Published: December 7, 1998

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"Home Sales Rate Tops 800K for a 14th Month"
American Banker (12/07/98) P. 19

The seasonally adjusted annual rate of 851,000 units for new home sales for October, according to the Commerce Department, was the 14th consecutive month in which total sales of single-family homes topped the 800,000 plateau. The 1 percent increase in new home sales for the month was attributed to the 11.2 percent increase in transactions in the West. In the South, new home sales were down 0.3 percent from September.

"Wall-to-Wall Installation"
Washington Post--Washington Business (12/07/98) P. 7; Stoughton, Stephanie

Myer-Emco, a leading home wiring installer, originally made a name for itself in the market by installing home-theater systems and other wiring into the living rooms of high-end homes. But company head Jon Myer saw that the number of companies involved in the various steps of home wiring installation and security was growing rapidly, so he decided to expand his company to allow full wiring installation services. Now Myer-Emco is still in direct competition with larger retailers such as Circuit City, but it hopes to attract more customers by offering a variety of installation services. The company is now able to install wiring and security systems throughout the home. It has established relationships with home builders to work as the home is being built. It may also soon establish a partnership with Bell Atlantic, another company trying to enter the wiring installation market in new homes. The companies would be able to provide security, home theater, and Internet and cable services together.

"Schools Take Hard Line on Residency"
Washington Post (12/07/98) P. B1; Whitlock, Craig

In an effort to curb education costs, many suburban school districts have intensified the residency requirements for children who live in temporary homes or whose families live outside of the local region. Around the greater Washington, D.C., metropolitan area, Howard, Montgomery, and Fairfax counties have all implemented strict guidelines that challenge the residency of hundreds of students annually. Although the practice of enrolling children in highly reputable nearby districts is not uncommon, some suburban districts are now coming under fire for their overzealous enforcement of regulations. Howard County has recently drawn attention since it approved only 8 percent of the 677 tuition waiver requests it received from parents for the 1997-1998 school year. In contrast, nearby Montgomery County approved 80 percent of the tuition waiver requests it received. Other counties such as Prince George's and Frederick simply grant residency to students who live locally with a legal guardian. In Howard County, officials say their stricter process has helped the state's best school district from becoming overrun by outside students. Sandra French, a county Board of Education member, explains, "Those who are deserving, who have legitimate needs are allowed into the system. Those who don't usually go away or else pay the [$6,590] tuition."

"Dow Jones Real Estate Index: Jumbo Mortgage Rates"
Wall Street Journal (12/04/98) P. W14

Michigan was offering homebuyers some of the best deals on jumbo mortgages on Thursday, Dec. 3. According to Bank Rate Monitor, the average rate on 30-year fixed mortgages valued at more than $227,150, and based on "1 point" loan fees and 20 percent downpayment, was 6.98 percent in Michigan. The national average was 7.32 percent. Also in the Midwest, Illinois homebuyers were obtaining rates on average of 7.58 percent for their jumbo mortgages. The Washington metro area had the closest rate to Michigan at 7.09 percent. Michigan also had a rate on the average 1-year ARM of 5.63 percent, that was well below the national average of 6.33.

"Loan Applications Slip But Outpace '97 Rate"
American Banker (12/04/98) P. 7

The number of mortgage applications for the week ending Nov. 27 was down 21.5 percent from the previous week, according to the Mortgage Bankers Association. But for the year, applications are up 73.9 percent from last year, and this year is expected to be a record year for mortgage applications. The refinancing index for the week was 2086.3, up from 1814.8 last week, and refinances accounted for 59.8 percent of all mortgage application activity.

"Second Opinion: No Rules on When to Refinance"
Washington Times--Home Guide (12/04/98) P. F9; Boone, Gloria; Russo, Joseph J.

