What Percent of Asking Price Should You Offer?

Most Realtors will tell buyers that the price of a home is negotiable. However, there is no set rule for what percent of a home's asking price to offer the seller. You don't want to overpay, but an offer too low may offend the seller. Your offer price should depend on a number of factors, including:

The appraised value. Whereas asking prices are determined by sellers and their real estate agents, home appraisals are determined by third-party professionals. They can help you determine the true value of a home.

The housing market. If the housing market favors sellers over buyers, you'll need to offer more in order to remain competitive.  Paying in cash also increases the competitiveness of offers. This situation is somewhat true of today's housing market, in which limited supply does not meet the high demand. Sales of nearby comparable homes can help you evaluate the market, which varies geographically.

Seller motivation. How eager is the current owner of a home to sell it? Consider a family that has been relocated due to a parent's career. The family has already moved, but its prior home is still on the market. Considering the family is losing money on maintaining the home, and not deriving any benefit, a lower offer stands a better chance than it might for a family that has not yet moved and faces little time pressure.

How long the house has been on the market. This is linked to seller motivation. The longer the house sits on the market, the more work it is for the owners to constantly clean it for showings, consult with their Realtor, etc. Also, sellers who are eager to move will likely grow impatient if buyers do not show interest in their house. Therefore, generally speaking, the longer a home sits on the market, the more likely its owner(s) will be to accept a lower offer.

Overall, many Realtors advise buyers to offer at least 90% of the asking price. However, as noted above, this figure is dependent on many moving parts. In some markets, buyers may even find it necessary to make offers above the asking price. This is one of the reasons that having an experienced Realtor familiar with the area in which you are buying is so crucial. Interested in buying or selling a home in Central Ohio? Contact me to see how I can help!

Columbus New Year's Eve Events

As we celebrate Christmas or other winter holidays, it's easy to forgot to make New Year's Eve plans! Read about some of Central Ohio's New Year's Eve events, below:

Columbus' Renaissance Hotel's New Year's Eve gala is promised to be better this year than ever before, with some of the Midwest's top DJs, upgraded lighting and sound, increased staff to shorten drink lines, and the ability to accommodate large groups. General admission tickets can be purchased for $99, and include 6 drinks, hors d'oeuvres from 8:00pm-10:30pm, and a pizza bar from 1:00am to close. Additional drink tickets can be purchased for $5 each. VIP tickets are selling for $139. In addition to the benefits accompanying general admission tickets, VIP tickets grant access to the VIP section and bars (serving premium alcohol) and a tour of the Watershed Distillery, valid until May 1, 2015.  Feel free to book a room at the hotel for a discounted rate (be sure to mention that you are a part of the "Nite Magic" group).

Other festive places to ring in the new year include:

• Park Street Saloon in the Arena District: Advertises live bands, pizza from Mikey's Late Night Slice, three dance floors, and a complementary Champagne toast at midnight. 
• Shadowbox Live's Backstage Bistro: Featuring 3+ hours of music from the Urban Jazz Coalition, a dinner banquette, and a Champagne toast at midnight.
• Funny Bone Comedy Club and Restaurant: Listen to stand-up comedian Roy Wood, Jr. and enjoy a pre-show dinner buffet.
• Camelot Cellars: a costume masquerade ball including a Champagne toast at midnight, food from Hubbard Grille, live music by Brave Weather, and burlesque performances. 
• Union Cafe in the Short North: offers a three course dinner and Vegas-syle DIVAS show.
• First Night Columbus: This family-friendly event offers activities for those of all ages, such as movies, a performance by the Fort Hayes School Band, face painting, and fireworks.

For even more options on how to spend New Year's Eve in Columbus, Ohio, click here.

The Most and Least Stressed Out Cities

CNNMoney published a list of the most and least stressed out U.S. cities, based on a variety of factors including traffic, cost of living, employment, and poverty rate. The results:

The 5 Most Stressed Out Cities:

1. New York, NY. Long commutes average 40 minutes each way and housing costs are double the national average. Poverty and unemployment rates are also above the national average. Residents experience long workdays and a high cost of living.
2. Detroit, MI. Detroit is known for its high crime rate, unemployment rate of around 9%, and its poverty rate that exceeds 25%.
3. Los Angeles, CA. Commuters deal with heavy traffic, no public transportation, and a high cost of living. 
4. Riverside/San Bernardino, CA. The effects of the recession hit this construction-industry city especially hard. Residents face long commutes, high unemployment, and a 20% poverty rate.
5. Houston, TX. Thanks to the oil industry which can require 80-hour work weeks, Houston has the longest average workweek of all 55 places CNNMoney analyzed.  Traffic is also problematic.  

