Fed raises rates by quarter point

On Wednesday afternoon, Fed Chairman Jerome Powell confirmed that his Fed remains independent of the White House. On Monday, President Donald Trump berated the Fed for even considering raising rates. Yet that’s exactly what Powell and the Federal Open Market Committee voted to do at today's monetary policy meeting. The stock market fell on the news. 

The U.S. Federal Reserve lifted short-term interest rates by a quarter percentage point, pushing up costs for everything from credit cards to adjustable-rate mortgages. But the central bank also suggested a slower pace of tightening next year, with two rate increases instead of the three investors had been expecting. Wednesday's increase sets the target for the benchmark federal-funds rate at 2.25% to 2.50%.

Interestingly, the 10-year Treasury bond yield fell, signaling that the Bond Vigilantes are leaving it to the Dow Vigilantes to punish the Fed for its Grinch-like decision. In my opinion, by proceeding with today's rate hike and suggesting that two more are on the way for 2019, the odds that there will be no rate hikes in 2019 have increased. That’s confirmed by the reaction in the bond market. 

It's the ninth move higher since 2015, and the fourth this year, as economic growth and inflation pick up.  

The Fed is forecasting 2 more rate increases in 2019.

Life Hack: Use This Site To Get Discounts On Just About Anything

Why waste your time waiting in line at some store or restaurant when you could order the same thing online in seconds? If you can relate, you’re going to love this online discount trick.

I use a Chrome extension to find the best coupon codes for me, and it takes zero effort. It’s called Wikibuy.

Here’s how it works:

Wikibuy is super popular for finding discounts on Amazon, Best Buy, J.Crew, Expedia and many other stores. But most people don’t know that Wikibuy works on a ton of food websites, too.
Just add the extension to your browser, and shop like normal. 

Wikibuy automatically looks for coupon codes while you shop on Postmates, Seamless, Pizza Hut, Grubhub, Instacart and a bunch of other sites. Then at checkout, it magically applies the best coupon code to your cart. All you do is click the notification, and Wikibuy does all the work.

You could save hundreds of dollars on electronics from televisions to computers! 

The best part? It’s totally free. Do yourself (and your wallet) a favor and get Wikibuy HERE.

Great News For Home Sellers & Buyers! FHA Loan Limits Increase in 2019!

Great news for home sellers and buyers! On January 1, 2019, the Federal Housing Administration's (FHA's) loan limits are set to increase across most areas in the country. The U.S. Department of  Housing and Urban Development (HUD) announced that FHA loan limits would be increasing in more than 3,000 counties, with the loan limit ceiling increasing to $726,525 from $679,650 in high-cost areas of the country.

     HUD announced the FHA would also increase its floor to $314,827 from $294,515 in 2019. The limit would also increase for FHA-insured Home Equity Conversion Mortgages (HECMs) to $726,525 from $679,650.  Clarifying this increase, HUD said, "FHA's current regulations implementing the National Housing Act's HECM limits do not allow loan limits for reverse mortgages to vary by MSA or county; instead, the single limit applies to all mortgages regardless of where the property is located."

       These changes in FHA's floor and ceiling caps mean that the maximum loan limits for FHA forward mortgages would rise in 3,053 counties and remain unchanged in 181 counties. The rise in forward mortgages in the over 3,000 counties would also be due to the robust increases in median housing prices and the required changes to FHA's floor and ceiling limits that are tied to the Federal Housing Finance Agency's (FHFA's) increase in the conventional mortgage loan limit for 2019.

      Giving the definition of what is considered a high-cost area, HUD said that the National Housing Act required FHA to establish its floor and ceiling loan limits based on the loan limit set by the FHFA for conventional mortgages owned or guaranteed by Fannie Mae and Freddie Mac. Giving a breakdown, FHA's 2019 minimum national loan limit, or floor, of $314,827 is set at 65 percent of the national conforming loan limit of $484,350. This floor applies to those areas where 115 percent of the median home price is less than the floor limit.

     As a result of this calculation, "Any areas where the loan limit exceeds this 'floor' is considered a high-cost area, and HERA requires FHA to set its maximum loan limit 'ceiling' for high-cost areas at 150 percent ($726,525) of the national conforming limit," HUD said.

Is Your Furnace Affecting Your Indoor Air Quality?

The push to make our houses as energy-efficient as possible has, in some cases, led to unintended consequences. Because modern houses are less drafty due to tighter-fitting windows, doors and weather stripping, pollutants that were vented in the past are trapped inside. Most of the pollutants are relatively harmless, but some can be dangerous, and they all contribute to what some people call "sick house syndrome."

