Tax Time!

Look for New Breaks at Tax Time
Last-minute changes may affect your 2006 income taxes.


Before you file your 2006 income taxes, double-check that you and your tax preparer have digested the last-minute changes made with the Tax Relief and Health Care Act of 2006, passed December 20, 2006.

The good news: You may qualify for some of these deductions.

The bad news: The tax law changes were passed after the IRS's November print deadline for key 2006 forms, which means that some of the printed forms you have in hand could be inaccurate. Yes, those tax forms that are already difficult for most of us to decipher have the added level of difficulty with possible inaccuracies.

The IRS knew that special extenders could be passed by Congress, so some of their forms indicate that there was legislation pending. Still, the IRS decided not to reprint all of the 2006 tax forms that are affected. Instead, they are relying on you to find out about the changes to correctly fill out the paper forms or download the correct forms from their website.

Before you say that you've missed the boat on any possible way to take advantage of the changes because you have already filed your returns for 2006, stop that thought. Ask your tax preparer to help you make the correction on Form 1040X if you filed as an individual or Form 1120X if you filed as a corporation. In most cases, you have up to three years to file the correction.

Many of the changes include extensions to previously discontinued programs. Listed below are the changes that are most likely to affect you.

Health savings accounts (HSAs) function a lot like IRAs, except they are earmarked for healthcare expenses. If you have an HSA, you can claim a tax deduction for contributions that you — not your employer — make to your tax-deductible HSA in 2006. Planning for the rest of 2007, you can make pre-tax contributions equal to your annual deductible, up to $2,700. (These contributions aren't included in your gross income.) If you want to transfer funds into your HSA from your IRA, you can make a one-time transfer of $2,850. You can also make a one-time transfer from a flexible spending account or a health reimbursement account. There are restrictions on the maximum transfer amount, so check with your accountant before making changes.

IRA contribution limits have risen for the 50+-year-olds who have Roth and traditional IRAs: from $4,500 to $5,000 for 2006. If you are under 50, the limit is still $4,000. If you are 70-1/2 or older, you can transfer up to $100,000 tax-free to an eligible charity. This contribution counts toward your minimum required distribution, which means that it's a tax-free way of moving the required funds out of your IRA. (More information can be found at IRS News Release IR-2006-192.

Welfare to Work Credit (WTWC) and Work Opportunity Tax Credit (WOTC) concerns employers who hire economically disadvantaged employees — convicted felons, food stamp recipients under age 25, high-risk youths, etc. This credit had expired at the end of 2005 but was extended through 2007. If you have hired someone from a qualifying group, you can typically claim 40 percent of the qualified first-year wages, with a maximum of $2,400. If you've hired someone this year who may qualify you for this credit, keep in mind that WTWC and WOTC are combining into just the WOTC, which means more changes. (For more information, click here and here.

Sales tax claims have changed for states that don't have state and local income taxes. The IRS allowed those taxpayers to claim state and local sales taxes in 2004 and 2005. With the end-of-the-year extenders, those affected taxpayers can continue to claim sales tax (including any paid for houses, cars, and boats) through 2007. The sales-tax tables weren't included in the Form 1040, so you will need to visit the IRS website for Publication 600, which helps figure out the deduction that is done on line 5 of Schedule A with the notation 'ST' to the left of line 5. For more information, click here.)

Your personal taxes If you are keenly tax-aware, you know that around November each year the IRS uses its authority to make some decisions that affect income tax filing, including those that involve cost-of-living deductions. A few of the other 2006 income tax changes that you should know about include the following:

Standard deductions typically change each year, based on cost-of-living changes. For married couples filing a joint return and qualifying widows and widowers, the standard deduction went up $300 to $10,300. For singles and married people who file separately, it rose $150 to $5,150. Heads of households have a standard deduction of $7,550 — up $250.

