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The Voice of Orange County

By Michael Caruso | Broker in Orange County, CA
  • Caruso Says Watch the Big 3 ~ Employment, Housing and Europe…

    Posted Under: Market Conditions in Orange County, Financing in Orange County, Agent2Agent in Orange County  |  March 2, 2012 1:09 PM  |  912 views  |  No comments

     

    We are halfway through the first quarter of 2012. The big question in everyone's mind is whether the economy continues to grow from here, or does it slow down like it did during the spring and summer of 2011? Remember, only a few months ago we were talking about the danger of a double dip recession. A stronger finish to the year ended that talk, but still many analysts have been predicting some sort of slowdown in 2012. What could prevent such a slowdown and keep the economy on pace to strengthen through 2012? We have already introduced the "big three" factors we will be watching. Not necessarily in order or priority, these factors are employment, housing and Europe. The numbers regarding employment are encouraging. First time unemployment claims last week hit the lowest level in nearly four years and employment growth was strong in January. The first set of January economic releases thus far have been mixed, however the data on housing starts and first time unemployment claims reported last week was very encouraging because of the importance of housing and jobs as two sectors of the "big three."

     

    If the economy keeps producing job growth, then home sales will keep rising and housing will become a positive factor with regard to economic growth in 2012. Economic growth is also the only factor which can pull Europe out of its crisis. All the austerity measures by themselves can't pare down their deficits without growth. Therefore, the key to whether the economy will continue to grow from here is actually the economy itself. Consider a rock rolling down the hill. Last year the rock hit a bump and slowed down. However, the faster the rock rolls, the less likely bumps will be able to slow it down. A stronger economy is self-sustaining. We believe that the economy has reached an important juncture. If growth accelerates from here, it will be harder to stop the rock. The rock is not rolling downhill fast enough now to overcome all the obstacles, however we are not far from that happening and the first half of 2012 will be crucial in measuring the speed of the rock.

     


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    And thank you for making me Your Orange County Real Estate Connection.  

    www.MichaelCarusoRealEstate.com

    Best regards,

    Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI

    Past President, Orange County Association of Realtors (949) 753-7900

    Be Michael Caruso's Friend! Watch Caruso TV! Are You LinkedIn with Michael? The Voice of Orange County Review Michael Caruso! Tweet Michael Caruso!

    Certified Luxury Home Marketing Specialist  Member of The Institute Luxury Home Marketing   Million Dollar Guild Member  Member of Proxio Pro - The International MLS


  • Caruso Never Sleeps ~ Hard VS Soft Credit Inquiries

    Posted Under: Financing in Orange County, Credit Score in Orange County  |  February 25, 2012 3:30 PM  |  755 views  |  No comments

    Do you know what a Hard versus Soft Credit Inquiry is?

     

    Consumers are entitled to a free copy of their credit report once a year, available through sites like CreditKeeper.com, AnnualCreditReport.com or IdentiryGuard.com. While the credit report from AnnualCreditReport.com is free, it doesn’t include a credit score. For this, consumers must pay a nominal fee.

     

    When a consumer asks about their own credit score, it’s considered a “soft inquiry”, which doesn’t impact their FICO score. Credit card, insurance companies, banks, and others can also make soft inquires, in order to identify consumers for marketing purposes. 

     

    In contrast, “hard inquires” for a consumer’s credit history are made if you apple for a loan, a mortgage, or open a new credit card. Depending on other factors, too many hard inquiries could have a negative impact on a consumers FICO score.

     



    And thank you for making me Your Orange County Real Estate Connection.  

    www.MichaelCarusoRealEstate.com

    Best regards,

    Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI

    Past President, Orange County Association of Realtors (949) 753-7900

    Be Michael Caruso's Friend! Watch Caruso TV! Are You LinkedIn with Michael? The Voice of Orange County Review Michael Caruso! Tweet Michael Caruso!

    Certified Luxury Home Marketing Specialist  Member of The Institute Luxury Home Marketing   Million Dollar Guild Member  Member of Proxio Pro - The International MLS


  • Cost vs. Value with Caruso!

    Posted Under: Financing in Orange County, Remodel & Renovate in Orange County, Design & Decor in Orange County  |  February 3, 2012 4:57 PM  |  979 views  |  No comments

    When tackling home remodeling projects, you’ll find some projects pay off more than others at times of resale. Remodeling Magazine, in conjunction with REALTOR® Magazine, recently released findings of its annual Cost vs. Value report for 2011-2012, revealing which remodeling projects offer the biggest bang for your buck.