"Pollutants" is a broad term, and can include things like dust mites, pet dander, mold spores and viruses, as well as gaseous pollutants like tobacco smoke and the off-gassing from paints, cleaning products and some building products. They can lead to headaches, dizziness, irritation of eyes, nose and throat, fatigue and more serious illnesses. If you experience these symptoms while in your house, but not when you are away from home, indoor pollutants may be the cause.

The best solution is to remove the cause of the pollutants and ventilate the space with fresh outdoor air. Unfortunately, natural ventilation is not always practical. No one is going to throw open the windows on a cold winter's day, nor are they likely to open the windows if the house is cooled by a central air conditioning system—as the purpose of a tightly sealed home is to conserve energy.

However, you can also help remove some of the pollutants by upgrading the filter used in your forced-air heating and cooling system. The basic furnace filter is designed to keep dust and large particles out of the machinery, but more advanced filters can effectively remove pollutants, including viruses and odors, using a variety of methods. Standard filters simply trap particles on a flat filtering medium, while others have deep pleats with added surface area. Electrostatic filters provide an electrical charge that helps trap some particles more effectively.

Pick a Filter

There are a number of rating systems to help sort out the types of filters available. The systems will help you compare filters from different companies. The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) developed the minimum efficiency reporting value (MERV) for filters. MERV rates filters on a scale from 1 to 20, with 20 being the most efficient at removing pollutants. According to the Environmental Protection Agency, filters in the 7 to 13 range are likely to be nearly as efficient as high-efficiency particle arrestance (HEPA) filters at removing airborne particles. Filters with higher ratings are used in hospitals, laboratories and clean rooms.

Be sure to buy the size filter that fits your system. The information should be in the owner's manual or on the furnace itself. If you don't have it, take the existing filter to the store with you. If you choose a high-efficiency filter, read the packaging carefully, as some need to be changed more frequently than others to function properly.
Inline purifiers are another option. These are installed inside the air ducts to remove pollutants. Some employ ultraviolet radiation to kill bacteria, allergens and mold. Others use a catalyst to oxidize pollutants (including gaseous ones), a process that converts the pollutants into harmless hydrogen and oxygen. Inline purifiers are usually used in addition to - not instead of - furnace filters.

Other Steps to Take

Installing a high-efficiency furnace filter is a good first step for tackling indoor air pollution. It's something that you can do right away, for little money—a premium filter will cost less than $25. However, it won't solve every type of pollution problem. Here are some other steps to take:

Make sure range hoods, bathroom ventilation fans and dryer vents are all working properly. They vent moisture and odors to the outside. Getting rid of moisture vapor in bathrooms and kitchen will help prevent mold.
Install carbon monoxide (CO) detectors in your home. CO is a byproduct of combustion, and if it accumulates in your home, it can be lethal.

Have your house tested for radon. Radon is an odorless, invisible gas that is a byproduct of uranium that occurs naturally in the soil. If it leaches into your home, it can lead to serious illnesses. Test kits let you take a sample of air from your home and send it to a lab for results. If you do have elevated levels in your home, don't panic. Radon mitigation products are straightforward and simple to install.

Protect yourself from the pollutants in your air by replacing your furnace filter as needed, and making sure to ventilate your home with fresh air whenever possible.

Interest rate hikes may be delayed. Great news for homebuyers!

Good news for home buyers! 

Federal Reserve Chairman Jerome Powell raised the possibility that the central bank is willing to hit the brakes on interest rate hikes in the near future.  This should slow mortgage rate increases, allowing you to buy more home for your money!

The Federal Open Market Committee (FOMC), the central bank’s policy making arm, will meet again in December, and many observers believed another rate hike would occur at that time. But in prepared remarks delivered today before the Economic Club of New York, Powell stated the central bank had “no preset policy path,” adding that he was cognizant of the concerns that raising rates too quickly would disrupt the economy.

“We know that moving too fast would risk shortening the expansion,” Powell said. “We also know that moving too slowly, keeping interest rates too low for too long, could risk other distortions in the form of higher inflation or destabilizing financial imbalances. Our path of gradual increases has been designed to balance these two risks, both of which we must take seriously.”

Powell made no specific mention of President Trump, who appointed him to the Fed’s leadership and has since made several harshly critical remarks of the Fed’s rate hikes. Powell defended recent rate increases, noting that “interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy—that is, neither speeding up nor slowing down growth.”

Thanksgiving Fun Facts

Should I Buy A Home From An Auction?

