As you know, I've been saying that statistics can lie. Actually, lie may be too harsh of a description..."misinterpreted" or maybe "misunderstood" or maybe (my favorite!) "taken out of context". Or maybe there isn't enough room in the article to explain everything!
Below is an article that appeared in this morning's Atlantic City Press that discusses yesterday's government report on home pricing by Metropolitan Statistical Areas (geographic regions). Kevin Post and I have exchanged notes on some of the recent housing data for our market and he called me for some insight into the recently published numbers.
Sometimes I wonder if the others who are quoted even read the report (it was 88 pages long!) but that doesn't matter since I read the areas that referenced our regional market.
Kevin was examining the first pricing decline for many moons in the Atlantic City and Ocean City MSAs. While that may be interesting and newsworthy, I was more interested in examining the big picture of our market. Where are prices right now?
Here's the picture from my eyes:
-- the price decline in AC was 0.72% for the year, 0.95% for the 4th quarter, and 77.3 percent GAIN for the previous five years (that is NOT A TYPO)
-- the price decline in OC was 3.37% for the year, 2.89% for the 4th quarter, and a GAIN of 69.89% for the previous five years ( NOT A TYPO!)
-- The Vineland, Millville and Bridgeton markets increased 2.95% for the year
-- The overall US market increased 41.3% for the previous five year period
Could the fourth quarter be the beginning of the decline? Perhaps. But I am betting that we are experiencing a flattening of the prices. I would be surprised if prices fell for a few quarters but these future declines (if they occur) will be after extraordinary pricing growth.
The author's comment on optimism was interesting...I never used that overused word (at least in real estate & political corners) and what I thought the quote implied was 1) one relatively small decrease doesn't make a trend, 2) as I have been reporting, this is indicative of a pricing bottom forming, and 3) our area is significantly above national averages for the five year average.
Our pricing growth was ALMOST DOUBLE the national average! This was one hot market and a bit of cooling off on the pricing front is probably warranted. Now I don't want to see the volume of transaction declining but that is another statistic and requires another blog...too funny.
Here's the article and the moral of this blog is don't focus on a tree to determine the overall health of the forest. Enjoy...time for more coffee.
Time for more coffee....TW
*************************************************************************************
Survey shows home prices fell 1 percent in 4th quarter
(Published: Wednesday, February 27, 2008
)
House prices fell about 1 percent in the Atlantic City metropolitan area in the fourth quarter of 2007, a federal survey said Tuesday, the area's first decline since the recession of the 1990s.
Home prices in Ocean City and the rest of Cape May County fell 3.4 percent in the fourth quarter, according to the Office of Federal Housing Enterprise Oversight's house price index.
Both declines were the largest since 1995. The survey tracks sales and refinancings of the same homes to prevent home size from influencing the results.
Franklin Williams, president of the Ocean City Board of Realtors, said he and others in the industry there hadn't seen significant price weakening.
"Actually, it's looking like the first quarter of this year is going to be above the last," said Williams, who is a broker/salesman with Prudential Fox & Roach Realtors in Ocean City. "January sales are showing an increase over January the previous year."
Williams said that in 2007, prices in Ocean City were unchanged, while sales volume was up nearly 12 percent.
A real estate professional who works in Philadelphia and has a house in Margate said the new figures are just starting to reflect significant price drops in the market.
Marc Wiser, vice president of Legend Properties, was shocked by Realtor figures earlier this month suggesting prices in Atlantic County were still going up.
"It makes no sense, when every single property that is within blocks of my Margate house has been lowered due to a lack of activity," Wiser said then.
The housing price decline reported in the federal survey makes more sense, but it too has further to go, he said.
"The house next door to mine was listed at $799,000. It's now $535,000. Around the corner a home was listed for $649,000. It's now $449,000. Both have been on the market well over two years, and I can go on and on," Wiser said.
Tom Wilhelm, with Century 21 O'Donnell of Ventnor, Brigantine and Egg Harbor Township, remained guardedly optimistic.
"The data suggest a pricing bottom forming in the Atlantic City and Ocean City Metropolitan Statistical Areas," Wilhelm said. "These relatively benign pricing decreases are on the heels of extraordinary five-year gains and I wouldn't draw any conclusions until the data trends are more substantial. Overall, area homeowners have fared very well in their property investments over a five-year period."
Nationwide, house prices gained a 10th of a percent in the fourth quarter, the federal report said. In New Jersey, prices fell a quarter of a percent, ranking it 41st out of the states in home price appreciation.
A companion survey by the Housing Enterprise office that only includes house purchases and not refinancings showed a grimmer trend: a nationwide price drop of 1.3 percent in the quarter.
The Standard & Poors/Case-Shiller Home Price Index, also released Wednesday, painted a bleaker picture still: a 5.4 percent plunge in home prices in the fourth quarter.
That index tracks typical single-family homes in 20 selected cities nationwide. It also includes houses bought with jumbo and subprime loans that aren't covered by the federal survey. (end of story)
Wednesday, February 27, 2008
Friday, February 15, 2008
ah, the should I wait for mortgage rates to drop debate?
