Houston Real Estate Market on the Upswing?

The table below shows the difference between the market experienced in February, June and October YTD 2009.   As you can see, as 2009 progresses, the single-family housing market is slowly marching toward a healthier market.

 

Houston Market Improvement Comparison 2009 of Single-Family Homes
Market Indicator	February ‘09	June ‘09	Oct. ‘09	% Change from June ‘09
# units sold	-24%	-20%	-11%	+81%
Dollar volume sold	-33%	-24%	-14%	+71%
Average Sales Price	-12%	-6%	-4%	+50%
Median Sales Price	-8%	-2%	-1%	+50%
# of Pending Sales	-23%	-21%	-14%	+50%
Active Listings	-20%	-22%	-21%	-.46%

A summary of October YTD market statistics compared to last year:

 

• Sales are down from October YTD 2008 by 11% with 45,391 single-family homes.
• Dollar volume sold is down from October YTD 2008 by 14% with $9,202,482,156.
• Average sales price is currently $202,738, down by 4%.
• Median sales price is $153,000, down by 1% [half of the homes sold above and half below this midpoint range.
• # of contracts written [pending] are 31,101 and that represents 14% fewer than found last year.
• Active listings, a metric that is good if on a decline, are currently 27,758 or 21% less than last year.  This is also a metric that in Houston is the exact opposite heard frequently in the national news.

For more detailed information, go to Prudential Gary Greene Blog

First Time Home Buyer Credit bill under consideration as explained by CPA

This is a summary of the tax changes in the Baucus-Reid substitute amendment to H.R. 3548:

“The first-time homebuyer credit, set to expire on November 30 under current law, would be expanded and liberalized as follows (changes 2 through 4 would apply for residences bought after the enactment date):

“(1) The credit would sunset on Apr. 30, 2010, but for those who enter into a written binding contract before May 1, 2010 (to close on the purchase of a principal residence before July 1, 2010), the credit would sunset on June 30, 2010.

“(2) The credit would only be available for homes with a purchase price of $800,000 or less (currently there’s no price ceiling).

“(3) The credit would not be restricted to first-time homebuyers. It could be claimed by taxpayers who have owned and used the same residence as their principal residences for any 5 consecutive-year period during the 8-year period ending on the date of the purchase of the subsequent principal residence (i.e., the one that would qualify them for a credit). However, the homebuyer credit for these “long-time residents” could not exceed $6,500.

“(4) The modified AGI-based phaseout would be liberalized. The credit would begin to phase out for individuals with modified AGI above $125,000 ($225,000 for joint filers); currently the phaseout begins at $75,000 and $150,000 respectively.

•  
  • “To help combat abuse of the homebuyer credit (see Newsstand e-mail 10/23/09), the amendment would include in IRS’s mathematical error authority any omission of the homebuyer credit recapture (this would apply for homes bought on or after the enactment date). This authority allows IRS to summarily assess mathematical or clerical errors without conducting an audit. Additionally, the credit would not be available to taxpayers who can be claimed as a dependent, or to those under age 18. New documentation requirements also would apply along with prohibitions against certain intrafamily purchases.
  • “The homebuyer-credit recapture requirement would be waived for military personnel, including members of the Foreign Service and intelligence community, forced to sell as a result of an official extended duty of service. Additionally, military personnel serving outside the U.S. for at least 90 days in 2009 or 2010 would have one additional year to qualify for the homebuyer credit. “

As explained by Jim Turlington, CPA with Turlington, Reeves & Richard, PLLC – 16360 Park Ten Place, Suite 340, Houston, Texas 77084 – Office (281) 398-5661 Ext. 203 – Fax (281) 398-7409

Census Bureau to Being …. Word of Caution to Keep in Mind

2010 Census to Begin

THIS IS PRETTY BASIC ADVICE; BUT, IN TODAY’S TIMES, I CAN SEE IT COULD LEAVE AN OPEN DOOR FOR PASSING OUT YOUR PRIVATE INFORMATION.

WARNING: 2010 Census Cautions from the Better Business Bureau

Be Cautious About Giving Info to Census Workers by Susan Johnson

With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but cautious, so as not to become a victim of fraud or identity theft. The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data.

The big question is – how do you tell the difference between a U.S. Census
worker and a con artist? BBB offers the following advice:

If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice. Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don’t know into your home.

Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. > Census.

REMEMBER, NO MATTER WHAT THEY ASK, YOU REALLY ONLY NEED TO TELL THEM HOW MANY PEOPLE LIVE AT YOUR ADDRESS.

While the Census Bureau might ask for basic financial information, such as a salary range, YOU DON’T HAVE TO ANSWER ANYTHING AT ALL ABOUT YOUR FINANCIAL SITUATION. The Census Bureau will not ask for Social Security, bank account, or credit card numbers, nor will employees solicit donations. Any one asking for that information is NOT with the Census Bureau.

AND REMEMBER, THE CENSUS BUREAU HAS DECIDED NOT TO WORK WITH ACORN ON GATHERING THIS INFORMATION.. No Acorn worker should approach you saying he/she is with the Census Bureau.

