Thank you so much to those who have stepped up to brighten Christmas for the children of our injured servicemen.  Twelve of the sixteen families on the list have been fully accounted for with 25 of the 33 kids ready to have a wonderful Christmas morning.  Nancy and I ran out on Friday to do our shopping for the Helmuth kids.  We simply couldn’t resist the urge to buy “any toy that makes noise” for the one year old girl.  It was a great deal of fun picking out toys we thought the twins would enjoy.  We also had to learn all about transformers for four year old Nathaniel!!

If you are still considering showing your appreciation to our vets, please take a look at the remaining names below.  Once you let me know who you would like to purchase a gift for, drop an e-mail to Santa@BobNelsonTeam.com.  We will then give you the address and contact info for the family.  Feel free to visit the websites for Our Military Kids, Operation Second Chance, Thanks USA, the Semper Fi Fund and the Yellow Ribbon Fund if you’d like to show your support to these wonderful grassroots organizations.

Kids Still in Need of Gifts

Weissmiller Family (Adopted by the Moran and Vamvakias families – Thank you Mary and Don)

• 12 yr old girl: in-line skates (size 6-7)
• 7 yr old girl: roller skates (size 1)

Jensen Family (Adopted by the Grimes family – Thank you James and Susan)

• ·         13 yr old girl: Ipod Touch
• ·         9 yr old girl: Wii gaming system
• ·         6 yr old girl: Littlest Pet Shop toy house

Fulkerson Family

• 18 yr old boy: laptop computer for his school work and for college next year  (A  big thanks to Shiner Roofing and Siding for offering to purchase the laptop.  Again my thanks Kevin.)
• (A short note about this one.  It seems that the Fulkerson boy is a senior in high school.  He had come home from school and accidentally left his car door unlocked.  Someone actually stole the laptop out of the car from the son of an injured vet.  I realize this is a large item to be requesting.  I’m imagine he would be happy to receive a good condition laptop if nothing else.)

Thank You to Those Who Have Agreed to Purchase Gifts for the Families Below

Bellis Family (Adopted by the Hoernig family – Thank you Laura and Family)

• 14 yr old girl:  electric guitar, JC Penney’s gift card
• 11 yr old boy: football, Tennessee Titans merchandise, JC Penney’s gift card
• 6 yr old girl: Barbie doll, furreal electronic dog, JC Penney’s gift card

Broesch Family (Adopted by the Heil family – Thanks Tim)

• 15 yr old girl: art supplies (paint brushes, charcoal pencils), iTunes gift card
• 7 yr old girl: books, craft supplies, a Barbie doll

Brown Family (Adopted by Knight Point Systems – Thank you Lindsey)

• 7 yr old boy: Xbox 360
  
• 1 yr old girl: Disney princess toys/merchandise

Christiansen Family (Adopted by the Christianson family- Thank you Vickie and Family)

• 9 yr old girl: Girl Gourmet Cake Bakery
• 4 yr old girl: Girl Gourmet Cupcake Maker

Deen Family (Adopted by the Matthews family and Collingswood Nursing Home – Thank you Catherine)

• 16 yr old girl: iPod
• 15 yr old boy: video games
• 14 yr old boy: video games
• 9 yr old boy: board games
• 3 yr old girl: educational toys teaching the alphabet and numbers

Helmuth Family (I can’t resist.  Adopted by the Nelson Family. 

• 3 yr old boy: Transformers, action figures, books
• 1 yr old girl: any toy that makes noise!  (I love this one)

Loper Family (Adopted by the Borland Family – Thank you Dodie and family)

• 12 yr old girl: digital camera
• 11 yr old boy: remote controlled cars
• 10 yr old boy: nintendo dsi
• 7 yr old girl: American Girls doll

Sherrill Family (Adopted by the Copito family – Thank you Debbie and family)

• 14 yr old boy: new sports bag (for carrying sports equipment to practice)
• 11 yr old boy: new sports bag (for carrying sports equipment to practice)

Hall Family (Thundercat Technology)

• 8 yr old boy: gameboy

Holsey Family (Adopted by the Grossmans.  Thank you Jackie!)

