“Remember, medical insurance is like a hospital gown – you’re
never covered as much as you think you are.”
Distressed sales—including bank-owned (REO) sales, sales of homes actively in foreclosure, and short sales—accounted for 12.9 percent of all U.S. single-family home and condo sales in Q3 2016. According to ATTOM Data Solutions’ Q3 2016 U.S. Home Sales Report, these numbers are down from 15 percent in the previous quarter and down from 15.9 percent in Q3 2015 to the lowest share of distressed home sales since Q3 2007, when distressed sales accounted for 12.3 percent of all home sales.
The peak in share of distressed sales was Q1 2009 at 43.9 percent of all U.S. single-family home and condo sales.
The report also shows that all-cash purchases accounted for 25.9 percent of all single-family home and condo sales in Q3 2016, down from 27.4 percent in the previous quarter and down from 29.2 percent in Q3 2015 to the lowest level since Q3 2007, when all-cash purchases accounted for 24.3 percent of all home sales.
The peak in share of all-cash purchases was Q1 2011 at 44.8 percent of all U.S. single-family home and condo sales.
“Distressed inventory for sale is virtually non-existent in many of the nation’s hottest housing markets, and when a distressed property is listed for sale in those markets, it often sells quickly and at little or no discount,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “The scarcity of discounted distressed inventory is chasing away cash buyers and other bargain hunters, but it’s certainly good news for home sellers, who nationwide realized the biggest home price gains since purchase in nine years.
“We are seeing the average seller home price gain since purchase start to wane in some of the highest-priced markets where appreciation is beginning to cool, indicating those markets are past their prime as sellers markets,” Blomquist continues. “Meanwhile, there are still a number of buyers markets across the country where a high level of lingering distress and relatively weak demand from owner-occupant buyers provides investors with plenty of bargain-buying opportunities.”
Q3 home sellers realize biggest gains in San Jose, San Francisco, Portland
Nationwide, homeowners who sold in Q3 2016 sold for an average of $43,000 above their purchase price, a 23 percent average home price gain since purchase—the highest since Q3 2007.
Among 118 metropolitan statistical areas with at least 1,000 single-family and condo sales in the third quarter, those with the highest average home price gain since purchase for home sellers in Q3 2016 were San Jose (68 percent); San Francisco (67 percent); Portland (51 percent); Seattle (51 percent); and Los Angeles (49 percent).
Two of those top five markets—San Francisco and San Jose—saw the average home price gain since purchase decline after peaking in the previous quarter.
Five markets where Q3 2016 home sellers lost home value since purchase
Homeowners who sold in Q3 2016 realized an average loss in home price since purchase in five of the 118 markets analyzed (4 percent): Huntsville, Ala. (5 percent loss); Mobile, Ala. (4 percent loss); Greensboro-High Point, N.C. (2 percent loss); Augusta, Ga. (2 percent loss); and Winston-Salem, N.C. (1 percent loss).
There were five additional markets analyzed where the average profit since purchase for homeowners who sold in Q3 2016 was 3 percent or less: Dayton, Ohio (0 percent); Columbia, S.C. (0 percent); Baton Rouge, La. (1 percent); Cleveland, Ohio (1 percent); and Little Rock, Ark. (3 percent).
Highest share of distressed sales in Toledo, Tucson, Rockford
Among metropolitan statistical areas with at least 1,000 single-family home and condo sales in Q3 2016, those with the highest share of distressed sales in Q3 2016 were Toledo, Ohio (36.4 percent); Tucson, Ariz. (24.4 percent); Rockford, Ill. (23.8 percent); Las Vegas (20.9 percent); and Lakeland-Winter Haven, Fla. (20.1 percent).
Other markets where distressed sales accounted for more than 15 percent of all single-family home and condo sales in Q3 2016 included Chicago, Orlando, Miami, Tampa, Memphis, Baltimore, Jacksonville (Florida), Cleveland, Virginia Beach, and New York.
Lowest share of distressed sales in Anchorage, Austin, Boulder
Metro areas with the lowest share of distressed sales in Q3 2016 were Anchorage, Alaska (3.7 percent); Austin, Texas (4.2 percent); Boulder, Colo. (4.6 percent); Asheville, N.C. (5.4 percent); and Springfield, Mo. (5.7 percent).
Other markets where the share of distressed sales accounted for less than 10 percent of all sales included Dallas, San Antonio, Houston, Denver, San Jose, Nashville, Pittsburgh, Seattle, San Francisco, and Minneapolis-St. Paul.
