Tax Credit Extended – Repeat Buyers Eligible

Congress passed the Homebuyer Tax Credit Extension. Here are the main facts that you should know:

* The tax credit has been extended to April 30, 2010.

* Repeat buyers who have owned their homes for at least 5 years are now also eligible for a credit of up to $6,500 from the government.

* If you’re a first-time homebuyer you may be eligible for a credit up to $8,000.

* To qualify, buyers have to sign purchase agreements by April 30, 2010 and have 60 days to close by June 30, 2010.

* The credit is available for the purchase of principal homes costing $800,000 or less.

* The new tax credit has increased income limits.

* Individuals with annual incomes up to $125,000 and up to $250,000 for joint filers are now eligible before the credit begins to phase out.

* The credit is equal to 10 percent of the purchase price of a primary residence.

* Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment.

* Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.

* Those who sell their new home or stop using it as their main residence within three years would have to repay the credit.

* You must be at least 18 year of old to claim the credit.

United Teachers Los Angeles and community spearhead innovative school reform project

LAUSD is now the home to the Belmont Zone of Choice, an innovative pilot school program developed from the ground up by UTLA and a grassroots coalition of teachers and community groups.  The group recently presented at Burbank Middle School in Highland Park.  Click here for more information on this project.

HOW TO BUY AN REO

Many entry level buyers are finding it quite a challenge out there…click here for some comic relief

Homes selling for closer to list price

U.S. homebuyers paid 3.3 percent less than listing price, on average, during July — a smaller discount than the 3.5 percent average in June and 4.6 percent in January, listing and valuation site Zillow.com said.

At the market level, Zillow’s July Real Estate Market Reports shows buyers paid the asking price or more in some California markets where sales are heating up.

In the El Centro metropolitan statistical area (MSA), one of 161 tracked by Zillow’s report, buyers paid 1.8 percent more than listing price. In seven California markets — Sacramento, Merced, Modesto, Riverside, Stockton, Yuba City and Fresno — the asking price and sale price were the same, on average.

Zillow attributed declining discounts from listing price to increased sales and a high proportion of foreclosures resales, which are already priced relatively low.

Homebuyers in Florida had the most negotiating power in July, Zillow said. Buyers in the Vero Beach metro area paid 10.2 percent less than the last listing price, on average.

Other Florida cities ranking in the top 25 markets for discounts from list price were Sarasota (8.2 percent discount), Naples (7.8 percent), Daytona Beach (7.5 percent), Miami-Fort Lauderdale (7.5 percent), Panama City (7.1 percent), Punta Gorda (7 percent), Melbourne (6.6 percent), Ocala (6.4 percent), Tampa (6.1 percent), Jacksonville (6 percent), Port St. Lucie (5.7 percent), Gainesville (5.5 percent) and Lakeland (5.5 percent).

Zillow reported that 22.8 percent of homes listed for sale on Zillow.com had at least one listing-price reduction as of Sept. 1, with a median reduction of 6.5 percent from the original listing price. Homes listed for sale on Zillow during August were listed for a median 96 days, up from 91 in July.

Source: Inman News

NY Time Touts Highland Park as new LA Cultural District

HIGHLAND PARK in northeast Los Angeles holds many honors: the first town to be annexed by Los Angeles (in 1895), the backdrop for Quentin Tarantino’s “Reservoir Dogs” and a historic trust of Craftsman and Victorian-style homes.

But few would ever confuse Highland Park for a cultural district. Until now. What was once a sleepy strip of garish 99-cent stores and auto parts shops is turning into a thriving neighborhood of cool restaurants and boutiques that draw young trendsetters in skinny jeans, flannel shirts and Converse high tops.

The turnaround started a few years ago, when real estate prices in nearby Silver Lake and Echo Park increased significantly. Priced-out artists, actors and writers were drawn to Highland Park’s walkable streets and its glut of handsome old homes. Not only was it aesthetically appealing, but the area also had parks, hills and a hushed, small-town feel.

Much of the flurry is clustered along a five-block stretch of York Boulevard, the main drag. “It’s an odd mix of artists, young families and traditional Latino culture,” said Matt Schodorf, who recently opened Café de Leche (5000 York Boulevard; 323-551-6828; www.cafedeleche.net), a Latin-style cafe, with his wife, Anya. “The landscape has changed significantly. Now, everything is centered on one street. It’s rare to find a walking culture in L.A.”