Eventually, Census workers may contact you by telephone, mail, or in person at home. However, the Census Bureau will not contact you by Email, so be on the lookout for Email scams impersonating the Census.

Never click on a link or open any attachments in an Email that are
supposedly from the U.S. Census Bureau.

For more advice on avoiding identity theft and fraud, visit www.bbb.org

PLEASE SHARE THIS INFO WITH FAMILY AND FRIENDS.

Susan G. Komen Race for the Cure in Houston 10/3/09

 

 

Dear Friends and Family,

Our Prudential Gary Greene Katy office always takes on a project for National Volunteer Day. This year we are joining thousands of other volunteers in a race for life.

I recently accepted the challenge to raise a mere $100.00 funds to support the 2009 Komen Houston Race for the Cure® being held on October 3rd in downtown Houston.  For those that know me and my pitiful ankle (broken or actually “ruined” according to the Ortho four years ago and still recovering from 2 surgeries) understand if this turns into a “Hobble for the Cure” but it will be worth it.

Please join me in the fight against breast cancer by pledging your support in the Race. Your tax-deductible contribution will fund local innovative outreach, awareness and treatment programs for the medically underserved in the greater Houston community as well as national cutting-edge breast cancer research.  

Please click here to support my participation.  I truly appreciate your support and will keep you posted on my progress. I plan to post photos and a short blog about the actual event.

 

I am so proud of our Pink Brigade here at Prudential Gary Greene, Realtors in Katy, TX. We are all racing or walking in honor of Rosemay Derstler’s daughter Nicole and sister Linda, both undergoing treatment for breast cancer as well as Phylis and April who are living as proof of the cure.

Thank you for your generosity.  Imagine Life Without Breast Cancer.

Sincerely,

Christi Borden

Should we extend the First Time Home Buyer Tax Credit?

Unless you have been living under a rock, you may have heard that the First Time Home Buyer’s Tax Credit is due to expire at the end of November and along with that, the incentive for new buyers to enter the real estate market. There are some that say this is simply a boondoggle for buyers who would have bought anyway without the monetary bonus. I beg to differ… in my opinion as a “boots on the ground” Realtor working with first time home buyers who were happy renters and only decided to purchase a home with the help and benefit of this incentive… hey, $ 8500 goes a long way toward helping with the down payment, new furnishings or paying the mover.

There are several versions of this bill before our legislators at the moment seeking an extension … which is supported by the National Association of Realtors. I know what you are thinking and yes, that does sounds a bit self-serving for Realtors to support a bill that will help sell real estate. Very much like if GM or Chrysler lent its support for the extension of the infamous Cash for Clunkers program.  But it goes a bit deeper than simply trying to protect real estate transactions. Another version not only seeks an extension but also broadens the coverage to any buyer – which would be a boon to the move-up segment of our society but may prove too costly to pass. Personally, I would love this version to pass but at a minimum, the first time home buyer is the consumer who will benefit the most from an extension of the existing plan.

According to the NY Times Online in a recent article released on September 15th,

“Mark Zandi, chief economist of Moody’s Economy.com, favors expanding the credit to all home buyers, even investors, into next summer. “The risks of not doing something like this are too great,” he said. “I don’t think the coast is clear.” James Glassman of JPMorgan Chase echoed those views but said he favored continuing to restrict the credit to first-time buyers.

On the other side of the issue is the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. It labeled the original credit as one of the worst provisions of the stimulus package, on the grounds that the money is a bonus for people who would buy a house anyway. The center has an even dimmer view of extending the credit to all buyers. “Is this the best way to spend money we don’t have?” asked senior fellow Roberton Williams.

Dean Baker of the Center for Economic and Policy Research called the credit “a questionable redistributive policy” from renters to home buyers, but said that he used it himself when he bought a house.”

Our nation’s economic health has been and will always be driven in part by our housing market. I agree with Mr. Zandi that while the costs for the credit is high, the cost of doing nothing is so much higher. We are sitting on the edge of recovery and this extension will help push us further toward the brighter future that exists around the corner. Be sure and drop an email or note to your legislator to let them know how important this issue is to your nation’s recovery.

If you would like more information about who qualifies for the current program, click here to visit my previous post “Understanding the First Time Home Buyer’s Tax Credit Before it is Too Late!”

Seller’s Disclosure: What does a seller have to disclose to a buyer?

in a word: EVERYTHING… 

In the bad old days, the seller did not have this requirement placed on him and it was a case of Caveat emptor – “Let the buyer beware!”. Times have changed and the onus is now entirely on the seller to make known any and all material facts regarding the condition of the property he or she is selling.

In real estate transactions, the root cause for most problems is lack of disclosure by the seller. Funny thing is… most of the time it is entirely unintentional. Why would anyone in their right mind try to hide an issue that will come out anyway through inspections, diligent research or nosy neighbors happy to share any and all facts known or rumored about your home. Yes, your nosy Nellie next door did happen to see the foundation repairman and the roofer two years and will certainly make sure your buyer knows all about it – in great detail.

