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Monday, January 30, 2012

Energy Efficiency: Pick Upgrades that (Actually) Drive Down Costs

By: Lisa Kaplan Gordon                                                                   
A new study says home owners won’t see their utility bills drop until they’ve conducted four or more energy upgrades. Here are projects that will give you the greatest bang for your energy buck.
I’ve long suspected that saving energy is like saving calories: Small measures add up, until a Thanksgiving pecan pie — or a dazzling holiday light display — wrecks a year’s worth of small though consistent efforts. 

Evidently I’m right, according to a
 new study claiming that doing a couple of small, energy-saving measures actually increase utility bills. And that a home owner must perform at least four energy upgrades before their utility bill drops.

The 450-page
 study, conducted by the eco-curious Shelton Group, found that energy-efficient home owners think they should replace water heaters and install a higher-efficiency HVAC system, though they actually replace windows and add insulation.

We think they’re half right:
 Adding insulation, especially in the attic, is a low-cost way to reduce utility bills. But replacing windows requires a huge upfront cost, which you probably won’t live long enough to earn back. 

To see net-net savings — in your lifetime —
 select upgrades that reduce energy consumption by 5% and require modest initial investments. We suggest:
·         Seal and insulate ductwork through unfinished and unheated areas, such as the attic, garage, and crawl spaces.
·         Install a programmable thermostat so you don’t overheat your house when you’re away or asleep.
·         Seal air leaks around windows, doors, attic access, and recessed lights.
How many energy-efficient improvements did you make last year? Did you see a drop or increase in your utility bills?
clear skies,
Doug Reynolds

Friday, January 27, 2012

Compile a Home Inventory with the Right Tools

By: Gwen Moran
A home inventory of your belongings for insurance purposes is a relatively inexpensive way to make any future claims go smoother.
Take pictures of your belongings
Photos of your belongings go a long way toward demonstrating ownership and value. Digital photos are preferred, since they're easier to print and store. A decent digital camera costs less than $100. Be sure to get full-room shots, as well as close-ups of items. Don't neglect to photograph possessions inside drawers, cabinets, and closets.
Video is even more convenient and effective, especially since you can record audio along with the images. Describe items and any identifying details as you film your home room by room. Digital camcorders are available for less than $150. It's a good idea to keep backup copies of digital files and hard-copy printouts in a safe place. (More on storage options below.)
Prepare a written home inventory
Images alone aren't enough. You should also prepare a written home inventory. Your insurance company will likely ask for one if you ever file a claim. Include as much identifying detail as possible, such as serial numbers, brand names, purchase dates, and estimated costs. Keep a copy off-site, perhaps with a friend or in a bank safe-deposit box, in case your home is damaged or destroyed. Download our free home inventory worksheet to get started.
Home inventory software is also available. Enter information on your possessions, attach digital images, and store the data electronically. The Insurance Information Institute has a free program called Know Your Stuff, or there are a number of programs available for purchase.
Be sure to attach receipts to your home inventory list. If you're storing your records electronically, you'll want to scan receipts at a copy and print shop or purchase a scanner. Pick one up for as little as $50 at an office supply store. Digital copies of receipts come in handy if originals are damaged or lost.
Safe ways to store your records
When backing up digital files, a USB drive--sometimes called a "thumb" drive, due to its small size--can be useful. Buy one for as little as $5. Simply copy the files onto the drive and keep it somewhere safe, preferably away from your home.
You can also stash a drive in a pre-packed emergency "go" bag, which should be accessible in case you need to evacuate quickly. An external hard drive can perform the same function, though it's less portable.
You can use a bank safe-deposit box to store paper records, drives, and other valuables off-premises. Rent may range from about $25 per year for a small box to more than $100 for a larger box.
If you like to keep important documents closer at hand, consider a fireproof safe, which is usually waterproof as well. You can find small safes for as little as $50, but a more representative range for good residential fireproof safes is $150 to $300. Larger, high-end safes can cost more than $1,000.
When your home inventory files are electronic, it's relatively easy to use online backup systems to keep digital copies outside of your home. That's a big plus if your computer is stolen or destroyed. Some backup services like Mozy offer limited storage space for free, while others like Carbonite charge $5 or more per month. Choose a backup service whose features fit your needs.
clear skies,
Doug Reynolds

Wednesday, January 25, 2012

8 Tips for Finding Your New Home

By: G. M. Filisko
A solid game plan can help you narrow your homebuying search to find the best home for you.

