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RISMEDIA, March 10, 2011. A recent study conducted by the National Association of Home Builders (NAHB) shows that while consumer hesitation on home buying is waning, the recent housing downturn has changed what Americans are looking for in their next home.

The survey research on consumer preferences, which is presented annually at the NAHB International Builders Show, suggests that the severity of the recession has left an indelible mark on prospective home buyers, who have shifted their perspective on the housing they want and need.

Builders who were surveyed expect homes to average 2,152 square feet in 2015, 10% smaller than the average size of single-family homes started in the first three quarters of 2010.

To save on square footage, the living room is high on the endangered list 52% of builders expect it to be merged with other spaces in the home by 2015 and 30% said it will vanish entirely.

As an overall share of total floor space, 54% of builders said the family room is likely to increase, said Rose Quint, NAHB’s assistant vice president for survey research. That makes it the only area of the home likely to get bigger.

In addition, the relative size of the entry foyer and dining room are likely to be diminished by 2015. However, opinions were fairly evenly divided on the fate of the kitchen, master bedroom and bath and mudroom, said Quint.

The average new home of 2015 is likely to feature a great room comprised of the kitchen, foyer and living room; a walk-in closet in the master bedroom; a laundry room; ceiling fans; a master bedroom on the first floor in homes with two stories; and a two-car garage.

In addition to floor plan changes, 68% of builders surveyed say that homes in 2015 will also include more green features and technology, including low-E windows; engineered wood beams, joists or tresses; water-efficient features such as dual-flush toilets or low-flow faucets; and an Energy Star rating for the whole house.

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When Barron’s called the bottom of the market for expensive second homes just about a year ago, some folks wondered what kind of caviar we’d been eating.

Prices of high-end homes had sunk 20% from their 2007 peak, and vacation homes were doing even worse, with some markets off 40%. America’s mainstream housing scene was getting pounded by foreclosures, and anxious pundits were warning of a double-dip recession.

Not to put too fine a point on it, but we were right.

Home prices in moneyed enclaves from Beverly Hills to Aspen to Greenwich climbed more than 10% last year, according to data from realty brokers and other experts and conversations with local residents. Though the rebound has been lumpy, the general uptrend looks to be firmly in place.

Two years after the worst of the financial crisis, the rich have dusted themselves off and resumed some serious discretionary spending. Both sales volume and prices are clearly on the rise for luxury vacation homes, one of the greatest indulgences of all. Prices for the majority of the 15 locales in our annual ranking of best places for second homes climbed in 2010, sometimes dramatically.

In seeking out and ranking these havens, we looked for beauty, comfort, convenience, a range of lifestyles and — always the paramount criterion at Barron’s — value. We wanted prices that had clearly hit bottom and were either rising or ready to rise.

Asheville is a funky town nestled in North Carolina’s Blue Ridge mountains. It has a thriving art and music scene, and a burgeoning reputation for micro-breweries. A University of North Carolina campus keeps the town young and vibrant.

15. Asheville, N.C.

It’s an easy place to live in, with enough culture and outdoor activities to keep even the most demanding resident satisfied. The Biltmore Forest development behind the world-famous Biltmore House is especially inviting. The tree-lined streets of Biltmore Forest, developed in the 1920s, reflect the vision of Frederick Law Olmsted, the landscape master who designed New York’s Central Park. The houses have an English country feel, plus access to a Donald Ross-designed golf course.

To some extent, Asheville is still in transition from Southern mountain town to major destination. But it already has come a long way. Think of it as the value buy for patient homeowners.

Median 2009: $635.000

Median 2010: $982,000

For more information on Asheville Real Estate and the Western North Carolina area including Cashier, Highlands, Hendersonville, Lake Lure, Lake Toxaway, Waynesville, Maggie Valley and Brevard, contact Kim N. Bregman, Exclusive Buyer Broker at kim@optimaproperties.com.
Visit www.OptimaProperties.com for property searches, area information, informative links, and more.

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The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the February edition of the Obama Administration’s Housing Scorecard. The latest housing figures show increased existing home sales as home affordability remains high, but officials caution that the market remains fragile, as prices are unsettled.

In the face of the deepest economic recession and housing crisis in decades, the Obama Administration has taken unprecedented action to promote stability in the market – keeping millions of families in their homes and helping millions more to save money by refinancing. But the data clearly show that the market remains extremely fragile, said HUD Assistant Secretary Raphael Bostic. While we cannot stop every foreclosure, we know that many responsible homeowners are still fighting to make ends meet. Through the broad range of programs this Administration has put in place, we can put help in reach to those homeowners as early as possible.

