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Kathy B. Hayes
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Lansdale  PA 19446
 Phone: 215-362-0800
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Kathy B. Hayes

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May 2012 U.S. Economic and Housing Market Outlook

May 24, 2012 5:38 am

Freddie Mac released recently its U.S. Economic and Housing Market Outlook for May showing for the most part encouraging signs with the release of several first-quarter 2012 economic indicators.

Outlook Highlights

  • Initial estimates for first-quarter 2012 economic growth was 2.2 percent, slower than the previous quarter, but better than three of the past four quarters.
  • Personal consumption expenditures grew at a 15.3 percent annual rate reflecting continuing strength in consumer durables such as cars and kitchen appliances.
  • Residential fixed investment like new housing construction and remodeling expenses have been a net positive contributor to growth for four straight quarters; however, it remains weak for this stage of the economic recovery compared with previous business cycles.
  • Home prices at or near a trough in many markets bodes well for further declines in delinquency rates.
  • Fixed-rate mortgage rates are the lowest in more than 60 years, providing extraordinary home-buyer affordability in many areas and likely translating into a sales pickup relative to last year.

According to Frank Nothaft, Freddie Mac, vice president and chief economist, "Taken together, the first-quarter data releases provide an encouraging sign for both the macroeconomy and the housing recovery. While not uniformly positive, for the most part the data trend in the right direction."

Published with permission from RISMedia.


Consumer Spending Index Moves Upward, Declining Home Prices Slows

May 23, 2012 5:38 am

The Deloitte Consumer Spending Index (Index) posted another monthly increase in April as the pace of falling new home prices slowed. The Index tracks consumer cash flow as an indicator of future consumer spending.

"The Index has been undergoing a mix of changes as housing, energy prices and unemployment tip back and forth each month," explains Carl Steidtmann, Deloitte's chief economist and author of the monthly Index. "On the positive side, some stability in home prices over the last two months helped the Index move upward. However, with a jobless recovery, falling incomes and rising savings rates, consumer spending growth may turn sluggish."

Deloitte's analysis of additional factors influencing consumer spending indicate:

- Real consumer spending posted a small rebound in the first quarter due to a rise in auto sales driven by a significant reduction in the quality of auto lending.
- A significant decline in driving may be having an impact on retailing. Over the past 12 months through February, miles driven are down 1.1 percent from a year ago. There have only been three periods of declining driving in the past 40 years: 1973 -- 1974; 2008 -- 2009 and now. Higher energy prices are one factor, but increased consumer spending over the Internet and more telecommuting must be playing a role as well.- Despite an improvement in the real price of new homes, it will likely be a long time before prices begin rising. Simultaneously, the steady decline in jobless claims has reversed.

The Index, which comprises four components — tax burden, initial unemployment claims, real wages and real home prices — rose to 2.07 from an upwardly revised reading of 1.88 the previous month.

Highlights of the Index include:

Tax Burden: The tax burden fell slightly this month. The significant rise in tax refunds has given a boost to household cash flow and temporarily pulled down the tax rate.
Initial Unemployment Claims: The decline in claims has stabilized and reversed in recent weeks, and initial unemployment claims are up more than 12 percent from a year ago. 
Real Wages: With energy prices rising, real wages continue to fall, and are down 0.9 percent from this time last year. 
Real Home Prices: Prices fell slightly in the most recent month, and are down 1.45 percent from a year ago. A slowdown in the pace of real home prices is a positive as it becomes less of a drag on the Index.

Published with permission from RISMedia.


Spring Activity Cools But Housing Shows Improvement

May 23, 2012 5:38 am

Housing activity indicated a promising start for the first quarter of 2012 that substantially outpaced performance during the same period last year. However, the monthly pattern suggests some loss of momentum late in the quarter. According to Fannie Mae's Economic & Strategic Research Group, a slowdown in momentum may be mirroring many economic indicators and may partly be the result of unusually warm weather at the start of the year that pulled some activity forward. 

