Gunning Daily News

Getting More for Less Homeowners Focus on "Rightsizing"

March 18, 2011 11:13 am

RISMEDIA, March 18, 2011-One of the victims of the housing bubble is the McMansion. Yes, they are still being built, but despite the great benefit of the mortgage interest deduction to high income homeowners, other factors are slowing their proliferation. Chief among them are growing doubts about the long-term home appreciation potential and the owners' increased risk of finding themselves much further underwater should another housing downturn occur. The economy is a significant factor as well. Not only are new home buyers opting for smaller homes, but more homeowners are choosing to remodel instead of buying a larger home.

The result is a trend towards "rightsizing" new homes-making them big enough and well enough equipped, but not going overboard just to impress the neighbors. The same factors are affecting remodeling projects and home decorating options. According to the National Association of Home Builders (NAHB), after growing in square footage for nearly 30 years, the average square footage of single-family homes is now declining. The average size of a single-family home in the United States peaked at 2,521 square feet in 2007. A 2009 U.S. Census bureau study found it had shrunk an average of 2,438 square feet. NAHB attributes the decline "to phenomena such as an increased share of first-time home buyers, a desire to keep energy costs down, smaller amounts of equity in existing homes to roll into the next home, tighter credit standards and less focus on the investment component of buying a home. Many of these tendencies are likely to persist and continue affecting the new home market for an extended period." NAHB also noted that fewer bedrooms and bathrooms are being built and that the several decade trend toward multilevel houses shifted back in the direction of single level homes last year. The American Homeowners Foundation believes that these trends are also being driven to some degree by the growing number of retiring/downsizing baby boomers.

Several trends are noticeable in both new homes and remodeling projects. "More bang for the buck" is the priority for more and more homeowners. This is also reflected in more careful thought about just how big the kitchen/bath/family room/deck really needs to be. Not every room gets the full luxury treatment. You can save thousands of dollars by focusing on effective space design and using less expensive components, such as cabinets or countertops. Despite the cutbacks on size and cost, some types of home investments continue to grow. The percentage of new homes and remodeling projects incorporating Energy Star appliances continues to increase, even though homeowners may not opt for the most expensive model. Available federal tax credits for home energy efficiency enhancements such as insulated windows, etc. (set to expire at the end of this year) are also helping to shore up homeowner spending in this area.

More homeowners are choosing to redecorate rather than remodel for many of the same reasons. Many small rooms in older homes can be made to seem larger and be made easier to live in through skillful redecorating.

There are many ways to use color, furniture selection and placement, and other alternatives to make a room seem larger. Traditional ways to achieve that objective are to use mirrors and white/light colored walls, while avoiding bold patterns, drapes that block window light, bulky furniture and clutter. Glass topped kitchen or coffee tables and/or desks occupy less visual space and are also good for small rooms. Eliminating knickknacks and/or consolidating them to a single display area will also help. You can often get away with one bold patterned object in a small room if it is balanced by solids or smaller and muted patterns. Similarly, a large overstuffed chair may not make a small room feel more confined if it replaces two smaller ones. Built-ins such as Murphy beds, bookshelves, window seats, shallow cabinets etc. can maximize space utilization and may also improve the room design.

Courtesy of the American Homeowners Foundation and the American Homeowners Grassroots Alliance, www.AmericanHomeowners.org.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Pending Home Sales Decline in January 2011

March 16, 2011 9:43 am

RISMEDIA, March 16, 2011-Pending home sales eased moderately in January 2011for the second straight month, but remain 20.6% above the cyclical low last June, according to the National Association of REALTORS . The Pending Home Sales Index, a forward-looking indicator, declined 2.8% to 88.9 based on contracts signed in January from a downwardly revised 91.5 in December. The index is 1.5% below the 90.3 level in January 2010 when a tax credit stimulus was in place. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist points to the broader trend. "The housing market is healing with sales fluctuating at times, depending on the flow of distressed properties coming on the market," he said.