Biggest bank-owned discounts in Pittsburgh, Toledo, Memphis
The median price of a bank-owned (REO) home in Q3 2016 was $131,500, 43 percent below the overall median price for all homes—up from a 42 percent discount in the previous quarter, but equal to the 43 percent REO discount in Q3 2015.
Metro areas with the biggest REO discount in Q3 2016 were Pittsburgh (67 percent); Toledo, Ohio (66 percent); Memphis (63 percent); Birmingham, Ala. (62 percent); and Philadelphia (62 percent).
Other markets with an REO discount of more than 45 percent in Q3 2016 included Milwaukee, Rochester (New York), Columbus (Ohio), Cleveland, New York, Detroit, St. Louis, Cincinnati, and Baltimore.
One of the most increasingly common impairments we’re getting requests for – and underwriting concerns with – is marijuana or cannabis use. With the frequency of use becoming more common in today’s society, along with legalization in some states for recreational use, and many more that have OK’d the use of marijuana for medicinal purposes, marijuana has become a very frequent topic for underwriting discussion. Regardless of what your personal views may be on the subject, the fact is that the use of the drug is more prevalent than ever and we must address the issue when it arises during the life insurance application and underwriting process.
Cannabis is a natural psychoactive drug that comes from the flowers and leaves of the hemp/marijuana plant. Tetrahydrocannabinol (THC) is the primary ingredient in cannabis that causes euphoria and intoxication. Cannabis is most commonly smoked as a cigarette or in a pipe. It can also be taken orally, either by eating it directly or by mixing it with food products. Short-term memory and attention, motor skills reaction time and skilled activities are impaired while the individual is intoxicated. Cannabis contains carcinogens and evidence suggests that heavy cannabis use may be associated with oral cavity, pharynx, esophageal and lung cancers. Because of those concerns, many carriers will assign smoker/tobacco use rates for any use.
For underwriting consideration, the first thing we must determine is whether the use is recreational, or if the proposed insured had been issued a prescription for medical use. If for medicinal purposes, underwriting is going to be looking to the specific issue that the marijuana is being used to treat. Medical legalization is intended to provide beneficial treatment for those suffering debilitating symptoms. However, severity is subjective and open to interpretation. These uses may include severe pain, muscle spasms, severe arthritis, cancer or HIV related symptoms, weight loss, nausea, glaucoma and seizures from epilepsy. This highlights the need for full information considering not only potentially serious uninsurable conditions, but also the high potential risk for misuse.
For recreational use the underwriter is going to want to know the frequency of use. Classification of marijuana use can run anywhere from experimental or intermittent use for those who have tried, but no longer use or using up to a couple of times a month or less…to moderate use which would be those whose use is as frequent as 8-16 times monthly…to heavy use which would be those that use frequency is more than 4 times weekly or daily use. There is evidence that many cannabis users do not abuse other drugs. However, multiple drug and alcohol use can be encountered with cannabis use and when combined, is more toxic than each drug alone.
The primary questions to be asked of a proposed insured that presents with marijuana use history are:
The underwriting of an applicant with marijuana use will often end up with Std Smoker offers at best, with a lot of carriers…but we do have some that look at this more aggressively, and depending on frequency and/or whether or not it’s medicinal use, we still have a few that can rate at Std Non-smoker or occasionally, even at Preferred classes. Each individual case will be looked at based on its own characteristics.
Homeownership is still a vital—though vulnerable—component of the American Dream. Protecting it, as well as promoting it, is at the top of the docket for National Association of REALTORS® (NAR) 2017 President Bill Brown, who recently discussed his agenda at the REALTORS® Conference & Expo in Orlando, Fla.
“Homeownership offers tremendous value, helping communities stabilize and families build wealth,” said Brown, a second-generation Realtor® and founder of Investment Properties in Oakland, Calif. “High prices, low inventories, rising rents and student debt burdens are all part of a deck that’s heavily stacked against buyers in competitive markets, but there’s reason for optimism ahead. Realtors® are working hard to ensure clients meet their personal and financial real estate goals, and NAR is helping give Realtors® the tools to get the job done.”
Brown pointed to historically low borrowing costs as an opportunity for buyers, as well as real estate investors, while noting that challenges still remain. Recent NAR survey data show a lingering misconception about how much of a down payment is required to purchase a home, a factor that may unnecessarily delay some qualified young adults from entering the market.
Brown also highlighted the need to protect the mortgage interest deduction and preserve a secondary mortgage market that ensures liquidity sufficient to provide safe, affordable mortgage credit to all qualified borrowers.
Part of making credit available, Brown said, is keeping fees low. He noted that guarantee fees, loan-level price adjustments and other costs shouldered by conventional mortgage borrowers are locking out individuals who have strong credit. Brown said steps need to be taken to reduce fees for borrowers while still taking reasonable, responsible steps to protect taxpayer dollars.
