Category Archives: Homeownership

There’s More to a Bubble Than Rising Home Prices

There's More to a Bubble Than Rising Home Prices | Simplifying The Market

What truly causes a housing bubble and the inevitable crash? For the best explanation, let’s go to a person who correctly called the last housing bubble – a year before it happened.

“A bubble requires both overvaluation based on fundamentals and speculation. It is natural to focus on an asset’s fundamental value, but the real key for detecting a bubble is speculation…Speculation tends to chase appreciating assets, and then speculation begets more speculation, until finally, for some reason that will become obvious to all in hindsight, the ‘bubble’ bursts.

I have taken to calling the housing market a ‘bubble’.”

– Bill McBride of Calculated Risk calling the bubble back in April 2005

Where do we stand today regarding speculation?

There are two measurements that are used to determine the speculation in a housing market:

  1. The number of homes purchased by an investor and
  2. The number of homes being flipped (resold within a twelve-month period)

As compared to 2005, investor purchases are down dramatically (from 23% to 13%) and so is flipping (from 8.2% to 5.7%). McBride explains:

“There is currently some flipping activity, but this is more the normal type of flipping (buy, improve and then sell). Back in 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation.”

What are the experts saying about speculation in today’s market?

DSNews recently ran an article which asked two economists to compare the speculation in today’s market to that in 2005-2007. Here is what they said:

Dr. Eddie Seiler, Chief Housing Economist at Summit Consulting:

“The speculative ‘flipping mania’ of 2006 is absent from most metro areas.”

Tian Liu, Chief Economist of Genworth Mortgage Insurance:

“The nature of housing demand is different as well, with more potential homeowners and far fewer speculators in the housing market compared to the 2005-2007 period.”

And what does McBride, who called the last housing bubble, think about today’s real estate market?

Sixty days ago, he explained:

“In 2005, people were just buying homes and letting them sit vacant – and then selling without significant improvements. Classic speculation. And even more dangerous during the bubble was the excessive use of leverage (all those poor-quality loans). Currently lending standards are decent, and loan quality is excellent…

I wouldn’t call house prices a bubble – and I don’t expect house prices to decline nationally like during the bust.”

Bottom Line

Speculation is a major element of the housing bubble formula. Right now, there are not elevated percentages of investors and house flippers. Therefore, there is not an elevated rate of speculation.

How to Master Your Holiday Returns

Returning Gifts Dos and Don'ts

It’s the most wonderful time of the year… right? It might not always feel like it with the endless list of returns, exchanges, and errands you have to do. Here are some dos and don’ts to help you navigate this busy time.

DO: Read up on the store’s return policy

We’ve all been there: You go to a store to make a return, hand the cashier the item and the receipt, and you receive a gift card in return. In-store credit? Where’s my cash?! Before you snap and demand the original amount go back on your credit card, be sure to brush up on their return policy. This policy may vary between traditional purchases and gifted items, so make sure you know what to expect. Here are quick links to the return policies of some retailers you may be visiting:

DON’T: Remove tags before you’re certain you’re going to keep it

Oftentimes, the cashier can’t complete the return if the original tag is missing. It doesn’t matter if you promise you didn’t wear the sweater yet, they just can’t do it. While not every store has this policy (see above to start your research), it’s best to play it safe and keep the tags on.

DO: Bring the receipt

This makes life so much easier for everybody. Many retailers are lenient around the holidays and will give store credit even without a receipt, but there are no guarantees. If you have it, bring it. Bonus tip: If you’re giving a gift, always include a gift receipt.

DON’T: Wait too long

Believe it or not, some folks have had their holiday shopping done since October. Since you don’t know exactly when your gifts were purchased, try to do your returns as soon as possible. The typical return-time is 90 days, which gives you some wiggle room, but it’s always best to be proactive.

DO: Keep calm!

We know how much of a nightmare holiday returns can be. Wouldn’t it be so great if everyone knew exactly what we like? Unfortunately, sometimes we receive presents that don’t fit, we already have, or we just won’t use. Remember: everyone is in the same situation. Everyone wants the line to move quickly. Cashiers can’t control the store’s policies. Just take a deep breath, remain patient, and keep smiling. After all, it’s the most wonderful time of the year.