Standard mileage rates also change almost every year. For 2006, the mileage rate for business use of a vehicle was 44.5 cents per mile. The rate for this year, 2007, is 48.5 cents per mile. Also, if you are involved in helping out with any charitable building with Katrina, the mileage rate is 32 cents per mile for 2006, which is higher than the standard 14 cents per mile for other charitable services.

Direct-deposit tax refund choices have expanded for 2007. Starting with your 2006 federal income tax refund, you can split your refund among three bank accounts. You will need to complete Form 8888. If you want funds deposited in just one account, just use the direct-deposit line on Form 1040.

Overwhelmed? Tax laws and the IRS forms can seem daunting, but it's worth taking the time to check into these end-of-the-year changes. They could affect your income tax return this year and may even affect the way you are planning to manage the rest of 2007.

If you'd like more information about the last minute tax changes, check out IRS Pub. 553 Highlights of 2006 Tax Changes.

Source: Theresa Coleman is a freelance writer and editor based in Ambler, Pa. She has an extensive background in publishing with the National Association of Home Builders, covering job-site safety among other topics.

The Advantages of Working with a REALTOR

Working with a real estate professional who is a REALTOR® is in your best interest. That's because:

Not everyone who sells real estate is a REALTOR®. Possessing a real estate license does not afford instant REALTOR® status; an important distinction of which you need to be aware. A REALTOR® is a member of local, state and national professional trade associations and, as such, has access to a vast array of educational programs, research and resources. A REALTOR® subscribes to a strict Code of Ethics developed by the NATIONAL ASSOCIATION OF REALTORS®. REALTORS® pledge to provide fair treatment for all parties involved, protect the right of individuals to own property and keep abreast of changes in real estate practice through continuing education and interaction with other professionals.

REALTORS® also are committed to higher levels of education and professional development; many REALTORS® have earned professional designations or specialty certifications requiring intensive study. For example, REALTORS® who have obtained the Accredited Buyer Representative and Certified Residential Specialist designations have been trained in all aspects of serving as buyers' and sellers' representatives in real estate transactions.

Your REALTOR® can tap into numerous resources, like immediate access to full-time real estate attorneys who can provide objective up-to-the-minute counsel. Your REALTOR® also receives up-to-date information on a wide variety of legal, financial and economic issues and has access to an association with more than 80 years of experience in real estate. And, if things don't work out, your REALTOR® can offer arbitration as a choice instead of lengthy and expensive legal proceedings.

In addition to subscribing to the REALTOR® Code of Ethics and belonging to their local, state and national REALTOR® associations, some REALTORS® have undergone additional training to serve specific markets and client groups. If, for example, you'd like to work with a REALTOR® who is familiar with international transactions or a REALTOR® who works primarily with elderly clients, you might want to find REALTORS® who are designated as Certified International Property Specialists (CIPS) or Senior Real Estate Specialists (SRES), respectively.

E-Mail

Get Wired: E-mail Mistakes That Make You Say, 'Uh Oh'

Here are some easily avoidable mistakes you should know to keep your image and inbox in tip-top shape.

Failing to follow e-mail etiquette:
- Don't write when you're angry. Calm down. Have someone else edit your e-mail.- Don't use sarcasm. You may think you're clever, but the recipient will be put off.
- DON'T USE ALL UPPERCASE! That's the e-mail equivalent of yelling. Go easy on the exclamation marks, too. Overuse dulls their effectiveness.
- Use clear subject lines. That will help people decide whether to read the e-mail now or later.
- Keep it short. If your e-mail is more than two paragraphs, maybe you should use the telephone.

E-mail is almost like talking. We use it so much that we don't really think about it. But there are rules and courtesies, just as there are with talking. Giving them some additional thought could make your e-mail experience more satisfying and your recipients much happier.

Source: MSN.com

FREE SEMINAR

REAL ESTATE INVESTMENT SEMINAR

LEARN TO USE THE KNOWLEDGE OF INDUSTRY EXPERTS!