The traditional channels of searching real estate listings and working with real estate agents aren't the only way to acquire

a property. Experienced real estate investors often purchase properties at auctions. But auctions aren't limited to professionals – novices have purchased their homes at auctions, too.

How Do Properties End Up at Auction?

The two main types of property auctions are foreclosure auctions and tax lien auctions. Before a property reaches this stage, several things have to happen.
First, the homeowner has to have not paid his mortgage for several months. Then, the bank files a notice of default with the county recorder. If the homeowner doesn't pay the balance owed or renegotiate the loan with the lender, the home can be put up for auction. The amount of time it takes from when the homeowner stops paying the mortgage to when the home ends up at auction varies, but can be anywhere from a few months to a year or more.

The other main way a home ends up at auction is when the owner doesn't pay property taxes or becomes severely delinquent on state or local income taxes. In these cases, it is the unpaid tax authority (not the bank) that seizes the property.

How Property Auctions Work 

Auctions take place at local government courthouses and other locations chosen by auction companies, such as hotel conference rooms. Homes are also auctioned online. Foreclosure auctions are held by bank-hired trustees. Tax lien auctions are conducted by local sheriffs.

Winning a property at these auctions can work in two different ways. In a lender confirmation auction, the lender doesn't have to accept your offer even if you are the highest bidder. In an absolute auction, the winning bid gets the property.

The starting price of the auction may be the balance remaining on the mortgage or may be a lower amount designed to spur bidding. In the case of a foreclosure auction, the lender is not allowed to profit from the auction. Often, these properties are sold at a loss, but if there is a profit, it is supposed to go the homeowner after the mortgage, and any other liens are paid.

What can potential bidders learn about auction properties before bidding? Some auction companies have open houses so potential bidders can walk through the properties ahead of time. Listings describing the properties to be auctioned are also available. Other times it is only possible to drive by and see the outside. To discover properties that will be auctioned off, potential buyers can check county recorder websites and foreclosure listing services.

As for payment, bidders should bring to the auction a cashier's check for the amount of money required by the auction holder. Winning bidders will pay any auction fees and/or bidding fees and put down an earnest money deposit on the property they are purchasing before leaving the auction site. The winners then go through escrow and closing just like with any other home purchase. Bidders at property auctions are often real estate investors who can afford to pay cash, but for auctions that allow financed purchases, it is best to get prequalified ahead of time.

Some auction houses prefer that you work with their affiliated lenders and will have those lenders on site at the auction. However, do your research beforehand, using a tool like a mortgage calculator to determine the interest rates available from competing lenders. This may give you some leverage when working with a bidder's lenders.

Benefits

Why would anyone be interested in buying a property at auction? For one thing, an auction offers a first chance to snap up a type of property you might not otherwise be able to afford. Because of the extra risk involved and because fewer people may be interested in the property than if it were available through traditional channels, prices can be lower. Auction properties aren't always great deals – the auctioneer could set a hidden reserve price on it, the minimum you must bid – but the potential to get a luxe residence at "fire sale prices" is such a big draw that, for many people, it compensates for the numerous potential drawbacks.

Drawbacks

Properties being auctioned off aren't necessarily hidden gems. If a property winds up at auction, it means the owner was having financial trouble, so the house may have deferred maintenance problems. It might even be completely trashed. Also, there may be claims against the home – not just the aforementioned tax liens, but contractor liens or a second mortgage. Bidders can avoid this problem by checking with the auction house to ensure that the property has clear titles.

Buying a property at auction often requires a lot of cash. Each auction company/county government has its own requirements for payment, but you will probably need some amount of ready money just to secure your bid. Down payment amounts and methods of purchasing often depend on the property and the auction house. More flexible financing options may be available by purchasing a bank-owned property the traditional way, instead of at an auction.

Auction properties sometimes do not allow for a home inspection or even provide a view of the inside prior to the auction. If you can't afford the risk of buying a property in poor condition, stick with auctions that allow you to inspect the property before bidding. Without this information, it can be hard to know what you're getting into, what a property's repair costs will be, or the true value of property until you've become the owner.

Also, in some cases, the (former) owner or a squatter will be occupying the property, meaning you will have to evict them – a process that can be unpleasant at best, and lengthy and expensive at worst. 

The Bottom Line

If you're interested in trying to pick up a bargain property at auction, there's a lot to learn. Auctions can be a riskier way to purchase a property than buying a property through a real estate agent, so it's important to be extremely well-educated about the process and about the properties you are interested in bidding on.

