For the first time in years, buying a home may beat renting.Two factors are at play, according to researchers who recently crunched the numbers, Ken Johnson of Florida International University and Eli Beracha of East Carolina University for a paper to be published in Real Estate Economics.

First, rents, though mostly stagnant the past few years, are expected to head higher as more people bitten by the housing bust turn to renting. Rents could rise 7% in each of the next two years, according to Peggy Alford, president of Rent.com.
Second, home prices have finally dropped enough to create a buying opportunity. Nationally, prices are down 32% from their peak, set in 2006.
The net result is that home price gains would need to average only 3.25% annually to beat renting, according to Beracha and Johnson. To make the math work, you have to stay in the home for at least eight years. (Buy or rent? 10 cities rated)
Beracha and Johnson compared the cost of owning with the cost of renting.
Renting has usually come out ahead, they say. Buying typically leads to higher monthly and annual bills once all costs are factored in — mortgage payments, property taxes, maintenance and transactional costs.
Those higher costs can be offset if the home gains in value. But renters — the researchers assume — can invest the savings. And that is a big part of why the professors say renting has typically been the better deal. “I was shocked at how often renters won,” said Johnson.
Another reason had been the push to homeownership, which resulted in a premium on home values. “My dad always told me not to ‘throw my money away on rent,’” said Johnson. “This mania toward homeownership tends to drive prices up.”
But that’s changing: Homeownership has dropped to 66.4% from a peak of 69.1% in 2005, according to the Census Bureau. (See “Home prices in ‘Double-Dip’”)

American dream still home ownership
How much better buying will be depends on location. Of the 23 cities Beracha and Johnson looked at, Seattle is the best place to buy right now. When renters invest in portfolios that include stocks, the appreciation rate required over the next eight years there is 4.84% and the area’s historical average is 6.06%.
Buyers should beware the assumption that home prices will rebound, even from these depressed levels, said Dean Baker, co-director of the Center for Economic and Policy Research.
Hiring has been slow and there are tons of potential foreclosures that could flood the market with distressed homes, depressing prices.
Even in cities where people are, theoretically, better off renting, they may not be in reality. Paying off a mortgage is a forced savings plan, said Baker. The mortgage bill comes in every month, the homeowner pays it and the mortgage balance goes down.
Renters, meanwhile, are just as likely to spend their savings. They’ll wind up with less money than homeowners, which is kind of what your dad was saying all along.

Military members who make Permanent Change of Stationone duty station to another are authorized many entitlements. Below is a quick glance of the major entitlements authorized in conjunction with moving from one duty assignment to another.

HOUSE HUNTING TRIP PRIOR TO MOVE. Military members are allowed a permissive TDY (Temporary Duty) for up to 10 days in conjunction with a Permanent Change of Station (PCS) move between and within the 50 states & District of Columbia. By “Permissive TDY” that means there is no transportation or per diem paid, but members are not charged for leave.

Military members may request (from their commander) this permissive TDY anytime after they receive their written re-assignment orders. However, because there is no travel entitlement, most military members elect to use this benefit, after signing out of their old base, but before signing into their new base. In other words, they plan to arrive at their new base 10 days early, which then gives them 10 days for house-hunting, which is not charged as leave.

The “house-hunting” entitlement only applies for members who will not be living in the barracks/dormitories after arrival at the new assignment.

TEMPORARY LODGING EXPENSE (TLE). TLE is designed to partially offset lodging and meal expenses when a member and/or dependents need to occupy temporary lodging in CONUS (Continental United States) in connection with a PCS. The member receives reimbursement (for member and family members) for temporary lodging and meal expenses, up to $180 per day.

If the member is moving from from one CONUS base to another, he/she is authorized up to 10 days TLE, either at the losing duty station or at the new duty station (or any combination, up to 10 days total).

If the member is moving from CONUS to overseas, they can only receive up to five days TLE at the losing duty station. If the member is moving from Overseas to CONUS, they can receive up to 10 days TLE at the new CONUS duty station after arrival.

TLE is not paid for lodging made during the actual travel days from one duty station to another (that’s an entirely different animal, called “per diem,” rather it’s for temporary lodging (in the states) at the old duty station, before departure, or at the new duty station, after arrival.

The legal authority for TLE is 37 USC 404a. For more information about TLE, see the TLE FAQ Page, on the Military Per Diem, Transportation and Allowance Committee Web Site.