"Despite the loss of momentum as we move through the spring months, we expect that home sales will rise slightly more than 7 percent during 2012," said Fannie Mae Chief Economist Doug Duncan. "Our outlook is bolstered by improvements in consumer sentiment seen in our National Housing Survey results, which show that consumer views of housing market conditions have become more supportive of home purchases and their outlook on home prices. Interestingly, we're seeing a pick up from depressed levels in the 'good time to sell' category, suggesting rising optimism about the housing market."

Economic growth slowed in the first quarter of 2012 to 2.2 percent at an annualized rate, down from 3.0 percent in the fourth quarter of 2011. While still modest, the recent pace of growth is stronger than the same time last year and accompanied by a better balance of upside and downside risks compared to a year ago. Consumer spending was the primary driver of growth, posting the best showing since the end of 2010. However, while the strength in consumer spending is encouraging, it will likely be unsustainable going into the current quarter due to the lack of income support. Overall, incoming data suggest that growth will continue to be sluggish in the current quarter, and the pace of activity should firm just slightly in the second half of the year. For all of 2012, Fannie Mae expects growth to come in at 2.3 percent—little changed from the view we have held since the beginning of the year.

Published with permission from RISMedia.


Struggling Homeowners Have Concerns About Mortgage Relief Help

May 23, 2012 5:38 am

What would you do if you couldn’t make your mortgage payments? According to a recent survey, most homeowner would first turn to family for help.

Money Management International (MMI) recently conducted a national housing survey to learn how homeowners would act if they were struggling with mortgage payments. Survey respondents said they would first seek help from family or friends (50 percent) followed by their lender (26 percent) then from housing counseling or mortgage relief program (13 percent). 

When asked about concerns regarding available resources and options for mortgage assistance, survey respondents stated they were concerned about scams/fraudulent services (53 percent), that the services would cost them money that they couldn't afford to pay (51 percent), and that the process was confusing or they would choose a solution they did not fully understand (45 percent).

Additional findings from the study include:

  • 25 percent reported they or someone they know needed assistance making mortgage payments during the last four years.
  • 57 percent would seek help only after a job loss, 35 percent if they knew they would miss at least one mortgage payment, and 27 percent if they had missed one mortgage payment
  • 63 percent of respondents who sought help did so when they were 1 to 3 months behind on their mortgage payments. 22 percent were 4 to 6 months behind, and 4 percent were 7 or more months behind before they sought help.

Free and safe foreclosure prevention help is available. Homeowners who have questions or concerns about their mortgage payment or loan should consider meeting with a HUD-certified housing counselor to discuss their options.

Published with permission from RISMedia.


Consumers Would Cash in Credit Card Rewards for Extra Vacation Days

May 22, 2012 5:36 am

With the summer travel season on the horizon, Americans are more savvy than ever about making the most of their rewards programs, according to the Capital One Rewards Barometer, a quarterly survey among American consumers that focuses on how they accumulate and redeem credit card rewards.

Fifty percent of respondents who plan to travel this summer will use credit card rewards to cover some of their summer vacation expenses, up from 42 percent compared to the Rewards Barometer results in 2011. Interestingly, nearly 19 percent were even willing to trade in as much as $200 worth of rewards for an extra vacation day, if it were an option.

When it comes to using rewards toward summer travel expenses, airfare tops the list (58 percent) of most popular redemption options followed by hotels (42 percent) and gas (18 percent). Sixty-seven percent of respondents are planning to travel this summer and a majority of summer travel budgets range from $500 - $2,000 (54 percent). Eighteen percent of travelers plan to spend between $2,001 and $3,000 for a summer getaway. Surprisingly, nearly two-thirds of these travelers do not plan to go away on popular summer holiday weekends, including Memorial Day, July 4th and Labor Day.

When traveling this summer, mobile devices can be a traveler's best friend from finding local hot spot coupons or using rewards for last minute travel deals. More than 30 percent of respondents who have a mobile device use it for on-site vacation research, such as restaurants, gas stations, coupons and deals. Meanwhile, 22 percent get ahead of the game by using their mobile device for pre-vacation research, and 14 percent book travel through their mobile device. For those who would like to redeem their rewards via a mobile rewards app, hotel (58 percent) and air travel (49 percent) were the top two options.

