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Michael Gillis

Michael Gillis
701 W. Market Street  Perkasie  PA 18944
Phone:  215-469-0213
Office:  215-453-7653
Fax:  267-354-6911

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Consumers Show a Little More Cheer this Holiday Season

November 16, 2012 1:30 am

U.S. households are expected to spend an average of $521 on gifts this holiday season, The Conference Board reports today. Nearly 10 percent of consumers said they plan to spend more on holiday gifts this year, up from 7 percent last year. Approximately 31 percent plan to spend less than last year, down from 40 percent a year ago. 

The survey of holiday gift spending intentions, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The survey was conducted for The Conference Board in October. 

"As the holiday season approaches, consumers appear to be in better spirits than last year," says Lynn Franco, director of Economic Indicators at The Conference Board. "Our survey results show a slight boost in holiday spending intentions. Retailers are cautiously optimistic that this holiday shopping season will be better than last."

Consumers will be searching for bargains this holiday season, with more than one-third saying they expect more than half of their purchases to be on sale or discounted. Nearly 70 percent expect to purchase a portion of their holiday gifts online, with about 20 percent saying more than half of their gifts will be purchased online.

Source: The Conference Board Holiday Spending Survey, November 2012

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November 2012 U.S. Economic And Housing Market Outlook

November 16, 2012 1:30 am

Freddie Mac recently released its U.S. Economic and Housing Market Outlook for November showing what a healthy national housing market should look like taking into account recent trends, key housing indicators and the shifting demographic patterns that will define a new and realistic trajectory over the next five years. A healthy housing market should have activity below the levels recorded during the peaks of the prior decade.

Outlook highlights - what a healthy housing market should look like:
  • Housing starts increasing to about 1.7 to 1.8 million dwellings per year compared with 2.1 million in 2005.
  • Home sales increasing to about 5 percent of the housing stock, or about 6.5 to 7.0 million homes per year, compared with sales of 7 percent of the stock in 2005.
  • U.S. house price appreciation rising gradually to about 3 percent per year compared to 11 percent of 2005.
  • Vacancy rates easing further to about 1.7 percent on for-sale homes and 8 percent for rental homes, down from peaks of about 3 percent in 2008 and 11 percent in 2009, respectively.
  • Serious delinquency rates nearing 2 percent, down from a peak of 9.5 percent in early 2010.
  • "What a healthy housing market should look like will dismay those who keep comparing housing to what it was during its peak years,” explains Frank Nothaft, Freddie Mac, vice president and chief economist, However, taking into account recent trends, key housing indicators and the shifting demographic patterns that will define a new and realistic trajectory toward a healthy housing market, the long-term prognosis is promising – just don't expect the housing market to wake up at 98.6 degrees tomorrow morning."
Source: Freddie Mac

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Mortgage Delinquency and Foreclosure Rates Decreased During Third Quarter

November 16, 2012 1:30 am

The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 7.40 percent of all loans outstanding as of the end of the third quarter of 2012, a decrease of 18 basis points from the second quarter of 2012, and a decrease of 59 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 29 basis points to 7.64 percent this quarter from 7.35 percent last quarter. Delinquency rates typically increase between the second and third quarters of the year.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans on which foreclosure actions were started during the third quarter was 0.90 percent, down six basis points from last quarter and down 18 basis points from one year ago. The percentage of loans in the foreclosure process at the end of the third quarter was 4.07 percent, down 20 basis points from the second quarter and 36 basis points lower than one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 7.03 percent, a decrease of 28 basis points from last quarter, and a decrease of 86 basis points from the third quarter of last year.

The combined percentage of loans in foreclosure or at least one payment past due was 11.71 percent on a non-seasonally adjusted basis, a nine basis point increase from last quarter, but a 92 basis points decrease from the same quarter one year ago.