TEMPORARY LODGING ALLOWANCE (TLA). What TLE is to CONUS, TLA is to overseas. Up to 60 days (can be extended) may be paid for temporary lodging expenses and meal expenses after a military member (and his/her family) arrive at a new overseas location, while awaiting housing. Up to 10 days of TLA can be paid for temporary lodging expenses in the overseas location, prior to departure.

DISLOCATION ALLOWANCE. Military members may be entitled to a Dislocation Allowance (DLA) when relocating their household due to a PCS. DLA is intended to partially reimburse relocation expenses not otherwise reimbursed. For more information and current rates, see our DLA Information Page.

PER DIEM FOR PCS TRAVEL. Military members receive a “per diem” allowance, which is designed to partially reimburse for lodging and meal expenses when traveling from one duty station to another.

When traveling by Privately Owned Conveyance (POC), military members are paid a flat rate of $85.00 per day for each day of authorized travel used. When the member travels cy commercial means, they are paid the established per diem rate, (under “Lodging Plus”) for the new Permanent Duty Station (PDS), or the rate for the delay point if the member stops overnight.

Per diem for dependents is 3/4 of the member’s applicable rate for each dependent 12 years old or older and 1/2 of the member’s rate for each dependent under 12 years.

TRAVEL BY PRIVATELY OWNED CONVEYANCE (POC). When members elect to travel to their new duty station by POC (auto), they are entitled to receive a mileage allowance, in lieu of cost of airline ticket. The reimbursement rate depends on the number of authorized travelers in the vehicle. For complete information, see our PCS/TDY Travel Mileage Rates Information Page.

DEPENDENT TRAVEL WITHIN CONUS BY OTHER THAN POC. Within CONUS dependents may be authorized to travel by commercial means (air, rail, bus), unless they elect to travel by POC, from the old PDS to the new PDS. The military member can be reimbursed for this travel, up to what it would have cost the military to purchase an airline ticket.

HOUSEHOLD GOODS TRANSPORTATION. Military members can ship Household Goods from their old duty station to their new duty station. Authorized up to 18,000 pounds, but varies by grade & whether or not the member is with or without dependents. See our Household Goods Weight Tablefor more information.

In addition to allowing the military to arrange for movement of Household Goods, the member can elect to move it themselves, and receive reimbursement if the move is within the CONUS. For details, see our article about “Do-It-Yourself,” or “DITY” Moves.

The American dream of homeownership is a very feasible aspiration for 2012.
There are many benefits of owning a home. Yet some first-time buyers are skeptical of purchasing with the uncertainty surrounding the housing market.
The uncertainty many reference when speaking about the housing market involves a specific date when home values will increase. Since no one can pinpoint this date, the word uncertainty (when paired with the housing market) often reveals a negative connotation.
There are some factors we can be certain about in this housing market such as home values rebounding. This is true; the housing market often moves in cycles.
It’s safe to assume that many Americans harbored the same uncertainty during the George H. W. Bush administration in the early 1990s when the national homeownership rate fell from its previous historic high of 64.4 percent in 1980 to a low of 64.1 percent in 1991.
In the 1960s Lyndon Johnson illustrated a correlation between homeownership and accountability by stating “owning a home can increase responsibility and stake out a man’s place in his community…The man who owns a home has something to be proud of and reason to protect and preserve it.”
This statement is still true more than 50 years later. There are many reasons to take pride in homeownership such as:
Appreciation – Buying a home now (at the current rates) can almost ensure your home’s appreciation in the future. Mortgage rates are near historic lows and home prices in many parts of the country are down. This is the perfect recipe for home appreciation. Additionally, many foreclosed homes are available for a fraction of the original cost. This can translate to a higher profit if you decide to sell once the market rebounds.
Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible. The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.
Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset. Capital assets are given preferential tax treatment.
Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals. Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace. This trend is called equity building. Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster. This rapid payment process allows borrowers to:
Pay off the principal balance faster
Lock in near-record-low interest rates
Shorten the length of their home loan
Own their home faster
Pay substantially less mortgage interest
Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners. Also, home equity is the largest single source of household wealth for most Americans.
Pride – Homeownership offers many benefits to many different types of people. For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk.