Soon enough, the chaos will be over and you’ll get to gather with family and friends to enjoy your fabulous presents — or at least what you exchanged them for.

Thank You for All Your Support

Thank You for All Your Support | Simplifying The Market

Thank You for All Your Support | Simplifying The Market

5 Ways to Pet-Proof Your Home

To help keep everyone happy and safe in your home, consider what might be potential hazards for your pet and take proper precautions.

1. Keep cleaners, laundry supplies, and medications on high shelves.

There’s nothing our curious creatures love more than snooping around. Keeping harmful chemicals and medications in low places — like the ever-popular under-sink storage — puts your pet at risk of exposure to these items. Opt for a higher-up shelf or cabinet for items you wouldn’t want them getting into.

2. Invest in a pet-proof garbage can.

You’ve probably heard — or, even worse, experienced firsthand — horror stories of dogs rummaging through the garbage, leaving a giant mess for their owners to clean up. Fortunately, this mishap is avoidable. For a quick fix, you can always add a safety lock to your existing trash can. (Think: baby-proofing. If it can keep a baby out, it can keep your pet out.) A metal step trash can is typically a safe bet because it’s difficult for pets to maneuver the step. To bring it up a notch, a step trash can with a butterfly opening will really keep your pets out.

3. Keep breakables where your pets can’t get them.

Even the best-trained pup can bump into an end table or two. If there’s something you absolutely do not want to get broken, play it safe and keep it out of harm’s way. A fireplace mantle is a great option!

4. Utilize a baby gate (or keep the doors closed).

Don’t want your pet getting into certain areas of the house? If it’s a specific room, oftentimes simply closing the door will suffice. However, if your home is more open, you may not have this option. Baby gates are excellent for keeping pets from going up or downstairs, or getting into other areas that aren’t typically blocked off with doors, such as the kitchen or dining room.

5. Control your cords.

Any pet, big or small, can be enticed by those cords dangling from your appliances. We might not see them as chew toys, but to your pets they probably look pretty appealing. Stop by your local hardware store and pick up a cord cover, or tape loose ends to the wall.

Tips and Tricks for Hosting Your Next Holiday Party

12 days of homeownership

The holiday season is in full swing and right about now, if you’re anything like us, there’s a new party being added to your calendar every day of the week. How are you supposed to plan yours when you’ve got a million other functions to attend? Make your holiday hosting planning easy with these tips and tricks!

Opt for a buffet-style menu.

Plated dinners are great for small get-togethers or a formal soiree, but it may not be the best option for a vibrant holiday party. Recruit some friends and family to help prepare the day of the party, and make a variety of tried-and-true appetizers. This way, there will be something for everyone and you won’t be stressing (too much) about the cooking process. Bonus tip: make sure you’re preparing food that guests can eat while standing up. A crowded party filled with mingling guests may not allow everyone to sit down to eat their meal.

Set the mood with a killer playlist.

Planning what background music you’ll play is a no-brainer for a holiday party. Keep it simple and play the holiday hits we all know and love, but don’t be afraid to mix it up by throwing in some current hits. A few (free and paid) music services to look into include:

Make garbage cans or bags accessible.

What’s the number one question party guests have? “Where’s the trash?” Don’t leave your guests wondering or forced to navigate your kitchen cabinets in their hunt for the trash or a recycling bin. Set out extra garbage bins or bags to keep things convenient for the party-goers AND yourself — you’ll be thankful when it’s time for clean-up. Bonus tip: Using plastic cups for easy cleanup? Think about keeping a few permanent markers handy so guests can write their name on their cup and you’ll have fewer misplaced cups to throw away.

Don’t forget to enjoy yourself!

Although you’re the host with the most, don’t forget to take some time to mingle with your guests and have some fun. Holiday parties — or parties of any kind, for that matter — are a great way to connect with friends and family, take your mind off work and to-dos, and relax. Try not to lose that in the hustle and bustle of planning. After all, you’ve thrown an amazing party — enjoy it! The cleanup can wait until tomorrow.