Cap & Trade and Real Estate

Published by peter | Filed under Buyer / Seller Tips, Market Trends, Real Estate

An article in the Washington Post does a good job explaining the impact that the Cap And Trade Bill will have on new home construction and the housing market:

The bill would give the federal government power over local building codes. It requires that by 2012 codes must require that new buildings be 30 percent more efficient than they would have been under current regulations. By 2016, that figure rises to 50 percent, with increases scheduled for years after that. With those targets in mind, the bill expects organizations that develop model codes for states and localities to fill in the details, creating a national code. If they don’t, the bill commands the Energy Department to draft a national code itself.States, meanwhile, would have to adopt the national code or one that achieves the same efficiency targets. Those that refuse will see their codes overwritten automatically, and they will be docked federal funds and carbon “allowances” — valuable securities created elsewhere in the bill that give the holder the right to pollute and can be sold. The Energy Department also could enforce its code itself. Among other things, the policy would demonstrate the new leverage of allocation of allowances as a sort of carbon currency — leverage this bill would be giving to Congress to direct state behavior.  washingtonpost.com.

Disinformation Reigns On The Internet

Sometimes it is very hard to tell the “airbags” from the experts on the internet. People can write whatever they please and if they have a decent writing style, they will develop a following. I suspect that is what has occurred with the disinformation on the American Clean Energy and Security Act that we are reviewing.This blog article started because my friend sent me a link to a forum where the following was posted (I have since found it verbatim on a number of forums…

Beginning 1 year after enactment of the Cap and Trade Act, you won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. H.R. 2454, the “Cap & Trade” bill passed by the House of Representatives, if also passed by the Senate, will be the largest tax increase any of us has ever experienced.The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year. No one is excluded. However, once the lower classes feel the pinch in their wallets, you can be sure these voters get a tax refund (even if they pay no taxes at all) to offset this new cost. Thus, you Mr. and Mrs. Middle Class America will have to pay even more since additional tax dollars will be needed to bail out everyone else.

But wait, there’s more …

A year from now you won’t be able to sell your house. Yes, you read that right. The caveat is (there always is a caveat) that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes (”mobile homes”) are included.In effect, this bill prevents you from selling your home without the permission of the EPA administrator. To get this permission, you will have to have the energy efficiency of your home measured. Then the government will tell you what your new energy efficiency requirement is and you will be forced to make modifications to your home under the retrofit provisions of this Act to comply with the new energy and water efficiency requirements.Then you will have to get your home measured again and get a license (called a “label” in the Act) that must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner. If you don’t get a high enough rating, you can’t sell. And, the EPA administrator is authorized to raise the standards every year, even above the automatic energy efficiency increases built into the Act.

OK, enough of the forums … what does the American Clean Energy and Security Act of 2009 really say?Some believe that if the American Clean Energy and Security Act of 2009 is enacted, new home construction costs will go up, and home affordability will decline. It appears as if a “national building code” will be created, thus usurping some of the rights of State’s to control building quality as they see fit.

A cursory examination of the 1,428-page bill, in its current form, finds itdoes not call for mandating an energy audit on existing homes. However, according to the House Committee on Energy and Commerce, Section 204 of the legislation does call for building an energy performance labeling program for new home and commercial properties.

Hillsborough home sales up in October

Published by peter | Filed under Real Estate

The Greater Tampa Association of Realtors recorded 1,722 sales in October 2009 versus 1,279 a year earlier. The average sales price - Tampa Realtors used average instead of median - dropped 16 percent over those 12 months. A typical home sold for $156,775 last month compared to $186,424 a year earlier.

Pew Report on Florida

Published by peter | Filed under Real Estate

A report issued yesterday by the Pew Center on the States finds Florida to be among the worst states in the nation in terms of its economy.The report, called “Beyond California: States in Fiscal Peril,” notes that what many of us have been recognizing day by day, month by month — Florida is not the state it was just a few years ago.Among the lowlights:- In 2006 the state’s job market was one  of the strongest — now it’s the 8th worst.-  Population.  For the first part of this decade, we all heard the statistics (wasn’t it, “There’s a thousand new people a day  moving to Florida”?).  Now deal with these stats:  From April of ‘08 to April of ‘09, the state’s population dropped by 58,00o.- And in ‘05 Florida ranked 2nd in economic growth. In ‘08?  48th.And though a lot of folks (particularly Republicans) love to bash California and its fiscal problems, Moody’s Economy.com says that Florida’s housing market is in worse shape than the Golden State’s.