Foreclosed homes may be financially appealing, but there are many obstacles to consider before buying.  Also, just because a home is for sale at auction doesn't mean that you'll be able to get it at a good price (or that the home is a good deal at any price – it could be a money pit!). 

Also buyer beware not all auction sites are the same.  One review on Trulia.com warned about Auction.com.   Here is what the reviewer wrote from his experience.


"Jim Breunig, Home Buyer, Pittsburgh, PA
Fri Dec 27, 2013
Let me start by saying that I am a flipper, and have purchased many foreclosed home through just about every way imaginable. Please, please stay away from bidding on Auction.com. I recently participated in one of their online auction. This is the worst "platform", or process of any online real estate auctions. I was the "Winning Bidder", 12/7/13 which translated in English means nothing. I complied with their ridiculous terms and conditions (Please Read Terms Fully) Sent my earnest money within the required time frame to Service Link (Closing Co) located in Pennsylvania, (I'm in Florida). After that I heard nothing. I had to place a call once a week to auction.com and got the standard runaround mushmouth BS congratulating me on being the winning bidder for three weeks, to which I requested a signed sellers acceptance... the response, let me check on that. Bid pending, was the answer. Now after 3 weeks have gone by, I get an email and a call letting me know my offer was rejected. Fine, I can accept that, it was a pretty low bid, so I ask for an estimated time frame in which I can expect my earnest money to be returned. This is when the real fun starts, 6 emails later and being informed that Auction.com has nothing to do with the return of my earnest money ($2500.00) I am shoved off to try and collect it myself from Service Link, Which has yet to respond. The moral of the story, deal local, if you don't bid on auction.com, or if the bid doesn't reach about 90% of market value it will revert back to the original list agent. Wait, and deal with a local Real Estate Agent and Title Company. Don't waste your time, or put yourself through the stress and aggravation. I have purchased other properties online through Williams and Williams and Hubzu, both closed successfully and without issue and their communication was significantly better than auction.com. I will post a follow up with how long the wait will be to get my earnest money returned."

Inventory Remains Low More Homes Needed To Satisfy Buyers

Existing-home sales declined for the second consecutive month in January and last month’s decrease was the sharpest in three years.

Total existing-home sales slumped by 3.2% in January to a seasonally adjusted annual rate of 5.38 million, according to the National Association of Realtors.  The annual rate during December 2017 was 5.56 million.

Sales are down by 4.8% compared to this time a year ago, which is the lowest annual drop since August 2014.

Once again, low inventory is at the forefront of the market’s problems. Housing inventory actually increased by 4.1% last month to 1.52 million existing homes available for sale. Good news, right? Sort of. Inventory is still 9.5% lower than a year ago and has fallen year-over-year for 32 consecutive months, according to the NAR. Unsold inventory is at a 3.4-month supply at the current sales pace.

NAR chief economist Lawrence Yun believes the market desperately needs a correction from a supply standpoint to

satisfy rampant buyer demand.

“While the good news is that Realtors® in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace,” Yun said. “It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”

The good news for agents and sellers is that prices increased for the 71st consecutive month. The median existing-home price in January was $240,500, up 5.8% from January 2017.

Agents can seriously control the market by accumulating a sufficient inventory of listings. Not only can you grow your network by connecting with sellers and buyers, you’ll put yourself in a prime position to cash in on the current market conditions. Until supply meets demand, housing prices should continue to rise.

Continued Low Inventory Means Sellers Are Getting More For Their Home

The real estate market has pretty much remained the same since the last quarter of 2017.  In most areas it is still a seller's market.  

The number of homes for sale continued to drop and prices

climbed back to pre-recession levels. 2018 looks to be another strong seller’s market as prices continue to increase as they have, month-over-month, since early 2012.

In December, the number of new listings in the county fell by nearly 600 homes compared to November, according to Realcomp. There were 1,510 new listings in November while December dropped to 941 homes.

Median prices and inventory decreased compared to November. Homes sold during December averaged $248,950, up from $238,450. Inventory dropped 400 homes from November.

2017 was an extremely good year for all metro Detroit residential property values. As we continue to have a low supply of homes on the market, values continue to rise. Many areas are now back to their pre great recession levels.

2018 could very well remain a strong seller’s market as inventory drops, selling prices increase and interest rates remain low.

The story in 2017 continued to be sale prices and inventory. Sale prices were up 9.4 percent over 2016 and 38.9 percent over the last four years. The one downfall with home values increasing rapidly with inventory so low, it’s been harder to appraise homes.

This challenge is due to the fact that because of the lack of inventory, buyers are willing to pay more in competitive situations.