When it comes to refinancing a mortgage, there are no specific rules, other than the fact that the homeowner should weigh the costs of refinancing against the benefits. The most important factors to consider are how much the loan will cost, how long the homeowner will have to stay in the home to recoup the costs, and how much savings the homeowner will generate from refinancing. Homeowners who only plan on living in the home for a short time should consider adjustable-rate mortgages, which have lower interest rates. But they should also consider that if the loan amount is small, the percentage and monthly payment will be higher. Lowering the interest rate by even a small percentage can mean significant savings, and at this point the homeowner must decide how to use these savings. The easiest way to consider all these factors is to do a cost-benefit analysis. This should include the fees charged by lenders, title companies, appraisers, and attorneys. When this is completed, the time required to recover all costs should be less than the time the homeowner plans on staying in the home. There are ways to lower the costs of the mortgage, including paying points, or pre-paid interest, and providing an appraisal to the lender.

"QuickenMortgage Expands Its Focus to Include..."
PRNewswire (12/03/98)

QuickenMortgage (www.quickenmortgage.com), a Web site designed by Intuit, recently announced it is expanding its services to accommodate more mortgage borrowers with poor credit histories. This group represented 15 percent of all mortgage borrowers in 1997, and their numbers are growing, according to Alison Berkley, group product manager for QuickenMortgage. To meet the needs of these borrowers, Quicken has launched the Credit Center, which provides educational resources on the importance of credit and how it can be improved. The company also debuted a "How's Your Credit" calculator, which allows consumers to determine their credit and walks them through a credit interview. In addition, Quicken has added four new lenders to its network which specialize in borrowers with credit problems. These lenders are The Money Store, Advanta, Bank One Corp.'s Banc One Financial Services, and United Lending.

"Bills Take Aim at Taxes on Home Buyers"
Philadelphia Inquirer (12/04/98) P. B1; Burton, Cynthia

Philadelphia Councilman Frank DiCicco recently introduced two bills that would reduce taxes on first-time homebuyers. The first bill would make home sellers pay the 4 percent real estate transfer tax if the home is being purchased by a first-time home buyer. Currently this tax is split between the buyer and the seller. The second bill allows first-time homebuyers to avoid paying the city's percent wage tax the first three years they own the home. The bills are necessary because the city is continuously losing residents because of its high property taxes, according to DiCicco and co-sponsor Councilman James Kenney. The bills could help more families budget money towards home improvements and other needs, and they could also attract empty-nesters to the city, said Ashley Andrus, director of public policy for the Greater Philadelphia Chamber of Commerce. The Greater Philadelphia Association of Realtors says it opposes the transfer tax bill because it is not advantageous to the seller, but it does applaud efforts to solve the property tax problems of Philadelphia, where taxes are much higher than in the suburbs.

"Pros and Cons for Both Old and New Homes"
Washington Times--Home Guide (12/04/98) P. F1; Paris, Ellen

With an especially strong real estate market in the Washington, D.C., metropolitan area, local home buyers have a number of options, most notably the choice of buying a new or existing home. Each type of home has its own advantages and disadvantages. The biggest appeal of new homes is simply that they are new and clean. New home buyers have more options when designing the home, including floor type, room location, and spaciousness. But there are risks involved in buying a new home. Home values may vary in the neighborhood, and because the purchase of a new home takes longer than an existing home, the buyer should lock in a low interest rate early in case rates eventually rise. In addition, buyers of new homes should make sure they plan to live in the home for a long time, or at least until all the homes in the development have been completed and sold. There are other options to consider, including the sales contract, which typically favor the builder, and the reputation of the builder, which buyers can check by interviewing homeowners who have previously worked with the builder. Buyers of existing homes don't have as many options, but they do have the advantage of proven character and qualities in many local homes, particularly older models. In addition, home buyers looking for one-story homes would be better off looking for an existing home.

