Have we reached bottom yet?

This article is by The Appraisal Institute

Historically, the value of real estate goes through cycles. Many factors affect the value of homes including the laws of “supply and demand.” From the Appraisal Institute, here’s a quick reference guide to some of the factors involved and advice on how to spot a turning point in the market:

1. A spike in local sales activity. A spike refers to a significant rise in the number of home sales (or values) in a local market area, which generally is measured month to month. A spike does not necessarily mean continued growth, i.e. it could be a one month phenomenon.

2. Higher asking and selling prices vs. appraisal value opinions for residential properties. Appraisers study the markets; they do not make the markets. When the data shows higher sale prices in comparable properties market value opinions will increase proportionally. Appraisers seek evidence of value but do not create the value. In time periods with low activity, evidence of any kind is difficult to find.

3. More activity at open houses. Open houses with five to eight attendees is considered average, so a dozen or more people attending an open house means buyer interest is picking up. Also, the mood of the attendees is important. Are they optimist and upbeat? Buyers interest alone does not always translate to effective purchasing power. If the number of buyers in the market increases but they do not have requisite down payments, the sales may still not occur.

4. Shorter marketing times. In some markets, houses have been up for sale for more than a year. In most balanced residential markets, properties that are priced competitively will typically sell in less than six months. If the Days On Market (DOM) is shortening, many practitioners will read an improvement in the market.

5. Reduced number of foreclosures and short sales. A reduction in these transactions commonly signals a more balanced market. If lenders are reluctant to foreclose because of an oversupply of inventory, they may choose to wait to repossess the properties, which could allow a spike in the number of foreclosures later despite a better market condition.

6. Stabilized employment. Stable or increasing employment rates provide the necessary confidence for potential buyers to invest in a home. Since most buyers rely on borrowed funds to make real estate purchases and borrowing money usually requires a source of repayment and that usually means jobs, an increase in this basic need, will enable more real estate sales.

7. Fewer buyer incentives and seller concessions. Seller-paid incentives or concessions are a sign of seller motivation. If there are fewer builders offering “free” upgrades and fewer sellers sweetening the deal with big screen TVs, it may be a sign of lessening supply and therefore a better market.

8. New construction starts. Most builders are quite attune to their markets and will not build new homes without a corresponding contract for sale or a perceived increase in demand. An increase in the number of building permits usually indicates higher demand and higher prices. If residential properties are selling for 25% less than they cost to build, only a few new homes will be built. It would be prudent to buy an existing home rather than build a new one for a much higher price.

9. “Move-up” buyers entering the market. More buyers willing to move to a larger or superior quality home indicates a healthy market. The lack of buyers at the lower end of the price range will have a chain reaction throughout the market. If a buyer for a high priced home has a lower priced home to sell first, the sale of the higher priced home may have to occur before the higher priced one can sell.

10. Apartments advertising renter specials - fewer renters in the market may indicate more people are moving into owner occupied homes or it could indicate a reduction in population. Lower population will cause an oversupply of housing which will oftentimes permeate throughout several markets.

6:40 PM - Aug. 18, 2009 - comments {0} - post comment

Moving scams

This article is by Sharon Asher at relocation.com

With millions of Americans moving this summer-the busiest part of the moving season-it bears repeating: beware of unscrupulous moving companies. Relocation.com, the leading online consumer resource for moving services, identified some of the less familiar tricks to avoid and offers guidelines to prevent getting taken.

“The majority of moving companies are solid, trustworthy companies. But like any product or service you buy, it’s the handful of bad ones that should keep consumers on their toes,” says Sharon (Ron) Asher, chairman and founder of Relocation.com. “Our goal at Relocation.com is to help people have an easy, stress-free move, and part of that is helping them be aware of any issues they might face when dealing with moving companies.”

The standard warnings apply: don’t accept a “low-ball” estimate, make sure the moving company is licensed, check Better Business Bureau (BBB) reports and reviews, and insist on an in-home moving estimate.

However, Relocation.com has some of the less well-known practices that a few moving companies use to separate consumers from their hard-earned dollars.

1. The “Guaranteed” Moving Quote. Most people rightly insist on getting a “binding estimate,” which is often referred to as a “guaranteed moving quote.” This estimate ensures that the customer pays no more than the quoted amount, and can actually pay less if the estimate was too high.

That “guaranteed” quote is only good for the inventory that the moving company uses to come up with the estimate. If that inventory is wrong - whether on purpose or not - the “guaranteed moving quote” becomes void, and a new rate will need to be negotiated with the moving company (on moving day, no less).

How to Avoid the Scam: “After the moving estimator compiles the inventory during the in-home visual estimate, double-check the inventory to ensure that it includes everything you need to have moved,” says Asher. “Many people don’t even look at it.”

Additionally, don’t try to add extra items to the move after receiving an estimate; this will void the estimate and incur additional fees.

2. Packing Pratfalls. Many people choose to pack their belongings themselves to save money. However, crafty moving companies may see this as an opportunity to add unnecessary charges on moving day. There might be a few extra items that the moving company wants to go into boxes, or they insist that some of the boxes need extra tape that they charge much more for than the actual cost. Another scam is the half-filled box - the mover takes a box, puts just a few items in the bottom and fills the rest of the box with packing paper. All of a sudden, an extra $100 in packing costs is tacked onto the final moving bill.

How to Avoid the Scam: Make sure the estimate details all the charges for extra packing material from the moving company. Knowing the prices in advance may be extra motivation to make sure that every item that should be packed before moving day is indeed securely taped and packed. Also, consumers should be sure to closely monitor the movers during the process, and make sure the manager is aware.

“The more consumers communicate and work with their movers, the better the move they will have overall,” says Asher.

3. The Move Size: Cubic Feet or Weight? When estimating the size of the move, some moving companies use cubic feet instead of weight. For many consumers, trying to envision all their belongings in terms of cubic feet is often downright confusing.

Why do they use cubic feet instead of weight? For an estimate based on weight, the moving company must go to a certified weighing station to see how much the inventory weighs - and that scale doesn’t lie. With cubic feet, the moving company measures the final move by the amount of space everything takes up in the truck. This gives the moving company sizeable “wiggle room” - literally - to load up the truck improperly, with lots of empty spaces. The moving estimate becomes much higher because the estimated cubic foot load is much lower than the final load in the poorly packed truck.

How to Avoid the Scam: “Insist on a moving quote based on weight,” says Asher. “And if the party being moved has concerns that there might be issues when the moving company weighs the load, tag along with the movers to the scales - consumers have the right to do this and should feel entirely comfortable asking.”

2:00 PM - Aug. 16, 2009 - comments {2} - post comment

What is title insurance and who pays for it?

this article is by Todd Foust who is the chief marketing executive for the FOUST Team at C21 Discovery; one of the top-selling real estate teams in Southern California

When it comes to real estate, we all know by now that things are not as simple as finding the home of your dreams and going on with your life.