This morning I was reading my favorite fishing site when a poster asked if mortgage rates would drop. I am not sure if or how much the rates will drop but I believe the rates will fall. With that said, the rates are really, really low from a historical level and a half-point drop is not significant when looking at your monthly payments.
The MOST important factor affecting your payments is your purchase price. If your realtor doesn't locate and negoiate the lowest price, shame on you and the realtor. And remember, price isn't always the variable you seek to maximize. VALUE is rubber meets the road.
Always "Buy to Sell" and you'll never go wrong...it may not be the least expensive route, but it was always be the best investment. Here are my comments from the post. Enjoy. TW........
*************************************************************************************
you really shouldn't wait to buy a home that you will live in and use for a half point drop in mortgage rates...the price difference isn't significant.
$200K, 6%, 30 years = $1,199/month
$200K, 5.5%, 30 years = $1,136/mpnth or $63 less.
The price of the home has a far greater impact...to get to the $1,136/month amount, you would need to spend $190K (or $10K less).
Focus on the best house value and don't fret too much about the interest rate (always fret but not TOO much).
Mortgage rates may drop but perhaps not enough to postpone plans for a new home...have your realtor look for the values or drop me a note and I will. If you have the patience and time to wait, there are a few bank owned properties available...worth a look but you have to be patient.
The MOST important factor affecting your payments is your purchase price. If your realtor doesn't locate and negoiate the lowest price, shame on you and the realtor. And remember, price isn't always the variable you seek to maximize. VALUE is rubber meets the road.
Always "Buy to Sell" and you'll never go wrong...it may not be the least expensive route, but it was always be the best investment. Here are my comments from the post. Enjoy. TW........
*************************************************************************************
you really shouldn't wait to buy a home that you will live in and use for a half point drop in mortgage rates...the price difference isn't significant.
$200K, 6%, 30 years = $1,199/month
$200K, 5.5%, 30 years = $1,136/mpnth or $63 less.
The price of the home has a far greater impact...to get to the $1,136/month amount, you would need to spend $190K (or $10K less).
Focus on the best house value and don't fret too much about the interest rate (always fret but not TOO much).
Mortgage rates may drop but perhaps not enough to postpone plans for a new home...have your realtor look for the values or drop me a note and I will. If you have the patience and time to wait, there are a few bank owned properties available...worth a look but you have to be patient.
Friday, February 1, 2008
Do you REALLY want to sell your house?
I just compiled the statistics for 2007 homes sales in the southern NJ area. The data is very interesting. I attempted to post the spreadsheet but of course my technical skills failed me & time is a commodity these days.
I'll try to summarize my perception of the statistics...here are the high/low points:
-- Days On Market (DOM) for homes SOLD hasn't changed much since the year 2000. The average DOM for 2007 was 101 days & the eight year average was 86. Selling a home does take some time regardless of the market temperature
-- Selling/Sold price to listing price in 2007 was 95.5%. This means the average home price was reduced a mere 4.5% from the asking price...no huge discounts here! Guess what the eight year average is?? Yep, 95.5%!!! If you want to SELL your home, price it within 5% of where you and your realtor believe the market will bear. Higher end homes had a 10% discount ($800k ++)
-- Number of homes sold (2007 vs 2006) was down 12% overall. Three & four bedroom home sales were down 14% (rounded). The 2007 home sales compared to the eight year average was down 18.4%...not nearly as many homes are selling in the SJ market
-- So you would figure since not many homes are selling the prices would be down? Hitch up your britches for this piece of information. Homes sold prices for 2007 vs 2006 are up a staggering 10.5% !!!!! Some of this increase is driven by higher end homes (5+ bedrooms) increasing by 26.5%. The average three to four bedroom home selling prices increased approximately 5%!! Now, please tell me how many people would have guessed that number? I've told you this was the case...the media information is specific to regional markets.
-- And if you bought a three bedroom home in the year 2000 the average selling price was $126 thousand. Guess what? That same average home cost you $276 thousand in 2007 or an increase of 119%!!!!!!!!!!! Has you mutual fund increased that much?
Okay, lets review. Number of sales are down, prices are up moderately, real estate remains a "solid" investment, keep your listing prices reasonable, and expect you home sale to take at least 90 days.
I am ready to help you with the real facts of home buying/selling/investing. Sometimes it difficult to accept reality but we will be successful!!
Thomas Edison said that success was 10% inspiration and 90% perspiration...that ole' Jersey boy was correct.
See you soon.
TW
I'll try to summarize my perception of the statistics...here are the high/low points:
-- Days On Market (DOM) for homes SOLD hasn't changed much since the year 2000. The average DOM for 2007 was 101 days & the eight year average was 86. Selling a home does take some time regardless of the market temperature
-- Selling/Sold price to listing price in 2007 was 95.5%. This means the average home price was reduced a mere 4.5% from the asking price...no huge discounts here! Guess what the eight year average is?? Yep, 95.5%!!! If you want to SELL your home, price it within 5% of where you and your realtor believe the market will bear. Higher end homes had a 10% discount ($800k ++)
-- Number of homes sold (2007 vs 2006) was down 12% overall. Three & four bedroom home sales were down 14% (rounded). The 2007 home sales compared to the eight year average was down 18.4%...not nearly as many homes are selling in the SJ market
-- So you would figure since not many homes are selling the prices would be down? Hitch up your britches for this piece of information. Homes sold prices for 2007 vs 2006 are up a staggering 10.5% !!!!! Some of this increase is driven by higher end homes (5+ bedrooms) increasing by 26.5%. The average three to four bedroom home selling prices increased approximately 5%!! Now, please tell me how many people would have guessed that number? I've told you this was the case...the media information is specific to regional markets.