“Our housing market remains fragile. We know this from data, but homeowners across the country can feel it too. That’s why this Administration remains committed to helping eligible homeowners avoid foreclosure where it makes economic sense to do so,” said acting Assistant Secretary for Financial Stability Tim Massad. “Every month, HAMP continues to help tens of thousands of additional families in a cost-effective manner. And by setting affordability standards and developing a framework for how mortgage service’s provide assistance to struggling families, HAMP has established critical protections for homeowners and has catalyzed improvements in modifications industry-wide.”Â

Available online at www.hud.gov/scorecard, the February Housing Scorecard features key data on the health of the housing market including:

• Housing market remains fragile as data through January paint a mixed picture of recovery. Existing home sales ticked upward in January, but remained below levels seen in the first half of 2010. Mortgage delinquencies continued a downward trend compared to early 2010 and foreclosure starts and completions remain below peak. However, as lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed. The decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.
• Administration efforts have been effective in blunting the effects of the deepest economic crisis since the Great Depression. Since April of 2009, record low mortgage rates have helped more than 9.5 million homeowners to refinance, resulting in $18.1 billion in total borrower savings. However, home prices remain unsettled at this fragile stage of the recovery. More than 4.2 million modification arrangements were started between April 2009 and the end of January 2011 – including nearly 1.5 million HAMP trial modification starts, more than 730,000 FHA loss mitigation and early delinquency interventions, and more than 2 million proprietary modifications under HOPE Now. While some homeowners may have received help from more than one program, the number of agreements offered was more than double the number of foreclosure completions for the same period (1.8 million). View the January HAMP Servicer Performance Report.

Given the current fragility and recognizing that recovery will take place over time, the Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market.
Each month, the Housing Scorecard incorporates key housing market indicators and highlights the impact of the Administration’s unprecedented housing recovery efforts, including assistance to homeowners through the FHA and HAMP. The Obama Administration’s complete Housing Scorecard is available at: www.hud.gov/scorecard.

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Condo buyers who sat out last year’s real estate market, waiting for prices to bottom or their own financial footing to improve, find themselves in an enviable situation.

Prices have plunged, and mortgage interest rates, while slowly rising, remain near 5 percent, creating the best home affordability in decades for consumers who qualify for loans.

There’s just one problem. It’s not just the borrower who has to be up to snuff; it’s the building, too, and there are buildings that lenders won’t touch.Among the deal killers: too many renters in a building, pending litigation, inadequate association reserves and delinquent assessments.

Those are some of the criteria lenders must look at in order to sell the loan to Fannie Mae or Freddie Mac, the troubled, government-sponsored entities, and the Federal Housing Administration, the first choice for many first-time homebuyers. Combined, the three agencies account for about 90 percent of the secondary loan market.

New FHA lending rules for condos could stall the housing recovery: Restrictions open door to heavier weight being placed on owners. In February 2010, the Federal Housing Administration passed a new set of lending guidelines that removes the long-standing spot approval process for FHA-insured condominium loans, and enacts stringent new requirements for projects to be approved on a property wide basis.

While these new guidelines purport to make the loan approval process simpler, they will dramatically reduce the market for the glut of unsold and abandoned condominium units.

FHA used to offer spot loan approvals on individual condo units, but now entire buildings need to be FHA-approved. With its attractive 3.5 percent down-payment requirement, new and existing developments have lined up to apply for that certification, for which they have to reapply every two years.

These regulations cast an extremely wide net. It is currently estimated that the FHA insures more than 20 percent of all loans. FHA-backed loans are attractive to buyers — they have lower down payment requirements and often better lending terms.And in some areas of the country, especially in metropolitan and resort areas, condominiums account for a large percentage of the total home marketplace. It is believed that condominium speculation was a large contributing factor to the housing bubble and crash, and a huge backlog of units remains unsold.

The following are some of rules must be met by the condo building for a condo buyer to be approved for an FHA loan:

1. Maintain a reserve equal to 10 percent of the annual budget.

2. Make sure that no more than 15 percent of owners are more than 30 days late on condominium fees.

3. Assure that no more than 10 percent of the units are held by a single investor.

4. Have no more than 25 percent of the space used for commercial activity.

Real estate agents and lenders say they are seeing more developers, condo associations and individual owners in economic distress, and, as a result, so are buildings.Many lenders maintain a frequently updated list of blackballed condo buildings, where they know a loan won’t get approved. They also are working with homeowner associations to improve their building’s lending potential by improving financial reserves and limiting the number of condo units that are turned into rentals.