“Our goal is to make sure every qualified buyer who wants to purchase a home has that chance,” Brown said. “In the year ahead, we’ll be working to bring down the needless hurdles that stand in the way of prospective homeowners. That’s good for buyers, good for communities, and good for the economy overall, and I’m excited for what we have ahead of us.”
This is a house in Southlake, Texas – what is wrong with this picture?
Do you see it? Respond if you do….READY GO!
Employers are worried about the employer health care mandate, now that the 2016 election is history.
The incoming administration in Washington has given, at best, conflicting signals about the Affordable Care Act and what actions it may take regarding health care, when it may do so, and whether, or how, it might seek to resolve conflicts.
According to an Aon pulse survey of more than 800 employers, conducted approximately a week after the election, nearly half (48 percent) of employers say the employer mandate is their primary health care concern going into the next administration.
The Department of Labor recently published final rule 2016-24559, solidifying the previously speculative Affordable Care Act (ACA) whistleblower-style employee protections.
“Not surprisingly, there is heightened interest in the fate of the employer mandate, which currently places significant reporting obligations on employers, including how they report coverage, track service and determine value and affordability,” J.D. Piro, national practice leader of Aon’s Health and Benefits Legal practice, said in a statement.
Piro added, “But it’s important to realize that in the short term, these mandates—and the Affordable Care Act (ACA) reporting obligations and penalties—remain in effect.”
But the employer mandate isn’t the only aspect of health care employers are worried about.
Other concerns, and the number of employers focused on them, were revealed in the survey. Prescription drug costs were a major factor for 17 percent of respondents, while 15 percent cited excise tax. Ten percent were worried about tax exclusion limitations on employer-sponsored health care, 8 percent were focused on paid leave laws and 2 percent with employee wellness programs.
Piro continued, “While details remain to be seen regarding policy proposals to address prescription drug pricing, this is an area that employers will keep a close eye on as drug costs continue to increase. Employers will also be tracking the future fate of the excise tax to see how the 115th Congress handles this important matter.”
Builder confidence in the market for new single-family homes remained generally good in October despite edging down two points to 63 on the National Association of Home Builders/Wells Fargo Housing Market Index.
“Even with this month’s drop, builder confidence stands at its second-highest level in 2016, a sign that the housing recovery continues to make solid progress,” NAHB Chairman Ed Brady said. “However, builders in many markets continue to express concerns about shortages of lots and labor.”
“The October reading represents a mild pullback from a jump in September, and indicates that the housing market continues to make slow and steady gains,” said NAHB Chief Economist Robert Dietz. “Moreover, mortgage rates remain low and the HMI index measuring future sales expectations has been over 70 for the past two months. These factors will sustain continued growth in the single-family market in the months ahead.”
Two of the three HMI components posted losses this month. The component that measures current sales conditions saw a two-point drop to 69, while the component gauging buyer traffic dropped one point to 46. However, the component measuring sales expectations for the next six months rose one point to 72.
The three-month average for regional HMI scores was up in all four regions of the country. The West increased two points to 75, while the Northeast, Midwest and South each saw one-point gains, rising to 43, 56 and 65, respectively.
1. Retirement Plans:
Retirement plans are often the easiest places to start investing. Through your employer or through an investment account you set up for yourself, your money is spread out over a diverse set of investments. A major benefit of retirement plans is that most of these plans allow your money to grow tax-deferred, which means you don’t pay taxes on it until you withdraw from the account.
2. Index Fund or Actively-Managed Mutual Fund
If you have taken advantage of tax beneficial retirement plan investments from Option 1, and you are looking for other simple ways to invest, a mutual fund might be your next best option. Unlike retirement plans, there are no maximum limits as to how much you are able to invest.
3. Digital Investment Advisor (or “robo-advisor”)
The newer option on the investment scene (a robo-advisor) uses algorithms to invest money, rather than human advisors. When you open an account with a robo-advisor, you answer questions about your risk tolerance and your goals, and then they suggest a diversified investment portfolio.
This article is for information and illustrative purposes only and does not purport to show actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular investment action.
FAFSA:
1. Do your FAFSA application today. Most students don’t realize that much of federal student aid is given away on a first-come, first-served basis. Unlike studying for your college exams, procrastinating on filing your FAFSA application can put a strain on your finances, so don’t delay.
2. Apply online. Using the web-based version of the FAFSA form is the fastest and easiest way to apply. Applying electronically allows colleges to receive your processed information faster than taking the traditional mail-in route. The online FAFSA form also gives step-by-step instructions, along with hints that may help you, incase you stumble upon confusing info or need more general clarification.