Seminar Details
Date Sunday, January 28, 2007
Time 1:00 ~ 4:00 p.m.
Location RE/MAX of Boulder, Inc.
Call to reserve your seat today ~ Space is limited
(303) 415.3590

Refreshments Provided

• Economic Outlook for Boulder & Colorado
• Investment Strategies In Today’s Market
• Foreclosure Investments ~ Pitfalls and Profits
• Panel Discussion ~ Ask The Experts!
  Bring All Of Your Questions And Ask The Experts For Their Advice!
  1031 Exchanges; Using Your IRA To Fund Investments; Mortgage Strategies;
  Title Commitments; Estate Planning, and Tax Advantages; and,
  Tenant-In-Common Investments
  
  
  Ask The Experts:
• Lou Barnes, Owner
  Boulder West Financial Services
  Attended Choate School & Brown University
  Colorado Real Estate Broker since 1978
  National Association of Securities Dealers Principal and Sales Licenses
  Author & Publisher of Mortgage Credit News, a national weekly newsletter
  Author of a finance column for the Boulder Daily Camera since 1992
• Mark Casey, Regional Director
  SCI Real Estate Investments, LLC
  MBA, Colgate Darden School, University of Virginia
  BS, University of Missouri
  20+ years of progressively challenging commercial real estate experience
  At the individual investor level, he has successfully structured ownership groups
  and facilitated tax-deferring 1031 Exchanges
• AJ Chamberlin, Broker Associate
  Residential REALTOR® since 1990
  Active member of National Association of REALTORS®
  Active member of Colorado Association of REALTORS®
  Chairperson of State Legislative Committee, Land Use/ CAR
  President, Property Owners for Sensible Road Policy
  Former President, Sugar Loaf Community Inc.
  Former President, Land Use Coalition
  Recipiant of Colorado Realtors Political Service Award, 2005
  BA, University of Colorado
• John Chamberlin, Broker Associate
  Residential REALTOR® since 1985
  Active member of National Association of REALTORS®
  Active member of Colorado Association of REALTORS®
  Active member of Real Estate Buyer’s Agent Council®
  Past Director of Boulder Area Realtor Association®
  Past member of Arbitration Committee, BARA
  Past member of Grievance Committee, BARA
  Past member of MLS Committee, BARA
  Past member of MAD Committee, BARA
  Former Owner/Broker of ERA 1st Choice Realty, Inc.
  New Home Sales Specialist/Former On-Site Builder Sale Manager
• Jim Hunter, Production Manager of Northern Colorado
  First National Bank
  Attended University of Maryland & Towson State University
  Certified Mortgage Lender (CML)
  Past president of Northern Chapter of the Colorado Mortgage Lenders Association
  Member Board of Directors, Northern Chapter Colorado Mortgage Lenders Association
  Member of Fort Collins Sertoma, a national service club
  Member of Colorado State Men’s Roundball Club
• Betty Marick, CES
  1031 Corporation Exchange Professionals
  Certified Exchange Specialist since 1998
  CES, Federation of Exchange Accommodators
  She was among the first in the nation to receive her CES designation
  Former escrow officer
  Former title examiner
• Colleen P. Weaverling, CPA
  Certified Public Accountant since 1982
  BS, Business Administration from Trinity University, San Antonio TX
  Specializing in Individuals, Small Business, International, Personal Service
  Corporations, Accounting and Taxation, Medical/Dental Practices
  Member of American Institute of CPA’s
  Member of Colorado Society of CPA’s
  League Coordinator of Boulder Tennis Association
  Founding member of Centennial Valley Tennis Association
  Past treasurer of Centennial Valley Tennis Association
• Karen Woolhiser, Senior Residential Mortgage Lender
  First National Bank of Colorado
  Top producer of residential mortgages since 1974
  Preferred mortgage lender with RE/MAX of Boulder for 6 years
  Major fund raiser for Boulder Community Hospital & Boulder County Hospice
  “My #1 goal is to design a loan program to meet your specific needs.”
• Catherine Wynne, VP
  Entrust New Direction IRA, Inc.
  Catherine Wynne is one of the two principals in Entrust New Direction IRA, Inc. New Direction is a self-directed IRA administrator which assists clients who want to diversify their IRA/401k plans into non-securities based assets like real estate. She has extensive background in buying and selling commercial real estate, both as an investor and an IRA administrator. The result is that Catherine is intimately familiar with what it takes to make a real estate investment — taxable or otherwise — work. She understands that assembling the investment and paying attention to the details of the transaction as well as the IRS rules is important. Working primarily in client asset acquisition she is well acquainted with the IRAs purchase of a wide variety of assets such as mortgages, notes, private placements and LLCs. Catherine has a BS in Structural Engineering from the University of Pittsburgh and spent the first part of her career in oil and gas production, later moving into nuclear power plant design with Westinghouse before moving into retirement plan administration.