1. Know thyself

Understand the type of home that suits your personality. Do you prefer a new or existing home? A ranch or a multistory home? If you’re leaning toward a fixer-upper, are you truly handy, or will you need to budget for contractors?

2. Research before you look

List the features you most want in a home and identify which are necessities and which are extras. Identify three to four neighborhoods you’d like to live in based on commute time, schools, recreation, crime, and price. Then hop onto REALTOR.com to get a feel for the homes available in your price range in your favorite neighborhoods. Use the results to prioritize your wants and needs so you can add in and weed out properties from the inventory you’d like to view.

3. Get your finances in order

Generally, lenders say you can afford a home priced two to three times your gross income. Create a budget so you know how much you’re comfortable spending each month on housing. Don’t wait until you’ve found a home and made an offer to investigate financing. 

Gather your financial records and meet with a lender to get a prequalification letter spelling out how much you’re eligible to borrow. The lender won’t necessarily consider the extra fees you’ll pay when you purchase or your plans to begin a family or purchase a new car, so shop in a price range you’re comfortable with. Also, presenting an offer contingent on financing will make your bid less attractive to sellers.

4. Set a moving timeline

Do you have blemishes on your credit that will take time to clear up? If you already own, have you sold your current home? If not, you’ll need to factor in the time needed to sell. If you rent, when is your lease up? Do you expect interest rates to jump anytime soon? All these factors will affect your buying, closing, and moving timelines.

5. Think long term

Your future plans may dictate the type of home you’ll buy. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in the home for five to 10 years? With a starter, you may need to adjust your expectations. If you plan to nest, be sure your priority list helps you identify a home you’ll still love years from now.

6. Work with a REALTOR®

Ask people you trust for referrals to a real estate professional they trust. Interview agents to determine which have expertise in the neighborhoods and type of homes you’re interested in. Because homebuying triggers many emotions, consider whether an agent’s style meshes with your personality. 

Also ask if the agent specializes in buyer representation. Unlike listing agents, whose first duty is to the seller, buyers’ reps work only for you even though they’re typically paid by the seller. Finally, check whether agents are REALTORS®, which means they’re members of the NATIONAL ASSOCIATION OF REALTORS®. NAR has been a champion of homeownership rights for more than a century.

7. Be realistic

It’s OK to be picky about the home and neighborhood you want, but don’t be close-minded, unrealistic, or blinded by minor imperfections. If you insist on living in a cul-de-sac, you may miss out on great homes on streets that are just as quiet and secluded. 

On the flip side, don’t be so swayed by a “wow” feature that you forget about other issues—like noise levels—that can have a big impact on your quality of life. Use your priority list to evaluate each property, remembering there’s no such thing as the perfect home.

8. Limit the opinions you solicit

It’s natural to seek reassurance when making a big financial decision. But you know that saying about too many cooks in the kitchen. If you need a second opinion, select one or two people. But remain true to your list of wants and needs so the final decision is based on criteria you’ve identified as important.

clear skies,
Doug Reynolds

Tuesday, January 24, 2012

Sacramento County Real Estate Update January - February 2012

Doug Reynolds, a Sacramento Realtor, provides an analysis of the local market statistics from December 2011. This month discussing how inventory is still on the low side at the time, and sales were strong for December. He also discusses a strategy for buyers to get their offers accepted in this competitive low-inventory market.  Using a lender rebate can provide a way for cash strapped buyers to avoid needing a credit from sellers.  More information can be found at his website, www.BuyWithDoug.com, as well as his blog and Facebook page (Doug Reynolds Real Estate). Become a fan of his YouTube page and Facebook pages.