“Mortgage delinquencies decreased compared to last quarter overall, driven mainly by a decline in loans that are 90 days or more delinquent,” observes Mike Fratantoni, MBA’s Vice President of Research and Economics. “The 90-day delinquency rate is at its lowest level since 2008, and together with the decline in the percentage of loans in foreclosure, this indicates a significant drop in the shadow inventory of distressed loans - a real positive for the housing market. The 30-day delinquency rate increased slightly, but remains close to the long-term average for this metric. Given the weak economic and job growth in third quarter, it is not surprising that this metric has not improved.”

“The improvement in total delinquency rates was accompanied by a further drop in the foreclosure starts rate, which hit its lowest level since 2007. Moreover, the foreclosure inventory rate decreased by 20 basis points over the quarter, the largest quarterly drop in the history of the survey. The level however, is still roughly four times the long-run average for this series as we continue to see back logs of loans in the foreclosure process in states with a judicial foreclosure system. The foreclosure rate for judicial states decreased slightly to 6.6 percent and the foreclosure rate for non-judicial states showed a steeper drop to 2.4 percent. The difference in the foreclosure rates of the two regimes is at its widest since we started tracking this metric in 2006.”

Source: Mortgage Bankers Association (MBA)

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Keep Holiday Cooking and Decorating Safe

November 15, 2012 1:28 am

Cooking and decorating, both long standing holiday traditions, help make the season merry and bright. However, these activities can also increase the chances of home fires. In fact, cooking remains the number one cause of home fires, with incidents increasing during the festive season ahead. According to the NFPA (National Fire Protection Agency), fires involving holiday lights and decor result in $25.5 million in property damage each year.

In an effort to help prevent home fires, UL (Underwriters Laboratories), a global science safety company, is encouraging families to follow a few important safety tips this holiday season.

"In the kitchen, even the most experienced chefs make mistakes," says UL Consumer Safety Director, John Drengenberg. "Trying to do too many things at once while cooking can potentially lead to accidental fires and related injuries. Protect your family by being a smart and safe chef."

UL offers the following safety guidelines to help prevent accidents in the kitchen.

Watch the Heat:
  • When simmering, baking, roasting or boiling food, check regularly
  • Never put metal in the microwave
  • Keep kids at least three feet from the stove and other areas where hot food is cooked
Clear Clutter:
  • Keep the cooking area clean and clear of anything that can catch fire, such as potholders, oven mitts, wooden utensils, paper or plastic bags, food packaging, towels or curtains.
  • Wear short, close-fitting or tightly rolled sleeves when cooking, as loose clothing can dangle onto stove burners and catch fire if it comes into contact with a gas flame or electric burner .
  • When cooking, it's also a good idea to turn the handles of pots inward, in case small kids enter the kid-free zone and reach for the handles.
Avoid Overloading Sockets & Check Cords:
  • Kitchens are particularly susceptible to overloaded outlets. Always pay attention to the recommended wattage for cords and power strips
  • Remember to remove the plug by reaching up and pulling it out of the socket rather than yanking on the cord. Cords should also not be placed underneath anything that is heavy nor should they be tacked to a wall to get them out of the way
Around the Home
According to the NFPA, holiday trees, lights and decor cause an average 390 fires resulting in 21 civilian deaths and 41 injuries per year. Fire research conducted by UL found that today's residential fires burn hotter and faster due to the combination of open floor plans and increased use of synthetic building materials, furnishings and decor.

Each year, UL engineers and scientists perform thousands of rigorous tests on products such as holiday lights and electric decorations and is offering the following safety guidelines to help families identify and prevent hazards that too often result in accidents or tragedy.

