Marsha Held - Blog

CONTINUED STRONG PACE FOR EXISTING-HOME SALES

marsha.held@coldwellbankerlegacy.com — Wed, 23 Jun 2010 09:40:21 GMT

Existing-home sales remained at elevated levels in May on buyer response to the tax credit, characterized by stabilizing home prices and historically low mortgage interest rates, according to the National Association of REALTORS^®. Gains in the West and South were offset by a decline in the Northeast; the Midwest was steady.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums, and co-ops, were at a seasonally adjusted annual rate of 5.66 million units in May, down 2.2 percent from an upwardly revised surge of 5.79 million units in April. May closings are 19.2 percent above the 4.75 million-unit level in May 2009; April sales were revised to show an 8.0 percent monthly gain.

Buyers Face Purchasing Delays
Lawrence Yun, NAR chief economist, said he expects one more month of elevated home sales. “We are witnessing the ongoing effects of the home buyer tax credit, which we’ll also see in June real estate closings,” he said. “However, approximately 180,000 home buyers who signed a contract in good faith to receive the tax credit may not be able to finalize by the end of June due to delays in the mortgage process, particularly for short sales.

“In addition, many potential sales are being delayed by an interruption in the National Flood Insurance Program. Florida and Louisiana, also impacted by the oil spill, have the highest percentage of homes that require flood insurance.”

As the leading advocate for homeownership issues, NAR is supporting Senate amendments to extend the home buyer tax credit closing deadline through September 30 for contracts written by April 30, and to renew the flood insurance program. “Sales and related local economic activity would have been higher without delays in the closing process or flood insurance issues,” Yun noted.

Housing Still Affordable
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.89 percent in May from 5.10 percent in April; the rate was 4.86 percent in May 2009.

The national median existing-home price for all housing types was $179,600 in May, up 2.7 percent from May 2009. Distressed homes slipped to 31 percent of sales last month, compared with 33 percent in April; it was also 33 percent in May 2009.

NAR President Vicki Cox Golder said home prices have been stabilizing all year. “With distressed sales at roughly the same level as a year ago, the gain in home prices is a hopeful sign that the market is in a good position to stand on its own without further government stimulus,” she said. “Very affordable mortgage interest rates and stabilizing home prices are encouraging home buyers who were on the sidelines during most of the boom and bust cycle.”

Pending home sales are expected to decline notably in May and June from the spring surge, but Yun added that job growth and a manageable level of foreclosures are keys to sales and price performance during the second half of the year.

Inventory Falling
A parallel NAR practitioner survey shows first-time buyers purchased 46 percent of homes in May, down from 49 percent in April. Investors accounted for 14 percent of transactions in May compared with 15 percent in April; the remaining sales were to repeat buyers. All-cash sales were at 25 percent in May, edging down from a 26 percent share in April.

Total housing inventory at the end of May fell 3.4 percent to 3.89 million existing homes available for sale, which represents an 8.3-month supply at the current sales pace, compared with an 8.4-month supply in April. Raw unsold inventory is 1.1 percent above a year ago, but is still 14.9 percent below the record of 4.58 million in July 2008.
Single-family home sales declined 1.6 percent to a seasonally adjusted annual rate of 4.98 million in May from a pace of 5.06 million in April, but are 17.5 percent above the 4.24 million level in May 2009. The median existing single-family home price was $179,400 in May, which is 2.7 percent above a year ago.

Single-family median existing-home prices were higher in 16 out of 20 metropolitan statistical areas reported in May from a year ago. In addition, existing single-family home sales rose in 18 of the 20 areas from May 2009.

Existing condominium and co-op sales fell 6.8 percent to a seasonally adjusted annual rate of 680,000 in May from 730,000 in April, but are 32.6 percent above the 513,000-unit pace in May 2009. The median existing condo price was $181,300 in May, up 3.4 percent from a year ago.

By Region

Existing-home sales in the Northeast fell 18.3 percent to an annual level of 890,000 in May from a surge in April, but are 12.7 percent higher than a year ago. The median price in the Northeast was $240,200, down 2.2 percent from May 2009.
In the Midwest, existing-home sales were unchanged in May at a pace of 1.33 million and are 22.0 percent above May 2009. The median price in the Midwest was $150,700, up 2.2 percent from a year ago.
In the South, sales increased 0.5 percent to an annual level of 2.15 million in May and are 22.9 percent above a year ago. The median price in the South was $159,000, up 1.0 percent from May 2009.
Existing-home sales in the West rose 4.9 percent to an annual rate of 1.29 million in May and are 15.2 percent higher than May 2009. The median price in the West was $221,300, up 7.4 percent from a year ago.

