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2009-02-06T08:26:00.000-08:00

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Ten Innovations That Will Reduce The Amount of Energy We Use

2006-10-26T08:22:00.000-07:00

By Rebecca Smith

From The Wall Street Journal Online

America is facing a crisis when it comes to electricity. But also a tremendous opportunity.

The forces that put us here look grim. Energy prices are high, supplies are increasingly tight, and anxiety is growing about climate change. But that dark outlook is driving consumers, utilities and public officials to finally take advantage of innovations that could radically reshape the nation's power consumption without lowering the standard of living.

Some are technological fixes, from more-efficient light bulbs to variable-speed motors that use less energy when the load on them isn't as heavy. Others involve public policy. States are rewriting their building codes with an eye on conservation, and Washington is trying to lay down efficiency standards for more household appliances and electronic goods. Utilities are joining the effort as well, offering consumers rebates for buying efficient appliances and urging customers to use electricity more wisely.

The good news is, "we haven't found a major use of electricity for which there aren't great opportunities for savings," says David B. Goldstein, director of energy programs at the Natural Resources Defense Council and a recipient of a MacArthur Foundation award for his work on appliance-efficiency standards.

Of course, we've all heard revolutionary promises like these before. But the promises seem to fade as each crisis recedes. So what makes this time different? Forces are converging to make the prospect of big change much more achievable.

Most urgent, of course, is the skyrocketing demand for electricity -- and the tightening supply. Many parts of the country set new records for electricity use in July and August, which sent a warning signal to officials that they have little time to act. Conservation seems a much more feasible solution than quickly building dozens of new power plants to add generating capacity -- especially if reducing emissions is a goal. The fact that the nation's energy bill totaled $296 billion last year, up nearly 50% from 1993, also provides impetus.

We've also gotten smarter about saving energy. New technology makes it possible to build more-efficient hardware without breaking the bank. And public officials now have much better data to draw on when they plan conservation efforts. They know what's worked in the past and can build on that success.

Some experts expect a transformation more profound than any since the 1973-74 Arab oil embargo. As a result of that six-month crisis, U.S. electric utilities largely weaned themselves off oil and shifted to coal and nuclear fuel for their power plants. The federal government set efficiency standards for automobiles and appliances, and building codes were revised. But much is left to be done. After all, 80% of U.S. buildings were built before 1980.

At the very least, the current push should produce considerable savings for consumers and unmistakable environmental benefits. "If you consume a lot less energy, it solves a lot of other problems," says Peter Darbee, chief executive of PG&E Corp., the San Francisco utility that serves one in 20 Americans.

Indeed, James E. Rogers Jr., chief executive of Duke Energy Corp. and president of the utility industry's leading trade group, the Edison Electric Institute, calls energy efficiency the "fifth fuel." By that he means that it's an alternative to coal, natural gas, hydropower and nuclear fuel.

Here's a look at 10 innovations capable of making a big difference immediately and in coming years:

1. Let the Light Shine

Lighting was the first market for electricity, and it's still one of the costliest. But because lighting is ubiquitous, it tends to get less attention than other big power burners like air conditioners. And that means some tremendous improvements in lighting have gotten overlooked.

Technology has improved conventional lighting systems, making them much more efficient. Take compact fluorescent bulbs, which have bases so small they can fit inside a standard screw socket. These bulbs can often cut lighting costs by 75%, and they last at least eight times as long as regular incandescent bulbs. Many even offer a soft white light that mimics incandescent light.

The bulbs are readily available in stores, and prices have dropped substantially recently. Sales volume has increased, and many utilities are offering rebates that cut the cost of 24-watt fluorescent bulbs that produce as much light as 100-watt incandescent bulbs to $1 or $2 apiece.

If each U.S. household replaced one regular bulb with a compact fluorescent, according to the Environmental Protection Agency, consumers would collectively save more than $600 million a year. The energy saved, meanwhile, would be enough to light seven million homes, and the greenhouse-gas reductions from power plants would be equivalent to taking one million cars off the road.

Then there's LED, or light-emitting-diode, technology, which is based on semiconductors. This method already has slashed power use dramatically for many cities as a replacement for conventional traffic lights. Typically, an 11-watt LED unit in a traffic light replaces a 140-watt incandescent unit, producing a 92% energy saving.

Now LEDs are poised to sweep into more industrial applications, such as supermarket refrigeration cases. For now, white LED light is more difficult to make, and thus far more costly, than colored LEDs. But lighting experts say they expect the price to drop enough in the next couple of years to permit broader use of white LEDs.

Meanwhile, a host of new methods are being adopted by consumers and companies, such as systems that "harvest" daylight, concentrating it and shooting it indoors so that buildings don't need to use as much artificial light. Nature's Lighting, of Park City, Utah, manufactures solar dishes, lined with mirrors, that sit on flat roofs and project sunlight through skylights into buildings. Diffusers distribute the bright light.

Mike Basch, a founder of Federal Express who's now chief executive of Nature's Lighting, says warehouses, auto makers and big-box retailers have been especially keen on the systems, which employees like because of the full-spectrum light.

At Wal-Mart Stores Inc., electricity is the leading expense after labor costs, exceeding $1 billion a year. So the retailer has been perfecting harvesting techniques to channel daylight into stores through prismatic skylights that concentrate the light without radiating heat. Sensors automatically adjust the store's fluorescent lights up and down in response to the amount of natural illumination available.

Wal-Mart now uses the system at nearly all of its stores, representing 330 million square feet of floor space. The systems cost about $200,000 per location and pay for themselves in two to three years through reduced electricity and cooling costs. "It's a pretty sophisticated setup," says Charles Zimmerman, Wal-Mart's vice president in charge of the initiative, who adds that Wal-Mart will gladly share its equipment specifications with anyone who wants them.

2. More-Efficient Hardware

The past few years have seen tremendous advances in the energy efficiency of hardware. For instance, new developments in industrial motors promise huge savings for businesses. Currently, the motors represent 67% of industrial energy use, according to Clark Gellings, vice president of innovation at the Electric Power Research Institute in Palo Alto, Calif. But older motors waste lots of power because they constantly switch on and off.

Now many companies are turning to variable-frequency drives. Instead of constantly turning on and off, the drives "let motors change speed in response to the load on them," says Mr. Gellings.

MGM Mirage, the big casino and hotel operator, is installing 22 of the new variable-speed drives on refrigeration units at its Las Vegas properties. The $4 million retrofit will pay for itself through reduced energy costs in about 2½ years and thereafter will save the company about $1.6 million a year.

Big gains also are being realized in air conditioning. New federal efficiency standards took effect in January for central air-conditioning units used by homes and businesses; the least-efficient units sold must be at least 30% more efficient than last year's least-efficient models. In industry parlance, that's a 13 SEER, short for seasonal energy efficiency rating, versus a 10 SEER, the standard that had been in effect for 14 years.

According to the Department of Energy, the higher standard will save a total of 4.2 quadrillion British thermal units, or "quads," of energy from 2006 through 2030 -- enough of a saving that utilities will be able to forgo building 40 new power plants nationally. Consumers, meanwhile, will save about $1 billion by 2020.

The saving might even be more pronounced than that. Many central-air units can achieve ratings in excess of 14 SEER at only slightly greater expense -- and manufacturers say consumers are very interested. One reason may be utilities like Austin Energy, a city-owned utility in Austin, Texas, which is offering a 20% rebate on air conditioners with SEER ratings of 14 or greater.

3. Smarter Sensors

Manufacturers are designing their products to be more intelligent, using advanced sensors to better control energy use and drive down operating costs. Sensors selling for a few dollars can save thousands of dollars over the course of a few years. And more companies are taking advantage of the technology.

For example, custom-sensor maker Kavlico Corp., of Moorpark, Calif., is seeing robust sales for semiconductor-based controllers used in commercial refrigeration equipment. Sensors tell a controller when to begin the defrost cycle in the freezer case, replacing automatic timers that put equipment through unnecessary heat-up-and-cool-down cycles.

The new controllers "result in a 25% to 30% reduction in power use," says Scott Farrenkopf, general manager of Kavlico, a unit of Schneider Electric of France. He says auto makers and equipment makers are ordering more custom-tailored sensors for systems designed to improve fuel economy and energy efficiency.

4. Better Measures

Consumers, meanwhile, are getting better tools for tracking energy use around the house with tools that are inexpensive and readily available. Eric Bier, a retired group-home administrator in San Diego, got concerned about his rising home utility bill. So he bought a device called a Kill-A-Watt meter, made by P3 International Corp. of New York.

He plugs the gadget, which cost about $40, into a standard wall outlet. Then he plugs various other devices into the meter, and it tells him how much power they're consuming. By multiplying this kilowatt-hour reading by his local utility's rate, he can easily figure out the monthly cost of operating the device in question.

Mr. Bier was surprised at the results of a recent home test. He learned that his new computer and accessories were using 242 kilowatt-hours of electricity a month, costing $48.50, because he never turned them off. Once he began shutting them down at night, the monthly cost dropped to about $18.80 a month for 94 kilowatt-hours of energy. On the other hand, his Roomba vacuum cleaner, from iRobot Corp., provided a pleasant surprise, vacuuming 8,960 square feet of floor space automatically each month for a total of $1.17 in electricity. "Considering how much work it does, it's a baby," he says.

Tom Lynch, director of sales and marketing for P3 International, says sales of the meters took off last winter. Sales in the first quarter of 2006 exceeded sales for all of 2005, he says, lifted by consumer worries about high utility bills.

5. Setting Standards

The federal government sets minimum standards for energy efficiency on more than a dozen products, including dishwashers, refrigerators, water heaters, room air conditioners and electric motors. From 1990 to 2000, these standards saved consumers approximately $50 billion in energy costs, according to one federal estimate.

The EPA, meanwhile, puts its own Energy Star labels on about 40 products, generally identifying the 25% of products in each category that are the most energy-efficient. In 2005, consumers with Energy Star products saved an estimated $12 billion, as well as enough electricity to power 11 million homes, according to the EPA.

But there are some glaring omissions in the EPA standards, and closing those gaps will bring more savings in coming years. For instance, television sets. The government doesn't impose an efficiency standard on TVs, and the Energy Star label identifies only TVs with low power consumption in "standby" mode -- in other words, not turned on. (Any device with a remote control is never really shut off, unless you unplug it.)

The call for a standard has grown louder as electricity use by televisions has boomed in recent years. Television screens have exploded in size, and add-on devices have proliferated, from satellite dishes to programmable set-top boxes. Some families now spend more money powering home-entertainment systems than they do refrigerating their food.

The International Electrotechnical Commission, which prepares standards for electrical and electronic technologies that often are adopted by governments, is working on common metrics to measure TV electricity consumption. After the IEC concludes its work, some efficiency information may begin appearing on sets in early 2008, the government says. Meanwhile, the EPA says it's considering Energy Star labels that would look at total power consumption by TVs instead of just power use in standby mode to give consumers a valuable tool to use when buying a new television.

The push for better disclosure is receiving some resistance from the electronics industry. The Consumer Electronics Association encourages voluntary labeling, but opposes mandatory efficiency standards for goods like TVs because "the industry has so many products and they change so fast," says Brian Markwalter, the group's vice president of technology standards.

Activists argue that the speedy evolution of products makes new standards more urgent. "Energy use has changed, and it's time for labeling to catch up," says Chris Calwell, principal in Ecos Consulting in Portland, Ore., a firm that specializes in energy issues.

6. New Building Codes

All states have building codes for health, fire and safety. But 40 also have codes for energy efficiency. The rules require, for example, at least minimal amounts of insulation in new buildings. The Department of Energy estimates code changes saved consumers $4.7 billion in lower electric bills between 1991 and 2005.

Now some of the 10 states that don't have statewide energy-efficiency codes, including Mississippi and Alabama, are considering adopting them, in part because they're facing lots of hurricane-related rebuilding. Meanwhile, several states that already have efficiency codes are considering adopting the latest version of a model code, released last winter by the International Code Council, a membership organization that creates the building codes often adopted by governments.

Experts say the latest version is shorter and less complex than the previous one; for instance, it divides the nation into eight climate zones instead of 19. At the same time, the new rules set more-ambitious goals for energy savings. The code hasn't yet been certified by the Department of Energy, but many states are moving ahead to consider it anyway. Energy-efficient building codes are expected to reduce primary energy use in the U.S. enough to save consumers $10 billion annually by 2010.

7. Incentives for Utilities

Most utilities earn higher profits as energy use rises; that's the way their rates are structured. So conservation efforts undermine their ability to make money and get reimbursed for their costs.

But many states have changed that pricing scheme to remove the disincentive for utilities to sponsor energy-reduction programs. California and some other states assess a larger proportion of a utility's costs in basic service fees, not volumetric charges based on the number of kilowatt-hours of power consumed.

In July, dozens of utilities, big energy users and regulators pledged to attack the rate-structure problem in states where it still exists and promote energy efficiency through resource planning, giving conservation more attention. Rather than build a new 500-megawatt power plant, for example, states would see if they could cut demand by 500 megawatts more cheaply and without environmental harm.

Utility regulators from more than half of these states have endorsed this National Action Plan for Energy Efficiency. The industry is engaged because most state regulators are confronted by "new plant proposals and rising rates" that they would prefer to avoid, says Diane Munns, a utility commissioner from Iowa and a leader of the effort. If the plan were adopted nationally, U.S. energy bills could be reduced by $20 billion annually, according to the EPA, a proponent of the effort.

Meanwhile, the California Public Utilities Commission is considering creating special monetary incentives for utilities that promote conservation. Says Michael Peevey, president of the commission, "I want to see utilities get a return on energy efficiency comparable to what they'd get for putting steel in the ground."

8. Variable Pricing

One of the more ambitious conservation efforts utilities are trying out -- both on their own and at the urging of regulators -- is a new kind of metering. Sophisticated electric or gas meters monitor how much energy is consumed by individual customers, taking automatic soundings several times a day instead of monthly.

This makes it possible for utilities to charge different prices by time of day or season. Regulators might use higher rates when the electric system is stressed or when fuel prices are especially high to suppress demand so fewer power plants need to run. Mr. Peevey of the California Public Utilities Commission says some consumers balk at the idea, "but when people understand this is the more environmentally sensitive option, they are supportive."

Nationwide, about 6% of electric customers have the meters in place, according to a recent study by the Federal Energy Regulatory Commission. Pennsylvania, Wisconsin, Connecticut, Kansas, Idaho and Maine have the highest usage rates, ranging from 14% to 53%.

California soon will make the list with a massive remetering project expected to cost about $3 billion. Five million customers of Southern California Edison, a unit of Edison International, will receive new meters beginning in 2008, for example. The meters will be two-way communication devices, able to send the utility instantaneous readings as well as talk to other devices like smart thermostats, which allow remote control of temperature settings. This will let consumers better control energy use -- for example, by cutting use at periods of grid stress or especially high prices.

9. Rebates

Many utilities also offer rebates on energy-efficient appliances and equipment, trying to permanently reduce demand by getting obsolete equipment retired. When New York offered a $75 bounty for old air conditioners in 2002, 160,000 units were turned in, saving enough juice over 10 years to equal a full year's output from a large power plant.

California, where consumers pay about $20 billion a year in electricity charges, has committed to spend $2 billion of customer funds on energy-efficiency programs from 2006 through 2008, a record expenditure for any state. Elsewhere, states are considered aggressive if they get utilities to spend the equivalent of 1% to 2% of electricity revenue on energy-efficiency programs.

PG&E's Pacific Gas & Electric utility will spend $974 million and expects to permanently cut demand by 600 megawatts, eliminating the need for one large power plant and 30 to 50 years of fuel. About 250 megawatts of reductions will come from lighting alone.

Some of these efficiency programs involve big rebates. GMH Capital Partners LP, a real-estate investment firm, bought a big apartment complex in Richmond, Calif., last year. It spent $327,428 rejuvenating the nearly 20-year-old structure, installing new lights, water heaters and heat-reflecting roofing materials. The expected annual energy savings: $112,000, most of which will be realized by renters at the 1,008-unit complex.

For its trouble, GMH got a rebate check for the full amount of the equipment and installation. The local utility, PG&E, made the move because most property owners won't do expensive retrofits if renters reap the savings. "It's a tough market to crack," says Beverly Alexander, vice president of customer energy at the utility.

10. Customer-response programs

Getting customers to trade up to energy-efficient equipment permanently reduces energy use. But there are ways to temporarily cut consumption, particularly among big energy users. These "demand response" programs will be more visible in coming years, especially in places like New England that are having trouble getting new plants built.

Early programs paid big energy users to reduce energy use, sometimes forcing them to curtail production. One current approach cuts consumption more painlessly, with the help of controls that dim lights or cycle air conditioners and pumps when requested by the utility.

In response to a directive from Congress, the Federal Energy Regulatory Commission recently surveyed the electric-power industry and found existing demand-response programs can cut consumption by 37,500 megawatts when activated, equivalent to the output of 75 big power plants.

In July and August, when U.S. electricity markets set new records for energy use, the outfit that runs the high-voltage electric grid in the mid-Atlantic region got big energy users to cut their usage in exchange for payments. This benefited all consumers by cutting wholesale power costs by about $650 million.

Many experts think that well-designed programs, backed by the right technology, can easily cut peak energy use by 5% to 10%. In fact, California did better than that in the 2000-01 energy crisis.

Jon Wellinghoff, a member of the Federal Energy Regulatory Commission, says consumers "easily could save billions of dollars annually" with only a modest expansion of existing programs and no impact on productivity. What you need, he says, is "a willingness to try new things."

Some utilities seem willing to go down that road. Rick Green, chief executive of Aquila Inc., a Kansas City, Mo., holding company that owns utilities in five Midwestern states, says utility executives gradually are becoming convinced they can't build their way out of the current situation, as they did in the past.

He says one employee in Colorado recently told him that when he talks to conservationists, "I don't say 'no' anymore. I say, 'Yes, if...' "

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Commercial Real-Estate Cycle Peaks and Will Pull Back in 2007

2006-10-26T08:21:00.002-07:00

By Ryan Chittum

From The Wall Street Journal Online

The commercial real-estate cycle appears to have reached its peak and will begin pulling back in 2007, according to a new survey of industry executives.

The Urban Land Institute, a Washington-based nonprofit planning and research group, and PricewaterhouseCoopers surveyed more than 600 developers, investors, brokers, consultants and lenders this summer for an annual report on the industry, dubbed Emerging Trends in Real Estate 2007.

The survey suggests commercial real estate is beginning a return to its norm as an income-producing investment rather than the wildly appreciating asset class it has been this decade. The easy lending of the past several years will tighten next year in part because of worries about the economy, surveyed executives said. Investors will have to turn to asset management and operating performance to raise returns as investment inflows slow because of lower return expectations, respondents added.

"I think it's a clear mandate from people that you're going to have to make money the old-fashioned way," says Stephen Blank, an Urban Land Institute senior fellow who specializes in real-estate capital markets. "You're going to have to earn it" through leasing, cost control and other asset management.

The report also says real-estate investment trust stock prices "appear to have more downside risk than upside potential over the short term."

Still, those surveyed expect commercial real-estate cash flow to continue to grow as factors such as reduced vacancies and higher rents keep improving across most property types. One reason: High construction costs are putting a damper on new construction.

While the commercial real-estate market has exhibited some signs of a bubble in recent years -- driven by low interest rates and an influx of investment -- it has differed from the residential market. A key difference is that supply and demand have been more tied to vacancies and rents and not as closely linked to the rising interest rates that have cooled the housing market.

The report advises investors to sell marginal properties and hold on to well-performing ones, with an eye to improving their performance in advance of a potential economic downturn. It advises developers to "hunker down," saying most property markets don't need much new space.

A pullback in the galloping commercial real-estate market will raise capitalization rates -- the initial return on investment in the first year -- by as much as 0.7 percentage point in some property types and restrain the increase in property values, the report says. Falling cap rates mean investors are willing to take a lower return for their money. Cap rates are already rising in some areas, especially in lower-quality properties, after dropping between 2.5 and three percentage points to record lows over the past five years. Cap rates vary by property type, but high-income apartments, for instance, averaged a 5.66% cap rate in July, while limited-service hotels brought a 7.93% cap rate.

The property sectors with a "buy" in the report are warehouse, which the executives interviewed said will boom on the East and Gulf Coasts because of overflow import traffic from the West Coast, and moderate-income apartments, especially on the coasts. Retail property fared worse, with executives suggesting consumer spending will be "middling" and advising investors to sell weak properties while holding strong ones.

Those surveyed said Seattle is the best office market to invest in right now, with office rents set to rise and supply tight. The city is also sitting in a prime position to benefit from explosive growth in Asia and has the best potential of any American city to become the next "24-hour" hub like New York or San Francisco, according to the report. The report lists five U.S. cities as "global pathways" with bright futures for real-estate investment: New York, Seattle, San Francisco, Los Angeles and Washington.

Philadelphia and Chicago are ranked among the worst markets for investment in all property types in the survey. Chicago is being dragged down by economic problems, the "Midwest malaise," the report says, while investors question Philadelphia's future as a global city since it lies between New York and Washington.

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Pinnacle Books Show Evidence That It Raised Over $60 Million

2006-10-26T08:21:00.001-07:00

By Zachary M. Seward

From The Wall Street Journal Online

A court-appointed receiver examining the books of Pinnacle Development Partners LLC has found evidence that the shuttered real-estate investment firm raised more than $60 million in the past year, higher than initial indications, a person familiar with the matter said.

Earlier, in a complaint filed on Wednesday, the Securities and Exchange Commission accused Pinnacle of operating a Ponzi scheme, and said the firm had raised "at least $30 million" from more than 2,000 investors in 33 states. The U.S. District Court in Atlanta shut down Pinnacle's investment operations and put the firm under receivership. The court also froze the assets of Pinnacle and its owner, Gene A. O'Neal.

The SEC said Pinnacle, which promised 25% returns in as little as 45 days from deals in foreclosed real estate, had misled and defrauded its investors. The commission also accused Pinnacle of offering an unregistered security in a national advertising campaign and on its Web site.

Mr. O'Neal's attorney, Michael J. O'Leary, said, "We emphatically deny that Mr. O'Neal or anybody else at Pinnacle was involved in any kind of an effort to defraud the individuals who entered into partnerships with Pinnacle."

Pinnacle investors fretted about whether they would ever receive their money back. "I barely could sleep last night," said Marvin Reyes, an information-technology specialist in Floral Park, N.Y., who invested $25,000 with Pinnacle on Aug. 31. Others, identified as investors in Pinnacle, gathered on an Internet message board and argued over who should get their money back first.

Those decisions -- if any money is recovered -- will be guided by the receiver, S. Gregory Hays, of Atlanta-based Hays Financial Consulting LLC. He was at Pinnacle's offices yesterday, according to an SEC lawyer, and couldn't be reached for comment.

William Hicks, an SEC lawyer in Atlanta, said that Pinnacle appeared to own property but he couldn't say what it might be worth. "Any property or assets that the receiver can collect, I think, would be used after expenses to compensate investors," Mr. Hicks said.

Pinnacle had told investors that it purchased foreclosed properties from banks in Atlanta, performed minor refurbishments and sold them at a profit. But the SEC said that in reality, Pinnacle had transferred the properties from one of its investor partnerships to another, without ever selling to an independent third party.

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U.S. Home Prices May Fall But Drops Will Be Mild

2006-10-26T08:21:00.000-07:00

By Brian Blackstone

From The Wall Street Journal Online

U.S. housing prices may decline "a little" within the next year, but any such drop is likely to be mild and inconsistent with a bursting housing bubble, according to a paper written by a Federal Reserve economist.

Based on an analysis of housing futures and options and derivatives of housing-related company shares, "market participants expect home prices to decelerate sharply or actually decline a little within the next year," wrote J. Benson Durham, an economist with the Fed's monetary affairs division. However, the anticipated drop in prices "is mild compared to some estimates of the purported overvaluation of the housing market," he added. The paper, dated September, was posted on the Fed's Web site Thursday.

Mr. Durham cautioned that deep and liquid markets needed to signal future home-price trends don't fully exist and that housing futures and options have only been trading on the Chicago Mercantile Exchange since May 22. Still, implied volatility on CME housing options are greater than the historical average, "which suggests that investors see more risks to home prices going forward," he wrote. That higher uncertainty, however, is "generally inconsistent with the perception of a "bubble,'" he added.

Mr. Durham also examined options on shares of certain homebuilders to gauge whether investors see upside or downside risks to home prices. Those options "are only marginally negatively skewed at the present time," he wrote. "This suggests that market participants do not, in fact, view the risks to home prices or, perhaps more accurately, to the broader housing sector as especially tilted to the downside," Mr. Durham concluded.

The paper's conclusions seem in line with the thinking of Fed officials that the sector will slow substantially through the rest of 2006 and into 2007 but is unlikely to derail the economic expansion.

In the minutes of the Sept. 20 Federal Open Market Committee meeting, the Fed said housing "seemed to be cooling considerably" but that the overall economy should strengthen next year "as the housing correction abated." Officials also continue to remark that higher inflation poses a greater risk than a slower economy.

Housing data had declined markedly in recent months, raising fears of a housing-induced slowdown severe enough that it would eventually require Fed rate cuts. But there have been tentative signs of stabilization of late. The National Association of Home Builders index rose in October, albeit by only one point, but nevertheless breaking a string of eight straight declines. And housing starts unexpectedly rose in September, breaking a string of three straight declines.