3. Get organized. Create a checklist of the documents you need early on; these may include forms your parents or guardians must fill out. For each step of the FAFSA process, try devising ways for you to keep each step in check, both literally and informally. Organizers are your friends, along with checklists and your parent’s help of course! Getting organized before you start allows you to complete the FAFSA seamlessly — without having to stop and retrieve missing items.
College Applications:
1. Make a list of colleges to apply to.
With over 6,000 colleges in the United States, the first step in applying to college is to do someresearch and make a list of colleges you’re interested in. This process will be different for everyone. Some students already have schools in mind, some know the state they want to live in, and others have no clue where to start.
2. Splitting the list into target schools, schools that are academically within reach, and schools you are pretty sure you’ll be accepted at.
You will need to take your list and decide which are your top picks, which are attainablefor you academically, which are affordable for you only with aid (don’t discount a schoolbecause of price, but if this is a factor have a backup plan), and refine your broad list into agroup of schools that gives you the best chance for success.
3. However, understand that there is a college for every student who wants to go.
The USA has many degree-granting institutions. Almost all of them accept the majority of applicants, only a small number of elite schools accept less than half the people who apply. Hundreds of colleges accept almost everyone who applies. So, you are definitely getting into college if you want to go.
Now get out there and get those things done using your newfound strategies!
In recent years, experimentation with single-payer and universal health care systems has largely taken place in the nation’s governmental laboratories.
Most of us call them states
Some states — most notably Vermont — have investigated building a single-payer system for health care consumers within their borders. However, the hurdles were too great to overcome in the Green Mountain State and Gov. Peter Shumlin had to put a halt to single payer due to a very high price tag in 2014. Fast forward to the 2016 presidential election cycle, and the issue again cropped up in the campaign of Vermont’s own Bernie Sanders, who made universal health care a central plank in his socialist-minded platform.
Sanders created a lot of exposure for the idea, and several states — up to 20 by some estimates — have opted to explore single-payer or universal health coverage in the past few years.
As the Sanders campaign relented to the presidential bid of Hillary Clinton, the center of the debate this election year has turned to the Rocky Mountains, where residents of Colorado will see a universal health care system proposed on their ballot in November. (It may not come as a surprise that Sanders won the state’s Democratic primary handily.)
Like a few other states, Colorado has a ballot initiative process to bring questions directly to voters. Proponents of a universal system gathered 156,000 signatures—more than enough for the initiative to appear on the ballot—in support of adding what’s known locally as Amendment 69 to the ballot. If passed, the measure would add a 12-page amendment to the state’s constitution and create ColoradoCare.
In essence, Amendment 69 would create one large insurance group for the state that would be governed by ColoradoCare’s elected board of 21 trustees. Proponents call ColoradoCare a universal plan because some payers, such as Tricare, Medicare and Medicaid, would remain in place. In these instances, ColoradoCare would act as a supplemental policy.
According to ColoradoCare’s website, the system would cover primary and specialty care; hospitalization; prescription drugs and medical equipment; mental health and substance use services, including behavioral health treatment; emergency and urgent care; preventive and wellness services; chronic disease management; rehabilitative and habilitative services and devices; pediatric care including oral, vision and hearing services; laboratory services; maternity and newborn care; and palliative and end-of-life care.
Under ColoradoCare, there would be no deductibles and designated primary and preventive care services would have no co-payments. ColoradoCare would replace the state’s health insurance exchange.
To pay for the program, Colorado would collect a 10 percent payroll tax — 3.33 percent from the employee and 6.7 percent from the employer. Residents who are 65 years and older would see some of their retirement and Social Security income exempted from the tax, up to $46,000 for individuals and $75,000 for joint filers. While employers would still be able to offer their own health insurance plans to employees, the ColoradoCare tax would still be collected.
ColoradoCare would also have to apply for several waivers from federal programs — such as the ACA — and have the money redirected to the system. Owen Perkins, communications director for ColoradoCare, says that Colorado is the first state in the nation to apply for an ACA waiver.
“The ACA leaves roughly 6 percent of the population uncovered and roughly a fifth of the population underinsured,” says Perkins. “You wind up with a million people without realistic access to health care. It’s people who are required to get health care under the ACA, but they’re making too much for Medicaid and not enough for adequate care. They’ve got deductibles that make their health insurance inaccessible.”
ColoradoCare proponents see health care as a fundamental right, like education and fire protection. They believe the system would reduce the overall amount Coloradans spend on health care, while improving quality and providing coverage for everyone. The system’s backers estimate that 80 percent of Coloradans will pay less under ColoradoCare.