One interesting disclosure item that always causes issues is disclosing a prior death on the property. Now, deaths by natural causes, suicide, etc. are not required to be disclosed but those caused by a defect of the property or criminal activity – yes, DISCLOSE, DISCLOSE, DISCLOSE! Should you let the buyer know about a death that is not necessarily required? That is a judgement call you will have to make. Example: my brother-in-law bought a home in Austin a few years ago. When we visited, being the chatty gal that I am, I stopped by the neighbor’s house to introduce myself and learn more about the area. I found out in less than one minute that the prior owner had committed suicide in the backyard. Now, that is not a required disclosure item but… should it have been shared? Probably. Would it have caused a termination in the contract… Probably not. My feeling about the matter is: Would you want to learn about something of this nature from the seller or later from the neighbors? 

When I work with sellers, I deliver to them the Seller’s Disclosure form, a 5 page document that is required by the State of Texas to be filled out to the best of the seller’s ability and given to the buyer of any property within a mandated time frame according to the actual contract. There are individuals who are exempt from the use this form: Banks or other entities who own foreclosure properties, Probate administrators, etc. but the normal seller in the State of Texas must render this form… and that is where he/she gets in trouble.

I am often asked by my sellers…”Should I disclose this or that…?” As your Realtor, I am not allowed to assist in the completion of this form but my answer to that is always the same… a resounding YES! If the question was brought up in the seller’s mind, then YES, disclose whatever it is. The litmus test is you should disclose any and all items that if not disclosed, could cause the buyer to reconsider his offer. Meaning, if the non-disclosure of an item would cause your buyer to either make a different offer or pass on the property, then yes, DISCLOSE, DISCLOSE, DISCLOSE. Even if it was a roof repair 20 years ago…Again, I repeat… IF IN DOUBT, DISCLOSE. 

You can always explain your answer. I have had clients add several pages of explanation to the disclosure form, which is entirely appropriate. The disclosed item may have no affect at all on a buyer’s interest in a property. In fact, most homes (like people) have a past and as long as the issues are not on-going or improperly addressed, your buyer will proceed as usual. But by making your disclosure, your buyer simply will not have a reason to come back to you later if any and all matters are disclosed up front.

Another important item to disclose is any inspection report on the home within the last 4 years: structural, mechanical, environmental, termite, etc. And if you had a major issue that needed remediation (mold, for example), that really should always be disclosed even if completely re-mediated. You can again attach your explanations of repairs made and receipts for those repairs.

Disclosure items are a mine field of trouble if handled incorrectly so the best road to take is always the high road. Remember, you will be a buyer someday, too and will want your future seller to treat you as you should treat today’s buyer for your home.

First Time Home Buyer Market Heating Up!

Houston and Katy market update:

Overall, the October home sale market continued to show softness as the market pivoted away from some of the higher end homes.  Rentals once again were red hot – up 36% from this time last year with increasing rental rates. Inventory continues to decline the fewest homes available on the market for the last 18 months. This is good news, considering the smaller buyer pool we are currently seeing in our area.

Sales to first-time homebuyers are at their highest in seven years. Over 40 percent of homes recently sold went to first-time buyers, according to a 10,000-person survey by the National Association of Realtors.

 

Other survey findings include:

• a record 32 percent of buyers found their houses first on the Internet;
• almost 90 percent looked for information online during their home search;
• almost 80 percent were concerned about commuting costs;
• 43 percent said heating and cooling costs were very important factors when they made their purchase; and
• more than 40 percent of sellers had to offer incentives to buyers, including assistance with closing costs and home warranty policies.

What does this mean for Katy, TX? It means that homes in the lower spectrum price ranges: $ 250,000 and under are experiencing the most brisk activity in our area. Our current months of inventory of the South Katy area is 4.6 months. This means if homes sold at last years’ pace, it would take this long to sell all available homes if no more homes were added to the market. Our current average days on the market is running 70 or more days – and this will differ when we break down the various price ranges. Homes on the high end are experiencing over 9 months inventory – and that is a lot of homes to compete with. Custom homes over $ 1 million have over 16 months of inventory and must be very competitive on price and ready to wait for a very special buyer.

Our market is so diverse and so fast paced, market information changes constantly. If you would like to receive my video newsletter from Realty Times, post your request here or email me at christi@christiborden.com.

 

 

Understanding the buyer tax credit!

This credit is very not necessarily a true credit so I went to the source, a lender who specializes in first time home buyers and she sent me the following information:

1.      Who is eligible to claim the $7,500 tax credit?
First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.

2.      What is the definition of a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.

3.      What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.

4.      Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been “purchased” on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

5.      What is “modified adjusted gross income”?
Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income” or AGI. AGI is total income for a year minus certain deductions (known as “adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.

6.      If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phase-out limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.

7.      Can you give me an example of how the partial tax credit is determined?
Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.

Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.

Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

8.      Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as “married filing separately” (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.

9.      Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.

10.     I heard that the tax credit is refundable. What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).

11.     What is the difference between a tax credit and a tax deduction?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.

12.     Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
No. The tax credit cannot be combined with the MRB home buyer program.

13.     I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
No. You can claim only one.

14.     I am not a U.S. citizen. Can I claim the tax credit?
Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of “nonresident alien” in IRS Publication 519.