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Tampa Apartments

Real Estate Terms b

2006-09-26T07:47:00.000-07:00

Mean Home Price (of New or Existing Homes Sold):: The mathematical average of the prices of all homes sold in the period. The mean price of homes sold generally runs higher than the median price due to the number of very high-priced homes. The National Association of REALTORS® usually releases home price figures for existing homes sold on the 25th of the month for the previous month; corresponding figures for new homes are released a few days later by the Bureau of Census.
Median Home Price (of New or Existing Homes Sold):: Of all the homes sold during the particular period, precisely half sold for more than the median price, and half sold for less. When determining the median, only one home price matters - that of the home in the middle. Because homes sold for exceedingly low or high values only count as one unit when determining the median - i.e., their values don't matter - median home prices are generally a better indicator of home price trends than mean, or average, home prices (where all the values matter). The National Association of REALTORS® usually releases home price figures for existing homes sold on the 25th of the month for the previous month; corresponding figures for new homes are released a few days later by the U.S. Census Bureau.
Mortgage:: Mortgage loans are long term loans, usually spanning 15 or 30 years, that are directly tied to a home or other piece of real estate property. The borrower acquires a mortgage loan in order to take possession of their home. While the borrower, also known as the mortgager, has ownership and use of the property, he or she does not hold the actual title until the mortgage loan has been paid back in full. Mortgage loans come in many forms and with many options and terms. Some common types are fixed and adjustable-rate mortgages. Borrowers can either lock in a fixed interest rate or let the rate change as rates change in the market. Even though mortgages are long term loans, they can be paid off in full through a process known as refinancing. Essentially, the borrower gets a new mortgage on the home and uses the proceeds to pay off the existing mortgage. If you are considering refinancing your home, there are several factors you should think about before making your decision. These factors include the interest rate on your current mortgage, the current market interest rate, how long you plan to live in your current home, and whether or not you need money for other things such as home improvements, a new car loan, or paying off credit cards.
Mortgage Application Index: Purchase:: An index published weekly by the Mortgage Bankers Association of America which gauges the number of applications submitted for the purchase of a home. The survey covers about 40% of all retail residential mortgage transactions and is released every Wednesday for the week ending the previous Friday.
Mortgage Application Index: Refinance:: An index published weekly by the Mortgage Bankers Association of America which gauges the number of applications submitted for the refinancing of a home. The survey covers about 40% of all retail residential mortgage transactions and is released every Wednesday for the week ending the previous Friday.
Mortgage Broker:: Many lenders use the services of a mortgage broker to perform what is known as the "Origination" of the loan - to meet with and pre-qualify the borrower, verify the credit and property aspects of the loan, and then provide it to the lender for actual funding. Mortgage brokers represent the consumer. Their goal is to try to understand the needs of each consumer as well as possible and then identify and source the best loan possible for that consumer. Mortgage brokers typically generate their customers either from marketing directly to consumers or through referrals from happy customers. Be sure that you ask for customer referrals when selecting a mortgage broker.
Mortgage Loan:: A mortgage loan is money lent for the purpose of buying real estate. Mortgage loans are secured by the property that they are used to buy. If the borrower or "mortgagor" fails to pay back a mortgage loan, the lender can seize the property in a process known as foreclosure. There are many different types of mortgage loans available and each one is designed for a specific purpose. Some are more flexible that others and it is important to learn a little about each type to better determine which one is right for you. It's like shopping for anything else. You need to see all of what's out there before you can make the final decision.
Mortgage Quote:: A mortgage quote is an interest rate offered to a borrower by a lender for a home loan. The mortgage quote is tied to a number of factors including the loan type, loan length and the credit history of the applicant and can vary quite a bit among lenders. Mortgage quotes are an important step in purchasing or refinancing a loan. Mortgage rates can change hourly so it is important to check rates frequently and when you do make a decision, make sure you find out if the mortgage quote you have been given has any expiration period associated with it. When considering a mortgage rate, be sure to understand not only the specific interest rate you are paying but also whether or not your loan is an interest-only loan or you are paying off principal at the same time. You should also be sure to understand the term of your mortgage, is it a 5 year, 10 year, 30 year or one of the many hybrid variations available. Depending upon the number of years, the amount you end up paying in interest and principle and vary enormously. Lastly, be sure to find out if there are any other costs associated with closing your mortgage that are not included in your mortgage quote. Generally mortgage quotes do not include closing costs, property taxes, insurance costs, PMI costs and other miscellaneous costs which are all important costs to understand when thinking about what you can afford.
Mortgage Rate:: A mortgage rate is the amount of interest charged on the money lent for the purchase of a home. Mortgage rates are expressed annually as a percentage and have fluctuated greatly over the years. These rates are tied specifically to the purchase of real estate property and the loans associated with them are secured by the property. Mortgage rates can also vary greatly by lender and borrower and are based on many factors including market conditions, the loan type, geographic location, the loan term and the credit history of the borrower. When mortgage rates go up, it becomes more expensive to borrow money for the purchase of a home. As mortgage rates drop, consumers are able to afford to borrow more money and purchase a more expensive home. When mortgage rates drop, existing homeowners with fixed-rate mortgages should consider refinancing to lock in the lower rate.
New Home Sales:: The Census Bureau surveys builders nationwide and bases their figure on the number of contracts signed for new homes. Because it reflects contracts rather than closings (as is the case with existing home sales), new homes sold should more quickly reflect changes in mortgage rates and the economic environment. The reported figure is generally a seasonally adjusted, annual rate.

Refinance:: Refinancing is when you get a new loan to pay off an existing loan on the same house. Your new home loan may have different terms, a lower interest rate or be larger than the amount of debt owed on your existing loan. In the case of the latter, you would end up with a cash surplus known as "equity take out." Your are taking equity from your home and converting it into cash to pay for other things. Home refinancing is often done when interest rates drop because home owners can lock in a lower rate and lower their monthly payments. It is also a great way to consolidate bills and pay off expensive credit card debt.
Searchitis:: An uncontrollable addiction to checking home listings multiple times per day. Please remember to feed your cat/dog/fish/kids.
Second Mortgage:: A second mortgage is a mortgage on real estate which has already been pledged as collateral against another mortgage, the first mortgage. The second mortgage typically has rights to the same real estate but those rights are subordinate to the rights of the primary or first mortgage. When getting a second mortgage, the lender will typically only lend up to the difference between the total estimated value of the real estate minus the first mortgage. Like all mortgages, lenders will also consider your cash flow to ensure that you can afford to make their interest and principal payments on top of your other mortgage payment commitments. Like standard mortgages, second mortgages can have varying terms, ranging from a year up to 20+ years depending upon your personal situation. Second mortgage rates and costs tend to be similar to other mortgage rates and costs although sometimes second mortgages are more expensive to reduce the risk lenders are taking by being subordinate to the primary lender.
Securitization:: The pooling of mortgage loans into a mortgage-backed security. The principal and interest payments from the individual mortgages are paid out to the holders of the MBS security.

Turtling:: An overwhelming urge to pull your shirt up over your head and hide from the world as you try to grasp all the real estate industry jargon. Consult a doctor if it lasts
Underwriting:: The determination of the risk a lender would assume if a particular mortgage loan application is approved. Ability and willingness to abide by the mortgage loan terms, as well as the value of the property involved, are critical to the underwriting analysis.

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Real Estate Terms a

2006-09-26T07:42:00.000-07:00

Adjustable-rate Mortgage (ARM):: An Adjustable-rate Mortgage (ARM) is a mortgage loan with an interest rate subject to change over the term of the loan. The interest rate is tied to the performance of a specified market rate, such as the cost of funds index calculated by the 11th District of the Federal Home Loan Bank Board, or the yields on one-year or six-month U.S. Treasury securities. The amount of times the interest rate can change and how often it can change are usually determined at the time the loan is created. Usually there is also an interest rate maximum that is set for the loan. One thing to remember regarding adjustable rate mortgages is that even a minor increase in interest rates can greatly affect the monthly payments on a mortgage loan. For example, a 30-year mortgage on a $250,000 loan at 5.5% results in a monthly payment of $1419. If, over time, interest rates rise to 7%, the monthly payment jumps to $1663 for a difference of $244 per month or almost $3000 more per year. When reviewing an adjustable rate mortgage loan, make sure that interest rate changes and subsequent increases in monthly payments will not stretch your budget beyond its limits. The benefit of an adjustable rate mortgage is that it generally has lower fees and a lower interest rate than a fixed rate mortgage. There are also many more variations of adjustable rate mortgages, allowing borrowers more flexibility and ease when getting that first home loan. Also, if rate drop significantly, borrowers with adjustable rate mortgages will automatically benefit from a lower rate without having to refinance. Something to consider regarding adjustable rate mortgages is that if interest rates are hitting their all time lows and are expected to rise in the near future, it may be a good time to refinance to a fixed rate mortgage loan and lock in the low rate.
Amortization:: The paying down of principal over time. In a typical mortgage loan, the principal is scheduled to be paid off, or fully amortized, over the term of the loan.

Basis Point:: One one-hundredth of a percentage point. For example, if mortgage rates fall from 7.50% to 7.47%, then they've declined 3 basis points. A full percentage point is 100 basis points.
Bill of Lading:: The receipt for your goods and the contract for their transportation. It is your responsibility to understand the bill of lading before you sign it. If you do not agree with something on the bill of lading, do not sign it until you are satisfied that it is correct. The bill of lading is an important document. Don't lose or misplace your copy.
C
Cash-out Refi:: A refinancing of a mortgage in which the new principal (the borrowed amount) exceeds the outstanding principal of the original loan by at least 5%. In other words, the homeowner is taking equity out of the home. Of the mortgages it owned that were refinanced during the first three quarters of 2000, Freddie Mac estimates that more than 4 out every 5 were cash-out refis.
Conforming Mortgage Loan:: Any mortgage loan that's at or below the amount that Fannie Mae and Freddie Mac can purchase and/or securitize in the secondary mortgage market. For 2001, the loan limit is $275,000. In 2000, it was $252,700.
Consumer Price Index (CPI):: A measurement of the average change in prices paid by consumers of a fixed market basket of a wide variety of goods and services. The broadest, and most quoted, CPI figure reflects the average change in the prices paid by urban consumers (about 80% of the U.S. population). The so-called "core CPI" excludes the volatile food and energy sectors in an attempt to determine the underlying rate of inflation. Strictly speaking, the CPI is not a "cost of living" index because its fixed market basket does not allow for the substitution of goods and services due to price changes. The CPI is released by the Bureau of Labor Statistics in mid-month for the previous month.
Conventional Mortgage Loan:: Any mortgage loan not guaranteed or insured by the government (typically through FHA or VA programs).
Credit Rating:: A seemingly arbitrary number that determines if your money situation is healthy, in need of a little cold medicine or a full body cast.
Credit Report:: A credit report shows borrowing and repayment history. It shows the amount of an individual's past and present debts and whether any debt payments have been missed. Debts can include money owed on credit cards, auto loans, mortgages and more. Credit reports also show an individual's address history, indicating how often and to what extent a person has moved. Lenders use the credit report information to determine a loan applicant's borrowing potential and interest rate. A credit report that shows late payments on debt may cause a lender to charge a higher interest rate or not lend at all. In addition, a credit report that shows little or no history of borrowing can also raise the interest rate. Lenders prefer to see some history of borrowing and repayment rather than none at all. Three main companies track the credit histories of individuals and issue credit reports. These are Equifax, Trans Union and Experian. These companies get their information from a variety of sources including creditors and public records.
Credit Score:: A credit score is a number based on an individual's credit report that indicates overall credit risk. If a borrower has a high credit score, he or she is considered more likely to be able to pay off debt in a timely manner. A low credit score indicates higher credit risk and may cause a lender to charge a higher interest rate or not extend credit at all. The most common type is called a "FICO" score, named after the Fair Isaac Company that created it. FICO scores range from 350 to 850 with the median score falling around 720. A score above 750 gives a borrower the best chance of securing the lowest possible interest rate on a loan. High scores qualify for lower interest rates and increase the number of lenders competing to provide the loan. Components that determine an individual's credit score include their borrowing and payment history, the length of this history, the amounts currently owed, the types of credit used and the level of recent credit history.
E
Existing Home Sales:: Based on the number of closings during a particular month. Because of the one-to-two month period between a signed purchase contract and a closing, existing home sales are more influenced by mortgage rates a month or two earlier than the prevailing mortgage rate during the month of closing. New homes sold, on the other hand, are counted when the purchase contract is signed. The reported figure is generally a seasonally adjusted, annual rate. Data are released by the National Association of REALTORS® on the 25th of each month (or the following business day) for the previous month.
F
Fannie Mae and Freddie Mac:: The nation's two federally chartered and stockholder-owned mortgage finance companies. Forbidden by their charters from originating loans (that is, from providing mortgage loans on a retail basis), these two Government-Sponsored Enterprises (GSEs) purchase and/or securitize mortgage loans made by others. Due to their directive to serve low-, moderate-, and middle-income families, the GSEs have loan limits on the purchase or securitization of mortgages (in 2001, the conforming loan limit is $275,000). The difference between these two entities often comes down to size (Fannie's larger), business strategy and execution.
Federal Funds Rate:: Also known as the fed funds rate, this is the rate that banks charge each other on overnight loans made between them. These loans are generally made so that bank can cover their daily cash flow and reserve requirements. As the rate rises, banks have an increased incentive to keep more of their own cash on hand - making less money available to lend out to households and businesses. The Fed doesn't actually set the fed funds rate, which is determined by supply and demand of the funds; instead, it sets a target rate and, through its own purchases or sales of securities, affects the supply of funds.
Federal Open Market Committee (FOMC):: The arm of the Federal Reserve that sets monetary policy, the FOMC is scheduled to meet eight times a year. The 12 members of the FOMC include the seven governors of the Federal Reserve System, the president of the New York Federal Reserve Bank, and, on a rotating basis, four of the presidents of the other 11 regional Federal Reserve Banks.
Fixed-rate Mortgage (FRM):: A fixed-rate mortgage (FRM) is a mortgage loan with an interest rate that does not change over the term of the loan. At the time the loan is created, the rate is set and the borrower will not be subject to fluctuations in interest rates due to changing market and economic conditions. A fixed rate mortgage usually comes with higher fees or interest rates than an adjustable rate mortgage and is best when rates are expected to rise significantly in the future. While borrowers with fixed rate mortgages don't benefit from drops in interest rates, they still have the option of refinancing the mortgage loan to take advantage of the lower rate and reduced monthly payment. The only drawback is the cost of refinancing which should, if you are refinancing at a significantly lower rate, be offset by your savings in interest payments. To recap, the main risks of a fixed rate mortgage are higher closing costs and potential additional closing costs when the borrower refinances to take advantage of a drop in interest rates. The main benefit is the peace of mind knowing that the mortgage rate and monthly payment on your home loan will not change, even if market interest rates triple.
H
Home Equity:: Home equity is the difference between the current value of the house and the amount of money owed on the mortgage. For example, if you owe $75,000 on your mortgage, there are no other liens on the property and the current market value of your home is $125,000, then the home equity amount is 125,000 - 75,000 = $50,000. The down payment that you make when purchasing a home will provide you with some initial equity.
Home Equity Line of Credit:: A home equity line of credit (HELOC) is a loan that allows you to borrow money when you need it. The amount you can borrow is based on the appraised value of your home and you can borrow and repay as much and as often as you like. The only requirement is that you make a monthly payment to cover the cost of the interest on the amount borrowed. A home equity line of credit is like having a credit card with a low interest rate and high credit limit. Because it is secured by the value of your home, lenders can offer much lower interest rates than a standard credit card company. And your credit limit can be up to 80 percent of the appraised value of your home so you have a potentially much greater borrowing capacity.
Home Equity Loan:: A home equity loan is a loan that is secured by a home and limited by the current market value of the home and any additional liens or mortgages that exist. A home equity loan is also known as a second mortgage and home owners can sometimes borrow up to 125% of their homes appraised value. For example, if the home is worth $200,000 and there is a mortgage on the home of $150,000 with no other liens on the property, then the amount available for a home equity loan may be as much as $250,000 - $150,000 = $50,000. The full 125% of the appraised value may not be available in all cases and every lender will have unique requirements and limitations. Home equity loans are used in place of other types of loans when cash is needed for bills and other expenses because the interest is tax deductible and the interest rate is lower in many cases. Borrowers can still use the money from a home equity loan to buy cars or pay for a child's college tuition. Unlike a home improvement loan or construction loan, the money does not have to be spent on the home itself and can be used for anything the borrower wants. With home equity loans, borrowers can put their home equity to work for them by using the equity to buy income property or other sound investments. One thing to remember is that a home equity loan will reduce your equity in the home by the amount of the loan and will increase your monthly mortgage payment. As with any financial or investment decision, you should first consult with a financial advisor.
Home Improvement Loan:: A home improvement loan is money lent to a property owner for home repairs, updates or remodeling. Home improvement loans are not necessarily secured by the property they are intended for and may simply be classified as home improvement loans by the lender. These loans can be secured or unsecured and are usually short term. Home improvement loans are intended to increase the value of your home so it is important to think carefully about where best to put the money. After all, the money spent on home improvements is added to your overall cost of the home and you want to be able to recoup this cost if and when you decide to sell.
Home Loan:: A home loan is money provided to you by a bank or lending institution to pay for your home. In return, the bank holds the title to your home until you've paid back the loan plus interest. The money lent to you in a home loan is "secured" by the home itself. This means that in the event that you are unable to pay back the loan, the lending institution has the right to sell the property in order to pay back the loan in a process known as foreclosure. A home loan is also known as a mortgage and has many variations with different terms and interest rates. One of the key benefits of a home loan is that the interest paid on the loan is tax deductible. Home owners can deduct interest on up to one million dollars of their mortgage debt. This can translate into huge savings in income tax.
Homeownership Rate:: The number of households residing in their own home divided by the total number of households. Late in the month following the end of each quarter, the U.S. Census Bureau releases an estimate based on a quarterly survey. A record homeownership rate of 67.6% was reached in the fourth quarter of 2000.
House Price Index:: A quarterly measure of the change in single-family house prices. The HPI is a repeat sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties, and is based on mortgages purchased or securitized by Fannie Mae and Freddie Mac. Homes with mortgages above the Fannie/Freddie conforming loan limit (in 2001, it's $275,000) are not included in the sampling, nor are homes insured or guaranteed by the FHA, VA or other federal government entity. This index is distinct from the similarly constructed Conventional Mortgage Home Price Index published by Freddie Mac. Indexes are available for the nation, nine Census regions, each of the 50 states and the District of Columbia, and 329 Metropolitan Statistical Areas (MSAs). Released by the Office of Federal Housing Enterprise Oversight (OFHEO) on the first business days of March, June, September and December for the previous quarter.
Housing Starts:: The Census Bureau's monthly count of the number of private residential structures on which construction has started. Data for a particular month is released about two weeks into the following month. Data on permits issued is also released. The reported figure is generally a seasonally adjusted, annual rate.

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ERA Absolute Realty is part of honored network

2006-09-26T07:36:00.000-07:00

Home News Tribune Online 09/17/06

NORTH BRUNSWICK — ERA Absolute Realty is part of the international global real estate network which was recently named the recipient of the 2006 J.D. Power and Associates Award for "Highest Overall Satisfaction For Repeat Home Sellers Among National Full Service Real Estate Firms."

This marks the third year in a row ERA Real Estate has received an award from this prestigious organization.

Last year, the company was the recipient of the 2005 J.D. Power and Associates Award for "Highest Overall Satisfaction For First Time Home Sellers Among National Full Service Real Estate Firms."

In 2004, ERA Real Estate received the award for "Highest Overall Satisfaction For First Time Home Buyers Among National Full Service Real Estate Firms."

"Being recognized for customer satisfaction once again by a well-respected organization such as J.D. Power and Associates is a testament to the dedication and commitment of our sales associates and staff," said Scott Lauri, Broker/Owner with ERA Absolute Realty.

"This award is a reflection of our promise to our customers to be "Always There For You' throughout the home-buying and -selling process," he added.

Locally, ERA Absolute Realty offers a host of products and services dedicated to meeting the needs of sellers such as the ERA Sellers Security Plan, a guaranteed sales program that offers sellers the freedom to close on their next home even if their current home hasn't yet sold.

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Median U.S. Home Prices Fall

2006-09-26T07:29:00.000-07:00

http://www.realestatejournal.com/

Sales of previously owned homes in the U.S. fell less than expected in August, as prices fell compared with a year earlier, the National Association of Realtors said Monday.

The median home price was $225,000 in August, compared with a revised $230,000 in July. Last month marked the first year-to-year median price decline since April 1995, and it was the second-biggest in the survey's 38-year history.

Home resales fell to a 6.30 million annual rate, a 0.5% decrease from July's unrevised 6.33 million annual pace. Inventories of unsold homes rose to 3.92 million, a 7.5-month supply at the August sales pace, the most since April 1993.

The weakness in existing home sales followed a report last week that construction of new homes and apartments plunged by 6% in August, pushing building activity to the lowest level since early 2003.

The housing sector, which had enjoyed five boom years of record sales, has been slowing sharply this year under the impact of rising mortgage rates and a slowing economy.

NAR chief economist David Lereah said an anticipated decline in prices compared with a year earlier has begun and is likely to continue until the end of the year, helping to support sales. "With sales stabilizing, we should go back to positive price growth early next year," Mr. Lereah said.

The August resales level was above Wall Street expectations of a 6.20 million sales rate for previously owned homes. The average 30-year mortgage rate was 6.52% in August, down from 6.76% in July, according to Freddie Mac.

Existing home sales were mixed regionally. Sales rose 0.7% in the Midwest and 1.9% in the Norhtheast. They were down 2.3% in the West and 0.8% in the South.

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Your Second Home: Should You Sell, or Pass It Down to Your Kids?

2006-09-26T07:27:00.000-07:00

By Robert Powell

From MarketWatch

http://www.realestatejournal.com/

To some it's a source of family harmony. To others, however, it's a source of great family division, anger and strife. Yes, it's the old family cottage or vacation property or compound or camp or call it what you will. And now with summer coming to a close, many Americans are trying to figure out what to do with their piece of heaven on earth.

Should they sell the property that has produced fond memories of times spent with loved ones? Or should they give it their children? Or should they do something entirely different?

Andrew Lee, a lawyer with Schaden Katzman Lampert & McClune in Broomfield, Colo., says families should deal with the issue in four steps.

1. Have a heart-to-heart

The first step is a sit-down between the family cottage owners - the parents usually - and their children. "It's best to talk about it ahead of time," he says. "Otherwise it could be a huge mess."

The parents need to ask their children straight out whether they want the property long before asking an estate-planning attorney to draft some expensive legal document. In his experience, Lee says there is a good chance, about 50%, that the kids don't want the property for one reason or another.

In some cases, the kids already have their own second home. In other cases, some of the children may live very far away from the cottage. And in still other cases, some or all of the kids may not be able to afford the property or its upkeep.

Indeed, parents should not be surprised to learn that the only reason children and grandchildren go to the family cottage is because of the parents or grandparents and if the senior generation were to pass away the kids would have no interest in visiting the property, says Lee.

"Often parents find that keeping the cottage in the family is more trouble than it's worth," he says. So, if the parents determine that the next generation has no interest in owning the family cottage, well, case is closed and the parents have saved a bundle in legal fees.

Children who do have an interest in the property, however, must go into it with their eyes wide open. They need to know the monthly nut: the mortgage, if there is one; real estate taxes; utilities; any management fees or association dues and the like. And if the family cottage doubles as a rental-income property, they'll need to know what sort of income the property generates.

In some cases, parents will learn that some but not all of the children will want the cottage. In that case, Lee says the parents will have to figure out how to pass on their assets; the house goes to the kids that want it while more money goes to the kid that doesn't want it.

2. Transfer the property

Getting a handle on whether and who wants the cottage is one piece of the puzzle. Figuring out the right way to pass the property down is the other big puzzle piece.

Often, families will use the cheap and easy way to transfer property, says Lee. They will simply add members of the next generation as joint owners with rights of survivorship or they will completely transfer the property to the next generation during the owner's lifetime by deed.

"Though easy to implement, these types of lifetime transfers can often have unintended consequences," says Lee.

For instance, adding a family member to the title of property or completely transferring the property to a family member is a taxable gift that, in some cases, could trigger a current federal gift-tax bill, he says.

In addition, if a child is co-owner on the property, then it would not qualify for the marital deduction, a tax break given to the first to die of either parent. Again, Lee says putting a child as a co-owner could create an unintended estate tax bill.

And in still other cases, adding a child as owner to a family cottage could result in a transfer tax and, worse yet, higher real estate taxes.

3. Create an LLC

Figuring out what "legal entity" should hold the family cottage must also be addressed, says Lee. Lee prefers using a limited liability company or LLC rather than a trust or "C" corporation to hold the property. The LLC is tax friendly. Plus, the LLC reduces exposure to liability.

"If mom and dad can get the kids to agree now and they are bound by those agreements there'll be less problems later," says Lee, who also recommends that family-cottage owners create an LLC to hold the property whether or not they have designs on passing it down to future generations.

4. Draft an operating agreement

Not matter how the family cottage is owned, Lee says it's crucial that there's an "entity agreement" in place that becomes the law of the land. The operating agreement, for instance, will spell out how the bills will be paid and the source of those funds.

In some cases, family members who don't use the family cottage as often as others will feel they may not have to pay as much toward the bills. The agreement will address that. In other cases, family members will collide on who gets to use the family cottage, especially around the holidays. The agreement will address that. Lee recommends that a family member serve as the calendar manager and another server as the operational manager.

And in still other cases, there will be disputes. The agreement will address how decisions will be made and how disputes will be resolved. That's especially important when it comes to sell the family cottage or one member of the LLC wants out.

In the latter case, Lee says the operating agreement will address how a member's share will be valued as well as perhaps how often a member can cash in their share of the family cottage.