• 15 yr old boy: gift cards to Footlocker and Macy’s

Pointer Family (Adopted by the Heil family – Thanks Tim)

• 13 yr old boy: ripstick skateboard

Williams Family  (Adopted by the Smiths – Thanks Laura and Gene)

• 14 yr old girl: gift cards to Barnes & Noble or AMC Theaters

• 6 yr old girl: Barbie doll, clothes (pants size 6x, shirts size 7)

According to data from the National Association of Realtors, pending home sales were up 3.7 percent in October, compared to September, and up 32 percent when compared to October 2008.  This was the biggest annual increase in history.  Keep in mind that October 2008 was a historic low so we should not be surprised by the huge increase.

Pending home sales — which equates to the number of contracts signed but have yet to close — rose in all sections of the country except the West.  They were up 20 percent in the Northeast, 11.6 percent in the Midwest and 5.4 percent in the South, but down 11.2 percent in the West.

Part of the surge is probably attributable to buyers rushing to take advantage of the government-subsidized first-time home buyer’s credit, which was set to expire at the end of November but now has been extended through April.  Also, the bulk of sales still are coming from cheaper houses, with little movement in houses costing more than $250,000.

I have recently teamed up with Our Military Kids and Operation Second Chance in an attempt to bring some holiday cheer to our injured service members and their families.  We’ve compiled a Christmas Gift Wish List for the families of our brave veterans.  I’m hoping everyone will check out this list and consider purchasing one item, serving as Santa for an individual child or even sponsoring an entire family.  The latter is a great option for a small company or office to consider.
The list below will be posted until Christmas and will be updated over the next few weeks.  Give me a call or drop me an e-mail (santa@bobnelsonteam.com) to let me know how you would like to brighten a family’s Christmas day.  Once you have done so, we will give you the full contact info for the family to allow you to send your gift(s) directly to them.  I would also encourage you to click on the links above and visit the two websites to learn more about these wonderful grassroots organizations.

Bellis Family (Adopted by the Hoernig family – Thank you Laura and Family)

• 14 yr old girl:  electric guitar, JC Penney’s gift card
• 11 yr old boy: football, Tennessee Titans merchandise, JC Penney’s gift card
• 6 yr old girl: Barbie doll, furreal electronic dog, JC Penney’s gift card

Broesch Family (Adopted by the Heil family – Thanks Tim)

• 15 yr old girl: art supplies (paint brushes, charcoal pencils), iTunes gift card
• 7 yr old girl: books, craft supplies, a Barbie doll

Brown Family (Adopted by Knight Point Systems – Thank you Lindsey)

• 7 yr old boy: Xbox 360
  
• 1 yr old girl: Disney princess toys/merchandise

Christiansen Family (Adopted by the Christianson family- Thank you Vickie and Family)

• 9 yr old girl: Girl Gourmet Cake Bakery
• 4 yr old girl: Girl Gourmet Cupcake Maker

Deen Family (Adopted by the Matthews family and Collingswood Nursing Home – Thank you Catherine)

• 16 yr old girl: iPod
• 15 yr old boy: video games
• 14 yr old boy: video games
• 9 yr old boy: board games
• 3 yr old girl: educational toys teaching the alphabet and numbers

Fulkerson Family

• 18 yr old boy: laptop computer for his school work and for college next year

Helmuth Family (I can’t resist.  Adopted by the Nelson Family. 

• 3 yr old boy: Transformers, action figures, books
• 1 yr old girl: any toy that makes noise!  (I love this one)

Loper Family (Adopted by the Borland Family – Thank you Dodie and family)

• 12 yr old girl: digital camera
• 11 yr old boy: remote controlled cars
• 10 yr old boy: nintendo dsi
• 7 yr old girl: American Girls doll

Sherrill Family (Adopted by the Copito family – Thank you Debbie and family)

• 14 yr old boy: new sports bag (for carrying sports equipment to practice)
• 11 yr old boy: new sports bag (for carrying sports equipment to practice)

Weissmiller Family

• 12 yr old girl: in-line skates (size 6-7)
• 7 yr old girl: roller skates (size 1)

Williams Family

• 14 yr old girl: gift cards to Barnes & Noble or AMC Theaters

• 6 yr old girl: Barbie doll, clothes (pants size 6x, shirts size 7)

Hall Family (Thundercat Technology)

• 8 yr old boy: gameboy

Holsey Family (Adopted by the Grossmans.  Thank you Jackie!)