15.     Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.

16.     Why must the money be repaid?
Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.

17.     Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.

18.     If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

19.     For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phase-out would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount. Sent by Christine A. Boles, Mortgage Consultant, Gibraltar Mortgage Services, LLC

If you need further clarification, please post here and I will get answers for you.

Houston Real Estate Update – November 18

The Houston housing market continued to feel the effects of the troubled national economy in October and residual business interruptions caused by Hurricane Ike. New monthly data released by the Houston Association of REALTORS®  (HAR) reflects improvement from market performance in September, when Ike derailed thousands of real estate transactions. However, the number of property sales across the greater Houston area declined last month when compared to October 2007, with sales of single-family homes down 20.1 percent. The average price of a single-family home dipped 1.6 percent last month to $194,607 from $197,751 in October 2007. That still marks the second highest average price for an October in Houston. At $142,000, the median price of a single-family home in October fell 2.7 percent. Year-to-date home prices are still up compared to 2007 and national figures show Houston continues to fare better than many other U.S. markets, some of which have experienced deprecations of as much as 40 percent. Sales of all property types for October 2008 totaled 4,962, down 21.6 percent compared to October 2007. Total dollar volume for properties sold during the month was $943 million versus $1.2 billion one year earlier, a 22.9 percent decline. “Houston remains the envy of real estate professionals around the country, who discussed their sales and pricing concerns with us at this month’s National Association of REALTORS® conference in Orlando,” said Michael Levitin, HAR chairman and principal of HTownRealty.com. “Month’s inventory in Houston is about half the national average, and on a year-to-date basis, prices here are up about three percent from 2007. Nonetheless, we must watch closely to see what further action the federal government may take to stimulate the economy, particularly on behalf of homeowners.” October Monthly Market Comparison The month of October brought Houston’s overall housing market disappointing results when comparing all listing categories to October of 2007. Total property sales and total dollar volume fell, as did average and median single-family home sales prices. The number of available properties, or active listings, at the end of October fell 8.2 percent from October 2007 to 49,016. That’s 1,139 fewer active listings than September 2008, and is seen as an indication that inventory levels are balanced and that home prices should remain stable. Month-end pending sales – those listings expected to close within the next 30 days – totaled 3,579, which was 21.5 percent lower than last year and suggests another likely sales decline next month. The month’s inventory of single-family homes for October came in at 6.3 months, the lowest level since March of this year. That compares to the October 2007 single-family homes inventory of 6.2 months.

ALL CATEGORIES October 2007 October 2008 PERCENT CHANGE Total property sales 6,327 4,962 -21.6% Total dollar volume $1,233,550,946 $943,444,534 -22.9% Average single-family sales price $197,751 $194,607 -1.6% Median single-family sales price $146,000 $142,000 -2.7% Total active listings 53,407 49,016 -8.2% Total pending sales 4,562 3,579 -21.5% Months inventory* 6.2 6.3 +1.2%

* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.

Single-Family Homes Update At $194,607, the average sales price for single-family homes reached the second highest level recorded for an October in Houston, down 1.6 percent from October 2007 when it was $197,751. The overall median price of single-family homes in October was $142,000. That compares to the national single-family median price of $190,600 reported by the National Association of REALTORS®. These data continue to demonstrate the higher value and lower cost of living that prevail in the Houston market.

Additionally, total October sales of single-family homes in Houston came in at 4,202, down 20.1 percent from October 2007 and the fourteenth straight monthly drop.

HAR also reports existing home statistics for the single-family home segment of the real estate market. In October 2008, existing single-family home sales totaled 3,526, a 17.3 percent decrease from October 2007. At $175,392, the average sales price for existing homes in the Houston area fell 5.3 percent compared to last year. The median sales price of $130,000 for the month was also down 3.7 percent from one year earlier.

Townhouse/Condo Update

The number of townhouses and condominiums sold in October fell compared to one year earlier. In the greater Houston area, 421 units were sold last month versus 534 properties in October 2007, translating to a 21.2 percent decrease in year-over-year sales.

The average price of a townhouse/condominium increased to $161,428, up 0.7 percent from one year earlier and the highest figure for the month of October. The median price dipped 1.5 percent to $129,000 from October 2007 to 2008. That figure is the second highest historically for the month of October. Lease Property Update Demand for single-family and townhouse/condominium rentals increased in October, continuing an upswing triggered by Hurricane Ike, as many sought short-term housing while engaging in storm-related recovery projects. Single-family home rentals rose 36.0 percent in October compared to a year earlier, while year-over-year townhouse/condominium rentals were up 34.1 percent. Houston Real Estate Milestones in October Second highest average single-family home sales price for an October ($194,607); Highest average townhouse/condominium sales price for an October ($161,428); Second highest median townhouse/condominium sales price for an October ($129,000); Lowest month’s inventory of single-family homes since March 2008 (6.3 months).

The computerized Multiple Listing Service of the Houston Association of Realtors® includes residential properties and new homes listed by 26,000 Realtors throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 53,000 properties may be found on the Internet at http://www.har.com.The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants. The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.) Founded in 1918, the Houston Association of Realtors® (HAR) is a 27,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual membership trade association in Houston, as well as the second largest local association/board of Realtors® in the United States.