"While home buyers over the past two years have been exceptionally successful with historically low default rates, there is still an elevated level of shadow inventory of distressed homes from past lending mistakes that need to go through the system," Yun said. "We should not expect the recovery to be in a straight upward path-it will zig-zag at times."

The pace of January existing-home sales, 5.36 million, is slightly higher than NAR's annual forecast for 2011. If contract activity stays on its present course, there should be an 8% increase in total existing-home sales this year.

"The broad fundamentals for a housing recovery are developing," Yun said. "Job growth, high housing affordability and rising apartment rent are conducive to bringing more buyers into the market. Some buyers may be looking to real estate as a hedge against potential future inflation."

The PHSI in the Northeast declined 2.4% to 73.5 in January and is 3.0% below January 2010. In the Midwest the index fell 7.3% in January to 78.0 and is 3.2% below a year ago. Pending home sales in the South rose 1.4% to an index of 97.7 but are 0.4% below January 2010. In the West the index fell 5.2% to 98.7 and is 0.9% below a year ago.

For more information, visit www.realtor.org.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Practice Good Hearth Health: Fireplace Safety Basics

March 16, 2011 9:43 am

By Charles Furlough

RISMEDIA, March 16, 2011-In the winter, there's nothing as idyllic as sitting by a gently crackling fireplace with a cup of cider or hot cocoa, feeling the warmth from your toes to your soul. The essence of comfort and luxury, a fireplace is the focal point of a home. But, in order to ensure many more years of fireside moments-and to keep something beautiful from becoming potentially dangerous-some regular maintenance is required, as well as a keen eye toward safety.

When most people think of fireplaces, they recall traditional ones, found in older and classic homes. In a traditional fireplace, the fire is encased in a metal firebox lined with special firebrick. Smoke moves up a flue, which is typically a tile or metal liner inside a masonry chimney. A flue damper keeps air from escaping when the fireplace isn't being used; and the smoke shelf, behind the damper, stops outside air from coming in and pushing harmful smoke into the living area.

Besides traditional fireplaces, though, there are plenty of other types. A heat-circulating fireplace produces some radiant heat, but mainly warms the air that circulates around the firebox; some have a fan that increases the air flow. A gas fireplace is mostly decorative and takes gas logs. By contrast, direct-vent fireplaces are like a wood-burning heat circulator-cool air enters at the bottom, is warmed, and rises out the vent at the top; the CO is expelled out the rear, so there is no need for a chimney. Finally, if you have a modern home or apartment, there's a good chance you'll have a modern wood stove-they're desirable because they're more efficient that a heat-circulating fireplace.

No matter what type of fireplace you have, maintenance is key to safety. First, before the winter, it's essential to call in a professional to clean the chimney. Creosote can build up in the chimney and start fires. Typically, as soon as the creosote in the chimney is 1/8-inch thick, that's an automatic sign to call in a professional who will also check the firebox and masonry and fill in potentially dangerous cracks.

Another important safety note: Chimneys must be lined with metal, or the appropriate tile. Older homes (especially those built before 1950) are typically not. If you have just moved to your home, this is something that a certified home inspector should have found during an inspection; but, if you're not sure, call in a reputable, professional home inspector to assess the safety of the chimney. The inspector will give input on required repairs you need to have done.

Beyond professional maintenance, it's essential for the homeowner to take safety precautions too. Here are some of the most important:

-Never burn pine or soft wood; it generally causes extremely fast creosote buildup.

-If you have a wood stove, make sure ashes don't build up too much. One or two inches of ash is optimal; more than that, and you should remove some.

-Never burn pressure-treated or painted wood; it can cause noxious fumes.

-Never burn any kind of trash-paper, Christmas trees, anything at all-in a wood-burning fireplace. Only use logs made for wood-burning fireplaces.

-Never burn charcoal in a wood-burning fireplace.

-Even though it's tempting to have as big a fire as possible, never overload a fireplace or wood stove; it can cause restricted air flow and dangerously high levels of combustion.

-Use logs specifically designated for your type of fireplace. If the label on the log's packaging doesn't detail this clear enough (which it should), ask a representative at the store you're buying it from.