-- Robert Powell has been a journalist covering personal finance issues for more than 20 years, writing and editing for publications such as The Wall Street Journal, the Financial Times, and Mutual Fund Market News.

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Key Indicators to Examine When

2006-09-26T07:23:00.000-07:00

Key Indicators to Examine When
Measuring the Housing Slowdown

From The Wall Street Journal Online

With the housing market clearly sagging, economists and investors are watching a variety of gauges to get a handle on the severity of the contraction.

Last week, the Commerce Department reported that construction starts on new homes dropped 6% in August from July, to an annualized 1.665 million. That "housing starts" figure was about 5% lower than forecast and 20% lower than the year earlier 2.075 million. The month-over-month decline was the sixth one this year and put housing starts at the lowest level in more than three years.

The government estimates housing starts by surveying a sample of people who have applied for building permits. In places where permits aren't required, the process includes driving around looking for new-home construction.

Other gauges track new-home sales, existing-home sales, median house prices and the inventory of unsold homes.

New-home sales for August will be released by the Commerce Department Wednesday, and are expected to be down about 17% from a year ago. July's sales were down 21.6% from a year earlier, to an annualized 1.072 million homes sold.

New-home sales figures reflect market trends more quickly than do existing-home statistics. That's because new homes are counted as sold when the contract is signed, and existing homes are counted as sold only when the deal closes, which may be 30 to 60 days later.

Existing-home sales data, coming Monday from the National Association of Realtors, are expected to be down about 13% from August 2005. The annualized rate of 6.33 million existing homes sold in July represented an 11.2% decrease from last year.

The median sales price of existing homes, which is a good indicator of the market's momentum, was $230,000 in July, up 0.9% from the July 2005 price of $228,000, according to the Realtors group. That's smaller than the double-digit year-over-year gains posted in 2005.

Some parts of the country, including the Northeast, the Midwest and the West, are reporting falling home prices. The Realtors association has said the national median house price may fall in coming months, although any decline is expected to be limited. August numbers will be announced with the existing-home sales figures Monday.

Meanwhile, there's been a spike in the number of existing homes for sale. The Realtors group says 3.86 million homes were on the market last month, up from 2.76 million a year earlier. In addition to reflecting a diminished appetite on the part of buyers, that growing inventory may reflect the unwillingness of sellers to lower their asking prices enough to tempt buyers. With more houses for sale, buyers have less incentive to bid up prices, and home builders have fewer reasons to start construction on more units.

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Bankers and Regulators Clash Over Surge in Real-Estate Loans

2006-09-18T07:41:00.001-07:00

By Bernard Wysocki Jr.
From The Wall Street Journal Online

Federal regulators are trying to hit the brakes on commercial real-estate lending. That annoys Bradley Rock, the chief executive officer of Smithtown Bancorp Inc.

Wheeling his black Lexus sedan toward the clubhouse of the Fox Hill Golf & Country Club, Mr. Rock gazed at the lush fairways of the 175-acre property, appraised at more than $15 million. The owners of the club owe $2.7 million to his bank. "You could sell the property for massively more than the debt," Mr. Rock said. "It’s impossible for the bank to lose money."

Like thousands of community banks across the U.S., Smithtown, of Hauppauge, Long Island, has feasted on commercial real-estate loans. About 80% of Smithtown’s $800 million loan portfolio is concentrated in that category, which Mr. Rock calls "the last safe, profitable niche" for community bankers trying to compete against giant banks. The banks consider these loans — the $1 million to $10 million loan to a home builder or strip-mall owner — to be their sweet spot.

To bank regulators, the rapid growth in commercial real-estate loans — up 16% in 2005 alone to $1.3 trillion — is alarming. In January, four regulatory agencies, including the Federal Reserve, proposed a clampdown. In a draft of new "guidance," they said banks exceeding certain levels of lending in construction and commercial real estate should step up risk monitoring or add capital, or both.

The proposed guidance wasn’t a hard rule and didn’t impose limits on lending, but the bankers went bonkers. The Independent Community Bankers of America, the American Bankers Association and more than 1,000 banks wrote protest letters. The community bankers, citing the government’s own reports, said commercial real-estate loan performance is healthy and growth is driven by employment and population growth. Bankers argued that their lending practices had become far more sophisticated since the last real-estate bust in the early 1990s, while the regulatory guidance had all the finesse of a meat cleaver.

A hearing on the issue before a House subcommittee is set for Thursday. Regulators probably will issue final guidelines sometime after that, and the implications could be significant. If regulators are too lax, there could be a raft of bad loans. If they are too tough, they could prompt a credit crunch, with small business owners unable to get loans. That could cast a chill on the entire U.S. economy.

Commercial real-estate loans "can be the sweet spot — or the tar pit" for banks, says Susan Bies, a governor of the Federal Reserve. It supervises bank holding companies and about 900 state banks, including the Bank of Smithtown, a wholly owned subsidiary of Smithtown Bancorp.

The regulators conjure up memories of the late 1980s and early 1990s, when aggressive lending led to overbuilding, vacant properties, price collapses and huge losses for taxpayers. From 1987 through 1994, more than 1,100 banks and nearly 1,000 savings-and-loan institutions failed or required financial assistance, according to the Federal Deposit Insurance Corp.

"It is hard to overstate the impact of that crisis on our economy," John Dugan, the comptroller of the currency, said in a speech to New York bankers in April. Mr. Dugan’s agency, part of the U.S. Treasury, supervises more than 2,500 nationally chartered banks.

Cracking Down

Though the guidance isn’t finalized yet — and, even when completed, won’t include hard-and-fast lending caps — examiners already are cracking down, say bankers. TransAtlantic Bank, of Miami, has cut back commercial real-estate loans in reaction to the regulators’ proposals, while expanding unsecured loans to doctors, lawyers and other business customers. Chief Executive Miriam Lopez says the unsecured loans are actually riskier; the bank has more than doubled its credit department to handle the change in strategy.

"Talk about unintended consequences," says Mr. Rock, who as vice chairman of the American Bankers Association is helping lead the charge against regulators.

The 54-year-old banker grew up in Hauppauge, 50 miles east of Manhattan, where he was a high-school football star. He worked as a lawyer before becoming chief executive at Smithtown in 1990.

He has produced strong results: soaring loan and deposit growth, rising profits and minimal bad loans. The bank says investors who bought its Nasdaq-listed stock in 1995 have enjoyed a more than 20-fold return on their investment.

The Smithtown formula involves gathering deposits, currently about $835 million, at 13 branches on Long Island. The bank then lends out the money at interest rates that are more than four percentage points higher, on average, than what it pays on deposits. Demand is robust in Long Island’s mostly white-collar economy, which has enjoyed strong job growth in health care and education, according to Moody’s Economy.com Inc., although it says high costs could crimp that growth.

The bank mostly steers clear of consumer lending, such as auto loans and credit cards. Residential real estate is just 14% of the loan portfolio. Mr. Rock says Smithtown can’t compete with the big banks that blanket the greater New York market.

"Citibank, Chase, Bank of America, they spend enormous amounts of money on the mass market," Mr. Rock says. "You need to be on television every night" with advertising, he says. "There’s no way we can afford to do that."

Instead, Smithtown has a small lending team of five people who specialize in making real-estate loans to businesses. One banker focuses on loans to homebuilders. Mr. Rock’s 24-year-old son recently joined the bank and is cutting his teeth on mortgages for small commercial buildings. The bank also lends to owners of multitenant office buildings and family restaurants.

In recent years, Mr. Rock has moved into the five boroughs of New York City, lending to smaller developers who might, for example, need a $5 million loan to convert an industrial building in Brooklyn’s trendy Williamsburg section into condominiums or rental apartments.

He has an army of loyal borrowers, such as Vincent Di Canio, a Smithtown developer who has received dozens of real-estate loans from the Smithtown bank over the past 25 years. Mr. Di Canio says he goes to the big banks only when he needs more than $10 million. He is worried the regulators’ guidance will cause Bank of Smithtown to cut back lending. "It would be detrimental to me and all midsized entrepreneurs," he says.

Mr. Rock acknowledges that real-estate busts occur and can be devastating. In his first years as CEO, in the early 1990s, his own bank had several loans go sour. Often, the bank hadn’t paid attention to the income stream on the borrower’s property, he says.

He slows his car to an intersection in Melville, just off the Long Island Expressway, and gestures at rows of 250,000-square-foot office buildings that were built in the 1980s, sometimes with financing from big banks. By the early 1990s, a number of the Melville buildings lay vacant and were sold at a loss.

"Here’s your 1980s real-estate bust," Mr. Rock proclaims. "The biggest amounts came from the biggest banks putting mortgages on the biggest buildings."

Mr. Rock believes most smaller banks such as his aren’t engaging in the sort of indiscriminate lending that caused trouble 15 years ago. Nowadays, he says, he ensures that a developer’s income from property is enough to pay down the mortgage, and he leaves an ample margin of safety in his loan portfolio in case real-estate prices turn south.

Mr. Dugan, who took over as comptroller in August 2005, is less sanguine. A former Washington lawyer with many financial institutions as clients, Mr. Dugan was heavily involved in the savings-and-loan cleanup as a U.S. Treasury official from 1989 to 1993. He declined to be interviewed, but his speeches leave no question about his concerns.

At a conference last October of credit experts from the Office of the Comptroller of the Currency in Atlanta, Mr. Dugan noted that about a third of national banks had commercial real-estate loans amounting to 300% or more of their bank capital. In its simplest definition, capital is equal to a bank’s assets minus liabilities. Under U.S. regulations, banks are required to hold a certain amount of capital, measured in various ways, as a financial cushion. Mr. Dugan urged his credit staffers to continue "carefully monitoring banks where these concentrations could become, or already are, significant."

Warning Letters

Within weeks, the office’s regulators in the field were sending out letters to banks, warning about concentrations.

Community bankers say the letters made them shudder. "I was very upset," says Everett Crawford, chief executive of First National Bank of Artesia, N.M. If he has to cut back such lending, "it will diminish the franchise," says Mr. Crawford, who worries the 103-year-old institution may have no choice but to sell itself.

By all accounts, banks have a much better handle on their loan portfolios these days than two decades ago. Nonetheless, regulators fear standards still aren’t strict enough sometimes.

The letter Mr. Crawford received was from Kay Kowitt, a deputy comptroller of the currency. She didn’t single out his bank but dwelt on several emerging problems among the 400 banks supervised by the western district of the agency. Noting that "competition in virtually all markets is intense," the letter fretted about "liberal terms for speculative land loans" and said some borrowers had only a thin margin between the cash flow from their property and their loan repayments. It also questioned whether some banks are getting fully independent property appraisals.

Regulators also believe new forces in the market are pushing up real-estate prices. One new factor: Unlike small banks, the biggest banks often are selling their commercial loans to be packaged into securities and sold to global investors. That market is making it easier for banks to come up with money for loans, which in turn boosts demand for commercial property.

In April, Mr. Dugan sounded the alarm bells again, this time before the New York Bankers Association. In the late 1980s and 1990s, he said, failed banks had three times the real-estate concentrations of banks that survived. With Mr. Rock looking on, Mr. Dugan also defended the guidance proposed by his agency and three others. It would single out for scrutiny banks that have lent more than 100% of their capital in construction or more than 300% of their capital in commercial real estate generally.

Smithtown’s portfolio is way over the guidelines because its commercial real-estate loans amount to 750% of, or 7.5 times, its capital. Mr. Rock believes it is simplistic to lump all commercial real estate into "a single bucket." His portfolio, he argues, should instead be viewed as "75 buckets" of diverse loans with different maturities and risks. Mr. Rock says he welcomes examinations, but he thinks examiners should dig down and assess the risks of individual loans and various types of loans.

In a June 20 meeting that Mr. Rock and officials from the American Bankers Association held with regulators, Mr. Rock complained that field examiners are using the measures in the guidelines to "beat up" banks with heavy concentrations of commercial real-estate loans. "Susan, here’s the essence of the disconnect," he says he told Gov. Bies of the Fed. "You call it guidance, but examiners are in my bank, criticizing me for having too many commercial real-estate loans."

Gov. Bies, in an interview, says she hasn’t received concrete evidence of overzealous activity by bank examiners, but she says the Fed will start a training program for its staff once the guidance becomes final. Regulators say their metrics are a valuable screening device to flag potential problems. Bankers say the definition of a commercial real-estate loan is too broad.

On a recent afternoon, Mr. Rock drove around Suffolk County, his prime lending area, and stopped outside a medical office building. He has extended a $350,000 line of credit to the doctors backed by the property, which he said is valued at two to three times that amount. He drove past one of Mr. Di Canio’s housing developments, with 34 single-family units under construction, and said his lenders minimize risk by doling out money little by little as the work progresses.

Then Mr. Rock drove a few miles out to the Fox Hill golf club. If the property ever got developed into houses on half-acre lots, he said, it could be worth $40 million or more. "This is just my idea of an absolutely great loan," Mr. Rock said. "But the regulators are saying I have a ‘concentration.’ So if another one comes along like this, I’m supposed to turn it down."

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Invasion of the Roof Snatchers; The Flat-Top Look Catches On

2006-09-18T07:41:00.000-07:00

By Sara Schaefer Munoz
From The Wall Street Journal Online

When it comes to flat roofs, beauty is clearly in the eye of the homeowner.

Eager to squeeze in more square-footage — and increase property values — while adhering to community height restrictions, a growing number of builders and homeowners are building homes with flat roofs. But these box-like structures and their party-friendly roof decks are sparking a backlash among neighbors who think the houses are homely, detracting from neighborhood character and blocking views and sunlight. Now, a number of communities are slapping new rules on builders that require sloping roofs.

Communities everywhere from Delaware to Washington are addressing roof pitch. The waterfront town of Bethany Beach, Del., several months ago passed a minimum-roof-pitch requirement after a spate of new, box-like homes dwarfed the town’s older cottages. St. Augustine, Fla., last fall banned flat roofs for homes on some smaller lots over concerns about style and rooftop parties, and the city of Kirkland, Wash., near Seattle, is holding a series of community meetings with homeowners and developers on house-to-lot ratios, which address, in part, concerns about the increase in flat-roofed homes.

Many popular home styles, of course, such as Prairie and Pueblo, have flat or low-pitched roofs. And in some parts of the country, such as Santa Fe, N.M., some ordinances even aim to keep roofs flat. Still, in many suburban American communities, the majority of homes have sloping roofs. But now, some Realtors, builders and local officials say, flat tops are increasingly infiltrating neighborhoods that traditionally featured sloping-roofed cottages and bungalows.

The trend is being driven in part by people seeking the best return on their investment amid soaring property values in recent years. It also demonstrates how zoning restrictions communities passed in recent years have backfired. In response to runaway development, many municipalities tried to prevent oversized homes on small lots. But in some cases, the unintended result was flat-roofed, boxy homes seen as out of character with surrounding styles. By using a flat roof, builders can sometimes squeeze in a second or third floor, adding square footage while staying under neighborhood height restrictions.

Kirkland, a city of about 50,000 people near the headquarters of Microsoft Corp., several years ago limited square footage on smaller lots, but officials say that move — coupled with height restrictions — may have encouraged flat roofs and boxy homes as people sought more space on the upper floor. "We may have gotten that wrong," says Kirkland Mayor Jim Lauinger. "When you have people taking away a peaked roof and putting on a flat roof to get additional volume, you’ve really altered what the neighborhood used to look like."

Steve Rabuchin, a Kirkland resident, learned that first-hand when a 5,000-square-foot, flat-top home went up recently on the lot below his 2,700-square-foot hill-side property. Because workers on the house chopped down trees, the Rabuchins now have a view of Lake Washington — but with a broad expanse of flat, black roof in the foreground. "They maxed out everything they possibly could and ended up with a box," he says.

Yet builders say the flat-roof style allows them to get the best return in areas where land is pricey. John Lux, a Kirkland-area developer, built five homes with flat roofs this year, compared with one in the previous two years, squeezing in two stories and a partially exposed basement by using the flat-roof style. "The city is wanting to see smaller homes on these lots, but it just doesn’t make sense financially," he says.

Flat roofs can also have drawbacks for owners. They generally don’t stand up well to heavy rain and snow, and can require more frequent maintenance than roofs with a traditional pitch, contractors say. Flat roofs can also be more expensive to build, requiring more structural support. Yet Realtors say that flat-roofed homes can have a "wow" factor from inside, offering higher ceilings and the possibility of roof decks.

But some Realtors say that out-of-place flat-roofed homes could be tougher to sell. "Most people don’t want a place that sticks out like a sore thumb," says Chuck Riley, a Realtor in the Washington, D.C., area.

Most homes going up with flatter roofs are in older neighborhoods, where the lots are so expensive that developers build as big as they can to make the investment worthwhile. Some big home builders are espousing the design: Pulte Homes Inc., based in Bloomfield Hills, Mich., recently put flat roofs on a town-home development in Baltimore as a way to offer roof decks and add more living space. The Maryland division president says the company is planning more homes in the same style.

Flattening the roof isn’t the only way builders are staying under height restrictions in certain neighborhoods. Builders will also grade the land higher at the base of the house, so the first story is partially underground and they can build higher, says Vince Butler, chairman of the Remodelers Council of the National Association of Home Builders. "When folks are trying to get the most space in their house they end up going up or down."

Builders also report that people on small lots increasingly are putting in big basements and protruding dormers — portions of a home that often don’t count against square footage restrictions. In some areas where regulations are strict and land is in short supply, it’s not uncommon for builders to lift an entire house up on hydraulic jacks and put in a partially exposed first story underneath. This adds another story without going over height limits; it also makes for easier approval by architectural review boards because the addition is partially underground, says Paul Winans, a California remodeler and chairman of the National Association of the Remodeling Industry.

Flat roofs can spur some strong emotions. In St. Augustine, Fla., residents in a series of meetings debated the merit of boxy homes before local officials passed an ordinance requiring that roofs on smaller lots have a minimum pitch. "When you plunk down one of these square boxes, it stands out — it’s an affront to the historic nature of the town," says John Marples, a resident who spoke at one of the hearings.

But residents Thomas and Elizabeth Dreisbach are chafing under the new restrictions. They own a 1,300-square-foot home on one of the city’s smaller lots. They would like to enlarge their house by adding a flat or slightly pitched roof to get a deck, more space and increase the home’s value. Now, they will have to request a variance. Otherwise, they’ll try to put a large roof deck on top of a sloping one, which Mr. Dreisbach says won’t look as nice. "These restrictions are just causing architecture to be uglier and are taking money out of people’s pockets," he says.

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Foreclosure Figures Suggest Homeowners in for Rocky Ride

2006-09-18T07:40:00.000-07:00

By Danielle Reed
From The Wall Street Journal Online

By any measure, things are getting tougher for American homeowners.

Online foreclosure-data service RealtyTrac of Irvine, Calif., said yesterday 115,292 properties nationwide entered some stage of foreclosure last month, a rise of 24% from July and nearly a 53% increase from a year earlier.

Also yesterday, Foreclosure.com of Boca Raton, Fla., which also tracks foreclosures nationwide, said new residential foreclosures fell by 6.7% in August from July to 26,255 nationwide. The company’s figures, however, show that foreclosures are up 7.3% compared to August 2005.

The divergent results can be explained by the way each company counts foreclosed properties. RealtyTrac data includes properties in the early stages of a foreclosure proceeding, even before the bank actually owns those properties. About 60% of these get remedied or the properties are sold before they get to the auction stage, said Rick Sharga, vice president of marketing for RealtyTrac.

A spokesman for Foreclosure.com said it only reports properties officially foreclosed and in the hands of the banks.

The trend is supported by data collected by the Mortgage Bankers Association, which reports the number of U.S. households late on mortgage payments fell slightly in the second quarter, but that a modest rise in delinquency and foreclosures is expected going forward.

The delinquency rate for residential mortgages was 4.39% in the April-June period, down from 4.41% in the previous three months, the MBA said in a survey that included 42.5 million loans. Home mortgages in foreclosure made up 0.99% of total mortgages at the end of the quarter, up from 0.98% three months earlier.

The MBA expects further cooling in the economy and the housing market, which in turn could lead to "modest increases in delinquency and foreclosure rates in the quarters ahead," said Douglas Duncan, MBA’s chief economist and senior vice president of research and business development.

RealtyTrac Chief Executive James J. Saccacio noted that billions of dollars of adjustable-rate mortgages that have benefited from a stable fixed rate of interest over the past two years are due to shift to higher floating rates in coming months.

"With home-price appreciation continuing to decelerate," he said, August’s "increase could be the beginning of an upward shift in the foreclosures market."

Foreclosure.com President and CEO Brad Geisen said while the company has continued to see fluctuations in month-to-month data, "as we near the end of the third quarter, most housing and economic indicators point to a sustained period of increased new foreclosure activity across the country."

Foreclosure.com noted that the West was becoming "an emerging foreclosure hot spot," with new foreclosures in Arizona up 155% in August from July. Foreclosures in California were up 32% and New Mexico saw a 10% increase.

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Builders offer incentives to entice new home buyers

2006-09-18T07:39:00.000-07:00

Asbury Park Press on 09/15/06

BY MICHAEL L. DIAMOND
BUSINESS WRITER

Melissa and Frank Picciolo had already made a deposit this summer on a new Manalapan home built by Hovnanian Enterprises Inc., when they decided to press their luck.

They wanted a finished basement. They wanted upgraded kitchen cabinets. And they didn’t hesitate to ask.

"Within two weeks after we put a deposit down, we went back and forth; could we include this and that? They would go back to their administration, come back and say, "Yes we can do that,’ " said Melissa Picciolo, 30.

Shore-area home builders are struggling with a downturn in the residential real estate market for the first time in nearly a decade. Builders are holding the line on price increases, but they’re offering incentives and slowing their production.

It has created opportunities for buyers such as the Picciolos, but it has also created financial difficulties for builders.

"With the economy the way it is, we’re ready to negotiate, which is something home builders haven’t had to do a lot of" in recent years, said Douglas Fenichel, spokesman for Red Bank-based Hovnanian. The company, New Jersey’s largest home builder, has seen its stock price fall nearly 50 percent during the first eight months of the year.

Home builders are slowing down nationwide. New home sales in July were down 21.6 percent from the same month a year ago, according to the U.S. Commerce Department.

New Jersey’s decline hasn’t been as pronounced, but the state isn’t immune from the nation’s real estate troubles.

"We’ve come off a little bit from last year, but the market here is not slowing anywhere near as rapidly as in other areas of the country," said Patrick J. O’Keefe, chief executive officer of the New Jersey Builders Association. "We weren’t at the white-hot levels that were prevalent elsewhere."

What’s the problem? O’Keefe and other experts said it’s a combination of rising interest rates and workers’ wages that aren’t keeping up with home prices.

Mortgage rates, which were at historic lows, essentially allowing home buyers to afford more expensive homes, have been rising for several months. The average 30-year fixed-rate mortgage in New Jersey was 6.5 percent for the second quarter, compared with 5.79 percent for the same quarter a year ago, according to the National Association of Realtors.

Moreover, homes are getting less affordable. New Jersey consumers who want to buy a median priced home, which was $373,900 during the second quarter, need to make $90,768 a year. The median family income, however, was $81,309, according to the association.

Economists have said much of New Jersey’s job growth this decade has come from lower-paying jobs instead of the technology, telecommunications and pharmaceutical sectors that once were synonymous with the state.

"There is a very cautious eye being cast on the horizon, not solely because of cyclical reasons, but because New Jersey’s competitive position is weak and getting weaker relative to the rest of the country," O’Keefe said. "An economy that is losing its economic momentum is one where the housing sector is in danger of losing customers."

Home builders have been hurt this year. Hovnanian in August lowered its third-quarter earnings expectations to $1.10 to $1.20 a share from its previous guidance of $1.40 to $1.50 a share, in part because of a slower sales pace and more pronounced use of concessions and incentives.

Meanwhile, Toll Brothers Inc., a Horsham, Pa.-based company that regularly builds in New Jersey, said its net income of $174.6 million, or $1.07 a share, for the third quarter, was down from net income of $215.5 million, or $1.27 a share, the same quarter a year ago. Its stock is down about 30 percent this year.

"The continuing malaise in the housing market, we believe, is the result of an oversupply of inventory and a decline in (consumers’) confidence," said Robert I. Toll, the company’s chairman and chief executive officer.

O’Keefe said home builders don’t want to be stuck with inventory, which is an expensive scenario since they would have to pay for property taxes and maintenance. So they have offered more incentives, such as premium lots at no extra charge, finished basements and slick kitchen appliances.

It’s a scenario that puts buyers in a stronger position. The Picciolos have a 2-year-old daughter, Victoria, and they are outgrowing their Old Bridge home. So they signed a contract to buy a home at Hovnanian’s Meadow Creek development in Manalapan that will give them nearly twice as much room, Melissa Picciolo said.

She said they considered the declining state of the real estate industry before they bought the house, but jumped in anyway; they think they can sell their current house relatively easily and mortgage rates are still considered low.

"It worked out really nicely," Picciolo said. "I was excited about the basement for my husband and daughter and the kitchen for me. There was something for all three of us."

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Locals urge U.F. to keep Sharon Station Road

2006-09-18T07:30:00.000-07:00

BY JANE MEGGITT

http://examiner.gmnews.com/

UPPER FREEHOLD - For at least a quarter of a century, the township has been asking the county to take jurisdiction over Sharon Station Road.

However, at the Sept. 7 Township Committee meeting, the governing body voted 4-1 to ask the township engineer to suspend all work related to the transfer of jurisdiction until the township attorney completes a review of local truck bans and related matters. Deputy Mayor William Miscoski abstained from the

presentation submitted by members of his and other subdivisions who call themselves Concerned Residents of Upper Freehold.