Real Estate prices across US – Great mapping tool

I just got this today and thought it was fascinating, and I think you will too.

You can move your mouse across most cities in the USA and by clicking on the little house you can then see the median price and the drop/gain in prices.  As you check on the median prices and the average increase or decline from the previous year, you will note that the Houston Market is very strong compared to the majority of the nation. Unfortunately, the Katy/West Houston area is not defined on this map but I will be happy to share that we have been in the # 1 and # 2 position for hottest markets in Houston for the majority of 2007 and 2008. Katy is still very strong and a wonderful place to purchase property and to raise a family.

To see the map click HERE.

As reported on my blog and in my newsletter, houses are being gobbled up now in some markets. In fact, many buyers are purchasing properties in depressed areas, sitting on them and waiting until the market conditions improve. This tells us that there is promise, after all we all need a place to live !

If you are sitting on a stagnant or decreasing IRA or 401K, did you know that you can move those funds (without penalty) into a Self-Directed IRA plan with a trustee/custodian and purchase real estate? Sound interesting? This a fabulous way to have more control over your retirement accounts as well as have the liquidity to move into the real estate market. I know, there are nay sayers who feel that the real estate market is too risky.  Well, have you seen your stock holdings lately? Risky is too soft a word for what happened to many of us. The interesting thing is while many stock holdings have lost up to 50% of their value, most real estate markets have held firm – with the exception of the speculative markets of California, Florida, Nevada and Arizona. These are markets that were unrealistically inflated by speculation and needed a correction – much like the dot com stocks several years ago. Of course, these are the only market we hear about in the news so everyone thinks the entire nation is up for a Fire Sale. Nothing could be farther from the truth.

When I speak about real estate investing, I am not speaking about speculation. That is a very risky enterprise and not a place to put your retirement funds. There are many solid real estate investments out there. In fact, the Warren Buffett’s and Donald Trump’s of the world are already adding to their portfolios. 

I am happy to share more information about Self-Directed retirement accounts and how you can take control of your nest egg. Good Luck and Happy Investing…

Understanding the First Time Home Buyer’s Credit… Before it is Too Late!

1.   Who is eligible to claim the tax credit?
If you are a first-time home buyer purchasing a new home or a resale-you are eligible for the tax credit.  The purchase must take place on or after January 1, 2009 and before December 1, 2009 to qualify for the tax credit. As it applies to the tax credit, the purchase date is the date when the home closes and the title to the property transfers to the home owner.

2.   What is the definition of a first-time home buyer?
The tax credit law defines a “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. If you are married, both spouses cannot have owned a home.

For example, if you didn’t own a home but your spouse did, you do not qualify.  For unmarried purchasers, the credit amount can be given to any buyer who qualifies as a first-time buyer, for instance, if a parent jointly purchases a home with a son or daughter. If you owned a vacation home or rental property not used as a principal residence you are not disqualified as a first-time home buyer.

3.   How is the amount of the tax credit determined?
The tax credit is 10 percent of the home’s purchase price, however, there is a maximum $8,000 credit.

4.   Are there any income limits for claiming the tax credit?4.
The full tax credit amount is given to buyers with a modified adjusted gross income (MAGI) of less than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. For taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) the credit is reduced to zero.  Taxpayers between these figures are prorated accordingly.
  
5.   What is “modified adjusted gross income”?
Modified adjusted gross income or MAGI is defined by the IRS.   For most buyers this will be the figure at the bottom of the first page of form 1040 or 1040A.  For Form 1040 EZ this is reported on line 4 as of 2008.

6.   If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income.

7.   Can you give me an example of how the partial tax credit is determined?
There is a $20,000 difference between those who are eligible for a full tax credit and those where the credit is reduced to zero.  If you take the amount you are over the limit by and divide it by the 20,000, this will give you the percentage that you are over the limit by.  Subtract that number from 100% and then multiply it times the $8,000.  That will give you your tax credit amount.

For example: A married couple has a modified adjusted gross income of $165,000. Their income exceeds $150,000 by $15,000. Dividing $15,000 by $20,000 yields 0.75.  This means they are over the limit by 75% and so are eligible for a tax credit of 25%.  Multiplying $8,000 by 0.25 shows that the buyer is eligible for a partial tax credit of $2,000.

Please remember that this is an example. You should always consult your tax advisor.

8.   How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid.  This tax incentive is a true tax credit. But home buyers must use the residence as a principal residence for at least three years or face having to repay it. Certain exceptions apply.

9.   How do I claim the tax credit? Do I need to complete a form or application?
You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.

10.What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence qualifies for the credit. This includes single-family detached homes, attached homes (i.e. townhomes and condominiums), manufactured homes (also known as mobile homes), modular homes and houseboats.  If it qualifies for the capital gains tax on a primary residence, it qualifies for this.

11.I read that the tax credit is “refundable.” What does that mean?
It means that the credit can be claimed even if the taxpayer has little or no federal income tax liability to offset.