    Overall, the trend right now is replacement over remodeling–swapping out the old for the new rather than doing a total gut job, which can be much more costly.

    This year’s Cost vs. Value report found that exterior replacement projects–such as new garage doors and a new entry door–offer some of the best returns at resale, allowing home owners to recoup close to 70 percent or more of the costs of the project at times of resale.

    The following are the top, mid-range projects from this year’s report, based on what home owners stand to recoup at time of resale:

    1. Replacing the entry door to steel

    Estimated cost: $1,238

    Cost recouped at resale: 73%

    2. Attic bedroom (converting unfinished attic space into a bedroom with bathroom and shower)

    Estimated cost: $50,148

    Cost recouped at resale: 72.5%

    3. Minor kitchen remodel (including new cabinets and drawers, countertops, hardware, and appliances)

    Estimated cost: $19,588

    Cost recouped at resale: 72.1%

    4. Garage door replacement

    Estimated cost: $1,512

    Cost recouped at resale: 71.9%

    5. Deck addition (wood)

    Estimated cost: $10,350

    Cost recouped at resale: 70.1%

    6. Siding replacement (vinyl)

    Estimated cost: $11,729

    Cost recouped at resale: 69.5%


    And thank you for making me Your Orange County Real Estate Connection.  

    www.MichaelCarusoRealEstate.com

    Best regards,

    Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI

    Past President, Orange County Association of Realtors (949) 753-7900

    Be Michael Caruso's Friend! Watch Caruso TV! Are You LinkedIn with Michael? The Voice of Orange County Review Michael Caruso! Tweet Michael Caruso!

    Certified Luxury Home Marketing Specialist  Member of The Institute Luxury Home Marketing   Million Dollar Guild Member  Member of Proxio Pro - The International MLS


  • Caruso's Economic Update!

    Posted Under: Market Conditions in Orange County, Financing in Orange County, Agent2Agent in Orange County  |  February 1, 2012 1:24 PM  |  788 views  |  No comments

    The first set of earnings released in January focused upon the financial sector.  In all, the reports by larger national and regional banks were disappointing and showed that we are not out of the woods with regard to the legacy of bad loans piled up on the asset sheets of banks during the recession. While the economy recovers, debt loads of banks and nations will prove to be a drag on growth.  This is why analysts are looking at the good economic releases we have experienced in the past few months and are still remaining cautious.  For the consumer, this situation actually represents good news.  A recovery that does not get too strong too fast will continue to translate into record low interest rates for a longer period of time. If it were not for Europe or the banks right now, the sale on our nation's real estate would be over much more quickly.  On the other hand, looser credit standards will not come until banks dig out from their credit morass.  We are not likely to have looser credit standards and record low rates at the same time as the two just don't go hand-in-hand.

     

    Home affordability is at 1971 levels, due to falling home prices and record low rates, pushing home ownership in reach to many more families, according to the U.S. Department of Housing and Urban Development (HUD).  Home owners are bringing in nearly double the median income they need to cover the cost of an average home, Housing Predictor reports. "With rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households,” Bob Nielsen, chairman of the National Association of Home Builders, said in a statement.  Home sales have been ticking up, according to recent reports by the National Association of Realtors® and the National Association of Home Builders, Source: Housing Predictor

     

    The apartment vacancy rate is at its lowest level since late 2001 as the rental market continues to soar, according to the latest fourth-quarter data by Reis Inc.  As demand increases, the vacancy rate for apartments dropped in the fourth quarter to 5.2 percent compared to 6.6 percent a year prior. Meanwhile, as the rental market takes off, builders are rushing to play catch up in building new units to meet the demand.  In 2011, Zelman & Associates estimates that more than 173,000 units were started, and about 225,000 and 280,000 starts are expected in 2012 and 2013. Source: The Wall Street Journal

     

    Borrowers who have a history of paying rent on time may see a boost to their credit score.  Experian, a leading credit report company, added a section to its credit reports last year that reflected on-time rent payments, which helped give a boost in the credit scores to some on-time rent payers.  Now the two other major credit reporting companies are following suit.  CoreLogic and FICO recently announced they are also adding a score that reflects payment histories from landlords, The New York Times reports.