Real estate comes with some strange procedures, terms, and lingo which can become very overwhelming to consumers. Despite the potential for confusion, there are some questions that they absolutely should be asking, particularly about the subjects of title and title insurance.

We have found that obtaining answers to these questions will help alleviate much of the normal home buying anxiety. With this in mind, here are the 3 best title insurance questions consumers should be asking, and the typical answers we would give.

Top Question #1 - What is Title?

Our Answer: The word "title," obviously, can mean a number of things. In real estate, when you hear "title," it is referring to one's right to ownership, or any form of evidence of land ownership. Simply put, you need to know is that having title means you have the rights to that land.

Top Question #2 - What is Title Insurance and Why Do I Need It?

Our Answer: Title insurance is a protection mechanism that will protect you against any kind of damage caused by a defect in the title. In California, for example, a standard title insurance policy will protect against things such as forgery, impersonation, and the expenses incurred in defending the title. Title insurance not only verifies ownership, it will also detect any possible "clouds" on your title. Clouds could be in the form of IRS claims, liens, or other uncertainties of ownership.

Speaking in more detail, consumers should know there are two different title insurance policies issued in every real estate sale. The first type is an owner's policy, which will protect the new owner from any ensuing claims to the property. The second type is a lender's policy, which will protect the lender against loss of an unpaid loan balance in the event of a claim.

Title insurance policies are important because they protect against possible non-recorded claims against your property and ensure free and clear ownership. As such, these policies benefit consumers in establishing safety and security in owning real estate.

Top Question #3 - Who Pays for Title Insurance?

Our Answer: Although there is not just one way to pay for title, one method stands out as the most common. As mentioned before, there are two types of policies: a lender's policy and an owner's policy. As far as the lender's policy goes, it is usually paid for by the actual buyer of the real estate. The owner's policy on the other hand is paid for by the seller of the real estate. Of course in real estate, almost everything is negotiable, but this is typically the way the policies are paid.

1:56 PM - Aug. 14, 2009 - comments {0} - post comment

Ways to tell if the market is changing

This article is from The Appraisal Institute.

Historically, the value of real estate goes through cycles. Many factors affect the value of homes including the laws of “supply and demand.” From the Appraisal Institute, here’s a quick reference guide to some of the factors involved and advice on how to spot a turning point in the market:

1. A spike in local sales activity. A spike refers to a significant rise in the number of home sales (or values) in a local market area, which generally is measured month to month. A spike does not necessarily mean continued growth, i.e. it could be a one month phenomenon.

2. Higher asking and selling prices vs. appraisal value opinions for residential properties. Appraisers study the markets; they do not make the markets. When the data shows higher sale prices in comparable properties market value opinions will increase proportionally. Appraisers seek evidence of value but do not create the value. In time periods with low activity, evidence of any kind is difficult to find.

3. More activity at open houses. Open houses with five to eight attendees is considered average, so a dozen or more people attending an open house means buyer interest is picking up. Also, the mood of the attendees is important. Are they optimist and upbeat? Buyers interest alone does not always translate to effective purchasing power. If the number of buyers in the market increases but they do not have requisite down payments, the sales may still not occur.

4. Shorter marketing times. In some markets, houses have been up for sale for more than a year. In most balanced residential markets, properties that are priced competitively will typically sell in less than six months. If the Days On Market (DOM) is shortening, many practitioners will read an improvement in the market.

5. Reduced number of foreclosures and short sales. A reduction in these transactions commonly signals a more balanced market. If lenders are reluctant to foreclose because of an oversupply of inventory, they may choose to wait to repossess the properties, which could allow a spike in the number of foreclosures later despite a better market condition.

6. Stabilized employment. Stable or increasing employment rates provide the necessary confidence for potential buyers to invest in a home. Since most buyers rely on borrowed funds to make real estate purchases and borrowing money usually requires a source of repayment and that usually means jobs, an increase in this basic need, will enable more real estate sales.

7. Fewer buyer incentives and seller concessions. Seller-paid incentives or concessions are a sign of seller motivation. If there are fewer builders offering “free” upgrades and fewer sellers sweetening the deal with big screen TVs, it may be a sign of lessening supply and therefore a better market.

8. New construction starts. Most builders are quite attune to their markets and will not build new homes without a corresponding contract for sale or a perceived increase in demand. An increase in the number of building permits usually indicates higher demand and higher prices. If residential properties are selling for 25% less than they cost to build, only a few new homes will be built. It would be prudent to buy an existing home rather than build a new one for a much higher price.

9. “Move-up” buyers entering the market. More buyers willing to move to a larger or superior quality home indicates a healthy market. The lack of buyers at the lower end of the price range will have a chain reaction throughout the market. If a buyer for a high priced home has a lower priced home to sell first, the sale of the higher priced home may have to occur before the higher priced one can sell.

10. Apartments advertising renter specials - fewer renters in the market may indicate more people are moving into owner occupied homes or it could indicate a reduction in population. Lower population will cause an oversupply of housing which will oftentimes permeate throughout several markets.

6:47 PM - Aug. 10, 2009 - comments {0} - post comment

Common household problems

This list was put together by ou friends at Front Range Inspection.

In a recent survey the most common home problems identified were as follows. It is interesting to note that four of the top ten problems involved water.

1. Improper Surface Grading and Drainage - By far the most frequent problem, it is responsible for the most common household aggravations, including water penetration into the basement or crawlspace and most basements eventually leak.

2. Improper Electrical Wiring - A number of respondents found this to be a significant defect. This includes such situations as insufficient electrical service, inadequate overload protection, and amateur (often dangerous) wiring connections.

3. Roof Damage - Leaking roofs are a frequent problem. Old or damaged shingles or improper flashing and drainage will cause this.

4. Heating Systems - Defect items in this category include broken or malfunctioning controls, blocked chimneys and unsafe exhaust venting.

5. Poor Overall Maintenance - A common problem with a number of homes. Signs of poor maintenance include cracked, peeling or dirty painted surfaces; crumbling masonry; makeshift wiring or plumbing; and broken fixtures and appliances.

6. Structurally Related Problems - As a result of problems in one or more other categories, damage is sustained by such structural components as foundation walls, floor joists, rafters and window and door headers.

7. Plumbing - Plumbing defects include the existence of old or incompatible piping materials, as well as faulty fixtures.

8. Exteriors - Flaws in this category, such as windows, doors and wall surfaces, rarely have structural significance but may pose discomfort to the occupants due to water and air penetration. The most common culprits are inadequate caulking and/ or weather-stripping.

9. Poor Ventilation - In an effort to save energy, many homeowners have "over sealed" their homes, resulting in excessive interior moisture. Significant moisture can lead to rotting and failure of both the structural and non-structural elements.

10. Miscellaneous - This category includes walkways, decks, patios, bushes and trees

9:27 AM - Jul. 29, 2009 - comments {0} - post comment

Prepare for disaster before it strikes

This information is from the SBA.  For more preparedness tips for businesses, homeowners and renters, visit www.sba.gov/disasterassistance.