Source: NAR

8 Easy Ways to Seal Air Leaks Around the House

marsha.held@coldwellbankerlegacy.com — Wed, 26 May 2010 12:32:50 GMT

For what the typical family wastes every year on air leaks—about $350—you can plug energy-robbing gaps, start saving money, and enjoy a more comfortable home.

A typical family spends about a third of its annual heating and cooling budget—roughly $350—on air that leaks into or out of the house through unintended gaps and cracks. With the money you waste in just one year, you can plug many of those leaks yourself. It’s among the most cost-effective things you can do to conserve energy and increase comfort, according to Energy Star. Start in the attic, since that’s where you’ll find some of the biggest energy drains. Then tackle the basement, to prevent cold air that enters there from being sucked into upstairs rooms. Finally, seal air leaks in the rest of the house. Here are eight places to start.

1. Insulate around recessed lights

Most recessed lights have vents that open into the attic, a direct route for heated or cooled air to escape. When you consider that many homes have 30 or 40 of these fixtures, it’s easy to see why researchers at the Pennsylvania Housing Research/Resource Center pinpointed them as a leading cause of household air leaks. Lights labeled ICAT, for “insulation contact and air tight,” are already sealed; look for the label next to the bulb. If you don’t see it, assume yours leaks. An airtight baffle ($8-$30 at the home center) is a quick fix. Remove the bulb, push the baffle up into the housing, then replace the bulb.

2. Plug open stud cavities

Most of your house probably has an inner skin of drywall or plaster between living space and unheated areas. But builders in the past often skipped this cover behind knee walls (partial-height walls where the roof angles down into the top floor), above dropped ceilings or soffits,

Up in the attic, you may need to push insulation away to see if the stud cavities are open. If they are, seal them with unfaced fiberglass insulation ($1.30 a square foot) stuffed into plastic garbage bags; the bag is key to blocking air flow. Close large gaps with scraps of drywall or pieces of reflective foil insulation ($2 a square foot). Once you’ve covered the openings, smooth the insulation back into place. To see these repairs in action, consult Energy Star’s DIY guide to air sealing.

3. Close gaps around flues and chimneys

Building codes require that wood framing be kept at least one inch from metal flues and two inches from brick chimneys. But that creates gaps where air can flow through. Cover the gaps with aluminum flashing ($12) cut to fit and sealed into place with high-temperature silicone caulk ($20). To keep insulation away from the hot flue pipe, form a barrier by wrapping a cylinder of flashing around the flue, leaving a one-inch space in between. To maintain the spacing, cut and bend a series of inch-deep tabs in the cylinder’s top and bottom edges.

4. Weatherstrip the attic access door

A quarter-inch gap around pull-down attic stairs or an attic hatch lets through the same amount of air as a bedroom heating duct. Seal it by caulking between the stair frame and the rough opening, or by installing foam weatherstripping around the perimeter of the hatch opening. Or you can buy a pre-insulated hatch cover kit, such as the Energy Guardian from ESS Energy Products ($150).

5. Squirt foam in the medium-size gaps

Once the biggest attic gaps are plugged, move on to the medium-size ones. Low-expansion polyurethane foam in a can is great for plugging openings 1/4-inch to three inches wide, such as those around plumbing pipes and vents. A standard 12-ounce can ($5) is good for 250 feet of bead about half an inch thick. The plastic straw applicator seals shut within two

hours of the first use, so to get the most mileage out of a can, squirt a lubricant such as WD-40 onto a pipe cleaner and stuff that into the applicator tube between uses.

6. Caulk the skinny gaps

Caulk makes the best gap-filler for openings less than 1/4-inch wide, such as those cut around electrical boxes. Silicone costs the most ($8 a tube) but works better next to nonporous materials, such as metal flashing, or where there are temperature extremes, as in attics. Acrylic latex caulk ($2 a tube) is less messy to work with and cleans up with water.

7. Plug gaps in the basement

Gaps low on a foundation wall matter if you’re trying to fix a wet basement, but only those above the outside soil level let air in. Seal those with the same materials you’d use in an attic: caulk for gaps up to 1/4-inch wide and spray foam for wider ones. Use high-temperature caulk around vent pipes that get hot, such as those for the furnace or water heater. Shoot foam around wider holes for wires, pipes, and ducts that pass through basement walls to the outside.