For example, if you owe $6,000 in taxes and had $4,500 in taxes withheld for the year you still owe $1,500 in taxes.  You would receive a check from the government for $6,500.  ($8,000 – $1,500 = $6,500.)
Or perhaps more common would be that you have a tax liability of $6,000 and you had $7,500 withheld so you would be getting a refund of $1,500 before the credit – the credit gets added to your refund so you would get a refund of $9,500 ($1,500 + $8,000 = $9,500)
And you don’t have to have any tax liability in the year you claim the credit – but you do have to have income.

12.I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns.How can I claim the new $8,000 tax credit instead?
You may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
 
13.Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. The “purchased” date is the date the owner first occupies the house.  The date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit isdetermined by the settlement date.

14.Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.

15.I live in a district where I am already receiving a first time home buyer credit (Washington D.C.)   Can I claim both credits?
No. You can claim only one.

16.I am not a U.S. citizen. Can I claim the tax credit?
Consult your tax accountant.  If you are NOT a nonresident alien (as defined by the IRS), have not owned a principal residence in the past three years and meet the income limits you may be eligible to claim the tax credit for a qualified home purchase.

17.Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Assuming the same $8,000 tax liability from above, a taxpayer is in the 33 percent tax bracket would have their liability reduced from $8,000 to $5,360. ($8,000 minus 33%).
So the tax CREDIT is much more helpful to the buyer

18.I bought a home in 2008. Do I qualify for this credit?
No, but you may qualify for another tax credit  if you bought  your first home between April 9, 2008 and January 1, 2009.
 
19.Is there any way for a home buyer to get the money before they file their 2009 tax return?
Yes. If you believe you will qualify for the tax credit you can reduce your withholding taxes on your paycheck by adjusting your withholding amount on your W-4 via your employer or through your quarterly estimated tax payment.  You can put this saved money aside to use as a downpayment.
 
IRS Publication 919 contains rules and guidelines for income tax withholding. Please note that if the qualified purchase does NOT occur, then you will be liable for repayment to the IRS of income tax and possible interest charges and penalties.  Consult your account prior to doing this.
 
20.If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers the opportunity to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008.

Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
 
21.For a home purchase in 2009, Can I choose which year to claim the credit (2008 or 2009) to make sure I get the largest credit possible?
Yes.  You can choose to claim the credit in the tax year that will give you the greatest credit based upon your MAGI.  The purchase must take place in 2009.

Social Media… ignore at your own risk!

I had the pleasure today to address an esteemed group of custom builders, members of the Greater Houston Builder’s Association and the subject today was Social Media and Marketing. Marketing for this group has always been very traditional. It is hard to imagine my being able to impress upon them the need to jump into The Groundswell… but I did and they were so interested that we have been asked to come back again to go deeper into this subject.

One of the things I spoke about is that I am the target market for a custom home buyer in Houston. I am a married Female of an age from 35 to 55 (not saying on which range I approach), dual income, heavy saver/investor, empty nester, etc. That said, I asked the audience how they were marketing to reach me with their message. And believe me, it is the woman making the decision here. What man in his right mind would look at his “paid off” home, low taxes, fully landscaped lawn, etc and say to his wife, “Honey, I think we should move…” Yeah, that is not happening.

So how are traditional marketers trying to reach “me”?

How about Print advertisements such as Houston Chronicle and magazines? No, this does not work because I download my Chonicle daily onto my Kindle DX (as well as magazines and books) and I do this for control, ease – only highlights and main articles and no advertising.

Radio? Well, no again… I listen to my iPod and Satelite Radio has effectively allowed listeners to have control over their music and again, avoid ads.

How about TV? Nope… other than the one news channel I watch live… anything else is recorded for later and again, ads are deleted.

So what is my message here? I am a pretty normal gal and not really all that techie but I am what I term “the hidden consumer”. I am hidden in the Groundswell and only respond to those seeking to reach me in my natural habitat.

So what is the lesson here? What worked yesterday, may not work today; and what will work today, most likely will not work tomorrow. Jump in the Social Media Pool… the water is warm and inviting.

‘Tis the Season To Make a Difference For Homeless Companion Animals!

 

Give Food and Healthcare

to Homeless Companion Animals

 

   Special Pals

    3830 Greenhouse Road

    Houston, TX  77084

    281-579-PETS

 

Items Needed:

•    Pedigree (small bites) dry & wet dog food
•    Pedigree Puppy dry & wet food
•    Purina dry & wet dog food
•    Friskies dry & wet cat food (not shredded or chunks)
•    Purina dry & wet cat food (not shredded or chunks)
•    Kitchen trash bags — 13 gal.
•    Liquid bleach
•    Clay cat letter (non-scoopable)
•    Angled Kitchen brooms
•     Financial assistance for medical expenses 

 

 

  

Food & Supply Drop Off:

Saturday, Nov. 7th – 1 PM to 3 PM

Saturday, Nov. 14th – 1 PM to 3 PM

 Saturday, Dec. 5th — 1 PM to 3 PM

   Saturday, Dec. 12th — 1 PM to 3PM

 

 

Also needed  (contact Special Pals for details):

   Volunteers needed for collecting items & hospitality.  