-- And if you bought a three bedroom home in the year 2000 the average selling price was $126 thousand. Guess what? That same average home cost you $276 thousand in 2007 or an increase of 119%!!!!!!!!!!! Has you mutual fund increased that much?
Okay, lets review. Number of sales are down, prices are up moderately, real estate remains a "solid" investment, keep your listing prices reasonable, and expect you home sale to take at least 90 days.
I am ready to help you with the real facts of home buying/selling/investing. Sometimes it difficult to accept reality but we will be successful!!
Thomas Edison said that success was 10% inspiration and 90% perspiration...that ole' Jersey boy was correct.
See you soon.
TW
Saturday, January 26, 2008
Is "it" over?
I am asked aboutthe real estate market every day. How's it going? Are prices dropping? "There must be some great steal sin the market", one person said to me the other day. Well, if I have disucssed this issue with you recently, you will know my answer has been consistent (and honest!). Prices are flat, number of sales are down (in general terms).
This an article from today's Atlantic City Press:
December home sales down 26% in county
Realtors say the worst of housing downturn appears to be over
By KEVIN POST Business Editor, 609-272-7250
(Published: January 26, 2008)
Just 134 homes were sold in Atlantic County in December, a drop of 26 percent from the year before and a level not seen since the last time the real estate market hit bottom in 1993.
According to figures from the South Jersey Shore Regional Multiple Listing Service, December's sales are down 54 percent from the 289 houses sold in the same month in 2004, when the real estate boom was near its peak.
The median sale price for Atlantic County houses in December was $250,000, essentially unchanged from the price the year prior of $250,050. In December 2005 it was $260,000.
The number of homes for sale in the county - another key housing market indicator - fell 7 percent in December from the year-ago period, according to the MLS data supplied by the Atlantic City & County Board of Realtors.
The reduction in inventory - to 2,600 houses for sale in December from 2,820 the year prior - supports the view of many in the industry that the market has leveled out. Five years ago, 1,357 houses were on the market.
The average length of time it took an Atlantic County house to sell lengthened from 85 days in 2006 to 102 days last year, according to a market report from Prudential Fox & Roach, Realtors.
For the year, there were 14.6 percent fewer homes sold in the county, the report said, dropping to 3,509 from 4,110 the year before.
Despite the downturn in many market indicators, prices continued to increase. Countywide, the average home price was 7.5 percent higher in 2007 than the year before.
The largest median price increase, 11.1 percent to $300,835, was seen in Atlantic City, according to the Prudential Fox report. Price increases elsewhere included: Mullica Township, 7.7 percent to $262,743; Ventnor, 6.9 percent to $524,109; Buena, 5.1 percent to $198,099; and Buena Vista Township, 3.3 percent to $215,177.
Ocean City actually saw an increase in the number of houses sold last year, from 633 in 2006 to 725 in 2007, a gain of 14.5 percent. Average sale price there decreased 1.7 percent to $637,159.
Realtors in the region suggested the worst of the housing downturn is over in their assessments of market conditions posted on the National Association of Realtors online site.
Gary Simmens, a broker at Northfield-based Balsley Losco with more than 30 years experience, reported that as of the the start of the year, "market activity is picking up a lot."
Simmens credited casino-driven growth in Atlantic City that looks to be strong for years to come. He also noted that the city metropolitan area rated highly for the past year in property price appreciation.
Maureen Harris, an agent with Century 21 Gilmartin & Co. in Cape May, said that area's "shore resorts have maintained their moderate market prices with only longer days on the market."
Harris said the boom and bust of the real estate market the past five years is over, and now market conditions are relatively normal. [END OF STORY]
*************************************************************************************
With mortgage rates falling well below 6% and house prices flat, this may be the best time to pick a well valued home in our market. The upcoming casino development projects may have some demand impacts but I'll save my commentary on this for another day.
Until demand picks up, your listing prices need to be reasonable if you really want to sell your home. When demand increases and inventory drops a bit, your realtor should be able to respond quickly with recommended pricing changes (not always reductions!) to the market conditions.
I know where the values are in the Atlantic County region...how? I study the market for my clients, I keep in contact with other realtors and mortgage folks (sometimes the mortgage folks know more than the other realtors!), and I am active in the market.
I would like to help you buy or sell your property...just give me a call at 609-335-3222 and we'll get the process started.
TW
This an article from today's Atlantic City Press:
December home sales down 26% in county
Realtors say the worst of housing downturn appears to be over
By KEVIN POST Business Editor, 609-272-7250
(Published: January 26, 2008)
Just 134 homes were sold in Atlantic County in December, a drop of 26 percent from the year before and a level not seen since the last time the real estate market hit bottom in 1993.
