Home art 3 taken from a reâ€œSocial Homeownership and Stable Housingâ€? written by The Research Division of the National Association of Realtors. The report highlights the strong correlation between homeownership and income, education, age, marital status and several other factors. titled, P port Benefits of
Homeownership and Civic Participation Homeowners have a much greater financial stake in their neighborhoods than renters. With the median national home price in 2010 at $166,000, even a 5 percent decline in home values will translate into a loss of more than $8,300 for a typical homeowner. Because owners tend to remain in their homes longer, they add a degree of stability to their neighborhood. Homeowners also reap the financial gains of any appreciation in the value of their home, so they also tend to spend more time and money maintaining their residence, which also contributes to the overall quality of the surrounding community.16,17 Renters, with less wealth tied to a specific locality, have less incentive to protect the value of their property via the political process. The right to pass property to an heir or to another person also provides motivation to properly maintain the property.
MLS Search The extent of community involvement and the benefits that accrue to society are hard to measure, but several researchers have found that homeowners tend to be more involved in their communities than renters. For example, homeowners were found to be more politically active than renters. Homeowners participate in elections much more frequently than renters. A study by Glaeser and DiPasquale found that 77 percent of homeowners said they had at some point voted in local elections compared with 52 percent of renters. The study also found a greater awareness of the political process among homeowners. About 38 percent of homeowners knew the name of their local school board representative, compared with only 20 percent of renters. The authors also found a higher incidence of membership in voluntary organizations and church attendance among homeowners. As before, it is not clear if homeownership in itself determines more civic participation or if the correlated variable of residential stability is more responsible for higher civic participation. One study that directly attempted to disentangle the two impacts found length of residence to be more important than homeownership. Therefore, according to this
study a renter household in a stable neighborhood is more likely to be engaged in a community and civic activity than a homeowner who frequently moves. There also is some evidence that homeownership programs may result in increased property values near subsidized or locally assisted homeownership sites Homeownership and Health Benefits Homeowners are happier and healthier than nonowners. But again, it would be incorrect to simply look at the correlation between homeownership and health outcomes to draw conclusions since homeownership is also correlated with such factors as income and education levels. And surely, higher income and education are associated with better health. Nonetheless, there are a few academic studies that provide evidence of the positive impact of homeownership on health even after controlling for factors like income and education. Rohe and Stegman found that low-income people who recently became homeowners reported higher life satisfaction, higher self-esteem, and higher perceived control over their lives. But the authors cautioned on the interpretation of the causation since residential stability was not controlled for. Similarly, Rossi and Weber
Contact December 2010 Inside this issue: Social Benefits of Home Own
Maintaining Your Fireplace
Mortgage Interest Deduction
From the Heart
Picture of the Month
concluded that homeowners report higher selfesteem and happiness than renters. For example, homeowners are more likely to believe that they can do things as well as anyone else, and they report higher self ratings on their physical health even after controlling for age and socioeconomic factors. In addition to being more satisfied with their own personal situation than renters, homeowners also enjoy better physical and psychological health. Another study showed that renters who become homeowners not only experience a significant increase in housing satisfaction, but also obtain a higher satisfaction even in the same home in which they resided as renters. More recently, research examining the association of self-rated health with socioeconomic position (Continued on page 2)
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showed that social mobility variables, such as the family financial situation and housing tenure during childhood and adulthood, impacted oneâ€™s self-rated health. In particular, the socioeconomic disadvantage indicated by not being able to save any money or not owning or purchasing a home, is negatively associated with excellent or very good self-rated health. A similar examination, but looking at self-reported financial well-being, also showed financial well-being depends on home ownership, the number of children, health insurance, age, and income. Homeownership and Crime Homeowners have a lot more to lose financially than do renters. Property crimes directly result in financial losses to the victim. Furthermore, violent non-property crimes can impact the property values of the whole neighborhood. Therefore, homeowners have more incentive to deter crime by forming and implementing voluntary crime prevention programs.
