U.S. Home Prices Accelerated In February as Sales Rise

The Gilmer Free Press

WASHINGTON, D.C. — U.S. home prices climbed at a faster pace in February than the previous month, driven by higher sales and a limited supply of available houses.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 5% in February from 12 months earlier, S&P said Tuesday. That is up from a 4.5% pace in January.

Faster sales likely drove the price gain. Signed contracts to buy homes jumped in February, yet the number of Americans listing their homes for sale remains low. That has led to bidding wars in some cities.

Home prices are increasing at a more sustainable pace than in the past two years, when they rose at a double-digit pace for 14 straight months. Yet some economists warn that the ongoing increases may price many would-be buyers out of the market, particularly as pay gains remain weak.

All 20 cities in the index reported year-over-year price gains in February. Home prices in Denver jumped 10%, the most of any city, followed by San Francisco with 9.8%. Denver is one of two cities, along with Dallas, where prices have surpassed their previous peak during the housing boom. Prices nationwide are 10% lower than the July 2006 peak.

Some areas may remain below their bubble peaks for years. Home prices in Las Vegas plunged nearly 62% during the housing bust and are still 41.5% below their previous peak, S&P said.

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.

Home sales rose at a healthy 6.1% pace in March to a seasonally adjusted annual rate of 5.19 million, the National Association of Realtors reported last week. That suggested the housing market may be returning to solid ground as the spring buying season gets underway.

Yet there aren’t many homes on the market. Nationwide, the number of homes for sale is equal to 4.6 months of sales, below the six months that is typically available in a healthy housing market.

Building more new homes would help boost supply, but home construction has been weak. Developers are focused increasingly on building apartments and more expensive homes for wealthier buyers. Home builders began work on new houses and apartments at a seasonally adjusted annual rate of 926,000 in March, down 2.5% from the previous year.

One factor pushing up prices is a steady decline in so-called “distressed” sales, which include foreclosures and short sales. Short sales occur when the seller owes more on a home mortgage than the house is worth. Both usually sell at steep discounts to traditional home sales.

Real estate data provider CoreLogic said Tuesday that distressed sales fell to 13.5% of all sales in February, down from 16.5% a year earlier. Fewer lower-priced distressed sales push up overall prices.

That figure has dropped precipitously since it peaked at 32.4% in January 2009, during the worst of the housing bust and recession.

Still, the figures also show that the housing market is not yet back to normal. Distressed sales made up just 2% of all sales before the housing bust, CoreLogic said.

Cell Phones for Kids

The Gilmer Free Press

To make the correct call, though, do the math to be sure you are ready for far-reaching consequences. After all, it’s not just a one-time purchase that parents are agreeing to, but a stiff monthly charge that could last for many years to come.

If you get your 12-year-old a plan that costs, say, $50 a month, that will set you back $4,200 though age 18. And that’s not even including any ancillary costs like equipment and upgrades, repairs and app purchases. Data overages, especially if your kids are heavy video watchers, could inflict significant extra damage.

Indeed, 23% of households report paying much more for their kids’ phone plans than they originally expected, according to a study by the National Consumers League.

That doesn’t have to be the case if you are thoughtful about how your decisions will affect household finances. Here are some suggestions:

1. Start with baby steps

A basic cell with phone and texting capability can be very reasonable indeed; Sprint, for instance, offers a ‘WeGo’ starter phone for only $9.99 a month.

There are also prepaid plans available, with varying restrictions on minutes and data, and low-cost handsets. T-Mobile, for instance, offers a $40-a-month prepaid plan with unlimited talk, text and data on its own network, and 1 GB of nationwide LTE data. With hard limits in place, parents are essentially saving themselves from any unwanted bill surprises.

Consider it something of a trial period: If your kids prove responsible with their new gadgets, and aren’t constantly calling or texting their buddies late into the night, then you can talk about graduating to more elaborate phones and plans.

When you are all ready, every major carrier offers a version of a family share plan, like Verizon’s More Everything and AT&T’s Mobile Share Value. Additional lines cost less money than standalone packages, but contracts are often involved.

At that point the training wheels are off - and if you are sharing your family data package with your teenager, be prepared to blow through some usage limits.

2. Have the money talk

“The question that must always be discussed is, ‘Who will pay for what?‘“ says Mark La Spisa, a planner with Vermillion Financial in South Barrington, Illinois. “It’s critical to talk about it in advance of a child receiving their first phone.“

For an 8- or 9-year-old, it is unfair to expect anything beyond a token contribution. But teens who have their own income from part-time or summer work can start chipping in to cover part of the bill.

Also consider who the phone is really benefiting. If it is mainly for the parents’ peace of mind, that’s one thing. But if it is only for their enjoyment, and parents are not deriving any benefit at all, then “then they should be footing the bill,“ says personal-finance expert Gail Vaz-Oxlade, author of “Money Rules”.