A prime example of the area’s youthful do-it-yourself spirit is Orecul77 (5159 York Boulevard; 323-254-2600; www.orecul77.com), a kind of hipster tailor shop where the owner, Tawni Lucero, renovates old dresses into “one-of-a-kind wearable pieces of art.” The funky brightly colored store, which opened last November, charges $55 to $75 for each dress.

Highland Park feels particularly alive at night, when young arrivals gather at places like the York (5018 York Boulevard; 323-255-9675; www.theyorkonyork.com), a stylish gastropub with brick walls and chalkboard menus. On weekends, the L-shaped bar is often five deep with floppy-haired students from Occidental College nearby, local women in short skirts and high heels and artist types from Silver Lake with shaggy beards and trucker hats.

A few doors down is Johnny’s (5006 York Boulevard; 323-551-6959), a dimly lighted bar with a “Cheers”-like vibe and a jukebox that bounces from Iggy and the Stooges to Led Zeppelin. The pool and foosball tables are a major draw, as are the chilled Jägermeister shots ($6). A favorite among York Street business owners, the bar often blurs into unofficial town hall meetings.

“We’re in a city of nearly four million people, but here it feels like a small town,” said Amy O’Connell, an owner of Society of the Spectacle (4563 York Boulevard; 323-255-4300; www.societyspectacle.com), a fashionable eyewear boutique in a converted 1920s bungalow. “I mean, where else in L.A. do people honk as they drive past?”

By JAMIE BRISICK, NY Times Travel Section July 2009

Pending Home Sales On the Rise

Pending sales are a great indicator of activity in a market.  According to the National Association of Realtors, it’s Pending Home Sale Index, a foward looking indicator based on contracts signed in May,  pending sales in May of 2009 were 6.7% higher than May of 2008.  This marks the 4th straight monthly gain – the last time there were 4 consecutive monthly gains was in October of 2004.  The pronounced increase in April and the fact that May sustained this rise does indicate that number of home sales are poised to rise in the coming month or two.

Appraisal Check List

Here are some of the factors that appraisers Joni L. Herndon of Real Property Analysts/Gulf Coast in Tampa, Fla., and John A. Hillas of Hulbert & Associates Inc. in Modesto, Calif., say they consider when determining value.

Seller Incentives and concessions. Most of today’s buyers expect to pay the lowest possible price and still get some extras. Sellers and home builders are offering money toward closing costs, remodeling and decorating, upgrades, and association dues. The price set initially may not be the final price once concessions are factored out. Appraisers care about that final number.

Closing date. Forget what comparable neighborhood houses sold for a few months back. Appraisers want prices from the most recently closed transactions. “If a sale was more than 45 days ago, even 35, the price may be irrelevant,” Hillas says.

Condition and curb appeal. Appraisers typically find several properties with similar interior and exterior features to determine value. When markets are healthy, blemishes matter less, but when markets soften, problems—a dated kitchen or barren lawn—can reduce prices and deter buyers. “The difference in value is not just the repair costs but the time and hassle to make them. It’s better for sellers to do work in advance,” Hillas says.

Foreclosures. Appraisers technically shouldn’t consider neighborhood foreclosures when valuing a home, since foreclosures don’t meet the Appraisal Institute’s definition of a property reasonably exposed in a competitive market, says Herndon. “But when several neighborhood homes are abandoned, it’s hard not to caution sellers that this is a troubling trend and may affect home values,” she says.

Changing demographics. If a house is in an up-and-coming area, the value can be expected to rise. A location that’s perceived as safe also may help attract the increasing number of single female buyers.

Economic clouds. If there’s an oversupply of comparable homes for sale, or if the local job market is suffering, buyers may be hesitant to invest. Hillas advises setting prices aggressively from the get-go.

Chemistry. It’s hard to account for those times when buyers fall in love with a house, despite a high price, poor condition, or tough economy. “Emotional attachment is a factor that can’t be predicted,” says Herndon. Hillas agrees, “It’s what makes it harder to appraise homes versus commercial buildings, where buyers care more about the bottom line.”

