Chapel Hill development projects move forward

The Chapel Hill town website has added a new search feature to the public website that publishes new development activity.  One look at the website and you will wonder if Chapel Hill has been affected much by the recession.  There are several mixed use/major luxury condo projects under construction at Greenbridge, 54 East and  Woodmont.  Another project is in the planning stage at I40 West.  Additional commercial spaces are approved, the library is expanding, churches are adding to their buildings, and the list goes on.

As a resident, buyer or investor, it is reassuring to see that Chapel Hill continues to grow, in the controlled and restrained way that is the essence of Chapel Hill.  If you want to monitor the development approval process, just book mark this link: http://www.townofchapelhill.org/index.aspx?page=589

Building equity takes thought and planning

Building equity should be part of any buyer’s decision.  The reason so many people are upside down on their mortgage right now, is because their motivation was getting the best house possible when they made their purchase.  You shouldn’t expect that a no down payment, thirty year term will be a good investment, unless you can stay in the home for ten years or more.

If you want your home purchase to pay back as a good investment, you  must be mindful of just a few decisions: 

Choose location over bling.  Location will always build equity while upgrades will eventually look dated.

Try to put as much money down as possible.  Consider delaying your purchase and downsize all of your living expenses to build up your savings.

Play with your numbers before you begin your home search.  Choosing the shortest term will build equity the quickest.  It might be advisable to downsize the price range you search.

Plan to make an extra principle only payment every year with your bonus, tax return, etc.  Making an extra payment consistently will take 10 years or more off a 30 year term.

Choose a home that will meet your needs.  If you expect to be short term, buy the home with the biggest resale potential.  If you expect to live there forever, get the floor plan and square footage you will need in the coming years.

Explore different loan products and get a second opinion on your mortgage before you commit to anyone. 

For anyone who would like to explore equity building, please visit my website, “resources” section.  You can play with the finance tools, search price ranges and locations, compare school districts and compare cost of living among areas.  Also, I am not a lender, and this post is just a result of my personal history with my own mortgages.  I can recommend a reputable lender who can help you explore all your options.

 

Interest rates may have bottomed

Mortgage experts say interest rates are predicted to rise about 1% in 2010.   It wasn’t too long ago that FHA loans accounted for just 3% of mortgages in the US.  Recent history in the banking industry has caused a shift and FHA loans accounted for about 30% of the new mortgages in 2009.

The big change is that HUD is out of money.  You heard me correctly; they have no more money to loan.  Experts are predicting that mortgages will be funded by foreign investors in the coming year which will likely result in a rise in interest rates.  It is a simple, supply and demand problem.

Triangle home prices are down about 6%?

Raleigh, Durham and Chapel Hill area home prices have fallen in 2009 around 6%, as heard on the news today.  We have all heard it before, “show me a statistician and I will show you a liar”.  This year, more than ever, I believe the stats may not be all they seem.  The 2009 market data is available and most counties in our MLS are showing a significant difference between the average home price and median sales price.  I think that this is a year that median sales price changes are a more reliable indicator of the market trend.  The market this year was uniquely dominated by first time home purchasers due to the $8000 tax credit.  We also saw new construction dominate the upper range, which typically is a higher price/sf than resale purchases.  The Chapel Hill market had a significant number of transactions in the luxury, high end, “green” condo market, that surprised us all; with price/sf exceeding anything in history. Dare we say, we have even seen foreclosures and short sales throughout the triangle.

All of these out of the ordinary trends can make the average a less reliable indicator.  With the median price marking the exact middle, with the same number of sales below as above, a clearer picture of the market is represented.  For example, the 2007 Wake County average sales price was $254,000 in 07 and 227,000 in 09.  The 2009 median price was $206,000 with a median of $195,000 in 09.  These stats are showing an 11% drop in average price that is not really representative of that market.  The 5% drop in median is more reflective of what you get now versus two years ago.

Orange County trends showed the average price down 7% from $322,000 to $299,000 with median home price up 6% at $258,000 from 243,000 two years prior.  Durham sellers saw the least fluctuation with median home price remaining unchanged over the past two years at $170,000.

No matter what you glean from the data, one thing is for sure, we continue to have a more stable real estate market than most major cities.  Homes are still relatively affordable to the average buyer and the triangle will continue to grow as one of the best places to live for so many reasons.