     

    No discussion of the prospects for our economy in 2012 would be complete without an examination of the housing sector. As daunting as the debt crisis in Europe is, there is no doubt that the real "x" factor is housing.  This topic is so complex that it is hard to sort out.  For example, we know that the housing sector will not rebound without employment strengthening.  But we also know that the housing sector is very important in creating employment. If that sounds like a catch-22, it is.  And it is one of the main reasons our recovery has been tepid up to now.  We also believe that it is no coincidence that the housing market seems to be improving now that the employment sector is also getting stronger.  Of course, we will know more about how strong the employment sector is in a few days because Friday we will see the release of January's employment report.

     

    Regardless of the results of this report, we do know employment growth was stronger in 2011 -- especially towards the end of the year. In January first time unemployment claims fell to their lowest levels since April of 2008.  We also know that existing home sales and starts for single family homes also have increased in the last quarter of 2011.  Again, no coincidence.  The National Association of Home Builders has indicated that every single family home built creates three jobs.  To put it another way, just over 425,000 single family homes were built last year. That is over one million jobs.  Sound impressive? It is still a few million jobs less than the sector produced during the real estate boom years.  An increase of 100,000 houses this year would create 300,000 additional jobs and that does not include the apartment sector which is starting to boom and the commercial sector which has yet to awaken from its slumber.  Conceivably, we could see close to 500,000 additional jobs created this year with modest growth in building.  Even more importantly, those jobs create even more demand for housing.  Will this happen?


    And thank you for making me Your Orange County Real Estate Connection.  

    www.MichaelCarusoRealEstate.com

    Best regards,

    Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI

    Past President, Orange County Association of Realtors (949) 753-7900

    Be Michael Caruso's Friend! Watch Caruso TV! Are You LinkedIn with Michael? The Voice of Orange County Review Michael Caruso! Tweet Michael Caruso!

    Certified Luxury Home Marketing Specialist  Member of The Institute Luxury Home Marketing   Million Dollar Guild Member  Member of Proxio Pro - The International MLS


  • Caruso's Fraud Alert!

    Posted Under: Financing in Orange County, Foreclosure in Orange County, Credit Score in Orange County  |  January 5, 2012 11:14 AM  |  1,308 views  |  No comments

    I came across this information while browsing the web and I just think it is very important to touch on & be aware so that we can prevent this from happening.

    Don’t fall victim to unscrupulous con artists trying to take advantage of unknowing, financially troubled home owners.  These scammers usually promise mortgage loan modifications or reduced monthly payments for upfront fees.  In most case, charging upfront fees or payments for these services is illegal. 

    According to the Federal Trade Commission, these offenders review foreclosure notices in newspapers, the Internet and public files to identify potential victims. 

    Scammers who place ads online, on television, and in newspapers claiming to “stop foreclosure now” and offering “money back guarantees” are suspect and should be reviewed cautiously by the homeowner. 

    Please be cautions & if something does seem right, follow your gut & investigate more. When something doesn't seem right it most likely isn't.


    And thank you for making me Your Orange County Real Estate Connection.  

    www.MichaelCarusoRealEstate.com

    Best regards,

    Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI

    Past President, Orange County Association of Realtors (949) 753-7900

    Be Michael Caruso's Friend! Watch Caruso TV! Are You LinkedIn with Michael? The Voice of Orange County Review Michael Caruso! Tweet Michael Caruso!

    Certified Luxury Home Marketing Specialist  Member of The Institute Luxury Home Marketing   Million Dollar Guild Member  Member of Proxio Pro - The International MLS



  • Caruso's Credit Card Update!

    Posted Under: Home Buying in Orange County, Financing in Orange County, Credit Score in Orange County  |  September 8, 2011 11:03 AM  |  1,027 views  |  No comments

    Many people who feel they are prepared to enter the real estate market by purchasing their first home have experienced a roadblock to good mortgage rates – their credit cards. Credit cards can play a positive, but also a negative role in the process of purchasing a home.

    There is not a doubt that having a credit card can work highly in your favor when it comes time to shop around for your first home.  If you have a consistent history of timely credit card payments this builds a strong credit rating.  Having a high credit score not only will secure you a mortgage quickly, but one with very competitive rates.