Eco-friendly. Carbon footprint. Global warming. Energy-efficient. These catch phrases have become part of our lexicon as we’ve become more aware of our impact on the environment and our role in protecting it. As a homeowner, there are some simple, inexpensive steps you can take to make your home energy-efficient. Get started on the road to being “green” with these five tips:
Change Your Light Bulbs
By replacing just five incandescent light bulbs with compact fluorescent (CFL) bulbs, you can save $100 per year on electric bills while using up to 75 percent less energy and removing greenhouse gases from the environment.
Buy ENERGY STAR® Appliances
ENERGY STAR-qualified appliances, such as refrigerators, washers and air conditioners, meet a higher level of energy efficiency set by the Environmental Protection Agency and U.S. Department of Energy than standard models. According to ENERGY STAR, if just one in 10 homes used ENERGY STAR-qualified appliances, the impact could be compared to planting 1.7 million new acres of trees. And, switching to these appliances is not only good for the environment, but easy on your pocketbook. Although these appliances may costs more, you can reduce your energy bill by $80 per year.
Seal Up
Cracks and air leaks represent cash seeping from your doors and windows. Get rid of air leaks in doors, windows and other areas by caulking gaps and cracks. This will help decrease your heating and air conditioning bill. But make sure you use silicone sealants. Acrylic caulk tends to shrink, while silicone sealants are waterproof and won’t shrink or crack, creating less waste.
Use Less Water
Did you know that roughly 60 percent of a home’s water consumption takes place in the bathroom, according to the California Urban Water Conservation Council? The largest culprit is the toilet, which accounts for 27 percent of your household supply every year. By installing low-flow toilets, showerheads and faucets, you can save thousands of gallons of water each year. In addition, replace leaky fixtures. That slow-dripping faucet can waste as much as 2,400 gallons of water per year.
Adjust the Thermostat
When adjusting your home’s thermostat, the rule of thumb should be: turn up the dial in the summer and down in the winter. Lowering the temperature by just one degree will reduce your electrical costs. And if you use a programmable thermostat, you can program your air-conditioning and heating systems to reduce output while no one is at home or at night while you sleep. Ceiling fans are also helpful in circulating the air to keep the room cool in the summer and warm in the winter.
Going green doesn’t have to be overwhelming or costly. By making just a few small changes within your home, you can help decrease energy consumption and help make the world a “greener” place.
If you are in the market for a home in the Clarksville/Ft. Campbell area, stop by either of our offices (2503 Wilma Rudolph Blvd, or 101 Ringgold Rd) or one of over 90 other locations around town and pick up a copy of Got Homes? magazine, or HomeFinder magazine (which includes an insert of Got Homes?). This month’s issue includes a “Green Home Indicator” to let you know which homes on the market are already “green”.
If you are interested in finding the perfect home now, give us a call or drop us an e-mail and we can set you up on an automated e-mail search for “green homes” in our area.

Six Questions that Can Help You Gain Insight on a Prospective Home

Unlike an automobile, you can’t test drive a home before you purchase it. You have to base your decision on other factors such as layout, condition and much more. And, of course, the seller is obligated to disclose the property’s condition that may alert you to issues such as previous mold, defective water heater or leaky roof. Yet, that still doesn’t always paint the entire picture. Here are six questions you should consider asking the seller to gain additional insight about the prospective home before you make a final decision.

1. Why is the seller selling the house?

This question may help you evaluate the “real value” of the property. Is there something about the house the seller does not like? If so, you may be able to adjust the purchase offer accordingly.

2. How much did the seller pay for the home?

In some instances, the answer to this question may help you negotiate a better deal. However, it is important to remember that the purchase price is influenced by several factors, like the current market value and any improvements the seller may have made to the home. The original purchase price might not have anything to do with the current value of the house.

3. What does the seller like most and least about the property?

By asking the seller what he or she likes most and least about the property, you might get some interesting information. In a few cases, what a seller likes the most about a home might actually be something the buyer is looking to avoid. For example, if the seller describes his house as being in a “happening neighborhood,” the buyer might consider this a negative factor because the area may be too noisy or busy for his or her taste.

4. Has the seller had any problems with the home in the past?

It is also a good idea to ask the seller if he or she has had any problems with the home while living there. Has the seller had problems with a leakage from the upstairs bedroom in the past? If so, even if the leak has been corrected, the floor and walls around the bathroom might have been damaged. You should check that these items were repaired properly.

5. Are there any nuisances?

Use this question to find out about barking dogs, heavy airplane traffic or even planned changes to the community, such as a planned street widening. This may give you insight on why the seller is really moving.

6. How are the public schools in the area?

Because the value of a community is usually greatly influenced by the public schools in the area, finding out the buyer’s perception can give you some insight about the quality of the area’s schools.

Knowing all you can about a prospective home will help you make a more informed decision as well as offer. A real estate professional can be a great resource in helping you get your key questions answered and give you advice on how to evaluate your findings.