   Posters for event

  

Unicare Health Insurance Provider Pulling out of Texas!

I found this information sent to me by my Texas Association of Realtors Board and wanted to share…

“UniCare, one of the largest providers of health insurance in Texas, is pulling out of our state. UniCare has made arrangements with Blue Cross Blue Shield of Texas to service Texas clients. All Texas residents currently insured under UniCare individual health/major medical policies can convert their policies to similar plans offered by Blue Cross Blue Shield of Texas on a guaranteed-acceptance basis, but only until Dec. 1, 2009. After Dec. 1, all transfer requests will be handled as new business and will be subject to full underwriting, which may penalize or disqualify some applicants for pre-existing conditions. “

If you are unsure as to how to convert your policy, please comment and I will do my best to assist.

Christi Borden Elected to Board of Directors of the Houston Association of Realtors

Christi Borden is newly elected director for HAR

HOUSTON, TX – October 5, 2009 – Christi Borden, Realtor with Prudential Gary Greene, Realtors, was elected to the Houston Association of Realtors (HAR) Board of Directors for 2010. Borden was elected for a two-year term, which is effective on January 10, 2010. She was elected in the category of largest firms.

Borden and other elected board members and officers will be installed on Wednesday, December 16, during the annual REALTOR® Celebration at the Hilton Americas Hotel in downtown Houston.

One of her goals as a director is to meet with the managers and brokers of the largest firms in the community and find out how she can support their needs. “Also, one of my main goals is to advance the level of professionalism in real estate and raise the bar in terms of training and brokerage oversight of agents,” Borden said. She is excited to represent the Katy area, one of the hottest real estate markets in Houston. She looks forward to bringing the unique concerns of the area to HAR and the leadership board.

Borden joined Prudential Gary Greene, Realtors in their Katy office five and half years ago. Enthusiastic about working in the Katy office, Borden loves the professional culture of Prudential Gary Greene. “We have an incredible work environment and team support that makes it a joy because real estate can be stressful. It’s great to have that team support behind you. I’m working with collaborators instead of competitors,” she said.

As a Certified Relocation Professional, Borden enjoys acting as the conduit for information and resources to her clients and getting them settled into the Katy community. She and her family lived abroad before she was a Realtor, and she is aware of the special stresses and needs of relocation families.

Borden is also a Certified International Property Specialist (CIPS) and is trained to work with incoming and outgoing buyers and sellers. Her other designations include GRI, ABR, TRC and ALHS. She also begins her second, three-year term on the Board of Directors of Texas Association of Realtors.

Active in her community, Borden is involved in Prudential Gary Greene’s sponsorship of Sunshine Kids. In the Katy office, Borden and other staffers are preparing the fourth annual Katy Sunshine Fest, which raised more than $30,000 in 2009. She also supports Susan G. Komen Race for the Cure®, and she is a supporter of the Krause Center in Katy.

ABOUT PRUDENTIAL GARY GREENE, REALTORS

Independently owned and operated, Prudential Gary Greene, Realtors became an affiliate of the Prudential Real Estate Network in 2000. Since then, it has earned a host of honors, including, most recently, receiving the company’s 10th consecutive Gibraltar Circle Award, which recognizes the top 50 companies in the Prudential Real Estate Network. Prudential Gary Greene, Realtors ranks ninth in Gross Commission Income in the Prudential Real Estate Network and is ranked #42 nationally by Real Trends in the Top 500 Brokers by closed transactions in 2008. In 2008, Prudential Gary Greene, Realtors took more listings, sold more listings, and closed more transactions than any other company in Houston. Prudential Gary Greene, Realtors was founded in Houston in 1963 as Gary Greene, Realtors. www.GaryGreene.com.

What should I buy in a Recession?

I ran across an interesting list of the best items to purchase during a recession. Of course, this article is speaking to consumers that might actually have access to cash at this time and does not suggest purchasing any of these items on already extended credit. The online article in www.Time.com presented the list but the comments are my own:

Fancy Threads: A relative bargain at this time compared to year’s past as Designer’s are finding themselves with abundant inventory and lackluster high end clientele orders. Web sites like www.Gilt.com offer many designer items (clothing, purses, and jewelry) at much lower than retail prices. This is a member’s only site and sales are offered on regularly scheduled basis. This allows the designer to knock off prices online without negatively affecting the retail value on the showroom floor. (Plus, you get a $ 25 referral fee each time one of your referrals makes a purchase… great deals and rewards, too.)

Computer Memory: You will find pretty good deals on all computers and computer products at this time. Since it is relatively inexpensive to purchase a new computer, the costs associated with upgrades are lower at this time. However, with the fast pace of technological advances… if your laptop is more than a few years old, you will be better served comparing the costs of upgrades versus new.

Cameras – I love taking photos and anyone with a passion has to feed this passion with great gear. Prices for great quality digital SLR cameras are coming down so fast that I frankly do not see any reason to use point and shoot – except for having it handy for quick party shots or when you do not want to lug around the much heavier SLR. The new cameras are so intuitive that almost anyone can handle them yet they have manual functionality for the shooter who understands what he is shooting. I am a Nikon fan but there are many different and terrific makers to choose from. Check with your local camera store (not necessarily the big box department stores as their staff may not have the experience and brand knowledge necessary to help you find the right equipment for your level of expertise and shooting style).

