Protect your home before disasters and emergencies happen
Protect your home before disasters and emergencies happen
by Dan Krell © 2012
DanKrell.com
Unlike recent years, when we experienced blizzards, earthquakes, and hurricanes, this year’s weather has been mild thus far – that is until last week. Although the disasters and emergencies we typically experience are usually local and often weather related; disasters/emergencies can also originate from other sources, such as: power outages, terrorism, wildfires, civil unrest, earthquakes, and pandemic health concerns. Even though we had some warning of the approaching storm, the after effects emphasize the need for preparedness.
If you don’t yet have a plan (or would like to update your current plan), preparedness information is available through Federal Agencies such as the Federal Emergency Management Agency (FEMA.gov), the Department of Homeland Security (dhs.gov), and the Centers for Diseases Control (cdc.gov), and Citizen Corps (citizencorps.gov) .
FEMA’s “Are You Ready? An In-depth Guide to Citizen Preparedness” is a comprehensive source on individual, family and community preparedness. In addition to the pamphlet, there is an interactive guide with the focus “on how to develop, practice, and maintain emergency plans that reflect what must be done before, during, and after a disaster/emergency to protect people and their property” (www.ready.gov/are-you-ready-guide).
Montgomery County’s Office of Emergency Management and Homeland Security offers advice on planning and preparing a disaster kit, as well as recommending to sign up for “Alert Montgomery,” which can alert you to emergencies by text messages, twitter, email and other devices (www.montgomerycountymd.gov/oemtmpl.asp?url=/content/homelandsecurity/index.asp).
Preparing for disaster/emergency also includes making sure your property insurance is adequate. Having the proper coverage may help you recover from a disaster quicker than those without coverage. Experts recommend that you review your home owners’ policy with your insurance agent (or insurance company representative) to make sure your coverage is up to date and is able to replace your home and/or possessions in case of a catastrophic loss.
Additional recommendations to mitigate damage from weather related disaster/emergency come from the American Insurance Association (aiadc.org). Your home can be prepared by ensuring that doors and windows are secure; ensuring that exterior doors should have at least three hinges and a deadbolt length of at least one inch; replacing older garage doors and windows for systems that are certified for wind and impact; consider storm shutter installation; repairing any cracks or leaks around windows, doors, roof, exterior walls and foundation; ensuring that gutters and downspouts are secure and can drain water at least five feet from your home; inspect the roof and repair if necessary; remove loose debris from around the home; remove dead or dying trees and shrubs; trim back tree limbs from your home’s exterior and roof; compile an inventory of your home’s contents by taking pictures or video.
Recognize your risks and plan accordingly. FEMA offers mitigation and risk planning resources such as: flood maps, loss mitigation software, and the risk management series. Along with these resources, FEMA offers specific advice on protecting your home or business from natural disasters, earthquakes, fire, flood and high winds (www.fema.gov/plan/prevent/howto/index.shtm).
And if you’ve yet prepared for the Zombie Apocalypse, the Centers for Disease Control and Prevention remarks that “it’s better to be safe than sorry.” The CDC offers “Preparedness 101: Zombie Apocalypse:” preparedness for the Zombie Apocalypse and real emergencies (blogs.cdc.gov/publichealthmatters/2011/05/preparedness-101-zombie-apocalypse).
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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of July 2 , 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.
This is not your father’s housing recession or recovery
by Dan Krell ©2012
DanKrell.com
When the housing market began its decent into uncharted territory in 2007, people talked of a “V” shaped housing market recovery, meaning that they braced for a market bottom followed by an upturn of increasing activity. What many experts are now talking about is an “L” shaped market recovery, where the housing market will hit bottom and not begin its ascent for a number of years. In retrospect, we have experienced the market’s bouncing along the bottom for at least 2 years (seeing inconsistent activity from month to month); although some still think that the market has yet to bottom out.
Two reasons why the housing market may continue to drag along the bottom include the dramatic loss of net worth in recent years and the recent increase in foreclosure activity.