8 Quick Fixes to Increase Home Value

With buyers scarcer, sellers must up the ante to convince them that their property offers what many want most — top value for dollar expended. Here are eight fast fixes:

1. Buff up curb appeal. You’ve heard it before, but it’s critical to get buyers to want to look on the inside. Be objective. View listings from the street. Check the condition of the landscaping, paint, roof, shutters, front door, knocker, windows, house number, and even how window treatments look from the outside. Add something special—such as big flower pots or an antique bench — to help viewers remember house A from B.

2. Enrich with color. Paint’s cheap, but forget the adage that it must be white or neutral. Just don’t  get too avant-garde with jarring pinks, oranges, and purples. Instead choose soft colors that say “welcome,” lead the eye from room to room, and flatter skin tones. Think soft yellows and pale greens. Tint ceilings a lighter shade.

3. Upgrade the kitchen and bathroom. These make-or-break rooms can spur a sale. But besides making each squeaky clean and clutter-free, update the pulls, sinks, and faucets. In a kitchen, add one cool appliance, such as an espresso maker. In the bathroom, hang a flat-screen TV to mimic a hotel. Room service, anyone?

4. Add old-world patina. Make Andrea Palladio proud. Install crown molding at least six to nine inches in depth, proportional to the room’s size, and architecturally compatible. For ceilings nine feet high or higher, add dentil detailing, small tooth-shaped blocks used as a repeating ornament. It’s all in the details, after all.

5. Screen hardwood floors. Buyers favor wood over carpet, but refinishing is costly and time-consuming. Screening cuts dust, time, and expense. What it entails: a light sanding, not a full stripping of color or polyurethane, then a coat of finish.

6. Clean out, organize closets. Get sorting—organize your piles into “don’t need,” “haven’t worn,” and “keep.” Closets must be only half-full so buyers can visualize fitting their stuff in.

7. Update window treatments. Buyers want light and views, not dated, fancy-schmancy drapes that darken. To diffuse light and add privacy, consider energy-efficient shades and blinds.

8. Hire a home inspector. Do a preemptive strike, since busy home owners seek maintenance-free living. Fix problems before you list the home and then display receipts and wait for buyers to offer kudos to sellers for being so responsible.

10 Popular Kitchen and Bath Trends

See what David Alderman, vice president of the National Kitchen & Bath Association, discovered in touring the floor at NKBA’s recent annual convention.

Green. With the green wave spreading, manufacturers are bringing out more products like stainless steel and glass that can be reused when life cycles are up. Plus, growing in popularity are more products that save energy, conserve water, and are made locally.

Beyond granite. Granite countertops may still reign because they’re practical, but glass, stainless steel, and mahogany are gaining a foothold.

Black and white kitchens. The all-white kitchen is being tweaked with crisp black. One example: white cabinets on the perimeter, black on the island.

Faster, healthier. Steam ovens will captivate health-conscious buyers who also desire moist food cooked quickly.

Less space. With many people now opting to downsize, manufacturers are debuting smaller 15” refrigerators and 18” dishwashers. Less space also means fewer multiples—one instead of two sinks. Mirrored backsplashes and higher vaulted ceilings also help to magnify space.

Greater value. To keep prices down for cost-conscious, value-oriented home owners, manufacturers are limiting selections but maintaining quality.

Multiple levels. The two-tiered island in multiple colors has gained ground to provide an upper-level eating and serving ledge that conceals dishes in the sink on the lower level. Wine coolers are often built in for entertaining pleasure.

Less maintenance. Since saving time and expense are on home owners’ minds, manufacturers now deliver longer warranties on everything from equipment to hinges and finishes.

More modern. Simple, straight contemporary lines, floating cabinets, and no toe kicks offer the hot contemporary look.

Dual, more private. Toilets with dual flushes are catching on, as is placing a toilet in its own private cubicle.

For more information, go to www.NKBA.org.

$8000 Tax Credit – get it upfront and use for down payment or closing costs

Potential first-time buyers have yet another reason to consider purchasing a home: the monetization of the $8000 tax credit. This article outlines four ways First Time Home buyers can get access to those funds for upfront costs such as down payment and closing costs.  Click here to read the full article.

