A pleasure, gerri. Gerri why do you do this study . Most people dont do the study this way. This is the question i have. If i buy a house with these basic parameters what will it cost you market by market . Why do you do the study . Weve done it many years. As you suggested it is all location. But we hear so much on National Level on averages and median prices but as we move through the housing recovery we find real estate becomes local and hyperlocal. At end of the day people want to know what will it cost me to buy a home in one location versus the other. We look in over 2000 markets and zeroed in on a four bedroom, two bath home. It is aspiration hal home an comparing to your point, apples apples across the country. Gerri when you dig into the numbers it es super interesting. California is a real rock star on this list and Silicon Valley really. No question. California has always been high on the list. This year nine out of top 10 most expensive markets. But to your point it shifted from Southern California over the years north to northern california. Silicon valley, tech boom is where so much wealth is being created. Gerri los altos, newport beach, saratoga, redwood city, woodside. Los gatos. 1. 9 million to typical four bedroom, two bath home. Gerri flip side, most affordable what are we looking at . Most affordable, second year in a row, cleveland ohio. You can go into the suburbs and find Beautiful Homes upward in the millions. Clearly one of most affordable markets and going through somewhat of a revival. Riverdale, georgia, park forest, illinois, lake wales, florida. All over the map. More diverse. Gerri interesting full screen how much would the los altos house by buy you somewhere else. The house was 1. 9 million. 1. 96 million. Give you indication you could buy 30 homes in cleveland for one home in the Silicon Valley. Gerri one of my Favorite Places charlotte, North Carolina, you could get nine. Chicago eight, miami, five. That is interesting a difference i wouldnt have expected. Seattle as well here. I was asking during the break. You see this firsthand. Were following the Real Estate Market so closely. Not because people as to own their own home and also it means so much for the broader economist. How is the Housing Market right now . Is it improving . The Housing Market is doing well. Were in the third year of recovery. The last two years we had both rapid growth in unit sales and prices because we were moving from overcorrection. Were coming back at rapid pace. Weve seen prices started to trend. Theyre going up but at slower pace and argue more healthy and sustainable pace. This is where were moving back towards the Traditional Market where exactly we need to be for the future. Gerri story this week saying that zero mortgage rules, stablizing mortgage rates, giving like a little boost to the Housing Market. Do you see that . We aim for firsttime buyers. A lot of uncertainty in terms of lending environment, particularly comes to regulations on qualified mortgages. Qualified Residential Mortgages and so we just had some important decisions. Down payment within the last, probably two to three weeks, no longer is it 20 . It is backs down to more manageable level. This is exactly the kind of Common Sense Solutions that we need in order to get us going, even further in the future. Gerri housing will help. Retailers, it will help people that make furniture carpet. It reverberates, goes through the economy. Such a big kick, once house something going. It will be interesting to see if it takes off to get beyond originally what we saw investors getting in. That only went so far. Investors moving out. We have traditional buyers moving back where we need to go into the future. Gerri yate to see you. Great to see you, thank you. Gerri for an update to a story we brought you in october, more americans will soon be able to to buy a home with just a 3 down payment. The new lending standards are being put in place by fannie mae and freddie mac. Theyre designed to help more lowincome an firsttime buyers afford homes in the wake of the 2008 financial crisis. Borrowers still must have enough income to repay loans on a monthly basis. But this could be the start of the same problem we had leading into the recession. People buying homes they cant afford. Well see. Still a lot more to come during this special hour. Tips on winterizing your home before the end of the year. There is a dangerous compac in the housing industry. Inflated home appraisals are back and they worry regulators. What you need to look for coming up. They are a glowing example of what it means to be the best. And at this special time of year, they shine even brighter. Come to the winter event and get the mercedesbenz youve always wished for, now for an exceptional price. [ho, ho, ho, ho] lease the 2014 cla 250 for 329 a month at your local mercedesbenz dealer. Gerri welcome back to the willis report, our hour of housing help. What is going on with appraisers . You know part of the process is getting appraisal of home and finding out how much it should be worth. Were seeing old ghost from previous days, appraisers overvaluing houses. I sat down with vera gibson and i asked her why. Sales are down. Price appreciation is slowing. Were not seeing baines over past couple years. So everybody need to make money. Loan originations are down. Average number of mortgages are down. Lenders need to make money. Appraisers need to make money. Brokers need to make money. Everyone is feeling heat. Gerri this greased the wheels of industry. Appraisers have it in their hand. If, what happens if they appraise too high, right . Gerri right. I was going to say, between 2011 and 2014, one in seven appraisals were inflated