Christi, Texas
    199. El Cajon, Calif.
    200. Salinas, Calif.
    201. Fairfield, Calif.
    202. Lakewood, Colo.
    203. Redding, Calif.
    204. Ontario, Calif.
    205. South Gate, Calif.
    206. Topeka, Kan.
    207. Arlington, Texas
    208. Lawton, Okla.
    209. Riverside, Calif.
    210. Antioch, Calif.
    211. Long Beach, Calif.
    212. Anchorage, Alaska
    213. West Valley, Utah
    214. Hawthorne, Calif.
    215. Yuma, Ariz.
    216. Louisville, Ky.
    217. Omaha, Neb.
    218. Clearwater, Fla.
    219. Independence, Mo.
    220. Spokane, Wash.
    221. Reno, Nev.
    222. Grand Rapids, Mich.
    223. Pueblo, Colo.
    224. Hayward, Calif.
    225. Tuscaloosa, Ala.
    226. Berkeley, Calif.
    227. Las Cruces, N.M.
    228. Mobile, Ala.
    229. Worcester, Mass.
    230. Palmdale, Calif.
    231. Modesto, Calif.
    232. Wichita Falls, Texas
    233. Lubbock, Texas
    234. San Leandro, Calif.
    235. Amarillo, Texas
    236. Bakersfield, Calif.
    237. Columbus, Ga.
    238. Gainesville, Fla.
    239. Gresham, Ore.
    240. Charleston, S.C.
    241. Tempe, Ariz.
    242. Lynn, Mass.
    243. Lafayette, La.
    244. Newport News, Va.
    245. High Point, N.C.
    246. Fort Worth, Texas
    247. Salt Lake City, Utah
    248. Jacksonville, Fla.
    249. Portland, Ore.
    250. Los Angeles
    251. Victorville, Calif.
    252. Bellflower, Calif.
    253. Glendale, Ariz.
    254. New Bedford, Mass.
    255. Pomona, Calif.
    256. Racine, Wis.
    257. Aurora, Colo.
    258. Elizabeth, N.J.
    259. Rialto, Calif.
    260. Savannah, Ga.
    261. Paterson, N.J.
    262. Seattle
    263. Albany, Ga.
    264. Southfield, Mich.
    265. Lancaster, Calif.
    266. Waco, Texas
    267. Fresno, Calif.
    268. Killeen, Texas
    269. Greensboro, N.C.
    270. San Francisco
    271. Fort Lauderdale, Fla.
    272. Durham, N.C.
    273. Fort Smith, Ark.
    274. Tallahassee, Fla.
    275. South Bend, Ind.
    276. Lansing, Mich.
    277. Federal Way, Wash.
    278. Huntsville, Ala.
    279. Albuquerque, N.M.
    280. Visalia, Calif.
    281. Winston-Salem, N.C.
    282. Providence, R.I.
    283. Everett, Wash.
    284. Davenport, Iowa
    285. Hammond, Ind.
    286. Roanoke, Va.
    287. Norfolk, Va.
    288. Fayetteville, N.C.
    289. Kent, Wash.
    290. Akron, Ohio
    291. St. Paul, Minn.
    292. Wilmington, N.C.
    293. Portsmouth, Va.
    294. Oklahoma City
    295. Columbia, S.C.
    296. Canton, Ohio
    297. Knoxville, Tenn.
    298. Montgomery, Ala.
    299. Allentown, Pa.
    300. North Las Vegas, Nev.
    301. Beaumont, Texas
    302. Las Vegas, Nev.
    303. Denver
    304. Yakima, Wash.
    305. Syracuse, N.Y.
    306. Longview, Texas
    307. Pittsburgh
    308. Tucson, Ariz.
    309. Bridgeport, Conn.
    310. Inglewood, Calif.
    311. Pompano Beach, Fla.
    312. Albany, N.Y.
    313. Phoenix
    314. Boston
    315. Chattanooga, Tenn.
    316. Tampa, Fla.
    317. Jersey City, N.J.
    318. Milwaukee
    319. Miami Beach, Fla.
    320. Indianapolis, Ind.
    321. Shreveport, La.
    322. Sacramento, Calif.
    323. St. Petersburg, Fla.
    324. Tacoma, Wash.
    325. Houston
    326. Columbus, Ohio
    327. Miami
    328. Baton Rouge, La.
    329. Charlotte, N.C.
    330. Jackson, Miss.
    331. Toledo, Ohio
    332. Macon, Ga.
    333. Nashville, Tenn.
    334. Rochester, N.Y.
    335. Tulsa, Okla.
    336. Stockton, Calif.
    337. Hartford, Conn.
    338. Dallas
    339. Miami Gardens, Fla.
    340. Buffalo, N.Y.
    341. Springfield, Mass.
    342. Kansas City, Kan.
    343. Philadelphia
    344. West Palm Beach, Fla.
    345. Minneapolis
    346. Dayton, Ohio
    347. Orlando, Fla.
    348. San Bernardino, Calif.
    349. Little Rock, Ark.
    350. Newark, N.J.
    351. Reading, Pa.
    352. North Charleston, S.C.
    353. Washington
    354. Cincinnati
    355. Atlanta
    356. Kansas City, Mo.
    357. Richmond, Va.
    358. Trenton, N.J.
    359. Memphis, Tenn.
    360. Baltimore
    361. Richmond, Calif.
    362. Gary, Ind.
    363. Youngstown, Ohio
    364. Oakland, Calif.
    365. Cleveland
    366. Birmingham, Ala.
    367. Camden, N.J.
    368. Compton, Calif.
    369. Flint, Mich.
    370. Detroit
    371. St. Louis

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And the price?

