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Stylish Outdoor Living

March 24th, 2008 4:19 PM

Welcoming spring

Stylish Outdoor Living

Decks and patios give a home and yard an attractive, functional outdoor space.

Home owners’ increased interest in enjoying nature and gardening is reflected in patios and decks sprouting on the front, back, and sides of city and suburban homes, as well as atop roofs of condominium buildings and townhouses. These outdoor spaces reflect a greater array of designs, materials, sizes, and price points than constructed in years past.

“They’re getting bigger and bigger and sometimes extend off the back and wrap around one side,” says Melissa Galt of Melissa Galt Interiors in Atlanta. Many also are designed as a transition between the indoors and a landscaped yard, says San Francisco architect Frank Bergmaschi.

Decks and patios also are getting swankier, the equivalent of outdoor rooms with sophisticated furnishings and all the bells and whistles. “Home owners want to take everything they love about their homes and move the whole lot outside,” says Michael Payne, a designer and former host of HGTV’s show, “Designing for the Sexes.”

Here’s how to get these outdoor spaces the attention they deserve:

Boost Curb Appeal

Outdoor spaces have become a bigger part of the curb appeal that attracts buyers and can even increase a selling price, says broker Kathy Braddock of Charles Rutenberg LLC in New York City. More than one-third of buyers want a patio or terrace (a space level with the ground) while 21 percent desire a deck (constructed above the ground), according to the NATIONAL ASSOCIATION OF REALTORS®’ “Profile of Buyers’ Home Feature Preferences.”

Choose Features Wisely

To get the greatest enjoyment and best return on dollars invested, home owners should study examples in design publications, drive through favorite neighborhoods to see possibilities, and ask themselves pertinent questions, such as how the desk will be used, when, and what activities will take place there.

Here are other factors to consider:

Style. Most designers recommend a style compatible with the home’s architecture. “The greatest opportunity for a successful look is for the space to be seamlessly integrated with the house rather than resemble an afterthought,” says Bob Hursthouse, a landscape architect in Bolingbrook, Ill.

Braddock says the style also should blend into the landscape. “More buyers are interested in Zen-like simplicity,” she says. And Chicago landscape architect Bernard Jacobs says a deck or patio should be an extension of interior taste. “You can repeat the floor pattern, colors, or an architectural treatment,” he says.

Materials. More buyers seek materials that require little or no maintenance and can withstand inclement weather. In addition to perennial favorites such as brick, bluestone, and Western red cedar, materials that are gaining popularity today are recycled plastic composites; dense renewable tropical hardwoods such as ipe; vinyls that have the look and feeling of wood; and Trex, made from reclaimed wood and plastic.

How the material is installed makes a difference. “Brick pavers atop a sand base can be installed quickly and inexpensively but may shift; those atop a crushed gravel base will cost more but require less maintenance,” Hursthouse says.

Color can make a difference. Lighter materials reflect more sunlight and can be hotter, Hursthouse says. Stains can change the color and protect wood from moisture, mold, and algae growth, says Rich Morrell, brand manager for Cabot, a company that manufactures coatings.

Size. While shape and size should be proportional to the home, the deck or patio also needs to be large enough to accommodate all uses and users comfortably. “Outdoor furniture is one-third larger than comparable indoor pieces; chaise lounges are especially big,” Jacobs says. To accommodate multiple uses and add visual interest, more decks are built on several levels, says Payne.

Placement. Where the deck or patio is situated should depend on views and the region of the country. “Everyone’s conscious of sun and how it can damage skin, but where the sun is rare — for example, in northern Minnesota — the last thing people want to do is sit in the shade,” says Payne.

Safety. Any deck or patio needs to meet local safety codes with the correct height of railings and spacing between and correct number of steps. Some communities require lighting in step risers to illuminate treads, says Hursthouse. A roof deck in Chicago must have two points of egress, says Jacobs.