The following tips can help rewards card holders save some money and make their summer vacations more satisfying:
  1. Redeem on the go. Find a rewards card that lets you redeem straight from your mobile device.
  2. Earn rewards on vacation. Rack up rewards for your next trip while you're on your current one. Use your rewards card to pay for vacation expenses such as tickets, meals or local tours.
  3. Include all fees in your vacation budget. Avoid sticker shock post vacation by making sure you account for any extra fees charged when booking travel with rewards or foreign transaction fees for overseas travelers. Better yet, find a rewards credit card that doesn't charge these fees.

Published with permission from RISMedia.


Fewer Immigrants and Newborns, More Elderly Slow U.S. Population Growth

May 22, 2012 5:36 am

Lower immigration levels, an aging population, and declining fertility rates are driving a decline in U.S. population growth, according to a new Population Reference Bureau (PRB) analysis of U.S. Census Bureau data.

Between 2010 and 2011, the U.S. population increased by 0.7 percent, after averaging 0.9 percent growth each year from 2000 through 2010, reported Mark Mather, PRB associate vice president for Domestic Programs. We added just 2.3 million people from 2010 to 2011, compared with 2.9 million from 2005 to 2006, just five years earlier.

The current decline is a "significant departure" from recent trends but "it's too soon to tell whether it will continue or is a short-term result of the recession," he said.

The U.S. population is currently projected to reach "majority-minority" status (the point at which less than 50 percent of the population is non-Hispanic white) in 2042. But a sustained drop in immigration levels and fertility rates would slow the pace of minority population growth.

Drop in Immigration: Between 2010 and 2011, net migration was estimated at around 700,000, down from 1.4 million per year in 2000 and 2001. This decline contributes to slower growth in the Latino and Asian American populations, and has been linked to job losses in occupations often filled by recent immigrants, as well as stricter immigration law enforcement.

Population Aging: Between 2010 and 2011, the number of children declined by 190,000, while the number of elderly increased by 917,000; just a decade ago we added more children than elderly. Also down sharply is growth in the number of working-age adults, including those in prime childbearing ages. With more baby boomers retiring and fewer people of reproductive age, births could decline further, and the United States could start to resemble elderly-heavy, slow-growth European countries, Mather noted.

Declining Fertility Rates: There were an estimated 4 million births between 2010 and 2011, down from 4.2 million at the recent peak of U.S. population growth between 2005 and 2006. The total fertility rate (TFR) stood at an average of 2.0 lifetime births per woman in 2009—down from 2.1 a few years ago—but preliminary data from the National Center for Health Statistics suggest that the TFR could drop below 2 births per woman in 2010. Births among Latina women, a group with historically high fertility rates, could drop below 2.5 per woman in the near future.

Published with permission from RISMedia.


REALTORS Raise Awareness at Real Estate Rally

May 22, 2012 5:36 am

An estimated 13,000 REALTORS® converged on the grounds of the Washington Monument last week to make their voices heard on behalf of homeowners, real estate investors, and those who aspire to homeownership.

At the Rally to Protect the American Dream, REALTORS® from every state in the country joined invited members of Congress to demonstrate their commitment to preserving access to homeownership and robust real estate investment.

“REALTORS® know that homeownership is an investment in our collective futures, and we’re here today to protect the American Dream of homeownership,” said National Association of Realtors® President Moe Veissi. “Homeownership and investment in real estate impacts families, communities, small businesses and the nation’s economy in a very meaningful way. Today, we’re proud to be showing the country that homeownership matters.”

In the current economic and political climate, REALTORS® are working to ensure that people who want to own a home or invest in real estate and can responsibly afford to do so will continue to have the opportunity to do that. Toward that end, REALTORS® are advocating better access to affordable financing, reform of the secondary mortgage market, improved liquidity in residential and commercial lending, and preservation of the tax benefits associated with homeownership.