clear skies,
Doug Reynolds

Monday, January 23, 2012

Consumer Confidence Shoots Higher Again

By Chris Isidore CNNMoney

NEW YORK (CNNMoney) -- Consumer confidence shot higher for the second month in a row in December, according to a survey from The Conference Board.
The research firm's overall confidence index, released Tuesday, jumped 9.3 points to 64.5. The increase follows a 14.3-point rise in November.

"After two months of considerable gains, the index is now back to levels seen last spring," said Lynn Franco, director of the group's research center. "Consumers are more optimistic that business conditions, employment prospects and their financial situations will continue to get better."
Still, Franco cautioned that it's too soon to tell if the year-end optimism is simply a rebound from declines earlier this year or a sustainable shift in attitudes.
The jump of almost 24 points since October is the biggest two-month increase since March 1991, when consumer confidence got a shot in the arm from the quick U.S. victory in the first Gulf War. But the recent increases follow sharp declines that occurred from July through October as both economists and the general public became worried that the U.S. was at risk of falling into a new recession.
"When we get to our low point in October, that was probably overdoing it," said Tim Quinlan, economist with Wells Fargo Securities, who said that reading was below the levels of the 2001 and 1990 recessions. "I don't think things were that bad then. I don't know that things are that great now, but it does signal that consumers were feeling better going into the holidays, which is a key time for retailers."

Helping to lift confidence is the fact that since mid-October stocks have rallied, gas prices have fallen and the labor market improved with both better and a decrease in the number of layoffs.

clear skies,
Doug Reynolds

Thursday, January 19, 2012

American Dream Homes Turn Green

By Rusty Weston, Yahoo! Real Estate
Despite historic problems plaguing the U.S. housing market such as tumbling values, record foreclosures and tight credit for buyers, a new Yahoo! Real Estate survey of current and aspiring homeowners indicates that owning a home is still a major part of the American dream.
But, unlike bullish years gone by, the so-called American dream home isn’t a supersized McMansion – it is a “green,” energy-efficient home built with “sustainable” materials that yield a lower carbon footprint. Or, more often, it is a home remodeled with energy-efficient appliances and eco-friendly home products.
Four out of five of those polled in a Yahoo! Real Estate study of 1,545 U.S. adults say that owning a home is still a part of the American dream. The Yahoo! Home Horizons 2012 study, fielded on the Web in October, is mapped to the American population of homeowners, buyers, sellers and renters.
The study finds that optimism about homeownership is widespread despite the massive downturn that has so far claimed six million homes in foreclosure and threatens to sink even more in the future. Yet, given the record inventory and dropping housing prices, buyers realize that their dream home is more attainable. In the study, 72% of homeowners and renters believe that they live in their dream home, or it will be their next home, or they will own it someday.
Yet, there is a growing consensus that the dream home must be more energy efficient. Take Marilyn, a middle-aged renter in Topeka, Kan. who is in the market to buy a home. She says that her conception of a dream home has evolved in the past five years. She seeks a brick house with four bedrooms, a large kitchen and “environmentally efficient appliances to conserve energy.”
Green Dreams
But, rather than build or buy new homes, many eco-conscious homeowners seek to lower their carbon footprint by purchasing more energy efficient appliances or making other home modifications that may include the addition of solar panels to offset other energy costs.
According to the Home Horizons 2012 study:
·         50% of people consider green/energy efficient appliances/materials are a requirement of their dream home – it is more popular than perennial favorites such as “building a custom home” (38%); “water views” (38%) and “mountain views” (32%); 
·         60% of those in the market say that green/energy-efficient appliances are amenities they’d like to have in their next home;
·         27% of those in the market say that looking for a greener, more energy-efficient home is a significant reason they want a new home.
Asked about their dream home, respondents indicated that they like various styles of home, but size was also a factor. One woman surveyed said that her dream home is “Small, environmentally friendly, very energy efficient.”
Higher Cost of Green
Although green homes are designed produce a smaller carbon impact that result in reduced home energy costs, even advocates concede that they have garnered a reputation as more expensive and not a little bit eccentric.
“Green homes have gotten a bad name because most stories are told about super energy efficient homes,” explains Sarah Saranka, architect and author of several “Not So Big House” books. Hyper-efficient, eco-friendly homes, the ones most closely associated with green living, “consume almost no energy – they’re essentially off the grid,” she says.
But there’s an emerging class of green homes that reduce energy consumption in cost-effective ways, yet haven’t drawn much attention because “they’re not astounding,” says Saranka. “Yet, they’re in the realm of possibility for an average home buyer.”
Increasingly homebuyers are willing to pay a bit of a premium for green or energy-efficient homes. The National Association of Home Builders (NAHB) says that baking in green construction materials and energy-efficient appliances typically adds 2% to 4% to construction costs, but that can translate to higher sales prices depending upon what local markets will bear.
To some extent this rise in interest by consumers is arguably a surprise considering that there are few if any standards about what constitutes a ‘green’ home, apart from the widely accepted EPA Energy Star standards for appliances. EPA is now moving into certifying homes. Energy Star-certified homes are reportedly 20% to 30% more energy efficient than standard homes according to the EPA – leading to average savings of about $200 to $400 per year on utility costs.
Yet, industry groups such as NAHB and organizations such as U.S. Green Building Council (USGBC) with its LEED, or Leadership in Energy and Environmental Design certifications, also seek to popularize certifications and guidelines, which may help build trust for consumers wading into uncharted waters and provide direction to the home industry itself. You can even find some green-certified realtors in certain pockets of the country.

