Daily Real Estate News | Monday, May 14, 2012

With rising rents, more renters are being swayed into home ownership, even
in pricey housing markets like New York.

For example, one New York renter said he started looking into owning a home
when his landlord tried to increase his rent by 13 percent when his lease
was up for renewal. He found that he could buy a home and get the same
amount of space for cheaper than continuing to rent, plus he’d be building
equity.

Other renters are starting to see that buying may be a better option for
them, too.

Rents are increasing at about the same pace that home values are dropping,
says Stan Humphries, Zillow’s chief economist, who says, according to their
surveys, home prices have dropped 3.1 percent year-over-year whereas rents
have increased 2.5 percent.

“Herein lie the seeds to eventually more interest in buying on the part of
consumers, which will help put a floor under home prices,” Humphries told
Investors Business Daily. Recent housing surveys, including Zillow’s, are
showing home prices are starting to rise in recent months.

Affordability in housing has been at record highs from the combination of
falling home values and record-low mortgages. Humphries says that housing
prices have rolled back to 2003 levels.

“That increased affordability in the face of rising rental prices will begin
to get buyers off the fence this year,” Humphries says. “What’s been keeping
buyers on the fence is a crisis of confidence. People who don’t have a job,
or who are worried about losing their job, don’t buy homes. They also don’t
want to buy an asset they think is rapidly depreciating.”

National Association of REALTORS(r)’ Chief Economist Lawrence Yun says the
tighter restrictions from lenders are also preventing many potential buyers
from securing financing in order to buy. But for those who are able to
qualify, Yun says “it’s better to get in now” than wait.

Source: ”
Direct Link
Rising Rents Prompt Buys, May Help Housing Recover,” Investors Business
Daily (May 10, 2012)

Fannie Mae:  Confidence in Economy and Home Values Rising
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Daily Real Estate News | Monday, May 14, 2012

Closing costs for a mortgage averaged $4,143 last year, which is 12.4
percent higher than in 2010, Bankrate.com reports.

Despite record low mortgage rates, borrowers are finding the cost of getting
a loan is on the rise.

Origination fees have posted some of the biggest increases, rising 12
percent in 2011 to $1,045, according to Bankrate.com data. Attorney costs
and other settlement fees now average $544, a 9.6 percent increase.
Appraisal fees have risen 7.8 percent, averaging $406.

Closing costs vary quite a bit among lenders so it can pay for borrowers to
shop around, housing experts say. For example, origination fees can range
anywhere from $123 to more than $2,000.

Analysts say part of the reason behind the increase in fees is the increased
cost to lenders of processing loans with more paperwork required nowadays.

Last week, the
<http://realtormag.realtor.org/daily-news/2012/05/10/consumer-bureau-propose
s-mortgage-fee-limits> Consumer Financial Protection Bureau proposed new
rules to limit certain fees lenders require borrowers to pay at closing. One
of the fees the agency said it hopes to ban is a fee referred to as
“origination points” that buyers sometimes must pay at closing.

“Mortgages today often come with so many different types of fees and points
that it can be hard to compare offers,” Richard Cordray, the director of the
Consumer Financial Protection Bureau, told The New York Times. “We want to
bring greater transparency to the market so consumers can clearly see their
options and choose the loan that is right for them.”

Source: ”
<http://online.wsj.com/article/SB10001424052702304451104577392441058019600.h
tml?mod=ITP_pageone_3> Rising Costs Hit Homeowners Chasing Lower Rates,” The
Wall Street Journal (May 9, 2012) and ”
<http://realtormag.realtor.org/daily-news/2012/05/10/consumer-bureau-propose
s-mortgage-fee-limits%20%20> Consumer Bureau Proposes Mortgage Fee Limits,”
REALTOR(r) Magazine Daily News (May 10, 2012)

NAR Chief Economist Lawrence Yun is upbeat about 2012 because in a number of areas indicators are pointing upward. Not only are home sales up but housing starts are up and home prices are stabilizing in many markets and heading up in some. In areas where they’re still down, the declines aren’t that great. More fundamentally, broader U.S. economic signs are looking positive, including the all-important jobs picture. About 100,000 job are being created a month, and that could rise to 150,000—still not a quick enough pace to get us back to where we were before the downturn but the headwinds are in the right direction.