Estimates indicate most homes are undervalued by 12.2%

10 Most Undervalued U.S. Cities

Housing research organization IHS Global Insight estimates that the average U.S. home is undervalued by 12.2 percent, and many previously pricey communities are undervalued by considerably more.

A recent study released by IHS used home prices, interest rates, area incomes, population density, and historic premiums and discounts to analyze housing values. It examined 330 markets and found homes are underpriced in 248 of them.

Despite the high percentage of undervalued areas, IHS says “it is too early to call a bottoming,” as “job losses continue, housing inventories remain elevated, and consumers remain wary in light of economic uncertainty.”

Here are the 10 most undervalued areas:

1. Vero Beach, Fla., -42.5 percent
2. Houma, La., -41.4 percent
3. Las Vegas, -40.9 percent
4. Merced, Calif., -40.1 percent
5. Cape Coral, Fla., -39.1 percent
6. Houston, -36.9 percent
7. Midland, Texas, -34.8 percent
8. Lafayette, La., -34.4 percent
9. Vallejo, Calif., -34.3 percent
10. Stockton, Calif., -34.3 percent

Source: CNNMoney.com, Les Christie (06/04/2009)

The outlook us UP

EHS – Existing-home Sales: 4.57 million

Seasonally adjusted annual rate, which is the actual rate of sales for the month, multiplied by 12 and adjusted for seasonal sales differences.

PHSI – Pending Home Sales Index: 84.6

The Pending Home Sales Index measures housing contract activity. An index of 100 is equal to the level of activity during 2001, the benchmark year.

Source: NAR Research

Sales Dip, But Outlook Is Up

The pace of existing-home sales slowed 3 percent in March to 4.57 million units, giving up some of the gains it had seen in February. Yet the easing could be short-lived because NAR’s forward-looking Pending Home Sales Index is up. The index gained 3.2 percent to a level of 84.6. NAR says first-time buyers make up half of those in the market, drawn by low rates and the first-time buyer tax credit.

*Numbers are adjusted from figures published in the May 2009 issue.

Buyer Traffic Drives Optimism

Practitioners’ expectations for sales activity over the next six months continue to trend up. In April, practitioners said they expected improved conditions, led by gains in buyer traffic. Confidence has been on an upward swing since December.

Results are based on 2,758 responses to 6,000 surveys sent to large and small real estate offices. The survey asks practitioners to indicate whether conditions are strong (100 points), moderate (50), or weak (0). Responses are averaged to derive results.

Lawrence Yun// <![CDATA[// | June 2009

Homeowership Still Pays

Many Americans have taken a hit to their home equity over the past couple of years, and some may wonder if it’s really the smartest financial decision to own a home. Good news—a recent analysis of Federal Reserve data by the NATIONAL ASSOCIATION OF REALTORS® shows the answer is yes.

In comparison with renters, home owners have much greater household wealth, says NAR’s April commentary on the Fed’s Survey of Consumer Finances. Owners’ wealth exceeds that of renters by a factor of 50-to-1: a median of $205,200 versus a median of $4,200. The main wealth difference between the two is home equity, of course. No news there. But even for households who’ve owned their home only since 2003, home equity gains are the rule rather than the exception—and in some cases, equity gains have been significant. Households who bought five years ago in Honolulu, for instance, already average nearly $272,000 in equity. In Northern California (San Francisco and Oakland), the comparable figure is $105,000.

Times are tougher for home owners in a handful of economically struggling markets like Detroit and other parts of the industrial Midwest. Households in these areas who’ve owned their home for five years or less are facing negative equity, although typically not a lot. Hardest hit are households in Detroit who have been owners only since 2003; they’re underwater by a typical $39,000. That’s significant. But in other markets where equity is negative, the numbers tend to be much smaller—$1,000 in Indianapolis, for example.

Yet the doom and gloom ends there. In all 150 markets tracked by NAR, including hard-hit markets, households who’ve owned their home for 10, 15, and 20 years have uniformly enjoyed strong equity gains despite the recent downturn. In Honolulu, 20-year owners have accumulated $485,000 in equity; in Northern California, the comparable figure is $481,000.