The extras. Among today’s favorites for decks and patios are fireplaces and pits, gourmet kitchens, Hollywood-style sound systems, water features, flat-screen TVs, high-end furnishings, storage, gazebos, colorful awnings, space heaters, and decorative and energy-efficient lighting. “Many home owners spend most of their time after dark on their decks and terraces,” Hursthouse says. “Lighting also is good for security.”

Understand Costs

The cost will depend on the material, size, amenities, and labor. A trellis built from 4-by-4 inch cedar posts that adds a simple decorative touch might run a few hundred dollars while an ornate cedar deck with pergola for shade could run a few thousand dollars, says Paul Mackie, Western-area manager with Western Red Cedar Lumber Association .

While it’s difficult to generalize, Hursthouse says concrete typically runs $8 to $10 a square foot, cedar or bluestone $25 to $35 a square foot, and granite or limestone $60 a square foot.

Amenities and furnishings also represent a wide range. Furniture for one Galt project totaled $50,000. Jacobs designed an elaborate roof deck in Chicago for $350,000.

The key is to make the price proportionate to the home’s value. “Don’t spend $50,000 on a house worth $350,000, but you might for one between $750,000 and $1 million,” Hursthouse says.

Don’t Forget the Landscaping

An outdoor room is best accessorized with plants, says Payne. “I can’t compete with Mother Nature,” he says. “She offers the best of the best.”

Posted by Anne Baker on March 24th, 2008 4:19 PMPost a Comment (0)

Low Cost Kitchen Updates

March 24th, 2008 3:15 PM

Daily Real Estate News | March 7, 2008

Low-Cost Kitchen Updates

Sellers whose kitchens are old and outdated, but who don’t want to spend money gutting and remodeling, should consider these tips from interior designers for updating inexpensively.

Buy new lighting. Replace fixed ceiling lights with modern movable track fixtures.
Replace the hardware. Handles on today’s cabinets are large and sleek instead of small and ornate. Also, brass is out. Replacing the outmoded ones can make the whole room look more modern.
Buy a new faucet. A stylish faucet can make a big difference.
Update the backsplash. Colorful mosaic tiles are better than plain boring tile.
Buy new seating. If sellers can’t afford that, then they can certainly reupholster or replace the cushions.
Clean up the clutter. Get rid of the canister set, the breadbox, and all the appliances on the counters. Leave only one bowl of fruit and a plant on the countertops.

Source: The New York Times, Stephen Milioti (03/06/08)

Posted by Anne Baker on March 24th, 2008 3:15 PMPost a Comment (0)

Why Now is a Smart Time to Buy

March 24th, 2008 2:52 PM

Daily Real Estate News | March 11, 2008

Why Now is a Smart Time to Buy
Now is a great time to buy a home, say the financial gurus at the Wall Street Journal.

The Journal calls it a buyers market and offers these suggestions for first-timers getting their feet wet. While their advice is solid, it’s not revolutionary, but some potential customers might find it reassuring.

Remember this is a place to live not a stock market investment, they say. Lenders want buyers to spend no more than 28 percent of their gross monthly income on mortgage payments, real estate taxes, and home insurance. Buyers shouldn’t count on stretching further because lenders won’t approve their loans.

Cash is king. Having enough money in the bank to pay closing costs that are typically an additional 2 percent to 3 percent of the price of the home is necessary.

Location. Location, location. As any good real estate professional knows, homes in good school districts where the crime is low are much more likely to hold or increase their value.

Compare. Besides just looking at the comps, buyers should examine what it would cost to rent a similar house in the same area and they might consider what it would cost to buy land and build a comparable home.

Think long haul. It will probably take at least six or seven years of living in the house to be able to sell and come out ahead.

Source: The Wall Street Journal, Shelly Banjo (03/11/08)

Posted by Anne Baker on March 24th, 2008 2:52 PMPost a Comment (0)

Fannie: Lawyers key to Borrower Help

March 24th, 2008 2:50 PM

Daily Real Estate News | March 24, 2008

Fannie: Lawyers Key to Borrower Help
Victor Medrano, a single-family servicing consultant for Fannie Mae, says up to half of homeowners in the foreclosure process did not contact their mortgage servicer when they began having problems making their monthly payment.