WASHINGTON – Dec. 19, 2011 – On Friday, Congress agreed to extend National Flood Insurance Program (NFIP) to May 31, 2012. It was part of H.R. 2055, a large spending appropriations bill that authorizes funding for a number of federal programs through the end of the fiscal year.

The U.S. House passed the bill on Friday, followed by the Senate on Saturday. To become law, it still needs President Obama’s signature, which is expected.

The National Association of Realtors® (NAR) ended its Call for Action intended to push Congress to extend flood insurance for five years. NAR says it will continue to push for a five-year extension before the program again expires in six months through H.R. 1309, a bill previously introduced in the U.S. House.

For updates on flood insurance extension, including information that the president signed the bill and it’s now law, refer to the NFIP website.

© 2011 Florida Realtors®

Still, when it comes to buying a house – something that many consumers are doing because of the many good deals to be had in a slow market – most of us prefer new. Even better, buying a new home also makes good financial sense. New homes offer countless advantages for consumers when it comes to saving money. Perhaps the biggest plus is that, since they’re brand-new, the maintenance headaches that often accompany maintenance – as with older homes – simply don’t exist, and won’t for a while.

New homes also use the latest in whole-house systems, like heating and air conditioning, so they’re not likely to break down, saving consumers money. They’re also more energy-efficient, which is also good for saving lots of green. Speaking of green, with interest rates that aren’t too far away from historic lows (just over 6 percent for a 30-year fixed mortgage as of March 11), consumers can also save money on new home mortgages. And, since mortgage interest and real estate taxes are deductible, it’s another way to save money by buying a new home, especially when it comes to tax time.

There’s a saying that when you buy a pre-owned home, you’re buying someone else’s vision of a home, and that’s true. Even if that “vision” involved avocado green counters, white laminate floors in the kitchen and neon Hollywood-style lighting in the bathroom. Today’s homebuilders are offering the latest in popular choices at up-to-the-minute design centers that allow consumers to choose from hardwood flooring to cabinetry, fixtures to lighting – and everything in between.

With a new home, the sky’s the limit when it comes to design choices – and they’re all yours. New homebuyers end up with a house that’s perfectly suited for their needs. Buying new means also adding elements as your home is built – the kind of custom features that would cost far more if they were added after the fact. Consider the cost of such finished spaces as game rooms or media rooms, or such extras as fireplaces and built-in microwave ovens.

Any builder will tell you that it’s much less expensive to choose these kinds of options up-front. In the end, buying new just makes more sense: less worries about maintenance, lower interest rates on mortgages, and design choices that fit your lifestyle. And who doesn’t want that?

source newhomesource.com

By Melinda Fulmer of MSN Real Estate

1. Replace your refrigerator
This is one of the biggest energy-guzzling appliances in the house, says Lisa Dornan, spokeswoman for Direct Energy, and there have been big changes in the efficiency of this appliance over the last five years. “If you look back at the top-rated refrigerator in 2001 that was Energy Star, and one you’d buy today with an Energy Star rating, there would be a 20% to 40% difference in energy efficiency,” she says. Her firm, Direct Energy, performs home energy audits and is an energy retailer. Replacing older dishwashers and dryers can make a big difference too, she adds.

2. Install a programmable thermostat and a timer for the water heater
Just as you would flip off the lights before heading out to work, you should turn the heating or cooling off or down while you’re away. Program the thermostat for a higher temperature when you’re gone in warmer months, or lower in cooler months. These thermostats can be had for $150 at big-box hardware stores.

Likewise, don’t heat your water when you’re not there to use it. “You definitely want to make sure you are not heating the whole tank needlessly,” Dornan says.

Tankless water heaters can be a great investment too, she adds, but they may take a few years to pay for themselves.