According to figures from the South Jersey Shore Regional Multiple Listing Service, December's sales are down 54 percent from the 289 houses sold in the same month in 2004, when the real estate boom was near its peak.
The median sale price for Atlantic County houses in December was $250,000, essentially unchanged from the price the year prior of $250,050. In December 2005 it was $260,000.
The number of homes for sale in the county - another key housing market indicator - fell 7 percent in December from the year-ago period, according to the MLS data supplied by the Atlantic City & County Board of Realtors.
The reduction in inventory - to 2,600 houses for sale in December from 2,820 the year prior - supports the view of many in the industry that the market has leveled out. Five years ago, 1,357 houses were on the market.
The average length of time it took an Atlantic County house to sell lengthened from 85 days in 2006 to 102 days last year, according to a market report from Prudential Fox & Roach, Realtors.
For the year, there were 14.6 percent fewer homes sold in the county, the report said, dropping to 3,509 from 4,110 the year before.
Despite the downturn in many market indicators, prices continued to increase. Countywide, the average home price was 7.5 percent higher in 2007 than the year before.
The largest median price increase, 11.1 percent to $300,835, was seen in Atlantic City, according to the Prudential Fox report. Price increases elsewhere included: Mullica Township, 7.7 percent to $262,743; Ventnor, 6.9 percent to $524,109; Buena, 5.1 percent to $198,099; and Buena Vista Township, 3.3 percent to $215,177.
Ocean City actually saw an increase in the number of houses sold last year, from 633 in 2006 to 725 in 2007, a gain of 14.5 percent. Average sale price there decreased 1.7 percent to $637,159.
Realtors in the region suggested the worst of the housing downturn is over in their assessments of market conditions posted on the National Association of Realtors online site.
Gary Simmens, a broker at Northfield-based Balsley Losco with more than 30 years experience, reported that as of the the start of the year, "market activity is picking up a lot."
Simmens credited casino-driven growth in Atlantic City that looks to be strong for years to come. He also noted that the city metropolitan area rated highly for the past year in property price appreciation.
Maureen Harris, an agent with Century 21 Gilmartin & Co. in Cape May, said that area's "shore resorts have maintained their moderate market prices with only longer days on the market."
Harris said the boom and bust of the real estate market the past five years is over, and now market conditions are relatively normal. [END OF STORY]
*************************************************************************************
With mortgage rates falling well below 6% and house prices flat, this may be the best time to pick a well valued home in our market. The upcoming casino development projects may have some demand impacts but I'll save my commentary on this for another day.
Until demand picks up, your listing prices need to be reasonable if you really want to sell your home. When demand increases and inventory drops a bit, your realtor should be able to respond quickly with recommended pricing changes (not always reductions!) to the market conditions.
I know where the values are in the Atlantic County region...how? I study the market for my clients, I keep in contact with other realtors and mortgage folks (sometimes the mortgage folks know more than the other realtors!), and I am active in the market.
I would like to help you buy or sell your property...just give me a call at 609-335-3222 and we'll get the process started.
TW
Tuesday, January 8, 2008
Energy Savings
I realize that the forecast today is for 68 degree temperatures but I read this article and believe there are a few good tips...enjoy!
TW
10 Ways to Shrink Your Energy Bills
By: Keith Pandolfi, This Old House magazine, January/February 2008Print Close
Illustration: Viktor Koen
Spend a Little, Save a Lot
"This Drafty Old Barn of a Place!...Why do we have to live here?" George Bailey asks his wife after their daughter ZuZu catches cold in It's a Wonderful Life. We hear you, George. A lot of us ask the same question come wintertime, when our houses seem to turn against us as comfort levels plummet and heating costs rise. Heating alone accounts for almost half of the average American household's utility bills each year. No need to get angry about it, though. There are plenty of measures you can take. But first you'll need to consider which ones fit your budget and which ones have the greatest payback. Here are 10 suggestions to make life in your own drafty old house a little more wonderful.
1. How To Save: Choke Your Chimney
Sure, it's nostalgia-inducing and all, but when it comes down to it, your fireplace is terribly—make that laughably—inefficient. According to the Department of Energy, a lit fireplace sucks about 24,000 cubic feet of furnace-heated air up your chimney each hour. Bonus: It's replaced by cold air that comes in the opposite direction through the same opening, causing your furnace to work extra hard to keep your house toasty. Still, we love gathering round the hearth as much as the next guy. Just remember to turn the thermostat down a little when you use it. Also, crack a window in the room where the fireplace is located and then close the door, so it doesn't suck too much warm air from the rest of the house. And remember to close your damper when it’s not in use.
2. How To Save: Seal the Air Leaks
Add up all those overlooked cracks, gaps, and openings around your windows, doors, plumbing, and wiring, and you may find your house has a hole the size of a Mack ruck. Seal it up, and you'll save more than 10 percent on your heating bills. Start by caulking or weatherstripping around windows. For added comfort, pick up a product such as the 3M Indoor Window Kit at the hardware store. Resembling Saran wrap, the plastic sheet costs about $20 and can be discreetly stretched over windows using double-sided tape, blow-dried for a tight fit, and peeled off come springtime. It can increase a single-paned window's R-value by up to 90 percent. Fill in cracks around door frames with caulk, and while you're at it, install a screw-on or adhesive-backed door sweep. Use expanding-foam sealants to fill in larger gaps around plumbing and electrical work, especially where pipes enter your house through exterior walls. Tackle energy suckers in overlooked places, too—like exterior wall sockets and switches. You can block them up using fitted insulation pads. Just unscrew the switch plates and pop the pads into place.