Noticing that borrowers appear more willing to contact the law firms handling the foreclosure, the government-sponsored enterprise now permits 39 law firms in 15 states to work out repayment or forbearance plans; they also have permission to lower principal amounts and approve short sales.

However, consumer credit counselors note that the law firms must act in the best interest of their client and point out that Fannie Mae pays those firms hundreds of dollars for each repayment plan--which is far less than the $1,300 fee paid when foreclosed properties are sold through sheriff's sales.

Source: Philadelphia Inquirer, Harold Brubaker (03/24/08).

Posted by Anne Baker on March 24th, 2008 2:50 PMPost a Comment (0)

Existing Homes Sales Rise in February

March 24th, 2008 2:48 PM

Daily Real Estate News | March 24, 2008

Existing-Home Sales Rise in February
Sales of existing homes increased in February and remain within a fairly stable range, according to the NATIONAL ASSOCIATION OF REALTORS®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rateof 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September.

Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”

The national median existing-home pricefor all housing types was $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets.

Source: NAR

Posted by Anne Baker on March 24th, 2008 2:48 PMPost a Comment (0)

Helping the kids buy first home

March 24th, 2008 2:46 PM

Daily Real Estate News | March 24, 2008

How to Help the Kids Buy First Home
Helping the kids buy a first home is a time-honored tradition that has become even more significant as home prices rise and incomes flatten.

Here are three ways parents can help their children:

Cash. For parents with the means, cash is clean and easy. An individual can give $12,000 a year to a recipient without having to pay a tax on the gift. Therefore, a couple could give an adult child and the child's spouse a total of $48,000 in one year. To keep things simple,
the gift is best given well in advance of the mortgage application.

Cosigning or otherwise jointly investing in the property. This can work for parents of more limited means or those who want to be paid back. The biggest risk is that the offspring will be unable to meet their obligations and it will affect the parent’s credit rating.

Knowledge and hard work are worth gold. Parents who can’t afford to help financially maybe able to provide experience and even some sweat equity to help the kids make a smart housing choice.

Posted by Anne Baker on March 24th, 2008 2:46 PMPost a Comment (0)

Top-Down Solution

March 24th, 2008 11:37 AM

Top-Down Solution
by Lawrence Yun, Chief Economist, NAR Research

The most recent data indicates that, yes, foreclosures rose again in the 4th quarter of 2007. A number of government agencies are trying to help reverse this trend. There are several policies proposed and some already being implemented to address rising foreclosures. But nearly all are attempting to alleviate the problem from the “bottom up,” rather than from the “top down.” The bottom-up approaches involve a work-out plan of current problematic loans. Let’s look at several of them.

The FHA Secure Program offered through HUD allows borrowers to get out of their high-interest rate, subprime loans into a lower-interest rate FHA loan if they meet certain conditions. Those conditions include having some level of housing equity and having demonstrated timely mortgage payments prior to the time when interest rates reset at a higher level.

Sheila Bair of FDIC was one of the first to call for voluntary loan remodification. Lenders' profit margins will be lower, but remodification is still better for their bottom line than a foreclosure. Recently, she called for systematic lowering of those resetting rates on 2/28 and 3/27 subprime hybrid loans.
Henry Paulson, Treasury Secretary, called for essentially the same after bringing key financial institutions together and putting the voluntary loan restructuring into more concrete form. There are a lot of hoops a borrower has to go through to qualify for the relief, however.

Ben Bernanke, Chairman of the Federal Reserve, has suggested lenders give a break to distressed borrowers by lowering some portion of the loan amount. A lower remaining principal will permit more manageable monthly mortgage payments for borrowers. More importantly, the write-down of the principal changes the homeowner’s position from being under water (negative housing equity) to above water. The idea is that borrowers can still make payments rather than walk away.