Even markets in the hard-hit industrial Midwest are holding up well. In Detroit, equity for 10-year owners is more than $10,000; that figure jumps to $60,000 for 15-year owners and to $78,000 for 20-year owners. In Indianapolis, the 10-, 15-, and 20-year equity gains are $19,000, $47,000, and $68,000, respectively.

The data clearly show that homeownership remains the biggest store of wealth for the typical household, even when markets are buffeted by some admittedly very rocky years.

By Robert Freedman | June 2009

Sellers – What if the Appraisal misses the mark?

What can be done if a home appraisal comes in dramatically lower than the agreed-upon sale price?

Lenders will consider an appeal, but sellers must provide them with evidence.

Start by examining the appraisal carefully for errors. If the appraiser missed one of the bathrooms, miscalculated the square footage, or didn’t note the garage, the seller has grounds for an appeal.

Look at the comparables: Are the homes used as comparison in a different and more challenged school district, are they in the same condition? Is the comparable home next door to something undesirable? If possible, pull some more realistic comps.

Source: The Wall Street Journal, James R. Hagerty (06/09/2009)

$8,000 tax credit proposed to be used for downpayment or closing cost

Reporting from Washington — The Obama administration has put out the official word: Starting soon, first-time home buyers nationwide will be able to turn their $8,000 federal tax credits into cash for use at closing if they use Federal Housing Administration mortgage financing.

But in its final guidelines to lenders and buyers issued May 29, the Department of Housing and Urban Development clarified that buyers obtaining FHA loans through private lenders would have to invest at least some of their own funds — whether from personal savings or gifts from relatives — in the form of a minimum 3.5% down payment.   Read entire article.

$10,000 Tax Credit for New Home Purchases

The State of California approved a $10,000 tax credit for the purchasers of a newly constructed home in the state of California.

1. The tax credit is good for 5 percent of the value of the newly constructed home, up to $10,000. (That would mean any home priced over $200,000 would qualify for the full credit.)

2. The tax credit will be available between March 1, 2009 and March 1, 2010, or when the funding authority runs out. (The Legislature has earmarked $100 million for this credit. That means at least 10,000 new home sales.

3. The tax credit will be allocated by the Franchise Tax Board and will be available to new homebuyers over a three-year period.

4. The new home purchaser must live in the home for at least two years.

5. There are no income limitations for the purchaser.

6. There is no “first time buyer” restriction.

7. There is no repayment requirement (unless the purchaser sells or rents out the home before two years have past from the close of escrow).

You must apply for this credit within a week of closing escrow.

Click here for more details and how and when to apply for the tax credit.

C.A.R. Launches Mortgage Protection Program

 On Thursday, April 2, 2009 the Housing Affordability Fund has launched a new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations.

Through the C.A.R. Housing Affordability Fund’s Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit.

 To qualify for the Mortgage Protection Program, Applicants must:

 · Be a first-time home buyer – someone who has not owned
a home in the last three years.

· Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009

· Use a California REALTOR® in the transaction

· Purchase the property in California

· Be a W-2 employee (cannot be self-employed)

 For more information to to get an application call (800) 941-2297.

Does It Pay to Renovate Your Home?

Renovations can make a big difference in how fast you sell your home and how much return on investment you get. But before you hire a contractor, find out which improvements are most likely to pay you back.

“If you’re going to stay for less than five years, be budget conscious about what you’re doing,” says Everett Collier of the National Association of the Remodeling Industry. “But if you’re going to stay for more than five years, think about what will make you happy.”

Recouping Your Investment

	National Average Cost	Recouped Amount of Cost
Midrange kitchen remodel	$17,928	85.2%
Midrange bathroom remodel	$12,918	84.9%
Master suite addition	$94,331	72.6%
Midrange sunroom addition	$49,551	66.3%
Home office remodel	$20,057	63.4%

Kitchens

Typically, kitchens cost the most of all rooms to remodel, but you’ll also enjoy a big gain in sales price – as much as 80% of what you spend on a major, midrange remodeling job, according to the recent Remodeling magazine Cost vs. Value Report 2006.

If resale is your top priority, go for broad appeal.