3. Resist the lure of the constant upgrade

For her own kids, Vaz-Oxlade pays the bills, because she wants to get in touch with them. But she draws the line at hopping on the “hamster wheel” of getting them the latest-and-greatest gadgets on the market. That’s just throwing away money, in her opinion.

As a result she, her son and her daughter are all still using trusty iPhone 4s they got a few years ago.

Guidelines: Before You Buy a Home

The Gilmer Free Press

Before you shop for a home, allow a Realtor to prepare you for the process.

Did you know, if you cannot buy a home in cash, you will need help with financing a loan? First, you should find out if you are credit worthy. Credit is one key component to obtaining a loan. The history on your credit will reveal:

1. How often you pay your bills.

2. The amount of debt you owe.

3. The length of credit history reflecting how often you use your accounts and how many accounts you have open.

4. Recent credit inquiries.

5. The amount of available credit you have.

Did you know you can run a free credit report? Why do lenders require paperwork to determine your debt and income? What is the difference between loan pre-qualification and loan pre-approval? Ask a Realtor. A Realtor will prepare you for your appointment with a lender.

When you receive your lender pre-approval, you are ready to shop for a home.

Discuss your top priorities with a Realtor when buying a home. What is important to you? Is it the location, school district, size of home, condition of home, pricing, neighborhood? These reasons are custom to each individual and their needs.

Establishing a relationship with a Realtor will help your Realtor understand your needs so he or she can find the right fit. Did you know your Realtor can add you to the automated Multiple Listing Service so you can have real-time access to homes available in your neighborhood based on your search criteria? Yes, you already have access using several websites, but where do they obtain their information? It starts with the agent entering information on the Multiple Listing Service. Once that information is submitted, then it becomes public information.

Why not start with the resource – the Realtor?

What do you do when you find a home? Your Realtor will review the offer terms and help you determine the fair market value. Time lines are also important to review as you will be held accountable to perform. In a multiple offer marketplace with a high demand to purchase homes, your Realtor can assist you to put your best foot forward. Understanding the negotiation process before you get there will empower you to make good decisions for a smooth transaction.

When you enter into contract, what are your rights? As a buyer, you deserve to exercise your due diligence in verifying information, condition and discovering as much about your home purchase as possible. Your Realtor has a fiduciary duty to disclose all known facts and guide you through the process using utmost care, integrity, honesty and fair dealings.

What about escrow? What purpose does this serve? Do you need title insurance? If so, why? These are questions you should ask your Realtor. The breakdown on the escrow process as well as the necessary steps to achieve prior to getting the keys to your new home should not be a mystery. Just ask a Realtor.

Ask yourself, are you ready for the next step? Contact a local Realtor for assistance.

Glaxo Recalls Flu Vaccine Due To Potency Problem

The Gilmer Free Press

WASHINGTON, D.C. — GlaxoSmithKline is recalling remaining doses of a popular four-in-one flu vaccine because of effectiveness problems.

The company alerted U.S. customers Tuesday that the vaccine can lose potency over time and fail to adequately protect against some strains of the flu. The Flulaval Quadrivalent Thimerosal-free vaccine in prefilled syringes is designed to protect against four strains of influenza virus.

But Glaxo said in a letter it “cannot rule out potential suboptimal protection” in people who received the vaccine in early January or later. The letter was sent to about 1,000 customers throughout the U.S., including wholesale distributors, pharmacies, government agencies and physicians.

The recall affects about 1.7 million doses, but a company spokeswoman says it’s unclear how many of those actually remain on the market. More than 99 percent of the vaccines were distributed in 2014, before the product began losing potency, according to GlaxoSmithKline’s Anna Padula.

“The lots are being recalled due to the potential for reduced efficacy offered by the vaccine and not as a result of any identified safety concern,” Padula said in a statement. The British drug and vaccine maker has also notified the Food and Drug Administration.

The recalled vaccines represent about 7 percent of the total 24 million flu vaccine doses Glaxo distributed in the U.S. this season.

Health authorities generally recommend getting the flu vaccine in the fall but many people don’t get vaccinated until later months. Flu season generally peaks around January or February.

Glaxo’s so-called quadrivalent vaccine is part of a new group of injectable and inhalable products that protect against four strains: two for Type A flu and two for Type B flu. Older vaccines traditionally only protected against three strains: two Type A strains and one Type B strain.

Glaxo said it launched the recall after company testing showed its vaccine’s potency against the B strains could fall below minimum effectiveness standards. Type B flu tends to strike children more than the middle-aged.

The Centers for Disease Control and Prevention recommends the flu vaccine for nearly everyone ages 6 months and older. Yet usually less than half of that target population follows the advice. Flu is particularly risky for seniors, children, pregnant women and people of any age with asthma, heart disease and other chronic diseases.

GlaxoSmithKline is headquartered in London, with U.S. operations in Philadelphia and North Carolina.

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