In most older houses with basements, air seeps in where the house framing sits on the foundation. Spread a bead of caulk between the foundation and the sill plate (the wood immediately above the foundation), and along the top and bottom edges of the rim joist (the piece that sits atop the sill plate).

8. Tighten up around windows and doors

In the main living areas of your home, the most significant drafts tend to occur around windows and doors. If you have old windows, caulking and adding new weatherstripping goes a long way toward tightening them up. Bronze weatherstripping ($12 for 17 feet) lasts for decades but is time-consuming to install, while some self-stick plastic types are easy to put on but don’t last very long. Adhesive-backed EPDM rubber ($8 for 10 feet) is a good compromise, rated to last at least 10 years. Nifty gadgets called pulley seals ($9 a pair) block air from streaming though the holes where cords disappear into the frames.

Weatherstripping also works wonders on doors. If a draft comes in at the bottom, install a new door sweep ($9).

Before working in the attic, take some precautions

Try to do attic work on a cool day. Wear protective gear: disposable clothes, gloves, and a double-elastic mask or half-face respirator. Bring along a droplight with a fluorescent bulb, plus at least two pieces of plywood big enough to span two or three joists to support you as you work. To save trips up and down a ladder, try to move up all of the materials you need before you get started. One warning: If you find vermiculite insulation, hold off until you’ve had it checked for asbestos; your health department or air-quality agency can recommend a lab.

Jeanne Huber writes a home-repair column for the Washington Post and has commissioned three new roofs on various houses over the years.

By: Jeanne Huber

Published: September 16, 2009

Remodeling a Home Built Before 1978 Requires a Certified Lead Contractor

marsha.held@coldwellbankerlegacy.com — Mon, 26 Apr 2010 09:56:40 GMT

Getting the lead out of your home may be tough to do, according to the National Association of Home Builders (NAHB). We've known for a long while now that lead paint is hazardous to our health. Lead paint can be very dangerous to children if they inhale or ingest it. It can cause damage to their brains and nervous systems. However, removing it may be difficult.

The NAHB says that a shortage of Environmental Protection Agency (EPA) accredited trainers may stall some remodeling projects in homes where lead is present. A new regulation by the U.S. EPA goes into effect this month (April 22, 2010) that requires all contractors working in homes built before lead paint was banned in 1978 to be trained and certified under the Lead Paint: Renovation, Repair, and Painting Rule (LRRP).

"We've gotten the word out to our members and they understand the new requirements and are working hard to get certified by the deadline," said Donna Shirey, CGR, CAPS, CGP, president of Shirey Contracting in Issaquah, Wash., and 2010 chair of NAHB Remodelers in a recent press statement. The NAHB is doing its part to ensure that remodelers are ready, but it still might not be enough to meet the remodeling industry's needs. "Our local home building associations are offering certification classes to their members, but EPA hasn't approved enough trainers to enable our members and other contractors to be certified on time, and that's going to put remodelers and their customers in quite a bind."

The purpose of the regulation is to reduce the potential exposure to lead paint that may occur when a home that was built before 1978 is remodeled. The regulation isn't limited to just remodelers. Other contractors who must become certified include carpenters, plumbers, heating and air conditioning workers, and window installers. The NAHB is sending out a word of caution, since the EPA has approved only 135 training providers and certified about 14,000 renovators in lead-safe work practices. However, according to NAHB, the EPA's own estimates indicated that more than 200,000 contractors must be trained and certified.

NAHB writes in a press statement that the shortage of trainers can cause big problems for homeowners. "This will severely limit the number of remodelers able to work in older homes and will open the door to more fly-by-night contractors who will skip the training, skirt the law and put home owners at risk." "EPA must extend the deadline so that consumers can find trained and certified remodelers for their projects. I talked to a group of our West Virginia members who had to travel all the way to Atlanta to take the training sessions because there are no trainers in their own state," Shirey said.

The new regulation issued in 2008 is rapidly approaching the certification deadline for contractors. The regulation requires contractors to take an eight-hour training course which includes a PowerPoint presentation, hands-on training, and a 25-question quiz. The training is designed to show workers how to handle and contain hazardous lead-based debris. If lead-based debris/dust gets into the air and is breathed in or ingested, it can cause severe health issues.

According to the EPA, lead is more dangerous to children and can negatively impact their brains and nervous systems (which are more sensitive than adults). Also, children tend to absorb lead more easily because they frequently put their hands in their mouths.