clear skies,
Doug Reynolds

Wednesday, January 18, 2012

Is Housing Bouncing Back?

By Neil IrwinWashington Post

The deeply depressed housing sector finally seems to have found its bottom — and may even be starting to bounce back.
A wide range of housing indicators — construction, home sales, prices — have stabilized in the past few months, although they remain at historically very low levels. And it looks as if construction activity in particular will pick up in 2012.

The latest evidence of the momentum — new-housing starts for November — was released Tuesday. The surprising 9.3 percent gain bumped the rate of new-housing construction to its highest level in 19 months, to a rate of 685,000 new units a year. The number of building permits issued for new houses and apartments also rose, to 5.7 percent in November.
“The good news is that housing has switched from being a drag on overall growth, to modest positive contributions,” said Brian Bethune, chief economist of Alpha Macroeconomic Foresights.
Behind this improvement was a combination of powerful demographic trends, differences in the job and housing markets in various local economies, and the half-decade in which very few homes were built or renovated.
In normal times, about 1.2 million new households are created in the United States each year, because of rising population. That number falls during bad economic times as more young adults live with their parents, retirees move in with their children and immigration declines. But it doesn’t fall as dramatically as has home construction amid the housing bust and recession.
Housing starts peaked in January 2006, and for the past five years the United States has been building considerably fewer new houses each year than demographics would seem to demand — 554,000 units were started in 2009, for example, and 587,000 in 2010.
Part of that gap is attributable to the excess built during the housing bubble, when more houses went up than demographics would support. More than 2 million units were started in 2005 alone. With so many homes to fill, there has been little need for more.
But the construction boom was not uniform. While far too many houses were built in markets such as Miami, Las Vegas and Phoenix, other regions experienced only a moderate oversupply. And many of those other markets have seen improved job growth this year.
A house in Las Vegas isn’t much use for someone who has a new job in Dallas or Washington. So even as the housing-bubble cities are still hobbled with a glut of vacant homes, building activity is rising rapidly in some of the stronger local economies.
In the first 10 months of 2011, the number of permits for new-housing units rose 36 percent in the Los Angeles metropolitan area over the corresponding period in 2010. The gain was 31 percent in Dallas, 32 percent in Washington and 35 percent in San Francisco.
In some of the housing-bubble markets such as Phoenix and Riverside, Calif., there was little or no increase.
The strongest gains in housing activity in November, as in recent months, were in apartments and other buildings that contain more than five units. That reflects a shift away from home ownership toward renting.
Even after a 50 percent rise in multi-family housing starts this year, “we expect a similar pace of growth next year,” Bank of America-Merrill Lynch senior economist Michelle Meyer said in a research note. It has its roots in a shift toward renting among Americans buffeted by foreclosures, a weak job market and tight credit.
The rising demand for apartments has driven up rent prices. Nationwide, there was a 3.4 percent gain in rents over the past 12 months, according to Labor Department data, compared with a 2.4 percent rise in all consumer prices. Some individual markets saw much larger gains. And those higher rents are coaxing developers to see opportunity.
“We have been and expect to continue to be very active in all aspects of our investment activity,” Bryce Blair, chief executive of AvalonBay Communities, said in a conference call with analysts last month. The Arlington-based company owns about 50,000 housing units across the country and has $1 billion worth of development underway. Blair noted rising rents and the dearth of new-building projects.
It’s hard to know how much of that shift is by choice — people avoiding the risk of buying a house that could decline in value — and how much is driven by the difficulty in getting a mortgage loan. But the reasons don’t matter much for the broader U.S. economy. If the gains in new permits and housing starts keep up, they could put construction workers back on the job.