Several years ago, there was an assumption that every condo building would pass scrutiny, but that’s no longer the case, said Jim Linnane, Northeast division sales manager at Wells Fargo Mortgage’s retail sales group. Wells Fargo has a dedicated group of employees whose job it is to dig into the financial details of a condo development and work with borrowers and buildings to meet agency guidelines.

The situation is slowing any recovery of the condo market, often the housing of choice for first-time buyers. Owners in troubled buildings aren’t able to refinance, and sellers who want or need to sell find thin ranks of buyers.The requirements are thwarting the plans of some potential purchasers, who have abandoned their searches and remain renters.

Some lenders will look past a problem in a building and still offer to take the loan and hold it in their own portfolio, but that acceptance comes at a price. The borrower’s credit has to be stellar, they have to make a sizable down payment, and the loan will carry a higher interest rate. As an Exclusive Buyer’s Agent I would caution my buyer against considering an investment in such a building since the risk of in-ceased fees is a real exposure, buying into a building that is becoming a “renter’s building” will devalue the property and make it more difficult to sell it in the future, on-going services and amenities may be reduced, etc. If a lender is protecting themselves from investing in a “risky building” so should the buyer.

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Are you looking to buy a new home? Are you thinking that now’s a great time to find bargains? Before you make an offer, it pays to know a little about the seller’s situation.

If a home is being sold for below what the current seller owes on the property and the seller does not have other funds to make up the difference at closing the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.

A short sale is different from a foreclosure, which is when the seller’s lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.

You’re a good candidate for a short-sale purchase if:

You’re VERY Patient:
Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.

Your Financing is in Order:
Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you’re preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.

You Don’t Have Any Contingencies:
If you have a home to sell before you can close on the purchase of the short-sale property or you need to be in your new home by a certain time a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.

If you’re serious about purchasing a short-sale property, it’s important for you to have expert assistance. Here are some people you want to work with:

Experienced Real Estate Attorney.
Only about two out of five short sales are approved by lenders. But a good real estate attorney who’s knowledgeable about the short-sale process will increase your chances getting an approved contract. Also, if you want any provisions or very specialized language written into the purchase contract, a real estate attorney is essential throughout the negotiation.

A Qualified Real Estate Professional ( Preferably an Exclusive Buyer’s Agent)
You may have a close friend or relative in real estate, but if that person doesnâ’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many buyers they’ve represented in a short sale and, of those, how many have successfully closed. A qualified real estate professional will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communications with the lender. (All MLSs permit, and some now require, special notations to indicate that a listing is a short sale. There also are certain phrases you can watch for, such as lender approval required.)

Title Officer:
It’s a good idea to have a title officer do an initial title search on a short-sale property to see all the liens attached to the property. If there are multiple lien holders (e.g., second or third mortgage or lines of credit, real estate tax lien, mechanic’s lien, homeowners association lien, etc.), it’s much tougher to get that short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you’ve waited for months for lender approval. If you don’t know a title officer, your real estate attorney or real estate professional should be able to recommend a few.

Some of the other risks faced by buyers of short-sale properties include:

Potential for Rejection.
Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.

Undesirable Terms:
Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you. No repairs or repair credits. You will most likely be asked to take the property as is. Lenders are already taking a loss on the property and may not agree to requests for repair credits.

The short sale process follows pretty much the same procedure from bank to bank. Make sure your agent completely understands the process and can direct you through all the hurdles required to bring a property through closing. As of Jan 31st there are additional disclosures and requirements that have been enacted by the Federal Trade Commission. Depending on certain factors, the so-called MARS rules (Mortgage Assistance Relief Services) could require members to make certain disclosures to consumers if they negotiate a short sale with a lender or advertise their short sales experience.

The Basics of a Short Sale:

Banks grant short sales for 2 reasons: the seller has a hardship, and the seller owes more on the mortgage than the home is worth.