-If you have a direct-vent fireplace, make sure that it's underwritten by Underwriters' Laboratories (the "UL" symbol will be prominently listed on the packaging) or by the American Gas Association (AGA).

-Play it safe. If anything looks or smells out of the ordinary while you're operating your fireplace, call a professional for servicing.

Charles Furlough is Vice President of Pillar To Post Professional Home Inspections.

For more information, visit www.pillartopost.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Word of the Day

March 16, 2011 6:13 am

Point. Fee charged by a lender to get additional revenue over the interest rate. A point is equal to one percent of the loan amount.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Q: What is the best way to find a real estate agent?

March 16, 2011 6:13 am

A: Begin by asking someone that you know. Friends, relatives, co-workers, or neighbors who have recently purchased a home can give you a firsthand account and attest to the agent's professional abilities. Sometimes an agent you contact will refer you to another one who works more closely with buyers and sellers in your neighborhood. Once you have a list of names, interview at least three agents and ask questions about their community knowledge, professional experience, and commitment some agents work full time; others only work at nights and on the weekends.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Take Care of Your Eyes with These Vision Safety Tips

March 16, 2011 6:13 am

RISMEDIA, March 16, 2011-By this time of year, many adults are eager to lie on the beach and read a book while the kids swim in the pool and build sandcastles on the beach. These spring break activities are fun, but they can also be harmful if the necessary precautions aren't taken.

"Many people are aware of the risks of the sun's ultraviolet radiation on the skin, but often, they do not realize the dangerous effects on the eyes," said Dr. Mark Lynn, owner and/or operator of 45 Dr. Bizer's VisionWorld, Doctor's ValuVision and Doctor's VisionWorks in Kentucky, Indiana, Tennessee and Georgia. "UV-A and UV-B radiation can have long- and short-term effects on a person's vision."

Excessive exposure to ultraviolet radiation over a short period of time can cause photokeratitis, which is like sunburn of the eyes. Symptoms include painful, red eyes, extreme sensitivity to light, excessive tearing and a foreign body sensation. Photokeratitis rarely causes permanent damage, but long-term exposure to the sun can be more harmful.

Research has shown long-term exposure to ultraviolet radiation over many years can lead to cataracts, macular degeneration and damage of the retina. With spring break approaching, Dr. Mark Lynn and Associates is warning kids, teens and their parents to take note of some important vision safety tips before heading south:

-Children should wear goggles when swimming in pools or hot tubs to protect their eyes from chlorine.

-UV rays from the sun or a tanning bed can cause age-related macular degeneration. Always wear sunglasses or eye protection when tanning.

-When buying new eyewear, look for lenses that block out 100% of UV-A and UV-B rays.

-Sunglasses should wrap all the way around to your temples so sunrays can't damage your eyes.

-The sun's rays are strongest between 10 a.m. - 2 p.m. Wear a hat/sunglasses to protect your eyes from UV rays.

-New cataract implants (IOLs) can block the sun's harmful rays. Speak with your doctor before having surgery.

-Research shows UV radiation increases the risk of developing certain kinds of cataracts. Millions of Americans develop cataracts and cost billions of dollars to treat each year.

-Protective eyewear also helps prevent: macular degeneration, skin cancer around the eyes and pterygium, (tissue growth that can block vision).

-Overexposure to UV radiation can weaken the body's immune system, reducing the skin's ability to protect against invaders, including cancers and infections.

-Drinking alcohol in excess can cause blurred vision and can impair a person's ability to drive.

For more information, visit www.aoa.org.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


6 Questions to Ask Before Paying Off a Mortgage Early

March 16, 2011 6:13 am

RISMEDIA, March 16, 2011-In the face of stagnant home values, paying off a mortgage early might appear to be a good way to reduce debt, but the strategy is not right for everyone, said Freedom Debt Relief (FDR) vice president Kevin Gallegos.

"With consumer revolving debt balances declining nationwide and home values flat, some homeowners are considering paying off their mortgages early," said Gallegos. "For people who are staying put in their home for some time, paying a mortgage off before the end of its term has benefits. Obviously, making extra payments eliminates the loan debt faster. This in turn dramatically lowers the total interest paid over the life of the mortgage."