Research on crime and homeownership shows that homeowners are far less likely to become crime victims. A study of both property and violent crime in New York City suburbs found that homeowners encountered significantly lower crime rates even after controlling for other socioeconomic variables. Glaeser and Sacerdote also found a lower incidence of crime victims among homeowners. From sociological literature on social disorganization, recent research by Miles-Doan showed residential mobility as a contributing factor for the higher violence rate by spouses and intimates. In a similar vein, a recent work by Kubin found that residential mobility is significantly and positively related to homicides. The results are congruent with sociologistsâ€™ theories of social disorganization, or a breakdown in social bonds, family and neighborhood association. A high level of social disorganization is said to exist where there is a high level of deviance in social norms and a lack of commu(Continued on page 3)
Tips for Inspecting and Maintaining Your Fireplace With fall here it's a good time to get a jump on maintaining a feature of your home you're sure to put to use this winter -- your fireplace. You may think your chimney only needs to be cleaned and inspected if you use your fireplace. However, almost all home heating appliances rely on the chimney to safely carry toxic gases produced by the heating system out of the house. More than 5,500 home fires per year originate in the fireplace, according to the U.S. Consumer Product Safety Commission. And the Journal of the American Medical Association reports that carbon monoxide poisoning claims more than 1,500 lives a year and causes about 10,000 injuries. Carbon monoxide is a colorless and odorless gas associated with home heating systems. When the furnace doesn't get enough oxygen, carbon monoxide is produced. The side effects from low-level exposure to carbon monoxide can include permanent organ and brain damage. Because the symptoms of low-level exposure are so easily mistaken for those of the common cold, flu or exhaustion, diagnosis is often delayed. Because newer homes are more air-tight (due to energy conserving measures), there is less air coming in and not as many pathways for it to leave. When carbon monoxide is produced, it tends to stay trapped in the home. As if that's not enough, damaged or deteriorating flue liners, soot build-up, debris clogging the passageway, and animal or bird nests all obstruct chimney flues, which can lead to carbon monoxide production. While the federal government doesn't yet have regulations mandating regularly scheduled chimney inspections and cleaning, the U.S. Consumer Product Safety Commission, the U.S. Environmental Protection Agency, the National Fire Protection Association and the American Lung
Association all recommend regular maintenance of home heating systems and chimneys. In addition to an annual inspection, basic fireplace safety tips include: 1. Use seasoned wood only (make sure it's dry). 2. Build smaller, hotter fires that burn more completely. 3. Never burn cardboard boxes, wrapping paper, trash or Christmas trees. 4. Clear the area around the hearth of flammable materials. 5. Always use a metal mesh screen with fireplaces and leave glass doors open while burning a fire. 6. Never use flammable liquids to start a fire. 7. When building a fire, place logs at the rear of the fireplace on an adequate supporting grate. 8. Never leave a fire in the fireplace unattended Âž extinguish the fire before going to bed or leaving the house. 9. Cover the chimney with a mesh screen spark arrester. 10. Remove branches hanging above the chimney, flues or vents. 11. Install smoke alarms in your home and be sure to test them monthly and change the batteries at least once a year. 12. Get at least two carbon monoxide detectors and place one near the furnace and one near the sleeping area of the home. Practicing fire safety in general is important, but the risk of carbon monoxide poisoning makes it crucial to get your fireplace inspected every year. Do it now and your fireplace will be ready for you and your family to enjoy this winter. Written by Michele Dawson
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nity to realize common values. Crime, suicide, juvenile delinquency, teen pregnancy and drug usage are all the consequences of social disorganization. The generally accepted causes of social disorganization include poverty, low educational attainment, family disruption, and racial segregation in urban life. In addition, frequent residential mobility is also considered one of the key causes of social disorganization. For example, one of the first college textbooks on the subject, appropriately titled Social Disorganization, mentions crime, unemployment, divorce, venereal disease, illiteracy, undernourishment, and mobility and transiency (our emphasis) as indications of a disorganized society. In another study Bursik showed the link between mobility and crime. A stable neighborhood, independent of ownership structure, is also likely to reduce crime. It is easier to recognize a perpetrator of crime in a stable neighborhood with extensive social ties. Therefore, the empirical studies showing a lower crime rate among homeowners and people living in a stable housing environment are consistent with theories on social disorganization. Homeownership and Public Assistance We found earlier that housing