According to ColoradoCare’s projections, the savings would come from reduced administrative costs, while increased purchasing power would give the system the ability to more aggressively negotiate prices with drug and medical equipment makers.
However, opponents of Amendment 69 say that the measure is short on details. They also point out that passage of the amendment would mean an alteration to the state constitution — a remedy too severe for the problem.
“The promise that a simple solution like combining all buyers into one block will result in more affordable care for all — unfortunately, it isn’t that simple,” says Joni Reents, president of the Colorado State Association of Health Underwriters and owner of the Reents Insurance Agency in Broomfield, Colorado. “And ColoradoCare is not the solution, but rather an experiment that will be embedded in our constitution.”
Reents also isn’t convinced that ColoradoCare’s savings will materialize over time. “When there isn’t enough money to keep up with the demand for health care, ColoradoCare will either have to ration care, increase taxes, reduce reimbursement, or some combination of the three,” Reents says. “Rationing of care in a single-payer model is accomplished by limiting access, which results in longer wait times.”
Perkins says that the quality of health care would actually improve because networks would be eliminated. Under ColoradoCare, patients would be able to choose their primary care physician, while doctors could send patients to other doctors without restrictions.
“Everybody on ColoradoCare gets the same access and the doctors get the full reimbursement,” Perkins says. “It also eliminates an incredible amount of bureaucracy for doctors because you do away with narrow networks of choice, so the doctor can send the patient to the provider they think is the best one and provide the best care.”
Perkins also points to ColoradoCare’s independence as a main benefit of the system. After attempts to push health care reform through the Colorado state legislature failed, architects of universal health care not only went with the ballot initiative process, they also proposed a system that’s largely free from government and private industry. However, the state would be responsible for collecting start-up taxes and the full tax if Amendment 69 were to pass.
“It’s not in the hands of the legislature, Washington politicians, or the corporate insurance industry,” Perkins says. “This takes it out of government hands, D.C. politicians’ hands and away from the groups who are focused on profits and puts it into the hands of Coloradans. It removes that interference between them and their provider.”
Health care is a large piece of the benefits industry, and benefits brokers and agents in Colorado, and around the country, are keeping a close eye on Amendment 69 this election season.
John Kirke, president of benefits and total rewards for IMA Inc., in Denver, says if Amendment 69 is passed, it would have a sizable impact on the benefits industry in Colorado. However, Kirke sees his fellow benefits professionals reacting to a potential passage of Amendment 69 much the same way as the industry reacted to the ACA.
“I would think that this business is so responsive to our clients that we would pivot,” Kirke says. “Our clients come to us for strategies; I think it would be a hit at first, but just like the ACA, we pivoted. We offered our clients services that they still needed. I think that if it passed, employers would add services above what Amendment 69 offers. Employers would still want advisors to help them distinguish themselves in the marketplace when they’re recruiting new employees. Our industry is creative; we would pivot to find new solutions.”
Kirke says his company has been working to educate people around the state about Amendment 69, mainly through a series of town-hall meetings. Those meetings, he says, are open to both IMA clients and non-clients. “What’s disconcerting to us in our industry is the assumption in Amendment 69 that all providers will play ball with whatever the new rules are, which are undefined at the moment,” Kirke says. “In my opinion, access would be limited as providers understand that the reimbursements to them are going to materially change.”
Kirke also points out that Amendment 69 could have a more far-reaching impact on Colorado’s economy than just the benefits industry. In recent years, the state has seen exploding economic and population growth. Kirke believes that Amendment 69’s passage could give business owners pause as they consider Colorado when starting or re-locating their businesses.
“Colorado is riding a wave of growth and we’ve been successful there,” Kirke says “But there’s no doubt in my mind that ColoradoCare would cause a business leader to question what else would Colorado be thinking from a tax standpoint. It’s a highly competitive market from Texas to Arizona to New Mexico in terms of competing for business, and we have to keep our momentum going.”
Other states are also looking into single-payer or universal health care models. California, New Jersey and New York are all in various steps of the process.
Earlier this year, Oregon hired the Rand Corporation to complete a study about a single-payer system.
Colorado’s experience with Amendment 69 may well serve as an example for others working to institute a universal health care or single-payer system at the state level.
“How to reduce health care costs in this country while maintaining access to high-quality providers is an entirely different conversation,” Reents says. “If it were simple, we would have accomplished it by now.
People like to talk about these issues as if it’s a simple game, but the financing of health care isn’t like checkers — it’s more like chess, and we can’t provide solutions in 10-second soundbites.”
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