5 Reason You Need A Realtor

5 Reasons You Need A REALTOR

A real estate transaction is complicated. In most cases, buying or selling a home requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page government-mandated settlement statements. A knowledgeable guide through this complexity can help you avoid delays or costly mistakes.

Selling or buying a home is time consuming. Even in a strong market, homes in our area stay on the market for an average of 77 days. And it usually takes another 35 days or so for the transaction to close after an offer is accepted.

Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with someone who speaks that language.

REALTORS have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. That’s why having an expert on your side is critical.

REALTORS provide objectivity. Since a home often symbolizes family, rest, and security, not just four walls and roof, homeselling or buying is often a very emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you keep focused on both the business and emotional issues most important to you.

REALTORS are members of the NATIONAL ASSOCIATION OF REALTORS, a trade organization of more than 1 million members nationwide. REALTORS subscribe to a stringent code of ethics that helps guarantee the highest level of service and integrity.

Freddie Mac Announcement

Freddie Mac economist says worst of US housing slump over

Nov 15, 2006
WASHINGTON (MarketWatch) -- The worst of the nation's housing slump is over, and the market should show signs of a pickup around mid-2007, a senior economist at Freddie Mac (FRE) said Wednesday.

"I think the worst is behind us in terms of the downturn in the housing market," said Frank Nothaft, Freddie Mac vice president and chief economist, at a luncheon in Washington, D.C.
While Nothaft felt the market may not have reached its "trough" yet, he said it was unlikely that housing starts would plummet as dramatically as they did from the third quarter of 2005 to the third quarter of 2006, when they fell by 18%.

"Housing starts will trend a bit lower, and we have them bottoming out at some point in the first half of 2007," Nothaft said. "I think by the midpoint of 2007 we're going to consistently see some positive signs," he added.

Those predictions for the housing market coincide with Nothaft's expectations for below-trend overall economic growth in the first half of 2007, followed by an uptick in the second half of next year, with overall gross domestic product growth coming in at 3.2% for 2007.

Real Estate Real Talk!

Are you all tired of being beaten up by the press about how bad the real estate market is?

Don't they realize that LOCALLY this is our second best year ever? 2005 was the best!

Don't they also realize that the market slows down about this time every year?

Yes, we have higher amount of inventory, but the prices are still inching up!

Here is a breakdown of September 2005 - September 2006 average house price changes:

Boulder + 5.8 %

Broomfield + 1.7 %

Erie + 0.4 %

Lafayette + 3.5 %

Longmont + 3.5 %

Louisville + 6.7 %

Superior + 5.4 %

Mountains + 9.9 %

Plains + 8.2 %

MEDIA HYPE

Economists Challenge Media's Negative Drumbeat on Housing

By Kenneth R. Harney, Realty Times Columnist: Is it a housing bust or a media-driven panic? Mike Moran, chief economist for Wall Street's Daiwa Securities America, says he's surprised that virtually nobody has challenged the constant drumbeat of negative headlines and TV news warnings of imminent crashes and home price meltdowns.