The 5 Least Stressed Out Cities:

1. Salt Lake City, UT. Low unemployment, a low cost of living, and short commutes make for a balanced work-life. 
2. Rochester, NY. Short commutes average 21 minutes each way, and work days are shorter than average. 
3. Raleigh, NC. A low cost of living, low unemployment, lots of green space, and proximity to mountains and beaches make Raleigh a relatively happy and healthy city. 
4. Minneapolis, MN.  Minneapolis benefits from low crime, lots of jobs, a healthy lifestyle, and a low poverty rate (11%). 
5. Richmond, VA. Shorter work days, low unemployment, and a poverty rate below 12% (one of the lowest of the 55 cities studied) earns Richmond its spot as the 5th least stressed U.S. city.

View the full list of the most stressed out cities and the least stressed out cities.

Help! My Home Won't Sell.

Has your home been sitting on the market for longer than normal? Typically in a hot market, homes sell within one month. In more sluggish conditions, it can take six months to one year. Read about the top 10 reasons that homes don't sell. Leaving your home on the market for a prolonged time can make it appear "stale," and buyers may assume that there is something inherently wrong with it that has prohibited it from selling already. Fortunately, there are a number of actions you can take if your home won't sell:

• Ask your Realtor for feedback. You Realtor can talk to buyers' Realtors about what their clients thought about your home. You can then make changes based on that feedback. If your Realtor hasn't already given you this insight, ask for it. If you're dissatisfied with your Realtor, talk to him/her about your concerns. You may also speak to the firm's broker. Lastly, consider re-listing it with a different Realtor once your listing agreement expires. Contact me if this is something you're interested in!

• Reduce the asking price. A too-high asking price is the number one reason a home doesn't sell. If you're home has been listed for a while already, you may need to adjust your asking price to current economic conditions. In an exceptionally dry time, this may even mean taking a loss on your home. You should also look at what comparable homes are selling for in order to determine your price. One way to do this is by attending local open houses. 
• Revamp its appearance. Try to look at your home from an objective perspective (look at photos and video footage). What turns you off? De-clutter your home by cleaning it and putting your belongings out of sight. Stripping wallpaper and repainting your home in neutral colors generally makes your home more attractive to buyers. Similarly, make sure your lawn is well kept--you want to make the best first impression possible! When buyers do see your home, make sure you are not home. This invites the buyers to stay longer and talk openly about your home. 
• Take your home temporarily off the market. On the Multiple Listing Service (MLS), each home is accompanied by a number indicating listing date. Taking your home off the market and then re-listing it essentially "refreshes" your home and gives it a new listing status. Consider re-listing at peak times, which tend to be April-June and September-November. You may be required to wait a certain amount of time or make changes to your listing (for example, asking price) before you can re-list.
• Rent it out. If you're house is vacant but not selling, consider renting it out. This allows you to capture rental income and re-list your home for sale in more advantageous seller conditions. Not ready to be a landlord? Don't worry--you can hire a property manager who will do the work for you!

What Affects Your Home Insurance Premium?

Home owner's insurance protects your property and belongings from unforeseen circumstances (such as a fire) by providing both property insurance and liability coverage. In some instances, you cannot control the premium you pay. Consider the following:

• Home age and materials. These two factors affect the premium you'll pay for home owner's insurance. Older homes are more prone to electrical, plumbing, roofing and foundation problems and thus can increase your premium. Check with your insurance provider to see if renovations can keep these related expenses down. Wood materials often warrant a higher premium because they are more susceptible to fire and water damage. 
• Location. Lower premiums are granted to homeowners who live near fire stations and not in flood plains or areas prone to natural disasters such as earthquakes. Additionally, neighborhoods with a high claim frequency may charge homeowners a higher premium.   