6500 ways to cash in for the not so first time buyers

Sellers who couldn’t sell their home in 2009 should be feeling a little  lucky.  The housing stimulus bill that Congress just passed will undoubtedly put a silver lining on some of your clouds.  The newly expanded housing stimulus offers tax incentives to all buyers provided they meet eligibility. 

A $6500 tax credit will be available to buyers who have lived in their home for five consecutive years within the past eight years.  You must have a signed valid contract by April 30, 2010 and settlement (closing) must take place before July1.  The income restriction has been expanded to singles earning up to $125,000/year and couples with a combined income not exceeding $225,000.  The cap on the purchase price is $800,000; homes sold at even a dollar above will not be eligible. 

I am not sure this will have a huge impact on the $800,000 housing market.  Most buyers in this price range will not be swayed by less than one percent incentive.  The luxury home market faired a bit better in 2009 as people with cash stores took advantage of discounted properties.  I expect the mid range $300,000 to $600,000 sellers will benefit from this program through spring.  This offer will surely be beneficial to buyers as well as sellers who have had to sit on the sidelines waiting for a better market.  More importantly, we can remian optimistic that this may provide relief for sellers who are trying to avoid foreclosure.

$8000 home buyer tax credit extended and expanded

Not just for the first time home buyer anymore!  The oh so popular $8000 first time buyer tax credit will be extended and expanded officially at any moment.  Congress has passed a bill to extend the original Dec 1, 2009 deadline to include buyers who are under contract by April 30th and closed no later than end of June 2010.  This is great news for first time buyers who just couldn’t get it together or find the right home by now.

The bill will also allow all buyers to cash in, provided they have been in their home for at least five years and they are purchasing a primary residence.  Even more exciting is that the income limit has been increased from $75,000 annual salary for singles and $150,000 for couples.  The new income limit is $125,000 for singles and $225,000 for couples. 

The new policy will be official as soon as Obama signs the bill and shortly after the official website should be updated with the details.  www.federalhousingtaxcredit.com  Lawmakers are hoping that the extension will get the real estate industry through the difficult winter months and jumpstart the spring market while being short enough to be fiscally responsible.

$8000 tax credit making a comeback in 2010?

It is looking more likely that congress will extend the first time buyer tax credit into next year.  However, nothing official has been announced yet.  There is a huge push to get the bill passed for another year and also to expand the bill to offer incentives to other buyers.  A bill being considered will give a $6500 credit to second time home buyers.  I have read in several articles that the Obama camp is in favor of extending the program that has helped to spur on a still sputtering housing market.

It is great news, but it is not too late to take the sure thing.  You still have time to close if you are approved and your seller is willing.  If you are trying to close before the current credit expires, you better git goin!

Month by month “to do” list to save energy in 2009

I saw an interesting commercial regarding saving energy this week.  A teenage girl denied owning a cell phone after a friend calls her on leaving her charger plugged in when not charging her phone.  The ad ended with a note to parents to follow the example of their kids and look for ways to save energy.  I am as guilty as everyone and there are plenty of ways that I can reduce my energy consumption.

If you resolve to make a list of priorities and do at least one each month, by the end of 2009 you will be greener and you will have more money in your bank account.  To help, I am giving the list of suggestions but only you know where your biggest offenders are.

January: Invest in a programmable thermostat and use it.  Program to turn the heat down at night and even in the day if you have a home where no one is home all day.  At my home, we have gotten in the habit of keeping the house a little chilly and putting on a sweater before we adjust the thermostat.

February: Insulate your pull down attic stairs.  There are lots of  do it yourself options for this major offender in winter an summer!

March: Showers use less water than bathing.  Take shorter showers and install a flow restricting shower head and insulate your hot water tank to reduce the cost of heating your water.  Turn down your water temperature ifat all possible.  Many homeowners don’t realize how hot their water is.

April: Use your dishwasher instead of washing by hand.  A dishwasher is much more efficient because it only fills once to do an entire load of dishes.  You can gain additional savings by letting dishes air dry as the heated dry cycle uses more energy, adds heat to the home in the summer and increases chemicals in the air by releasing vaporized detergents in the rinse water.  Invest in more dishes if you can’t fill your dishwasher before needing to run it.