stability lowers teenage pregnancy. There is vast literature on the link between teen pregnancy and the likelihood of receiving public assistance. Therefore, to the extent that homeownership and stable housing reduce teen pregnancy, one can expect a reduction in the incidence of public assistance among those living in a stable neighborhood. Furthermore, Page-Adams found that homeowners are better able to adjust after being laid off from a job due to their access to home equity credit lines, and hence, lessening their need for public assistance. Homeownership and Property Maintenance and Improvement Another key benefit received by homeowners is the structural quality of their housing. However, a well maintained home not only generates benefits through consumption and safety, but research has shown that high quality structures also raise mental health. It is often suggested that owner-occupied housing is better maintained than renter-occupied. In a study by Henderson and Loannides, the authors argue that landlords cannot distinguish between households that will maintain a rental unit from those that will cause damage. Consequently, landlords charge rents based on the expected level of care that will be taken by renters and households that plan to take care of their dwelling are motivated to become homeowners. Further, homeowners have a financial interest in ensuring that their unit is well maintained and repaired while mobile households may ignore damage. In contrast, Ozanne and Struyk find that including information about the neighborhood and housing structure in estimating statistical relationships causes the owner-occupancy effect to disappear.
Another early study finds that owner-occupant landlords are more likely to rehabilitate housing dwellings than other rental housing landlords because owners most directly experience the improvements, as opposed to current and future renters or tenants. Heywood also finds that income impacts the level of maintenance with low-income owner-occupants maintaining their homes less than high-income owneroccupants. When looking at the different effect renters have on maintenance, research compared differences in price appreciation using the repeat sales technique and found some evidence that renter-occupied housing appreciates less than owner-occupied housing. Finally, a study looking at how much neighbors affect each other provides evidence that the maintenance behavior of individual homeowners is influenced by those of their neighbors. Conclusion Owning a home embodies the promise of individual autonomy and is the aspiration of most American households. Homeownership allows households to accumulate wealth and social status, and is the basis for a number of positive social, economic, family and civic outcomes. Two-thirds of all U.S. households who own their home currently are enjoying these benefits. The positive social benefits from homeownership and stable housing are compelling. As this paper has shown, there is evidence from numerous studies that attest to the benefits accruing to many segments of society. Homeownership boosts the educational performance of children, induces higher participation in civic and volunteering activity, improves health care outcomes, lowers crime rates and lessens welfare dependency. Owning a home is different from renting. With the home purchase comes the pride of ownership and the sense of belonging in a community where one has a financial stake in the neighborhood. Perhaps, homeowners are “happier” just from having achieved the so-called “American Dream” -- a sense of accomplishment, a milestone. Also, ownership entails greater individual responsibility. As discussed above, homeownership requires a large (if not the largest) financial outlay of a person’s life and often requires the responsibility of a mortgage spanning 30 years. Therefore, it is a long-term commitment, which may alter human behavior. Given such an opportunity, public policy makers would be wise to consider the immense social benefits of homeownership for families, local communities and the nation. Written and Published by the National Assoc. of Realtors
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Mortgage News If you are currently floating your interest rate, you may want to consider locking in now. While today’s rates are higher than yesterday’s, Friday’s jobs report may cause even more damage. We locked our pipeline yesterday on our float down lock saving each and every client .25% in rate when compared to today’s market. The double sided truth is that a growing economy will also likely equate to growing interest rates. During the past four weeks, mortgage rates have provided irrefutable evidence that this is exactly the direction we are headed in as they continue to rise slowly and steadily. In addition, key economic stats are telling the same story: Personal income for October - +.5% Consumer Spending for October - + .4% Savings rate increased to 5.7% in October Unemployment claims are down and new jobs are up
Right now is a great time for buyers to still take advantage of low mortgage rates. If a true healing of our economy is underway, the chances of seeing higher mortgage rates increases. In the long run, an improved jobs market and economy will also lead to a more functional and sustainable housing market. I am all for this! However, now may be a time that buyers can cash in on both low rates and low home prices.