Fortunately, there are many things you are can do to lower your home insurance premium, such as:

• Increase your deductible. Generally speaking, there is a tradeoff between your monthly coverage payment amount and your deductible. A higher deductible means you will face lower monthly payments, but should you make a claim, you will be held responsible for paying more upfront.
• Find a provider who is a good fit for you. For example, some companies will charge higher premiums to pet owners. When shopping for an insurance provider, search for one that is pet-friendly and does not up-charge for pets.
• Keep your credit score as high as possible, which requires you to pay bills on time and avoid accumulating high levels of debt.
• Increase security by installing an alarm system, gated entrance, insurer-approved locks, or fence. These measures all result in a reduced likelihood that your home will be damaged or destroyed. Have fire sprinklers and an extinguisher, and take other precautions as needed. For instance, if you live in hurricane-prone region of the U.S., install hurricane shutters. Remember that floor insurance is a separate entity than home owner's insurance and should also be considered based on where you live.

Baby Boomers Staying Put

In the past, many empty-nesters downsized upon sending their children away for school and growing older. However, the Baby Boomers are defying this traditional pattern. With roughly 10,000 people reaching age 65 each day for the next 15 years, and 17% of the 76 million Boomers already in retirement, the decisions this generation makes are central to the housing market.  63% of Baby Boomers plan to stay in their current home once they retire, according to a survey of 4,000 Baby Boomer households conducted by the non-profit Demand Institute. Why? Many simply are not financially ready, with a substantial amount of equity tied up in their homes. The financial crisis caused the average Boomer household's net worth to drop from $200,000 in 2007 to $143,000 in 2013 according to Federal Reserve data. Additionally, the median outstanding mortgage balance for 50- to 69-year olds more than doubled from $48,743 in 1992 to $118,000 in 2013.

The financial situation is particularly tough for those also in the sandwich generation--middle aged people who find themselves supporting both aging parents and their children. This recent phenomenon can be explained by an increase in the average life expectancy in conjunction with an increased number of "adult children" living at home. A 2013 Pew Foundation survey of 2,511 U.S. adults revealed that at least 15 percent of middle-aged adults are financially supporting both their parents and children.

The Baby Boomers surveyed placed little weight on "aging-friendly" homes, with only 1/5 planning to live in a senior housing. This is despite the fact that roughly 75% reported serious health issues such as arthritis or high blood pressure.

Flipping a Home: It's Not For Everyone!

The idea of buying a house, tearing down a wall, replacing countertops, and painting the place before selling it for a substantial profit is appealing. However, experts warn that it’s it nowhere near that easy.  Flipping a house takes a substantial amount of money, experience, education, and time: the average flip takes 101 days according to MarketWatch. Brendon DeSimone, author of “Next Generation Real Estate,” states that house flipping is a full time job and is not something people who work 9-5 jobs can reasonably manage.

How much will it cost?

The median cost to improve filliped homes is almost $5,000. However, many projects cost more. A significant kitchen remodel costs roughly $55,000, while a bathroom costs $16,000. To be safe, experts advise adding 10% to your projected project budget, and not to rely on making a profit. Instead, home flippers should be financially stable even if they only break even. It may be worth tackling bigger projects, though: flips associated with building permits have a 50% ROI. This is much higher than the average ROI of all flips (including ones that solely involve cosmetic changes), which is 13%. Indeed, there is a positive correlation between how much an investor spends on a home and his ROI.

What type of home should I buy?

If you want to flip a house, look for undervalued properties. Professionals look for homes approximately 30% under market value. These can be outdated fixer-uppers, foreclosures, short sales, or homes sold at an auction. It’s no secret that these homes offer the best potential to flip, so be prepared to act quickly if you see a home with great potential.

How will I be taxed?

If you flip a home on the side (i.e, you still have a full time job doing something else), that’s considered an investment as opposed to a business. If you hold onto a house for a year or less, the proceeds are classified as a short-term capital gain and will be taxed at your regular income. If you own it for over a year, it’s considered a long-term capital gain, which is taxed at 15% of the gain.

What else should I consider?

Location is key! When looking for a home, look for a fixer-upper in a great location. Central to location is school district, since a good school district helps homes in that area maintain their value. Richard Davis, creator and star of A&E’s reality show “Flip This House” also warns people who are unfamiliar with the real estate and construction businesses against flipping homes. He comments on an MSN article, “I mean, my wife is a doctor, you don’t see me going out doing heart surgery.”  In other words, flipping homes is not a hobby—it’s a profession that requires technical skills, time, and money. Finally, you should be familiar with anti-flipping regulations: houses sold less than 90 days after they were purchased are not eligible for FHA mortgage insurance.

