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Archive for the 'Housing Topics' Category


Brent Walen, MetLife Home Loans/REAL Education/6 Things You are Overpaying For

Author: Steve & Charlie
April 15, 2011

April 13th, 2011

Segment I Guest: Brent Whalen, MetLife Home Loans

Segment II Topic: How To Get a REAL Education/By The Numbers/6 Things You Are Paying Too Much For

 

Brent Whalen, a mortgage broker at MetLife joined us to discuss the housing market and some of the good and bad news about the current market. Starting with the good news, rates are low, pricing is low and there are a lot of benefits for first time home buyers. Foreclosures are making amazing sales available. As for sellers at the moment, it is possible to sell, but you have to price it accordingly. It’s a buyer’s market right now. You may not be able to sell your house for what you purchased it for, or even  close. Over the horizon, Brent explained that his expectations are low. A lot of economists are predicting 2011 could be the worst year in the real estate world. Foreclosures are flooding the market and HUD is sitting on a large quantity of homes. Large inventory will drive pricing down, which does not help anyone that needs to refinance or sell their home. In the early 2000’s house prices were accumulating value and going up. But lenders created unique loans to help buyers obtain these homes. They gave ANYONE loans and it got a lot of people in trouble. Lenders gave irresponsibly and buyers were buying out of their comfort zone, which created the situation we are in now. The housing industry is a huge chunk of the economy, when the economy is up, the housing market is up, for a while it was actually booming! But then the economy tanked and the loose lending caught up because many homeowners could not afford their homes and the market spiraled downwards.

 

 Even though there are many people that diligently pay their mortgages, they are still affected by the current state of the market. Many homeowners cannot refinance or take out equity because the value of their home has dropped drastically. We asked Jay about his opinion on when is best time to look into refinancing. He explained that refinancing is only worth it if you can recoup the finance charges in the first 13-15 months. It is also not worth refinancing if you are not going to be staying in the home for a long duration of time. It is best to look into refinancing when you can lower your interest and you are interested in improving your home.

 

Brent shared the areas in the US that are facing the worst of these times. Over 1.2 million homes will be reposed this year in the United States; over half will be in the states of California, Florida, Arizona, Illinois and Michigan. However, the worst is Nevada. One in eleven homes will be faced with foreclosure in the state of Nevada. Locally, Carroll County, overall, is starting to level off. There are definitely more homes for sale than buyers in the area. Homes are slowly, but steadily selling. 

 

How to Get a REAL Education

We discussed a great column that creator of Dilbert, Scott Adams wrote in the Wall Street Journal titled,  “How To Get a Real Education”. He explained that great leaders may not always be the best “workers”. You have to learn what you are good at and what your strengths are overall. Particularly, students who aren’t “A” students may find their niche in more of an entrepreneur route.  Also, he suggests to “combine skills” and learn how to make yourself valuable. It is not always easy to find one world-class skill, but you can learn to do several things well and mold them together to create success. He also wrote about how to “fail forward”. It is sometimes important to take risks to learn what you can and cannot do, but the trick is to get paid while you are doing it. Either by monetarily or lessons learned. Then if you fail, you can use the experience and gain skills that WILL be useful. Scott Adams feels “students should be taught that failure is a process, not an obstacle”. You should also “find action”. Whatever you are seeking or interested in perusing, go to where the action is! You can learn the most by being there, distance is your enemy, according to Adams. To succeed you must act on something, work to “attract luck” by seeking and working towards your goals. You won’t get lucky without looking. Another important step is to “conquer fear” in the process. If you struggle with speaking in public, work at getting over your fear by challenging yourself to giving a speech, at first, make it about something you love and work from there. People can be trained to replace fear with enthusiasm. Simplicity makes ideas powerful and easy to follow, so “write simply”. Learn how to express yourself in ways that can appeal to others. Lastly, you should “learn persuasion” in all its forms including, psychology, sales, marketing, negotiating, and even design.  Scott Adams made his the Dilbert comic strips very successful, but Scott Adams wasn’t necessarily the best writer or artist, but he knew how to appeal to his audience and use his strengths to his advantage.

 

By the Numbers (April 11, 2011):

Almost a Trillion Increase: The total market capitalization of the US stock market was $16.4 trillion as of 3/3/11, a $900 billion increase from its value on 12/31/10 of $15.5 trillion

Has Happened Before: The US government has been forced to shut down 17 times in our nation’s history (due to Congressional stalemates over budgetary issues) before the current 2011.