 

As those living near the Gulf of Mexico and along the Eastern Seaboard prepare for another Atlantic Hurricane season, which began June 1 and runs through November 30, the U.S. Small Business Administration is reminding small businesses, homeowners and renters nationwide to write down their emergency preparedness plan before disaster hits.

Regardless of where you live, it’s a good idea to be ready for any kind of crisis.

“Every threat, from wind storms, floods and wildfires, to power outages and computer system failures, reminds us to be proactive when it comes to building strategies to survive a disaster and recover quickly,” said SBA Administrator Karen G. Mills. “The catastrophic events of the last few years demonstrate the need for preparedness at the individual level, to diminish the risk to life and property.”

In the aftermath of last year’s Midwest Floods, and Hurricanes Gustav and Ike-which pounded parts of Louisiana, Mississippi and Texas last summer-the SBA approved more than 23,000 disaster loans for a total of $1.2 billion.

Disaster preparedness for homes and businesses should include:

- A solid emergency response plan. Find evacuation routes from your home or business and establish meeting places. Make sure everyone understands the plan beforehand. Keep emergency phone numbers handy. Business owners should designate a contact person to communicate with other employees, customers and vendors. Ask an out-of-state friend or family member to be your “post-disaster” point of contact-a person to call to provide information on your safety and whereabouts.
- Adequate insurance. Disaster preparedness begins with having adequate insurance coverage-at least enough to rebuild your home or business. Homeowners and business owners should review their policies to see what is not covered. Businesses should consider “business interruption insurance,” which helps cover operating costs during the post-disaster shutdown period. Flood insurance is essential. To find out more about the National Flood Insurance Program, visit www.floodsmart.gov.
- Making copies of important records. It’s a good idea to back up vital records and information saved on computer hard drives, and store those items at a distant offsite location. Computer data should be backed up routinely. Copies of important documents and CDs should be kept in fire-proof safe deposit boxes.
- A “Disaster Survival Kit.” The kit should include a flashlight, a portable radio, extra batteries, a first-aid kit, non-perishable packaged and canned food, bottled water, a basic tool kit, plastic bags, cash, and a disposable camera to take pictures of the property damage after the storm.

9:34 AM - Jul. 27, 2009 - comments {0} - post comment

Now is the time for commercial tenants to buy

This article is by George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts.  He is currently the founder and president of The Associates Financial Group, a real estate consulting firm.


In most communities, there is a high vacancy rate in the commercial sector. Not only have lease rates fallen dramatically, but there are also a number of unique ownership opportunities that have resulted from the economy and as a result of new urban planning. Many businesses have contracted leaving an abundance of available space including office, retail, industrial, and warehouse space competing for tenants at the very same time that jobs are contracting. This has impacted landlords as well as sellers creating better deals for businesses that continue to do well.

Factor in the looming possibility of commercial mortgages resetting to much higher rates forcing more owners to sell or abandon their commercial property.

Business owners who are confident in the future of their own enterprises may be wondering, “Should I expand my space, renegotiate my lease or is there a way I could stop paying rent and use my business revenue to buy my own facility”?

This could be the best time in decades to take a business to the next level. The financial shift from paying rent to building equity could be the most profitable decision a business could make.

Consider the case of my friend Max. Recently, he retired after 30 years as a neighborhood Veterinarian. Twenty-eight years ago, the strip mall that housed his office and other commercial operations came up for sale. After some agonizing, Max decided to buy the center just to have more control over it’s management. He located tenants, paid the mortgage, saw to the maintenance, and collected the rent. He viewed the situation as a chore related to his business and went about treating pets.

One of the tasks associated with his retirement was the sale of the strip mall. As he told me the story, his eyes grew wide with genuine astonishment as he said, “I made more money on the real estate than I did in thirty years of running my practice.”

Then he winked, leaned in close and said, “Turns out that the best reason for being a Vet was buying my building.”

Had Max leased the space from someone else, they would be the ones getting the primary benefit of his being in business; the tax benefits and the appreciation.

There are many reasons why business owners choose to lease rather than purchase. Among these are financial limitations or they may be anticipating changes in either the scope or the volume of the work, and they want to remain flexible. Perhaps there is no suitable space for sale in their desired location.

In some businesses, particularly larger enterprises, there is no long term incentive for management to want to capitalize real estate. If you are a fortune 500 CEO, you’d rather retain cash for your bonus than to put it to work for the benefit of the stock holder’s decades from now.

Small to mid-size businesses have the greatest incentive to pay rent to themselves. Given the current state of the economy and a shift toward more mixed use development, there are now greater opportunities for smaller business owners than had previously existed for them.

More options for ownership

Up until a few years ago, owning your own space meant having to buy an entire building or center. Class A office space, for example, is usually found in much larger, often multi-story buildings rarely within the means of most users.

Commercial Condominium Ownership

For the past several years, we have been witness to the growth of office and manufacturing condos allowing businesses to buy only the space they need. Now, the concept is moving to mixed use, adding the option of ownership to small retailers, as well

Live/Work

Live/work zoning can make a simple loft commercial, residential, or both. A typical live/work home might have a large open space on the ground floor adaptable to almost any purpose and residential quarters above.

Features and Benefits of Live/Work ownership

Generally, the largest category of cost for a business is the expense associated with operating physical premises. Many professions have given up bricks and mortar in favor of working from a home office. According to the U.S. Census Bureau, half of all businesses are home based so the principal is well established. But, not every business can operate from a strictly residential home. Live/work ownership provides an alternative, and a host of financial as well as time saving benefits such as:

-A single mortgage payment to make.
-A single utility bill.
-A single cable and phone payment.
-A single insurance payment.
-No commute.
-Residential rather than commercial mortgage.
-Favorable tax advantages.

Just eliminating the mileage associated with commuting will save on gas, oil, maintenance, wear and tear, and parking. Not going out for coffee or lunches could also result in significant savings. Factor in the additional time you could spend on business when you aren’t commuting, and you can understand why a report by the Small Business Administration found that home-based businesses have higher net incomes than those that are office-based.

Convenient, greener, and you make more money. Throw in the benefits of ownership, and it’s clear that the timing is right for live/work. And with other ownership opportunities such as office condos offering prices below cost, there may never be a better time for commercial tenants to move to ownership.

3:16 PM - Jul. 17, 2009 - comments {0} - post comment

Now it's commercial real estate's turn

This article is from realtor.org.

The general economic downturn, complicated by a severe credit crunch in commercial real estate, is dampening commercial real estate activity. In addition, a forward-looking index shows the forecast for commercial real estate sectors will remain weak for the remainder of the year, according to the National Association of Realtors (NAR). Lawrence Yun, NAR chief economist, said commercial real estate has been hit by a double whammy. “Significant job losses have reduced the demand for commercial space, while a lack of credit has stalled transactions and refinancing activity,” he said. “It is critical for the Federal Reserve to increase liquidity by purchasing commercial mortgage-backed securities. Because commercial real estate always lags an overall economic recovery, it will take some time for the commercial real estate market to rebound.”