The best (and worst!) cities to flip homes in:

According to RealtyTrac, the best place to flip a home is Pittsburgh, PA. Here, the average purchase price is $54,949 and the average flipped price is $103,755. That’s a ROI of 89%! Other cities with good flip potential include Philadelphia, Memphis, Detroit, Seattle, Baltimore, Milwaukee, Atlanta, Rochester, and Washington. Each of these cities have ROIs between 43-56%. On the other hand, Indianapolis-Carmel is the worst place to flip a home, with an average purchase price of $163,400 and an average flipped price of $144,400—an ROI of -12%. Other cities with a negative ROI include Tampa/St. Petersburg/Clearwater, Houston, and Charlotte.

Beverly Hills Home Most Expensive in U.S.

In September I published a post on Le Palais Royal, which was the most expensive publically listed home on the market at $139 million at the time. However, Le Palais Royal did not hold the spotlight for long. Jeff Greene, who made his fortune betting against sub-prime mortgages before the 2008 financial crisis, is selling his home for $195 million to capitalize on the strength of the international demand for extreme luxury estates. The property is known as Palazzo di Amore (Palace of Love) and was listed on November 6th. 

• Size: 25-acre compound, 53,000 sq. feet interior space
• Bedrooms: 12
• Bathrooms: 23
• Garage: Fits 27 cars
• Features: A private vineyard and wine label (creating 400-500 cases of wine per year), bowling alley, 50-seat movie theater, game room, discotheque with a rotating dance floor, separate quest house, reflecting pool, and spa
• History: The estate was developed by Mohamed Hadid with help from architect Bob Ray Offenhauser and designer Alberto Pinto. Green bought the house in 2007 out of bankruptcy for a reported $35 million and spent nearly 8 years and $25 million expanding the estate.
• Listing brokers: Joyce Rey and Stacy Gottula of Coldwell Banker
• The price to beat: The most expensive home sale in the U.S. occurred this year, for $147 million. If Palazzo di Amore sells for greater than $147 million, it will set the record for the most expensive home sale in the U.S. 

What You Can Do With a Flex Room

Home buyers today have very different wish lists. The traditional style home, with a formal living room, dining room, family room, kitchen, bedrooms, and bathrooms, is becoming obsolete in favor of homes that are better suited to cater to a family's specific wants and needs. To address this, many new builds include a "flex room," sometimes called a bonus room, which is a generic room (sometimes similar to a loft) that can take on various purposes based on how it is outfitted. Flex rooms are great for resale value, because they can adapt to the needs of the people living in the house. When you're house hunting and you see a room you with no predefined purpose, consider turning the space into one of these rooms:

1) A home office. Home offices are convenient to have, even if you don't often work from home. They provide homeowners will a place to retreat from outside commotion and get work down--weather that's paying bills, writing emails and letters, making phone calls, or filing important documents. 

2) A home gym. If you like to hop on a treadmill every day, save time and gym membership fees by buying your own! This is especially a good idea for Ohioans, since we can't always depend on sunny weather conducive to running and exercising outside. 

3) A playroom. For families, this may be your best option. Keep your main family room clean by having an additional designated area where your kids can play, build forts, and run around. This will keep you from having to pick up the main living area all the time, since most of the toys will be elsewhere. Once your kids get older, they will appreciate having their own living area, too. It will give them a place to do homework, play with friends, watch TV, and play video games.

4) A library. For avid readers, a home library is a dream come true. Many depicted existing home libraries are parts of large, expensive homes. However, there is no reason for smaller homes not to have one--especially if you have a room with a lot of built in shelving. If you don't, add multiple book cases, a comfortable couch, and coffee table. Make the room into a peaceful retreat and settle down with a good book!

5) A game room. Do you like to entertain? A flex room can serve as the perfect place for your foosball or pool table! If you plan to use a flex room as an adult hangout space, consider adding a TV and a wet bar with a mini fridge for beer or wine. Sounds like the perfect place to watch the next OSU game!

6) A media room. Often found in basements and called theater rooms, media rooms feature large TVs or projector screens and luxorious seating. For families who enjoy spending time together watching movies, sports games, or TV shows, a media room may be just right. Kids can also play video games there. 

7) A hobbies room. A hobbies room is the ultimate multiputpose room, because it can change along with your interests. It can be used for scrapbooking, knitting, playing and keeping musical instruments, arts and crafts, yoga, wrapping presents during birthdays and holidays, and much more. 