After citing several dangerous truck traffic incidents occurring on Sharon Station Road and near the Galloping Brook development off Route 526, Nolan said it is the safety of their children that most concerns residents.

Nolan said that residents have met with the county about this situation, and were encouraged by the answers given about possible remedies to the problem.

"We are disappointed," he said, "that our [Township] Committee advised us to perform this task ourselves rather than doing it on our behalf."

Nolan said that the Township Committee had cited the need to connect county roads with other county roads as a reason for transferring the jurisdiction of Sharon Station Road to the county. He said Township Engineer Glenn Gerken has stated that the township would benefit from the alleviation of maintenance costs associated with the road.

However, Nolan said that the county does not budget for additional miles of road and would only accept Sharon Station Road if the township agreed to take some other roads back into its own budget.

Housing Market Will Deflate Economy, Economist Says

2006-09-13T06:58:00.000-07:00

By Rex Nutting
From MarketWatch

The United States is headed for a recession that will be "much nastier, deeper and more protracted" than the 2001 recession, says Nouriel Roubini, president of Roubini Global Economics.

Writing on his blog Wednesday, Roubini repeated his call that the U.S. would be in recession in 2007, arguing that the collapse of housing would bring down the rest of the economy.

Roubini wrote after the National Association of Realtors reported Wednesday that sales of existing homes fell 4.1% in July, while inventories soared to a 13-year high and prices flattened out on a year-over-year basis.

"This is the biggest housing slump in the last four or five decades: every housing indictor is in free fall, including now housing prices," Roubini said. The decline in investment in the housing sector will exceed the drop in investment when the Nasdaq collapsed in 2000 and 2001, he said.

And the impact of the bursting of the bubble will affect every household in America, not just the few people who owned significant shares in technology companies during the dot-com boom, he said. Prices are falling even in the Midwest, which never experienced a bubble, "a scary signal" of how much pain the drop in household wealth could cause.

Roubini is a professor of economics at New York University and was a senior economist in the White House and the Treasury Department in the late 1990s. His firm focuses largely on global macroeconomics.

While many economists share Roubini's concerns about imbalances in the global economy and in the U.S. housing sector, he stands nearly alone in predicting a recession next year.

Fed watcher Tim Duy called Roubini the "the current archetypical Eeyore," responding to a comment Dallas Fed President Richard Fisher made last week in referring to economic pessimists as "Eeyores," after Winnie the Pooh's grumpy friend.

"By itself this slump is enough to trigger a U.S. recession: its effects on real residential investment, wealth and consumption, and employment will be more severe than the tech bust that triggered the 2001 recession," Roubini said.

Housing has accounted, directly and indirectly, for about 30% of employment growth during this expansion, including employment in retail and in manufacturing producing consumer goods, he said.

In the past year, consumers spent about $200 billion of the money they pulled out of their home equity, he estimated. Already, sales of consumer durables such as cars and furniture have weakened.

"As the housing sector slumps, the job and income and wage losses in housing will percolate throughout the economy," Roubini said.

Consumers also face high energy prices, higher interest rates, stagnant wages, negative savings and high debt levels, he noted.

"This is the tipping point for the U.S. consumer and the effects will be ugly," he said. "Expect the great recession of 2007 to be much nastier, deeper and more protracted than the 2001 recession."

He also sees many of the same warning signs in other economies, including some in Europe.

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Housing Slump Proves Painful For Some Owners and Builders

2006-09-13T06:57:00.000-07:00

By James R. Hagerty and Michael Corkery

From The Wall Street Journal Online

For years, real-estate brokers and home builders promised that the soaring property market eventually would glide to a soft landing. These optimists predicted that home prices, which had more than doubled in parts of the country between 2000 and 2005, would continue to rise, but at a more normal pace of 5% or 6% a year.

It isn't working out that way. The rapid deterioration of the market over the past 12 months has caught many homeowners and builders off guard. Some are being forced to cut prices far below what their homes could have fetched a year ago. It's too early to say how hard the landing will be, but at a minimum it will be bumpy for many people who need to sell homes. And the economy as a whole, buoyed in recent years by the housing frenzy, could suffer.

The pain that homeowners and home builders are now feeling follows a raging national house party. As Americans soured on the stock market after the tech bubble burst in 2000, they poured money into real estate, spurred on by the lowest interest rates in four decades and looser lending standards. Surging demand created home shortages in California, Florida and the Northeast. Over the five years ending Dec. 31, average U.S. home prices jumped by 58%, according to a federal housing index.

But mortgage rates began rising and surging inventories of homes for sale finally caught up with demand. Though economists had been predicting a slowdown in housing for years, many homeowners and builders were surprised by how fast the market changed. "It's just like somebody flipped a switch," says Lynn Gardner, a real-estate auctioneer who works in Northern Virginia.

"It would be difficult to characterize the position of home builders as other than in a hard landing," says Robert Toll, chief executive of luxury home builder Toll Brothers Inc., which reported yesterday that net income fell 19% in the third quarter ended July 31.

In his 40 years as a home builder, Mr. Toll says, he has never seen a slump unfold like the current one. "I've never seen a downturn in housing without a downturn in employment or... some macroeconomic nasty condition that took housing down along with other elements of the economy," he says. "This time, you've got low unemployment, you've got job creation, you've got a stable stock market and relatively low interest rates."

Joan Guth is one homeowner who was taken by surprise. Last September, she put her stately five-bedroom home in Herndon, Va., on the market for about $1.1 million. She was confident she would get something near that price, and planned to use the proceeds to buy a retirement home in Florida. But her home in the Washington suburbs attracted few serious lookers, and in March, she cut her asking price to $899,900. Still there were no takers. Finally, on the advice of her broker, she called in an auction firm, beginning a process that would eventually reveal to her just how weak the Northern Virginia market had become.

In much of the country, property markets began cooling rapidly in the second half of last year. Home builders were still turning out houses at a rapid clip, and the surge of new and previously occupied homes on the market convinced buyers there was no need to hurry. Over the past year, the number of previously occupied homes listed for sale nationwide has risen nearly 40%. In some metropolitan areas, including Orlando and Phoenix, the supply has quadrupled.

Investors who during the boom had been snapping up properties from the outskirts of Phoenix to the slums of Baltimore began dumping them on the market, hoping to get out with a profit before it was too late.

The resulting slump, thus far, is being felt mainly on the East and West coasts and in Florida, where home prices had soared beyond the average working family's ability to pay. In California's San Diego County, the median home-sale price was $487,000 in July, down 1.8% from a year earlier, according to DataQuick Information Systems, a research firm in San Diego. Prices in the Northern Virginia counties of Fairfax and Arlington and in nearby towns, near Washington, averaged $537,731 in July, down 3.9% from a year earlier, according to the Northern Virginia Association of Realtors.

In some other parts of the country, notably Texas and the Seattle area, local housing markets remain robust. Texas' low housing costs are attracting new residents and investors, while Seattle's strong job market and shortage of homes have kept prices rising.

Nationwide, the median sale price of previously occupied homes in June was 0.9% higher than it was a year earlier, the smallest year-to-year increase since May 1995, according to the National Association of Realtors, a trade group. Over the next few months, the median price may decline from year-earlier periods, a spokesman for the association says, something that hasn't happened since February 1993.

The market may be weaker than the Realtors' widely followed monthly reports suggest. The group's data don't reflect the latest transactions. Its report on July home sales, for instance, due today, will mainly reflect sales that were agreed upon in May or June and closed in July. Moreover, when the market turns down, many home sellers initially let their homes sit instead of cutting prices enough to entice buyers.

Allen Sinai, chief economist at Decision Economics Inc., a New York research firm, contends that housing is poised for something "harder than a soft landing but softer than a hard landing." The weaker market will hurt the economy by eliminating jobs in construction and other housing-related fields and by reducing the ability of consumers to finance spending by borrowing against their home equity. Mr. Sinai predicts these factors could shave as much as a percentage point off economic growth over the next year or so. Taking that into account, he expects the economy to grow at a relatively sluggish annual rate of 2.5% to 2.75% in 2007, compared with 2.5% in this year's second quarter and 5.6% in the first quarter.

In a speech yesterday, Michael Moskow, president of the Federal Reserve Bank of Chicago, noted: "While we factor a housing slowdown into our outlook, there is some evidence -- such as higher rates of cancellation in home-building contracts -- that the slowdown could be more extensive."

With fewer consumers applying for home loans, some big mortgage lenders are already retrenching. Countrywide Financial Corp. last month announced plans to reduce costs by $500 million. Earlier this year, Washington Mutual Inc. eliminated 2,500 jobs at loan-processing centers.

Builders, who were optimistic about prospects until a few months ago, are cutting back too. KB Home, a big home builder based in Los Angeles, has eliminated 7% of its work force, or 440 jobs. In July, U.S. home builders started construction at an annual rate of 1.45 million single-family homes, down 20% from the January peak.

Last August, when Horsham, Pa.-based Toll Brothers reported that its quarterly profit had doubled, Mr. Toll boasted: "We've got the supply, and the market has got the demand. So it's a match made in heaven." Since then, Toll has cuts its guidance four times on the number of homes it expects to close on, and its share price has fallen by more than 45%. Yesterday, the company said orders for new homes in the third quarter were down 48% from a year earlier.

Mr. Toll blames a "drop in confidence" among prospective home buyers, who he says are worried about "the direction of America" and the situation in Iraq. The retreat of speculators who were buying and "flipping" homes also hurt the market, he says. Such speculative buyers, who Mr. Toll estimates accounted for about 10% of demand one year ago, are now sellers.

Even so, Mr. Toll contends that new household formation, immigration, job creation and rising affluence are currently producing a pent-up demand for housing. Once Americans believe that home prices have bottomed, he argues, they will rush back into the market, although he is unwilling to predict when that will happen.

At D.R. Horton Inc., the nation's largest home builder by units built per year, executives said late last year they were confident that quarterly earnings would continue to increase even during a housing-market slump. In July, Horton reported a 21% decline in net income for the third quarter ended June 30, the first quarter in 28 years in which it didn't report year-over-year profit growth. Horton's chief executive, Donald Tomnitz, said the surge in home prices had priced many people out of the market.

"Every time we've gone into a downturn in the home-building industry, they've always been longer and deeper than we've all imagined," Mr. Tomnitz told analysts in a July 20 conference call. "So we're preparing for the worst, and we think this one will be longer and deeper than just the last six months."

For some homeowners who bought as the market was peaking last year, the downturn is already creating a financial pinch.

In April 2005, Jennifer Bloom paid about $229,000 for a condominium in Yarmouth Port on Massachusetts's Cape Cod, where her son planned to live. After his plans changed, Ms. Bloom, a software specialist for a computer company, decided early this year to sell the condo. She initially listed it at $229,000, and then gradually shaved the price to $199,000 as the market weakened. Earlier this month, she gave up on finding a buyer at a price she could bear to accept. Instead, she is renting out the condo for $1,000 a month, which she says is more than $200 below her monthly costs for mortgage payments, insurance, taxes and other items. She says she intends to hold off on selling it until the market improves.

The slump has been particularly harsh in Northern Virginia, where in recent years, large home builders have turned open fields and wooded lots into new subdivisions. Inventories of unsold homes here have risen 147% over the past year, compared to a 40% increase nationally.

Would-be sellers such as Tahir Javed, a 36-year-old management consultant, are growing frustrated. One year ago, Mr. Javed decided to move up from his town house in Ashburn, Va. He signed a contract to buy for $983,000 a four-bedroom brick colonial that a developer planned to build in nearby Leesburg. He put down a $60,000 deposit and planned to move into the new house in October 2006.

In May, Mr. Javed put his town house on the market for $499,900, which he says is far above the $212,000 he paid in 1999, but in line with asking prices for similar homes in the neighborhood. He hasn't been able to find a buyer, and the balance he owes on his new house -- about $920,000 -- is due in about six weeks.

Mr. Javed says he asked the builder for a price break, but the answer was no. He's considering cutting the asking price for his town house to slightly under $470,000, and if that doesn't work, he may try to find a renter. He had planned to use the money from selling the town house as a 20% down payment on what he owes on his new home, and to borrow the other 80%. Now he may need a bigger loan, which could carry a higher interest rate, he says. "That is the painful part," he says.

Ms. Guth, whose home in Herndon, Va., had failed to attract a buyer after months on the market, eventually turned to Tranzon Fox, an auction firm based in Burke, Va. Ms. Guth had based her initial $1.1 million asking price on a 2005 appraisal of her home, which now appeared far off the mark. She and her family decided they would accept the highest bid of at least $675,000.

Kristin Eddy, a 35-year-old pediatric occupational therapist living in a town home in Reston, Va., had noticed Ms. Guth's dark-green turreted home with its wraparound verandas while riding her bike along a nearby trail. "I've had my eye on that house for a long time -- as a dream," Ms. Eddy says. When it first went on the market, it was far beyond her price range. Then she noticed the sign announcing the auction.

On the morning of Aug. 5, the auctioneer, Stephen Karbelk, set up loudspeakers on Ms. Guth's side lawn. Ms. Guth handed bottles of chilled water to the several dozen bidders and curious neighbors who showed up. "I have a whole stomach full of butterflies," Ms. Guth said.

Ms. Eddy figured her chances of winning were near zero. When the auction began, it became clear that there were only two serious bidders. Although Mr. Karbelk tried to stir excitement, the bidding petered out within minutes. Ms. Eddy was the high bidder, at $475,000.

Looking stricken, Ms. Guth and one of her sons huddled with their broker for a few minutes. Then they told the auctioneer they wouldn't accept the bid, which fell below the stipulated minimum that hadn't been revealed to bidders. The auction was over.

Ms. Guth said she would move and leave the house empty until she could sell it at a reasonable price. Late that afternoon, Ms. Eddy raised her offer to $525,000. The Guths wavered for two days before agreeing to accept about $530,000. Ms. Eddy is getting a home with five bedrooms, four full bathrooms, a half-acre lot and a three-car garage for about what some people had been paying until recently for town houses in the area.

Ms. Guth has revised her retirement plan. The disappointing auction result made it difficult for her to afford the kind of home she wanted in Florida. She has decided to buy a home in South Hill, a rural area of south-central Virginia where home prices are cheaper than they are in either Florida or the Washington suburbs. She thinks she can find a home there for $175,000 or less.

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We have hundreds of listings of homes for sale in your area. If you are interested in buying a house feel free to search through our database. This is a free service and we have a low-pressure policy. We list homes for sale in Manalapan NJ, Point Pleasant Beach real estate and many other New Jersey properties for sale. There is a lot of property for sale in New Jersey. We are the realtors NJ!

The Pros and Cons of Being A Residential Real-Estate Agent

2006-09-13T06:56:00.000-07:00

By Aja Carmichael
From The Wall Street Journal Online

The job: A residential real-estate agent

The pay: Agents are paid by commission. The median annual pay for a real-estate sales agent is $37,600, according to the National Association of Realtors. In New York, an agent who's starting out can make as much as $70,000 a year -- if successful -- while in Washington, an agent could earn $80,000. Some also receive year-end bonuses.

The hours: Agents who handle the sales of luxury homes in popular markets say they sometimes work as many as 70 hours a week.

Benefits: Independent-contract agents don't receive benefits, though many pay for medical coverage through a trade group, such as the National Association of Realtors.

Other incentives: Vary -- some top-selling agents can receive complimentary trips to exotic destinations, while some offices offer treats like weekly massage services. Agents with high-profile clients may also receive invitations to exclusive events.

Career path: Many agents say starting as an assistant to another agent helped them learn the industry from the ground up. Agents, who are licensed by state, need to have strong negotiating skills and know their local housing market as well as the past of buildings they're selling. "When you're selling a home you're literally selling a piece of history," says John T. Mahshie, an associate at Tutt, Taylor & Rankin, an affiliate of Sotheby's International Realty in Washington.

Best part of the job: Helping people find a home, and making friends. "The American dream is to own a house," says Anthony Abdalla, a real-estate agent at Coldwell Banker's Town & Country Property in Clarks Summit, Pa. "It's so rewarding to help people reach their dreams."

"The nature of what I do is so personal," says Joan Sacks, an associate broker at Stribling & Associates in New York. "My business relationships with these total strangers end up as friendships. They become part of my social circle and to me that's a perk."

Worst part of the job: When a deal falls through. "It's frustrating not being able to have [complete] control of a deal," says Wendy J. Sarasohn, a real-estate broker at Corcoran Group Real Estate in New York. "Sometimes things do not work out, so I've learned to be more resilient and to find my clients better deals."

"Most people's homes are their primary assets, so some tend to be emotional about selling," notes Drew Kern, a real-estate agent at Esslinger-Wooten-Maxwell Realtors in Coral Gables, Fla., a subsidiary of HomeServices of America. "To help them sell, you have to make sure their personal and financial goals are met."

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Lenders' Workout Programs Offer Help for Borrowers in Trouble

2006-09-13T06:55:00.000-07:00

By Andrea Coombes
From MarketWatch

http://www.realestatejournal.com/

Whether it's from a job loss, medical emergency, mortgage-payment hike or simply personal-finance mismanagement, a small but growing number of homeowners is falling into foreclosure every year.

For most people who fall behind on their mortgage, their first instinct is to avoid all contact with the lender. But that's a mistake, consumer counselors and others say, because it's likely those financial problems will only get worse, making it harder to work out the best repayment terms.

Many borrowers don't realize that lenders are as eager as homeowners to avoid foreclosures, which cost lenders $40,000 to $60,000 per house, according to industry estimates. Most lenders offer "workout" programs where they work with the borrower on repayment plans that meet the borrower's financial circumstances.

"Going to the lender is ideal. The sooner, the better," said Erica Sandberg, a spokeswoman with the Consumer Credit Counseling Service of San Francisco, certified by the U.S. Housing and Urban Development Department to provide housing counseling.

Lenders agree. "It's never too early and never too late to call your lender," said Loretta Abrams, vice president of consumer affairs for HSBC North America.

And, "any of our borrowers can approach our workout staff," said Tim McGarry, spokesman at Washington Mutual. "It's always our goal to keep people in homes. Foreclosure is a bad outcome for us as a lender."

Justifiably nervous

But plenty of borrowers -- about half, according to some focus-group research -- are afraid that divulging their money woes to their lender will prompt the lender to accelerate the foreclosure process.

That fear is not surprising: Often, when borrowers fall into financial difficulty, their first contact with the lender may encourage them to run in the other direction the next time the phone rings. That's because many lenders, if a borrower is 30 to 60 days' late, initially have the collections department call.

"A collection agent's job is really to get you to pay. They want to know when you're going to pay, how much you're going to pay, how you're going to pay," said J. Michael Collins, a principal at PolicyLab Consulting Group, LLC, a market-research firm focusing on consumers' financial decisions, in Ithaca, N.Y. "It's a very ... aggressive approach."

It's not until the borrower is close to defaulting on the loan that lenders move the account to the "loss mitigation" department, staffed not by collection agents but by people trained to work with the borrower to prevent foreclosure, Collins said.

Some lenders already understand this issue. "Lenders who are working with borrowers who have a history of credit problems, they understand that the first time you make contact with that borrower when they're in trouble, you've got to facilitate a cooperative relationship," Collins said. "But what a lot of lenders are used to is more of a market where people have more income. There's no real good reason for somebody not to pay" is the standard thinking.

Still, Collins says he sees a shift happening, with more prime-market lenders realizing the importance of making that initial contact with the borrower a cooperative one.

Maybe that's because some see delinquency and foreclosure rates getting worse before they get better, thanks to more people holding loans with adjustable rates set to move higher. In some cases those adjustments will push up monthly mortgage bill 30% or more.

More foreclosures coming?

Adjustable-rate mortgages are a growing portion of the mortgage-loan market, accounting for about one-fourth of all home loans nationwide, and three-fourths of subprime home loans in 2005, according to a recent report by ACORN, an advocate for low- and moderate-income families.

"While foreclosure activity continues to remain slightly below historical averages, the number of properties in some stage of foreclosure from January to July has increased by 39% compared to the same period of 2005," said James Saccacio, chief executive officer of RealtyTrac, a foreclosure-tracking company, in a recent press release.

First-quarter data from the Mortgage Bankers Association shows delinquency and foreclosure rates essentially flat, and still a small portion of the overall loan market. But there's been an up-tick in late payments among borrowers with subprime credit.

About 4.41% of all loans were late 30 days or more in the first quarter compared with 4.31% for the first quarter in 2005, according to MBA. That delinquency rate includes homes in the foreclosure process.

For loans held by borrowers with subprime credit, 12.02% of adjustable-rate loans were delinquent, up from 10.25% a year earlier, according to the MBA, which says its survey covers about 80% of residential mortgage loans in the U.S.

"When these people get faced with their first increased payment and their payment goes from $600 to $1,200, that's very difficult for folks to deal with," Collins said. Some borrowers "had no idea their payment was going to go up this much," he said, citing his research with focus groups of borrowers in default on their adjustable-rate mortgages.

And it's not only working-class people who are surprised, said Douglas Robinson, a spokesman for NeighborWorks America, a nonprofit company that works on housing and community-development issues.

"We're seeing more and more middle-income homeowners who are in trouble, particularly on the coasts -- the Boston, New York, California markets where home buyers may have stretched just a little bit to get into that house in those high-priced markets ... and for whatever reason they miscalculated the increase that would occur," Robinson said.

Consumer counseling agencies also say they've seen a rise in the number of people coming to them with mortgage-related problems.

"We're seeing a surge in the people who are calling because they have [adjustable-rate mortgages] and they can no longer afford the monthly payment," said Sandberg, of CCCS in San Francisco. "They end up behind on their credit-card payments. Then they can't refinance the mortgage because their credit is damaged. Then they're stuck with these high mortgage payments and damaged credit."

Meanwhile, the number of homeowners seeking help from her agency in preventing a foreclosure jumped 125% in the past two years, said Betty Parker, housing coordinator for the Consumer Credit Counseling Service of North Central Texas. "We see well over a hundred foreclosure preventions a month," she said.

What to expect

The good news is lenders do want to work with borrowers. If your lender's collection department is still calling you, consider working with a third-party housing counselor.

You can reach housing counselors by calling 888-995-HOPE, a number recommended by NeighborWorks America. Or you can call 866-845-2227 to reach one of 1,000 housing counselors certified by the National Foundation for Credit Counseling.

Be sure to confirm the U.S. Department of Housing and Urban Development has certified those counselors.

"It's better if they're working through an agency. I think the lender will be more responsive," said Ron Chicaferro, executive vice president of Thornburgh Mortgage, in Santa Fe, N.M.

When you start negotiating, your lender will likely offer you one of its "loan workout" options, which tend to be about the same across lenders, though some lenders are more willing to work with borrowers than others. "Some of them are great and some of them are ... a little more challenging," Parker said.

One option is a repayment plan, where any late payments are spread out and added to your regular mortgage bill. Another common option: Forbearance, where mortgage payments are reduced or suspended for a set period of time.

Some borrowers are eligible for mortgage modification, essentially a rewriting of the loan to extend its term or to reduce the interest rate.

Then, there's the short sale: In a situation where the borrower is simply unable to maintain the mortgage payment, the lender will sometimes allow the borrower to sell the house for less than the outstanding balance on the loan.

The borrower has to arrange the sale, but gets to walk away without a foreclosure on record (though the seller may owe taxes on the portion of the loan that the lender has forgiven). The lender doesn't have to deal with foreclosure proceedings or with selling the house.

Plenty of Web sites offer valuable information:

Tips on avoiding foreclosure, from CCCS of San Francisco

The Hope for Homeowners site also has tips

The NeighborWorks America site also has useful information

Also, check your state and city Web sites for "consumer affairs" or "consumer services" - they often list homeowner assistance programs, said Abrams, of HSBC.

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Art with a Message: Buy This House

2006-09-13T06:54:00.000-07:00

By Kelly Crow
From The Wall Street Journal Online

For years, the Seattle Art Museum has let its most generous supporters rent original artworks from its auxiliary gallery, charging $40 to $600 a month so patrons could create temporary exhibitions in their homes. But now the museum has a burgeoning new market for its highbrow rentals -- home sellers in search of an artistic edge.

Museum officials say they've seen a spike in their art-rental business thanks in part to home stagers, who redecorate houses in hopes of boosting their sales prices and increasing the odds of selling. One Seattle artist popular with this set: abstract expressionist Drake Deknatel, whose paintings have been used in some 200 homes, according to gallery records and one of the city's largest staging companies. "It's amazing how it's taken off," says SAM Gallery director Barbara Shaiman.

As home sales slow in many areas and more houses linger on the market, some sellers are going to greater lengths to catch the buyer's eye -- by installing splatter paintings by emerging artists, 7-foot-tall metal sculptures, even works by Calder and Dali. It's a pronounced shift in the strategy of staging, which traditionally held that the fastest way to sell homes, and get the highest price, was to give them a toned-down, hotel-style makeover. Now, rather than merely boxing up family knick-knacks, adding a new couch or repainting the bedroom in jewel tones, stagers are experimenting with a riskier approach.

The new practice is boosting business for art institutions. At the SAM Gallery, revenue has more than doubled in four years, to $1 million, says Ms. Shaiman. Sales have doubled since 2001 over at the Larsen Gallery in Scottsdale, Ariz., in part because of bigger orders for contemporary art from homeowners and sellers of the area's new, loft-like buildings. At New York City's Agora Gallery, director Angela Di Bello says she fields at least five calls and emails a day from inquiring real-estate agents, up from "none" a few years before. "I've been in this business 25 years, and I've never seen anything like it," she says.