The seller will need to prepare a financial package for submission to the short sale bank. Each bank has its own guidelines but the basic procedure is similar from bank to bank. The seller’s short sale package will most likely consist of:

– Letter of authorization, which lets your agent speak to the bank.
– HUD-1 or preliminary net sheet ( provided by listing agent or Seller’s Attorney/Title Company)
– Completed financial statement
– Seller’s hardship letter
– 2 years of tax returns
– 2 years of W-2s
– Recent payroll stubs
– Last 2 months of bank statements
– Comparative market analysis or list of recent comparable sale ( provided by listing agent)

Writing the Short Sale Offer and Submitting to the Bank:

Before a buyer writes a short sale offer, a buyer should ask his or her agent for a list of comparable sales. Banks are not in the business of giving away a home at rock-bottom pricing. The bank will want to receive somewhat close to market value. The short sale price may have little bearing on market value and may, in fact, be priced below the comparable sales to encourage multiple offers.

After the seller accepts the offer, the listing agent will send the following items to the bank:

– Listing agreement
– Executed purchase offer
– Buyer’s preapproval letter and copy of earnest money check
– Seller’s short sale package

If the package is incomplete, the short sale process will be delayed. In this event, the bank might even shred the package. The Buyer’s agent should determine the status of the Short Sale Package before presenting an offer.

The Short Sale Process at the Bank:

Buyers may wait a very long time to get a response from the bank. It is imperative for the listing agent to regularly call the bank and keep careful notes of the short sale process. A Buyer’s Agent should ensure that the listing agent is conducting the necessary follow-up with the lender and provide meaningful and periodic feed back to the Buyer. If a Buyer must close on a home is a defined period of time, then a short sale property may not be for them. Buyers should continue to look at other properties that may meet their requirements. Once they make an offer on a different property and have a contract they MUST have their agent withdraw their short sale contract.

Following is a typical short sale process at the bank:

– Bank acknowledges receipt of the file. This can take 10 days to a month.
– A negotiator is assigned. This can take 30 to 60 days.
– A BPO is ordered. The bank probably will refuse to share the results of the BPO.
– A second negotiator may be assigned. This can take another 30 days.
– The file is sent for review or to the PSA. This can take 2 weeks to 30 days.
– The bank may then request that all parties sign an Arm’s-Length Affidavit.
– The bank issues a short sale approval letter that defines the price and the date that price is good through. The buyer and seller must close on the property at those terms and before that date. A revised contract my be required and the due diligence period begins.

Some short sales get approval in 6 to 8 weeks. Others take 90 to 120 days, on average. The clock starts once the short sale package is complete and all the required paperwork has been submitted to the bank and a file has been assigned to a negotiator.

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A report released by Florida Realtors clears up the confusion by explaining the three different levels of foreclosure activity that analysts consider, and listing the state numbers for each during 2010.

The Florida Foreclosure Report found general confusion about the definition of foreclosure. One group might focus on the number of homeowners who received at least one notice of foreclosure and consider that the number of homes in foreclosure. A second group might focus only on the number of homes actually taken over by a bank. But while the number of foreclosure notices could be rising, the number of homes actually taken over by a bank could be declining.

The report outlines three levels of foreclosure, which added together are the foreclosure rate :

Lis Pendens: Homes under Lis Pendens have received at least one foreclosure notice.

Notice of foreclosure sale: Homes that received a notice have been scheduled for a foreclosure sale, but the homeowner may still find a way to keep the house.

Real estate owned (REO): Bank-owned homes post-foreclosure.

In 2010, only 2,800 Florida properties made it through the foreclosure process to become REOs. Of the rest, 180,402 were Lis Pendens and 140,105 received a notice of foreclosure sale. However, the total number of homes in some phase of foreclosure – all three categories – comes out to 323,307 Florida households.

Other report highlights:

In 2010, 1 in every 29 Florida housing units were in some phase of foreclosure. In 2008, it was only 1 in every 54.

The top Florida counties for high foreclosure rates are, in order: Lee, Miami-Dade, Osceola, Charlotte and Orange.

The Florida counties for lowest foreclosure rates are, from least up: Taylor, Union, Jefferson, Lafayette and Liberty.

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According to the latest housing data released by the Florida Association of Realtors (FAR), Florida’s existing home and existing condo sales both rose significantly in January 2011.

Existing home sales increased 14 percent last month with a total of 12,151 homes sold statewide compared to 10,702 homes sold in January 2010, according to Florida Realtors. January’s statewide sales of existing condos rose 36 percent compared to the previous year’s sales figure.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in January; 16 MSAs had higher condo sales.

