On average, Americans expect home rental prices to increase by 3.2 percent over the next year. Some 41 percent said rents will increase next year, 48 percent expect rents to stay the same and only 6 percent expect them to fall. The November numbers showed a slight retreat from October, when 43 expected rents to rise and 47 expected them to stay the same.

Consumer expectations for next year exceed the current level of rent increases. The average monthly rent for all categories, including apartments and single-family homes, was $846 nationwide in the third quarter, up 2.5 percent from the same period a year earlier, according to Local Market Monitor. Reis, Inc. data puts the third quarter increases at 2.3 percent year-over-year in the 80 plus markets it tracks. The National Association of REALTORS® forecasts multifamily rents to rise 3.5 percent next year, virtually what consumers expect.

Rising rents impact the homeownership markets in two ways. Monthly mortgage payments on the median priced home-including taxes and insurance-are increasingly falling below average rent levels. In 15 cities today, it is less expensive to rent than to buy, according to the Wall Street Journal. Higher rents also make investment purchases of residential properties more attractive. Increasingly, investors are buying to rent out properties for extended periods of time rather than selling.

Consumer home price expectations changed slightly in November, moving from negative to positive territory for the first time in six months, with respondents expecting home prices to increase by 0.2 percent over the next year.

“Though their home price expectations have become slightly positive, consumers remain concerned about the direction of the economy and continue to view their household finances as being relatively flat,” said Doug Duncan, vice president and chief economist of Fannie Mae. “Most Americans expect no improvement in their personal financial situation in the next 12 months and will likely remain wary about undertaking the significant financial obligation associated with homeownership until their view of their income, expenses, and job security heads in a more positive direction.”

Highlights:
• Twenty-two percent of respondents expect home prices to increase over the next year (up 3 percentage points since last month), while 22 percent say they expect home prices to decline, down 1 percentage point since last month. 53 percent say prices will stay the same, a 2 percentage point drop from October.
• Thirty-three percent of Americans say that mortgage rates will go up over the next 12 months, down 3 percentage points from October and a return to the level seen in September.
• Sixty-eight percent of respondents say it is a good time to buy a home (down by 1 percentage point since last month), and just 10 percent say it is a good time to sell, which is unchanged from the previous two months.
• On average, Americans expect home rental prices to increase by 3.2 percent over the next year, a 0.1 percent decrease from October.
• Just 6 percent expect a decline in home rental prices (unchanged since last month), while 41 percent of respondents believe that home rental prices will increase in the next 12 months.
• Thirty-two percent of Americans say they would rent their next home, while 63 percent say they would buy, down 3 percentage points since last month and a return to the level seen.

Young Americans under 30-a prime age group for first-time home buying-are feeling considerably better about their financial picture than they did a year ago, according to a major new study from Bankrate.

Nearly one-third of those younger than 30 say their overall situation is better today than it was last year and 25% feel more secure about their jobs than they did in November 2010.

By comparison, older Americans remain glum. Only 1 in 10 Americans age 30 to 64 feel more secure in their jobs now than they did a year ago. Three times as many feel less secure. Only 17 percent of those approaching retirement (age 50-64) feel better about their overall financial situation than a year ago.

Workers with less education and lower paying jobs feel less secure. Roughly a quarter of college grads feel less secure today than a year ago, but 34 percent with a high school education or less fell less secure. Among low earners (less than $30,000), only 19 percent feel better off, while 38 percent feel their overall finances are worse. Nearly half of those earning less than $50,000 say they’ll spend less on the holidays, versus about 30 percent of those earning more.

“Recent years have been hard, and that’s a tough feeling for some people to shake. Almost half of the people surveyed said their situation is about the same today as a year ago. Of the rest, more think their situation (is) worse than better. None of this surprises me because our national mood tilts toward pessimism right now. But I’m reminded of the old saying that it seems darkest right before the dawn.

Recent years have been hard, and that’s a tough feeling for some people to shake. Chances are good that those people will still feel bad even as their financial situation slowly improves. Even in the best of economic times, improvement comes in small increments. There aren’t a lot of “Hallelujah!” days in personal finance, commented Dan Danford, CFP, principal at Family Investment Center in St. Joseph, Mo

SB 458 ensures that any lender who agrees to a short sale must accept the agreed-upon short sale payment as payment in full on the outstanding balance of all loans, including second mortgages.

The previous law, SB 931, enacted in 2010, held that a first mortgage holder must accept the agreed-upon short sale amount as full payment, but the law did not extend to junior lien holders.

“The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender could pursue them after the short sale closes, and demand additional payment to subsidize the difference,” says California Association of REALTORS® President Beth L. Peerce. “The new law brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders—those in first position as well as in junior positions – must consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”

An urgency clause in the new law makes SB 458 effective immediately upon signing.

The appraisal process can leave sellers in a state of confusion. Unfortunately, lack of knowledge can be detrimental to obtaining the best price and fast closing for even the most competitive properties. Following are some guidelines to follow for best results:

1. Understand the Home Value Code of Conduct (HVCC): The code stipulates that brokers, loan officers and others who earn income from the close of a loan cannot select a specific appraiser or attempt to influence an appraised property value by questioning or disputing the appraisal.

2. Understand the Appraisal Process: Determining the value of a property requires experience in evaluating the local market, type of property and market value. Most appraisers take location, condition of the home, comparable sales in the area and potential income data into consideration when creating a Uniform Residential Appraisal Report or similar form.

3. Delineate the Scope of Work: Determine in advance whether or not you need a limited or complete appraisal, including the intended use of the report, delivery date and who will have access to the appraiser.

4. Don’t Confuse Price With Value: Many sellers confuse asking price with the market value of their home. While the two should relate to one another, they are not necessarily the same. For example, investment income may represent a premium over the market value due to the additional income generated. Ask your agent about special situations that may impact price versus value.

Imagine saving thousands of dollars on your next commercial real estate transaction. Section 1031 of the U.S. Internal Revenue Code allows for the exchange of one investment property for another, providing the opportunity to defer the capital gains tax on approved property transactions.

A 1031 exchange is a method for selling one qualified property, then purchasing another qualified property within 180 days of the initial transaction.

The process works much like any other commercial real estate selling and buying situation. Because investors are exchanging properties, the IRS allows those investors to defer the capital gains tax on the initial sale.

There are two points that need to be closely adhered to in order to qualify for a 1031 exchange.

First, the total purchase price of the new investment property must be equal to or greater than the property that was sold or being sold. Second, all the equity received from the initial sale must be used to purchase the replacement property. If there is any shortfall in the purchase price of the similar property, the investor will be liable for any capital gains taxes associated with the sale.

It can also be used as an investment strategy by realizing the effects of compounding the savings in capital gains and reinvesting it in your new property purchase. The key to getting the best compounding result is to keep all of the money, including the value of the deferred tax, working for the investor. By reinvesting you will maximize the compound yield of your investment at a future time.