Last week, securities lawyer Eric Klein and his wife, Susan, put their home in Encino, Calif., on the market for $1.5 million after dressing it up with a dozen pieces of rented art. Outside, the two-story, four-bedroom house looks much as it did when the couple bought it 12 years ago for $630,000, with the same blue-gray wood shingles and yard full of lemon and apple trees. But inside, the place looks like a gallery. There's a cherry-red canvas with black, green and blue geometric shapes by neo-Surrealist Patrick Slattery in the living room, and a brick collage sculpture by Sandy Bleifer hung on the wall of the curved staircase. Rather than enlist the advice of a stager or designer, the Kleins visited the Art Rental and Sales Gallery of the Los Angeles County Museum of Art and selected works that suited their own taste. Total cost to rent: $750 a month. "The art just brightens up the rooms immensely," Mr. Klein says. "And it's cheaper than renovating."

Falling in Love

The strategy isn't foolproof, certainly. In February, Santa Fe resident Wendy Jacobs went on a broker-sponsored homes tour, where she saw a $1.9 million mansion that had been decked out with art and furnishings. But rather than make an offer on the house, the retired public affairs executive called Aleta Pippin, one of the artists featured, and bought her painting, "Path to Freedom," for $1,200. The house is still on the market, brokers say. "It was the art I fell in love with," says Ms. Jacobs.

Loaner art is fairly easy to come by. A handful of museums and a host of galleries and leasing services nationwide rent art for temporary use, with monthly fees from $25 to $8,000 per work and rentals allowed, in some cases, for up to two years. The Artists Gallery at the San Francisco Museum of Modern Art has a revolving inventory of 3,000 works by lesser-known regional artists that it rents in two- or three-month increments for $60 to $800. Renters don't have to be museum members, and half of the fee for the first few months can be applied to purchase of the piece.

Even works by established artists -- including Salvador Dali, Robert Indiana, Larry Rivers and Lorna Simpson -- can be rented from places such as Scottsdale's Larsen Gallery. Typically, rental rates are 2% of the artwork's retail price.

Art-world insiders aren't surprised that real-estate types have seized upon fine art's power to persuade, though evidence of its impact on sales is largely anecdotal. "People want to be engaged, and when they see great art in a home, they're seeing something new and inspiring," says Marena Grant Morrisey, executive director of the Orlando Museum of Art, whose auxiliary gallery leases works from its print collection to local corporations but not to individuals.

The art-house strategy is one of the ways sellers are pressing for competitive advantage as residential sales slow. At the end of June, unsold U.S. homes numbered 3.7 million, a 42% increase compared with a year earlier, according to the National Association of Realtors. Sales of new homes are expected to drop this year by 12%, to 1.1 million, in part because of rising interest rates. And some high-end markets have a glut of available properties -- some on the market for more than a year.

For years, upscale condominium developers have added a blue-chip work or two to class up common areas. What's new is that the middle market has joined in by favoring one-of-a-kind works over mass-produced posters. The strategy works, according to Showhomes, a Nashville company that has furnished 23,000 residences over the years, mostly model homes. Two years ago, the company hung 5-foot-tall red and blue streetscapes in a pair of homes in Mobile, Ala.; one had sat on the market for two years, the other for three. Less than a month after the paintings were installed, the first home's owners accepted an offer for 93% of its list price, and the second sold for about 98% of its list price. Says Larry Lyles, co-owner of Showhomes: "I'm convinced the canvases did a lot of the work."

Still, reactions to art-staging vary widely. Last weekend, potential home buyers Janet Micka and Bill Cirino stopped by an open house in Seattle's Northgate neighborhood that included works by local artists. Ms. Micka thought the $500,000 Craftsman-style house looked more inviting than it had when she saw its bare walls on an earlier visit. While Mr. Cirino liked the art, he said it didn't distract from the creaky wooden gutters and dimly lit dining room. "It doesn't make a dime of a difference," he says. "When I see a big picture on the wall, I tend to want to see what's behind it."

Style Matters

Richard Pohl is a believer, however. The Salem, Mass., psychiatrist and his wife, Sally Jablon, expect to move into a $700,000 townhouse today in nearby Marblehead. They actually passed on the place a few months back, but upon revisiting recently, they say, they were more impressed. Why the change of heart? Five oil paintings of trees by local artist Debra Freeman-Highberger had been hung by a stager from Da Vinci Designer Gallery, who continued the woodsy theme with twig wreaths, twine balls and an espresso-colored dining table. The effect, Dr. Pohl says, was transformative. "The artwork made it all feel like a home, as opposed to a space. And suddenly," he says, "things that worried us before, like the Home Depot sinks, worried us less."

Despite such testimonials, not everyone in the art world -- or even the real-estate business -- is a fan of loaner art. Curators caution against placing paintings in homes where humidity and temperature may fluctuate wildly. And brokers say damage might not be covered by homeowners' insurance, which typically covers only loss or theft of rented art.

Choosing the right work can be tricky. Seattle stager Jan Sewell, who uses about 100 pieces a month in clients' houses, prefers contemporary abstracts with a lot of color. Other effective choices include landscapes and paintings with primary-color palettes, pared-down modern sculptures and detailed botanicals. Stagers steer clear of works with nudity or religious themes. Presentation matters, too: A canvas that's too large or small for a space will detract from the look of a room.

Even well-known artists can present a problem. When surgeon Keith Saxon hired a stager to prepare his $890,000 Tudor home in Bethesda, Md., for an open house in November, he was initially upset when the stager stashed away his prized Andrew Wyeth. "I said, 'This is a Wyeth. You want this around,' " Mr. Saxon recalls telling her. But the stager persuaded him to keep the painting -- a watercolor of a naked woman's torso -- hidden under his bed until the house sold this spring. "They finally convinced me," he said. "It got the house sold."

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We have hundreds of listings of homes for sale in your area. If you are interested in buying a house feel free to search through our database. This is a free service and we have a low-pressure policy. We list homes for sale in Manalapan NJ, Point Pleasant Beach real estate and many other New Jersey properties for sale. There is a lot of property for sale in New Jersey. We are the realtors NJ!

My House Beautiful

2006-06-29T10:19:00.000-07:00

It’s often said that a couple that plays together, stays together. In the case of Brian and Laurie Wolfson, they really stay together, working as principals of Wolfson Custom Homes in Woodbury. Brian is the founder and president; Laurie works with him as lead design consultant for the firm. Between the two, they’ve spent the last 20 years developing their design skills in residential and commercial construction projects. So when it was time to build an oasis in the backyard of their Haddonfield home, nothing less than the best would do.

Their 450-square-foot Bartlett model pool with natural bluestone coping was built by Swim-Mor Pools & Spas, a 40-year-old family-owned business with locations in Mt. Ephraim, Northfield and Englishtown. The pool features a raised spa that seats six to eight, with stone facing on the outside. On the backside of the pool, which was completed from start to finish in about eight weeks, there is a raised wall with a sheer-descent water feature. Computer controls manage all of the equipment from inside the house, meaning that as soon as the Wolfsons walk in from a hard day at work, they can fire up the spa without even going outside.

“[Swim-mor’s] Clark Binitti worked closely with us, and he recommended doing a hot tub, which I am thrilled with,” says Laurie Wolfson. “We have an 11-year-old daughter, and we have some of our best family talk time sitting in the hot tub in the evening, just the three of us. We enjoy it for therapeutic reasons and just the restfulness of it.” When she’s not helping clients select their finishes for roofing and siding and bathroom tile, Wolfson paints portraits. That artist’s creativity is evident in her choice of color palette, and the fact that it was inspired by her love of blue-and-white china. Even outdoors, Wolfson found no reason not to use something very traditional in a non-traditional manner. She’s placed old plates in random patterns in the garden, tilted large blue-and-white china bowls against her fence with flowers coming out of them, and hidden blue-and-white blown-glass orbs beneath small bushes. “When you really look hard, you see little touches of blue and white,” says Wolfson, “And when you look down at the ground, you see little surprises.”

One surprise is how Wolfson often shops for her patio pieces and accessories: by auction. That’s how she obtained her 1920s wrought-iron patio furniture. Since the pieces are heavy, they stay outside year-round, so she had them upholstered in a durable neutral fabric that could withstand exposure to the elements. When summer comes, Wolfson pulls out two tried-and-true designer’s secrets. The first is using neutral backgrounds whose accessories pop with color. The second tip is to pair expensive pieces with inexpensive items for a look that enhances both. For example, Wolfson’s custom-upholstered patio furniture is accented with turquoise, lime green and blue-and-white pillows from stores like Home Goods and Home Depot.

In staying true to her colors, though, Wolfson’s design plans hit a snag when it came time to lay the pool’s patio. “We wanted to use real bluestone, but found it too expensive,” she says. “Then Arcon [Specialty Concrete, the Wolfson’s patio contractor] came up with the great solution of doing stamped concrete. [Arcon’s owner] Bart Rockett then hand-colored the concrete to the coloration that I wanted to achieve. He’s an artist as far as concrete is concerned, so I really appreciated what he did.”

But all those beautiful blues aside, a space just isn’t complete without the right people there to enjoy it. “Our daughter is a real swimmer, so she uses the pool all the time,” says Wolfson. “We love that the kids in the neighborhood end up in our yard. It’s really nice.”

Published (and copyrighted) in Suburban Home and Garden, June 2006.

Author: Stephanie Arasim Portnoy

South Jersey Window Tinting

2006-06-29T10:17:00.000-07:00

Your mantra when building your dream home may have been “bringing the outside in,” but the resulting sunlight has showered your space with powerful ultraviolet light, leading to fading carpets, couches and even artwork. If that weren’t bad enough, there are areas of your home that actually gather too much sunlight, creating hot and cold spots that drive utility bills through the roof. The good news is you don’t have to pull the blinds to protect your family, furnishings and flooring. With a little window tinting, you can keep your gorgeous views and make everyday living a little more cost-effective.

Since 1985, South Jersey Window Tinting has been a leading contractor of window-tinting products, including the complete line of Vista window films, a high-end product with over 25 films to suit just about every purpose. Comprised of a micro-thin layer of polyester and metallized coatings bonded by adhesives, window films block out 99 percent of harmful UVA and UVB rays, eliminate glare and regulate hot and cold spots in your home. This translates into lower utility bills, which is not only good for the environment, but also for your pocketbook.

Rob Kemly, the owner of the company, says window films can also be a daunting foe against the whims of Mother Nature. “Applying a window film to your windows strengthens the glass from the elements, forming a shield against hail, high winds and heavy rain,” he says. “And if for some reason a window breaks, whether it’s from high winds or even a foul ball from a neighborhood softball game, the shattered glass is contained within the sheath of the film.”

One myth about window tinting is that it ruins your view. While most residential window film is lightly tinted, it’s not the color of the tint that does the work of blocking out glare and heat transfer. Instead, that’s accomplished by the material of the film, so there’s no need to apply a film with a very dark tint. South Jersey Window Tinting even carries a window film that allows complete viewing of the outdoors from inside the home, but prevents viewing of the interior of the home from the outside. That means there’s no need for window coverings, which keeps your view intact and saves you money.

If UV rays aren’t your concern, but you’re looking to add a little visual interest to a lackluster design scheme, decorative window tinting could be the answer. South Jersey Window Tinting carries a full line of decorative window films that come in a multitude of designs and patterns. Often used in bathrooms, children’s rooms, and as room dividers, these films can be easily removed or replaced to change the look of a room in an instant. Frosted films offer privacy for your windows, skylights and front doors while diffusing ambient light. Stained-glass window films give the look of original art at an affordable price. There are even do-it-yourself decals that come in mosaic patterns or simulate the rice paper look of Japanese shoji screens.

Maintenance, too, is a snap. “With the [window film’s] scratch-resistant coatings, windows can be cleaned and generally maintained the same way you did before you had the film applied,” says Kemly. All South Jersey Window Tinting products carry a lifetime manufacturer’s warranty against peeling, cracking, demetallization and delamination. The company also guarantees that when viewed from a distance of four feet, the film will not distort vision and will have a clean and uniform margin. If you’d like to see how the products work, South Jersey Window Tinting will provide a free on-site estimate. “We’re happy to come into the client’s home or business, take a survey and come up with a personalized solution to their ‘sun situation,’” says Kemly. “There’s never any obligation to customers, but once they experience the product up close, it’s hard for them not to see the difference it can make in everyday living.”

South Jersey Window Tinting is located at 14000 Commerce Parkway, Suite H, Mt. Laurel, 800.985.8468. It is open Monday through Friday 8AM-5PM, Saturdays by appointment, closed on Sunday. For more information, visit www.sjwindowtinting.com.

Published (and copyrighted) in Suburban Home and Garden, June 2006.

http://southjersey.com/

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Coastal Castles: Shore Real Estate Still Sizzles

2006-06-29T10:12:00.000-07:00

The warm summer air of South Jersey beaches still beckons buyers into a simmering vacation home market…

While it’s true that the housing bubble that has been talked about more than Martha Stewart’s stocks didn’t burst, realtors, sellers and buyers alike are cashing in their reality checks on a new and changing market. The market trend over the last few years, with low inventory and high-spiking sales prices, seems to be steadily slowing in recent months. Economists in Washington, DC and at the National Association of Realtors say that the trend is healthy, though it feels strange to most people who have been experiencing the sellers market of the last few years.

Although the subtle slowing of the market is, at best, a minimal shock to consumers, it is more normal a situation than the market has been recently. For those who are still fighting change, what is descending upon us is called a ‘balanced’ market, and it’s actually a good thing. As Goldilocks said it is not too hot, not too cold --- it’s just right. There is no exception when it comes to the ebb and flow of real estate on South Jersey’s shores. It’s just right.

“Looking back to May 2005, the sale inventory in Stone Harbor and Avalon was approximately a three to four month inventory. Now there is approximately a nine to twelve month inventory to active sale listings. There is more than double the number of single family homes and condominiums listed for sale than one year ago,” says Hugh Merkle of Prudential Fox and Roach realtors in Stone Harbor and Avalon.

“A year ago, there were numerous sales where there were multiple offers on properties and properties selling for more than the listed price. Now we are seeing very few multiple offers [on properties].”

There are several factors that have affected the sale of shore homes in recent months. Indicators, like interest rates, inventory and current events [like the Hurricane Katrina catastrophe] are all helping in some way to make all sides more equal on the real estate front, which includes a decrease of sellers asking exorbitant, inflated prices for their homes.

“The houses that are priced right are still moving. I feel that although the prices will not increase in double digits as in past years, we are still seeing appreciation,” says Linda Novelli of Prudential, Fox & Roach in Margate. Novelli also states that the extra inventory perceived by many is partly related to new construction in and around the shore area.

The balanced market overall leaves pockets of towns with promising sales trends in the shore area, with the bigger picture still being: houses are still selling, just in a different fashion than recent memory.

“We are encouraged and optimistic by the early indicators we see for the 2006 season. It is our view that Absecon Island is still not ‘over supplied’. The total for sale inventory represents approximately 5% of the total units contained in these two towns, which is historically a good ratio- approximately 350 properties for sale in Margate and less than 50 for sale in Longport,” says Jerome DiPentino of Premier Properties Real Estate, Inc. in Longport. “This balanced supply coupled with a continued demand is a recipe for another year of brisk sales.”

Certainly, though demand is still there, the buyers and sellers interested in real estate on the coast need to remember that houses are taking longer to sell, and home prices are not rising as fast. (Repeat mantra silently: “The balanced market is a good thing.”) In this type of a housing situation, sellers and buyers may not get exactly what they want – but neither party really loses. Sellers will still make out well in terms of closing in a relatively timely manner and getting a reasonable price for their homes. Buyers will find that they do not have to fight multiple offers coming in on their favorite property – and can afford to take a little longer in selecting the property. It’s no longer harried and seemingly out-of-control. In short, the vacation home market in South Jersey has gone from all-out-frenzy to promisingly-steady status.

So, what does this all mean for you as you head down to the shore, Internet printouts in hand, searching for your coastal castle?

Take Your Time, Do It Right
Invest in housing for your future enjoyment at the shore. In other words, it is safe to dive into the sandy waterfront properties, if you are doing it for the right, practical reasons in mind. Experts at the shore are advising that the current climate is not conducive to buying with only the intention of selling for large profit, as was a popular trend in recent years, when appreciation was skyrocketing at a blinding speed. If you are investing in a shore property, with the intention of spending some years in it, then you are coming from the right field. If your intention is to purchase properties at the shore just to sell higher, make a profit, and buy another fast, you may want to take heed.

“As a real estate professional when I am working with buyers, I never recommend buying a property and turning right around and putting it back on the sale market. My recommendation is when you buy a vacation home or investment property, the best strategy is to hold the property for three to five years and you will see the best return on your investment dollar,” says Merkle.

With the changing market, there are a few important things you should consider, that you might not have in recent months or years when considering shore real estate purchases:

Buy rather than don’t. Even if the pace is slowing and appreciation is not in the double digits percentage-wise, the chances are that even if home prices fall for a year or two, they will begin rising and you can eventually recoup your funds if you sell your property. Refinance or look into several mortgage options for your existing shore home or buying your first shore home. Mortgage rates have been hovering around the lowest levels in more than four decades. Hurricane Katrina and rising energy costs can keep rates low for a bit longer. However, they are anticipated to rise again. If you opt for the interest-only ARM, there will be a second payment shock when you will have to pay interest and principal on the loan.

Get information on the IRS 1031 Tax Deferred Exchange. If you keep a property for a few years as a property to rent out, and chose to sell it, using the proceeds to buy another property you are going to rent, the 1031 can defer your paying of capital gains tax on the sale of your initial property. This only applies to investment properties, however. So if you are using your shore home as a primary residence (not a rental property) you may not qualify.

Get information on the IRS Revenue Procedure 2000-37 – otherwise known as a “reverse exchange.” A reverse exchange is similar to the deferred exchange, but works if you found a replacement property but have not yet sold your own property. A third party can hold the title to your replacement property so that they may find a buyer for the property they are selling. It can allow for up to 180 days (a lead-time that may be very helpful in a balanced market) for the homeowner to find a buyer for the property they are relinquishing, at which time the funds can be applied to the new property, and you may qualify for the 2000-37 exemption.

It’s also helpful to remember that the baby boomers are looking lately for more long-term investments, with more years of boomers retiring to come. Studies show that the coasts of New Jersey and Florida rank highest for number of vacation home purchases. So what does this mean to you? The shore is a desired area, one with much to offer, and with the demand from the boomers as well as other demographics, will fall in line nicely in line with the current supply of inventory and value of the houses at our coast. According to NAR, the Jersey shore is among the most popular vacation spots in the country – a characteristic of our great shoreline that will never change. It allows those who live in Philadelphia, Washington and Philadelphia to take mini-vacations, which means it allows for a very steady stream of repeat and reliable rental income of your investment in shore real estate. It also secures a certain value on the properties at the shore, in general, as above average – which cannot be claimed by most vacation destinations.

Steady as She Goes…
The floodgates have now opened, and the real estate selling season at the shore is officially in full swing. Buyers, searching for their next vacation homes (or maybe a shore home as a permanent residence), and sellers who are posting their signs will be taking a more realistic look at their specifications and expectations. The climate of the market will always fluctuate, just as interest rates, and for that matter, like everything else in life. Nothing is forever, the upswing or the downturn in any situation. Don’t let the economy fully dictate how you will retire or on what you will spend your money. The shore home forecast is a solid, balanced one, and there’s no reason (and no better time than now) to go out and make a sensible offer on the home of your dreams. So get out there and make your desire a reality. Pull up a piece of the shoreline, stake your umbrella in the sand, and smile with the knowledge that the home you own in this wonderful paradise is only steps (or mere blocks) from where you’ve rested your lounge chair in ths sun. And, isn’t that what it’s all about?

Published (and copyrighted) in South Jersey Magazine, April 2006.

Author: Lara Webb-Barrett; Photo by David Michael Howarth

Existing-Home Sales Post Decline As Higher Interest Rates Deter Buyers

2006-06-29T10:10:00.000-07:00

By Jeff Bater and Michael S. Derby
From The Wall Street Journal Online

Sales of existing homes in the U.S. fell in May to a 6.67 million annual rate, a 1.2% decline from April, the National Association of Realtors said Tuesday.

Meanwhile, an improved outlook for the economy's performance over coming months helped lift U.S. consumers' mood in June, amid a mixed outlook for the jobs market.

NAR chief economist David Lereah said rising interest rates are affecting home sales. "Although mortgage interest rates remain historically low, the uptrend in interest rates this year is affecting those buyers who are at the margins of affordability," Mr. Lereah said.

The level of resales in May was above Wall Street expectations. Analysts predicted a 6.64 million rate of sales of previously owned homes.

Analysts said this is a classic pattern for a cooling housing market with sales starting to lag under the impact of rising mortgage rates.

Mr. Lereah said he expected sales to fall by 6.8% from last year's record pace. Sales had surged to record levels for five consecutive years as buyers responded to the lowest mortgage rates in four decades.

But with mortgage rates climbing steadily under the impact of credit tightening by the Federal Reserve, analysts look for housing to slow this year but not to crash.

The average 30-year mortgage rate was 6.6% in May, up from 6.51% in April, according to Freddie Mac. The median home price increased to $230,000, compared with a revised $222,000 in April.

The inventory of homes on the market increased to 6.5 months, from April's revised 6.1 months, NAR said. Existing home sales were mixed in the four regions of the U.S. Demand fell 3.8% in the Midwest and 4.2% in the Northeast, while it rose 0.7% in the West and 0.4% in the South.

Separately, private research group the Conference Board reported Tuesday that its index of consumer confidence for June performed better than forecasters had thought, hitting 105.7, up from a revised 104.7 in May. Economists had expected the June reading to come in at 104.0. The index was equal to 100 in 1985.

The rise in June was rooted in the group's expectation index, which moved up to 87.6, versus May's revised 85.1. Meanwhile, the present situation index, which gauges consumers' mood on the current state of the economy, edged down to 132.7, from May's revised 134.1.

Against the unexpected buoyancy of the report, the Conference Board argued for some caution. "Despite the uptick, consumers remain concerned about the short-term outlook," noted Lynn Franco, who directs the group's Consumer Research Center. "The present situation index lost ground for the second consecutive month, a signal that the economy is shifting into lower gear heading into the second half of this year."

Indeed, a wide range of recent economic data has been pointing to a slowing economy, led by a moderation in housing activity. However, the Federal Reserve, which meets to deliberate on interest-rate policy on Wednesday and Thursday, hasn't gotten much breathing room. Mounting inflation pressures are broadly expected to drive policy makers to raise rates to keep price pressures in check, and many believe the rate hikes could continue as the year progresses.

The Conference Board said in its report that those who called economic conditions "good" in June slipped to 26.8% of those surveyed, versus 28.5% who held the same view last month. Those calling conditions "bad" also moved down, falling to 14.9%, after 15.2% in May.

The group called labor market assessments "mixed." Survey respondents calling jobs "plentiful" fell to 28.1%, down from 29.1% a month ago. But those calling jobs "hard to get" also lost ground, sliding to 19.9% in June, from 20.2% who offered the same view in May.

The Conference Board noted the outlook for hiring was more "optimistic" and added those who expect to see their incomes rise over coming months was "virtually unchanged" at 17.1% of the survey.

The Conference Board report is based on a mail-in survey of 5,000 households. The cutoff date for responses was June 20.

-- The Associated Press contributed to this article.

Wealthy Residents and Retailers Head Downtown to Wall Street

2006-06-29T10:09:00.000-07:00

By Ryan Chittum
From The Wall Street Journal Online

Is Wall Street becoming the new Fifth Avenue?

Drawn by some of the country's wealthiest households, a daytime work force that is doing even better, a bevy of swank condominium projects and relatively low commercial rents, blue-chip retailers are for the first time beginning to covet the street synonymous with money. Last week venerable jeweler Tiffany & Co. said it is bringing its trademark blue boxes to the neighborhood of the New York Stock Exchange. That followed Paris fashion house Hermès's disclosure earlier this year that it would open a store across from the Big Board.

For now, the upscale retailers are focused in the immediate vicinity of the stock exchange at 11 Wall St. But retailers and developers who have watched a surge of luxury condos open in Lower Manhattan over the past three years believe the announcements could be the beginning of a broader transformation as high-dollar retailers follow their high-rolling customers downtown.

Faith Hope Consolo, chairman of retail leasing and sales at Prudential Douglas Elliman, says she has a dozen luxury-retail clients that have begun looking in the financial district in the past six months, including a "very big Italian shoe company and a French perfumery that are in negotiations now. They haven't put their toes in the water; they've put their arms and legs."

"Luxury is going to own the financial district by the end of this year," she adds.

The south side of Wall Street from the exchange to the East River is almost all residential now or being converted to it. The fusty former headquarters of J.P. Morgan is being converted into Downtown by Philippe Starck, where condo units go for a minimum of $1.2 million. The new Hermès is moving into the first floor. Tiffany will set up shop next door at 37 Wall Street at the base of the former Trust Co. of America building, now being turned into luxury apartments.

Down the street model Naomi Campbell, actor Bruce Willis and movie producer Harvey Weinstein are moving into the former 55 Wall Street, which once housed the stock exchange, last was a luxury hotel and now is being souped up as the pricey Cipriani Club Residences. Last week real-estate broker Dolly Lenz flew to London to host a lunch for the Duchess of York and 80 of her closest friends -- to promote the Duchess's coming book and to help sell luxury condos at 55 Wall Street. By the end of a seven-hour event that also included breakfast, tea and cocktails, Ms. Lenz sold two luxury apartments at the building to friends of the Duchess.