3. Put a solar film or solar shades on the outside of windows to cut the heat
If you’re moving into a house with single-paned windows, or living in a climate with extreme heat, you should consider putting something on the outside to reflect the light, Arizona home inspector Scott Hubbard says.

4. Don’t let the heat escape
Also, caulk window and door frames to make sure they are airtight. And if possible, use honeycomb-type shades on the inside to trap the heat before it is absorbed into the room.

5. Use compact fluorescent bulbs
This is kind of a no-brainer, experts say, because it’s so cheap to do and saves so much on your electricity bill. “Just for swapping out 10 light bulbs (in my home), I was able to get $400 a year in energy savings,” Dornan says.

6. Change the filter on your air conditioner regularly
This monthly maintenance helps it run more efficiently, Dornan says, and minimizes wear and tear on your unit. Arranging furniture so it doesn’t block air vents also is important to maximize the flow of cooling from your system.

7. Put in shady landscaping
Planting a tree or some vegetation outside a big window can shade your house from the strongest rays of the sun and stifle freezing winds. Planting low-water native plants can also cut your water bill, lowering the total cost you pay for you home each month. (See this slide show on 16 water-wise plants and read more about planning a drought-tolerant garden.)

8. Invest in an attic fan
These inexpensive fans can make a difference in the temperature of the whole house and keep your air conditioning from working so hard.

 For more tips CLICK HERE

By Melinda Fulmer of MSN Real Estate

There’s more to shopping for a house than curb appeal and sticker price. If you want to buy a house you can truly afford, it pays to consider its monthly operating expenses as well.

An inefficiently built house can cost you more in the long run — as much as several hundred dollars more a month — in energy bills and repairs, home inspectors say.

To get a true idea of how much you’ll be shelling out each month for utilities on that cute bungalow, you can ask to see copies of the owner’s water and power bills over the past year.

Alternatively, some home inspectors are using infrared cameras now to look at the “thermal envelope” of houses before a purchase. That can tell you where a home’s hot or cold spots are, which are indicators of where the system is leaking, or where insulation is missing. (Using this technology, Arizona inspector Scott Hubbard once even detected a small fire inside a home’s walls.)

But even without the high-tech inspection or old utility bills, there are tip-offs that a home will guzzle energy like a bad SUV. Here, in no particular order, are the five biggest offenders:

1. Shoddy or missing insulation
Simply put, more is better. Insulation needs to be thick enough to keep out the elements.

This is something you’ll need to have an inspector check for you. The inspector will look at the insulation’s “R” rating, or its resistance to transferring heat. You want at least an R-30 for attic space and R-13 for walls so your air-conditioning or heating system doesn’t have to work as hard, says Deena Willis, a Pasadena, Calif., agent who earned an “EcoBroker” certification from the Association of Energy and Environmental Real Estate Professionals.

In an energy review of her own house, she was told that better insulation in her ceiling would cut her energy use by 40%.  “I was stunned,” she says.

There have been some houses — new houses included — that inspector Hubbard has checked out before a sale that don’t even have insulation in the attic. “These sellers were upset with the builder when they realized they were paying more money than they needed to for the last five years.”

2. Older air-conditioning system or furnace
Older air-conditioning systems can make your electricity bills run one-third higher than a new, energy-efficient model, says Mike Traen, owner of Certified Energy Raters in Dayton, Ohio. His firm performs home energy audits and Energy Star inspections for builders.

To gauge the efficiency of the unit, use its age and Seasonal Energy Efficiency Ratio (SEER) as a guide. The SEER is the Btu of cooling output during a typical season divided by the total electric energy input in watt-hours during the same period. A SEER rating of at least 16 is considered average efficiency. In California, state law requires new air conditioners to have a SEER rating of at least 13, Traen says.

Also check out the ductwork to make sure the system isn’t leaky. “Having a 95% (efficient) furnace doesn’t make a lot of difference if it’s leaking along the way,” Traen says.

For those in colder climates, high-efficiency furnaces are a big plus, using up to 35% less fuel and saving up to 25% in annual home-heating costs.

3. Orientation of the house
While most people shopping for a home aren’t going out with a compass, maybe they should, inspectors say. In cold climates, southern-facing houses receive more light through their windows, providing passive heating.