Senator Chris Dodd (D-Connecticut) has proposed legislation that would permit bankruptcy judges to modify the terms of the loans in order to make payments more manageable.

Martin Feldstein, Harvard University professor, made an intriguing proposal of immediately converting 20 percent of the existing loan balance into very low interest-rate loans. The federal government will provide the exceptionally low rates.

All of these proposals are well-intended and most will help mitigate foreclosure problems for mortgagees. But in addition to some aspects of these programs, what is also needed – and could well be far more effective – is a top-down solution: raising the housing demand. As I have written in this column previously, there exists a significant pent-up demand. What we need now is to get the home sales rolling. Rising home sales will lower housing inventory. Lower inventory will help quickly stabilize home prices. A recent Boston Fed study showed that home price movements – and not interest rate resets – are the primary determinant of foreclosures. If households have less or negative housing equity, then they have more of an incentive to default on mortgages and simply walk away.

The challenge is unleashing this pent-up demand into the marketplace. Consumer pessimism is pervasive. The raising of the loan limit on FHA and Fannie/Freddie backed loans will likely help unleash some of this demand as more households will have access to lower interest rate loans. And while lower home prices can also work to bring buyers to the market, they are no guarantee because lower prices can also add to excessive pessimism and consequently hold off buyers.

So, what do I think we should do? What is critically needed at this important point in the housing cycle is a measure to assuredly and quickly raise home buying activity. This can be accomplished by providing a home buyer tax-credit. A nationwide $5,000 tax credit (the same amount currently in existence for home buyers in Washington, D.C.) would cost the federal government $40 billion. Factoring in rising economic activity and accompanying rising tax revenue, the true cost could be minimal or even positively favorable. A reversal in the weakness in the housing market, which has been subtracting about one percentage point off GDP growth, can add $40 billion to the U.S. Treasury – essentially offsetting the cost of the tax credit. If the initial $40 billion cost is hard to swallow, how about a more targeted tax credit for only first-time home buyers? That would cost the government about $15 billion.

The ongoing subprime loan mess and related foreclosure problems are due to past lending mistakes. Current home buyers fortunately are not exposed to these “errors in judgment.” And these fresh buyers will also help save the day for existing homeowners who are either defaulting or facing foreclosure. Rising demand lifts all boats. There is a wide selection of safe mortgage products for today’s home buyers. Combine those safe mortgages with a home buyer tax-credit and we have the makings of a solid housing market recovery. Because housing nearly always leads the economy, a solid economic recovery will not be far behind.

Posted by Anne Baker on March 24th, 2008 11:37 AMPost a Comment (0)

Housing's Second Wind

March 24th, 2008 10:26 AM

Housing's Second Wind
by Ken Fears, Manager, Regional Economics

The strong home price appreciation that the housing market experienced from 2000 through 2006 was great for homeowners. Increases in home values helped those households build equity and wealth.

However, that price appreciation had a downside as well. It made achieving homeownership much more difficult for first-time buyers and those potential buyers with less-than-perfect credit, particularly when mortgage rates began to rise from historic lows in mid-2005. As rates increased, average monthly payments also rose. The consequence was that home sales fell as fewer people could afford to buy. Additionally, beginning in mid-2007, many homeowners who had taken out adjustable rate mortgages (ARMs) to finance their purchases made after mid-2005 could not refinance. Stagnant or declining prices reduced or eliminated the equity in their home. Unable to refinance, households were faced with making monthly mortgage payments that they could no longer afford. The impact of this trend was particularly harsh on the sub-prime market as funding in this sector evaporated after July of 2007. Default and foreclosure rates increased as a result.

Some Relief in Sight
The good news is that there is some relief on the way. One month ago, Congress passed and the President signed an important stimulus package that goes far beyond the well-publicized $600 tax rebate check. The package includes a provision that will temporarily increase FHA lending limits and the limits on loans that the GSEs can buy.