8) A guest room. If you don't have a designed guest room, consider putting a Murphy bed in a flex room. This way, the room can serve as a second living area most of the time but double as a guest bedroom as needed. Ideally, the flex room would have doors and nearby access to a bathroom. Note, a  flex room is unlikely to have a closet, since it would then be classified as a bedroom. 

So, next time you see a flex room in a home, don't think of it as a waste of space. Think of it as an opportunity to truely customize your home. 

Parking Spots in Hong Kong Selling for $500,000+

Those who live in big cities can attest to fact that it is not only difficult to find a parking spot, but it is also expensive. Midtown Manhattan and Downtown  Manhattan boast the most expensive monthly fees that residents pay for a parking space, at $541 and $533, respectively. Other cities with steep monthly parking rates include Boston ($438) and San Francisco ($375). In large cities like these, apps such as Parker and BestParking can help drivers find parking spaces based on price and location.

But these prices are nothing compared to Honk Kong, where parking spots are bought and sold like investment property. CNN Money reports that, In May, a single parking spot in a residential neighborhood of Hong Kong Island sold for 4.24 million Hong Kong dollars, which translates into a shocking $547,000. This lofty price reflects the classic principles of supply and demand: the city has only 683,000 parking spots for a population of 7 million+. Although the 6.2% car ownership rate in Hong Kong is among the lowest in the world, most homes do not come with a garage or driveway, driving demand for parking places. The city government has extended a tax intended to cool the residential property market to parking spaces, but demand is still high along an increase in investment dollars. The number of registered parking spots sold in August increased by 29% to 956 since July, reaching the highest level in 20 months.

Mortgage Rate Drops Below 4%

Last week, Freddie Mac reported an interest rate on a 30-year, fixed rate mortgage of 3.97%, representing the lowest level since June 20, 2013. This results from a number of factors. Interest rates typically move alongside the 10-year Treasury note, which reached a low of 1.86% last week. This is the first time that the yield has been below 2% since May 2013. Many investors prefer the safety of U.S. Treasury bonds given concerns about the economic weakness in Europe, Ebola, and geopolitical turmoil worldwide (such as the threat of the Islamic State militia group in the Middle East). This contrasts expectations of rising interest rates resulting from the Federal Reserve pulling back its economic stimulus of buying bonds and mortgage-backed securities.

Many homeowners have seized this opportunity to refinance. Bank of America reports that a .5% decrease in mortgage rates for a home worth $221,000 should result in savings of $50 per month. However, the Associated Press argues that mortgage rates should not solely dictate the decision to refinance, because doing so is costly. For example, it would cost approximately $2,500 in fees to refinance from a 5.5% to 4% mortgage rate on a $200,000 mortgage, taking roughly 14 months to break even.

Helpful Websites for Prospective Homeowners

The internet is one of your best resources when it comes to buying a home. Websites and mobile apps such as the ones listed below can help you find a realtor, browse homes for sale and rent, see how much you can afford, and check out the crime reports, walkability, and school districts of various communities:

Homes and Realtors

Realtor.com – Realtor.com is a great place to start you home search, and can be accessed from a computer or a mobile device. Realtor.com allows you to input your own search criteria including price, number of bedrooms/bathrooms, location, and type of home. Realtor.com also has a search function that generates a list of nearby open houses, which can be a great way to get a feel for the current housing market.

Zillow.com – This has similar features as Realtor.com, but it also allows you to view information (such as size, year built, and  estimated worth) on homes that are not for sale. This is helpful if you are curious about the value of other homes in the community you are considering moving into. You don’t want to have the least or most expensive home in the neighborhood, as neither is good for resale value. Zillow.com also allows you to shop for mortgage rates and gather home design ideas (which you can pin and share with other people). 

Affordability

Annualcreditreport.com - A good credit score impacts the interest rate you pay on your mortgage and how much you can borrow. A score of 692 is average, and the higher your score the better. Federal law allows you to get a free copy of your credit report once a year. Similarly, FreeCreditScore.com offers a free, 7-day trial membership during which you can access your current credit score.

MortgageCalculator.org – Use MortgageCalculator.com to get a rough estimate of monthly payments, pay-off date, and total interest paid. You should also consult with a lender. As a rough rule of thumb, many lenders advise clients not to spend more than 28% of their monthly, pretax income on a mortgage. 

