We have reported that almost six million adults between the ages of 25 to 34 are currently living with their parents. That number reflects an almost 50% increase since 2003. These young adults are now being advised to jump into homeownership.

Who are the people selling them on the American Dream? Their parents! It seems that parents of some adult children are strongly suggesting that their children take advantage of the low cost of homeownership available today. Some moms and dads are helping financially and are even co-signing for the mortgage. Middle age parents who have owned a home understand its true value. A home has always been a good long term financial investment. However, homeownership also has many other benefits.

In Fannie Mae’s most recent National Housing Survey, they asked the question directly:Is this a major reason to buy a home?

The study broke up the answers into financial and non-financial reasons. The top four reasons and six of the top ten reasons were NON-FINANCIAL. The top four are below:

1. It means having a good place to raise children and provide a good education.
2. You have a physical structure where you and your family feel safe.
3. It allows you to have more space for your family.
4. It gives you control over what you do with your living space (renovations & updates).

Should this surprise us? Aren’t these the same reasons our parents bought their home? Aren’t these the same reasons we purchased our home? These are the same reasons parents have suggested their children buy a home. They want the same things for their grandchildren that they believed to be important for their children.

And today, the cost of homeownership is at all time lows:

J.P. Morgan

“The numbers on housing have an important message for American families today, and particularly younger families setting out on life’s great adventure: Five years ago, at the peak of the home-buying euphoria, it was emphatically a time to rent. Today, when home ownership is depreciated more than ever before, the numbers tell us it is a time to buy.”

MSNBC.com

“Someone who plans on staying put for seven years would come out ahead by about $9,000 if they bought a median-priced home rather than being a tenant in a median-priced rental.”

HUD

“Homes today are more affordable for average families than they have been since 1971. Median-income families today have nearly double the funds needed to purchase the average home.”

Bottom Line

Now that the economy is beginning to show signs of stabilizing, people are getting back to the core values that families have always embraced. Homeownership is definitely high on that list. And today, from a financial standpoint, it may be the opportunity of a lifetime.

Conflicting reports can be misleading and confusing. Let’s see what has been written in the last 30 days regarding NY and foreclosures.

RealtyTrac: New York State November 2011 total foreclosures decrease; state continues to rank among lowest in nation

12/20/2011

In its U.S. Foreclosure Market Report for November 2011, which reports default notices, scheduled auctions and bank repossessions in the month of November, RealtyTrac Inc. reported New York State had 1,587 total foreclosures, a decrease of 3.17 percent from October and a decrease of 42.89 percent from November 2010.

New York State ranked number 43 of all 50 states for monthly total foreclosure filings with one in every 5,052 properties receiving a foreclosure filing in November.

Foreclosure filings were reported nationally on 224,394 U.S. properties in November, a decrease of 2.72 percent from October and a decrease of 14.46 percent from year-ago totals. Nationally, one in every 579 properties received a foreclosure filing.

Sounds great, doesn’t it? Let’s look at THIS article:

Homeowners shouldn't be penalized for alleged Baum misconduct, regulator says

Posted By JUSTIN T. HILLEY On December 16, 2011 @ 4:03 pm

Mortgage servicers operating in New York state shouldn't charge borrowers when substituting new counsel in foreclosure cases previously handled by the Steven J. Baum P.C. law firm, said the New York State Department of Financial Services.

Baum said last month that the firm would wind down its business and close. The announcement comes in the wake of the firm agreeing to pay $2 million to the federal government and change its foreclosure practices and after Freddie Mac and Fannie Mae removed the law firm from their lists of approved counsel. It was the largest foreclosure law firm in New York.

Financial Services Superintendent Benjamin Lawsky sent a letter to servicers saying they shouldn't apply any penalties, fees, costs or interest accrued to homeowners.

Based in Amherst, N.Y., the Baum firm represented plaintiffs in about 40% of the foreclosure proceedings in New York in 2010. Servicers across the state will now have to hire new counsel, who will have to gather and review case files and ask courts for the approval of new legal representation. As a result, significant delays in pending foreclosure cases are expected.

New York already faces the longest foreclosure timeline in the nation, with a foreclosure there taking an average of 900 days to work through the process. Earlier this year,RealtyTrac estimated that the New York foreclosure backlog would take seven years to clear through the New York court system.

The state's administrative board of judges implemented an affirmation rule in October 2010 that further exacerbated an already long time line. Banking attorneys now have to sign an affidavit vouching for the accuracy of the records in a foreclosure, forcing these lawyers to go back and check documentation before filing a case.

“New Yorkers facing foreclosure should not be penalized in any way because of delays which may arise because many mortgage servicers will now need to find new counsel," Lawsky said. "It adds insult to injury for New Yorkers to suffer further as a result of the shuttering of this abusive and discredited firm."

Mortgage servicer Ocwen Financial Corp. already signed an agreement with the Department of Financial Services promising to refrain from charging homeowners for such costs.

