Doug MacGray’s Weekly Financial Update – Week of February 25, 2008
John Thomas
February 25, 2008
FORECLOSURES OVERHYPED?:
The foreclosure figures used by much of the media come from RealtyTrac, a source that counts each filing in the foreclosure process. One house has to go through several steps in the process (each with its own “filing”), so counting each one as a separate foreclosure, as many in the media do, is inaccurate.
HOME VALUES DECREASING?:
In a one year period, home prices have decreased by about 4.5 percent. However, since January 2000, the national average home price has risen by 80.45 percent, according to the S&P/Case-Shiller index of home prices. Declines from record highs should be put in perspective. However, according to Moody’s Economy.com, nearly 8.8 million homeowners, or 10.3% of the total, have mortgages that are higher than the value of their houses.
A SLUMP IN HOUSING ACTIVITY:
Housing starts were up overall in January of 2008, but all of the gains were in the multi-unit construction area. Single-family home construction actually dropped 5.2%. Even worse, building permits fell 3.0%, the lowest level since 1991, which doesn’t look good for the future of the housing sector.
LEAVING YOUR ESTATE TO YOUR CHILDREN “IN EQUAL SHARES”:
Four out of five people split what they have equally among their children, according to an article in this month’s Money Magazine. When I was drafting estate planning documents, I found the percentage even higher, but I always asked questions to make sure it was right for them. Here are some circumstances which could dictate that “equal shares” may not be right:
- One of your children has an addiction, such as gambling, alcohol, drugs
- One of your children got a full scholarship to college for whatever reason (grades, athletics, etc) but you paid for all four years of your other children’s tuition.
- One of your children takes you into their home in your old age, while your other children live far away.
- One of your children provides significant monetary assistance to you in your old age, while your other children are unable or unwilling to do so.
- One of your children is smart, ambitious, and/or independent and sets out on their own at age 18, while another languishes at home living off of you well into their 20s (or even later).
What I would more commonly see is variations on the manner of distribution. For example, one child gets her inheritance “at my death” in a lump sum and the other gets it in several staggered distributions due to his past indiscretions in dealings with money.
It is an issue that deserves a lot of thought, so don’t let your estate planning attorney rush you through this decision.
MONEY DOES NOT BUY HAPPINESS…WHAT DOES MAKE US HAPPY?:
A recent article on MSN found the following are the best indicators of happiness (I have not done any independent research to determine the veracity of any of these findings):
- Being married. 43% of married men and women report being “very happy” while only 24% of unmarried people say the same.
- Attending religious services at least once a week.
- Living in a sunny region.
- Employment.
- Good health.
- Being socially engaged.
- Helping others.
- Living in a well-designed city.
If you would like to speak with Doug or schedule an appointment to meet with him, please give me a call at 302-368-7132 Ext.12 and I can provide you with Doug’s information.
If you would like to apply for a Mortgage Loan, you can APPLY ONLINE HERE, you can call John Thomas at 302-703-0727.
John R. Thomas – NMLS 38783
Certified Mortgage Planner – Primary Residential Mortgage, Inc.
302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office
248 E Chestnut Hill Rd, Newark, DE 19713