“Now is a great time for anyone thinking of buying a home in Florida to make that decision,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “Mortgage rates are historically low, although they are beginning to tick up slightly as the economy shows signs of strengthening. Conditions remain very favorable for buyers, with a range of housing inventory and attractive prices.

“Homebuyers soon will have the opportunity to visit a number of open houses in their preferred locales all in a single weekend, as part of the second annual Florida Open House Weekend, March 26-27, 2011! From the Keys to the Panhandle, Realtors across Florida are participating in this statewide open house event sponsored by Florida Realtors. Consult a local Realtor about Florida Open House Weekend, and find out more about qualification criteria and opportunities in your local housing market.”

Florida’s median sales price for existing homes last month was $122,200; a year ago, it was $131,000 for a 7 percent decrease. Analysts with the National Association of Realtors (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in December 2010 was $169,300, down 0.2 percent from a year ago, according to NAR. In California, the statewide median resales price was $301,850 in December 2010; in Massachusetts, it was $285,950; in Maryland, it was $240,000; and in New York, it was $225,000.

According to NAR’s latest outlook, improving economic conditions and strong affordability are positive factors for the coming months. “Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions,” said NAR Chief Economist Lawrence Yun. “Mortgage rates should rise only modestly in the months ahead, so we’ll continue to see a favorable environment for buyers with good credit.”

In Florida’s year-to-year comparison for condos, 6,681 units sold statewide last month compared to 4,916 units in January 2010 for an increase of 36 percent. The statewide existing condo median sales price last month was $79,400; in January 2010 it was $97,000 for an 18 percent decrease. The national median existing condo price was $165,000 in December 2010, according to NAR.

The interest rate for a 30-year fixed-rate mortgage averaged 4.76 percent in January, down from the 5.03 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

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The NC real estate contract has changed dramatically for 2011. The new North Carolina real estate contract, called the Offer To Purchase And Contract, will require a totally different approach to the home buying process. Let’s take a look at the major changes to the NC real estate contract.

Due Diligence Period: The biggest change to the NC real estate contract is the addition of a due diligence period. This is a mutually agreed upon period of time that the buyer will have to fully investigate the property and decide whether to proceed. The length of time and the fee for the due diligence period are negotiable between the buyer and seller. The buyer purchases this period to fully contemplate the purchase of the property and may terminate the contract for any reason or no reason, and at their sole discretion, prior to the expiration of the period.

Due Diligence Fee: A negotiated fee will be paid to the seller by the buyer for the right to conduct due diligence. It would stand to reason that the longer period of time required by the buyer, the more the cost of the fee. The fee becomes the property of the seller and is a credit to the buyer upon closing.
It is important to note that this does not replace the earnest money deposit.

Due Diligence Process: During this period the buyer must complete any of the following items that are important to them and critical to completing the purchase.

– have all inspections performed
– secure final approval for any financing
– review all relevant property documents
– investigate insurance availability and affordability
– have the property appraised
– have the property surveyed
– investigate zoning, schools, proposed roads, etc
– investigate potential flood hazards and and flood insurance requirements
– any other investigation the buyer wishes to perform

Gone is the process of inspecting the property and then debating what is a necessary repair. The buyer is free to request that the seller make any repairs and improvements they wish without regard to whether the request is for an item on the previously used necessary repair list. Likewise, the seller is free to refuse to make any repairs or improvements. The buyer can accept the property in its as-is condition, negotiate a written agreement as to what will be repaired, or terminate the contract prior to the expiration of the due diligence period.

Note: There is no longer a finance or appraisal contingency. These matters must be resolved prior to the expiration of the due diligence period.

Simplified Dates: Eight dates have been reduced to only three. The new NC real estate contract contains 1) effective date 2) due diligence date 3) settlement date.

Seller Breach Provision: In the event that a seller breaches the contract, or materially fails to comply with their obligations to deliver the property at settlement, both the due diligence fee and the earnest money deposit are returned to the buyer. The seller is also now obligated to reimburse the buyer for reasonable costs actually incurred during the due diligence period.

There are other changes as well, however, this pretty much covers the major differences between the previous contract and the new one.

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Ten reputable sources offer slightly differing opinions on mortgage rates and housing prices in 2011.
What will happen with the real estate market in 2011? Many predictions are being thrown about but smart buyers and sellers need to consider the sources of these predictions before taking them too seriously. Here you’ll find the 2011 real estate predictions from ten leading resources.