The Commercial Leading Indicator for Brokerage Activity fell 4.8% to an index of 103.5 in the first quarter from a downwardly revised reading of 108.7 in the fourth quarter, and is 12.9% below the 118.8 recorded in the first quarter of 2008. NAR’s track of the commercial leading indicator dates back to 1990.

The weakening index means commercial real estate activity, as measured by net absorption and the completion of new commercial buildings, can be expected to decline over the next six to nine months.

The Society of Industrial and Office Realtors®, in its SIOR Commercial Real Estate Index, a separate attitudinal survey of more than 600 local market experts, also indicates a lower level of business activity in upcoming quarters. More than 90% of respondents believe it is a tenant’s market, with many tenants benefiting from moderate to deep discounts in office and industrial rental rates, as well as landlord concessions.

The SIOR index has declined for nine straight quarters and stood at 42.3 in the first quarter, well below the 100 point criteria that represents a balanced marketplace.

Realtors Commercial Alliance Committee chair Robert Toothaker said data for commercial mortgage-backed securities are very telling. “We went from $230 billion in CMBS issued in 2007 to only $12 billion in 2008,” he said. “Thus far in 2009 the number is essentially zero- liquidity in commercial credit is crucial to prevent damage to the broader economy. We need better policies and progress in accounting rules to facilitate lending.”

Overall, commercial vacancy rates are rising and rents are softening, according to NAR’s latest Commercial Real Estate Outlook. The NAR forecast for four major commercial sectors analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research.

The gross domestic product is expected to contract 2.9% this year, then grow 1.4% in 2010. Similarly, the consumer price index is forecast to decline 0.8% in 2009 before rising 1.7% next year.

The unemployment rate is projected to average 9.5% this year and 10.2% in 2010. Inflation-adjusted disposable income is likely to grow 1.3% in 2009 and 1.1%.

“Although we expect the economy to begin to stabilize later this year, unemployment will probably peak at about 10.5 percent around the end of 2009,” Yun said. “The job picture should gradually improve as 2010 progresses, but the fundamentals in commercial real estate won’t stabilize until somewhat later and will depend on the Fed’s actions.”

Multifamily Market
The apartment rental market-multifamily housing-has been doing better than other commercial sectors, but a gain in home sales during the second half of this year will modify demand. Multifamily vacancy rates are forecast to rise to 6.8% in 2009 and 6.7% next year from 5.7% in 2008.

Average rent should grow 1.5% this year and 2.5% in 2010, following a 2.9% gain in 2008. Multifamily net absorption is projected at 133,000 units in 59 tracked metro areas in 2009 and 89,700 next year.

3:10 PM - Jul. 15, 2009 - comments {0} - post comment

What does a trillion look like?

3:06 PM - Jul. 13, 2009 - comments {0} - post comment

Homes of tomorrow - back to the future

This article is by George W. Mantor, The Real Estate Professor and the founder and president of The Associates Financial Group.

 

Growing up in the fifties, we were fascinated with the future and the great prospects that beckoned from the road ahead.

In particular, I recall the “The Home of Tomorrow.” Living in an apartment, the first thing I noticed was that it was spacious, it was light it was bright, and it had an island kitchen with the cook-top right in the middle. Imagine that! But, it was the fifties version of the future; cars had fins, women wore beehives, and the “Home of Tomorrow” had a robot vacuuming the floor.

The reality of the moment was that new homes were less than 1,000 square feet, had one bathroom, and few frills.

So, here we are in the future we once imagined. No robot vacuuming the floor, our SUVs are bigger than a 1960 Lincoln Continental Mark V, and our homes have earned the title, “McMansions” by swelling from an average of 950 square feet to about 2,400. And, in many moderate wage communities, homes of 6,000 to 7,000 square feet are common. Why?

Well, because we wanted them, for one thing. They were the ultimate status symbol and maybe always will be. If a man’s home is his castle, it darn well better feel like one.

As much as a castle-sized home is a status symbol, it is also a symbol of wretched excess and the general contempt of its owner for those of us being crushed under the boot-heels of his enormous carbon footprint. Free market economy or not, no one is entitled to such a gluttonous amount of the planet’s limited resources.

Most of the homes built in the last 20 years are bigger than they really need to be. They consume too many resources to create the materials, the building process has too much negative impact on the surrounding environment, they require too much energy to occupy and they do not guarantee happiness.

One wonders if families weren’t closer when homes were smaller. How do you keep track of a kid in 7,000 square feet?

Homes of such volume signal the end of an era as we face the new reality of our carbon footprints and the limitations on developable land.

There is already a shift away from building single family suburban homes in favor of multifamily housing as land around large metropolitan areas disappears and the limitations on energy discourage commutes longer than drivers in many metropolitan areas are now making. Today’s long commutes are the result of moving business parks far from urban centers and the desire for ever larger homes.

Coupled with the movement toward sustainability, a desire to reuse existing structures and a search for greener building alternatives, many communities are rethinking planning, zoning, and special use permits.

In an effort to create more pedestrian friendly communities, more thought is being given to bringing lifestyle-elements such as jobs, services, and recreational opportunities to the residents, rather than have them drive elsewhere.

Among the tools employed to achieve these results are adaptive reuse, live/work zoning and mixed use zoning.

In downtown Los Angeles, they have been converting unused office buildings into residential use.

Home is a chunk of air in the sky, but because live/work zoning allows qualifying businesses to use a portion of the space for work, it might also be your office downtown. With retail shops on the ground floor, mixed use zoning allows residents quick access to their morning latte or smoothie.

There is also an effort to incorporate more of a village atmosphere.

Over 25 years ago, Seaside, Florida pioneered a new model for an urban community. Seaside is a remarkable example of going back in time to find a better way of integrating the elements of life into a pedestrian oriented community.

Seaside is comprised of 80 acres with 489 residences and 76 commercial shops. The community is laid out so that most of life’s daily needs are available within a short walk or bike ride. Three large public greens offer space for social activities and events. All public spaces are linked to a thriving town center that serves not only Seaside, but the surrounding communities, as well. Dozens of shopping and dining options are located in or adjacent to the town center.

As an environmentally conscientious community, the precious coastal dune system remains intact on the Gulf side of town, and preservation of the indigenous vegetation is a priority. The only lawns are public greens.

The success of this type of community has spawned other similar developments in places as unlikely as North San Diego County where three decades of bigger and bigger boxes is giving way to more diverse housing alternatives

Take the case of San Elijo Hills, a master planned community tucked away in the remote hills of San Marcos, CA. Slated for 3,400 homes and 10,000 residents, the project inched forward for more than a decade before becoming a reality in 2002. When completed, the community is expected to have 10,000 residents on 1,920 acres, yet maintain 1,115 acres of permanent open space.