The fact that the mean (average) income fell 7.7% is nothing compared to the 38.8% drop of mean net worth, as reported by a recent Federal Reserve Bulletin, “Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances” (fed.gov). The report stated, “Although declines in the values of financial assets or business were important factors for some families, the decreases in median net worth appear to have been driven most strongly by a broad collapse in house prices.” The report further clarifies, “…The decline in median net worth was especially large for families in groups where housing was a larger share of assets, such as families headed by someone 35 to 44 years old (median net worth fell 54.4 percent)…”
This report underscores what many in the industry have known, but have not fully admitted about the weak move-up market; the dramatic loss of home equity in recent years has not only made it difficult for many to sell their homes, but also has taken away the means to purchase another [home]. Additionally, the combination of diminished net worth and reduced income has forced many would-be first time home buyers to wait on the sidelines.
Additionally, foreclosures have not been news for some time, but the reduced foreclosure activity in the past year was said to be temporary in response to legal challenges and the robo-signing fiasco. As the shadow inventory (homes in foreclosure or bank owned) has been building up, many speculate the impact when foreclosure activity picks up.
A recent RealtyTrac (realtytrac.com) press release reveals that foreclosure filings have picked up and discusses the possible outcome. Besides a 9% increase in nationwide default notices was reported in May; RealtyTrack reported, “Foreclosure starts nationwide increased on an annual basis after 27 consecutive months of year-over-year declines.”
Lenders are becoming increasingly aware of the benefits of selling distressed homes as short sales over repossessing them. Brandon Moore, CEO of RealtyTrac, was reported to say that the increase of pre-foreclosure sales is an indication that many recent foreclosure filings may end up as short sales or auctioned to third parties, rather than becoming REO (bank owned).
The dramatic loss of net worth along with continued foreclosure activity only contributes to the changing perception of home ownership. This housing recovery will certainly be recorded in the history books as one of the most protracted and having a lasting impact; this is not your father’s housing recovery.
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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of June 25, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.
Perceptions of U.S. housing boosted by international investors
by Dan Krell ©2012
DanKrell.com
A June 11th report by the National Association of Realtors® discussed how international home buyers are an increasingly important segment of the U.S. housing market (realtor.org). The NAR release, “International Sales Continue to Climb in U.S. Market, Realtors® Report,” indicated that the dollar volume of U.S. homes bought by foreign home buyers increased about $16.1 billion over the last year. As encouraging as this may sound, there’s more to the story than you might imagine.
Interestingly, the report stated that average price paid for a U.S. home by an international home buyer is $400,000; and 30% of the homes purchased were priced between $250,000 and $500,000. Because foreign home buyers typically find it difficult to obtain a mortgage, it was reported that 62% of the purchases were cash deals. The NAR report stated that although many of these home purchases were for primary residences, a majority of international home buyer purchases were for vacation and investment uses.
Would you believe that 55% of international home buyers originated from Canada, China, United Kingdom, Mexico, and India? Canada accounted for the largest number of foreign home buyers (24%), followed by China (11%), the U.K. and Mexico (6% each).
But before you decide to learn a new language, you should note that four states have received the most attention from these home buyers; Florida, Arizona, California, and Texas “accounted for 51% of the purchases.” Of these sales, Florida accounted for 26% of all foreign home purchases, and California coming in second with 11% of foreign purchaser sales.
This market segment is not a new phenomenon; international home buyers have participated in the U.S. housing market for a long time. It just seems as if this segment of home buyers has been stronger during economic turmoil (Are you old enough to remember the influx of Middle East investors during the 1970’s and Japanese investors during the 1980’s?). The increasing number of international home buyers investing in the housing market is a tribute to the perceived value of U.S. real estate.