So, What’s the Difference Between a Lease Purchase and a Lease Option?

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Real Estate

What do you do if you want to buy a house, but don’t have the good credit necessary to obtain a mortgage? Or perhaps you can get a mortgage, but are short for money for a down payment? How do you get your house then? Fortunately, there are ways to get a house without a traditional mortgage, and one of these ways may be just what you’re looking for. If you really want to get your house, you may want to get the seller to consider doing a lease purchase or a lease option.

Either of these options allow you to avoid the banks, and may not require a huge down payment. But what are the differences between these two options? Well, there’s really only one difference, but it’s a VERY significant one.

With a lease purchase, you’re agreeing, and actually contracting, to buy the house after the lease period is over. With the lease option, you’re agreeing to lease the house for a specific period of time, with the option to purchase at the end of the lease if you so choose. In both cases, part of your monthly payment for the lease will go toward a down payment for when you later apply for a traditional mortgage to buy the house. With a lease option, if you choose to not buy the house, you lose the money that was set aside for that purpose.

With the real estate market being what it is, more and more sellers are offering lease purchase and lease option agreements to entice buyers to take houses off of their hands. Even if you find a house you want to buy that isn’t currently offering either of these options, the chances of talking the owner into going in this direction is high. If you can’t get a traditional mortgage now, a lease option or a lease purchase offers you an excellent opportunity to save up money for a down payment while cleaning up your credit for a few years, thus making you a much more desirable mortgage candidate when the lease period is over.

Housing Plan Reaches 1 in 5 Borrowers

Published by peter | Filed under Market Trends

The Obama administration’s mortgage relief program has reached one in five eligible homeowners, a government report says, but most of those borrowers are on temporary trial plans that have yet to be made final.

As of the end of October, more than 650,000 borrowers, or 20 percent of those eligible, had signed up for trials lasting up to five months, the Treasury Department said Tuesday. The modifications reduce monthly payments to more affordable levels.

Homebuyer Tax Credit Extended

Published by peter | Filed under Market Trends

Congress has extended and expanded the homebuyer tax credit. The modifications will become effective when President Obama signs.  I have received numerous emails and comments from readers who asked for me to report the changes to the First Time Homebuyers Tax Credit when they occurred, and the changes most likely will occur immediately. This post will review the changes and enhancements so you should be able to understand the new housing tax. The $8,000 homebuyer tax credit for first-time buyers, due to expire November 30, 2009, will be extended through June 30, 2010. First-time buyers who are in the process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, roughly a $55,000 increase above the level in existing law. For the first time, the new legislation states that buyers who already own a home are eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.

3 Tips for Finding the Best Mortgage

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Miscellaneous, Real Estate

When looking for a mortgage, the buyer is more than scanning through the phone book for the next listed mortgage agent. Instead, they are shopping for the best interest rates and the best deals a lender can offer. The mortgage business is just that, a business. They are out to make money like every other business and when the market is soft, they need to offer the BEST deal in order to keep the attention of the buyer. Here are three tips to find the best mortgage for your home purchase.

#1 Stay within budget. Before buying a home, it is important to set a budget. That budget will state the highest possible payment you can afford in addition to home bills and upkeep cost. Once that budget is set, there is nothing that should push the limit of that monthly payment. If no lender can help you into a loan for a home you love under that budget, find a new home or a new lender.

#2 Use the Internet. Shopping around for the best mortgage interest rate and deal does not mean you have to stick with a lender that is in your current area. The Internet opens the doors to every mortgage agency or lender listed on the Internet. This means more competition for your mortgage and lower interest rates. Bankrate.com is one of the best places to find the lowest interest rates for the day and the best lender will offer that rate (pending credit rating).

#3 Educate yourself on mortgage terms. Mortgage terms like adjustable rate mortgage, balloon payment, interest-only payments and fixed interest rates can be very confusing. The Internet is the best source of information and definition of these terms, but more than that, the potential buyer needs to walk into a real estate agency or lender’s office and ask for literature explaining real estate terms. The more education you acquire before actually applying for the mortgage, the better you will understand what is happening during the lending process.