Its core is a 70 acre, mixed use town center reminiscent of old California towns and neighborhoods. Architectural diversity, walkability, and nearby services have been incorporated into the town center.

“People love the small town feel and the convenience; I often hear the word Mayberry”, said Diane Eiler, a sales representative at Luminara, a Richmond American Community.

Exactly 10 miles due west, the coastal city of Carlsbad had for many years attempted to segregate residential and commercial development, requiring almost everyone to drive to almost everything. But, in recent years, there have been concessions to allow for development of unique properties that lend themselves to transit orientation, multiple uses, or better use of resources.

Here, builder Trammell Crow is the force behind a unique transit oriented, live/work, mixed use development called Bluwater Crossing. Located adjacent to the Coaster Station, the development offers live/work, as well as, segregated retail opportunities for businesses such as restaurants.

Harkening back to a time when shopkeepers lived above their establishments, the live/work lofts feature professional space downstairs with living space above. While there are some obvious limitations on the types of businesses which would be compatible with the residential aspect, the list of permitted uses includes gallery, studio, business professional, floral, or retail.

The ground level features a large open space with 18 foot ceiling heights and a Clopay roll up door that, not only looks great, but easily allows for receiving goods, displaying merchandise, or allowing a large opening for a bicycle shop, perhaps.

According to John Melka, a sales associate, “Our visitors to the project have been amazed at the possibilities, and seem genuinely pleased that we offer a lifestyle not dominated by automobiles and commuting.”

The home of tomorrow could be a lot of different things, but it won’t be larger. It’s more likely to be a Mongolian Yurt than a McMansion. It will doubtless be smaller. As the “age of stuff” draws to a close, we won’t need as much space, and to be greener, it will need to be smaller. Here, less really is more.

It will be greener. The global pressure for building materials obviously poses a threat to our environment. We are altering our planet through the destruction of natural resources. Processing methods are sources of pollution and the use of chemicals poses a lingering health threat for end users. We won’t be buying Chinese drywall anytime soon.

It will be energy efficient. To make “Green” more than a marketing gimmick, the end use of the product must be as energy efficient as possible. This, again, argues in favor of smaller.

It will be largely constructed off-site and shipped for assembly at the location.

It will be transit oriented. And, unless your android is solar powered, you’ll still be vacuuming your own floor.
 

2:10 PM - Jul. 9, 2009 - comments {0} - post comment

Reasons you may not be able to re-finance

This article is by Suzanne Leedy, broker in Northern Virginia.

With rates being the lowest they have been in nearly half a century, customers are anxious to refinance. Here are three things that might prevent them from being able to do so. 

Negative Equity.
If you bought your home a few years ago and didn't put any money down, chances are your loan is now "underwater". If your loan is underwater, you owe more on the home than it is worth. If you owe $400,000 and the home is worth $300,000 you will be hard pressed to find a bank that will allow you to refinance. 

If you purchased the home using an FHA mortgage, FHA allows something called a streamline refinance. With a streamline refinance, no appraisal is necessary so this would enable you to refinance even if you owe more on the home than it is worth. 

President Obama also has a plan which would allow you to refinance if you owe 105% on the first mortgage. His plan would allow you to keep an existing 2nd mortgage in place provided the 2nd trust lender agreed to stay in second position (i.e. agrees to re-subordinate). 

Another solution to the problem of negative equity is to pay down the balance on your mortgage. You can do it with a lump sum payment (by taking money from a retirement account or savings) or do it gradually buy adding principal to the amount you pay each month. That will make your overall financial situation better in the future.

High Debt To Income Ratios.
Lenders look at two ratios when they consider your loan. The first ratio they look at is the ratio of just the mortgage payment compared to your income. The second ratio is the mortgage payment + all your other monthly expenses that show up on your credit report. 

Loan programs vary on their ratio requirements but lenders typically like the 2nd ratio to be no more than 39% (some loans do allow higher ratios). The solution to this to either to pay down your debt so your ratios improve or make more money. Sometimes getting a job with more income can help you qualify for the loan. 

Poor Credit Score. 
The lower your score, the higher your interest rate. As a minimum, lenders want at least a 620 score for FHA loans. Conventional loans have add ons if your score is below a 740. If your score needs improvement, it can improve over time. The easiest part of your score to manipulate is by paying down your credit card balances. Dispute any information on your report that you don't believe is true.

If You Can Save a Point in Your Interest Rate, It Might Pay to Refinance

With the flurry of news reports showing interest rates are dropping, it can be tempting to refinance. How do you know if refinancing makes sense or not? The typical rule of thumb is that if you are going from a fixed rate loan to a new fixed rate loan, you should save about 1 point in the rate in order for it to make sense. So if your current rate is 6% and you can get a rate of 5%, it would make sense to refinance.

Many people with Adjustable Rate Mortgages are interested in switching over their loans to a fixed rate mortgage. A wise thing to do if you have an adjustable rate mortgage is to pull out a copy of your adjustable rate rider. This document will tell you what index your rate will be based upon as well as the margin that is added to the rate. That will let you know what your payment will adjust to. Keep in mind that many people who have ARMS have rates that will adjust to 3 or 4%. Here is how you would figure out what your rate would adjust to. If it tells you that the index is the London Interbank Offered Rate (LIBOR) and your margin is 2.25, you'd look up the rate for the LIBOR which today is 1.92 + 2.25 your margin for a total of 4.17%.

Some ARMS don't adjust all that badly and can actually have better rates that what is currently available for fixed rates. If you like the security of having a payment that won't increase, it still might make sense to switch to a fixed rate. Another important factor that most people don't consider when refinancing is their timeframe to stay in the home. If you only plan on being in your home a few years, refinancing probably doesn't make sense. It takes some time to recoup the cost of refinancing.

2:04 PM - Jul. 7, 2009 - comments {0} - post comment

Financial health can be yours

This article is by Ethan Ewing of bills.com

The first step to financial health is to create healthy savings and budget habits, according to the money experts at Bills.com, a free online personal finance portal and a subsidiary of the debt settlement firm Freedom Financial Network LLC. The good news: finding savings really can be simple.

“Money is tight these days, and so is time,” said Bills.com president Ethan Ewing. “If you like the idea of trimming the fat from your budget, but not the idea of spending hours clipping and organizing coupons, we’ve put together a list of 12 ways to save money effortlessly.”