Even without royal friends, Lower Manhattan has among the best demographics in the country: A residential population with median household income of $87,000 -- roughly twice the New York City average -- and more of that income to spend because 81% have no children, according to the Alliance for Downtown New York, a nonprofit group representing business and property owners. Defying expectations after the Sept. 11, 2001, attacks, the population of Lower Manhattan, south of Chambers Street, has swelled to more than 36,000 from 20,000 before terrorists brought down the Twin Towers.

"It's an ideal place for high-end retailers," says Carl Weisbrod, president of Trinity Real Estate and a former head of the Downtown Alliance.

Add to that the 311,000 workers who spend most of their weekdays in the area, and retailers have an underserved market. About 212,000 of the workers downtown are private-sector office workers who make $136,500 on average. Just yesterday BearingPoint Inc. announced that it will locate 633 workers in the World Financial Center, a major downtown office complex owned by Brookfield Properties Corp., in exchange for up to $3.1 million in state and city subsidies.

Those well-paid workers already have fueled strong starts for BMW AG and Hickey Freeman, an upscale men's wear store, which both opened stores near the stock exchange last year. "Since we opened in September of last year, we have been building our client base faster than anticipated with repeat customers, and exceeding our planned sales goals," says Paulette Garafalo, group president of Hickey Freeman and Bobby Jones.

That doesn't surprise Alan Napack, director of retail services at New York-based commercial real-estate services firm Cushman & Wakefield Inc. "A guy just made that $2 billion deal, why not head down to BMW and pick up a couple of 745s?" he asks.

Luxury retailers also are attracted by the much lower rents downtown. Fifth Avenue rents have reached $1,400 a square foot, compared with $38 for space in the average American mall and $60 to $225 in Lower Manhattan.

Still, the question remains: Is this enough to make the financial district the next frontier for Manhattan luxury retail? SoHo once seemed like the likely successor to Fifth Avenue, but luxury retailers have had mixed success there, says Ms. Consolo of Prudential Douglas Elliman.

For all its riches, Wall Street has never been a retail center, says John Steele Gordon, a historian and author of "The Great Game," a history of Wall Street. Once a fashionable place to live -- when George Washington gave the first Inaugural Address there in 1789, Wall Street was lined with the houses of the rich and famous -- the street became a financial hub within decades.

Today, while Fifth Avenue has Bulgari, Louis Vuitton and Bergdorf Goodman, Wall Street has small personal-service outlets including a tanning salon, a shoe-repair shop and a fitness center.

Since Sept. 11, Wall Street has been mostly blocked off to cars and pedestrians must negotiate a maze of security precautions. It will need to continue to make itself look less fortress-like if the city wants to draw shoppers to the area.

Perhaps the biggest unknown downtown is the redevelopment of the World Trade Center retail space, which had been located under the Twin Towers. At least 500,000 square feet -- about half the size of an average shopping mall -- of retail space is planned for the three new WTC buildings and a train station on Church Street.

But much will depend on the configuration of the new space, which still must be negotiated by World Trade Center developer Larry Silverstein, the Port Authority of New York and New Jersey and Westfield Group, which controlled the WTC retail space before Sept. 11 and maintains a legal "right of first offer" on any new retail development there. Westfield is likely to exercise that right, says a person familiar with the company. The World Trade Center mall was one of the highest grossing retail spaces in the world, bringing in sales of $900 a square foot, then more than triple the national average.

After the Sept. 11 attacks slowed growth downtown, government subsidies helped lure residents and corporations back downtown in the years following the attacks and the residential population has jumped by 61% since 2001. To serve that rising clientele, Bobby Van's Steakhouse opened last year, and after a three year hiatus, Harry's, a Wall Street institution, just reopened with a cafe and a steakhouse in India House.

"The retail community recognizes the buying power in Lower Manhattan and isn't waiting for some of the larger things to happen," says Eric Deustch, head of the Downtown Alliance.

For Tiffany, it is a homecoming of sorts, and the move tracks the evolution of New York itself, says Mr. Gordon, the historian. Its first store opened on Broadway just around the corner from Wall Street in 1837, but as the city's population exploded and the fashionable neighborhoods gradually moved uptown, Tiffany followed, first to Union Square, then to 37th Street and finally to its current store at 57th and Fifth Avenue in 1940.

Hillary Smith, an assistant at trading-floor firm Bear Wagner Specialists LLC, which has offices in the Trump Building at 40 Wall Street, says the new stores will make her job easier. "A lot of times we have to go to Tiffany's, and we get the car service and go all the way uptown" to get personalized gifts for clients, she says. It will also be good for some of her co-workers, Ms. Smith adds. "They always forget their wives' birthdays."

Alaska Investor Turns Home Into a Profitable Rental

2006-06-29T10:06:00.000-07:00

By Jane Hodges

The investor: Jim Nelson, 53, a former special-education instructor, lives outside Homer, Alaska, where he moved in his early twenties. At the age of 24, he purchased approximately two acres located 12 miles north of the city for $10,000 and later built a home there. He moved out of the residence in 2001 and is now selling the property.

The property: The cedar triplex has 3,100 square feet. From the property, residents have views of Cook Inlet, four volcanic mountains and Mt. Iliamna. Each unit has one bedroom and one bath, but the largest apartment (1,300 square feet) features a geodesic dome with 26-foot ceilings and triangular windows. The second unit has 1,000 square feet and the third has 800 square feet. Homer's main industry is fishing or service and tourist businesses, but nonetheless, Mr. Nelson has kept the home at full occupancy by renting it to young people in their twenties who have year-round jobs locally or run small businesses in the area.

Purchase price: $10,000 for the land, plus $150,000 to build the home, including renovations to expand the house. Mr. Nelson bought the land in 1976 and had a home built on it in 1977.

Additional investment: $4,000 to install a new septic system. The house was originally constructed as a single-family home, but Mr. Nelson expanded it to a duplex in 1982 and to a triplex in 1994.

The strategy: Mr. Nelson and his wife, Lu Anne, a teacher, have enjoyed the property because they were able to make money from it while occupying it, Mr. Nelson says. Living on-site made handling repairs and tenant issues easy, he says. The couple would keep the property, he says, but need to sell it to generate retirement funds. They earned between $200 and $400 a month in rental profit from the home, he says. He and his wife are now running and residing at a bed and breakfast, Knob Hill Guest House, which they purchased in 2001. Located less than 30 miles away from his investment property, the inn is in a region that has an active tourist trade and is a natural next step in his career, he says.

The pitfalls: The house is on a dirt road, which has discouraged some buyers, Mr. Nelson says. "People who come down this road for the first time sometimes say, 'Oh, I don't know,'" he says. But the asking price, along with the views from the property, he says, may sway a buyer eventually. "At $225,000, you're only paying $75,000 per unit," he says.

The potential payoff: $123,850. If he gets his $225,000 asking price, the math works this way: $225,000 - $160,000 (land and construction costs) minus a new septic tank ($4,000) is $61,000. He expects to pay a buyer's agent commission of about 3%, but won't pay a listing agent fee, since he is marketing the property as a for-sale-by-owner property. Paying the buyer's agent would reduce the figure by 3% ($6,750) to $54,250. Adding his profit of $69,600 from rental income (after paying mortgage, taxes and insurance) brings his total to $123,850. He doesn't anticipate paying capital-gains tax, he says.

- Ms. Hodges is a free-lance writer in Seattle.

http://www.realestatejournal.com/commercial/

Single People Are on the Hunt for Homes, Too

2006-06-15T14:23:00.000-07:00

By Dennis P. Carmody, Asbury Park Press, N.J.

Mar. 9–For Melissa Kiss, it’s a simple matter of math.

“I’m paying $1,310 a month for rent,” said the 28-year-old school teacher who is single and lives with her mother above the pet store that her mother co-owns in Brick. “I’m looking at that number and thinking, ‘That’s a mortgage payment.’”

Like millions before her, Kiss has realized there’s not much financial point to throwing her money away on rent each month, when instead she could be paying off a mortgage and building up equity in a home of her own. So the elementary school teacher is now looking for a house to buy in the Brick area.

She is not alone. According to the National Association of Realtors’ annual survey of buyers and sellers, 21 percent of home buyers last year were single women. By way of comparison, single men make up 9 percent of the market.

Buying a home is still something done mostly by married couples — they make up 61 percent of home buyers, according to the survey.

But the findings on single people represent a real difference in the way men and women live. In 1981, the first year the survey was conducted, the number of single women and single men home buyers was virtually the same — 11 percent for women, 10 percent for men, said Walt Moloney, spokesman for the association.

“Nowadays, women are not waiting to start their lives,” said Stacey Rose, a licensed clinical social worker who offers counseling services at the Rose Relationship Learning Center in Ocean Township.

Women are focused more on building their professional careers, and so they’re naturally drawn to the financially wise decision of owning a home rather than renting, she said.

“They don’t need a man to buy a house,” Rose said. “They’ll pick up a relationship along the way.”

One factor at work may simply be the traditional difference seen between men and women and their approach to commitments and risk.

“Women are more apt to want permanency and men are less apt to want to settle,” she said.

The survey doesn’t ask single men and women why they are buying homes, Moloney of the Realtors association said.

“It may be as simple as guys don’t get serious about real estate until they meet the right woman,” he said. “It seems like women have a better sense of the value of real estate.”

Sometimes that can be seen even with married couples, said Mark Kotzas, owner and broker of Crossroads Realty, Dover Township. “Women are the decision makers,” he said. “They worry about school districts, neighborhoods, etc. Husbands worry about the mortgage mainly.”

In years past, when the numbers were closer to equal, that comparatively lower percentage of single female buyers may have simply represented an untapped demand for housing from single women, who 25 years ago still had a harder time getting credit and often had a greater income disparity with men than they do today, Moloney said.

Men and women may simply grow up with different attitudes toward building a home, said Fred Kelly, dean of the School of Business at Monmouth University in West Long Branch.

“The male concept of setting up a household is not something that’s bred into them or genetically part of their nature,” he said. “Women prefer the safety and security that a house provides.”

Sometimes simple practicality might explain the disparity.

“A portion of that 21 percent (of women home buyers) would be single parents, and moms tend to raise the kids more than dads,” said Don Moliver, director of the Real Estate Institute at Monmouth University.

That thought was echoed by Darleen Palmizio, a licensed clinical social worker at Associated Counseling Services in Manasquan. Single mothers often wind up with primary custody of the children, while divorced fathers in contrast, often rent an apartment just big enough to host the children during their days of custody, she said.

Additionally, it may be difficult for single fathers to afford a home of their own, she said. “Child support eats up a lot of your pay,” she said.

Kiss, a teacher at Bay Head Elementary School, wants a three-bedroom house, so she and her mother, Dawn, will have rooms for themselves and for the reiki business they are starting, a kind of stress-reduction therapy. But given her $220,000 maximum price range, she’s finding the same frustrating search that many first-time home buyers are facing, no matter what their marital status.

“I’m seeing a lot of things that are overpriced for what they’re offering,” she said.

http://www.app.com

Homes Sweet Homes: Sizable questions

2006-06-15T14:22:00.000-07:00

When it comes to homeownership, think a little about going big

Thursday, March 09, 2006

BY JUDY DeHAVEN Star-Ledger Staff

We live in a super-sized world, from the Big Macs we eat to the SUVs we drive to the bling we wear around our necks.

So, when buying a house, why not do what real estate mogul Donald Trump would do?

Why not buy "yooge?"

The family room can be 2-stories tall, the garage built for three cars. A tennis court, in-home theater and state-of the art gym are a must, not to mention the eat-in kitchen with wine cooler and bread warmer, two refrigerators and two dishwashers.

And no master bedroom can exist without gigantic his-and-her walk-in closets, a sitting room and fireplace, plus a master bathroom with shower, soaking tub and twin sinks.

Why not own the biggest house on the block?

"It makes you feel like you're the king of the neighborhood," said Thomas Crivello, owner of ERA Statewide Realty in Belle Mead in Somerset County.

Real estate professionals said buyers should love the house they intend to buy, but also look around at the other houses on the block or down the road. Being king of the block isn't always the smartest move in the real estate world.

Big houses cost big money, both to buy and to maintain and just think of the landscape and utility bills.

And as investments, big houses aren't always that great either, which is something that will come as an immense comfort to your neighbors who look up longingly at your McMansion from behind the cheap white shades of their tiny three-bedroom Colonials.

There is the mortgage to consider and the prospect of selling it some day when you want to downsize and simplify your life. The first is expensive, the second difficult.

Two years ago, Jeffrey Otteau, president of the Otteau Appraisal Group in East Brunswick that analyzes residential real estate trends, said his advice would be to "buy as much house as you can."

Not anymore.

Times have changed.

"Essentially, you're taking on more debt, more financial burden and more risk in a market not likely to have the big payoff we've seen over the last five years," Otteau said.

Big houses may "stroke the ego," Crivello said, "but they're bad for the pocketbook."

And yet, buying one is so tempting, especially with creative financing mechanisms, such as adjustable-rate mortgages and interest-only loans. Both allow homeowners to take on big mortgages, but pay more modest monthly payments. But they come at a price.

With adjustable-rate mortgages, the rates are tied to a market index and rise and fall along with it. So while the rate is low initially, it "has the ability to ratchet up quickly," Otteau said.

Interest-only loans are just that: they require payments on interest only for the first few years. Using one allows a homeowner to buy "22 percent more house" for much lower monthly payments, Otteau said, because the buyer isn't paying anything toward the principle balance.

But when the set period of interest-only payments ends -- typically about three years -- interest-only mortgages may not be an option available in refinancing because the banking industry is considering eliminating them. Then the homeowner could be left paying higher monthly payments -- Otteau estimates it could be 30 percent more -- on a more traditional mortgage, one that will likely carry a higher interest rate than available today.

A "double-whammy," Otteau said.

So, while buying a big home with a big family room that can accommodate your big-screen TV might seem like a lofty goal, financing it could be risky.

And when it comes time for you to sell -- or if you have to sell because you can no longer afford the payments on your big house -- it can be much harder to do compared with selling a smaller house priced at the lower or middle range.

"It's just simple economics: There are more buyers for that $250,000 house," said Crivello of ERA Statewide Realty. "How many people can buy a $2 million house?"

That brings some consolation for owners of smaller homes. Here's another: When your neighbor builds a gigantic house next to your tiny one, it brings up the value of your home, while the value of theirs is compromised by small houses such as yours.

"The homeowners of the smaller properties -- they love it," said Pat Hoferkampf, president of Burgdorff ERA in Parsippany. "They look at the big dog and the price he gets and it brings up the value of the entire street."

So what should you do if you want to buy big but can only afford small? Otteau of the Otteau Appraisal Group gives this advice: "Buy as much house that you can in the best community you can find."

In many cases, that means a smaller house. But it is a way of shoring up your investment.

"The blue-chip communities see the most property increase in an up market," Otteau said. "And when we do find ourselves in down markets, which is very rare, they lose the least in value.

"You always want the least expensive house on the market," he said. "You never want the largest and most expensive house."

Judy DeHaven may be reached at jdehaven@starledger.com or (973) 392-7804.

www.nj.com/business/ledger/index

Realtor: Camden real estate values soar

2006-06-15T14:21:00.001-07:00

Posted by the Asbury Park Press on 03/27/06

THE ASSOCIATED PRESS

CAMDEN — Last Sunday, real estate agent Dee Sica listed a home in downtown Camden for $149,900. By Wednesday morning, it had an “under contract” sign slapped on it.

While such a quick sale and such a high price are still unusual in this city, which is among the poorest and most crime-ridden in the nation, real estate values here have increased dramatically in the last few years.

The median sales price for homes in Camden increased by 81 percent between 2003 and last year, according to a new Prudential Fox & Roach Realtors analysis of five central and southern New Jersey counties. Only one community of any size in the study — Gloucester County’s fast-suburbanizing Elk Township — saw a bigger increase.

In Camden, the median price is still low, just $63,350 last year — about one-third of the $183,000 median for all of Camden County.

Steve Storti, a senior vice president at Prudential Fox & Roach, said the rising sales prices in Camden partly reflect a hot home market in Center City Philadelphia and the New Jersey suburbs.

The rising housing prices in Camden also suggest that intense public and private efforts to revitalize the city are starting to take root.

In 2002, the state launched a plan to put $175 million into various projects in the city, with much of the cash infusion going to expand its hospitals and universities.

Homes in neighborhoods near those institutions are typically priciest.

Frank Fulbrook, a community activist who lives in the Cooper Grant neighborhood between Rutgers University’s campus in the city and the five-year-old minor-league baseball park on the redeveloped banks of the Delaware River, said his small neighborhood has only two of its 90 homes vacant. He said the last half-dozen three-story row homes to sell in the area went for more than $200,000.

Ocean County: Summer rental rules changing for vacationers

2006-06-15T14:21:00.000-07:00

Posted by the Ocean County Observer on 03/26/06

BY KAREN HAMMERDORFER
DELANCEY
AND EDDIE HOLLOWELL
STAFF WRITERS

Due to myriad factors, ranging from the downsizing of corporations to an upswing in family activities, vacationers are changing the rules when it comes to who is renting a house at the Jersey Shore — and for how long they plan on staying.

Several area Realtors say they’re seeing specific trends over the last couple of years: day-trippers are on the rise; group rentals are down; and people just don’t seem to want to rent a summer home for an entire season anymore.

“The complexion of the residential seasonal rental market has drastically changed in Point Pleasant Beach,” says Jack Breda, a Realtor at William H. Ball Agency in Point Pleasant Beach. He and his wife Maureen own the agency. “The complexion of the town has changed in terms of the type of person that rents.”

Summer rentals are slow this year; last year they were horrendously slow, said Breda.

Just a few years ago, group rentals in Point Pleasant Beach were about as common a sight as flip-flops on the boardwalk.

When Belmar inaugurated an “animal house” ordinance some five years ago, it had a ripple effect throughout other Jersey Shore towns, said Breda.

“Towns have discouraged group rentals. It’s not bad or unwarranted, but it seems excessive to those who are renting,” said Breda.

Many towns, including Point Beach, adopted similar laws. Nowadays there are fines and/or penalties dealing with issues ranging from parking to how loud someone plays their music, said Breda.

Breda said several complex issues come into play regarding summer rentals.

A lot of investors who paid very high prices for summer homes during the real estate boom a couple of years ago expected to pass those fees on to renters, but summer rental values have decreased.

Breda said that 2 1/2 years ago, a five-bedroom, two-bath summer rental with off-street parking would cost $25,000 for the season. Last year that same home rented for $20,000, he said.

“A lot has changed over the years,” said Breda. “The employment picture has changed. Jobs have been downsized. More people are working below their economic and educational status than they did 10 years ago. Point Pleasant Beach is a microcosm of the United States.”

In addition to a decrease in group rentals, several real estate agents say there is a decrease in the number of families who want to rent a home for the entire summer season.

Breda said that the number of people who rent a home for an entire season is off by some 50 to 60 percent.

Nowadays, however, 65 to 70 percent of the renters are families — but they are looking to rent for only one to two weeks, said Breda.

The reason is due, in part, to the change in the family dynamic. Years ago when children were off for summer vacation, they didn’t have as many pursuits as they do now.

Just about every college student has a summer job, takes extra college courses to get ahead or keep up, or, if they have the money, opt for travel. Teenagers in high school are busy, too. Many get summer jobs; football players begin practice in August, which eats into the summer vacation schedule. Children are occupied with traveling soccer programs, out-of-state camps and other pursuits.

“It’s nice to see families coming back, but they complain about parking and cost of goods and entertainment on the boardwalk,” he said. A family of four can easily spend $200 on a day trip that involves fees for parking, food and entertainment, he said. That’s excluding tolls and gas.

One-week stays are the choice of most renters, often because of affordability, several Realtors said.

“It’s expensive even in a modest household,” said Bob VanBuren, sales representative for Island Realty on Long Beach Island. “It’s a chunk of money to lay out for some families.”

VanBuren said rental rates on Long Beach Island can range from about $800 for a week in a small one-bedroom unit near the Bay, up to about $15,000 for a week’s stay in a much larger and newer oceanfront property. On average, people spend about $2,500 to rent for a week, VanBuren said.

With regard to home sales, Breda said that four years ago a house in Ocean County sold in approximately 47 days. Some, if they were the right price and near the water, sold in a day. Now houses are on the market for a much longer period of time, he said.

Carol Duffy, general manager of Childers Sotheby’s International Realty in Point Pleasant Beach, said she’s also noticed a trend in summer rentals. More families, she said, are waiting until the last minute to make a rental-related decision.

“Maybe people are putting their money into other programs for their kids. Or maybe their kids are so busy they can’t catch a week off,” she said.

Duffy said she’s noticed that more day-trippers are hitting the beach. It used to be that traffic would back up on Route 35, where Childers is located, on Fridays and Saturdays. Now it’s a daily occurrence in the summer, she said.

Pat Tallman, a Realtor associate at Coldwell Banker Riviera Realty in Point Pleasant, said that summer rentals are about the same as last year.

“And last year was slow,” she said.

Tallman said weekly and monthly rentals are steady, but season rentals are off.

Weekly rentals are more popular in Point Beach. Seasonal rentals are more conducive to areas such as Bay Head and Mantoloking, said Tallman.

“Rents are high because investors want to recoup,” said Tallman.

Tallman said many people want to rent during July. June and August are more difficult to rent. Investors are willing to break up the season and rent their home out for June and August, but they won’t break it up for less than a month, she said.

Like Duffy, Tallman said she’s noticed an increase in day-trippers, many of them families, she said.

Many area Realtors said so far the summer rental season seems to be busier than in recent years.

“It’s busier than it has been, but I don’t know why,” said Bob Schaffer, owner of Schaffer Real Estate in Seaside Heights. “I don’t know why it was slow the last two years.”

Schaffer said vacationers continue to look for one or two week rentals, which on average can cost about $1,500 per week.

“People do one-week rentals, it’s always been that way and it will remain that way,” said Jeff Serio, manager of Ocean Beach Rental Agency in Lavallette.

Serio said the unseasonably warm winter has helped this year’s summer rental season get an early head start.

“Most people will come down on the weekends to look at the houses, and the weather has been so nice this winter,” Serio said.

Mark Dietz of Ward Realty in Point Pleasant Beach said the summer rental season to date has been “hot.” Summer rentals have spiked 25 percent more than last year. Ward Realty books about 200 rental properties in the area.

“We’re getting bookings a lot earlier than last year and in years past,” said Dietz. “We’re getting flooded with calls.”

Dietz compared this year’s summer rental market to that of three to four years ago.

Dietz said the early interest in rentals, is due, in part, to the mild winter. The weather has been bringing people down to the Jersey Shore earlier than usual, he said.

Realtor Marketing: A Must For Your Real Estate Business

2006-06-15T14:20:00.001-07:00

by Jim Bruce

Like with any business, realtors need to know marketing to increase the number of clients and sales. Marketing is a step that real estate brokers often overlook in their training. Many believe that in the real estate business, the market is pretty much guaranteed. But this isn’t the stance to take if you are a realtor and want to make your business the best in your community.

There are realtors that believe the “brand name” advertising that the parent company provides is all the marketing they need. If the realtor works for Century 21, Re-Max, Coldwell Bankers, or any number of national firms, they believe the tv and print advertising is what brings their clients to them. But this brand name advertising is not the local marketing that will benefit the real estate broker and increase their realty business.

Realtor advertising that markets the real estate business in the yellow pages and newspapers all tend to be the same. They say, here we are. Here’s what we do. How is the potential client supposed to make their choice?

Housing advertising attempting to sell houses all look the same. 2 bedrooms, one bath. 4 bedrooms, 2 baths. Living room, dining room, study, etc. Only the house photos are different.

What the realtor fails to realize is that whether a potential client is trying to sell their property or buy, they make their decision based on emotions. Then they back up their decision based on facts and features.

Realtors should market themselves and the property they are trying to sell based upon this fact. They should sell the benefits to the client. The benefits of having their real estate firm represent the client. The benefits of the house to the customer.

Benefits are based on emotions. They solve the clients problem, They emphasize the needs, desires, and wants of their clients. Realtor marketing should feed on benefits. Unfortunately, most realtors give the potential client facts and features.

As a realtor, don’t tell the client that you’ve been in the business for “X” number of years. That you’re an expert in your field. Who cares? They want to be assured that you are going to help them with their problem of selling or buying a house, rural property, investment property, etc.

The pictures of the property in housing advertising is the only, real emotional draw. It’s what gets potential customers wanting to go see the property. All those features of bedrooms and bathrooms are secondary and wasted space.

Replace those features with the benefits of the property and you’ll see sales go up. Benefits, along with the photo, pre-sell the house or land to the client. They are emotional. And, emotions sell!

The realtor should look at how direct marketing sells. This kind of marketing is the basis of direct mail marketing. It can be applied to the real estate business with noticable results. The next time you get a direct mail marketing letters in the mail, don’t throw them away. Open them and see how you’re emotionally draw towards the sale.

As a realtor marketing your business and properties, you could learn much from reading this type of mail salesmanship. Think about how you could employ the techniques of these marketers in your realty business and you’ll be steps ahead of the crowd.

About the Author

Jim Bruce is an online direct marketer. He consults with realtors on how to maximize their clientle and profits by applying direct marketing principles and techniques. For more on realtor marketing, visit: http://www.realtormarketinginfo.com

Real Estate - Understanding Where to Start

2006-06-15T14:20:00.000-07:00

by Jennilyn Bylund

When buying your first home, entering the real estate industry can be complex and overwhelming. The industry is a world of its own and comes with a vocabulary that is foreign to most. However, knowledge and understanding of the real estate business will bring confidence and security when making one of the largest financial investments in your life.

Knowing the difference between a Real Estate Agent and a Realtor
The first hurdle to jump when acclimating yourself to the industry is to identify who you want to work with. Real estate agents are licensed professionals who are well-educated about the processes and financial management options that are available when buying or selling a home. Realtors are also licensed professionals, but set themselves apart through membership in the National Association of Realtors and must abide by a strict code of ethics to uphold honest and ethical transactions.