Shopping around for the best mortgage has little to do with JUST finding the best rate. While this can be very important, learning about the mortgage lending process and keeping within a great budget will get you into the home of your dreams with a smile on your face that stays for the entire duration of the mortgage.

Water: Bottled or Tap?

Published by julia | Filed under Miscellaneous

In the ever popular battle against filling land fills with useless waste, bottled water seems to be losing. Bottled water contributes more than 50 million pieces of garbage per day to land fills, all of which will take no less than 1,000 years to biodegrade. The trouble with bottled water is not solely in the waste it creates, but in the process from which bottled water is created.

Bottled water is a unique product in that there are no real rules regarding where the water originates. That means any bottled water manufacturer can fill their polyethylene terephthalate bottles with pure, unchanged, tap water. That is right, tap water is the most common water used by bottled water companies. These companies add minerals to the water to improve the overall taste and then slap a price tag on the bottle that is equivalent to 500 times the cost of the same water you can run from your tap.

Tap water offers its own advantages over bottled water. Tap water provides tooth protecting fluoride in many cities and is tested on a daily basis versus bottled water which is only tested weekly. Tap water costs the consumer a mere 3 cents per bottle and saves the environment by reducing crude oil consumption by more than 1.5 million gallons.

The most common complaint about tap water is the taste. Bottled water contains minerals that improve the taste of the water. If taste is the problem, add one of the many flavored packets to your water before drinking. While these flavor options increase the overall cost of the water, flavored tap water remains less expensive than bottled water.

Choosing tap water over bottled water is simply the best choice for your body and your environment. Keep plastic out of the land fills, keep environmentally damaging gases out of the air and keep clean, healthy water in your home. Tap water is safer, healthier and more cost effective for every home.

Using a Focus Group to Earn a Quick Sale

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Miscellaneous, Pinellas County Homes, Real Estate

Everyone believes their home will be just as beautiful to the people walking through for a sale as it is to them. This is never the case. A homeowner tailors their personal space to their likes and not to the feelings of the masses. When trying to sell your home, a focus group of strangers and local real estate agents can be a Godsend for a quick sale.

A focus group is a group of people who take a survey or try a product out for free in order to give feedback to the creator or manufacturer of the product. While big business is usually who takes advantage of the focus group, a homeowner can tap into the group in order to get an honest feel of how the home will show on the market.

The focus group can be gathered from friends, family members, acquaintences and local real estate agents. If you do not want to pay the agents to walk through your home, simply as them to walk the home as a favor before you list the property for sale.

Before the focus group walks through the home, it is important to hand out a list of instructions regarding the information they pass on about the home. These instructions should tell the group to HONESTLY rate the home on the various topics listed on your questionnaire. These topics can include cleanliness, size, number of bedrooms, paint colors and room flow, among others. There should also be a section where the focus group can write comments about the property.

Once the group has completed their tour, the homeowner will need to read over the comments with an open mind. These people represent the same people who will be walking the home during the open house. They will feel the same way as the focus group and thus the changes noted are important to the quick sale of the home.

The easiest changes to make are to room color and clutter. Nearly all furniture should be removed from the home before the open house is set. This will give the potential buyer the ability to visualize their furniture in the home as opposed to feeling shut in by your furniture.

Another huge plus is to place the furniture on casters throughout the home. These castors will allow the potential buyers to move around the furniture to “see” the room from different angles. On each piece of furniture, leave a note that states, “Move me into YOUR perfect spot!”

Fixed and ARM Refinance Loans - Are ARMS Still an Option

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Real Estate

When the bottom fell out of the mortgage market, potential home buyers looked at the ARM loan as being the worst loan to choose. The ARM has its place in the mortgage and refinance world, but that does not mean it should be used by people who can only afford the lower repayment rate. Choosing between a fixed rate and ARM loan, the home buyer should look at all the costs of each loan before making the final decision.

A fixed rate loan will cost the new homeowner more money, hands down. But, this higher loan payment comes with the benefit of never raising during the loan maturation. The same mortgage payment the homeowner makes on the first month of the loan is the payment they will make throughout the loan. The ARM, on the other hand, cannot say the same.

The ARM, or adjustable rate mortgage, is available for new home loans and refinance loans. The ARM is often blamed for the rise in foreclosures in many cities. The ARM payment often starts out lower and then rises over time. The homeowner could begin repaying the loan with an interest only option and a very low payment. When the loan adjusts, that payment could double or even triple depending on the current interest rates.

