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Existing home sales in the Greater LouisvilleArea continued their strong upward trend,rising 30% in September from a year ago.The number of homes sold year-to-date is upabout 18% from this time last year. Pricesare up approximately 7% over the last 12months. Buyers in most areas still have agood selection of homes and condos tochoose from with 13% more properties forsale now than at this time last year. Accordingto the Louisville Board of Realtors, 16% morecontracts were signed in September than ayear ago which will carry over into the sales

figures for October and November.Nationally, existing home sales were upalmost 11% in September from a year agowhile prices rose 12% according to theNational Association of Realtors. However,home sales going forward are expected toface pressures. On a per-capita basis, existinghomes sales are now back to historicallynormal levels, so theres not room for the

increases themarket sawearlier thisyear, sayseconomistPaul Digglewith CapitalEconomics.

Higher inter-est rates,higher homeprices and relatively flat incomes will alsoconspire against buyers, says Lawrence Y

NAR Chief Economist. He expects existinghome sales next year to be flat with this yafter having risen for three straight yeHowever, even if sales flatten next year,prices will continue to rise, Yun says. Onefactor helping prices is fewer distressedhomes on the market. As the housing mahas improved, distressed sales have declinsignificantly.

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When to Use Home Equity and When Not To

Before cashing out your home equity to

purchase something, determine if it's an

appreciating or depreciating asset and

think about if you'll still be using the item

10 years down the road.

With home prices rising in most areas ofthe country, a lot of us are building home

equity again. And when equity builds, its

tempting to tap it.Used wisely, home equity can send your

kids to college or launch a business. But

theres a real risk to using home equityloans they can make you more susceptible

to foreclosure.

A recent Federal Reserve study found 30%of Los Angeles homeowners who lost their

houses during the foreclosure crisis

wouldnt have defaulted had they not

cashed out their home equity.The researchers said borrowing against

your home equity causes problems for a

few reasons:Your payments go up (if your total mortgage

gets bigger).

If home prices fall, you have less equity tolose. That might make you more tempted

to walk away from your home.

If youre hit by a financial whammy,

your financial cushion is thinner.

Despite this Federal Reserve study,

home equity can be a smart tool whenyou want to build family wealth. During

the past two decades, some investors

repeatedly used home equity to buy andrenovaterental properties. When the

value of a rental property rises, you can

refinance, pull cash out, and buy anotherrental property although with credit so

tight, thats been tougher to do lately.

Thinking about cashing out your homeequity to buy something? Answering two

questions can tell you if youre unnecessarily

putting your home at risk:

If its an appreciating asset, it makes sense

to use home equity to buy it. Youre buying

something with a future payoff. Things toput into the appreciating asset category:

* Training or education (It makes youmore valuable in the workplace.)

* Buying rental real estate

* Improving your home (Check the costvs. value of certain remodeling projects.)

* Starting or buying a business (if youre

ready to gamble your house on its success).

If its a depreciating asset, dont usehome equity to buy it. Things to put into

the depreciating asset category:* Anything you eat* Stuff you wear

* Most vehicles

Whatever youre buying should last at

least as long as your payments.

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6511 Glenridge Park Place, Ste. 10

Louisville, KY 40222WRrealtors.com

Fall mulching isbetter for the plants

than spring mulchin

says Dan Taft, owne

of The Cutting Edge

Chantilly, VA. It heprotect roots from

frost and helps retamoisture during a

cold and dry winter