Check Your Lights, Check Them Twice:
  • Inspect all of your electric lights and decorations for damage or wear
  • Cracked sockets, frayed or bare wires and loose connections may pose a fire or shock hazard
Decorate with a Safe Eye:
  • Cords should not be run under carpets or tacked up with metal nails or staples
  • Small decorations can be a choking hazard for small children or pets and should be kept out of reach
  • Keep flammable materials "three feet from the heat" of lit candles or fireplaces
Indoor or Outdoor? Look for the UL mark:
  • Indoor-use-only light strings are marked with UL's green holographic label
  • Indoor- or outdoor-use light strings are marked with UL's red holographic label
  • Only use light strings and other electrical decorations that bear the UL mark. The UL mark indicates that samples of that product have been tested to UL's safety standards
Source: UL

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Green Building Accelerates through Economic Downturn, Says Study

November 15, 2012 1:28 am

Around the world, the green building marketplace is accelerating, according to a new study recently released by McGraw-Hill Construction in partnership with United Technologies at the Greenbuild International Conference and Expo in San Francisco.

The study indicates a shift in the global construction market, now viewing green as a business opportunity rather than a niche market. Overwhelmingly, firms report that their top reasons to do green work are client demand (35 percent) and market demand (33 percent) - two key business drivers of strategic planning. The next top reasons were also oriented toward the corporate bottom line - lower operating costs (30 percent) and branding advantage (30 percent). In contrast, the top reason in 2008 motivating the green building market was doing the right thing (42 percent) and market transformation (35 percent), followed by client and market demand.

In the next three years, the sectors with the largest opportunity for green building around the world include new construction and renovation projects. Sixty-three percent of firms have green work planned in new commercial projects and 45 percent in new institutional projects by 2015, and 50 percent have plans for green renovation work. In the United Kingdom and Singapore, green renovation projects were planned by the greatest number of firms at 65 and 69 percent respectively. In Brazil and UAE, new projects pose the largest opportunity. In Brazil, 83 percent of firms are planning to work on new green commercial projects over the next three years, and in the UAE, 73 percent have new green institutional projects planned.

Green buildings are also expected to garner business benefits for building owners. For new green building projects, firms report median operating cost savings of eight percent over one year and 15 percent over five years, as well as increased building values of seven percent (according to design and construction firms) and higher asset valuation of five percent (according to building owners).

Other significant findings include:
  • Human factor benefits are driving green building more today compared to three years ago - 55 percent cite greater health and well-being as the top social reason for green (tied with encouraging sustainable business practice), up from only 29 percent in 2008.
  • Energy use reduction tops the environmental reasons for green building - 72 percent say it is the important environmental reason to engage in green building.
  • Water use reduction is more important today - 25 percent of study respondents cite reduced water consumption as the top reason, up from only four percent in 2008. It is particularly important in the UAE (64 percent cite it as a top reason), Brazil (39 percent), and the U.S. (32 percent), ranking as the second most important environmental factor in these countries.
  • Improved indoor air quality is also more important today - 17 percent cite it as a top reason to engage in green building, up from only three percent in 2008.
  • For firms not currently doing any green project work, the primary driver that they think will motivate future green activity is the desire to do the right thing. This is in sharp contrast to those involved, suggesting this market is not as familiar with the business case for green building.
The study also revealed that approximately 48 percent of the work by U.S. respondents was green, with that share expected to increase to 58 percent by 2015. These results are consistent with McGraw-Hill Construction's 2013 Dodge Green Construction Outlook that sized the green building share of new construction starts in the U.S. to be 44 percent by value, and up to 55 percent by 2015.

The findings are drawn from a McGraw-Hill Construction survey of firms across 62 countries around the world. Firms include architects, engineers, contractors, consultants and building owners.

Source: McGraw-Hill Construction

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'Black Friday' a Good Time to Launch Remodeling Plans

November 15, 2012 1:28 am

With the holidays fast approaching, you probably aren’t putting much thought into home improvement—except, perhaps, to grumble about the fact that you’ll have to cook another Thanksgiving meal in your outdated kitchen, or steer guests toward your home’s only bathroom with its leaky faucet.

If those complaints sound annoyingly familiar, you may not want to put off thinking about a remodel until the spring. According to Dan Fritschen, a golden opportunity to get a head start on planning the house of your dreams is right around the corner, and it goes by the name “Black Friday.”