Knowing what to ask
A common mistake future home buyers experience is failing to do thorough homework. After individuals have developed criteria for homes they wish to view, a list of questions for the seller, and the real estate professional you are working with, should be formed. It is critical to not only ask questions, but to ask the right questions. Through the right questions home buyers can discover more than can be seen. A few example questions are below.

How long has the house been for sale? This may tell you about accuracy of the asking price of the home, or its potential.
Have other offers been made? If so, why were they not accepted? Answers to these questions will help you avoid making the same mistakes other potential buyers made.
How does this home compare to other houses on the street? If you are working with an agent he or she should be able to tell you about other homes in the area that might be coming up on the market, or possible remodeling ideas.
Why is the home being sold? The answer is valuable for buyers to discover the motivation behind selling the home, which might not be visible while viewing the home.

Knowing their language
When looking for your first home, don’t be alarmed if you don’t know all the lingo and acronyms being thrown at you. But try to become familiar with the language real estate professionals and sellers use. Here are a few examples of the most popular real estate lingo used to get you started on your new vocabulary.

MLS - Multiple Listing Service is a computer-based system that provides real estate professionals with current properties available for sale. MLS data is local or regional. listing - An agreement made between a real estate broker and a home seller that allows the broker to make arrangements to market and sell the home. Sometimes “listing” makes a direct reference to the house for sale.
expansion pot’l - expansion potential indicates there is additional space on the lot to build, or possibly adding a room on an upper level based on local zoning regulations.
nr bst schls - near the best schools
4B/2B - four bedrooms and two bathrooms.
dk - deck
FDR - formal dining room
frplc, fplc, FP - fireplace
gar - garage
grmet kit - gourmet kitchen
HDW, HWF, Hdwd - hardwood floors
hi ceils - high ceilings
pwdr rm - half bathroom or powder room
upr - upper floor
vw, vu, vws, vus - view(s)

Knowing how to start
One of the best ways to become real estate savvy is talk to family and friends that have already gone through the process of buying a home. Find out what challenges they experienced and tips that may make your experience more enjoyable. If you decide to use a real estate professional, get several referrals from them and then talk to multiple agents. Find someone you feel completely comfortable working with. Never be afraid to ask questions -this may be the largest financial investment you make in your life. The real estate industry is less scary once you understand it.

About the Author

Content provided by 10x Media. Established in 2003, 10x Media provides innovative online marketing tools. It has expanded its online presence through networks such as Inside Real Estate, Inside Finances and Grab Real Estate, which contain thousands of pages for city and state specific real estate information across the nation.

We have many listings of homes for sale. There are townhomes for sale, homes for sale, condos for sale, lots for sale and real estate for sale, residential and commercial. So, come inside and search through thousands of listings of homes for sale in New Jersey and all other NJ real estate.

Slower Home Sales Open Up An Opportunity for Some Buyers

2006-06-15T14:19:00.001-07:00

By James R. Hagerty

From The Wall Street Journal Online

POMONA, N.Y. -- The cooling market for real estate brought Michael Termine and Uso Mbanefo together.

Mr. Mbanefo, a 43-year-old entrepreneur struggling to launch a clothing-design company, had fallen behind on his mortgage payments. He needed to sell his four-bedroom house here quickly to avoid losing it in a foreclosure. That's when Mr. Termine, a 32-year-old novice real-estate investor, stepped in.

One afternoon in early April, Mr. Termine visited Mr. Mbanefo's office in a strip mall and offered to pay $400,000 for his house. Mr. Mbanefo showed Mr. Termine fliers for nearby homes offered at $600,000 or more. Mr. Termine pointed out that the inventory of unsold homes here, as in many parts of the country, has nearly doubled over the past year. Even so, Mr. Mbanefo said that he might be able to refinance his home, spruce it up and sell it for $500,000.

"I don't see it at 500," said Mr. Termine. "I think the magic number to move that house fast is 475." Before leaving, he reiterated his offer. "I have $400,000 waiting for you, in cash."

The slowdown in housing sales, after five years of frantic buying, has ended the party for many real-estate investors. But the cooler market is welcome news for a subset of investors -- those who target homeowners facing foreclosure.

Most foreclosure investors run small, local operations, buying and reselling a handful of properties a year. Some are self-taught; others take courses touted on Web sites or in late-night TV ads. Invariably, they draw criticism from advocates for the poor, who accuse them of preying on the vulnerable.

"Our time has finally come!" proclaims a recent email advertisement from ForeclosureS.com, a Fair Oaks, Calif.-based company that markets training materials for would-be investors. A 90-minute telephone program promises to teach foreclosure specialists how to be a "white knight" and not "feel like a shark."

More people are falling behind on their mortgages, according to the Mortgage Bankers Association. The percentage of loans on which payments are at least 30 days overdue rose to 4.7% in the fourth quarter of 2005 from 4.4% a year earlier. With interest rates rising, it's harder for homeowners to refinance or sell quickly.

Such conditions are attractive to investors like Mr. Termine, who previously has owned a bar, worked in construction and tried acting. "I've always wanted to do the real-estate thing," says the father of two young children. "I just didn't know how."

Last year, Mr. Termine bought home-study materials from ForeclosureS.com, including six compact discs, for about $400. Then he flew to California in November to take an intensive three-day course. Mr. Termine says the lessons taught him to deal honestly and ethically with people facing foreclosure -- and make a good return for himself. "If I can create some kind of win-win, then it's worth it," he says.

So far, he says, he has used home-equity lines of credit to purchase four homes in foreclosure. He has sold two of them, he says, clearing about $160,000 in profits. Though he expects some transactions to be less lucrative, Mr. Termine predicts he can easily earn a six-figure annual income. One sign of his confidence: he bought himself an $82,000 red Porsche Carrera late last year.

Investors find prospects by scanning court filings for notices of defaults on loans. Sometimes, they advertise in poor neighborhoods by tacking up signs on telephone poles. Most ads have a quick-cash pitch, and some hold out the promise of advice for people in distress.

A common practice is to find people whose homes are worth much more than the mortgage-loan balance but who have fallen behind on payments. Some investors then persuade the owner to sell the home for a negligible sum above the balance due -- with the promise that the former owner can stay on as a tenant and have an option to later repurchase the home.

Sour Deals

Once the investor acquires the house for a bargain-basement price, some deals go sour. Some investors, for example, evict the former owner if he or she is unable to pay the rent. In other cases, an investor refinances the house, extracts tens of thousands in cash, and then fails to make payments on the new loan.

Annie Stephens, a 68-year-old receptionist in Atlanta, says she fell behind on payments on her mortgage in 2003 after suffering a stroke. Nathan Mack, a real-estate investor, offered to help her avert foreclosure, according to a Fulton County, Ga., court filing. Ms. Stephens says she agreed to transfer the title to her house to an associate of Mr. Mack, Gaytonya Jones, with the understanding that Ms. Jones would refinance the house and Ms. Stephens could stay put, paying rent, for a year. After that, she says, she was to regain the title to her home.

As the new owner of the home, Ms. Jones obtained a new mortgage of $110,700 and used part of the proceeds to pay off Ms. Stephens's old $80,000 note, according to Michael P. Froman, an Atlanta lawyer who represents Ms. Stephens. Ms. Stephens received about $3,000 from the transaction, even though she was giving up title to a home in which she had built up about $40,000 of equity, Mr. Froman says.

Ms. Stephens says she paid rent to Ms. Jones, initially $700 a month and later $900 a month. Nevertheless, says Mr. Froman, Ms. Jones failed to make payments on the new mortgage loan, prompting the lender to initiate foreclosure proceedings in 2005. Now Mr. Froman is seeking a court order to return the title to his client, who still lives in the home pending resolution of the dispute.

Mr. Mack says there was nothing improper about the agreement with Ms. Stephens. "We thought we were helping her," he says. Ms. Jones couldn't be reached for comment.

The foreclosure process usually begins when people fall three months behind on their payments. If the borrower fails to catch up or work out a deal with the lender, it can take as little as a few months or as long as a few years before the lender meets various state and local requirements for selling the home at auction.

Lenders often lose money when they foreclose on homes since renovation and marketing costs can be high. And because many homeowners have saddled their properties with debt, houses often are worth less than the amount owed. This lopsided equation makes most lenders eager to work out arrangements with delinquent borrowers, giving them time to catch up on payments.

Once an auction is scheduled, though, it may be too late to work out an arrangement with the lender. At that point, the homeowner can be an easy mark for those touting rescue plans.

Advocates for the poor, as well as some politicians, warn that deals with foreclosure specialists are rarely good for strapped homeowners. Elizabeth Renuart, a lawyer at the National Consumer Law Center in Boston and the co-author of a 2005 report on foreclosure scams, says it is "theoretically possible to make a fair deal if the investor makes only a modest profit and the sale returns a reasonable amount of equity to the homeowner." But she believes consumers would be better off trying to work out a deal with their lenders or seeking help from a financial counselor.

Illinois Attorney General Lisa Madigan likens some foreclosure investors to "piranhas." She recently has filed three lawsuits against companies she alleges have misled homeowners into selling their houses for paltry sums.

Illinois is among several states that have passed, or are considering, measures to bolster protections for homeowners considering foreclosure deals. New legislation in Illinois will require investors to provide a clear, written contract and give sellers the right to cancel within five business days after it is signed. The new Illinois rules also will limit the profit investors can make when they buy a home and allow the occupants to remain as renters with an option to repurchase the property.

Some investors are pushing back. Last year, a group of them formed the National Association of Responsible Home Rebuilders and Investors to lobby against what they see as overly restrictive state legislation.

"Let's create a regulatory framework that takes the bad people out of the industry" but doesn't block all transactions, says John Grant, executive director of the association. He says legitimate investors have been unfairly tarred by politicians aiming to crack down on scams.

One of the best-known buyers of homes from distressed owners is HomeVestors of America Inc., a franchising company based in Dallas that helped found the trade group headed by Mr. Grant. After paying an upfront fee of $49,000, franchisees receive two weeks of training, and can tap into leads generated by the company's ads. HomeVestors, known for big yellow billboards proclaiming "We Buy Ugly Houses," has 250 franchisees in 31 states and the District of Columbia, up from 43 at the end of 2000.

The company says its franchisees typically offer about 65% of the estimated market value of homes, minus renovation costs. Such a deal, it says, can benefit people who lack the time or inclination to fix up and sell a home themselves.

"We never want to look like we're taking advantage of people down on their luck," says John Hayes, the company's chief executive.

ForeclosureS.com, the firm that provided training to Mr. Termine, also says that its methods are fair.

During a recent $19.99 seminar provided via a telephone conference call, company president Alexis McGee said investors should be honest in describing borrowers' options -- including how they might get a higher selling price by listing with a real-estate agent. Rather than scare owners about the prospect of losing their homes, she suggested a softer approach: "Hi, my name is Alexis. I understand you are in a difficult situation with your house, and I wondered how I could help."

'A Ton of Dough'

Using such techniques, investors still "can make a ton of dough," Ms. McGee told the conference-call participants.

Mr. Termine hopes to do just that. One recent day, he started work at 7:30 a.m. in a cubicle at the office of a friend. Wearing blue jeans and a crisp white shirt, he switched on his computer, bringing up an image of his pet pit bull. Then he called up the Web site of New York's Rockland County Clerk, and began searching through legal notices of foreclosures.

He jotted down notes about people to call. "Every week that I do this more and more people are in trouble," he said. "It's slowly, like, on an incline."

When records show that people have loans and overdue taxes that total more than the value of their homes, Mr. Termine doesn't bother to make contact. He can make a profit only if there is equity remaining in the home after he buys it and pays off all the obligations.

After about an hour of computer research, Mr. Termine got back in the blue Ford Taurus he uses for work and set out to look at prospects. One stop: a two-story house in Stony Point, N.Y., with moldy white siding. From court filings, Mr. Termine knew the name of the home's owner and that a foreclosure auction was pending. A neighbor who was watering the lawn said the owners had two children, drove a new Lincoln Navigator and now live in Florida.

Mr. Termine made a note to track down the owners' current phone number. He then did some quick calculations. If the owner would sell him the home for around $230,000, "I'll probably make $100,000," said Mr. Termine -- even after spending about $30,000 on renovations and paying broker fees.

Later in the day, Mr. Termine arranged his meeting with Mr. Mbanefo. Mr. Termine first contacted Mr. Mbanefo early this year after finding court records showing that he faced foreclosure. The two had discussed Mr. Mbanefo's options and dickered over the value of his house for weeks.

Mr. Mbanefo bought the house in 1994 for about $175,000. Though the value has more than doubled, so has his mortgage debt because he has borrowed against the house to finance businesses, including a line of denim clothing branded Abani. Sitting across a table from Mr. Termine, Mr. Mbanefo tapped some numbers into his calculator. After buying, renovating and reselling the house, "you'll come up with 100 grand (in profit) at the end of the day," Mr. Mbanefo said.

"I don't know how much I'll make," Mr. Termine said.

A few weeks later, Mr. Termine reached a tentative agreement to buy Mr. Mbanefo's house, at a price the latter doesn't wish to disclose. At the time, Mr. Termine said in an interview that he might make a profit of around $85,000 after paying $20,000 for minor renovations and reselling the house.

But the deal fell apart in May when Mr. Mbanefo decided to sell to another investor instead. He declines to discuss that transaction.

Though the outcome was disappointing to Mr. Termine, he presses on. "I can't help everybody," he says. "But I try."

How To Analyze Rental Potential When Buying Investment Property

2006-06-15T14:19:00.000-07:00

By Joel Teo

There are two traditional ways to make money from property investment. The first being capital appreciation and the second being rental returns. Good rental returns incidentally affect capital appreciation to some extent it would be hard to segregate the two. Thus, this article will identify three indicators of a good rental property investment so as to help one that can form the basis of your next real estate property investment.

Firstly, good human traffic would be key if the investment property category that you are interested in involves shopping malls, strips and shop houses. Spend some time thinking about what type of crowd a rental property seeks to attract and then go down during the period in which you think the human traffic is at its maximum to have a gauge of the ground conditions.

For instance some rental property attracts the office crowd, then you want to analyze when the office crowd might appear like during lunch time and you can then go down during lunch time to estimate the crowd size and figure out whether your investment property investment will give you good rental yields.

Secondly, pay some attention to future developments in your area to figure out where the large shopping malls might develop and then purchase your property in the direction of progress as some real estate writers like to put it. The reason for this is that where there is development, there would be an increase in crowds and this would be in addition to any crowds that you might have noticed in the first point above and therefore increase you rental from your investment property.

One good way to stay abreast of such developments is to network with property developers, architects and real estate agents who come across such information. Such a team can form part of your Master Mind Team as Napoleon Hill suggested to accelerate your property investment progress. Another way is to spend some money in a real estate investing magazine in your country or area and be updated on property investment trends.

Thirdly accessibility to transport is very important for rentals. When accessing an investment property for rental purposes, if your property is far out from the city but is readily accessible from the subway, bus routes or walking or the freeway, the rental of your property might be a lot higher than a property that is nearer the city but is very inaccessible. When determining accessibility, check if its connected to the freeway or whether public transport is readily accessible.

In addition, if your investment property involves industrial property, you want areas where your tenants can move their manufactured goods easily to the port. Spend some time talking to your real estate agent about this and they can advice you on this.

In conclusion, do spend some time thinking about what your tenant might want in a rental property of that particular class and you will be able to choose a property that can help you achieve good rental yields that is critical for cash flow purposes.

If you are looking for homes for sale in Spring Lake NJ, Newark NJ, Marlboro NJ or any other area in New Jersey ERA Othello Realty are the real estate agents that you are looking for. Whether you are looking to buy or sell your New Jersey real estate they can help you. Search through thousands of houses for sale in New Jersey.

Mortgage Rates And Factors

2006-06-15T14:18:00.000-07:00

By James Calvin

There are several factors that affect your mortgage rate. One major factor of mortgage rate movement is inflation. Inflation means a growing economy and increasing prices of goods and services. A growing economy means a stronger demand for goods and services, allowing producers to increase their prices. This therefore results in higher real-estate prices, higher apartment rents, and higher mortgage rates.

In an effort to reduce inflation and slow down economy, the Federal Reserve lowers down interest rates, and in the process, decrease mortgage rates. Although mortgage rates have the tendency to move in the same direction as interest rates, their actual movements are also based on the supply and demand for mortgages.

Mortgage rates have a slightly different equation in their supply and demand as compared to interest rates. This is the reason why sometimes, mortgage rates move differently from other rates. For instance, a lender has a commitment to make and is forced to close additional mortgages. To achieve this, they would have to lower down the mortgage rates even with interest rates going up.

Other Factors Affecting Mortgage Rates

Mortgage rates are affected by several other factors besides inflation. Mortgage rates rise up when the amount of the loan increases. This increase in mortgage rates is especially true if the loan amount exceeds the established loan limits of Fannie Mae and Freddie Mac. Loan limits typically changes at the beginning with each year to conform with the trend mortgage rates are taking.

The length of the loan may also affect mortgage rates. Shorter loans usually means lower mortgage rates and longer loans can cost you higher mortgage rates. Loans with a 20-year or 15-year note can allow you to save thousands of dollars on mortgage rate payments. However, this also means that your mortgage rate payments every month will also be a lot higher.

To avoid this, an adjustable mortgage rate may help you get started on a lower mortgage rate, but if interest rates grow, your monthly mortgage payments will rise also. Fixed mortgage rates are usually higher than adjustable mortgage rates but they can save you money too, especially if the interest and mortgage rates go up.

Larger down payments can help you save up on your monthly mortgage rate payments. You can get the best possible mortgage rate with a down payment that is greater than 20%. Higher mortgage rates are expected if the down payment is less than 5% since the beginning equity is smaller and provides less collateral.

Discount points are another way to move mortgage rates. Lower mortgage rates usually means higher points paid on your loan. The same goes for closing costs, which are fees that the lender must pay. Higher closing costs paid to them means lower mortgage rates. However, if you do not wish to pay for all the closing costs upfront, the lender will raise your mortgage rate in order to cover it.

The concept is pretty simple. Lenders are usually willing to lower mortgage rates as long as more money is paid upfront. More money down means lower mortgage rates. And lesser money down means higher mortgage rates.

About the Author:
If you're set on greatly increasing your odds at discovering how to exploit the profit potential of real estate.... Then this may be the most important website you'll ever see! You may reproduce this article as long as there is an active link.

Home Buying Tip: 7 Ways to Avoid Unethical Lenders

2006-06-15T14:17:00.001-07:00

Purpose of this home buying tip: To give you the information you need to protect yourself from unethical or "predatory" lenders during the home buying process.

What's a Predatory Lender?
Unethical lenders are commonly referred to as "predatory" lenders. It's a fitting description, because just like the lion preys upon the weakest of the herd, these lenders prey upon the most uniformed of home buyers.

Some predatory lenders lure you in with big promises, such as low rates, easy qualification and flexible terms. Others use the "only chance" ploy, trying to convince you that they are your only hope for a mortgage loan. By the time you realize what has happened, you've become a victim of loan fraud.

How Can I Protect Myself?
Common sense goes along way to protect you from predatory lenders. Trust your "gut" instincts during the home buying process. If something doesn't feel right, it's probably not.

Here are seven more ways to avoid predatory lenders:

1. Educate Yourself
Educate yourself before buying a home. Your education should include the types of mortgages, how the mortgage process works, what rights you have under the RESPA act and more. You can start your education by visiting HomeBuyingInstitute.com, the Internet's largest library of professional home buying advice.

2. Get Professional Help
Seek professional help from a real estate agent. Agent fees are nominal when compared to the price you'll pay for a new home. And the protection and advice they can offer are priceless.

3. Know Your Market
Start following real estate trends in your area. Get information about the prices of other homes nearby. Don't be tricked into paying too much.

4. Compare Lenders
Shop for a mortgage lender and compare their costs. By comparing several lenders, you'll be more likely to spot red flags, such as unusually low interests rates or other "to good to be true" promises.

5. Be Honest
Never let a mortgage lender persuade you to make false statements on your mortgage application. You are solely responsible for the information you put onto such documents.

6. Read the Fine Print
Take your time when reviewing mortgage documents. If somebody rushes you to sign something, tell them goodbye. Have your agent review the documents with you, or hire a real estate attorney if necessary. Never sign a document until you fully understand it.

7. Don't Sign Blank Areas
In your mortgage application, make sure there are no blank areas to be "filled in later." If there are blanks, mark them with "N/A" or cross them out.

Conclusion
Trust your instincts when buying a home, ask plenty of questions, and read all the fine print. If a deal sounds too good to be true, it probably is!

About the Author:
Brandon Cornett

Learn more:
For more home buying tips, visit HomeBuyingInstitute.com -- the Internet's largest library of home buying articles and advice. Visit http://www.HomeBuyingInstitute.com

The Formula To Help You Decide Whether To Refinance Or Not

2006-06-15T14:17:00.000-07:00

There are many reasons why it may be beneficial to refinance you home. The obvious one is the possibility of saving money. Depending on the interest rate of your current mortgage, and how long you have been paying it off, there could be a huge reduction in the monthly payments to be had. But that will largely depend on the term you want to spread your new mortgage over.

Many people seek to either shorten or lengthen the term of the loan. Changing personal circumstances such as a redundancy or a cash windfall may mean that you have a higher or lower capacity to make repayments, and need to renegotiated the terms of your mortgage to suit.

An increasingly common reason people refinance is to consolidate debts into the one loan. You may have other debts that you wish to pay off, and refinancing may provide a means of rolling all you debts into one overall lower payment. This option can be a 'double edged sword'.

Whilst you may significantly lower your monthly outgoings, you will more than likely end up paying more in the long run, due to having rolled a relatively high interest one or two year loan, into a much lower rate mortgage that may still have 20 years to run.

Another reason that some people refinance is if their original mortgage was structured with low initial repayments with a balloon payment due at the end. It's unlikely that many borrowers have the cash resources to pay out the final payment, so they will either have to sell the property when this payment is due, or refinance the mortgage, and continue paying it off.

The interest rate isn't the only thing that should be taken into account when thinking about refinancing. There are often substantial fees and charges associated with refinancing your mortgage. Most lenders will require new valuations, title searches and property inspections to re-assess the property value at its current market value, and these costs will all be borne by you the borrower. Plus your lender will also have a series of standard fees for establishing a new mortgage, just like you had to pay with your original loan.

Working out the viability of whether to refinance or not, is a relatively simple process. You just need to know the total loan re-establishment costs, and the net amount you are going to be saving each month. Then work out how many months it will take you to 'break even'. So long as you plan on keeping the property for longer than it will take you to break even, then the deal is probably a smart move.

For example, if it's going to cost you a total of $3000 to refinance, and you are going to save $200 every month, then you're break even point is 15 months away. Unless you plan on selling up in under 15 months, refinancing would probably be advisable. Make sure you add the re-establishment cost onto the new mortgage, and you'll "feel no pain" while you wait to break even, the deficit is only "on paper", and not coming out of your pocket.

This article is intended to be very general in nature. Refinancing is something that needs to be carefully checked our, particularly in times of volatile interest rates, therefore you should always seek independent professional advice that takes into account your own personal circumstances before entering any new financial arrangement.

About the Author

David Neehly writes on all aspects of the Refinance industry on his website, where you'll find more interesting articles. Don't forget to subscribe to his FREE newsletter, for expert advice, bonus gifts, and the latest developments in Refinancing.

Move Over, McMansions: Microhouses Are on the Rise

2006-06-15T14:16:00.001-07:00

By Annelena Lobb
From The Wall Street Journal Online

When Scott McGlasson, a St. Paul, Minn., furniture designer, bought land for a vacation house on Little Pequaywan Lake, he knew he didn't want to build a large, traditional house like many of those he had seen going up in the region.

"There are a lot of people building McMansions on lakes, but I really like small, simple things. And as a designer, I'm steeped in modernism -- I love things that don't have unnecessary elements to them," he says.

He designed the home with the help of his friend Geoff Warner, principal architect at Alchemy Architects, a St. Paul firm. The 800 square-foot dwelling, which cost around $160,000, was the second of Mr. Warner's "weeHouses," multipurpose units that can be used as anything from second homes to yoga studios. Mr. Warner says that the first one he built drew such a positive response that he decided to build more of the tiny houses -- since 2003, he has sold 14 additional units.

Mr. Warner is one of a number of U.S. architects designing microhomes -- typically, houses spanning from a few hundred to a little more than a thousand square feet. These houses, far smaller than the average 2,400 square-foot home built in the U.S. last year, contain most of the amenities of larger dwellings, including kitchens and bathrooms. Many occupy just two rooms, or sometimes two rooms plus a living area. Some microhomes compensate for the small layout by capitalizing on vertical space, custom-designing cabinets and furniture, raising ceilings to build in sleeping lofts, or even using flat-roof space as a deck or patio area.

Designers say microhome buyers tend to fall into one of two groups: The majority are looking for a secondary space, either a vacation home or a building near or attached to a primary residence. A minority of buyers are hoping to move into a minihouse full-time, motivated by a desire to simplify their lifestyles or by social and environmental concerns about the amount of living space people need.

While the market for tiny houses is still tiny itself, architects say they have seen interest from buyers jump significantly in the past five years. In 2002, Greg Johnson, an information-technology consultant in Iowa City, co-founded the Small House Society, a group that champions extra-small homes. He says he initially sent his newsletter to seven people; today he has about 260 individuals and architectural firms on the list.