$639,900 and it's for-sale-by-owner!

The overall feeling after the tour could be best described by one word "overpriced." The house is being sold by the owner, it has no study room, no balcony/deck, the basement isn't finished, and, finanlly, the house isn't big. For all of thse, $639,900 was way too high.

We left the house without showing much interest, though we still left our phone number. Later on, almost every weekend we went out, we saw their open house sign, sometims miles aways on the main highway. Apparently, nothing happened. Then one night early this month, we got a call the owner, asking if we were still interested in the house. Interest, yes, but not at price level. Today, out of curiosity, I logged onto the website they provided and found that the sell price has been reduced to $624,900, $15,00 less than what they asked for two months ago.

Frankly, I have to say it's a nice house in a nice neighborhood, but not good enough for the $624,900 price tag. I also feel there is some disconnection between the owner's perception of the market and the reality. With house prices falling by the month every where, this seller did slash the asking price by $15K, but since the starting price was too high, the reduction didn't make much difference, in my opinion. In fact, a quick check of other houses in this area that are currently on the market show that prices for houses with similar conditions (size, age, rooms) range from $560K to $610K, even some houses still underconstruction have lower prices than what this seller is asking for, and this has me wonder what makes the seller so confident about the price of the house, which has been on the market for more than two months already.

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many of them may work five or 10 years beyond the traditional retirement age of 65

Not just because they are healthier, but they have to.

Some other key findings in the study include:

• For those baby boomers that married later and had children at a later age, they probably will continue to work beyond the traditional retirement age;
• One-third of baby boomers expect to go back and forth between periods of work and periods of leisure, and another 35 percent want to work at least part-time or start a business;
• The median age at which baby boomers expect to stop working is 70, but 27 percent say they never intend to stop working;
• Most boomers live in two-income households, with a median income in 2005 of $64,700, which is 31 percent higher than the median for all households.  
• For baby boomers earning $100,000 or more, more than 9 in 10 are homeowners.  Among middle-income boomer homeowners, home equity accounts for fully half of their net worth.  However, 19 percent are renters, 37 percent say they have just enough to make ends meet and 17 percent say they are having financial difficulty.
• A quarter of baby boomers own one or more other kinds of real estate in addition to a primary residence. 
• Almost one in four boomer households have a net worth of $500,000 or more and 97 percent of them are homeowners. More than a third expect to help children or grandchildren with a downpayment on a home.
• Forty-two percent of survey respondents would like to retire in the South, 32 percent in the West, 15 percent in the Midwest and 12 percent in the Northeast.
• Although most boomers are married couples and 27 percent have children under the age of 18, nearly two out of five baby boom households are nontraditional households, most of which are headed by women.

Click here for more details about the report.

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1. Westchester County, NY – $7,337    
2. Nassau County, NY – $7,025         
3. Hunterdon County, NJ – $6,988      
4. Bergen County, NJ – $6,846         
5. Essex County, NJ – $6,642         
6. Rockland County, NY – $6,527       
7. Morris County, NJ – $6,478         
8. Somerset County, NJ – $6,465       
9. Putnam County, NY – $6,335         
10. Union County, NJ – $6,312          
11. Passaic County, NJ – $6,210       
12. Suffolk County, NY – $6,131       
13. Monmouth County, NJ – $6,015       
14. Hudson County, NJ – $5,472         
15. Lake County, IL – $5,393           

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Today’s New York Times article offered a glimpse on how personal income increases since 2002 were outpaced by the rise of property tax. According to the article, from 2000 to 2004, personal income went up 16 percent nationwide, while property tax soared 26 percent. In the tri-state area (NJ, NY, and CT), property tax grew two to three times faster than the gain in personal income. This, however, was not the case ten years ago during the internet boom of the late ‘90s. From 1995 to 2000, personal income was up 33 percent, topping property tax increases during the same period by 19 percentage points.

As the stock market cooled off in 2001, municipalities throughout the country felt the pressure as revenue from income and sales taxes sharply lowered. For most local governments, property tax, commercial and residential, became the main source to fund the municipal and county governments and the public schools, and the stable period of property tax increases residents experienced in the late ‘90s came to an end. On the other hand, while many people in the tri-state area saw their house values doubled or even tripled in recent years, a steep rise in property tax has become a burden, especially for those who bought their houses at the peak of the real estate boom.

In New Jersey, which already has the nation’s highest property tax rate, situation is even worse. After 2000, the New Jersey’s government employment rate went up twice as faster as the national average, and that in turn dramatically drove up property tax while personal income kept pace with other areas in the nation. According to the Times’ article, in Bergen County, NJ, property tax jumped 26 percent from 2000 to 2004, three times the growth rate of income. The sharpest rise happened in Somerset County, NJ, the county I am living in, where a 41 percent jump in property tax is more than eight times of the income growth rate.

And the solutions?

“Sell my house and move out of New Jersey.”

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