Sen. Johnny Isakson (R-Ga.) and Rep. Steny Hoyer (D-Md.) addressed the crowd of REALTORS® at the event.

“I commend the National Association of Realtors® for keeping the issue of homeownership at the forefront when we talk about our economic recovery,” said Rep. Hoyer. “Stabilizing the housing market remains a central issue for Democrats, who understand we will not have robust economic growth without a vibrant housing market and that access to homeownership remains a critical component of the American Dream.”

Sen. Isakson said, “Homeownership always has been, and remains to this day, a part of the American Dream. It is the biggest and most important investment that the average American family makes, and that’s why we should remain focused on the value of the housing market and the important role it plays in our country. It is my hope that this rally encourages Congress and the president to move forward with policies that are supportive of housing, which is vital to job creation and the recovery of our economy.”

The rally was part of NAR’s week-long Midyear Legislative Meetings, during which REALTORS® and guests met with members of Congress, federal regulators and industry experts to address pressing real estate issues and public policies in support of private property rights, homeownership and housing issues.

Published with permission from RISMedia.


Tornado Season Safety: Be Prepared

May 21, 2012 5:36 am

This year’s tornado season got off to an early start, and the National Weather Service is predicting another savage storm season after recording one of the deadliest tornado seasons ever last year. While the next few months are typically the most active for twisters, Amica Insurance offers the following tips to make sure everyone is prepared.

"Deadly tornadoes can occur anywhere with limited warning, so it’s important to be prepared,” said Michael Gillerlane, a senior assistant vice president for Amica Insurance. “Make sure you have an emergency supply kit in your home with food, water and a radio with extra batteries.”

It’s also important to locate an emergency shelter in your community and develop an emergency communication plan with your family in case someone is separated, Gillerlane said. Also, remember to keep your cellphone charged and with you, in case of an emergency.

Most important, be aware of weather conditions that spawn tornadoes, especially powerful thunderstorms, Gillerlane said. Pay attention to news alerts:

-A tornado watch means tornadoes are possible, so make sure to keep checking for news and updates.
-A tornado warning means that a tornado has been sighted or indicated on the radar, so it’s important to seek shelter immediately.

The Federal Emergency Management Agency says warning signs of a tornado include:

- Dark, often greenish sky
- Large hail
- Low-lying clouds, particularly if rotating
- A loud roar, similar to that of a freight train

If a tornado is headed your way, stay inside and take cover, Gillerlane said. Basements are the safest place to stay. Turn off all utilities, especially natural gas or propane to avoid fire. If you don’t have time to go to an emergency shelter, stay inside your home, keep away from doors and windows and head to the basement if possible.

"If a tornado does strike your community, monitor local news and weather before you head outside,” Gillerlane said. “Stay clear of downed wires and evacuate the area immediately if you smell gas. Also, be careful entering any buildings that have been damaged.”

If you experienced a loss during a tornado, contact your insurance company as soon as possible to report the damages, Gillerlane said. Try to compile an inventory of your losses and photograph the damages to submit with your claim. And be sure to use reputable contractors for clean-up and repairs.

Published with permission from RISMedia.


10 Tips for Choosing a Tree Removal Service

May 21, 2012 5:36 am

Choosing a tree removal company is a decision that can spell disaster or delight for a homeowner. If you have dead or dying trees on your property that need to be removed, the following questions will help in selecting a company that can perform the job safely and fit your specific needs.