Conversely, people living in hot climates might want to choose houses with windows facing north, to cut down on some of the sun’s strongest rays heating the house, Hubbard says.

If you live in the Midwest, where it’s hot in the summer and freezing cold in the winter, south-facing windows with overhangs attached to the roof strike the right balance.

4. Dark roofs or paint
That black roof works as a heat magnet for your house, heating up your attic and therefore your entire house. It’s better to consider lighter-colored gray or tan roofs, Hubbard says, because they reflect sunlight, rather than absorb it.

That same principle also holds true for dark paint on the outside of the home, Hubbard says. It’s better to have navy or dark brown trim on that Craftsman-style house than coating the whole exterior with these colors.

5. Flimsy windows
What you don’t want to see on a home you’re considering are single-paned aluminum windows, says Lisa Dornan, spokeswoman for Direct Energy. The firm is an energy retailer and performs home energy audits. These windows, now considered obsolete, allow hot and cold to transfer through more easily than their vinyl-framed double- and triple-paned counterparts, she says.
Replacing the windows in a house can cost tens of thousands of dollars, so if there are two houses you are keen on that are about the same price, this particular line item might be the thing that sways the vote.

One mitigating factor, however, is whether these single-pane windows have solar or Low-E film on the outside. Home inspectors have a gadget that can check this, even if the film is undetectable, Hubbard says.  If they do have this extra layer of protection, you might be able to contain some of the energy loss with the right window treatments, such as honeycomb blinds that trap heat.

One last thing to consider — though it probably wouldn’t impact a purchase – is the energy efficiency of the appliances that come with the house. Are they Energy Star rated? Would the buyer be willing to replace them with ones that are?

In today’s buyer’s market, it may be possible to negotiate for new appliances or repairs that will boost the efficiency of the house, Willis says. “I would say that home sellers would definitely take a look at making some adjustments for homebuyers.”

And, conversely, she says, sellers with a relatively energy-efficient home might want to market that advantage to potential buyers. There are many energy-rating firms, she says, that will come out to your house and evaluate its energy efficiency, generating something called a Hers (pronounced airs) report. This report assigns a house a score between 1 and 100, with a score of 86 and above dubbed an Energy Star home.

“It was a joke,” says Tassi, a Kenosha, Wis., resident who runs a six-person computer-service company. “The lady across the street would bring her electric bill to show me.”

Her bill, for a similar house, was less than half what he was paying, Tassi says.

He replaced his windows, electric furnace and refrigerator with energy-efficient models. His local utility performed two energy audits. He added insulation.

“I can heat the inside of my house with a lighter,” he says.

But his bills remained high. So Tassi became an early adopter of home-electricity monitors. He started using a new device to find where the waste was in his home and how he could reduce his bills. (Bing: Find a home-electricity monitor for your home)

Unlike smart meters, which allow homeowners to view their total usage only after a delay, home-electricity monitors tell consumers specifics about their energy use and what it’s costing them in real time. The device connects to a home’s breaker box, from which it wirelessly transmits the information to a smartphone-like display unit.

Moving around the house with the handheld device, homeowners can immediately see the difference that each light or appliance makes in their total power consumption and bill. They can also view the data online using software that comes with the monitor or with free online tools such as Google’s PowerMeter and Microsoft’s Hohm.

Katy Bachman, a travel agent who works from her house in Cape Coral, Fla., bought a home monitor last August and downloaded a meter application, which she checks throughout the day. Seeing that her consumption rose when she turned on her electric oven to heat up an individual pizza for lunch, she bought a toaster oven and now uses it or her microwave as much as possible. She also runs her pool pump less and keeps her air conditioning a few degrees warmer.

The result: a 20% reduction in her power consumption.

Instant savings
These monitors “should be as widespread as TV sets,” says Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission. He purchased a monitor for his house last fall and says he cut his home power consumption and his electricity bill by 3% to 5% so far.

Article by: By Russell Gold of The Wall Street Journal

Original source MSN Real Estate News