"Countrywide Offers an Alternative to Jumbo Home Loans"
PRNewswire (12/03/98)

First-time homebuyers are easily able to take advantage of today's low interest rates, but homebuyers purchasing a home worth more than the loan limit of $240,000 will often be forced to pay higher interest rates. To avoid this problem, Countrywide Home Loans recommends alternative methods of financing for buyers of high-priced homes. These recommendations have led to a 20 percent increase in the number of jumbo mortgage borrowers using an alternative method of financing. Countrywide suggests that these homebuyers purchase a conforming loan of up to $240,000 and finance the rest through a home equity line of credit. This allows homebuyers to capitalize on lower interest rates, and other advantages as well. Buyers can purchase a more expensive home, they can avoid paying private mortgage insurance, and they can lower monthly payments at certain times by making interest-only payments. These buyers can also pay down the line of credit and reuse it in another way.

"Council OKs Rezoning for Controversial Project"
Washington Business Journal (11/12/98) Vol. 17, No. 26; P. 10; Sunnucks, Mike

The Montgomery County Council (Md.) recently rezoned 30 acres of land on Rockville Pike for the Potomac Investment Properties, which plans to develop a $90 million apartment and townhouse community. The land was rezoned from single-family/residential to medium/high density planned development, and the council said the project meets the county's smart growth policy. Only one council member opposed the project, saying the impacts should have been studied further. Some local residents expressed concern that the project would increase traffic and result in crowded schools. Jenny Barnes of the Sierra Club also said the project should have allowed more local forest area to be preserved, although she said the project's proximity to local mass transit will be beneficial.

"FEMA to Increase Flood Premiums for Disaster-Prone Areas"
National Mortgage News (11/30/98) Vol. 23, No. 11; P. 23; Hicks, Darryl

The Federal Emergency Management Agency is proposing that homeowners who live in disaster-prone areas be forced to pay higher flood insurance premiums or risk having no insurance. As many as 35,000 homeowners live in high-risk areas and file repeatedly for insurance, yet fail to attempt to elevate their homes to avoid flood waters, according to James L. Witt, director of FEMA. "People need to accept the responsibility and the consequences of their choice to live in high risk areas," said Witt. The proposal by FEMA, which could save taxpayers as much as $200 million a year, would not permit flood insurance to be given to homeowners filing two or more claims without elevating their homes or moving. Another proposal would charge people who live in high-flood risk areas the market value for insurance, rather than lower rates. The proposals will either be sent to Congress or amended in FEMA's Flood Prevention Program.

"Use Unconventional Spaces to Create Home Offices"
Miami Herald (11/27/98) P. 10HN

Beverly Robbins, a member of the American Society of Interior Design, advocates finding additional space in unexpected places for home offices. "Many people cannot dedicate a room for a home office and need to be imaginative when creating workspace," says Robbins. Hidden spaces in kitchens, garages, and niches under stairwells can be found, as can spots in corners or behind furniture or doors. Installing shelves and using sliding baskets or files are several ways to maximize space in these areas. There are nearly 40 million home offices today, according to Framingham, Mass.-based analyst and research firm International Data Corp.

"Bathroom Addition"
Realtor Magazine (11/98) Vol. 31, No. 11; P. 49

After minor kitchen remodels, bathroom additions are the remodeling projects that recoup the most money for consumers who sell their homes within a year of having renovation work done on their residences. According to the "1998-99 Cost vs. Value Report" of Realtor Magazine and Remodeling Magazine, the national average cost of a bathroom addition is $12,577, and the national average of cost recouped for the project is 89 percent. "Younger buyers have higher minimal standards," said John Pentecost, a Los Angeles-based sales associate. "No longer acceptable are postwar two-bedroom, one-bath homes." Bathroom additions are paying off the most in the West where homeowners are recouping an average of 101 percent of the cost, followed by the South at 97 percent, the Midwest at 81 percent, and the East 79 percent. JHomeowners in San Francisco are recouping 189 percent of the cost of a bathroom addition. Other top markets for bathroom additions are Garden City, N.Y. with an average cost recouped of 155 percent, Miami at 141 percent, Seattle at 134 percent, Birmingham, Ala. at 127 percent, and Houston at 126 percent.