Gary Pierpont Blog

Many first-time home-buyers may not have heard of home owners associations (HOAs), but they’re very common for a lot of properties. You’ll almost certainly see them if you’re purchasing a condominium or townhouse, but they’re also frequent in gated communities, and sometimes exist even in regular subdivisions. Investopedia covers nine things you need to understand about your HOA (which you may be obliged to join, and to which you may have to pay dues). Review their coverage and take their advice — the most important of which may be to understand whether you want to live in a community that has one or not.

Everyone who’s ever purchased a home can remember how overwhelming the experience was the first time he or she did it. There is a lot of ground to cover, and the landscape is continually changing. Recent blog posts have covered some mortgage terminology, and some changes in the industry. Today, the Boston Globe provides some higher level advice for first time borrowers: get educated, pay your bills, shop around, be sensible, consider your options, and trust the process. Take a look at the article, then delve deeper into this blog to get started with the education process.

Have you heard of Porch or Houzz? If not, and you’re considering a remodel, you should probably check them out. CNBC provides in-depth coverage of the now booming remodeling digital app industry. Both Porch and Houzz allow you to connect with local professionals, but each provides a slightly different service beyond that. Porch gives you historical data on homes you may be looking to buy or renovate, while Houzz provides a Pinterest like “idea book” for products and designs you may want to use. These are just two of the players entering the $300 billion remodeling industry.

Mortgages that are at least 30 days late dropped to the lowest level since the second quarter of 2007, according to Bloomberg. New loans entering foreclosure are back to the historical average of 0.45%. But while new loans may be back to average, we still haven’t completely worked through the foreclosures that occurred during the crash — and that means that home prices still haven’t gotten back to where they were, either. Prices have recovered 30% since their low in March 2012, including 5% in the year through February; but they’re still 16% below their 2006 high.

Buzzfeed may be famous for their shocking headlines and not-always-so-uplifting content, but sometimes they come out with stuff that is actually great and useful. This collection of 31 Insanely Clever Remodeling Ideas is just such a time. To be sure, not all of their suggestions are completely practical. Nevertheless, they’re all entertaining, and some of them are probably seriously worth considering (really, who doesn’t want a secret room?). But even if you don’t find the perfect idea for your remodeling project, you can be sure to get some inspiration here.

Fully 60% of homes purchased in the U.S. by foreigners are paid for in cash. Some of that, of course, is rich people abroad making investments. But much of it is from people who have green cards or valid work visas, and simply (and incorrectly) think it’s impossible for them to get a mortgage. The reality is, Fannie Mae and Freddie Mac have pretty much the same requirements for permanent residents and those with valid work visas as they do for natural citizens. Investopedia walks through this in more detail, including some hurdles that are real, but the bottom line is you probably don’t have to save 100% of the purchase price of a home in order to get one.

With winter over, many people are looking to do lots of repairs, from storm drains, to shingles, to shudders. On top of that, with thunderstorms, tornadoes, hurricanes, and every other kind of spring weather coming through, you can definitely call this home-repair season. And conmen know that. Of course, you need to get your home repaired, but if you don’t already have a regular handyman that you trust, be cautious — particularly if anything seems a little off. Huge discounts, large down-payments up front, and a lack of proper ID can all be signals — but some of these scammers even have yellow page ads. Here are a few local reports from around the country that go deeper into this: Bangor Daily News, KAKE.com for Wichita.

The Tuesday blog update was about Amazon getting into the home repair
business (or at least, the business of locating home repair services). It
looks like Google wants in on the act, too. Rumors are circulating that
the search giant will be augmenting its comparative mortgage and insurance
tools with the ability to search for local services. It’s not yet clear
how this would be different from the current, Google local results, but one
thing is certain. If both Google and Amazon are entering a market,
there’s bound to be disruption. Keep your eyes open as you search for
your local plumber, and see how Google is changing things.

(centered)

It’s been eight years since the sub-prime mortgage shutdown in 2007. Overall, the market seems to be doing fairly well, and while the U.S. economy may still not be firing on all cylinders, it’s certainly pointed in the right direction. But this belies a dirty little secret: the mortgage industry is still backed by the tax payer. There has been no meaningful injection of capital from private markets back into mortgages, and while Fannie Mae and Freddie Mac paid back the treasury department (i.e., us, the taxpayers) a little over a year ago, they’re currently sitting on precious little capital to back any losses on the $5 trillion on their balance sheets.

Everyone is familiar with the concept of homeownership, but you may be less familiar with the economic indicator, “household formation” — and it’s something to which you should pay attention if you’re not buying or selling right now, but planning to do in the future. As the Wall Street Journal explains, “When the economy stumbles and joblessness rises, more people tend to move in with family or double up with roommates. When the economy expands, the opposite takes place as people strike out on their own.” That’s household formation. Yesterday, Reuters reported the latest figures on homeownership and household formation. Check out the article for better insight into the future of housing prices, housing starts, and rental rates.