Ewing’s tips include:People spend more when using credit than when they use cash. Tracking expenses in detail also helps; learn to develop and use a simple budget.
2. Keep the change. After paying in cash, save the change. Once your jar is full, deposit the amount in savings, or postpone a splurge until savings will cover it.
3. Cut prescription costs. Ask your doctor if a less expensive, generic medication will meet your needs. Check with a pharmacist about other discount options for which you might qualify, from AAA programs to $4 prescription promotions to state-sponsored discounts.
4. Buy store brands. A recent exercise by a Consumer Reports writer found that purchasing store brands instead of brand names saved almost 50%. It also saved more money and time than savvy coupon-clipping.
5. Skip the shopping cart. People buy 30% more if they use a large shopping cart. Leave the kids at home, too, if possible. Shoppers who have children with them buy 40% more than those who do not.
6. Unplug unused appliances. Today, many electronics use power even when turned off. Connect the TV or computer to a power strip and turn off the electricity when not in use. Unplug appliances such as a toaster, coffee maker or spare refrigerator when not in use.
7. Chill hot water heating costs. Water heating accounts for 12% of home utility costs. Wrap the water heater in an insulating blanket and lower its thermostat setting to 120 degrees from the typical 140 degrees Fahrenheit. For every 10 degrees the temperature is lowered, energy costs can drop 5%, or approximately $5 per month.
8. Bring your own. Brew coffee at home and bring it to work in a reusable cup. Those who prefer strong coffee can invest in an espresso maker to brew up lasting savings. Or buy soda pop at the grocery store or warehouse club for 20 cents a can instead of from a vending machine for a dollar or more.
9. Review bills for errors. Instead of writing checks on autopilot, carefully review credit card, utility and other bills to be sure charges are accurate. If you suspect a problem, contact the provider. Be especially wary of ongoing charges that might have been incorrect from the beginning.
10. Keep pets small. Love has no price, but when choosing a new dog, opt for the smaller canine. Its annual upkeep costs will average $700 less per year. Or choose a cat for another $60 in savings.
11. Eliminate catalogs. We will not covet what we do not see. Free services such as catalogchoice.com can help eliminate junk mail.
12. Wait before buying. For any impulse buy, wait 48 hours. If you still want the item and can afford it, return to buy it. Many purchases lose their appeal after even a short cooling-off period.

1. Use cash instead of credit.

6:31 PM - Jul. 5, 2009 - comments {0} - post comment

Moving CAN be stress free

This article is by HGTV’s FrontDoor.com

When it comes to moving, a little preparation goes a long way. Tons of time and energy can be saved by planning ahead, staying organized and focusing on details.

1. Make a moving schedule. Starting 60 days before the move, use a week-by-week checklist to keep the process on track. The tasks to accomplish further from moving day might seem trivial at first, but staying on schedule will prevent last-minute headaches. Time will be at a premium on the days leading up to the move, so be diligent in checking off each task.
2. Hire a quality moving company. Resist the temptation to hire a company that offers a too-good-to-be-true rate. An unreliable mover will cost time and money in the long run if items are lost or broken. Check out moving company credentials with the Better Business Bureau and the Federal Motor Carrier Safety Administration.
3. Pare down your possessions. If an item won’t be used in the new home, don’t waste time packing it. Notorious clutter items- unread books, unfinished projects and half-empty cleaning products- are prime targets to leave behind. Hold a garage sale or give away the unwanted stuff.
4. Pack like a pro. Come up with a packing system so all boxes end up in the right rooms when they get to the new home. One option is to buy a box of magic markers and create a “color code” system for the movers- red-labeled boxes for the living room, blue for the kitchen, etc. On moving day, draw a floor plan of the new place with each room labeled and give it to the movers.
5. Make the house move-out ready. Most movers won’t disconnect anything that’s hard-wired, so unplug all the appliances and lighting fixtures that go. Make sure all paths are clear from the house to the moving truck. Speed up the process by knowing the ground rules for what movers will and won’t do- most won’t touch flammable items, perishable foods or plants.
6. Stock up on packing supplies. Don’t run out of packing tape the morning of the move; have plenty of supplies on hand. Early on in the moving process, start gathering boxes, tape, bubble wrap, newsprint, box cutters and markers. Try to save time and the environment by packing with materials you already have. Load up suitcases and plastic containers and use pillows, scarves and towels to “wrap” fragile items.
7. Pack a moving survival kit. Don’t throw everyday essentials like ID and medicine in with other belongings, only to have to dig through boxes later. Instead, pack a “last-to-go” box with all of the necessities-toiletries, snacks, important documents-and keep it with you instead of packing it in moving truck.
8. Spruce up the new home before moving in belongings. It’s easier to clean, paint and make improvements while the new home is still empty. Before hauling in all the furniture and boxes, be sure to vacuum, dust baseboards, and wash the kitchen and bathroom floors.
9. Map out the new floor plan. Decide how to arrange the furniture before moving it into the new place. The best way to do this is to make paper cutouts of the furniture. Measure the dimensions of the piece and tape together newspaper pages to match the “footprint” of the furniture. It’s much easier to reshuffle newspaper than all that heavy furniture.
10. Change the address and notify companies before the move. Completing a change-of-address form before you head out can prevent hassles such as past-due bills, service lapses and even identity theft. Schedule dates in advance to discontinue utilities, phone, cable and Internet and arrange for these services at the new address. Several services even allow utilities hookups online.

6:26 PM - Jul. 3, 2009 - comments {0} - post comment

Don't ignore these warning signs!

Homeowners might be tempted to put off fixing their home until the economy rebounds. But Consumer Reports warns that some problems, if left unchecked, can lead to thousands of dollars in repairs and might even compromise your family’s health. The trouble signs are easy to spot, provided homeowners know what to look for. What’s more, contractors aren’t as busy now, so they’re likely to be more flexible on price.

The following are the five biggest red flags of home maintenance:

Runaway rainwater. Gutters, downspouts, and leader pipes collect rainwater and channel it away from the house. In very wet regions, leaders should extend at least five feet from the house. Check the entire gutter system seasonally for proper pitch and for clogs, corrosion, broken fasteners, and separation between connections and where gutters meet the fascia board.

Roof and siding. Roofs are the most vulnerable to water infiltration, given their exposure to the elements and the laws of gravity. On a sunny day, use binoculars to spot cracked, curled, or missing shingles, which are signs that the roof is near its end of life. Also check flashing around chimneys, skylights, and roof valleys, and the rubber boots around vents for cracks. Siding is also susceptible to leaks, especially where it meets windows and doors.

Pest infestations. Termites and carpenter ants gravitate to moist soil and rotting wood, another reason to make sure your gutters are in good shape and soil around your foundation is graded properly. Keep mulch, firewood, and dense shrubbery away from your foundation. Once termites infiltrate a home, they can bore through the structure in a few short years.

Mold and mildew. Even houses in arid climates aren’t immune. Hot outdoor temperatures can drive even small amounts of water trapped in the structure to condense on colder interior surfaces, leading to mold. Musty odors, dank air, and family members with chronic runny noses are warning signs. Check under carpets and around windows for visible mold or mildew. Remove cover plates for cable-TV, phone, and Internet connections, and use a flashlight to peer behind walls and wallpaper for mold.

Foundation cracks. Some cracks are harmless, but others can mean trouble. Monitor them using a ruler. Cracks wider than 3/16 inch, even vertical ones, can be a problem. Mark smaller cracks with tape and monitor their progress over the coming months. Be on the lookout for horizontal cracks or bulging or buckling. Along with expanding cracks, those conditions require the attention of a structural engineer.