• 15 yr old boy: gift cards to Footlocker and Macy’s

Jensen Family

• ·         13 yr old girl: Ipod Touch
• ·         9 yr old girl: Wii gaming system
• ·         6 yr old girl: Littlest Pet Shop toy house

Pointer Family (Adopted by the Heil family – Thanks Tim)

• 13 yr old boy: ripstick skateboard

We are getting close to publishing the Christmas Gift Wish List.  Please keep track here and watch for an e-mail to learn how you can help out the children of our service men and women.

Please read the exchange below.

From: Tricia Bellis [deleted to protect]
Sent: Tuesday, November 17, 2009 2:20 PM
To: mcvoght@ourmilitarykids.org
Subject: RE: A Holiday Opportunity from Our Military Kids

What a wonderful thing to do!  It has brought tears to my eyes, the compassion your organization has for wounded soldiers and their families.  I can’t tell you how much this means to us to have someone help out….a true Santa Claus.

We have 3 children and it seems like the older they get, the more expensive and electronical things they want become.  Please let me know if it is 1 item per child and up to what dollar amount for each.  I don’t want to come off sounding greedy but am very excited that you have thought of us.

Thank you again, and I will be waiting for you to write me back before I make our list.

sincerely,

Tricia Bellis

---

From: mcvoght@ourmilitarykids.org
To: deleted to protect
Subject: A Holiday Opportunity from Our Military Kids
Date: Fri, 13 Nov 2009 13:25:07 -0500

To whom it may concern:

A local businessman,  Robert Nelson,  already a proud sponsor of Our Military Kids, recently expressed an interest in providing additional recognition to several of Our Military Kids grant recipients during the holidays.  With your permission, and some gift ideas for your children, we would like to compile a list of children and one special “Christmas Wish List” item to Bob.  He in turn will forward this list to his personal business associates. If interested, these business associates will contact us and indicate the child they would like to shop for.  This opportunity will help brighten their holidays knowing they could give something back to a military family who has served our country.

If you are interested in participating in this opportunity, please respond back to this email.  Include your current mailing address, names and ages of your children and a gift idea for each.  We appreciate the opportunity to offer you this special holiday thank you.  (Last names and mailing addresses will be made available only to the individual doing the shopping.)

Sincerely,

Our Military Kids

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of REALTORS®.

Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home-owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said.

Conditions for First-Time Buyers
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers,shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.

NAR President Charles McMillan said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average.”

Inventory Falls
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.

Home Sales Breakdown
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.

Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.

Here’s the region-by-region picture:

• Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.
• Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.
• South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.
• West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

The following is the same advice I gave my son four years ago when he purchased his first home and the same my dad gave me over 30 years ago when I purchased my first home. I still thank my dad for having done this and Bob still thanks me as well.  I am fairly certain you would do the same in four and in 30 years. 

You really want to stretch yourself a bit when you purchase your first, second, or third home.  It requires some minor sacrifices from a personal lifestyle perspective, but will pay huge dividends in the long run.  On average, home prices increase by about 10 percent per year.  Since the end of WWII, we have repeatedly seen peaks and valleys in the housing market.  We have also seen that, on average, home prices have doubled every ten years.  The recent downturn really was not much worse than some of the previoues drops.  In fact, there have been worse, particularly following the Savings and Loan crisis of the late 1980’s.  More importantly, right now we are in the midst of the most affordable home market in almost 30 years.  I would venture say that we are likely to see gains in home values (in our region) more to the tune of about 15 percent per year for the next few years.  Even using the more conservative 10 percent average, if you purchase a $250,000 home, you will see a gain of more than $25,000 per year.  A home purchased for $450,000 will see a gain of $45,000 per year, etc.