by at least 20 . Now this helps the seller but for the buyer, vera, what does it mean . Yeah. I mean the buyer need to do your own homework. Not uncommon to actually present the appraiser with your own comps. Run the numbers and check what is going on. Use a site like zillow which i blog for. Present them with your own information. Some of these apracers are not all that great actually. Weve seen decline in number of appraisers going into the industry ever since the Appraisal Management Companies took over. It is a whole new landscape. These are not as skilled as necessarily they have been in the past. Some really good guys, residential appraisers left the industry all together or moved into more lucrative fields in the industry. The industry has definitely changed. Gerri important thing for consumers to know about. Veer remarks thanks for coming on the show. Thanks, gerri. Gerri later on the show, advice what you need to do if youre living in an overvalued Housing Market and how to make money off the expensive areas. Were fully into the Christmas Season and temperatures are dropping. Well tell you how to properly winterize your home. Im angela, and i quit smoking with chantix. People who know me, they say i never thought you would quit. but chantix helped me do it. Along with support, Chantix Varenicline is proven to help people quit smoking. It gave me the power to overcome the urge to smoke. Some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. Some people had seizures while taking chantix. If you have any of these, stop chantix and call your doctor right away. Tell your doctor about any history of Mental Health problems, which could get rse while taking chantix or story of seizures. 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Gerri low temperatures bring hightech new technology to your house making it easier to keep your house warm but the energy bills low. We have tom host of the money pit. Great to have you hire. Look, i have to tell you i spent ten years on our house, not that long, trying to winter proof it, weatherize it and you can really save a lot of money. Yeah. Gerri give people an idea how much they can save by closings that house in . Well you say close it in, there are always places can tighten it up. There are different components to take meaningful action. For example, the thermostat, for years get a programmable thermostat. Set two temperatures when youre home and one not at home. We stepped it up with the wifi thermostats. They have capability gerri like nest. Like nest. Gerri we had problems with nest. I had problems with nest 2 1 2 years. I absolutely love it. I love of the fact it knows when were home and knows when were gone. It does a scan. When were not home brings the heat down. Were not on nine to five schedules. Gerri that is true. That is huge capability. Gerri we had trouble working it in our house. Aging systems can be difficult. What about ducks. Most ducts have 4 leakage. Gerri 40, four, zero . Yes. How do we seal ducts with duct tape. Duct tape was not designed for ducts. Never will be. The adhesive heats up and dries out there. Is better system called arrow seal. You play a polymer inside of ducts and finds holes and seals them up to 3 8 of an inch gap. Gerri can do it yourself. Noings that has to be done by a professional. Gerri talk about insuelation. Yeah. Gerri that oldfashioned pink thing you roll out. You dont have to do that. No, you dont. Best insulation is spray form insulation. When you spray it can expand. It expands 100 times its thickness. Space it and fills up and insulates an seals at the same time. That is huge. We did that in our house this past spring. My airconditioning bill was 50 what it was the year before. 50 . Gerri half off. Not to mention increase in comfort. Really good stuff. Gerri weve done the same thing. Made a huge difference. Keep doing that. The walls, floors. You have to have the opportunity n our case the house was put a new roof on. The attic was accessible. You cant tear walls down but do it a little at a time. Gerri windows are leak culprit. Winterizing your windows is very straightforward thing. I use latex caulk, acrylic latex caulk and out side of and inside. A lot of folks skip inside winterization. If you caulk the molding between window and wall, you cut down on drafts. You can use a weather stripping caulk looks like clear silicone caulk. Except in the spring you can peel it off to open your window again. Gerri talked to us about nest. You will have passive solar panels put on your house. Are you optimistic you can go off the grid . I was talking about perhaps adding active solar panels to the roof. I think yes, there are systems today where you can generate so much electricity your bills go down. Gerri even in the northeast here. Yes, absolutely. It is entirely possible. It is happening now. You mentioned passive solar energy. A Company Called inertia is constructing homes using almost zero additional amount of heat. Double shell design. Kind of like a physical heat pump where the heat circulates through the house of the goes back to the either to be reheated or recooled and continues cycle. Gerri wow, that is interesting. Thanks for coming on the show. Great to see you, thank you. My pleasure. Gerri coming up next, is buying a rental property a good investment . Well, depend where youre looking. Well explain. Is housing on the way to becoming a bubble . Prices are skyrocketing but my next guest says there are some areas that are overvalued. Details coming after the break. John investing in real estate is not for faint of heart. Fox businesss Cheryl Casone has markets you should be buying. She has great insight into this because she has done it herself. I didnt quite