Ocwen agreed it would not penalize homeowners affected by the Baum closing in an amendment to an agreement reached in September with DFS to adhere to mortgage servicing reforms designed to address troublesome practices in the servicing industry.

In the letter, Lawsky noted that one Baum attorney had asked for a 60- to 90-day continuance for a settlement conference in order to facilitate a change in counsel. Such a delay could cost a homeowner between $1,540 and $2,310 in additional interest charges based on a $150,000 mortgage at a 6.5% interest rate, Lawksy said.

Now, look at this graphic!

So, what can we conclude?

Foreclosure FILINGS may be down, but the backlog is out there! With all the turmoil in NY due to the situation in the courts and with Steve Baum’s office, banks are waiting for the dust to settle. With 50+ months of Shadow Inventory out there, NY home prices will continue to stay lower.

Definition of 'Shadow Inventory'

A term that refers to real estate properties that are either in foreclosure and have not yet been sold or homes that owners are delaying putting on the market until prices improve. Shadow inventory can create uncertainty about the best time to sell (for owners) and when a local market can expect full recovery. Also, shadow inventory typically causes reported data on housing inventory to understate the actual number of inventory in the market.

1. A lot of water

Storms produce vast quantities of water on roofs. A ranch home with a roof area of about 2,400 square feet will generate nearly 1,500 gallons of water during a storm that dumps 1 inch of rain. That's a tremendous amount of water to concentrate around the foundation of your home. It can cause significant leakage in basements and crawl spaces.

2. The lowdown

Roof water should be piped to the lowest spot on the property, into municipal stormwater systems or, if you can afford it, into a cistern or other collection vessel so the water can be reused for gardening or other household uses.

3. The right pipe

Some homeowners have had nothing but success piping roof water underground in rigid PVC pipes. You might try using a pipe that's made for sewer line work. It comes with slip joints that don't have to be glued.

4. How deep?

These buried downspout lines don't have to be too deep in the soil. Usually they are no deeper than 16 inches, unless you have a flat lot. It's best to make sure they fall by a quarter-inch per foot of run. This provides plenty of pitch so the water readily flows.

5. Matter of degrees

You'll want to use 4-inch diameter pipe for your system. Be sure that any change of direction of the pipes while underground is done with 45-degree bends. The only place to use a 90-degree bend is at the end of the pipe where it turns up to capture the end of the metal downspout.

6. Bend separation

To make other 90-degree bends in the piping system, use two 45-degree bends and put a 1-foot piece of straight pipe between them. This spacing will really help you if you ever have to put a drain-cleaning snake down the pipe to unclog it.

7. Over the top

If you're in a bind and can't immediately bury the pipes, you can run them on top of the soil. These pipes look ugly, but they work. The trick is to get the water as far as possible from the house, always making sure it's aimed at the lowest part of your land where it would naturally drain if your house were not there. It's never a good idea to pipe water to part of your land where the water would not naturally go.

8. New-house rule

When installing downspout drain lines in the soil, never bury them immediately adjacent to your home if it was built within the past five to 10 years. The soil that's put in around the foundation is seldom compacted. It can take years for it to completely self-compact.

9. Uncompacted soil

If you install the lines in un-compacted soil, the pipes can bend, kink or develop reverse drainage where the water doesn't flow. If you use the slip joints, in worst cases, the pipes can come apart at the joints.

10. Extra slope

In new construction, always put the buried pipes in undisturbed soil. When you cross over the soil around the house, keep it to a minimum. Give this section of pipe extra slope, up to an inch per foot of run, to compensate for future soil settlement.

In this difficult housing market, more and more homeowners are considering renting their house instead of adjusting the price. We strongly believe that residential real estate is a great investment and therefore can understand this thinking. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for.

Before renting your home, you should take the following steps to make sure this is the right course of action for you and your family.

Set a consultation appointment with an eviction attorney

People rent out their homes assuming that every tenant will pay the rent every month. We must realize, because of the current economy, there are millions of people not paying their mortgage. There is a chance you may rent to someone who at some point can’t (or simply won’t) pay you the rent. Understand what the legal challenges of eviction could potentially be before deciding to rent your home

Interview property managers

If you are not a full-time investor, hire a professional to handle the property. You need someone to find a qualified tenant, collect the rent and manage the problems. You don’t want to have to make collection calls. What would you say if a tenant told you that they had enough money to either buy food for their children or pay you your rent but not both? You need a person experienced with these situations to help.

You also don’t want to receive calls at all hours of the day and night regarding maintenance issues or challenges a neighbor may be creating for your tenant.

Create an honest budget

Sure, you will receive revenue in the form of rent. However, don’t forget you will also have expenses. Some of the expenses you should consider:

• Mortgage Payment (unless there is no mortgage on the home you will rent out)
• Property Taxes
• Maintenance Expenses such as repairing or replacing: roof, heating/air conditioning unit, appliances, etc.
• Insurance – Check with your insurance company who may suggest or demand that you increase your liability coverage.

Bottom Line

Again, renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided that you want to rent the house because you want to be an investor, not because it looks like an easier way out than selling the house.