 Using current mortgage interest rates of about 5 percent, your mortgage payments plus taxes and insurance (referred to at PITI) will cost about $55 per month per $10,000. (This factors in the savings that you will have on your state and federal taxes based on a 25 percent tax bracket.)  Your annual in costs will be roughly $625 per year for every $10,000 increase in price.  If historical trends continue to play out, your increased costs of $625 per $10,000 will result in an increase in equity of $1,000.  A $50,000 increase in mortgage would cost about $3125 per year with a $5000 potential increase in equity. At the same time, you will be living in a considerably more comfortable home than your current home.

I don’t know nor need to know your income level, but an average couple in this region earns a minimum of somewhere around $100,000+ per year. Assuming an annual cost of living increase of about two percent, this income increase by about $2,000 per year.  It might be worth thinking about cutting back on some of your entertainment expenses for a year or two to broaden the selection of homes available and imrpove your ability to see increased gains in the long run.

 Of course, this is simply a suggestion. I am certainly happy to show you homes in the whatever price range you’d like, but am certain you will thank me profusely in three to five years if you decide to look at the next higher tier of homes.

  A recent Wall Street Journal article, entitled “A Toe in the Water” written by Dave Kansas gives a very good perspective on what it happening in the marketplace.  Dave is located in London and would presumably suggest diving into the local Northern Virginia market based on our current trends.

  Last week I sent a total of 22 listings in Arlington for one of my clients to review.  When we got together yesterday to look at these homes, 10 were already off the market. They are looking in the $650,000 to $750,000 price range.  This is probably above the typical first time homebuyer range and is not likely affected by the $8,000 tax credit.  I also went out with another couple on Saturday looking in the $200,000 range.  We had a list of about ten homes to see which I had check for availability Friday night.  From this list, only two were available by Saturday afternoon and they were complete wrecks. 

  To learn more about your home as an investment, I suggest reading “The Automatic Millionaire Homeowner” by David Bach.

  Let me know when you are ready to take advantage of this incredible market.

The current housing slump began when first time homebuyers stopped moving into the market. I had a real gut feeling that this was going to start happening back in mid-2005 when we started seeing more and more homes and condos being offered for rent in the DC Metropolitan area. This started to occur because the number of homes for sale exceeded demand. My personal feeling was that speculators had increased the demand for new homes starts with the idea in mind that they could then sell for a 20-30 percent profit once the home was completed. This was the ultimate pyramid scheme that was doomed to collapse. Once it did, more and more homes became available for rent at increasingly lower rent prices.

We now have a situation where home prices (in some areas) are significantly below 2004 prices. This is particularly the case in Loudoun, Prince William and Prince Georges counties. Mortgage payments, particularly after taxes, are now lower than rents. As a result, buyers have begun to recognize the unprecedented opportunities they are being offered and are beginning to come back into the market at a rapidly increasing rate. The following information is from a Weichert report:

A recent study released by the National Association of Realtors (NAR) at the 2008 Realtors Conference & Expo provides important information about first-time homebuyers. Specifically, the research showed that first-time buyers are responding to favorable market conditions, purchasing homes in greater numbers and helping to reduce the inventory of homes for sale.

The number of first-time buyers rose to 41 percent from 39 percent of all transactions in 2007, and NAR Chief Economist Lawrence Yun expects this figure to continue increasing due to the first-time buyer tax credit of up to $7,500 (see my earlier posting form more info on the tax credit) and better access to financing through the FHA loan program.

In addition, these facts about first-time buyers were released:

• The median age was 30, down from 31 in 2007.
• The median income was $60,600.
• The typical home purchased cost $165,000.
• 92% chose a fixed rate mortgage

Anyone who is still renting and has a decent credit score should seriously consider purchasing a home before the market starts heading back up. The days of 25 percent increases each year won’t be back, but I am firmly convinced that we will begin to see 4-5 percent appreciation beginning next year. With a ten percent downpayment, this translates into a 100 percent appreciation on your investment.

To better understand how this works, give me a call or send an e-mail.