do it myself. I found data and i will relay it to you. This comes from realtytrac. Third quarter, rental Property Income report. So what they do, do it every quarter. Kind of cool. Take average amount of prices out there,1 of the population, that they cover, basically with all these, more than 500 counties. They compare that to the prices. What they found over the last year, is that prices actually, for like a three bedroom home, they compare, prices actually went up 7 yearoveryear. What does this mean . It is bad if youre wanting to buy a house to be a landlord or to rent. Now there is some good news in all of this. I want to press everybody. There are good markets where you can make doubledigit returns. First take a look at this. Rocky mountain, North Carolina. Gerri yeah, North Carolina. I was in North Carolina over the weekend. Beautiful state. Guess what . Buy property in the state. Parts of it. 41 Annualized Rental income returns. That is after you buy the house you make 41 returns on the house. Gerri can i ask you a question. Rocky mountain is far away from here in new york city. Would you buy property far away to invest in . Is that a good thing to do . Well i personally believe that to be out of town landlord has to be tricky business. You have to hire a property manage mare. You have to know an area. I wouldnt tell anybody to go into area they dont know to buy a property to use as rental income. Vacation home is another story. The other areas, like Atlanta Metro area is great place. Kokomo, indiana. Palatka, florida, 22 . Detroit, michigan, 20 . Also, tampa st. Pete came in top 10. I was there a couple weeks ago representing our wonderful network. Tough say that it depend where you look. Think about this though, detroit. Think of all those canadians that went down into detroit, instead of buying up hopes especially in the middle of the housing security . Burst. They are laughing all the way to bank. Canadians in particular. Look at cash money that came into this country over last five years, the canadians led the list. Gerri theyre smart. Theyre smart those canadians. Yeah. Gerri are there places you should not go or avoid . Absolutely. Look at heat map, comes from rael at this track, across the country, red, bad, no, do not try to buy a home right now. Gerri california, uhuh. Mostly look along the coast of california. You see the lovely new york, boston. Think of boston, philadelphia, parts of texas are rough right now. That is the hill country in texas as you can see on the map. Even as you go up towards canada, on the western side you can see some rough spots. Really have to know the numbers and crunch the numbers. All about price, versus what you can think of, what you think you will get for rent in that city. Funny, david asman said earlier, oh, new york city. I said absolutely not new york city. That is the worst place to try to buy a rental property to make a little cash. I got friend trying to buy stuff in brooklyn. Forget it. They cant touch what they want to buy to rent. Gerri another way new york is different. Cheryl, good to see. You bet, thank you, gerri. Gerri if you want to go from renter to buyer watch out. A new report is reporting that some Housing Markets are way, way overvalued. Are we heading toward another bubble . What should you do if youre in the overvalued areas. We have chief economist for trulia. What are the markets so overvalued . There are some markets across the country that look 10 or more overvalued. When we say overvalued, this is compared to fundamentals, compared to where we would expect prices to be based on things like incomes and rent. They tend to be in texas and in california. Austin, los angeles, some of the overvalued markets. Gerri l. A. , orange county, San Francisco, riverside, san bernardino. What happened to these markets . These did pretty well during the bubble, right, when prices were going up. Do they fall so dramatically that investors came back in again. The most overvalued markets are including two very different kind of Housing Markets. On one hand you have the california markets. Huge housing bubble, big bust. Now a pretty strong recovery. A bounceback in prices outpaced increases in incomes. The texas markets are very different story. Texas had a very mild housing bubble and very mild bust. Their bigs ups and downs were back in the 80s. Price increases in texas are not prices that fell much after the bubble burst. Gerri they are on fire for some time. Im seen that myself. So, you lived there, the prices are going up, up, up. Maybe youre locked into a house and you would like to trade up. What is the best thing to do . First is, not to panic. This is not 2006 all over again. In 2006 prices nationally looked more than 30 overvalued and more than 5 in many markets. So today, even 10 or 15 overvalued is not 2006 all over again. But it is a reminder that housing prices go up but they can also go down in places that are overvalued are at greater risk for a correction. So, in these overvalued markets you cant count on housing being a great investment by itself. You have to really want to live in the place that youre going to buy. Gerri got to tell you. We all learned that the hard way, right . Say you want to be buyer in overvalued market, what would you recommend people do right now . The first thing if youre buying in overvalued market, have a long time horizon. For someone looking to buy, only for a short period of time, theyre at greater risk if prices turn down. Over a longer period of time, places tend to recover. And the ups are more likely to balance out the downs over the long term if youre looking to move to one of the overvalued markets for a time, renting might be a smart. Gerri undervalued