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Mortgage Interest Deduction Vital to Housing Market Having a tax deduction for mortgage interest makes owning a home more affordable because the deduction lowers the amount of tax you pay. U.S. Census data shows 37% of home owners with mortgages spend more than 30% of their income for housing. Paying less for housing means having more disposable income for savings and other household expenses. Increasing housing affordability increases the number of renters who can afford to buy a home of their own responsibly; increasing the number of home buyers helps keep home prices stable for those who already own homes by ensuring a steady stream of new buyers.
How the deduction works In general, any home owners who pay U.S. taxes and who itemize their taxes can deduct mortgage interest attributable to primary residence and second-home debt totalling $1 million, and interest paid on home equity debt of as much as $100,000.
Mortgage interest deduction threatened In recent years, the mortgage interest deduction has come under attack. Among the suggestions for cutting it back to deal with the deficit: •Reduce the mortgage interest deduction for upper-income taxpayers-they'd only receive 28 cents on the dollar, even if they're in a 33% or 35% tax bracket and can now deduct 33 or 35 cents on the dollar. ? •Reduce the $1 million cap by $100,000 a year. •Change the mortgage interest deduction to a 15% tax credit. In the past, members of Congress have suggested other mechanisms for eliminating or limiting the mortgage interest deduction. None of those has ever gained traction.
Arguments against mortgage interest deduction Arguments against the mortgage interest deduction center on who benefits and whether the government should support home ownership. They say: •It primarily helps the wealthy, since high-income taxpayers are more likely to itemize their deductions and to own homes. About 90% of taxpayers earning more than $100,000 itemize, while only 18% of those earning less than $50,000 follow suit, the Tax Foundation estimates. •Taxpayers who don't itemize deductions get to use the "standard deduction." They do that because it gives them a bigger tax break than itemizing to use the mortgage interest deduction.
•Ending or reducing the mortgage interest deduction would create a deep source of money for reducing the budget deficit. •In the aftermath of the mortgage crisis, the U.S. needs to rethink its favored tax treatment of home ownership.
Arguments for mortgage interest deduction Those who favor keeping the mortgage interest deduction say it helps middle-income families, who already pay nearly all U.S. income taxes. Plus, getting rid of the mortgage interest deduction would hurt home prices. •More than 60% of the families who claim the mortgage interest deduction have household incomes between $60,000 and $200,000, estimates the NATIONAL ASSOCIATION OF REALTORS;. •A disproportionate number of those high-income taxpayers live in areas where housing is especially expensive, such as California and New York. In high-cost housing markets, lowering the $1 million cap would add a tax burden on families who already must pay high prices for homes. •Home owners already pay 80% to 90% of the income tax in our country, and among those who claim the mortgage interest deduction, almost two-thirds are middle-income earners, says NAR Chief Economist Lawrence Yun. So home owners, who are the pillars of federal income tax revenue, would have to shoulder a bigger tax burden. •Home values could fall 15%, says Yun, as buyers discount the value of the mortgage interest deduction in their purchase offers. •It's faulty to link the mortgage meltdown to the country's support for home ownership. The meltdown is rooted in lax underwriting and faulty ratings by credit rating agencies of the securities backed by the mortgage, says Yun. Protecting the deduction promotes housing. In supporting the mortgage interest deduction, you help ensure that tomorrow's families can follow the same path to home ownership that so many of us have already traveled. Dona DeZube, HouseLogic's News Editor, has been writing about real estate for over two decades. She lives in a suburban Baltimore 1970s rancher on a 3-acre lot shared with possums, raccoons, foxes, a herd of deer, and her blue-tick hound. Article From HouseLogic.com By: Dona DeZube Published: October 29, 2010
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Randy’s Holiday Fruitcake Recipe lemon juice 1 cup sugar 4 large eggs
1 teaspoon salt 1 cup brown sugar 1 teaspoon baking soda
2 cup dried fruit nuts 1 gallon tequila
Sample the tequila to check for quality. Get a large bowl. Check the tequila again to be sure that it is of the highest quality. Turn on the electric mixer; beat 1 cup butter in a large fluffy bowl. Add 1 teaspoon sugar and beat again. Make sure the tequila is still okay. Cry another tup. Turn off the mixer. Break two legs and add to the bowl and chuck in the cup of dried fruit. Mix on the turner. If the fried druit gets stuck in the beaterers, pry it loose with a drewscriver. Sample the tequila to check for tonsisticity. Next, sift 2 cups of salt. Or something. Who cares. Check the tequila. Now sift lemon juice. Add one tablespoon. Of sugar or something. Whatever you can find. Grease the oven. Turn the cake tin to 350 degrees. Throw the bowl out the window. Check the tequila again. Go to bed. Who the heck likes fruitcake anyway?