Predictions on Mortgage Rates in 2011

1.Bloomberg Television: In a Bloomberg Television appearance, Harvard University’s Joint Center for Housing Director Nicolas Retsinas predicted that mortgage rates won’t increase in 2011 but once they do start to go up they may increase quickly.

2.Freddie Mac: Mortgage enterprise Freddie Mac predicts that mortgage rates will climb slightly in 2011 but should remain below 5% for 30-year fixed mortgage loans through the end of the year.

3.Mortgage Bankers Association: This mortgage association agrees with predictions that mortgage rates will remain low but will start to climb. They do, however, think that rates may exceed the 5% rate that Freddie Mac predicts before the year is up.

Predictions on Housing Prices in 2011

1.Forbes: A report from leading news source Forbes predicts that home prices may fall another 20% in 2011 before a nationwide housing bottom is reached.

2.Moody’s Analytics: Chief Moody’s Analytics Economist Mark Zandi says that home prices will continue to decline but not as sharply as Forbes suggests. He predicts approximately an 8% decline through the third quarter of 2011.

3.National Association of Business Economic: Economists surveyed by NABE believe that the starting price of homes that sell will start to increase slightly in 2011 although they will remain fairly low. They believe that home prices have already hit bottom in most of the United States.

4.The Wall Street Journal: Writing for the Wall Street Journal, Nick Timiraos reports that economists and housing analysts predicts that home prices will reach their bottom in 2011 but that the housing market won’t start to recover until sometime the following year. He notes that, the housing market is faring better in several metro areas, particularly those with decent job growth such as parts of Texas and Washington, D.C.

5.TIME Magazine: An article in TIME reiterates the same predictions made in The Wall Street Journal although they say that recovery may not happen until as late as 2013. The article says that the housing bottom may not have been reached quite yet but that it’s almost there.

6.Warren Buffet for Berkshire Hathaway: Early in the year billionaire investor Warren Buffet wrote a letter predicting that the housing market woes would be behind us by 2011. He may have spoken too soon according to some of these other sources.

7.Zillow: Chief Economist Stan Humphries agrees with TIME and the Wall Street Journal regarding the impending bottom of the housing market. He notes that the rebound will be slow although he doesn’t offer a prediction for a specific date when the real estate market will be back on track.

Summary of 2011 Real Estate Predictions

Based on these ten credible resources, the following general predictions can be made:

– Mortgage rates are going to remain low. However, it’s tough to tell when they’ll start to climb and how quickly they may climb. For that reason, it may be smart to try to secure a mortgage near the beginning of 2011 rather than waiting until the end of the year.
– Home prices are going to decline in 2011. This seems fairly clear. However, it is much less clear how much they will decline or when they will stop declining and bottom out. Although some sources predict drops as high as 20%, it is much more likely that the drop will be small. Housing bottoms may even have been reached in some urban areas.
– Because mortgage rates will remain low and home prices are at or near their bottom, 2011 is a good time to invest in real estate if you have the means to do so.

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Florida and Arizona have long been the favorite 2 states for retirement migration.

In a recent Del Webb survey among baby boomers on retirement preferences the top reasons for choosing where to live in retirement were cost of living, health care, climate, and opportunities for culture and recreation. Family and friends were further down the list. Boston College’s Center for Retirement Research found the same general reasons for retirement moves, but in a different order: family, financial, better location, leisure/climate, and health. Looking at these and related reasons, is there a logical explanation why boomers now prefer North Carolina over Florida for retirement?

Taxes:
Both NC and FL are fairly low tax states. Florida has one important edge – it has no state income tax (although North Carolina does not tax social security income, and military retirement pay is exempt with some conditions).

Neither state has inheritance or estate taxes. In both states, full-time residents can take advantage of homestead laws which protect them from unreasonable property tax increases (there are certain restrictions in North Carolina). Both states have sales taxes (6% in FL vs. 6.75% in NC). Both states have fairly low property taxes, at least compared to the northeast.

The Tax Foundation ranks North Carolina as the 20th highest state for tax burden, while Florida is 47th (higher ranking is more tax friendly).

Climate:
Florida certainly has the edge for people who prefer warmer winters. Even in northern Florida the winters are mild – vegetable gardens grow in January and it rarely snows or goes below freezing. In southern Florida shorts and short sleeves are usually comfortable on January and February days, although there can be occasional cool spells.