“When many people think about Black Friday, they have visions of sale-crazed hordes trampling each other in pursuit of merchandise, claustrophobia-causing crowds, and a shopping experience that’s so horrible it’s not worth the savings,” acknowledges Fritschen, founder of www.remodelormove.com. “But if you have a remodeling project in mind, you might want to conquer your fears and revise your post-Thanksgiving plans.”

Most remodeling projects aren’t cheap—even if you’re going the DIY route. And the super sales that are offered on Black Friday and Cyber Monday could realistically take your expenses from budget-busting to reasonable. If you aren’t convinced, consider the cost of a kitchen remodel in which appliances can easily account for 30 percent of the total. Saving just 10 percent on those purchases might bring down your expenditure by thousands of dollars.

“Plus, at this time of year, remodeling supplies aren’t as sought-after,” Fritschen shares. “So you’ll often find that home improvement retailers discount them that much more in order to get consumers’ attention.”

If you’re planning on remodeling your home in the foreseeable future, here’s what Fritschen says you should do now to get the most for your money:

Make a list and check it twice. According to Fritschen, most homeowners are shocked by how complicated remodeling actually is. For instance, if you’re redoing your kitchen, you might naively focus the majority of your planning on picking out appliances, cabinets, and countertops…and once work commences, be blindsided by the amount of details you’ve overlooked (think drawer knobs, paint colors, lighting, cabinet hinges, faucet types, disposals, etc.).

“Now’s the time to educate yourself on everything you’ll need for your remodel,” Fritschen says. “Try to formulate as complete a list as possible, including photos so that you won’t accidentally miss any discounts or sales. Years of experience have taught me that autumn and winter are some of the best times to buy, since remodeling ‘season’ usually takes place in the spring and summer.”

Go shopping with a strategy.
Most retailers publish the details of their post-Thanksgiving sales well in advance, so take a little time to map out where and when to get the best deals. Keep in mind that, thanks to modern technology, you might save the most money if you do your shopping from your trusty laptop.
Read up on return policies. If you aren’t planning on starting your remodel immediately, check and double-check return policies before buying materials. Especially on big-ticket items, you’ll want to make sure you’re not making an irreversible commitment.

“A thousand little things could change between now and next summer, for example,” Fritschen says. “You might need to change your plans because of budget issues. The product you bought might turn out to be defective. You might simply change your mind and decide that you’d like to go with a different style of light fixture. Make sure you don’t accidentally lock yourself into something you’ll later regret buying.”

Surf the ’Net—but be smart about it. As Fritschen has mentioned before, you may be able to find some of your remodeling supplies online—it’s called Cyber Monday for a reason! But before you whip out the credit card and click away, do a little preparation. If possible, Fritschen suggests scoping out big-ticket items in person. For instance, it’s well worth your time to measure the refrigerator you’ve been eyeing and look at it next to the paint and countertop samples you’re considering.

“Pay special attention to shipping fees and, again, return policies,” he adds. “If you have to send something large or heavy back and pay return shipping, it could eat up your savings and more.”
Remember that there’s an app for that! According to an NRF.com holiday spending survey, 33 percent of consumers will use their smartphones to research products and compare prices in the coming month. And if you’re remodeling, you have a great incentive to join them.

“So, even if you usually stay home, watch football, and graze on leftover turkey on Black Friday, consider changing those plans if you have a remodel coming up,” concludes Fritschen. “Braving the crowds can save you a surprising amount of time, money and stress when it’s time to start tearing down walls and installing new appliances next year.”

Source: remodelormove.com

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Americans Dish on Thanksgiving Holiday Preparation and Plans

November 14, 2012 1:28 am

Game and jigsaw puzzle company Buffalo Games Inc. got the scoop from Americans about their Thanksgiving holiday plans this year. The survey sought to identify when people begin Thanksgiving holiday preparation, where they shop, what they buy, and what they do on Thanksgiving Day.  