"It's really been way out of line with reality," says Moran, whose firm specializes in the bond market. When a 1.7 percent decline in the median home price nationwide sparks headlines about the "housing bust," that is "just pure sensationalism about what is going on here," he said in an interview.

The housing market "is going through a correction that's badly needed" after five years of record sales and price appreciation. "The key issue is whether it is orderly or disorderly" - and it's clearly the former. Yet the financial press and TV news programs are "portraying it as a catastrophe."

Moran got indirect support for that view from other economists, including the Mortgage Bankers Association of America's chief economist, Doug Duncan, who said "the rhetoric is just way overwrought" - the sky is not falling in the real estate and mortgage sectors.

To the contrary, even the Federal Reserve's vice chairman believes the current correction will not be dramatic or even that long-lived, and that the housing slowdown will not have dire side effects on other parts of the economy.

In a speech that went virtually unreported by major media, vice chairman Donald L. Kohn told New York analysts that the "rebalancing" of prices to better fit current demand that is under way in many metropolitan markets is a normal, cyclical event - not an incipient disaster. In fact, it may even be a healthy and necessary part of the cycle: "The reported declines in new home prices in a number of areas should help facilitate the rebalancing of supply and demand" - i.e., lower prices should help gradually expand the number of serious buyers looking for houses.

Thanks to strong underlying demographic factors - new household formations and population growth - the current down phase may be relatively short-lived, Kohn suggested. New housing "starts may be closer to their (low point) than to their peak." If one takes mid-summer 2005 as the peak of the multi-year housing boom, Kohn appeared to suggest that the low point of the cycle - and the beginning of the eventual turnaround - could be just over the horizon.

The latest pending home sale index from the National Association of Realtors, which showed a surprising 4.3 percent jump in the number of sales in the contract stage, but not yet closed, supports that conclusion.

Kohn also noted that other economic conditions today do not point to a deep housing price recession or bust. For example, long-term mortgage interest rates are about a point above their historic lows, the Fed itself has stopped raising short-term rates, gas prices are falling, and the unemployment rate just dropped to 4.6 percent.

The current "situation stands in sharp contrast to some past downturns in the housing market" - in the early 1980s especially - "that followed actions by the Federal Reserve to tighten credit conditions significantly."

"Continuing growth in real incomes should underpin the demand for housing," said Kohn, "and as home prices stop rising, help to erode affordability constraints."

How come you're reading about the Fed vice chairman's moderately upbeat speech here rather than watching it on the evening news or reading about it in your newspaper?

Good question.

SUPPLY & DEMAND

There has been a lot of news media in the recent past about the "slowing housing market"....

Did you know that this year ranks among one of the highest in home sales? Well, probably not, the news media isn't talking about that.....

There are times when the economy is brisk and everyone feels confident about the future. As a result, people spend money. They eat out more, buy new cars, and they buy houses!

In a slowing market where the supply of available houses is greater than the supply of buyers, appreciation may slow and prices may even fall. If you are lucky enough to purchase a home during a slow period, you will probably have lower interest rates available for financing, you can be reasonably certain the economy will begin to show strength again and along with it higher appreciation rates.

Well, we are in that SUPPLY & DEMAND timeframe, interest rates are low AND NOW IS A GREAT TIME TO INVEST IN A HOME PURCHASE!

Since 1983, we have had two failrly long expanses of hot real estate markets with only a slight recession in between each. You would not want ot wait nine years to buy a home, would you? You could miss out on a substational amount of appreciation by waiting, and end up paying much higher prices.

BUY NOW - THERE IS A FABULOUS SUPPLY - LOW INTEREST RATES - LOW PRICES!

Best Of The Best

We're Number One!

Boulder ranks high in many national publications lists.

And, RE/MAX of Boulder, Inc. , once again wins the destinction by being voted "Best Of The Best" - Boulder Realtors!