6:41 PM - Jun. 25, 2009 - comments {0} - post comment

Tips to negotiate a loan modification

This article is by Caleb Groos at findlaw.com

For some small business owners, trouble on the home front (as in home mortgage front) threatens already precarious business conditions. Home mortgages that once seemed a good source of money for the business now could result in the need to layoff workers or even close. Homeowners with trouble making mortgage payments often hear that their best bet is to contact their lender about a loan modification, but they should be well prepared when they do so.

Whether the problem making mortgage payments is short term or long term, the best option for homeowners often is to contact their lender to try to work out a new payment agreement. Lenders are not obligated to make mortgage modifications, however it is often in their interest to work out a feasible payment plan for the homeowner rather than foreclose and sell the property.

The Obama Administration’s Homeowner Affordability and Stability Plan included refinancing of qualifying mortgages owned or securitized by Fannie Mae or Freddie Mac to a lower fixed interest rate. As reported by the Washington Post, the Obama Administration announced that the program will apply to previously excluded second mortgages.

In part to help those outside this program, the Obama plan also included $75 billion in matching cash to encourage lenders to agree to mortgage modifications.

Here are a few tips to keep in mind when seeking a mortgage loan modification:

1. Don’t fall for any mortgage modification scams (such as advanced fee scams).
2. To learn how to best make your case for a loan modification, contact one of the HUD Approved Foreclosure Avoidance Counselors in your area. They can also inform you about any federal, state or local programs that may assist you.
3. Get an accurate picture of your finances. Your best chance at getting a modification is to demonstrate the ability to repay and a thorough understanding of the costs and income you face going forward.
4. If the problem making payments is short-term, ask your lender about forbearance or postponement of payments for a limited period. Be prepared to demonstrate when you’ll be able to start making payments again.
5. If the problem is long term, and what you need is modification, be prepared to make an offer and demonstrate how you could repay the modified loan. Be sure your lender is up to speed on incentive programs that may be available to help.
6. When negotiating a modification, make sure to understand how it will deal with any fees or penalties that may have accrued. Know what fees are in play and whether the modification will eliminate, reduce or tack them on for repayment.
7. If the lender won’t modify and foreclosure looms, consider asking the creditor to “produce the note,” (particularly when a creditor other than the original lender seeks foreclosure). It’s a stalling tactic, but can sometimes encourage creditors to negotiate.

2:51 PM - Jun. 15, 2009 - comments {0} - post comment

Know your shut offs

This article is courtesy of Front Range Inspection.

Everyone should know where and how to turn off all utilities to their home. We will often see these shut off locations inaccessible. Never block a gas meter shutoff valve, water shutoff or breaker panel! In an emergency you must be able to shut these off or risk fire, explosion, electrocution, serious water damage or personal injury..

		Water The main shutoff for most homes is sometimes hard to find. Since these valves are rarely used they will often leak when you turn them off. For these reasons, we recommend that you locate your main shutoff at your water meter. This valve is usually under a cover near the sidewalk or at the edge of the road. Open this cover and look for the valve, you will need a tool to turn this off. There are a couple types of valves, so it is important to look at yours and make sure you have the proper tool to turn off the water. Most of them can be turned with an adjustable wrench, similar to the valve on a gas line. Others may require a special tool available at your local hardware store. If you are on a well, familiarize yourself with the equipment in your pump house so you know how to turn off the pump and water valves.
		Natural Gas These shutoffs are located at the meter. It is best to have a wrench that is tethered to the meter, so you know it is there when you need it. If you have propane the tanks have shut off valves at the lines connecting them to the home or appliance. If you ever smell a strong odor of gas (rotten egg smell) shut off the gas immediately, turn off the electricity (this can prevent explosions or fire) and open all the doors and windows. Call 911 for the fire department and the gas company to locate and isolate the gas leak. Electricity You should know how to turn off the power to your home. Usually there is a main shut off in the breaker panel or at the power meter. Occasionally there is no single main shutoff, in this case, turn off every breaker in the panel. If your home has a fuse box there will sometimes be a shut off above or beside the box. If there is no shut off, then unscrew each fuse and lay them out in the same pattern as they were in the box. This is so you can replace each fuse in the proper location and not mix up the amperages of the circuits. Most older homes also have 2 or more pull out fuse holders, so remove these also.

2:37 PM - Jun. 11, 2009 - comments {0} - post comment

Feng shui tips for prosperity

This article is by Debra Duneier, president of Living Home By Debra and Senior Associate Manhattan Real Estate Broker for Corcoran.

Feng Shui is an ancient Chinese energy practice over 6,000 years old based on the knowledge that there is both good energy (Sheng Qi) and negative energy (Sha Qi). As a Feng Shui practitioner, Debra Duneier, president of Living Home By Debra, Duneier focuses on balancing the energy in living and working environments. Her objective is to enhance and increase Sheng Qi and eliminate or minimize the Sha Qi.

During this financial crisis, Duneier has been called upon by both individuals and businesses to balance the energy in living and working environments and to increase the flow of wealth. Although on site this is a complex procedure performed with analysis of Ming Gua calculations, Form School, Lo Pan Compass readings, Flying Star and Four Pillars, Duneier has created a list of simple tips to increase energy support for your prosperity:

1. The kitchen is a portent for wealth. This comes from the belief that the better you eat the healthier you are. A healthier person is a more productive person and brings in better business. The burners on your stove represent wealth. Keep them clean and alternate your use of the burners when you are cooking. Sometimes Duneier prescribes a mirror over the stove to double the burners. The refrigerator should be filled with healthy food as a full refrigerator brings in abundance.

2. Plants bring life force into our living and working environments. Not only do they bring beauty, but plants clean our air and can absorb electromagnetic fields which have a negative impact on our health. Bamboo and Jade plants are indoor plants that act as wealth enhancers.

3. The Ming Tang of your office or home is the entrance. As you step inside, you are transitioning from the outside world to the inside world. Very often in the Ming Tang area, a rug or mat is placed near the front door. Take 3 lucky Chinese coins and tape them to the back of the rug. Every time someone walks in they symbolically are bringing money into your property and into your life.

4. Keep your toilet seats down when not in use. Keep them up and money will disappear.

5. Whether you work from home or from an office, a wall behind your chair, called a “Black Turtle” is very supportive of you in your work. Be sure you can see the door, which protects you and your deals. In front of you is the ‘Red Bird’. Use this area for a beautiful piece of art which represents your prosperous future. If there is room for a water feature, this is a perfect place for it. Water flowing upwards brings wealth. The sound should be gentle and soothing to you.

6. Goldfish are pretty, relaxing to watch, and bring “life” energy into your environment. They are also magnets for wealth. The winning combination: Fill your tank with 8 goldfish for luck and 1 black fish to keep away bad luck.