But not everyone gains from paying off the mortgage early. Gallegos suggested consumers take these factors into consideration before launching any accelerated payment process:

1. Are all other needs under control? For anyone, paying off credit card debt and contributing the maximum to a retirement plan are goals that should beat out paying off the mortgage early. Those planning to retire soon might find it appealing to eliminate the mortgage. "It's most important, in that situation, to be sure you will have enough cash to fund your retirement," said Gallegos. Consumers should ask: Can they afford to pay more each month? Do they have an emergency fund that could cover six months' living expenses? If not, rest content with paying the mortgage as scheduled until these safeguards are in place.

2. Is a move coming up? Homeowners who might sell soon would do better to put extra cash in a fund for a new-home down payment. "The market is still a bit wobbly in most locales," Gallegos said. "And lenders are demanding higher down payments than in recent years. If you plan to relocate soon, hang on to your cash for the move."

3. Check for prepayment penalties. Most mortgage loans do not have a prepayment penalty. But those that do present heavy charges for paying the balance off early. Review the Truth in Lending disclosure to find out.

4. The earlier, the better. Making extra payments earlier in the life of the mortgage makes a bigger difference in the amount of interest the bank collects over the years.

5. Analyze the mortgage interest deduction. Homeowners who itemize deductions reap tax benefits from paying mortgage interest. Naturally, paying a smaller amount of interest results in a lower total itemized deduction amount. (To find out the potential savings, multiply the mortgage interest paid by the applicable tax bracket). The difference could be thousands of dollars annually, so plan accordingly.

6. What else could be done with the money? Find the rate of return for a paid-off mortgage with an online mortgage tax-deduction calculator. Then compare it to potential earnings on investments. Most people would fare better by investing the money instead of paying the loan, especially when considering the interest saved over time. Those who can pay the mortgage off early might do well to do so and then invest what had been spent on monthly payments in a savings or retirement vehicle.

People who decide an accelerated payment schedule is right for them have several options to choose from, Gallegos said.

-Pay off any excess debt, and then add any available income to the mortgage payment. This is simple to do if the statement has a line for "additional principal." If not, check with the lender to find their preferred method-and confirm there is no prepayment penalty.

-Some mortgage companies offer biweekly payment plans. These plans usually involve a set-up fee as well as a monthly charge. Traditionally, mortgage payments are made monthly, with 12 payments per year. A biweekly payment plan has the borrower pay half of a regular mortgage payment every two weeks-equating to 26 half-payments over a year. Without adding much to the monthly budget, a homeowner making a biweekly mortgage payment is effectively making one extra mortgage payment per year.

-Simply pay half the mortgage biweekly. Caution: Some mortgage companies will return a check that is less than the amount of the bill or received at an odd time. Others may charge a prepayment penalty. Check the lender's policies carefully.

-Divide the monthly mortgage payment by 12. Then add that amount each month to the regular monthly payment (write it on the "Additional Principal" line of the statement). Doing this every month will result in an extra month's payment each year.

"Paying off a mortgage can be a great relief. On the other hand, with mortgage debt, you're paying to own your own home, with beneficial tax deductions," said Gallegos. "Either option can be a good one. Consider your complete financial picture before choosing the right path to homeownership."

For more information, visit www.freedomdebtrelief.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Don't Become a Victim of Home Improvement Fraud Tips to Hire and Knowledgeable and Trustworthy Home Improvement Contractor

March 15, 2011 10:13 am

RISMEDIA, March 15, 2011-In 2010, 1,401 consumers filed complaints related to home improvement fraud in New Jersey alone, making it the second most common consumer complaint filed in the state last year. National Consumer Protection Week (March 6-12, 2011) aims to arm consumers with an arsenal of resources and emphasizes the importance of protecting privacy, managing money and debt, avoiding identity theft and avoiding fraud and scams.

In honor of National Consumer Protection Week, Power Home Remodeling Group, one of the nation's largest home improvement companies offers the following tips to help homeowners select a home improvement contractor and navigate an industry often fraught with dishonest providers and unethical practices.