• When replacing or adding cabinets, use lighter woods and nothing too contemporary.
• Stick with features and finishes common to your neighborhood and to the kind of house it is. Don’t put granite countertops in a starter home, for instance.
• Ask local salespeople what sells best.
• Change out cracked and stained countertops, but not always with pricey granite. Less expensive options include ceramic tile and concrete.
• Select up-to-date appliances. If you’re on a budget, visit retailers that sell secondhand appliances or those almost as good as new.
• Keep in mind that if the kitchen is shabby to begin with, any upgrades will help impress potential buyers.

Bathrooms

A major redo with new flooring, pedestal sinks, designer tubs, and showers with multiple shower heads can cost as much as $40,000, says Gregory A. Miedema of the National Association of Home Builders. “It’s the higher-end options like granite, frameless glass shower doors, and basin vessel sinks that add to the cost,” he says. A midrange bathroom remodel costs $12,918.

However much you spend, upgrading the bath garners rewards at resale. Recoup 84.9% for a midrange job, and in some regions even more – in the Pacific Northwest, for instance, up to 103.2%, according to the Remodeling report.

A few quick fixes include:

• Painting cabinet doors and updating hardware.
• Adding stylish new faucets.
• Reglazing worn tub and tiles.
• Replacing older fluorescent lighting fixtures.

“Lighting changes can make a big difference in buyers’ reactions,” says Pat V. Combs, president of the National Association of Realtors.

Master Suite

Remember, if you upgrade your home you may need to upgrade your insurance coverage, too. Renovations can up the cost of what it would take to rebuild, so make sure you have enough coverage.

A spacious master suite with a sitting nook, a changing area, and a closet that has organizers in place can make buyers swoon. And the master bath is a real selling point.

Without big bucks, plush towels, candles, and new cabinet pulls can make the master bath seem inviting and updated.

Outdoor Deck

If right for your climate, outdoor living areas make great investments. You can recoup more than 75% of the cost. To dress up an existing, weathered deck, restain it for minimal cost, says Dean Herriges of the National Association of the Remodeling Industry. Power-wash synthetic decks or clean them according to the manufacturer’s directions. “Buyers are looking for the least amount of work they’ll have to do, so if these things are done, it adds value,” Mr. Herriges says.

Attics and Basements

The attic might transform into an extra bedroom, an office, or a playroom. “Especially in older houses, look into it,” Ms. Farrar-Wegener says. “Get it as cleaned out as possible. Put in good lighting so people can see the potential.” Basements, too, have potential for more living space, Ms. McCormick says. But she says not to spend a lot on them. Buyers often expect this part of the house to be unfinished, so it’s not necessary to spruce it up just to sell the home.

Choose Upgrades Wisely

Not all additions add value. A midrange sunroom addition can average $49,551, with a potential for recouping the cost of only 66.3%. Home office remodels cost on average $20,057, recouping only 63.4% of their cost. Look at neighborhood trends. “It doesn’t make sense to put in a media room when no one else in the area is doing that,” Ms. Farrar-Wegener says. “Yours isn’t a neighborhood where people will look for those kinds of amenities.”

Bottom Line

“People want to envision living in your home,” Ms. McCormick says. “If you let things go and get out of date, the impression will be that you’ve left other things, like the roof and furnace, unattended, too.”

However, before spending loads of money on upgrades, consider whether your home is in a declining market. If so, it’s less likely that you’ll be able to recoup your costs.

Remember, if you upgrade your home you may need to upgrade your insurance coverage, too. Renovations can up the cost of what it would take to rebuild, so make sure you have enough coverage.

Source for all average cost figures: Remodeling 2006 Cost vs. Value Report, Remodeling magazine.

Can’t find a job? Create one

NEW YORK (CNN) — Madame Alexander was one of the great innovators in the doll industry.
by Peter Bregman

According to the company that bears her name, she made the first doll with moving eyelids, the first doll based on a licensed character (Scarlett O’Hara from Gone with the Wind), the first doll fashioned after a living person (Queen Elizabeth) and many others.

But what’s most interesting is how and why the company got started.

Beatrice Alexander’s father owned the first doll “hospital” in New York City, where broken porcelain dolls were sent to be repaired. That got her thinking. Maybe porcelain wasn’t the best material for a doll. So she sat around her kitchen table with her four sisters, and they started a business sewing dolls out of cloth. Theirs were not the only cloth dolls (Raggedy Anne was already popular), but they created a Red Cross doll, a smart choice so soon after World War I. She put all the dolls in a big suitcase and lugged them around to local mom and pop stores where she made small sales.