2:18 PM - Jun. 7, 2009 - comments {0} - post comment

Second chance for first time home buyers

You've already filed your 2008 tax returns and maybe you've already received your refund. That means it's too late to obtain the $8,000 tax credit for first-time home buyers enacted by President Obama's Stimulus Plan, right? Wrong. The great thing about this tax credit is that you can still get the cash this year, even if you've already filed your taxes for 2008 – and the money is yours to keep. You don't ever have to pay it back, as long as you stay in the home for at least 36 months.

There's a lot of confusion in the media surrounding this tax credit, but it's actually pretty simple. Qualified first-time home buyers (anyone who hasn't owned a home in the three years prior to the purchase) can receive a tax credit of 10% of the purchase price up to $8,000. All you have to do is purchase a primary home (that means a home you'll actually live in, not an investment home) any time between Jan. 1, 2009 and Dec. 1, 2009. If you make a qualified purchase after April 15, or after having already filed your 2008 taxes, you and your tax professional can submit an amendment to your return and receive the credit on your 2008 taxes – you don't have to wait until next April.
 

3:53 PM - Jun. 5, 2009 - comments {0} - post comment

Make the most of your lawn and garden this month

This article is from lifetime.com

The warm weather, longer daylight hours, and blooming tree buds can mean only one thing: spring has finally arrived. Now, with winter behind us, it’s the perfect time to head outdoors and freshen up the yard.

In celebration of Lawn and Garden Month, beautify your landscape with these easy tips:

Add a “Recession Garden” - An estimated 43 million people are expected to grow their own fruits, vegetables, herbs and berries this year. Growing your own produce can save your family a large amount of money on groceries each year, and some say that fresh, homegrown fruits and veggies taste better than those purchased at the store.

Befriend the Birds - Consider including a birdhouse, birdfeeder or birdbath in your landscape this spring. Not only will it lead beautiful wildlife to your yard, but it will also serve as a nice decoration. If you’re on a budget this year, you can easily make a homemade birdfeeder by rolling a pinecone in peanut butter and birdseed.

Plant a Family Tree - Enrich your family ties (and your soil) with a tree that the whole family can plant together. Apple trees and mulberry trees look great in the yard and provide a shady spot for relatives and friends. Try planting one of these trees to commemorate your household’s next special occasion, like a birth or a wedding.

Tackle Yard Work With Ease - With all the lifting, hauling and digging, yard work can be a heavy load to bear. The wheelbarrow is a great tool as it helps lighten the burden for homeowners, as more weight is distributed to the wheels, instead of the user.

Take the Natural Approach - If you’re looking for an alternative to pesticide, consider planting some natural repellants to keep insects at bay. For example, mint can be used to ward off ants, and garlic can do the same for Japanese beetles. These additions will blend in nicely when planted among the flowers and vegetables in your garden, and they’ll also provide lots of flavor to spring and summer recipes.

3:47 PM - Jun. 1, 2009 - comments {0} - post comment

Take advantage of energy efficiency tax credits

This year, the federal government extended and expanded home energy efficiency tax credits through 2010 as part of the broader economic recovery package, and millions of U.S. homeowners appear poised to pursue them, according to a survey released by Johns Manville. More than two-thirds of survey respondents, or 68%, said they were aware of the newly created federal energy efficiency tax credits. Of those homeowners, 46% said they intend to make a home improvement-related purchase that qualifies for an energy efficiency tax credit, including nine percent of homeowners who said they had already done so during the first three months of 2009.

The energy efficiency tax credits were created earlier this year by President Obama’s economic recovery package, which sought to encourage consumer spending amid the recession, as well as persuade homeowners to become more energy efficient. The tax credits allow homeowners to claim 30% of the cost of qualified energy efficiency products, up to $1,500, including insulation, windows and doors, roofs, HVAC equipment, and water heaters.

According to the survey, saving money was a primary motivator spurring homeowners to pursue an energy efficiency upgrade. The survey found that 40% of the respondents who were aware of the tax credits cited monthly savings on their utility bills as the key reason for the planned home upgrades, followed by improving the comfort of their home (30%), reducing their carbon footprint (13%), and earning the energy efficiency tax credit (8%).

Despite the interest among many homeowners, 72% of survey respondents said they did not know exactly how to apply for any energy efficiency tax credits or rebates, including those offered by state governments or local utilities. And some respondents indicated the existing tax credits might not be big enough to spur action. A total of 41% of respondents said the tax credit would need to exceed 40% of the product’s purchase price to motivate them to pursue a home energy efficiency upgrade if they weren’t planning one for any other reason. Roughly 32% of respondents said a tax credit of 30% or less was sufficient motivation.

To earn an energy efficiency tax credit, homeowners must save their receipt for a qualified purchase, print a form provided by the product’s manufacturer and then claim the deduction on their federal income tax return.

“This recent survey clearly demonstrates that millions of U.S. homeowners are interested in making purchases that qualify for the newly created energy efficiency tax credits,” said Kateri Callahan, president of the Alliance to Save Energy, a Washington, D.C.-based nonprofit that promotes energy efficiency. “The new tax credits can help homeowners defray the cost of several types of energy efficiency upgrades, making them more affordable at this time of economic strain for many.” “By tightening up their homes with added insulation and caulking and sealing of doors and windows, homeowners will enjoy lower heating and cooling costs, too,” Callahan added.

The U.S. Department of Energy (DOE) estimates that homeowners can save up to 30% on their heating and cooling bills by adding insulation to adequate levels and air sealing their homes. In addition, an estimated 65% of U.S. homes, about 45 million, are under insulated, according to the Harvard School of Public Health.

The survey found that the most popular projects for respondents intending to pursue the tax credit included: energy-efficient windows and doors (19%); a water heater (14%); roofing (14%); insulation (13%); heating, ventilation, or air conditioning (12%); and a solar energy system (8%). A total of 53% of respondents said they did not intend to make a purchase that qualified for the credit.

The survey’s other key findings:

- Roughly six out of 10, or 63% of respondents knew that in addition to the federal energy efficiency tax credit, many states and local utilities offer energy efficiency rebates for certain home improvement-related purchases.
- More than half of responding homeowners (58%) underestimated how much a homeowner can potentially save on monthly heating and cooling costs by adequately caulking, sealing and insulating their home. About 21% of respondents answered correctly, pegging the savings at up to 20% to 30%.
- Homeowners making between $50,000 and $75,000 who were aware of the tax credit were the most likely to pursue an energy efficiency upgrade, with 59% of respondents saying they intend to do so during 2009.

“This is a perfect time for homeowners to make their homes more energy efficient,” said Mark Ziegert, a senior brand manager for Insulation Systems with Johns Manville. “With local and federal tax credits and rebates, the potential savings of lower heating and cooling costs, and product promotions offered by retailers, homeowners should have ample motivation to move ahead in 2009 with energy efficiency projects. If and when energy prices move higher, homeowners will be glad they added insulation and made other improvements. ”

3:42 PM - May. 30, 2009 - comments {0} - post comment

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