The problem comes when a buyer is willing to pay more for your home but you can’t sell it for more because there are no other homes to compare it to.

December 2017

• New Listings: 941 (- 11.7 percent from 2016)

• Pending Sales: 881 (- 1.8 percent from 2016)

• Closed sales: 1,252 (- 6.4 percent from 2016)

• Days on Market Until Sale: 38 (- 5 percent from 2016)

• Median Sales Price: $248,950 (+ 12.8 percent from 2016)

• Average Sales Price: $288,937 (+ 6.6 percent from 2016)

• Percent of list price received: 97.9 percent (+ 0.9 percent from 2016)

• Inventory of Homes for Sale: 3,103 (- 29 percent from 2016)

• Months Supply of Inventory: 2.1 (-30 percent from 2016)


December 2016

• New Listings: 1,066

• Pending Sales: 897

• Closed sales: 1,337

• Days on Market Until Sale: 40

• Median Sales Price: $220,750

• Average Sales Price: $271,079

• Percent of list price received: 97 percent

• Inventory of Homes for Sale: 4,372

• Months Supply of Inventory: 3

OAKLAND COUNTY DECEMBER HOUSING MARKET: http://gmaronline.com/documents/stats/17.12_Oakland.pdf

OAKLAND COUNTY NOVEMBER HOUSING MARKET: http://gmaronline.com/documents/stats/17.11_Oakland.pdf

SOUTHEAST MICHIGAN HOUSING MARKET 2017 SUMMARY: http://gmaronline.com/documents/stats/18_YearEnd.pdf

Ronald Dwyer is a licensed Realtor serving: Troy, Rochester, Rochester Hills, Birmingham, Bloomfield Hills, Bloomfield Township, Sterling Heights, Shelby Township, Livonia, Novi, Livonia, Canton, Plymouth, Dearborn, Dearborn Heights, Redford and all Southeastern Michigan 

10 Things Never to Put Down Your Garbage Disposal

Chicken Skin Should Never Go Into The Garbage Disposal

Oil and Grease

While your garbage disposal can handle liquid or semi-solid fat, grease, and oil, the rest of your home’s plumbing system cannot. Instead, throw the greasy stuff out with the trash; seal liquid oil and grease in a can or jar first. 

Pasta and Rice
Delicious on your plate, but a problem in your plumbing, both pasta and rice continue to swell with water, even after cooking. Toss them in the trash unless you’re willing to risk a clog.

Bones, Fruit Pits, and Seafood Shells

Even though very small bones will probably pass through without a problem, it’s safest to keep all bones, fruit pits, and seafood shells out of your garbage disposal. These hard items can break your disposal or clog up your plumbing. 

Medication

Tossing your unused medications down the garbage disposal might seem like a smart way to dispose of controlled substances, but putting drugs into the plumbing system can eventually impact the water supply. Instead, the FDA recommends removing the drugs from their packaging, putting them in a plastic bag with something unappealing like dirt or cat litter, then disposing of the bag in the trash.

Fibrous Vegetables
While most vegetables can safely pass through the garbage disposal, fibrous veggies, including artichoke, celery, rhubarb, lettuce, kale, cornhusks, onion skins, asparagus, and chard tend to tangle around the disposal’s blades. Add these to your compost heap instead, or toss them in the trash. 

Potato Peels
It’s convenient to peel spuds over the kitchen sink, but don’t send those peels down the drain. Potato peels turn into a gluey mass inside your plumbing pipes, and pose a major clog risk.

 Broken Glass or Metal

If metal or glass fall into your garbage disposal, don’t turn it on. Instead, switch off the disposal at the unit under the sink, then try to fish out the offending item with a fork, grabber, or hook. If that's not possible, put on gloves to protect your hands and carefully retrieve the item. Always make sure the garbage disposal is completely turned off before attempting to retrieve an item from the sink.

Produce Stickers Can Damage Your Disposal

Coffee Grounds and Eggshells

There’s some dispute about whether or not eggshells and coffee grounds are safe for the garbage disposal, but why take a chance? Instead, add them to your compost pile, mix them around your outdoor potted plants to add nutrients, or dispose of them in the trash. 

Chicken Skin

Go ahead and reduce your fat intake by removing chicken skin before cooking, but don’t toss that skin down your garbage disposal. It can easily clog your plumbing, and brings unnecessary germs and stink to your sink.

Produce Stickers
It’s fine to put citrus, apple, or banana peels into the garbage disposal, but be sure to remove any produce stickers before you do. Stickers are likely to stick to the disposal blades or the inside of your pipes.