READY - SET - BUY

WHETHER THE HOME YOU ARE ABOUT TO BUY IS NEWLY BUILT OR PREOWNED - ESTABLISHING YOUR PRIORITIES EARLY IN THE HOUSEHUNTING PROCESS IS VITAL!

• Identify FAMILY priorities: Begin with a family discussion of priorities, a "must list". Establish a price range and mortgage amount that you can qualify for. Determine how long you expect to live there and its location. Select a competent and experienced REALTOR.
• Define INDIVIDUAL priorities: Identify privacy needs, family and individual activity requirements, and space needs to accommodate your current and anticipated lifestyles and preview homes that fit those priorities as closely as possible.
• Establish MONETARY priorities: Expect some anxiety - it's normal whether you are a first time buyers or veteran movers. Avoid "qualification anxiety" by meeting with a lender early-on so that you know what price range you can qualify for and search with your REALTOR in an appropriate range.

WHY RENT WHEN YOU CAN OWN

Home Ownership - A Good Investment In Your Future!

As a general rule, homes appreciate about five percent a year. Some years will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region.
Five percent may not seem like that much at first. Stocks, may at times, appreciate much more and you could currently earn 4.87 % with 30 year treasury bonds, the safest investment of all.
Over the last 10 years, the cost of renting housing in the U.S. has increased an average of 3% per year. That means that an apartment or home renting for $1,000 per month will cost more than $1,300 per month in 10 years. If you rent the same home for 10 years, the total amount you would pay for rent will equal $137,567!

None of that $137,567 is returned to you, either through savings or as an investment. Homeownership, on the other hand, has tax advantages that renting does not, and those advantages can help you save money! Unlike your monthly rent, part of your monthly mortgage payment “comes back to you” in tax savings.

Return On Investment

If you bought a $250,000 house, obtained a mortgage, and put as much as 20% down—that would be an investment of $50,000. At an appreciation rate of 3% annually, a $250,000 home would increase in value $7,500 during the first year. That means that you earned $7,500 with an investment of $50,000—an annual “return on investment” of 15 %!

Plus Income Tax Savings &Tax Advantages

Because of income tax deductions, the government is basically subsidizing your purchase of a home. All of the interest and property taxes you pay in a given year may be deducted from your gross income to reduce your taxable income.

For example, assume you purchase a home that costs $250,000. Your down payment is $50,000 (plus closing costs incurred to actually process the transaction). You finance the balance with a 30 year fixed rate mortgage at 7 % interest, making your initial loan balance $200,000. During the first year you would pay $13,935 in interest. If your first payment is January 1st, your taxable income would be $6,135 less due to the IRS interest rate deduction!
Property taxes are deductible too. Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your tax obligation.

Tax Advantage & Home Ownership

Annual Taxable Income $50,000
Interest Deduction -13,935
Property Tax Deduction - 2,500
Taxable Income $33,565
Tax Liability $10,069

Annual Tax Savings $3,401
Return on Investment $7,500
Principal Payment $2,031
Ownership Advantage $12,932

Freedom & Individualism

When you rent, you are normally limited on what you can do to improve your home. You have to get permission to make certain types of improvements. Nor does it make sense to spend thousands of dollars painting, putting in carpet, tile or window coverings when the main person who benefits is the landlord, not you.
When you own a home, however, you can do whatever you want. You get the benefits of any improvements you make, plus you get to live in an environment you have created.

Your rate of return when buying a home is higher

than most any other investment you could make!

It's Easy Being Green!

Have A BBQ!

You knew grilling was a healthy way to cook vittles, but did you know it was good for the air? Outdoor grills take less energy than electric kitchen stoves. They also keep heat out of the house, lowering air conditioning costs.

Stick with grills that use propane or natural gas; they emit 5.6 pounds of carbon dioxide into the atmosphere while a charcoal grill belches 11 pounds of the air-polluting compound.