If the fixed rate or ARM loans both offer good benefits, the home buyer could be looking for a hybrid loan. A hybrid loan offers both ARM and fixed rate characteristics. There are many different types of hybrid home loans, so the homeowner looking to refinance or the potential home buyer shopping for the right loan will need to speak with their lender about the hybrid loan options.

Now on to the choice…

The trouble with many novice home buyers the lure of the ARM loan. The ARM may be pushed by the lender due to the lower upfront payment. If, during the adjustment of the loan, the homeowner will not be able to keep up with the payments (even hypothetically) they should not enter into an ARM. These loans are great for people who buy a home for a great deal and believe the value of the home will rise before the loan adjusts. This is the art of investing and not traditional home buying.

Homeowners can often afford the fixed rate loan by choosing a smaller home or a home with fewer features. If the home price is lower and thus the mortgage lower, the payment will be lower. It is better to afford the home you live in then lose the home you love.

Hillsborough County home sales higher in September

Published by peter | Filed under Market Trends, Miscellaneous, Pinellas County Homes, Real Estate

Hillsborough County sales rose 20 percent in September from a year earlier. The Greater Tampa Association of Realtors counted 1,709 sales last month. That’s 20 percent higher than the 1,429 sales reported in September 2008.

September sales were up 2 percent over August’s tally of 1,672.

As always, here’s the chart: Download Gtar909

Beware of America’s housing crisis - huh?

Published by peter | Filed under Market Trends, Miscellaneous, Real Estate

A must-read from the Washington Times: On and on go the professional alarmists - America’s housing sector is down and will stay down for a long time to come. Fact: The bursting of a severe housing bubble nearly pushed the American economy over the edge last year. But does that alone make a case for long-term distress? Take a look at the housing picture in its entirety, and count us among those who don’t buy the despair.

Let’s see, for example, how population affects the housing situation. In America, alone among today’s wealthy nations, is on a path of solid population growth. This is good, notwithstanding the harum-scarum alarms by those who see disaster impending from a “population explosion.”

The U.S. population was approaching 300 million in 2000. Quite solid projections by the Census Bureau see the number at about 400 million people in 2100.

Why is the U.S. growing, while other modern nations shrivel up? First, our total fertility rate is about 2.1 children per woman - a magic number in the demographer’s kit, because that’s what it takes to “replace” a society. Sooner or later, Mom and Dad pass on (sorry to break the news), and they must be “replaced” by two children. The extra 0.1 accounts for children who do not live to reproductive age.

A strong relationship exists between America’s “replacement fertility” families and what/where they call home. Much more than their counterparts in Europe and Japan, Americans inhabit single-family detached houses. There is room for two, three - or more - children to play in the backyard, and the nice sense of privacy those children have because they live in their own rooms. Residents of other large, modern and wealthy nations tend to live in apartment nations, where space limitations put a damper on the idea of having a big family.

The coming housing boom will not only employ carpenters, electricians and roofers, but real estate lawyers, policemen and firemen, teachers and athletic coaches to begin a very long list. It was once said that the automobile industry was the great American job producer. No more. That honor surely goes to housing.

America’s history of successfully absorbing large waves of immigrants is a lightning rod for controversy, but the historical record is clear. New immigrant groups - be they German, Irish, Chinese, Italian, Jewish, Polish or Greek - are at first greeted with suspicion. Then they work hard, make lasting contributions and end up being central to America’s cultural fabric.

Mexican immigrants are the hated group du jour but move into the mainstream rapidly. Today’s landscapers and housekeepers are raising tomorrow’s engineers, judges and entrepreneurs. Today’s immigrants, like others before them, will leave the slums and barrios to chase the American dream in a leafy suburb.

At present, about 1 million “net immigrants” (i.e., immigrants minus emigrants) arrive in America each year, so 20 years down the road there will be about 20 million additional Americans (plus their natural growth once here). They will either live in the streets, or the housing market will bloom. This is hardly the stuff of a housing crash. American cities may have problems, but they do not approach Calcutta and its twin Howrah, where sleeping on the street is common, notwithstanding India’s remarkable economic boom.

The bright future we envision for housing in America also tells us a lot about the infamous bubble in that sector and the bright side of all economic bubbles.