3. How To Save: Show Your Heating System Some Love
Soot buildup, dusty or poorly lubricated fans, flickering pilot lights, and loose fan belts can add hundreds to your heating costs each year. Getting your furnace tuned up regularly by a heating contractor can do wonders for both your wallet and your overall comfort. Natural gas–powered systems should be serviced every two to three years, while oil-fired units need a tune-up every year, since they burn dirtier. To make your system even more efficient, prevent heated air from leaking into your attic or crawl spaces by sealing ductwork with mastic duct sealant—a nontoxic, paint-on material—or foil-backed tape. Doing so will reduce your home's air leakage and could save you a bundle in heating and cooling bills.
4. How To Save: Give Into Energy Star
We spend 20 percent of our electricity bills running our appliances. But we can shrink that number dramatically by replacing them with fridges, clothes washers, and dishwashers that qualify for the Energy Star. Energy Star fridges, available from major manufacturers such as GE and Frigidaire, use half as much energy as those manufactured 15 years ago and 15 percent less than new non–Energy Star models. Rated dishwashers exceed current federal energy standards by 41 percent, while Energy Star clothes washers are 40 percent more efficient than conventional models.
5. How To Save: Make Your Attic More Cush
The Department of Energy tells us you can reduce your heating and cooling needs by 30 percent just by adding a few hundred bucks' worth of new insulation. This is especially true if your house is more than 25 years old, from the time before building codes became more mindful of energy efficiency, and you haven't added any new batts yet. We tend to focus on the attic, but it's also wise to see how much insulation you have in crawl spaces, ceilings, basement walls, and around recessed lighting fixtures (just make sure those fixtures are designed for direct insulation contact). Check that your R-value is right for the climate where you live. In general, R-values should run between R-22 and R-49 in the attic, less in other spots.
6. How To Save: Embrace the Pellet Stove
It's not getting any cheaper to heat your house with gas or oil. But pellets—well, that's another story. Clean-burning pellet stoves can drastically cut your home heating costs. They look like wood-burning stoves but are fueled by small pellets made from superconcentrated sawdust. Pour them into the stove's hopper, and they're fed automatically into a burn chamber; a fan blows the hot air into your house. There are freestanding models as well as fireplace inserts, which vent through a stainless-steel lining that runs up your chimney.
7. How To Save: Take Cheaper Showers
Next time you take a shower, remember this: Heating water accounts for up to 11 percent of our utility bills. If your water heater is more than a decade old, that number could be even greater. Switching it out for a new, more efficient electric storage model could save you 10 to 20 percent on heating bills. You might also think about gas and tankless units, which save 30 and 40 percent on water heating, respectively. And let's not forget solar water heaters. At $3,500 to $4,800 installed, they're more expensive than conventional heaters, but they have longer lives (about 20 years) and pay for themselves in energy savings in about half that time. If you're not ready to buy a new water heater just yet, ratchet up your existing unit's efficiency with a water-heater blanket. It costs just 15 bucks and will save you between 4 and 9 percent on your heating bills.
8. How To Save: Find Some Perfect Storms
Did you know that 10 to 25 percent of your heating and cooling costs might be flying right out your windows? If you're not quite ready to fork out the $12,000 or more you'll need to put in new, high-efficiency units, then installing storm windows is your best option. Triple-track windows—they hold two glass sash and one screen that slide up and down on separate tracks—from Larson Manufacturing cost about $100 each and can reduce heat loss through your existing windows by 25 percent (even more if fitted over inefficient single-pane windows). They may not be as pretty as replacement windows, but sometimes it's better to feel good than look good.
9. How To Save: Address that Beast in the Basement
If you've tried all of the energy-saving recommendations above but still find your house too cold and inefficient, then maybe—just maybe—it's time to consider replacing your furnace. The average life span for a gas—or oil-fired unit is between 15 and 20 years. Along with fridges and dishwashers, Energy Star also certifies furnaces from companies such as Bryant, Carrier, and York, among many others. Most are at least 15 percent more efficient than standard models and can save you up to 20percent on heating costs.
Not sure if it's worth the money? Add up your fuel bills for last winter, then multiply that sum by 20 percent. Divide the result into the cost of buying and installing the new system, about $3,000 or so, and you'll see how many years it will take to recoup your investment.
10. How To Save: Sell Your House
That is, as long as any new pad you buy is certified by Energy Star. These newly constructed homes meet the performance standards established by the EPA and Department of Energy, consuming 30 percent less energy than standard homes, thanks to features such as enhanced insulation levels, high-performance windows, air sealing and ventilation, and high-efficiency heating and cooling equipment. If you already have a building plan worked out for your new home, then making the upgrades for Energy Star certification costs just 1 to 3 percent more but pays for itself immediately. According to Energy Star, their upgrades add just $10 to $15 per month to your mortgage payment but save you around $25 to $45 per month on your utility bills.