Prior to 2008, the FHA could only loan up to a maximum of $362,790 for a home in the highest priced markets; most markets had lower limits. Under the new provisions, that limits jumps to as much as $729,500 depending on the local median home price. Based on 2007 mortgage data, NAR Research estimates that more than 140,000 homes in this price category were purchased using sub-prime loans.

FHA vs. Subprime
FHA loans compete with sub-prime loans for borrowers with lower credit standards. However, the FHA has a longer history of lending and has government support, so borrowers receive mortgages rates that are 3.0 percent lower on average than those of subprime loan. In addition, these FHA loans require inspections; users of the FHA program know about issues with their home up front and so can budget accordingly. In short, FHA loans cost home buyers less up front and allow them to budget their long-term expenses more accurately. Finally, FHA has programs in place to keep owners out of foreclosure if they become delinquent – a lesson the private, subprime sector is currently learning.

FHA and Housing Demand
Because FHA loans are considered safe, the increased FHA limits will help stimulate housing demand from buyers with less-than-perfect credit. That in turn will help to support prices, enabling owners facing re-setting of their mortgage-interest rates to refinance into more affordable loans. This will further undercut the precarious position of housing markets with large concentrations of sub-prime ARM loans.

Increased GSE Loan Limits
Equally important are the effects that increased GSE limits will bring. The GSEs, Fannie Mae and Freddie Mac among others, buy up loans, repackage them, and sell them in the secondary market. The GSEs’ loose relationship with the government is viewed by buyers of mortgage backed securities as insurance – that the risk on these mortgages is much lower than that on mortgages not backed by the Federal government or the GSEs.

The subprime meltdown last summer caused the spread between conforming mortgages rates, those at or below $417,000 that by law could be backed by the GSEs, and jumbo rates to surge nearly a full percentage point. This increase knocked many would-be buyers out of affordability. The difference between 6% and 7 percent is magnified on a monthly payment as the home’s value increases. Now that the GSEs can buy loans above $417,000 up to $729,750, mortgage rates on non-GSE backed loans will likely come down as well. This change will help to boost demand in the volatile, high-priced markets on the east and west coasts.

Impact on Markets
Nearly every county in the county will benefit from this change. Of the 3,190 counties in the United States, 100 will see an increase of 100 percent or more in their FHA loan limit. An additional 3,070 counties will receive an increase of 30 percent or more in their FHA loan limits. Many of the high-priced markets on the east and west coast will experience sharp increases in FHA limits. On average, counties in California will experience an increase of $185,361, with many counties in Los Angeles, San Diego, and San Francisco receiving more. Lower priced areas in the central valley that are experiencing sharp foreclosures – including Modesto, Sacramento, and Stockton – will also experience significant boosts. Washington, D.C., New York City, Boston, and Chicago are just a few of metro areas that will experience sharp increases in both FHA and GSE limits.

However, it’s not just large metros and suburban areas that will benefit. There are many smaller markets that will feel the positive effects of increased loan limits. Some smaller, coastal counties in New Jersey, North Carolina, and Virginia as well as Nantucket have received substantial increases in their loan limits. Other areas have received sizable increases such as popular counties in Colorado outside of Denver and Boulder as well as Lancaster, Ohio and recent boom markets like Wasatch, Utah.

Finally...
The new FHA loan limits combined with the new GSE loan limits will go far to re-vitalize demand in today’s sagging housing market. More importantly, these changes will help to strengthen confidence, the fabric of the industry’s damaged mortgage market, and it will do so at the local level

Posted by Anne Baker on March 24th, 2008 10:26 AMPost a Comment (0)

Funny stories from Realtors

March 24th, 2008 10:23 AM

In the Shadows

I was a real estate agent in New Jersey for 12.5 years specializing in marketing foreclosed properties for banks, before I started working for the MLS. A foreclosed property is a dark, lonely, and often forbidding place. There is no furniture, no power, and often a great deal of debris.

Late one afternoon as the sun was going down, I was touring a home. The home was older and unusual with lots of little rooms, hallways, and a number of stairways. I was walking down one particularly dark set of stairs, and as I turned right at the bottom, I shrieked at the top of my lungs!