Adults exposed to lead paint risk suffering from reproductive issues, nerve disorders, concentration problems, high blood pressure, joint pain, and more.

The EPA recommends that homeowners of homes built before 1978 have their homes inspected for any lead-based paint issues. Typically, lead-based paint that is not chipping and is in good condition is not hazardous to your health.

by Phoebe Chongchua - Fri, Apr 16, 2010 for Realty Times

Last-minute homebuyer tax credit tips

marsha.held@coldwellbankerlegacy.com — Tue, 23 Mar 2010 14:32:06 GMT

Homebuyers still have time to buy a home and meet the deadlines, but they will need to act soon and be proactive throughout the transaction.

The homebuyer tax credit is worth 10 percent of the home's sale price, up to $8,000 for buyers who haven't owned a home in the previous three years and up to $6,500 for buyers who have owned and occupied a principal residence for at least five consecutive years during the eight-year period that ends on the day the new home is purchased.

Here are some tips for last-minute buyers:

The buyer must enter into a binding contract to purchase the home on or before April 30 of this year. The term "binding contract" isn't defined in the homebuyer tax credit law and may be subject to interpretation. Generally, the term refers to an agreement that's signed by both parties and has a deposit in escrow, according to Randi Bennett, an escrow officer at First Centennial Title Co. of Nevada in Reno.
The purchase must close within 60 days after the binding contract deadline. In this context, that means June 30, not June 29, according to the Internal Revenue Service. The discrepancy between 60 calendar days and two months occurs due to a financial fiction that every month equals 30 days.
Certain U.S. military, foreign service and intelligence service personnel have an extra year to claim the homebuyer tax credit. These buyers must enter into a binding contact on or before April 30, 2011, and close on or before June 30, 2011.

Buyers should be "upfront with their Realtor about their must-haves and their wish list," says Allyson Bernard, owner of Real Estate Professionals of Connecticut. Buyers who aren't realistic could find themselves up against the deadline with fewer houses from which to choose.
Harsh weather may be "a help or a hindrance," Bernard says. Buyers who are willing to trudge through snow to find a house may have an advantage over buyers who wait until the weather improves.
Contract contingencies allow buyers some breathing room to take care of big items such as financing, inspections and the sale of their current home, Bernard says. But contingencies shouldn't be an excuse to delay once the deal is pending.

Time Running Out For Homebuyer Tax Credit

"If you run into a problem and you no longer want to buy that house, it's great that you had those contingencies to protect you, but you may not have time to find another property," she says.

Anecdotal reports suggest that some buyers have included a tax-credit contingency in the purchase contract. Whether that's a necessary protection to make sure the deal closes on time depends on the situation and local practices. Either way, buyers should read the contract to make sure the closing will occur before the deadline.
Buyers should get preapproved for a mortgage, because glitches such as a mistake on a credit report or a lender's request for tax returns that must be retrieved from the IRS can cause a delay, says Patti Ketcham, owner of Ketcham Realty Group in Tallahassee, Fla.

"You don't want to wait until the last minute, because you could end up shooting yourself in the foot over something that's no one's fault, but you just run out of time," she says.

Buyers also should allow extra time in case the mortgage lender requires a second appraisal, which can delay final loan approval.

"The appraisal process in residential lending is going through some painful changes. It is not uncommon to have a mortgage lender require more than one appraisal," Ketcham says.

Buyers should line up homeowners insurance as soon as the house is under contract. Homeowners insurance is usually routine, but some states have special disaster-related issues. A big storm, earthquake or fire can trigger a moratorium on new policies.
Buyers should be aware that short sales, in which the seller needs a lender's approval to sell the home for less than the loan balance, are typically subject to lengthy delays. For instance, one typical requirement is that the final closing statement must be sent to the bank for final approval. That can take five to 10 business days, Bennett says.

It's an unfortunate irony for homeowners who have experienced a financial hardship, but Ketcham suggests that buyers who want to claim the tax credit should set some firm deadlines or avoid short-sale homes.

MSN Money: Find a mortgage under 5%

"If the home they fall in love with is a short sale, they need to have a very serious talk with their Realtor with the calendar in front of them and say, 'If we don't have an answer by this date, we need to look for another house,'" she says.

The IRS has introduced Form 5405 and instructions for taxpayers who want to claim the homebuyer tax credit.

By Marcie Geffner of Bankrate.com