TW
10 Ways to Shrink Your Energy Bills
By: Keith Pandolfi, This Old House magazine, January/February 2008Print Close
Illustration: Viktor Koen
Spend a Little, Save a Lot
"This Drafty Old Barn of a Place!...Why do we have to live here?" George Bailey asks his wife after their daughter ZuZu catches cold in It's a Wonderful Life. We hear you, George. A lot of us ask the same question come wintertime, when our houses seem to turn against us as comfort levels plummet and heating costs rise. Heating alone accounts for almost half of the average American household's utility bills each year. No need to get angry about it, though. There are plenty of measures you can take. But first you'll need to consider which ones fit your budget and which ones have the greatest payback. Here are 10 suggestions to make life in your own drafty old house a little more wonderful.
1. How To Save: Choke Your Chimney
Sure, it's nostalgia-inducing and all, but when it comes down to it, your fireplace is terribly—make that laughably—inefficient. According to the Department of Energy, a lit fireplace sucks about 24,000 cubic feet of furnace-heated air up your chimney each hour. Bonus: It's replaced by cold air that comes in the opposite direction through the same opening, causing your furnace to work extra hard to keep your house toasty. Still, we love gathering round the hearth as much as the next guy. Just remember to turn the thermostat down a little when you use it. Also, crack a window in the room where the fireplace is located and then close the door, so it doesn't suck too much warm air from the rest of the house. And remember to close your damper when it’s not in use.
2. How To Save: Seal the Air Leaks
Add up all those overlooked cracks, gaps, and openings around your windows, doors, plumbing, and wiring, and you may find your house has a hole the size of a Mack ruck. Seal it up, and you'll save more than 10 percent on your heating bills. Start by caulking or weatherstripping around windows. For added comfort, pick up a product such as the 3M Indoor Window Kit at the hardware store. Resembling Saran wrap, the plastic sheet costs about $20 and can be discreetly stretched over windows using double-sided tape, blow-dried for a tight fit, and peeled off come springtime. It can increase a single-paned window's R-value by up to 90 percent. Fill in cracks around door frames with caulk, and while you're at it, install a screw-on or adhesive-backed door sweep. Use expanding-foam sealants to fill in larger gaps around plumbing and electrical work, especially where pipes enter your house through exterior walls. Tackle energy suckers in overlooked places, too—like exterior wall sockets and switches. You can block them up using fitted insulation pads. Just unscrew the switch plates and pop the pads into place.
3. How To Save: Show Your Heating System Some Love
Soot buildup, dusty or poorly lubricated fans, flickering pilot lights, and loose fan belts can add hundreds to your heating costs each year. Getting your furnace tuned up regularly by a heating contractor can do wonders for both your wallet and your overall comfort. Natural gas–powered systems should be serviced every two to three years, while oil-fired units need a tune-up every year, since they burn dirtier. To make your system even more efficient, prevent heated air from leaking into your attic or crawl spaces by sealing ductwork with mastic duct sealant—a nontoxic, paint-on material—or foil-backed tape. Doing so will reduce your home's air leakage and could save you a bundle in heating and cooling bills.
4. How To Save: Give Into Energy Star
We spend 20 percent of our electricity bills running our appliances. But we can shrink that number dramatically by replacing them with fridges, clothes washers, and dishwashers that qualify for the Energy Star. Energy Star fridges, available from major manufacturers such as GE and Frigidaire, use half as much energy as those manufactured 15 years ago and 15 percent less than new non–Energy Star models. Rated dishwashers exceed current federal energy standards by 41 percent, while Energy Star clothes washers are 40 percent more efficient than conventional models.
5. How To Save: Make Your Attic More Cush
The Department of Energy tells us you can reduce your heating and cooling needs by 30 percent just by adding a few hundred bucks' worth of new insulation. This is especially true if your house is more than 25 years old, from the time before building codes became more mindful of energy efficiency, and you haven't added any new batts yet. We tend to focus on the attic, but it's also wise to see how much insulation you have in crawl spaces, ceilings, basement walls, and around recessed lighting fixtures (just make sure those fixtures are designed for direct insulation contact). Check that your R-value is right for the climate where you live. In general, R-values should run between R-22 and R-49 in the attic, less in other spots.
6. How To Save: Embrace the Pellet Stove
It's not getting any cheaper to heat your house with gas or oil. But pellets—well, that's another story. Clean-burning pellet stoves can drastically cut your home heating costs. They look like wood-burning stoves but are fueled by small pellets made from superconcentrated sawdust. Pour them into the stove's hopper, and they're fed automatically into a burn chamber; a fan blows the hot air into your house. There are freestanding models as well as fireplace inserts, which vent through a stainless-steel lining that runs up your chimney.