Can’t find a job? Create your own

No bank would lend to her; she was a 20-something woman in the early 1900s, a poor risk. So she scraped together what she could and just started. Eventually, she found someone who was willing to loan her $1,600, which she paid back in half the time she was allotted.

After four years of dragging that suitcase door to door, she got her first big break: a big sale to FAO Schwarz.
Forbes magazine recently profiled the most popular toys of the past 100 years, and Madame Alexander topped the list from the 1920s. It beat the yo-yo.

There’s a lesson here for us. We’ve lost 4.4 million jobs since the economic mess started. And many of those jobs aren’t coming back. John Silvia, chief economist at Wachovia, told The New York Times, “There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”

Don’t Miss
Bregman: Make the recession work for you

At this point, outplacement is just a bad bet. There is no place to be placed. Companies aren’t hiring, they’re firing.  And when eventually they do emerge from this recession, those companies that are still solvent won’t rehire to previous levels. Over the years, companies have gotten leaner as employees have gotten more productive. And they won’t rehire as much when times improve because they’ll want to keep their profit margins high. It’s quite possible that the age of big business tending to thousands of workers is coming to a close.

Looking for a job might make you feel better, but it won’t pay your mortgage. Don’t waste your time looking for a job that isn’t there.
There is another way. It’s the great opportunity of our time. For many people, it’s the only one. And it might actually make you happier than you were at the old job.

Start a business.

Wait, hold on. Before you get all angry at how out of touch I am, hear me out.

In a New York Times article, “Weary of Looking for Work, Some Create Their Own,” Ryan Kuder who started a Web design company after unsuccessfully looking for work for months said, “It’s probably easier right now to find a problem, solve it and charge people than it is to find a job.”

Easier doesn’t mean easy or painless. Any way you cut it, these are terrifying times we live in. And starting a company is a risky proposition. But this is one time when looking for a job might be riskier.

A friend of mine, Ben Dubrovsky, recently laid off from his technology job in Boston, Massachusetts, shared with me an idea he’s trying at his local synagogue. He’s pulling a group of people together to brainstorm business ideas that leverage their skills, talents, passions and experience.

“We’re not looking for a trillion dollar return. We’re looking for sustainable employment. Jobs that will give people an ongoing living, not companies as a vehicle for creating empires,” he said to me.

Then they’ll look to their synagogue community for advice, contacts or investment. Perhaps even a synagogue-based micro-finance bank where small loans could help start these businesses — businesses driven by passion.

Brilliant. Ben’s idea can translate to any community where people trust and care for each other. There are an estimated 400,000 churches in the United States.

Imagine if each one could generate 10 jobs; that would be 4,000,000 jobs — roughly the same number that President Obama is looking for out of the stimulus at a fraction of the cost. If you think that’s unrealistic, imagine we got half that. Or even a quarter. Insane? Maybe. But it just might work.

Don’t wait until you come up with the perfect idea.

You’ll be better off if you work out the kinks as you face them. Just get started. And this is the perfect time to start a new business. Marketing costs are way down because of the Internet and less competition. And as I wrote in a recent article about the new economy, small companies are replacing big ones because we trust people more than companies.

Just ask Howie Jacobson, author of “Adwords for Dummies,” who started his Internet marketing business during the last downturn.
He told me the entrepreneurs he knows all seem to be doing pretty well in this economy. They don’t have huge infrastructures to support. They don’t need to sell a million widgets just to stay in business. They’re comfortable with modest profits that sustain their lifestyles. MailScanner has detected a possible fraud attempt from “www.ireport.com” claiming to be iReport.com: How are you surviving in this economy?
Madame Alexander had a wise model for finding work. She started a business doing work she loved, with people she loved, solving a problem others were willing to pay money to have solved. It was a small company that took very little investment but gave her and others meaningful, sustainable work.

In other words, start a business in your kitchen with your sisters.

6 Reasons Why It’s Still a Good Time to Buy

The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.
2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.

1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available.

3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you’ve made $10,000.

4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.

5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.

6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.

Source: The Wall Street Journal, June Fletcher (03/27/2009)