Key survey findings include: 
  • Preparation Time: 48 percent of those who host Thanksgiving dinner prepare two or three days ahead.
  • (Hungry) Gift-Giving Guests: 55 percent of guests bring the Thanksgiving host/hostess a gift; 84 percent of those gift givers bring food, such as dessert or a side dish. 
  • Cooking versus Carving: 48 percent of hosts do not carve their own turkey – a partner or significant other does.
  • Turkey, football and … games?: In addition to eating, 64 percent of respondents say they will watch football and 56 percent of respondents will play  board games on Thanksgiving Day.
  • Nap time: 41percent admit they will take a nap on Thanksgiving. 
  • Going back for seconds: 52 percent of respondents say they will have two helpings of Thanksgiving dinner.
  • Why bother slaving over dinner?: More than one third (34 percent) of respondents enjoy Thanksgiving leftovers more than dinner
  • Who is really helping in the kitchen?: While 86 percent of guests say they help with clean-up and dishwashing after Thanksgiving dinner, only 56 percent of hosts say they let guests help with post-Thanksgiving dinner clean-up.
Source: Buffalo Games
 

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Survey Shows Dual Income Couples Fueling Market

November 14, 2012 1:28 am

Dual income households are comprising a greater portion of the housing market and helping sales recover, according to an annual study recently released by the National Association of REALTORS®.

According to the 2012 National Association of REALTORS® Profile of Home Buyers and Sellers, 65 percent of all buyers are married couples, 16 percent are single women, nine percent single men, eight percent unmarried couples and two percent other; percentages of single buyers were slightly higher in 2011. However, just two years ago, 58 percent of buyers were married, 20 percent were single women, 12 percent single men and seven percent unmarried couples; the overall marketshare of single buyers declined a total of seven percentage points over the past two years. Before 2010, the marketshares moved within a very narrow range, generally a percentage point or two.
Paul Bishop, NAR vice president of research, said the study is painting a clearer picture of the impact of mortgage limitations. “We’ve known for some time that stringent mortgage credit standards have been holding back home sales, but these findings show single buyers have been hurt the most over the past two years. Total home sales would be 10 to 15 percent higher without these unnecessary headwinds,” he said. 
“The continued growth in married couples as single buyers shrink demonstrates that households with dual incomes are more successful in obtaining a mortgage.  However, given the historically favorable housing affordability conditions, most single-income buyers could also purchase a home and stay well within their means, if lending requirements were more sensible,” Bishop said.
First-time homebuyers edged up to a 39 percent marketshare in the past year from 37 percent in the 2011 study.  Long-term survey averages show that four out of 10 buyers are typically first-time buyers, who are critical to a housing recovery because they help existing homeowners to sell and make a trade.
The study shows the median age of first-time buyers was 31 and the median income was $61,800.  The typical first-time buyer purchased a 1,600 square-foot home costing $154,100, while the typical repeat buyer was 51 years old and earned $93,100.  Repeat buyers purchased a median 2,100-square foot home costing $220,000.
The median down payment for all homebuyers was nine percent, ranging from four percent for first-time buyers to 13 percent for repeat buyers. First-time buyers who financed their purchase used a variety of resources for the down payment:  76 percent tapped into savings; 24 percent received a gift from a friend or relative, typically from their parents; and six percent received a loan from a relative or friend.  Eleven percent tapped into a 401(k) fund, and six percent sold stocks or bonds.  Ninety-three percent of entry-level buyers chose a fixed-rate mortgage.
Seventy-eight percent of recent homebuyers said their home is a good investment, and 46 percent believe it’s better than stocks; 92 percent were satisfied with the buying process.
Source: The National Association of REALTORS®
 

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29 Percent of Borrowers That Refinance Shorten Mortgage Term during Third Quarter

November 14, 2012 1:28 am

In the third quarter of 2012, 29 percent of borrowers that refinanced an existing mortgage chose to shorten their loan term, based on the Freddie Mac Quarterly Product Transition Report released today. Further, refinancing borrowers clearly preferred fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or a fixed-rate.