Location

Walkscore.com – This website is a great resource renters can use to find out how “walkable” homes are, from a score of 1 (not walkable) to 100 (highly walkable). Walkschore.com allows you to serach for rentals based on rent, number of bedrooms, commute time, distance to public transportation, and walkscore. It also lets you filter your search to include pet-friendly options. Walkscore tells you what amenities are in walking distance and how far they are from any given home. Amenities include restaurants, shops, schools, gyms, etc. The one downside of this website and mobile app is that it only shows rentals—not homes for sale. However, homeowners can select a rental nearby in order to look at the area around it. Buyers can also use GoogleMaps.com. GoogleMaps doesn’t provide a walk score, but still illustrates what homes are surrounded by and how close they are to city centers, schools, and so forth.

Crimereports.com – Enter an address or ZIP code to access statistics on crime. Remember, every community has some degree of crime. It’s a good idea to talk to current residents of a particular neighborhood to see how safe they feel.

GreatSchools.com – This website rates schools, which is important even for people without children. A good school district helps a home maintain its value other the years. When you eventually sell your home, the school district may be paramount to buyers even if it was secondary to you.

Your most trusted resource when searching for a home is a professional  real estate agent. Hire an experienced REALTOR who is a good communicator and knows the market well. If you or someone you know is thinking about buying a home in Central Ohio, visit my website and contact me to ask how I can help. 

Millennials Put Hold on American Dream

Millennials-those born after 1980 through the mid/late 1990s-are not buying homes at the rate previous generations have. To determine why, Bank of America Merrill Lynch conducted a survey of 1000 adults ages 20-34 across various U.S. cities. This is what the company found:

Millennials want to own their own home, but lack the financial resources to do so. 73% of survey respondents report that owning a home is either very important (56%) or important (17%) to them, indicating that Millennials maintain the strong desire to own their own homes consistent with the classic perception of the American Dream. However, Millennials have been negatively affected by cyclical economic factors including high unemployment, lack of wage growth, and lack of credit. 

The study suggests that Millennials may have a distorted image of interest rates as a result of growing up during a time when interest rates were artificially low, hovering around 3-5%. Looking back in time presents a different picture: since 1971, the median 30-year fixed mortgage rate has been 7.98%. Employment for those ages 25-34 is 75.6%, which is more than the low of 73.4 but still behind the pre-recession level of 83%.  Wage growth has been slow, with the real median income for those under 35 falling 16% from $42,000 in 2007 to $35,000 in 2013. Tight credit remains another issue. The average qualifying FICO score as of July 2014 (690 and 760 for an FHA mortgage and conventional mortgage, respectively), is nearly 13 points greater than the average score back to 2000. 

Student loan debt is also hindering first-time homebuyers. One quarter of survey respondents cite that student debt has prohibited them from purchasing a home to date. The median education debt for those under 35 was $17,200 in 2013. It is not a surprise, then, that the survey revealed that Millennials who have student loans are 55% more likely to currently rent than own a home.

Nineteen percent of Millennials are living with their parents. This consists of 31% for those ages 20-24, 16% ages 25-29, and 10% ages 30-34. Many Millennials are living in an apartment (38%) while others have their own home (31%). Not surprising, higher income earners are much more likely to be living in their own home. 12% of respondents making less than $25,000 own their own home, while 60% of those making $75,000-$100,000 own their own home. 

Millennials are delaying household formation, including getting married and having children. Annual household formations of married couples lave dropped 61% for those under 25, 41% for those 25-29, and 18% for those 30-34 since 1982. Mellennials are having fewer kids, and they are having them later in life. Birthrates for women ages 20-29 are decreasing while birthrates for women ages 30-39 are increasing.

As the economy continues to recover and Millennials increase their earnings, they are expected to enter the housing market in greater numbers. Half of those surveyed plan to buy a home within the next five years. The American Dream is not lost: it is merely on hold. 

Investors Withdraw From Housing Market

In August, many investors withdrew from the housing market, possibly resulting from the Federal Reserve's signal that interest rates will be rising. It is no surprise then, that the portion of all cash buyers has dropped. At only 23%, cash transactions represent the lowest share since December 2009.

 First-time home buyers, who account for 30% of transactions and often rely on mortgage financing, will benefit from reduced competition with all-cash offers, fewer bidding wars, and increased inventory.  Another side effect of investor withdraw is the 1.8% decline in existing home sales from a seasonally adjusted 5.14 million in July to 5.05 million in August. This marks the first dip following four months of consecutive gains.

For more information, click here.