clear skies,
Doug Reynolds

Tuesday, January 17, 2012

Freddie: Low Mortgage Rates to Hang Around Next Year

By Drew FitzGerald
Mortgage rates are expected to remain very low at least through mid-2012, while housing activity improves slightly, according to Freddie Mac’s economic and housing outlook released Wednesday.
The outlook also projects fewer single-family home-loan originations but more multifamily lending in 2012. The rental market is likely to lead growth in the lending industry, though parts of the country will also benefit from increased activity in the single-family home market.
High unemployment and a glut of foreclosed properties have depressed the housing market in recent years, despite extremely low interest rates that have made borrowing more attractive.
“While the headwinds remain strong going into 2012, there are indications the economy and the housing market are gaining ground, albeit slowly,” said Frank Nothaft, Freddie Mac’s chief economist. “All told, next year will be another bumpy ride.”
Job growth must accelerate beyond the average monthly payroll gains of 130,000 seen this year through November for the unemployment to decrease significantly. Even then, the mortgage company predicted the unemployment rate will remain above 8% in 2012.
Freddie Mac predicts the U.S. economy will grow by about 2.5% next year.
clear skies,
Doug Reynolds

Monday, January 16, 2012

Why Home Prices Are (and Aren’t) Stabilizing

Remember, this article is national news.  Sacramento Has more local stats that support a more stable market than the country as a whole.