May: Spread mulch over your garden to reduce the need for watering.  Choose natural products like shredded pine bark, pine straw, cypress or coconut husks.  An inch or two of mulch will beautify your garden and help plants survive drought, reducing your water consumption.  Gravel is not a suitable mulch as it can get very hot and damage shrubs in warm climates.

June: Plant shade trees on the southern exposure of your yard.  Adding deciduous trees (trees that drop their leaves) will provide shade in the summer and reduce cooling costs.  When trees drop their leaves in winter, you will still have the benefit of the sun to heat your home and provide light for shorter days.  Contact your local planning department to see if there are any scheduled plant rescues.  Many communities offer free plants for the taking prior to clear cutting for development.

July:  Appliances and small electrics use up to 40% of your power.  A small investment in power strips and instead of turning off the computer, the tv, the everything… will shut the power down.  If you don’t think you will unplug your chargers, put them on a power strip and you will be more likely to turn off the strip than to unplug the charger.

August: Replace your most outdated appliance with an energy star rated product.  If your appliances are more than ten years old, you will be amazed at how much appliances have improved in recent years.  A front loading washer would be my first choice for energy savings because it will do two to three times the volume with less energy and use as little as 7 gallons of water.  A standard washing machine can use up to 30 gallons/load.

September:  Put your screens in and turn off the air conditioning.  Crickets and tree frogs are a much nicer white noise than the drone of a motor.

October: Rake leaves and mulch them.  They can be added to compost or spread as much around acid loving shrubs such as rhododendren, azaleas, hydrangeas, camelias, and most evergreens.  Shredded leaf mold can make up the 50% hard to find “brown” layer in the compost pile.  Using compost and leaf mold as mulch eliminates the need for chemical fertilizers in the garden and it is free! Raking is great exercise and a strong calorie burner.

November: Before the year ends, take advantage of some of the tax credits for energy efficient upgrades.  Thermopane windows and energy star appliances will provide comfort, energy savings and beauty to your home.  If you can’t afford the upgrade, check windows for leaks and replace all leaks with caulk for just a few dollars.

December: Give up the garbage disposal and start composting.  Many towns and cities are trying to stop people from using garbage disposals because they burden the sewage treatment plant with excessive solid waste material and costly to treat oils.  Garbage disposals are polluters.  Composting will save you elecricity, the cost of repair or replacement and provide a chemical free fertilizer and mulch for your garden.  If you are not ready to compost, consider properly disposing of household waste.

I want to encourage all to take a moment to think about how we affected our planet in 2008 and consider improving on that in 2009.

Top 10 home improvement projects with payback potential

According to the recent statistics pubished by the National Association of Realtors, home renovations are still a good investment.  Improving curb appeal with quality exterior upgrades was one of the best decisions for homeowners.  Quaity Siding, windows and decks topped the list for sellers who recouped the cost of upgrades.  Of course, kitchen remodels are always the best place to spend your renovation budget indoors.   

Here is the list that appeared in the article:

Top 10 Project Paybacks 

 1. Upscale fiber cement siding (86.7%)

2. Midrange wood deck (81.8%)

3. Midrange vinyl siding (80.7%)

4. Upscale foam-backed vinyl (80.4%)

5. Midrange minor kitchen remodel (79.5%) 

6. Upscale vinyl window replacement (79.2%)

7. Midrange wood window replacement (77.7%)

8. Midrange vinyl window replacement (77.2%)

9. Upscale wood window replacement (76.5%

10. Midrange major kitchen remodel (76.0%)

 If you would like to read this article in entirety, please follow this link:
http://www.realtor.org/rmohome_and_design/articles/2008/0812_costvsvalue_2008?id=bcaa4b804bfb44b98fe18f66fe42bfc9&wcm_page.resetall=true&cache=none&contentcache=none&connectorcache=none&srv=page

Chatham home revaluation will happen in January

Chatham County property owners will see their home revaluation in January in the form of a new tax value on their tax bill.  The state mandates that home values must be adjusted every four years to be sure that home owners are paying their fair share of property tax.  County commisioners considered a proposal to delay revaluation one year due to the state of the economy.  After further investigation, it was decided that a one year delay would not be a significant enough savings to provide relief to taxpayers.  Chatham residents enjoy low taxes, sometimes less than half of what our Chapel Hill and Carrboro neigbors are paying.  Although it is likely that homeowners will see an increase in home value, given the low tax rate, changes in tax bill should not be too painful.