7. How To Save: Take Cheaper Showers
Next time you take a shower, remember this: Heating water accounts for up to 11 percent of our utility bills. If your water heater is more than a decade old, that number could be even greater. Switching it out for a new, more efficient electric storage model could save you 10 to 20 percent on heating bills. You might also think about gas and tankless units, which save 30 and 40 percent on water heating, respectively. And let's not forget solar water heaters. At $3,500 to $4,800 installed, they're more expensive than conventional heaters, but they have longer lives (about 20 years) and pay for themselves in energy savings in about half that time. If you're not ready to buy a new water heater just yet, ratchet up your existing unit's efficiency with a water-heater blanket. It costs just 15 bucks and will save you between 4 and 9 percent on your heating bills.
8. How To Save: Find Some Perfect Storms
Did you know that 10 to 25 percent of your heating and cooling costs might be flying right out your windows? If you're not quite ready to fork out the $12,000 or more you'll need to put in new, high-efficiency units, then installing storm windows is your best option. Triple-track windows—they hold two glass sash and one screen that slide up and down on separate tracks—from Larson Manufacturing cost about $100 each and can reduce heat loss through your existing windows by 25 percent (even more if fitted over inefficient single-pane windows). They may not be as pretty as replacement windows, but sometimes it's better to feel good than look good.
9. How To Save: Address that Beast in the Basement
If you've tried all of the energy-saving recommendations above but still find your house too cold and inefficient, then maybe—just maybe—it's time to consider replacing your furnace. The average life span for a gas—or oil-fired unit is between 15 and 20 years. Along with fridges and dishwashers, Energy Star also certifies furnaces from companies such as Bryant, Carrier, and York, among many others. Most are at least 15 percent more efficient than standard models and can save you up to 20percent on heating costs.
Not sure if it's worth the money? Add up your fuel bills for last winter, then multiply that sum by 20 percent. Divide the result into the cost of buying and installing the new system, about $3,000 or so, and you'll see how many years it will take to recoup your investment.
10. How To Save: Sell Your House
That is, as long as any new pad you buy is certified by Energy Star. These newly constructed homes meet the performance standards established by the EPA and Department of Energy, consuming 30 percent less energy than standard homes, thanks to features such as enhanced insulation levels, high-performance windows, air sealing and ventilation, and high-efficiency heating and cooling equipment. If you already have a building plan worked out for your new home, then making the upgrades for Energy Star certification costs just 1 to 3 percent more but pays for itself immediately. According to Energy Star, their upgrades add just $10 to $15 per month to your mortgage payment but save you around $25 to $45 per month on your utility bills.
Wednesday, December 19, 2007
Tuesday, December 11, 2007
Handling Low Offers
I recently read this interesting article and found it enlightening.
TW
How to Handle Low Ball Offers
If your house has been on the market for quite a while, you may have already dropped your price and now you're waiting for the buyers to rush in and make wonderful offers on this now-priced right property. And then it happens.
The lone buyer does appear, like a bandit in the night and offers you even less than what you just agreed to. Quite a bit less -- about 10 percent less. So on your $350,000 house, that you just dropped to $324,000, you now have an offer for $299,000. With a seller subsidy request of $5,000. At this point, your net is $294,000.
So how do you handle such a low-ball offer. Well, first of all -- don't panic, get angry or lose sleep. Especially, don't reject the offer right off the bat and tell them to come back when they're serious. Remember, it's now a negotiation game and the buyer IS serious or he or she would not have made an offer.
Several things have happened before this offer came in. The buyer, with his agent, has researched the market, walked through as many as 30 or 50 properties, conducted a study on the value of the property and written an offer for your house. Remember, you just won the lottery. They could have written on any other house, but they selected yours. So let's get busy.
First of all, do an analysis of your own goals and needs. How much do you really need to come out of this house to meet your goals of moving to your next home? What could you really live with and what amount are you going to counter. Remember this last point -- what are you going to counter? This is assuming that you're not rolling over and that you're going to stay in the game.
Next, conduct a comparative market analysis of the house once again. What's happened in the market to get this buyer to offer such an offer (notice I didn't say 'low'). It might be that your house is now worth that amount. And if it is -- that's okay, because it probably means the house you wanted to buy up into is also worth less. At the worse, you're going to take away less money. The best thing to look at, however, is that now you're going to buy up with a smaller down payment because the buy-up property is also less.
Now, let's start the negotiation. Keep in mind, this is for the long haul. Keep it alive as long as the buyer will keep it alive. Give up a little bit at a time. If you reduced the house to $324,000, expecting an offer of $319,999 with closing costs of $10,000 -- then start there. You're already willing to accept a net of $309,999, so you're not really that far off. Understand you're not going to get top dollar with no seller subsidy. So come down to $320,000 and give them their closing costs. So now, your net has come up to $315,000.
Hey -- you're actually ahead of the game if they accept. Oops -- they don't. Now they've countered to $309,000 and still want the $5,000 in closing. (Now our net's at $304,000). Great. Just think. When you started, you were $324,000 apart (remember, you had NO offer at all). Now, you're only $5,999 away from the net you were willing to accept in the first place.
We're almost there. Now, before I go much further, here's a negotiation tip -- keep this civil. Use a lot of complements about the offer, the buyers and the agent. "What a great offer. Thanks so much for writing. We are very excited about selling this house to you."