More Cash, Less Credit: The current amount of indebtedness in the USA is 5.1% less than in 2009. This includes credit card debt, auto loans and borrowing (excluding home mortgages and home equity loans)

Show Me The Money: The combined payroll of the 5 major league baseball teams with the smallest 2011 grand opening day payrolls is $217 million. The 5 teams are Kansas City, Tampa Bay, Pittsburgh, San Diego and Cleveland. The New York Yankees have an opening day payroll of $203 million this year, the largest in the MLB.

6 Things You’re Paying Too Much For

  1. Bottled Water (tap is cleaner and tested more often)
  2. Books & Magazines (wait for discounts, libraries, or don’t buy brand new)
  3. Long Distance Charges (most cell phone packages no longer have long distance charges)
  4. Bank Fees (shop around)
  5. Packaging (buy generic, don’t pay for the name)
  6. Insurance (find appropriate pricing and coverage)
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Anirban Basu, Renowned Economist

Author: Steve & Charlie
January 12, 2011
January 12, 2011
Segment Guest: Anirban Basu, CEO of Sage Policy Group, Inc. and renowned economist
Anirban Basu is one of the Mid-Atlantic region’s most recognizable economists, we were very honored to have him join us! His serves a wide range of clients, including prominent developers, bankers, brokerage houses, energy suppliers and law firms. Recently, he has focused upon health economics, the economics of education and economic development.
 
We began by asking Basu about the general state of the economy. Importantly, does he think we are out of the woods with the recent crashes? Basu explained that despite the recent increase in consumer activity in businesses such as restaurants, retail stores and car dealerships. That is a good sign. However, the labor market is still down 9.4% is the US. The growth in job increases is going much slower than anticipated and the rates have been disappointing. Also lagging is the housing market. It is still very weak and not improving the way that was hoped.
Basu stated he was bullish about the economy and its turn around. We are beginning to see the benefits of the stimulus funds that will help increase productivity and debt issues, the Small Business Act dispersed $30 billion dollars. However, the country is still experiencing tight credit and living outside our means. The Bush Tax cut package has helped tremendously, but we will have to see what changes take place after 2012, when it ends.
For Maryland, although we are still experiencing a deficit, we have a great actually decreased the unemployment rate. We currently have an unemployment rate of 7.4%, 2% lower than the national average.
 
Maryland has the advantage of having large numbers of federal government employees and agencies, many careers in health services and medical research. These occupations are in high demand and employ a large number of citizens. We also have an AAA Bond rating. The biggest improvement Maryland needs to have is a balanced budget.  Maryland has decided to cut the education budget by 5%, which is unfortunate because we have been ranked #1 in the country for education services. However, with the deficits at hand, budget cuts of some type are inevitable.
 
Carroll County is currently in high demand for living and shopping growth. Many people have made Carroll County their home because of the pleasant living environment, good school systems and substantial job opportunities. Carroll has a very high bond rate and the employment rate has has not had the negative effects that so many other places in the country have experienced. Compared to neighboring Howard County, we are catching up. Howard County is considered the most successful county in Maryland. They have a a very high income rate, the best MD school system, and access to many major cities. However, they also have higher taxes. Because of the positive growth and development in Carroll County, we have become a reasonable substitute.
 
The housing and labor market is very weak. In a way, they go hand in hand. Mr. Basu explains the effects the housing market has had on the job opportunities. Many people are not able to relocate to locations with  more substantial job  opportunities or a specific job offer because they are not able to sell their home at this time. In turn, the labor market has become weak. There are many jobs being cut, but there are also several jobs that are not being taken advantage of, such as technical skills. Job that require specific technical skills are difficult to fill, despite the roaring number of unemployment rates. Many people have the misconceived notion that our economy is based upon computers. Not all jobs require computers and having extensive computer training and degrees are not always an easy way to a career. Because of the high focus on these areas, the job market in computer skill-based positions can be very competitive. They are many people who focus on this type of training that are not necessarily interested in working with computers. There are many, many other job skills that can be taken advantage of in many different fields. Mr. Basu urges people to take advantage of unique skills and find a skill that is not only enjoyable, but needed in society. To those who are currently unemployed, don’t be afraid to explore technical skills that are in high demand in your area, especially those that are difficult to fill. Those are ideal areas to focus on skill training and education. In Mr. Basu’s opinion, the labor outlook is too pessimistic.   Government has been and will continue to reinforce jobs, but we have to be patient.
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