    Your credit card can be very influential when determining what mortgage you are seeking because the credit card payments are added to what the payments ‘would be’ on a possible mortgage to determine how much can be afforded.

    Purchasing a house requires you to have a certain percentage of cash for the down payment and affiliated costs (such as legal fees). Generally speaking, the more cash you can put toward the down payment the
    lower the mortgage cost.

    For those who may not be in such a desirable position, they need to examine their loan-to-debt ratio.  First, take a look at your monthly gross income.  Lenders use terminology including front-end ratios.  What this means is that a front-end ratio is the payment a purchaser can afford from the lender’s perspective, regardless of what you may want to pay monthly.  The back-end ratio reflects the mortgage payment plus all debt.

    If your credit card carries a high balance or if there have been some recent struggles paying the credit card monthly payment by the due date, this may not be such a good time to consider shopping for your first home.  This will reflect on the lender’s outlook at your ability to be financially responsible in paying a mortgage.  There are inevitably some high-risk lenders who exist and are willing to take a chance on what is considered a risky mortgage loan, but the interest rates will reflect this by being much higher; therefore the monthly payment may be more than what is realistically affordable.

    Some first-time home buyers ask if they can have their credit card debt added to the mortgage they are seeking so that it eliminates this debt.  The answer is no.  When you buy a house, the mortgage is secured by ‘collateral’ and that is the house.  A lender will not provide a loan for anything other than the collateral.

    Some people have made a serious mistake by taking cash advances from their credit cards to use as a down payment. This cannot be stressed enough – not only can this become a financial disaster to the individual, it is breaking the rules.  Those who are determined to break these rules have taken out cash advances well in advance of buying their first home and have put this money into a savings account.  The only way this can work is if the cash advance is taken out more than two months before applying for a mortgage and have that cash sit in the bank.  The money then avoids questioning from the lender because any length of time shorter than that means you will have to come up with the required documentation to validate the source of the money.

    While there are ways around the rules, it is really important to understand why these rules exist – they are designed to prevent people from doing this because it ultimately ends up becoming a serious financial nightmare.

    Bottom line; keep your credit cards in good shape by maintaining a consistent history of timely credit card payments and a low balance.  The reward in doing so will help the first time home buyer in obtaining the best-available mortgage.

     

    And thank you for making me Your Orange County Real Estate Connection.  

    www.MichaelCarusoRealEstate.com

    Best regards,

    Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI

    Past President, Orange County Association of Realtors (949) 753-7900

    Be Michael Caruso's Friend! Watch Caruso TV! Are You LinkedIn with Michael? The Voice of Orange County Review Michael Caruso! Tweet Michael Caruso!

    Certified Luxury Home Marketing Specialist  Member of The Institute Luxury Home Marketing   Million Dollar Guild Member  Member of Proxio Pro - The International MLS


  • Caruso's iPhone Update!

    Posted Under: Home Buying in Orange County, Home Selling in Orange County, Financing in Orange County  |  August 20, 2011 12:29 PM  |  672 views  |  1 comment

    Zillow recently released an iPhone app that helps buyers out looking at homes figure out if they can afford a mortgage on the property they are viewing. The Zillow Mortgage Marketplace app includes calculators that help buyers determine whether a home is affordable or how much the monthly mortgage is. The app also boasts a calculator to help existing homeowners who want to know whether it makes sense to refinance. It estimates how much money you save if you refinance. It even includes breakeven point and savings over the life of the loan. You will be able to determine the home price you can afford and money left over after your mortgage payment. You’ll be able to see your monthly mortgage payment and how it breaks downs into principal, interest, taxes and insurance. All mortgage calculators include interactive sliders, cool, data-generated charts, advanced fields and field pre-filled with latest rates and estimates. And the app is FREE!

     

    And thank you for making me Your Orange County Real Estate Connection.  

    www.MichaelCarusoRealEstate.com

    Best regards,

    Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI

    Past President, Orange County Association of Realtors (949) 753-7900

    Be Michael Caruso's Friend! Watch Caruso TV! Are You LinkedIn with Michael? The Voice of Orange County Review Michael Caruso! Tweet Michael Caruso!

    Certified Luxury Home Marketing Specialist  Member of The Institute Luxury Home Marketing   Million Dollar Guild Member  Member of Proxio Pro - The International MLS



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