By Nick Timiraos, WSJ

Prices of homes that aren’t selling out of foreclosure have been holding steady.
CoreLogic reported that home prices in October declined by 1.3% from September and by 3.9% from one year ago. A separate index released Monday by LPS Applied Analytics showed that home prices in September had dropped by 1.2% from August.
“Many housing statistics are basically moving sideways,” said Mark Fleming, chief economist at CoreLogic.
Still, the CoreLogic index shows an important emerging trend where home prices are stabilizing after excluding distressed sales.
What’s the difference between distressed sales and non-distressed sales?
Unlike traditional owners, banks are often faster to cut prices in order to unload properties quickly—or what are called “distressed” sales. The upshot is that, the more homes being sold by lenders in any given month the faster prices tend to fall.
This was clear throughout the initial years of the housing bust. Prices declined most sharply in 2008 as banks dumped foreclosed properties at fire-sale prices. Owner-occupants are less likely to list their homes for sale in the winter months, too, which means that each winter there are also drops in prices because distressed sales account for a growing share of sales.
Are prices of distressed homes falling at the same rate as non-distressed homes?
That’s been the case up until recently. While total home prices were down by 3.9% from one year ago, prices were down by just 0.5% from one year ago when excluding distressed sales. In September, total prices were down by 3.8% from one year ago, but non-distressed prices were down by 2.1%.
This shows that while price declines are resuming, they are not yet falling from one-year ago for non-distressed homes. In fact, during the first nine months of 2011, prices of non-distressed homes remained relatively stable, with year-over-year declines between 2% and 3%.
Analysts at Barclays Capital called this “the most important trend in the housing industry right now,” in a report published on Monday.
Why would any stabilization of non-distressed prices matter?
If it’s true that prices of non-distressed homes are stabilizing, even as distressed homes continue to fall in price, it would mean that a distressed home is “increasingly being seen as a poor substitute for a non-distressed home,” writes Stephen Kim, the Barclays housing analyst. He says it’s possible that the “bifurcation between distressed and non-distressed homes will only widen with the passage of time.”
Won’t the overhang of foreclosures put pressure on non-distressed prices anyway?
That’s all too possible. There are more than two million loans in some stage of foreclosure, and it may be too early to argue that those won’t in some way impact the sales prices of non-distressed homes. For one, homes that sell out of foreclosure at significantly lower prices could be used by appraisers as “comparable” sales that may make banks less willing to lend at an agreed sales price for a non-distressed home.
In certain markets where many homes are selling out of foreclosure, it’s hard to simply set aside distressed homes. “You can’t deny the fact that if half of homes that sold in San Diego in a given year were distressed, that is the trend,” said Kyle Lundstedt, managing director at LPS.
What could happen if this trend holds up, with distressed prices falling and non-distressed prices staying flat?
It could stabilize something else: home-buyer confidence. “There is nothing that strikes fear in a homeowner’s heart than to hear that his home value has declined,” writes Mr. Kim of Barclays. “But if it was home price trends that got us into this funk, it stands to reason that a recovery in sentiment will be similarly ushered in once price declines have abated—which is precisely what the CoreLogic price data shows us.”
clear skies,
Doug Reynolds

Saturday, January 14, 2012

California May Have Turned the Corner

By Dean Calbreath
California may finally have turned the corner into recovery, with the job market slated for slow but steady growth over the next two years, according to a report released today by UCLA's Anderson Forecast.
"Have we turned the corner in the Golden State? Perhaps we have," wrote UCLA senior economist Jerry Nickelsburg. "The last two months have yielded both job growth in excess of the U.S. rate and job growth which is widespread throughout the state."
It was the second time in two days that a Southern California think tank has predicted increased job growth in the state. On Tuesday, Chapman University in Orange issued a similar report, predicting slightly higher growth than UCLA. (To see the Union-Tribune's article on the Chapman report, clickHERE.)
The UCLA report notes that since July, job growth throughout each major region of California has outpaced the national average. San Diego County, Orange County and Ventura grew at an average rate of 2 percent, compared to the U.S. average of 1 percent.
"In coastal California export and technology growth has been the key to recovery," Nickelsburg wrote. "A resurgence of investment and exports in 2012 will continue to drive the coastal economies."
On the other hand, the forecast warns that the U.S. and international outlook is so weak that it is doubtful that the growth will be robust enough to chop down the unemployment rate anytime soon, especially in the Inland Empire and the Sacramento region. As a result, the unemployment rate will likely not dip below 10 percent until late 2013 or early 2014, and it could be 2016 before it returns to pre-recession levels.
And partly because of the continuing problems in the job market, the report projects that the downturn in the housing market will continue, with no dramatic growth in home construction - a key growth engine for the inland areas of the state - until 2013.
"The end of a recession does not mean 'recovered from a recession,'" Nickelsburg wrote. "It only means the contraction has ended. The pain remains real and persistent until solid and sustained gains occur."
clear skies,
Doug Reynolds