This winter's heavy snowfall and subsequent thawing and refreezing caused thousands of dollars in damages to homes across the region. Repairs will be needed for leaky roofs, down gutters and soggy drywall before the rainy spring season, making now a great time for homeowners to become knowledgeable on best practices to avoid home improvement fraud.

"There are several critical questions homeowners must ask before hiring and trusting someone to work on or at their home," said Jeff Kaliner, co-founder and chief executive officer of Power Home Remodeling Group.

Here are several tips for homeowners looking to hire a knowledgeable and trustworthy home improvement contractor:

-Don't pay in full up front. Only make a final payment when the work is completed.

-A written contract is your right as a consumer. Always obtain a written proposal, including a cost estimate.

-Seek proof of your contractor's license and insurance. You are well within your right as a consumer to insist on seeing proof that your potential contractor is legally operational.

-Obtain recommendations. Use established and well-recommended contractors. Consider how long the company has been in business and how many service and installation technicians they have at their disposal.

-An award-winning company is more trustworthy. A company that has won industry awards is confident enough to be in the spotlight. If the company welcomes the scrutiny that comes with an award selection process, it is likely they have upstanding business practices.

-Research your contractor with a consumer-friendly third party. Check out the company with your city or county, or opt for a contractor who is affiliated with the Better Business Bureau or local Chambers. Researching the company online is also a cost effective way to gather background information.

-Consider the company's hiring policies. Do they drug test and background check employees before hiring them-and continue random tests?

-Plan for emergencies. It is important to know that the company is available nights and weekends with customer service representatives and technicians to handle any service calls or emergencies.

For more information, visit www.powerhrg.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Fannie Mae's Latest National Housing Survey Shows Key Changes in Americans' Attitudes toward Housing and the Economy

March 15, 2011 10:13 am

RISMEDIA, March 15, 2011-Fannie Mae's latest national housing survey finds that Americans are more confident about the stability of home prices than they were at the beginning of 2010, even though they lack confidence in the strength of the economy:

Seventy-eight percent of respondents believe housing prices will hold steady or increase over the next twelve months, up from 73% in January 2010; but almost two-thirds still believe the economy is on the wrong track, virtually unchanged (61%) from the beginning of last year.

The Fannie Mae Fourth Quarter National Housing Survey, conducted between October 2010 and December 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system and overall confidence in the economy.

"Over the course of the last year, we gained deeper insights into Americans' confidence in the strength of the housing market and the economic recovery," said Doug Duncan, Vice President and Chief Economist of Fannie Mae. "More Americans believe that housing prices will remain stable over the next year. We are also seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y. But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future."

Additional survey highlights include:

-Younger Americans, Hispanics and African-Americans are generally more positive about owning a home than the general population. Fifty-nine percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment, even though this age group suffered the steepest decline in homeownership during the housing crisis-from nearly forty-four percent when home prices peaked to under forty percent in 2009.

-More than one-third of Hispanics (34%) and African Americans (35%) say they will buy a home in the next three years, compared to only one in four (23%) of all other Americans.

-The percentage of Americans who believe that buying a home is a safe investment declined to 64% over the course of the year, from 70% in January 2010. This is down sharply from a similar survey conducted in December 2003, when 83% of the general population thought buying a home was a safe investment.

-During 2010, survey respondents increasingly expressed a strong belief that it will be harder for future generations to obtain a mortgage. Three-quarters of those surveyed (74%) believe it will be harder to get a mortgage in the future, up from just over two-thirds at the beginning of 2010.

-One out of three delinquent borrowers continues to say they have considered defaulting on their mortgage. However, that number fell from 39% at the beginning of the year to 31% in the fourth quarter. The number of delinquent borrowers who say they have seriously considered defaulting has also declined, from 25% in January 2010 to 19%.

For more information, visit www.fanniemae.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Word of the Day

March 15, 2011 7:13 am

Plat. Map or survey showing the location and boundaries of individual properties and how they have been subdivided into lots and blocks.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.