Refinancing 101

Refinancing is the process of replacing your original mortgage with a new mortgage that has a more favorable interest rate and term. Many people choose to refinance when they have home equity (the difference between the amount owed to the mortgage company and the home's value). In other words, refinancing is paying off an existing loan with the proceeds from a new loan. Refinancing lenders typically require a percentage of the total loan amount, in the form of "points," as an upfront payment. One point equals 1 percent of the total loan amount. The more points, the better, because a larger payment upfront results in a lower interest rate.

Pros
Refinancing can reduce monthly payments and interest rates, and allow people to choose a different mortgage company or take cash out of their home preceding a large purchase. Homeowners can also cancel their private mortgage insurance (PMI) with a mortgage refinance loan, as the home's value increases and the balance on the home declines. Some people refinance to switch between an adjustable rate mortgage and a fixed one. For those with balloon programs such as ARMs, refinancing allows someone to switch to a new, fixed rate before the entire mortgage balance is due at the end of the term (usually five to seven years). One other reason for refinancing is to consolidate other debts into one loan.

Cons
However, there are risks involved. People may incur penalties that can amount to $1000+ for paying down their existing mortgage with home equity credit. Make sure you have an understanding of the fees involved before committing to refinancing. Fees can account for 3-6 percent of your outstanding principal and include the application fee, title insurance and title search, the lender's attorney review fees, homeowner's insurance, the appraisal fee, and points and fees incurred in loan origination. Your savings in interest must exceed refinancing fees in order for refinancing to be worthwhile.

Interested in refinancing? Experiment with the home refinance calculator. To learn more about refinancing a home, watch the short video below:

Columbus, OH One of Best Markets For Landlords

RealtyTrac studied 370 major U.S. counties in order to determine the most attractive markets for landlords. Its results are based on factors including unemployment rates, median home prices, average rents, and demographics. An article released by CNNMoney states that, regarding demographics, a presence of large millennial and baby boomer populations is ideal because both groups are undergoing major life changes that sometimes entail changes in housing. While a significant number of baby boomers move to Florida, millennials are more spread out across cities such as Philadelphia, Pennsyvania and Atlanta, Georgia.

The results list Columbus, OH as the eighth best market for landlords. The median sales price for a home in Columbus is $125,000, while the average rent for a 3-bedroom place is $1,039 per month. This translates to a gross rental yield of 10%

The single best market in which to be a landlord is Anderson, South Carolina. Here, the median home sales price is only $69,900, and the average rental rate (again for three bedrooms) is just under $900, resulting in a 15.3% gross rental yield. Other top ten markets include Gainesville, Florida, Pittsburgh, Pennsylvania, and Charleston, South Carolina.

The Baby Boomer Burden

The more Baby Boomers entering retirement, the greater the housing strain to accommodate them. FiveThirtyEight Economics reports that, at 14.5% in 2014 and a projected 20.9% in 2050, the U.S. has a high concentration of residents aged 65 and over. A report published by the Harvard Joint Center for Housing Studies and the AARP Foundation recently revealed that the number of adults 65 and over will more than double to 73 million by 2030.

Still, other countries have an even higher proportion: Japan tops the chart with 25.8% in 2014 and a projected 40.1% in 2050. Other countries with a high concentration of seniors include developed countries such as Germany, France, and Canada.

Unfortunately, retirees have less savings (partially attributed to the financial crisis) and carry more debt than previous generations: 70% of Boomers between 50 and 64 and 40% of Boomers 65+ still owed money on their home in 2010. Non-housing debt (such as credit card and auto loan debt) among boomers aged 65+ surged from $4,300 in 1992 to $7,200 in 2010. CNN Money brought attention to the fact that the number of senior households living on less than $15,000 (below the poverty line) is expected to increase by an astonishing 37% in 10 years. The fact that many will have to put over 30% of their income toward housing means they will have to cut back on other expenses such as medical care and transportation.

Federal rental assistance does exist; however, only one-third of eligible low income seniors received assistance in 2011. Opinions on how to remedy this precarious situation vary, from improved in-home senior programs, senior tax relief, and increased federal rental assistance.

What does this mean for the rest of the population? When Boomers retire they reduce production and consumer spending and increase dependence on others (such as their children and the government), resulting in overall slower economic growth.  Key indicators that speak to this trend include the labor force participation rate (the ratio between those working or actively looking for work and the overall population) and  the dependency ratio (the number of people outside of working age--under 18 or over 64--per 100 adults between those two limits).