Stuff for your House: I recently met with the owners of www.DirectBuyHouston.com who stated that their business is usually recession proof. Why? Because today, many of us stay home for a “Staycation” or decide to stay put as opposed to move, and our home becomes a priority. This time of year is a great time to purchase furnishings. Check first with the big name stores but also visit the little guy because he may just have the perfect, unique item you are looking for and at a great price, too. Don’t forget the discount stores like The Dump and Brandon’s… they have an ever changing showroom and offer great deals if they have what you want when you want it. Google “discount furniture Houston” and you will be amazed at what you find.

Lobsters: Funny, don’t know a thing about this one except that I love Lobster. Recently,HEB had lobster tails for $ 5.99 per lb. and they steamed them while I shopped. It does not get any better than that.

New Car: It is a no-brainer that cars are a good bargain right now – even with the makers that have not been bailed out by our Government. This is certainly not the time to pay “sticker price” for any vehicle. I would research your dream car, figure out the base costs and make an offer that will compensate the dealer fairly. I usually go straight to the Fleet Manager and avoid the floor guys (sorry guys and gals) because I want to avoid “the pitch”. I am in sales and hate nothing more than a sales pitch. The more you research and know before you go, the better your deal will be. But whatever you are offered in the deal…get it in writing!

Travel: Ahhh, my favorite topic. Great travel deals are everywhere and truly benefit those with flexibility to leave on short notice. Flights can be researched through a variety of web sites but I like www.Kayak.com because it will watch the fare for you and send you notice of up or downward pricing. Another great way to go is to cruise just about anywhere. My office mates and I are taking a 7 day Carnival Cruise in a few weeks and we paid barely over $ 600 total for 7 days… Do the math, folks… no air because we drive to Galveston, all food, room, entertainment (except our 2 excursions) and all the relaxation we can stand for less than $ 100 bucks a day. WOW! Try to get that deal anywhere on land.

Country Club Memberships: Private clubs are a luxury that has been hit hard with the recession and many are seeking new members with terrific incentives. Check out your local country club and ask for discounts… all they can say is NO. Of course I am like Groucho Marx… I may not want to join any club that would have meJ.

Houses: Glad to see this on the list as this is my area of expertise. First let me state that real estate is truly “local”. Before I suggest you go out and purchase property, you really need to check with a Realtor in your area. That said, our housing market is improving all across the nation and many areas have already bottomed out and are on the incline. Foreclosures are a good buy in some areas but not so in others (due to too many factors to illustrate here.) Again, check with a professional Realtor who knows the area, the market and the ramifications of purchasing a home at this time. If you are a first time home buyer… time is running short on the Tax Credit (although I truly hope our Senators will extend this fantastic incentive) so you may get another chance. Now truly is a terrific time to buy.

Stocks: Watch what the big guys do… Warren Buffett only buys when stocks are cheap and only sells when they are high. Sounds easy but when stocks are cheap (like now) most of us are still licking our wounds from recent losses and are afraid to purchase even more stocks so we tend to get conservative and put money in low yield mutual funds, CD’s, etc. Not really all that much better than putting it in their mattresses so it might just be a good time to take our heads out of the sand and dip our toes back in the stock market.

What would you add to this list?

Mayonnaise Jar and Two Beers – Unknown Author

Mayonnaise Jar & Two Beers…
 
When things in your life seem almost too much to handle, when 24 hours in a day are not enough, remember the mayonnaise jar and the 2 beers.

A professor stood before his philosophy class and had some items in front of him. When the class began, he wordlessly picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. 
He then asked the students if the jar was full. They agreed that it was..

The professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. 
The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar was full.The students responded with a unanimous ‘ yes. ‘ 

The professor then produced two Beers from under the table and poured the entire contents into the jar effectively filling the empty space between the sand. The students laughed.’ Now, ‘ said the professor as the laughter subsided, ‘ I want you to recognize that this jar represents your life.
 
The golf balls are the important things—your family, your children, your health, your friends and your favorite passions—and if everything else was lost and only they remained, your life would still be full.

The pebbles are the other things that matter like your job, your house and your car..

The sand is everything else—the small stuff. ’If you put the sand into the jar first, ‘ he continued, ‘ there is no room for the pebbles or the golf balls.
 
The same goes for life. If you spend all your time and energy on the small stuff you will never have room for the things that are important to you. Pay attention to the things that are critical to your happiness. Spend time with your children. Spend time with your parents. Visit with grandparents. Take time to get medical checkups. Take your spouse out to dinner. Play another 18. There will always be time to clean the house and fix the disposal.
 
Take care of the golf balls first—the things that really matter. Set your priorities. The rest is just sand.
 
One of the students raised her hand and inquired what the Beer represented. The professor smiled and said, ‘ I ‘ m glad you asked. ‘ 

The Beer just shows you that no matter how full your life may seem, there ‘ s always room for a couple of Beers with a friend.