One more thing - dine on reuseable plates, not disposable paper ones.....The Tress Will Thank You!

Economic Outlook & Real Estate

Excerpts from The Kiplinger Report:


Will housing's slump cause a recession?
* No. But it will slow growth a lot through next year, until the balance of supply and demand for residential property returns. Next year...2.5% economic growth TOPS, and it may well be closer to 2%.

Housing is delivering a triple economic whammy:
* A sharp, sudden drop in housing construction, financial strains on many homeowners' incomes and a major chill in consumer confidence.
* Energy prices remain the linchpin on whether the economy sinks or swims in 2007.
A big increase in costs of oil and other fuels would be too much for U.S. consumers to bear on top of the hit they're taking from housing.
* Most likely, oil prices have peaked and will start a slow easing after Labor Day. But supply disruption risks are rising as conflicts in the Middle East gain intensity.
* Average home prices will stay flat through about the middle of next year. By then, builders will have curtailed supply enough to allow the current overhang of about 300,000 houses nationwide to start to be absorbed by the market.
* Still, sellers will face a dismal spring, usually the best sales season.
* We see starts sliding to 1.7 million next year from 1.85 million this year. Population trends argue for an average of 1.8 million homes to be added annually, but builders surpassed that level in 2004 and 2005.
* Much of that surplus went to speculators, but the demand has vanished.
* Housing will play a big part in slowing job growth. Next year, net employment growth will slacken to an average of 117,000 a month.
* Home building and related fields...mortgage finance, furnishings, design, landscaping, etc...have made up 25% of overall job growth since 2002.

The housing cooldown will have a broader reach than expected just a few months ago. Back then, it seemed that the bulk of the downturn would be restricted to former boom areas, located mainly on the coasts. But sluggishness in some industries, especially autos, is taking its toll on some inland areas, notably Ind., Mich., Ohio and parts of Pa. and N.Y.

That doesn't spell a shift from a market correction to a crash. The market is adjusting, albeit very quickly, from an extended period of unusually robust activity made frothy by investment-led purchases. By late 2007, homeownership will resume its historical role as a relatively secure store of value that also provides shelter.

Strong global demand is putting a firm floor under oil prices, keeping them between $70 and $75 a barrel through Nov. at least.
* Of course, any new threat to supplies will produce sharp price spikes.
* Gasoline prices WILL start coming down after Labor Day, as usual.
* But motorists may hardly notice. In past years, pump prices fell about 15% between the end of summer and early Jan. This year, the drop will be about half that, to $2.75 a gallon, on average, from $2.95 now.
* Diesel fuel...down only about a dime, from $3.11 a gallon.
* Heating oil...up about 30¢ a gallon, on average, this winter from $2.80 this summer. That's about 25¢ a gallon higher than a year ago.
* Natural gas will be much costlier by year end as well, increasing to $10 to $12 per million British thermal units, from $7 now, as demand for electricity to heat homes puts pressure on scant supplies.

Although many large U.S. companies are flush with cash... Not all are prosperous. Public company bankruptcies are rising this year for the first time since 2001 and will keep climbing for years. Among the reasons: Higher interest rates, a cooling housing market and high energy costs will bedevil firms struggling to pay off debt.

HOW A NEW CAR PAYMENT REDUCES YOUR PURCHASE PRICE!

BUY THE HOUSE FIRST!

When determining your ability to qualify for a mortgage, lenders look at what is called your "debt-to-income" ratio. A debt-to-income ratio is the percentage of your gross monthly income that you spend on debt. This will include your monthly housing costs, including principal, interest, taxes, insurance, and HOA fees if applicable It will also include your monthly consumer debt, including credit cards, student loans, installment debt, and ..... car payments.

For example, suppose you earn $5,000/month and you have a car payment of $400. At current interest rates you would qualify for approximately $55,000 LESS than if you did not have the car payment. Even if you feel you can afford the car payment, mortgage companies approve your mortgage based on THEIR guidelines, not YOURS!