Remember the dot-com bubble of the 1990s? Despite suffering a truly spectacular burst, it laid the groundwork to go from dial-up Internet to wireless, and now computing in the cloud. It made e-mail and e-commerce part of our daily lives and gave us near-instant access to all manner of human knowledge. Many of the entrepreneurs who made it happen were immigrants. If that’s an impressive upside, imagine how we’ll benefit from a rebound in housing, something even more essential to us than our Facebook pages.

Housing will come back stronger than before because America possesses the essential ingredients - a growing, dynamic population and a resourceful spirit to overcome burst bubbles - that make us citizens of the First Universal Nation. We should revel in that. Far from a housing-led era of gloom, it guarantees that this will be the second American century.

Pinellas County Home Sales Up 35 percent

Published by peter | Filed under Pinellas County Homes

Pinellas County home sales rose 35 percent from September 2008 to September 2009. Prices declined 16 percent year over year from $160,000 to $134,160.

The statistics come from the Pinellas Realtor Organization. There’s a brief analysis from James Thorner after the jump:

Read the rest of this entry »

Luxury Homes Can Sell - But You Need a Great Real Estate Agent

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Miscellaneous, Pinellas County Homes, Real Estate

People are looking for the next great deal and when that buyer is talking about spending millions instead of thousands, the stakes and the rules change dramatically. Despite the fact that much of the real estate market has faltered over the last few years, there are home buyers out there that have been shielded from the recession. These home buyers can walk into a real estate agency and ask for a listing of million dollar homes - will you have that listing?

The interesting thing about luxury real estate is the price point and the variable separation between the luxury real estate market and the traditional real estate market. Home buyers will money to spend do not want to know the true cost of ownership or the fact that the local water bill is slightly higher than the surrounding area. They want to supply their real estate agent with a list of needs and have a home available when they are ready to buy.

On the flip side is the seller that is trying to sell off a million dollar home. Luxury real estate is all about patience even when the seller is hard pressed to get rid of the home. Again, when people have money, they know they have the buying power to choose the piece of luxury real estate they want, rather than a piece they need. Sellers have to make sure their homes are the BEST of the best and in optimal condition in order to sell fast and sell first.

When trying to sell a luxury home, the open houses and word of mouth recruiting that may work for a less expensive home is not going to cut it. There are less buyers with the buying power to land a mortgage for a luxury home and that means extra work for the real estate agent. In addition to the open houses, the agent needs to publish the home all over the Internet, in local newspapers, on the front page of their website and in print magazines. These listings need to be refreshed often and must include a huge list of pictures showing off the BEST parts of the luxury home.

You can sell a luxury home even when the rest of the world isn’t buying and while the work and labor will be hard, the commission is well worth the time.

Save Money With an Unfinished Home

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Real Estate

There is money to be saved in the real estate market and it has nothing to do with home foreclosures. Not every home on the market was finished before the bottom fell out of the new home sales. Many builders were unable to finish their current projects before the market tanked and that left a huge inventory of homes that were in need of work before they could be move in ready. These homes are considered unfinished and that means money in your pocket.

There are several forms of unfinished home on the market today, but the start homes are the most money saving for the potential buyer. The unfinished starter home will often offer a main level that is move in ready with a second level and / or basement that have not been completed. These homes can be used as a primary residence while the remainder of the construction is completed.

Other types of homes that fit into the unfinished category include homes that have planned garages or additions that were started but not completed. If the landscaping is not finished, the home could also be listed as unfinished.

The Builder and the Unfinished Home

If the builder is still in the picture, the home could be finished according to the original plans with the purchase price being higher. The buyer could help to keep the price of the home lower by talking with the lender about the proposed upgrades on the home and cutting out some of the more expensive upgrades that are causing the price to increase. Expensive decking, landscaping and basement finishing can cause the price to jump dramatically. While the lender may not agree to all of the changes, there is no harm in asking for the bare essentials in order to keep the price low.

Lending and the Unfinished Home

When it comes to getting a mortgage for the unfinished home, the lender may require the home be mostly finished before they will honor a mortgage. This is due to the security the lender has in their ability to resell the home in the case of foreclosure. If the bank is requiring landscaping or minor repairs before the mortgage will be approved, the buyer could work with the builder to complete these items. The buyer must remember that the builder does not have the money to put into this home and is selling the home for a cheaper price because it is unfinished. This means the buyer may have to fund the repairs or landscaping in order to qualify for the mortgage.