You want the buyer agent and his/her clients to know you're wanting to work with them. You've been waiting six months for this day (negotiation day) and you want to keep everyone engaged in the process to get your goals met -- sold and on your way to your new home in the country.
Now offer your final counter (or maybe next to final). You definitely want to use the complements at this point: "We are so close." "I can't wait till we wrap this up, then we can all celebrate."
At this point, you know the buyers want to buy and your sellers are ready to start packing, so emphasize that you're very close. Use a dialogue like this: "We are so close. We have some goals to meet, just like you do. And I hope we can bring this together to get us both where we want to be."
This is when you make the final offer and stick with it. If you offer $314,000, they definitely get what they need and you get closer to your final net -- which at this point would be $309,000 -- just $999 off of your initial goal. Then you know if it goes forward or you're back on the market. However, don't be so stubborn that you lose the lone buyer because of $2,000 or so.
If the buyer is stretching and this won't work, this is when the honesty comes out. The agent may tell you, If we can't do $309,000, it's just not going to work. It goes too far beyond their qualification." Then you can decide whether to keep it on the market (hoping you don't have to drop the price again), or you cut the loss and move forward with settlement.
Be patient with the process. Don't get upset, remember, they're trying to meet goals just like you are. By working together, both can get what they want.
Written by M. Anthony Carr
TW
How to Handle Low Ball Offers
If your house has been on the market for quite a while, you may have already dropped your price and now you're waiting for the buyers to rush in and make wonderful offers on this now-priced right property. And then it happens.
The lone buyer does appear, like a bandit in the night and offers you even less than what you just agreed to. Quite a bit less -- about 10 percent less. So on your $350,000 house, that you just dropped to $324,000, you now have an offer for $299,000. With a seller subsidy request of $5,000. At this point, your net is $294,000.
So how do you handle such a low-ball offer. Well, first of all -- don't panic, get angry or lose sleep. Especially, don't reject the offer right off the bat and tell them to come back when they're serious. Remember, it's now a negotiation game and the buyer IS serious or he or she would not have made an offer.
Several things have happened before this offer came in. The buyer, with his agent, has researched the market, walked through as many as 30 or 50 properties, conducted a study on the value of the property and written an offer for your house. Remember, you just won the lottery. They could have written on any other house, but they selected yours. So let's get busy.
First of all, do an analysis of your own goals and needs. How much do you really need to come out of this house to meet your goals of moving to your next home? What could you really live with and what amount are you going to counter. Remember this last point -- what are you going to counter? This is assuming that you're not rolling over and that you're going to stay in the game.
Next, conduct a comparative market analysis of the house once again. What's happened in the market to get this buyer to offer such an offer (notice I didn't say 'low'). It might be that your house is now worth that amount. And if it is -- that's okay, because it probably means the house you wanted to buy up into is also worth less. At the worse, you're going to take away less money. The best thing to look at, however, is that now you're going to buy up with a smaller down payment because the buy-up property is also less.
Now, let's start the negotiation. Keep in mind, this is for the long haul. Keep it alive as long as the buyer will keep it alive. Give up a little bit at a time. If you reduced the house to $324,000, expecting an offer of $319,999 with closing costs of $10,000 -- then start there. You're already willing to accept a net of $309,999, so you're not really that far off. Understand you're not going to get top dollar with no seller subsidy. So come down to $320,000 and give them their closing costs. So now, your net has come up to $315,000.
Hey -- you're actually ahead of the game if they accept. Oops -- they don't. Now they've countered to $309,000 and still want the $5,000 in closing. (Now our net's at $304,000). Great. Just think. When you started, you were $324,000 apart (remember, you had NO offer at all). Now, you're only $5,999 away from the net you were willing to accept in the first place.
We're almost there. Now, before I go much further, here's a negotiation tip -- keep this civil. Use a lot of complements about the offer, the buyers and the agent. "What a great offer. Thanks so much for writing. We are very excited about selling this house to you."
You want the buyer agent and his/her clients to know you're wanting to work with them. You've been waiting six months for this day (negotiation day) and you want to keep everyone engaged in the process to get your goals met -- sold and on your way to your new home in the country.
Now offer your final counter (or maybe next to final). You definitely want to use the complements at this point: "We are so close." "I can't wait till we wrap this up, then we can all celebrate."
At this point, you know the buyers want to buy and your sellers are ready to start packing, so emphasize that you're very close. Use a dialogue like this: "We are so close. We have some goals to meet, just like you do. And I hope we can bring this together to get us both where we want to be."
This is when you make the final offer and stick with it. If you offer $314,000, they definitely get what they need and you get closer to your final net -- which at this point would be $309,000 -- just $999 off of your initial goal. Then you know if it goes forward or you're back on the market. However, don't be so stubborn that you lose the lone buyer because of $2,000 or so.
If the buyer is stretching and this won't work, this is when the honesty comes out. The agent may tell you, If we can't do $309,000, it's just not going to work. It goes too far beyond their qualification." Then you can decide whether to keep it on the market (hoping you don't have to drop the price again), or you cut the loss and move forward with settlement.
Be patient with the process. Don't get upset, remember, they're trying to meet goals just like you are. By working together, both can get what they want.
Written by M. Anthony Carr
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