North Carolina has a much more diverse climate than Florida’s. The coast is a bit cooler in summer and a bit warmer in winter than elsewhere in the state. It rarely goes below 40 along the coast, but can go into the teens in the Great Smoky and Blue Ridge mountains in the western part of the state, where there are ski resorts. People who want 4 seasons will find them in North Carolina, and folks who want to go swimming or play golf in January will usually be able to do so in Florida.

Both states have climates that permit a wide range of activities year round. Florida has had a number of hurricanes in the last 10 years, and those storms have led to very high insurance rates.

Economy and Cost of Living:
Both states have been on “watch” lists for fiscal problems due to the recession. Both have high unemployment and have borrowed money to pay unemployment claims.

Florida, at least, has begun to implement severe austerity measures which are unpopular, but which have helped to reassure the state’s credit raters. North Carolina probably has a more diverse economy than Florida’s top-heavy concentration on tourism and construction.

Cost of living in both states is below average. In North Carolina the Zillow Home Value Index statewide was $137,300 in early 2010, almost identical to Florida’s at $136,500 (data from Zillow.com – the U.S. Value Index was $182,400).

Geography:
Like Florida, North Carolina has an ample, but not quite as long coastline, where people can enjoy the beach and access to bays and the ocean.

NC has pastoral places to live like the sandhills around Pinehurst in the central part of the state, as does Florida in the panhandle and center of the state. North Carolina, however, has towns in its western mountains where people who crave mountains can find their ideal retirement. At a towering 345′ above sea level Britton Hill is the tallest peak in Florida, whereas Mt. Mitchell in NC stands at 6,684′. Overall: NC wins for geographic diversity.

Where to Live:
Both states have interesting towns to live in. Both have college towns – like Chapel Hill in NC and Gainesville in FL. Each state has large cities to live in like Charlotte, Tallahassee and Miami. Each also has interesting towns like Mount Airy or Key West. There are plenty of cultural activities to be had in either state, if one chooses a town carefully. Because of cheap land and plenty of willing retirees, both states have hundreds of new and existing active adult communities to choose from.

North Carolina has an edge with Asheville, the most popular retirement destination in the country. Florida, however, has dozens of towns that are dominated by and desirable for retirees.

Health Care:
Both states have a wonderful collection of medical facilities and professionals, particularly in the larger cities. Doctors and hospitals tend to go where the patients are, and since both states have a growing population and (at least until recently) booming economies, they are both well-supplied medically.

So Why is North Carolina coming out on top for retirement preference?
After analyzing all of these factors we had hoped that we would find a compelling reason why North Carolina is beating the pants off Florida in attracting retirees. Unfortunately, that is not the case. On most factors the states are about even – each one comes out ahead on a few points and behind on some others. Conclusion: there must be some intangibles at work here.

The Cool Factor:
These are strictly our opinions, but here are some reasons why North Carolina’s Secret Sauce is giving Florida a licking in the retirement department:
– Florida just isn’t cool anymore. In our opinion most of us baby boomers are obsessed with fads – being cool by being in on the latest trend. Too many movies have parodied retirement life in Florida – from “Cocoon” to “In Her Shoes”. A lot of people don’t want to be associated with the blue haired, shuffleboard playing set that is displayed in popular culture about Florida.
– Florida is tacky and crowded. By no means is the whole state that way, but there are many, many towns where everything is new and every store is a big box or a chain. Some people are rejecting that barrenness, along with the intense traffic and development that comes with unchecked growth.
– On the positive side, North Carolina has a cool factor. Towns like Asheville, New Bern, and Chapel Hill have good reputations as interesting places to live. North Carolina represents something new and undiscovered, with the advantage of being not too far away or too different from the northeast many retirees are moving away from.

Most popular retirement towns in North Carolina:
Here are the most popular retirement towns in North Carolina as determined by page visits to their reviews at Topretirements.com:

Asheville – In the western mountains – the #1 retirement spot in the country
Beaufort – An old seaport (and Blackbeard the Pirate’s retirement town) with considerable charm
Chapel Hill – A lively college town and home to the University of North Carolina
Hendersonville – Small town in the Blue Ridge National Heritage area
Mount Airy – The fictional home of Mayberry in the mountains
New Bern – Smaller and more charming, near the coast
Pinehurst – Charm and understated elegance in a legendary golf community
Southport – An active fishing village in southern North Carolina – where “Dawson’s Creek” was filmed
Winston-Salem – A larger city that is attracting retirees

Filed under: Blog by Kim Bregman
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