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All my children Hardly a day goes by that I don’t mention my kids to someone, and never does a day go by during which I don’t think about them ~ all 4 of them. With my wife of 32 years, the mother of all my children, it’s almost like we’ve had two families. My sons, Adam & Eric, are now 30 and 27 respectively. My daughters, Jeni & Z, are now 18 and 16 respectively. As you might guess, it was like we first had a family of boys; and now we have a family of girls. And yet, our family of 6 is a most incredible experience. What fascinates me the most, I think, is how often I’m struck by the wondering thought that perhaps each child chose me to be their dad ~ as opposed to my choosing to ‘have’ him or her, or even that ‘God’ chose to give each one to me. Rather than thinking in terms of “raising” my kids and being ultimately responsible for everything they are or do, or will ever be or do, I managed to pick up the liberating perspective that maybe, just maybe they
are a gift to life in the universe ~ and that my primary role was/is to simply give them as much unconditional love and acceptance as I could. Everything else, after that, could then become secondary issues. I was not aware of the dynamics when my boys were younger, but I have become keenly aware of another dimension since my girls have been with me. I’ve been able to see and feel some of the most incredible gifts that they have brought to me. And I have to tell you that it’s a most humbling experience. All 4 of my kids ~ unique in their own individual ways ~ have brought me immeasurable happiness and satisfaction, and each has made their mark on me and my life. I’m most grateful for the awareness that’s allowed me to appreciate them for who they are, rather than judging them for what they do. My New Year’s wish for us parents is that we will experience an ever-increasing awareness of the gift(s) that were wrapped up in the packages we call FROM MY HEART children.
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The Spy in the Black Trench Four spies in trench coats sat in four facing seats. As they traveled the Peking Express with two by the window and two by the aisle, the arrangement was strange (as you guessed): The English spy sat on Mr. B’s left. Mr. A had a coat colored tan. The spy dressed in olive was on the German spy’s right. Mr. C was the only cigar smoking man. Mr. D was across from the American spy. The Russian, in khaki, had a scarf round his throat. The English spy stared out the window on his left. So who was the spy in the black trench coat?
Answer Randy Hooker, M.Ed. Designated Broker Broker@DreamCatcherRealty.com Cindy Hooker, MBA Associate Broker/Editor Newsletter@DreamCatcherRealty.com
To be able to purchase a home is an absolute blessing. Finding Randy was Priceless! Randy was available 24/7 for any questions, concerns or updates on the status of the sale. Without a doubt he went above and beyond the call of duty to get the bid, repairs taken care of and copies of receipts. He also set up a courtesy signing for my sister since she is relocating from Boston and has been back and forth finishing up her business there. After dealing with other realtors, Randy, by far is the most knowledgeable, committed, and unselfish agent we have met. We can not thank him enough for the service he has provided us. Our recommendation - Outstanding! Thank You Again, Gail Biedronski ~ May 19, 2010 Copyright 2010 ~ Dreamcatcher Realty, All Rights Reserved