1. Experience: What experience does the company have in large tree removals; especially where a tree is positioned close to a house, fencing, or electrical power lines?
2. Professionalism: Does company representative arrive on time for his appointment, dressed professionally with company identification?
3. Certifications: Is the company representative an ISA Certified Arborist? Is the tree removal crew EHAP certified to work around electrical hazards?
4. Safety: How will the property be protected from damage during the tree removal? Does the company employ crew members who are Certified Treecare Safety Professionals (CTSP)?
5. Best Practices: Will the job be done according to ANSI A300 standards; the best practices in the industry?
6. Insurance: Does the company have a “Certificate of Insurance” that covers worker’s compensation, property damage and at least $2,000,000 business liability in case of accidents?
7. Security: Does the company do criminal background checks and drug test their employees?
8. Crew Qualifications: Are personnel trained to work around electrical hazards? Does the company require its crew members to participate in continuing education and training in the latest techniques and safe working procedures?
9. Track Record: Does the company have references for work completed in the neighborhood?
10. Ethics: What is the company’s policy on handling problems and ensuring complete satisfaction?

“Removing a tree is a science of logistics, weights and angles,” explains Robert Nagy, ISA Certified Arborist and Giroud Tree and Lawn Representative. “The most qualified company will have deep experience in all parts of the tree removal operation. Price is always a consideration but it should not trump the company’s ability to do the job safely.”

Before starting work, tree removal crews who follow best practices will assess the work area. The crew will set up the job to maximize efficiency and prevent property damage. Finally, the crew must evaluate the proximity of the tree and workers to electrical lines. Tree crew members should be specially trained to work safely around electrical hazards. By federal law, a crew cannot work within 10 feet of a live electrical wire.

When the tree removal operation begins, the angles at which limbs are cut and the weight of each tree limb becomes critical. Limbs that look small from the ground can actually weigh more than the family car when they are cut and lowered from the tree. The tree crew must understand how each limb will behave when it swings free from the tree plus the rigging and equipment required to safely lower it to the ground.

Every tree removal has a unique set of challenges, concludes Nagy. “When research on each company’s capabilities is done before making a hiring decision, a homeowner is more likely to have the job done safely and be satisfied with the end result.”

Source: Giroud Tree and Lawn

Published with permission from RISMedia.


Effective Mold Identification and Treatment Tips for a Healthy Home

May 21, 2012 5:36 am

We all know that April showers are supposed to bring May flowers, however, a wet spring season can do more than help plants grow. In fact, heavy rain storms can actually pose a threat to homeowners in the form of mold. While it’s common for mold to be present in the great outdoors, it can pose serious risks if left untreated within the home.

Molds are basically fungi that come in thousands of species, not all of which are harmful. However, many are capable of causing physical problems ranging from slight allergic reactions and skin conditions to more serious neurological and respiratory problems. People with weak or compromised immune systems, such as very young children and the elderly, are particularly at risk for problems related to mold.

Mold occurs normally in outdoor environments, serving as nature’s recycling center and breaking down the dead organic matter from animals or plants. Humans encounter mold and even inhale mold spores every day with no ill effects whatsoever. When mold occurs in an indoor environment, however, things change. Suddenly, mold and its accompanying spores (through which it reproduces) are encountered (and inhaled) in large concentrations. When you consider the job that mold is designed to do on organic matter, it becomes easy to see how it could become a serious health hazard.

Mold occurs as the byproduct of water damage, or in any area where the moisture level is sufficient enough to sustain its growth. Even if the mold is not dangerous to anyone’s health, it still presents a problem since it destroys the surface on which it grows, meaning that a growth that is large enough could cause serious damage. Homes, businesses, and even entire city blocks have been condemned and destroyed simply due to out of control mold growth. For this reason alone, professional mold remediation services should be brought in to handle mold infestations.

Unfortunately, too many people mistakenly believe that removing the mold is sufficient. This is not true. Unless the area is properly treated, the mold will eventually return. The affected area should be thoroughly cleaned, disinfected, and humidity levels brought down to within acceptable parameters, normally between 40-45 percent. Only by changing the environment to make it inhospitable to mold can any property owner hope to avoid mold problems in the future.

Even new homes may have mold problems, so mold inspections are recommended for new home purchases. Newly constructed homes are often tightly sealed up between the time that construction is finished and the time the home is sold. Any moisture trapped inside will have no place to go, and over time may easily give way to mold and mildew growth.

Source: Restoration Local

Published with permission from RISMedia.