By the way, the influence of international sales has not gone unnoticed by Congress either. In an effort to help stimulate this sector of the housing market, S. 1746: Visa Improvements to Stimulate International Tourism to the United States of America Act was introduced in October 2011, by Senators Charles Schumer [D., N.Y.] and Mike Lee [R., Utah], and H.R. 3341: Visa Improvements to Stimulate International Tourism to the United States of America Act, was introduced in November 2011 by Rep. Mazie Hirono [D-HI2] and Rep. David Dreier [R-CA26]). These bills offered resident visas to foreign investors who invested at least $500,000 in U.S. real estate. However, some have criticized such stimulus as an empty gesture because international home buyers may not need additional incentive to purchase homes in the U.S.
Will foreign home buyers save the housing market, as a U.S. News and Report piece suggested (October 28, 2011)? Unlike the clichéd climax of a dramatic film noire, when the foreign investor saves the day, the answer may be “yes” and “no”. Although housing is receiving an increased amount of attention from foreign investors, it is unlikely that the increased activity itself would save the U.S. housing market. However, the increased foreign investment in U.S. housing may boost the perceived value of housing and the perception of home ownership.
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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of June 18, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.
Understanding property tax assessments in Montgomery County MD
It’s the time of year when property tax bills are issued to home owners. And understanding property tax assessments can be confusing. A common question among home owners and home buyers is, “how are property taxes calculated, and what is the money used for?”
Understanding property tax assessments
Information about property assessments and taxation is conveniently posted on the internet by the Maryland Department of Taxation and Assessments (www.dat.state.md.us) and the Montgomery County Department of Finance (www.montgomerycountymd.gov). There are two factors that determine your property tax bill, the property assessment and the property tax rate.
According to the Maryland Department of Taxation and Assessments (MDTA), “Properties are reassessed once every three years and property owners are notified of any change in their assessment. Assessments are certified by the Department to local governments where they are converted into property tax bills by applying the appropriate property tax rates.”
Because Maryland does not impose any restrictions or limitations, property tax rates vary throughout the State. This means that counties and cities are free to set the rates needed to fund government services. According to the Montgomery County Department of Finance, “The real property tax rate, which is set each year by the County Council, is an ad valorem tax, meaning it is applied to the assessed value of the property. The fully phased-in assessed value equals the full cash value of the property…”
The total tax rate is a combination of the State, county, and (for some home owners) municipal tax rates. The rate is typically expressed in dollar amount per $100 of assessment; the MDTA gives this example to understand how property tax rates are expressed, “for a property with a fair market value of $100,000 the property taxes would be calculated by dividing the assessment by 100 and multiplying the product by the property tax rate. Using an overall tax rate of $1.08 per $100 for this example ($1.00 local property tax plus $.08 state property tax), the amount of property taxes due would be calculated: $100,000 divided by 100 times $1.08 or $1,080.00.”
The MDTA explains, “The property tax is primarily a local government revenue. Counties and cities depend on the property tax and a portion of the income tax to make up their budgets.” Montgomery County levies a general tax to fund basic services, such as police, elementary and secondary education, the community college, transportation, health and social services, and libraries. Additional county taxes are levied to fund public transportation, fire and rescue services, and acquisitions by the Maryland-National Capital Park and Planning Commission. Seven additional county taxes are also levied on residents in “specially defined areas.”
If you disagree with your property assessment, you can appeal it by following the instructions provided by the MDTA. The assessment notice has an appeal form, which must be filed within 45 days of the date on the notice (a home buyer has 60 days from the date of property transfer to appeal the property tax by submitting an appeal of the property value, but only if the transfer of the property occurs after January 1st and before the next taxable year).
Know your rights throughout the property assessment and appeal process; SDAT provides “Property Owner’s Bill of Rights” (https://dat.maryland.gov/realproperty/Pages/Bill-of-Rights.aspx) to summarize sections of the Tax-Property Article which deal with appeals, assessment notification, and public information.
Original published at https://dankrell.com/blog/2012/06/13/understanding-property-tax-assessments-in-montgomery-county-md/
By Dan Krell
Copyright © 2012
This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.