My heart came to a standstill and I jumped away as far as I could — keep in mind, I am a 200-pound man, used to being in empty houses by myself, so that’s not a very common sound for me to make. But I was more scared than I had ever been in my life.

Hesitantly, I took another glance to come face-to-face with what other person or creature was in the dark hallway with me.

A full length floor mirror rested on the wall at the bottom of the stairs. The person I had been so terrified to encounter? Myself!

— John Hicks, director of MLS Outreach and New Product Development, CVR MLS, Richmond, Va.

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Locked Out

I was called by a repossession company to list a home in the Dry Fork Canyon area, a beautiful mountainous area in Utah. I was anxious for the listing and went to the area to locate the home.

But, being a rural community, there weren’t any addresses on the houses. So after a little effort, I finally found the house and called to have the house re-keyed.

I had gotten the wrong house. The house I re-keyed was a house where the owners were merely away for the summer.

So I had to locate the owners in another city and mail them their new keys. Ironically, that family later listed their home with me — after all, I had the keys already!

— Shar Benson, broker/owner, CRS®, GRI, Roosevelt, Utah

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Out the Window

In the 1970's, there was a group of investors who I would load up in the van about once a month and then we’d spend the day touring low-priced foreclosed homes. At the end of the day, each would give me his list and I would prepare the offers to purchase.

But on one such day, the last property we visited was missing the key in the lockbox. In those days it wasn't uncommon for an agent to remove a key and keep it if their buyer showed interest in a property.

Since foreclosures are vacant homes, I looked for an alternative entry and found the window on the front porch unlocked. So we all climbed in and toured the house, which seemed to be under renovation.

I was the last to exit, only to meet a football-player sized man as I climbed out the window. He did not look amused either.

Apparently he had purchased his mother's property out of foreclosure, and he didn’t understand why real estate practitioners were climbing out his window.

— Lana McDaniel, Realty Executives Classic, Shawnee, Kan.

Posted by Anne Baker on March 24th, 2008 10:23 AMPost a Comment (0)

Real Estate Economy Today

March 24th, 2008 10:15 AM

This article was published on: 04/01/2008

Economy
Triggering That Chain Reaction

BY LAWRENCE YUN

Close to 80 percent of today’s prospective buyers have their house on the market. Most of them can’t get serious about buying until someone first takes their house off their hands. In other words, at least three quarters of the market’s potential demand is pent up until others start buying again.

It’s because of this demand that the federal government’s enactment of higher conforming and FHA loan limits in mid-February is so important.

Although it’s unlikely that these higher limits will trigger a surge in home sale activity, they will help spur sales in coastal and other high-cost areas where the old conforming loan limits were simply too low to make agency loans a realistic option for buyers. Now, with limits rising to as much as $720,750 (up from $417,000) in some areas, buyers can get the most advantageous mortgage pricing available rather than take out a costly jumbo loan or be forced to put together two loans in a piggyback mortgage package, a difficult task in today’s climate.

Higher FHA loan limits will help, too. They rise to the same $720,750 maximum, handing many first-time buyers the kind of financing they need to buy a home and pave the way for the move-up buyer.

Two other factors favorable to buyers — continuing historically low interest rates and notable price declines in some previously overheated markets — help set the stage for a return of consumer confidence.

But to really get the homebuying surge under way, there are a number of thoughtful proposals pending in Congress to which lawmakers will want to give serious attention. Sen. Johnny Isakson (R-Ga.) last year introduced a bill to give a temporary tax credit to home buyers, and Rep. Barney Frank (D-Mass.), chair of the House Financial Services Committee, is a chief promoter of federal down-payment assistance.

Passage of one or both of these proposals, perhaps as part of a second stimulus package, would go as far as possible to trigger the homebuying chain reaction that we’re all waiting for.

Lawrence Yun is chief economist of the NATIONAL ASSOCIATION OF REALTORS®.

Posted by Anne Baker on March 24th, 2008 10:15 AMPost a Comment (0)