However, if you have not already bought a car, remember one thing. Whenever the thought of buying a car enteres you mind, think ahead.....Think about buying a home first. Buying a home is a much more important purchase when considering your future financial well being.

Do Not Buy The Car First -- Buy The House First!

Buying A Home Is A Good Investment!

As a general rule, homes appreciate about four or five percent in a year. Some years will be more, some less. The figure will vary from neighbohood to neighborhood and from region to region. Boulder County has generally seen much higher appreciation rates over the years.

Five perdent may not seem like much. Stocks can sometimes appreciate much more and treasury bills or bonds are a pretty safe return on investment.

Let's take a look at a property investment....

• If you bought a home for $200,000 with a 20% downpayment, your initial investment would be $40,000. At an appreciation rate of 5%, your home would increase in value by $10,000 during the 1st year. Not bad on a $40,000 investment!
• You are also making mortgage payments and paying property taxes. However, since the interest you pay on your mortgage and your property taxes are both tax deductible, the governments is essentially sudsidizing your home purchase.

Your rate of return on your home purchase investment is higher than most any other investment you could make!

Pikes Pike Bicentennial Celebration

July 14 - August 15

Original Pike documents from the National Archives will be on display at the Colorado Springs Pioneers Museum. This will be the first time these documents have been seen in this region since Zebulon Pike was here 200 years ago!

Pikes Peak was first seen by Zebulon Pike on November 15, 1806.

Many activities to celebrate are going on throughout the year.

Visit www.zebulonpike.org for more details.

ARE YOU READY FOR SOME FOOTBALL?

The first pre-season Broncos football game is just 8 days away!

Are you ready?

The game is at Detroit but will be televised on CBS.

Remember the time difference!

Don't miss a minute!

7:30 p.m. EDT from Ford Field

IMPACT ON EDUCATION

Crayons to Calculators Helps Boulder Valley Students

Start School Ready to Learn

Do you know that over 4000 students in the Boulder Valley School District (BVSD) who are from low-income homes routinely begin school without adequate supplies? Not only are these students unprepared, they never experience the excitement of starting school armed with new supplies.

To ensure that these students start school prepared, Impact on Education, along with five other non-profits, is involved with Crayons to Calculators, a community-wide school supply drive for students in need. The drive is a partnership among Extras for Education, Family Learning Center, Foothills United Way, “I Have a Dream”® Foundation of Boulder County, Impact on Education and Sister Carmen Community Center. It is sponsored by the Boulder Rotary Club Foundation and Corporate Express and supported by about 15 local financial institutions, corporations and organizations.

Crayons to Calculators aims to ensure that all BVSD students start school ready to learn. But the drive needs your help. Individuals can support the drive by filling a backpack for a student in need, donating cash online or donating loose supplies at one of about 30 supply drop-off locations. To learn more, log on to www.CrayonsToCalculators.org or call (303) 245-5880.
You also may send a check to Crayons to Calculators, care of Impact on Education, 75 Manhattan Drive, Suite 205, Boulder, CO 80303. Together, we can ensure that all BVSD students start school prepared.

Insert taken from Boulder Valley School District Newsletter

The Honeymoon Is Over

The media has recently been reporting that the real estate market is slowing. Boulder County sales statistics substantiate these reprots with year to year sales comparison ot be off 5% and inventory of homes up by 16% in the singel family residence category. Condos & townhomes sales are virtually even but the inventory is up by 13%.

The market is increasingly strong for long-term investments, whether it's for your primary residence or a part of your financial portfolio.

Investors who purchase fix & flip properties must approach the market with caution. In the past, properties purchased at discounted prices and fixed could be resold for a tidy profit due to appreciation. In the current market, fix & flip properties need to be purchased at bargain basement prices and will most likely sell closer to current competitive pricing and linger on the market longer.

In terest rates continue to rise and the economic outlook for 2007 predicts that market conditions will be more balanced.

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