Fed Plans to Keep Interest Rates Low

Fed Plans to Keep Interest Rates Low, Image by renjith krishnan & FreeDigitalPhotos.net

The Federal Reserve announced Wednesday that it plans to keep interest rates low as long as the unemployment rate is above 6.5 percent. This was the first time that the Fed has ever identified an exact unemployment rate to be reached before it plans to raise interest rates.

To push rates lower, the Fed will continue to buy $85 billion in Treasury securities and mortgage-backed securities each month until the unemployment rate improves.

Since December 2008, the Fed has held short-term interest rates near zero. The move has helped reduce borrowing costs and helped mortgage rates reach all-time lows.

Many of the Fed’s senior officials say they do not expect the unemployment rate to reach 6.5 percent until the end of 2015.

In November, the unemployment rate was 7.7 percent. The last time it was below 6.5 percent was September 2008.

Source: “Fed Ties Rates to Joblessness, With Target of 6.5%,” The New York Times (Dec. 12, 2012)

The Best Buyers’ Market Is …

The Best Buyers’ Market Is …, Image by phanlop88 & FreeDigitalPhotos.net

Chicago is the top housing market for home shoppers, according to recent rankings of 30 of the largest U.S. metro areas released by Zillow. This is the second year in a row the Second City has nabbed the top spot.

To arrive at its rankings, Zillow analyzed selling prices versus list prices, the number of days a listing appeared on its web site, and the percentage of homes in a market with a price reduction.

Here are some of the top markets for home buyers, according to Zillow’s list:

1. Chicago
2. Cleveland
3. Philadelphia
4. Cincinnati
5. New York, N.Y.
6. Pittsburgh
7. Baltimore, Md.
8. St. Louis, Mo.
9. Columbus, Ohio
10. Charlotte, N.C.

Meanwhile, the top housing market for sellers is San Jose, Calif., according to Zillow.

Source: “The Top Buyers’ and Sellers’ Markets for American Homes,” Business Insider (Dec. 12, 2012) and “Chicago Again Named Best Housing Market — for Buyers,” Chicago Tribune (Dec. 12, 2012)

Blogging Mistakes to Avoid for Real Estate Agents

Blogging Mistakes to Avoid for Real Estate Agents, Image by Stuart Miles & FreeDigitalPhotos.net

Many real estate professionals have blogs to help them reach out to new customers and establish credibility and expertise. But if you’re not careful, blogging could hurt your brand — not help it.

Forbes recently highlighted some of the following common blogging mistakes to avoid:

• Not posting on a schedule or frequently. “Posting sporadically can impact how well your blog ranks in search engines, but can also hurt readership numbers, as visitors may think you stopped posting and never return,” according to the Forbes article.
• Not Using Google+. While the social network has been dubbed a “ghost town” by some, it may be able to help increase your blog’s readership and appear higher in the search rankings. Share your blog posts on Google+ and also use Google’s authorship feature, the Forbes article recommends.
• Failing to use images. “A lack of images impacts how a blog post looks when shared on social platforms,” according to the Forbes article. “Using images also helps keep readers engaged on a blog post by providing visual and psychological breaks, which are especially useful for longer posts.”

Read more about how to counter common blogging mistakes at Forbes.

Source: “6 Blogging Mistakes Your Business Should Avoid,” Forbes (Dec. 11, 2012)

Number of Improving Housing Markets Soars

Number of Improving Housing Markets Soars, Image by fotographic1980 & FreeDigitalPhotos.net

Short Sales Surge Before Potential Tax Hike

Short Sales Surge Before Potential Tax Hike, Image by sdmania & FreeDigitalPhotos.net

Real estate professionals are rushing to get short sales completed before the end of the year. That’s when a tax break expires that could leave borrowers responsible for paying any unpaid mortgage debt.

Short sales from borrowers behind on their payments jumped 22 percent over last year for the three months ending Sept. 30, RealtyTrac reports. Short sales also jumped 17 percent among borrowers who were still current on their payments.

On Dec. 31, the Mortgage Debt Forgiveness Act is set to expire, and the number of short sales before that date is expected to jump much higher.

Unless lawmakers extend the Mortgage Debt Forgiveness Act, the IRS in January will treat any unpaid mortgage debt as taxable income for many borrowers.

As such, real estate agents are “encouraging people to sell before the tax break ends,” says Daren Blomquist, vice president of RealtyTrac. “ If that law expires, home owners who agree to short sales could see their income tax jump significantly because the portion of unpaid loan balance not covered by the short-sale proceeds will be considered taxable income in many cases.”

In some areas, borrowers won’t have to worry about the expiring act. For home owners in California, Arizona, and 10 other states, the IRS does not tax forgiven debt due to those states’ laws.

Source: “Short Sales Jump Ahead of Tax Hike,” CNNMoney (Dec. 6, 2012)