Of borrowers who refinanced during the third quarter of 2012, 29 percent reduced their loan term, while 68 percent of borrowers kept the same term as the loan that they had paid off; three percent chose to lengthen their loan term. 
More than 95 percent of refinancing borrowers chose a fixed-rate loan. Fixed-rate loans were preferred regardless what the original loan product had been. For example, 82 percent of borrowers who had a hybrid ARM chose a fixed-rate loan during the third quarter, the highest share since the second quarter of 2010, while the remaining 18 percent chose to refinance back into a hybrid ARM.   
Those borrowers who refinanced under the Home Affordable Refinance Program (HARP) were more likely to take out a long-term, fixed-rate mortgage. For example, 25 percent of HARP borrowers shortened their loan term when they refinanced during the third quarter, compared with 31 percent of borrowers who refinanced outside of HARP. Further, of those borrowers who were refinancing out of an ARM, if they refinanced under the HARP program, then more than 95 percent chose a fixed-rate mortgage; in contrast, of borrowers that had an ARM but did not refinance through HARP, about one-half opted for another hybrid ARM.
Source: Freddie Mac

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Positive Housing Sentiment Continues Steady Climb

November 13, 2012 1:28 am

Americans continue to show growing confidence in home price increases over the next 12 months, providing further indications of a slow but steady housing recovery, according to results from Fannie Mae's October 2012 National Housing Survey. Taken together with rental price expectations, which surged in October and remain much higher than home price expectations, more consumers may be motivated to purchase a home in the coming months.

"This has been a year of steady growth in the percentage of consumers with positive home price expectations," said Doug Duncan, senior vice president and chief economist of Fannie Mae. "Increasing household formation, encouraged by an improving labor market, is adding additional momentum to the housing recovery and putting upward pressure on rental price expectations. Expected increases in both owning and renting costs may encourage more consumers to buy and add further strength to the housing recovery already under way."  

Continuing the positive upward trend seen over the past year, survey respondents expect home prices to increase an average of 1.7 percent in the next 12 months. The share who say home prices will decrease in the next year dropped to 10 percent – 13 percentage points lower than October 2011 and the lowest level since the survey's inception in June 2010.

Additionally, the positive difference between those saying home prices will go up and those saying they will go down remained steady at a survey high of 26 percentage points. The percentage who believe mortgage rates will go up climbed four percentage points to 37 percent following a steep drop in September. Returning to the July 2012 level, respondents' average rental price expectation jumped by 0.8 percent to 3.9 percent, and 50 percent believe home rental prices will rise in the next year – a three percentage point increase over last month and the highest level since the survey began. 

When asked about the state of the economy, the share of respondents who say it's on the right track dropped to 38 percent, down three percentage points from last month. Conversely, those who say the economy is on the wrong track climbed three percentage points to 56 percent. The share of consumers who expect their personal financial situation to get better or stay the same over the next year remained essentially level at 43 percent and 40 percent, respectively.

Other highlights from the survey include:
  • Consumers' average home price change expectation edged up slightly to 1.7 percent, continuing the positive trend of the past year. 
  • Ten percent of those surveyed say that home prices will go down in the next 12 months, a 13 percentage point decrease since October 2011, and the lowest level since the survey's inception in June 2010. 
  • After a sharp drop last month, the percentage who think mortgage rates will go up rose four percentage points in October to 37 percent. 
  • Seventy-two percent of respondents say it is a good time to buy, while 18 percent say it is a good time to sell, consistent with the trends seen over the past six months. 
  • The average rental price expectation jumped up by 0.8 percent to 3.9 percent, a return to the level seen in July 2012. 
  • Fifty percent of those surveyed say home rental prices will go up in the next 12 months, a three percentage point rise over last month and the highest level since the survey's inception in June 2010. 
  • Nineteen percent of respondents say their household income is significantly higher than it was 12 months ago, a slight increase from last month's total of 17 percent. 
  • Household expenses remained stable over the past month, with 56 percent responding that their household expenses stayed the same compared to 12 months ago.
Source: Fannie Mae
 

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