Design Challenge

For architects who are weary of designing large-scale or cookie-cutter houses, building a minihome offers the challenge of figuring out how to make every nook and cranny count. Rocio Romero, who heads an architectural firm in Perryville, Missouri, says she finds it rewarding to make every space purposeful. A recent design for a 625-square-foot guest house uses a loft sleeping area and built-in beds to create more room below. She added windows in the loft and alcoves at the head of each bed with recessed lighting fixtures to facilitate reading in bed.

Since 2003, Ms. Romero has sold 45 microhomes around the U.S., using a design modeled after a vacation home that the architect built for her parents in Laguna Verde, Chile, a beach town along the country's central coast. Marion Anderson, a sculptor, bought one of the units to install next to her existing home in South Haven, Mich., as an art studio. The 1,250-square-foot dwelling, which includes the studio space and a bathroom, cost about $110,000, including assembly. "I have always been in love with Mies Van Der Rohe's house in Plano, Texas," Ms. Anderson says. "As I told Rocio one time, I feel like I've got a poor man's Mies."

Microhomes often rely on artful space-enhancing designs. Still, the houses can only hold so much. A year ago, Libby Crawley, the associate director of the doctoral program in business at Georgia State University, felt that her five-bedroom, three-and-a-half-bath home in the suburbs of Atlanta was too sprawling and put needless strain on the environment. She decided to move into a one-bedroom house just under 700 square feet, in Atlanta's East Lake neighborhood. The house was once the garage of the house next door. She says that editing her possessions made her realize which ones she valued. "I stored some furniture that belonged to my grandmother," she says. "I kept my books. I left the washer and dryer and a side-by-side fridge." Right now she relies on a Laundromat, but says she might buy a small washing machine.

Other microhome buyers describe similar experiences of thriving on less. Tiffany Larsen, a graphic designer in Seattle, enjoys home-improvement projects to optimize her 650-square-foot space, from tiling to building closets. "I'm obsessed with trying to make it the most functional space possible," she says. She says the only thing she misses having is a dishwasher.

Many of today's mini dwellings, including Ms. Romero's compact homes and the weeHouses, are designed to be easy-to-assemble structures that are linked to a renewed interest in modernist, prefabricated homes. Today's prefabricated homes are delivered either in parts, as nearly finished units, or somewhere in between. Earlier modernist prefab designs, such as the General Panel Corp. system, designed by Walter Gropius in the early 1940s, eventually lost their appeal -- in part because their similarity made them difficult to market, says Witold Rybczynski, a professor of urbanism at the University of Pennsylvania's School of Design, and an author of 11 books on architecture and planning. "People wanted something more idiosyncratic," he says.

Today's designers have had more success by marketing the houses as multipurpose units. V2World, a Phoenix, Ariz., builder of minihouses, for example, pitches its units as "hotel, guesthouse, yoga room, urban dwelling, vacation pad, personal sanctuary, live-work space" -- whatever the owner wants them to be.

Architects and buyers say two of their biggest challenges they face with tiny houses are creating enough storage space and finding furniture small enough to be squeezed into compact rooms. Sleeping lofts, raised beds and underbed storage are staples. V2World uses small European appliances, including a Miele 24-inch convection oven and combination washer-dryer units, in its 450-square-foot, one-room units. In-house designers at V2World build cabinets to fit the units. Large windows make a little house seem less boxy.

Unique Look

Some homebuyers who live most of the time in standard-size houses like the idea of having a more unusual property for their vacation home. "The same people who are very conservative with their main house are prepared to be quite different [with a vacation house]," Mr. Rybczynski says. "People like A-frames, log cabins, geodesic domes."

Architect Jim Higgins bought one of Ms. Romero's LV units to use as a vacation home for himself and his partner in Eliot, Maine. While their primary home in Boston's Beacon Hill neighborhood is very traditional, the modern design of Ms. Romero's houses appealed to them for a secondary residence. "When we go to the Eliot house, it's like fun town," he says. The home's uniqueness makes him feel even more removed from ordinary life during his time off, Mr. Higgins says.

Installing a scaled-down, fully equipped minihouse next to a larger home also has gained currency in the past few years. Tom Stevens, a builder for Consortium Design Group in Canton, Mich., sells extra-small houses he calls "personal spaces." Ranging between a mere 64 square feet to just over 1,200, the microhomes have cathedral ceilings and hardwood floors.

For the past two years, Mr. Stevens has been working on a house on Batteese Lake, Mich., with a 288-square-foot flat-roof unit beside it. The smaller unit will incorporate the same materials as the house, and will have heating and a bathroom. It costs about $35,000 to build and "will look like a chip off the old block," Mr. Stevens says.

Living in a tiny home, as opposed to doing yoga in it or using it for vacations, often appeals to people who want simpler lives that leave less of an ecological "footprint." Small houses require less fuel for heating and cooling, fewer building resources and are much easier to clean. V2World Chief Executive Tim Russell says his company designed their houses on the premise that people in the U.S. eventually might have to move to smaller spaces due to demographic pressures and land exhaustion. "That puts good design at a premium," Mr. Russell says.

In fact, many of these microhome designs look quite edgy. Mr. Higgins says his modernist Maine vacation home sits on a little street amid a string of quaint New England colonial houses, and so it stands out. It has attracted a lot of attention from the neighbors, he says, who have told the architect they like the way the house looks, even if it doesn't quite fit in. "The metal on the outside reflects a blue sky," Mr. Higgins says. "It's so different from the other houses, and it's great to be in a different kind of space."

Fund Flows Into Home Builders Are Slow but Remain Positive

2006-06-15T14:16:00.000-07:00

By Janet Morrissey
From Dow Jones Newswires

Investor concerns about a possible crash in the homebuilding sector have been escalating in the past couple of months as industry fundamentals have been deteriorating at a faster clip than expected. However, the investor jitters have not shut down interest in the group as fund flows into the sector remained positive in May, although investors favored some homebuilding names over others.

A Birinyi Associates Inc. report, commissioned by UBS Associates, found general investor sentiment toward builders cooled in May from April, with investors carefully cherry-picking the homebuilding stocks they wanted to build positions in at this point in the cycle.

Fund flows increased into five homebuilding names -Centex Corp. (CTX), Meritage Homes Corp. (MTH), Standard Pacific Corp. (SPF), Pulte Homes Inc. (PHM), and WCI Communities (WCI) - in May. However, money flows significantly slowed in others, with the biggest drops appearing in D.R. Horton Inc. (DHI), Ryland Group Inc. (RYL) and KB Home (KBH). Despite the slowdown, fund flows didn't turn negative, indicating investors were not pulling out of the stocks.

"Of the 15 homebuilders we monitor, Birinyi found that money flows were positive into five in April and neutral among the remaining 10," said UBS analyst Margaret Whelan. "None of the companies had negative flows," she emphasized.

Whelan said the fund flow data is a good barometer for gauging near-term investor sentiment and psychology toward the group.

"Homebuilder investors know that the cycle in psychology has as big an influence on the stocks as that of any economic cycle," said Whelan.

Although there has been much talk of a housing bubble and homebuilders have been reporting a sharp drop in orders in the last two quarters, investors don't believe the sector is heading for a crash - at least not yet.

"Otherwise, they'd be selling" and fund flows would be negative, said Whelan. "The reality is that actions speak louder than words."

The fact that many of the fund flows were neutral - meaning there were as many buyers as sellers in the stock - indicates much of the institutional money is sitting on the sidelines waiting. "When institutional money is coming into the group, then the flows are positive," Whelan said.

Homebuilding stocks fell about 32% in the first five months of the year, marking the steepest drop in five years, the report said. The last time the group saw a sharper falloff was in 1999, when homebuilding stocks declined 45% over 292 days.

"I think that overall the valuations are so low that it's making people more interested," Whelan said.

Homebuilding stocks were off across the board Monday, with shares of Beazer Homes USA Inc. (BZH) off 3.4% to $45.72, KB Home off 3.2% to $43.32, Lennar Corp. (LEN) down 3% to $43.77, M.D.C. Holdings Inc. (MDC) down 3.6% to $50.97 and M/I Homes Inc. (MHO) down 3.6% to $31.36.

Meritage stock was off 4.5% to $47.90, Pulte Homes was down 3.1% to $27.38, Ryland was down 3.9% to $41.64, Standard Pacific was lower by 4.5% to $24.85, Levitt Corp. (LEV) was down 4.2% to $14.53 and Toll Brothers Inc. (TOL) was down 3.6% to $26.16.

http://www.realestatejournal.com

Harvard University Predicts Soft Landing for Housing Market

2006-06-15T14:15:00.001-07:00

By Amy Hoak
From Marketwatch

Climbing interest rates and cooling speculative demand is putting pressure on the housing boom, but as long as jobs continue to be created and builders curb production, the sector will experience a soft landing, according to Harvard's Joint Center for Housing Studies.

The center's "State of the Nation's Housing" report, released on Tuesday, predicted that even though home-price growth will fall to more moderate levels in many areas, sharp drops in prices are unlikely. The absence of severe overbuilding or big job losses in major metropolitan areas is an important factor in the stability, the report said.

About 1 million people became homeowners last year, and mortgages including low-down payment, hybrid-adjustable and interest-only loans helped them make the purchases amid higher home prices and interest rates, the report said. Most owners with adjustable loans have an initial fixed-rate period of three or more years, and most interest-only loans extend for at least five years.

"While homeowners with annually adjusting mortgage rates are facing interest increases this year, including those with expiring teaser discounts, only about one in 10 homeowners face higher mortgage payments this year" Nicolas P. Retsinas, director of Harvard's Joint Center for Housing Studies, said in a news release.

Years of high appreciation rates, however, are feeding housing affordability problems, the report found. Between 2001 and 2004, the number of households spending more than half their incomes on housing increased by 14% to 15.8 million. In addition, the bottom three-quarters of the income distribution is seeing slow wage growth that isn't keeping pace with rising housing costs. The supply of rentals affordable on a $16,000 annual income fell by 1.2 million between 1993 and 2003.

"Slow growth in domestic discretionary spending at the federal level and the reluctance of state and local governments to relieve intense barriers to the production of more affordable housing make the road ahead difficult," Retsinas said. "Unless governments step up to these challenges, spending on housing will increasingly crowd out spending on pensions and savings among those with low and moderate incomes."

The report also looks at the contribution foreign-born and minority owners will make to overall household growth. The center projects net immigration will run at 1.2 million annually, which will help drive household formation to 14.6 million over the next ten years.

"Strong household growth, combined with record incomes and wealth, will lift housing investments to new highs next decade," Eric Belsky, executive director of center, said in the news release. "Each generation is achieving higher homeownership rates, incomes, and wealth than the one ahead of it, with the leading edge of the echo baby boom now in their 20s and the baby bust now in their 30s starting off on especially high paths. This is despite the fact that each younger generation has successively higher shares of foreign-born and minority household heads with lower average incomes than same-age native-born whites."

Other findings:

A renewal of rental demand was seen in all four regions of the country last year. Rental vacancy rates fell from 10.2% to 9.9% in 2005.
Adjustable rate mortgages shares fell from 35% in 2004 to 31% in 2005. Interest-only loans rose to 20% of loan originations in 2005. Subprime originations increased in real terms to $625 billion in 2005 from $210 billion in 2001; more than one in 10 mortgage holders is a subprime borrower.
House prices increased 9.4% in 2005, after adjusting for inflation. Of the 149 largest metropolitan areas in the country, the number in which median house prices are at least four times the median household incomes increased from 13 in 2001 to 49 in 2005.
Minorities accounted for 63% of household growth from 1995 to 2005. They are projected to account for 71% of household growth from 2005 to 2015, which would put the minority share of all households from 28% today to 33% in 2015.

http://www.realestatejournal.com/

Creating Real Estate Notes Can Help Sell a House Quickly

2006-06-15T14:15:00.000-07:00

Author: Linda Wilson

Banks and mortgage companies have been selling mortgage notes in the secondary for years. They even buy and sell those notes to other lending companies. This most likely has happen to you or to someone that you know at some time or another. Why do lenders do this? They do it in order to keep a steady reserve of cash on hand to make other loans.

The information in this message is designed to help you understand about creating trust deeds, real estate notes, or if you have a business and have contracts you also have a business note which will bring you a cash flow that you can receive monthly payments, which brings you steady cash flows. You can also have the option to sell whole or part your real estate notes, trust deeds or business notes. The whole idea here is to first elevate your potential of meeting a home buyer to sell your home to.

Time and time again you might find houses that are for sale but are on the market for a very long time. Most of the time home buyers don’t qualify for a 100% loan and must get 2 loans to equal the 100%. The home seller can offer “Seller Financing” in order to get the house sold.

The home seller has one objective and this to sell that property as quickly as possible. To do this you can create a trust deed which is secured by real estate. This is a real estate note. The real estate note has several purposes and the most important reason is to help the home seller close on the house.
The trust deed that you now have is because you agreed to finance the home buyer so that the buyer could get the house and you can your cash at closing.

Not only do you have cash at closing but you now have a real estate note that you will be receiving monthly payments on from the new home owner. Your home is sold and you have residual income from the trust deed you created. This creates steady cash flows from the trust deeds, real estate notes or business notes you may have. This is what “Seller Financing” is. This occurs when the buyer makes regular monthly payments to you instead of the bank. You now hold an asset that you can choose to keep for steady cash flow or sell part or all of it for cash right now.

This should motivate any home seller to give this a try, after all what could it hurt and it will be a win/win situation for the home seller, as well as for the home buyer. “Owner-Financing” is widely accepted and is an alternative for the home buyer who can’t qualify for a conventional loan. Even if you have real estate notes, business notes or trust deeds for a while you can generate cash flows by selling all or part of it for cash now.

Isn’t that great news for the home seller? This will give the home seller a boost in getting the house sold. Most people would consider buying that house if the they knew that the home seller was willing to create a real estate note or trust deeds to secure the home buyer qualifying for the house. Just envision selling your home much faster then your neighbor down the street because you possess the key to selling your home. “Owner Financing”.
You also have created cash flows created from your real estate notes, trust deeds, or business notes and that can be the key to your financial future.

Contact website: www.notefindersrus.com

The Shocking Truth About Your Mortgage!

2006-06-15T14:14:00.000-07:00

Author: Alicia Guidry

What your banker won’t tell you…

This summer could be a foul season for many consumers followed by tumultuous times for the remaining years. The quadruple jinx of rising interest rates, higher credit card minimum payments, erratic fuel costs, and depressed home values could be the calamity for many families already living on the threshold of bankruptcy.

Americans who recently broke into overvalued home equity, at historically low interest rates, are now seeing a sign of things to come. In some cases, consumers may find themselves upside down, owing more than their home is worth. In other cases, low interest rate credit cards now mandate APRs at least four percentage points higher than two years ago. Plus, issuers have been forced by regulators to double minimum payments on some cardholders who are paying high interest rates. But the real blistering is fuel prices which could now soar any day to any price. Paying $4 per gallon for gas, higher utilities, a 30%+ APR for credit cards, and clinging to a 100%+ home equity line of credit may push more Americans into foreclosure and ultimately bankruptcy.

Don’t kid yourself on your current home situation. If you are upside down in your home, there is a clause in your contract with the lending institution that states that they can ‘call’ the loan in at anytime. That means quite simply that they can force you to pay enough to settle yourself into an equity position or foreclose on the home. Why would the banks do that?

Look at it this way. Banks are in the business to make money, it’s as simple as that. In addition, while you are mailing off your mortgage payment to Chase Manhattan, it may actually be forwarded to The Bank Of Beijing! That’s correct. China now holds over 40% of American home mortgages.

There is a concrete reason that credit card minimums have doubled. The credit card industry will attempt to fill your head with propaganda such as: ‘they are attempting to help consumers get out of debt quicker’. What they are really pulling off is this: when you can’t make the minimum payment and contact them, they are now trained to look at your credit file and determine how much (if any) equity you might have in your home. They then offer you a consolidation loan with their bank. Should you decide to take them up on their generous offer of a consolidation loan, they then own you. Should you default on your credit card, they can take the house! Beware of wolfs in sheeps clothing.

Another clandestine offer is consumer credit counseling. Every ad and commercial you will see for this service pitches themselves as a non-profit organization that was established naturally to help you get out of debt quicker, thus avoiding bankruptcy. What you don’t know is that the non-profit consumer credit counseling industry if fueled and funded by the credit card industry. They report to the credit card industry! They also will not make your monthly payments on time, thus ruining your credit history anyway. I have seen this time and time again, over and over.

This brings me to ARM’s. In short, they are adjustable rate mortgages. Never in American history have we seen so many people with no credit files approved for home loans. Many of these people were innocently following the American dream and quite naturally, the American dream is to purchase as much house as you can afford for the longest amount of time. Based on this fact, many people that could not afford that dream house under conventional financing were able to afford it by incorporating an ARM loan.

In the long run, this will come back to bite them hard. When they signed an ARM, they were betting that the interest rates would not rise during the next 30 years! When the rate does rise and their mortgage rises accordingly, we will start seeing the effects of this in the way of mass foreclosures. As of this writing, we are already at an all-time high for foreclosures starting with Indianapolis in first place, Atlanta in second place and Dallas-Ft. Worth in third place. As rates continue to rise and jobs continue to be outsourced, we will see a plague of foreclosures that I predict will surpass the 1980’s.

Newark NJ Real Estate, Spring Lake NJ Real Estate, Marlboro NJ Real Estate, Jackson NJ Real Estate are all popular destinations. Spring Lake NJ is the premium shore location with it's exclusive homes for sale. Newark NJ is a popular city location for it's proximity to NYC and it's large business population. Marlboro NJ is known for it's excellent school district, it's exclusive homes for sale, the vicinity to NYC and it's a beautiful area. Jackson NJ is a very popular residential area in Central New Jersey with many different classes of homes. If you are interested in real estate in any area of New Jersey, please let ERA Othello Realty help you.

Internet Marketing Not Optional For Home Sellers In 2006

2006-03-09T10:35:00.000-08:00

It wasn't too long ago that all a real estate agent or for-sale-by-owner had to do to let the world know that they were interested in selling their home was to place a sign in the front yard and run a classified ad in the local paper. In 2006 it is a totally different world in residential real estate marketing. If you're trolling for buyers you better be in their path, which is the Internet. According to The National Association of Realtors(R) over seventy-percent of homebuyers start their search on the Internet before contacting a real estate agent.
Getting up to speed with Internet marketing is not difficult. Many companies today specialize in property web sites, home virtual (360 degree digital image) tours and blast new-on-market emails. To find these companies look in your local phone books or in Internet search engines. Mark Nash author of 1001 Tips for Buying and Selling a Home provides the nuts and bolts you need to know about marketing a home on the Internet.
-Eight still photos required for a home on Internet. Search engines and Multiple Listing Searchs look for at least eight still photos for a property. These should include an exterior shot under current seasonal conditions. If you put up a summer photo in the winter, buyers will think that the property has languished on market for many months. The other shots should be of the living, dining, and family room, master bedroom, master bath, kitchen and a backyard or other optional shot.
-Place a classified ad on your local Craigs List. Many first-time buyers search this popular directory of rental and purchase homes. You'll be amazed at how many inquiries you receive from devotees to this list.
-When booking a classified ad for your home in the local newspaper ask if they have an online edition. Make sure that your in every newspapers online edition that you advertise in.
-For as little as a hundred dollars you can have a web sites for your home. Marketing information, floor plans and mortgage rates and scenarios can be posted to it. The web sites address should be the property address, www.123mainstreet.com
-Virtual tours are a great way for Internet surfers to take a miniature tour of your home, and many buyers won't visit a home until they've taken a virtual tour. Here are some tips on virtual tours. Virtual tour camera lens can make small rooms smaller, so don't bother with walk-in closets, powder rooms and other small spaces. Take a look through the lens to get an idea what the camera will record. Move and stage shots to edit out too much furniture, close window blind or shades and streamline tabletops and bookcases. Place a blooming or green plant in shots to perk up and add life.
-Have your virtual tour burned onto CD's to give to buyers who have visited your home. Mail CD's to real estate agents in the area to give them a sneak-peek before they show your home. Put the web site address of your home on the outer sleeve of the CD.
-Gather email addresses of interested buyers and real estate agents for email notification of Open Houses, price reductions and interior photos to refresh their memories. Avoid spam, no one appreciates it.

Author: Mark Nash's fourth real estate book, "1001 Tips for Buying and Selling a Home" (2005), and working as a real estate broker in Chicago are the foundation for his consumer-centric real estate perspective which has been featured on ABC-TV, CBS The Early Show, Bloomberg TV, CNN-TV, Chicago Sun Times & Tribune, Fidelity Investor’s Weekly, Dow Jones Market Watch, MSNBC.com, The New York Times, Realty Times, Universal Press Syndicate and USA Today.

Article Source: http://EzineArticles.com/?expert=Mark_Nash

ERA Othello Realty can help you buy or sell your home. 732-364-2015. We offer relocation packages for corporate accounts, government accounts or for individuals. Whether you are moving from out of state to New Jersey, or you are within NJ and are moving north, south or lateral. We are your NJ Relocation specialists and we look forward to being challenged by your needs. From finding a house to selling your house, from moving companies to utility changes, and from school assistance to job assistance we are here for you every step of the way.

2006-03-09T10:29:00.000-08:00

When potential buyers come to look at your house, they're not only LOOKING, but they're also SNIFFING, either consciously or unconsciously. When we live in a house, we tend to get used to the way it smells and don't always notice when something is a little...stinky. But any obnoxious odors will be immediately apparent to a first-time visitor. So before you show your house, take a sniff or two, and then take these steps to de-odorize.
1. Pets. Dirty litter boxes and old "accident" stains are the obvious culprits here. Keep Kitty's litter box scrupulously clean at all times, and consider having your carpet professionally cleaned by someone who is experienced with pet stains. Don't forget that many people are allergic to cats, so make sure your furniture and carpet are vacuumed frequently. If possible, think about keeping your cat or other pets confined to a certain area of the house while your house is listed. If you're thinking of getting a cat or other pet, wait until AFTER you've moved.
2. Cooking. We've all been told that we should eat more fish, but until your house sells, eat that fish at a restaurant. Strong odors from cooking fish hang around and permeate the house. Cabbage, onions and garlic are notorious offenders, too. Throwing a few lemon slices in some boiling water or running lemon peel through the garbage disposal can help clear the air. And remember to take out your kitchen garbage as often as possible.
3. Cigarettes. Smoking easily drops the value of a house by 30% or more. Smoke gets into the drywall, carpets, furniture, and drapes, and it is very difficult to remove. If you or a family member smokes, stop smoking inside the house as soon as you decide to sell. Paint the interior, and either shampoo the rugs or replace them. If weather permits, keep the windows open to help air out the house.
Follow the above steps, and your home will not only LOOK good, it will SMELL good. A fresh-smelling, odor-free house is much more appealing than a stinky one, and much more likely to sell at the price you want.

Author: Kathleen Yamauchi is a long-time realtor located in Prescott, Arizona. For more free tips and resources on buying and selling your home and other real estate advice, visit her web site at http://www.kathleeny.com.

ERA Othello Realty is your source for your real estate needs throughout New Jersey. From the shores of Spring Lake NJ to Newark NJ they can handle all your real estate buying and selling needs. For homes for sale in Monmouth, Ocean, Mercer, Burlington, Camden, Middlesex, Passaic and all the other counties in NJ. From Central NJ to Northern NJ to Southern NJ you can count on ERA Othello Realty for New Jersey Real Estate.

Essential Tips for Real Estate Appraisals

2006-03-09T10:24:00.000-08:00

When you have the perfect home picked out and you know this is the home you want, your lender will require you to have an appraisal upon the request to use the home as security for a loan. A real estate appraisal will help in establishing a property's market value, the sales price it would probably bring the seller, if offered in an open and competitive real estate market.
The reason the lender requires the real estate appraisal is because they want to ensure that the property would sell for at least the amount of money you require for your loan. Simply put, if the lender should ever have to foreclose, they want to ensure they would be able to get their moneys worth.
A real estate appraisal is not to be confused with a comparative market analysis (CMA). Real estate agents commonly use a CMA as a tool to determine a realistic asking price for home sellers. Although, an experienced agent may come extremely close to an appraisal price with the CMA, an real estate appraisal's report include a lot more detailed information, not to mention the fact that it is the only evaluation report a bank will accept when making the decision of whether or not to loan money.
When having a home appraised for this purpose you should have an appraiser that is an objective third party. The appraiser should have no financial or any other connection with either party involved. If you have never experienced a real estate appraisal before, here are a few things that are included in the report.
There will be many details about the property in question as well as side-by-side comparisons of three different properties like it. There will be an evaluation of the areas overall real estate market. Any issues an appraiser feels can be harmful to the value of the property. Notations about any serious flaws will also be made; these are all coupled with many other items on the detailed appraisal report.
Real estate appraisals come in two different methods for appraising homes. There is the sales comparison method where the market value is estimated by comparing the property to other similar properties that has been sold in the same area. This method uses the similar properties to make several estimates of what they would have sold for if they had the same feature as the property in question.
Then there is the cost method, this is generally used for new properties when the costs of building is known. In this method, the appraiser estimates the costs involved in replacement of the structure if it were to be destroyed.
It is important to note that you should not depend on an appraisal to help you determine if the home is in satisfactory condition. This is a job for a home inspector. During a real estate appraisal, the appraise may take notes about obvious issues, however they will not test appliances, inspect the chimney or roof.

Rory H. Hawkins writes about real estate appraisal and other interesting topics. For more information on real estate appraisals visit us today.

Make a Million on Real Estate

2006-03-07T11:56:00.000-08:00

By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - Call her "The Accidental Tycoon." When Philippine-born Mary Buenaventura first started buying second homes, she didn't intend to become a real estate millionaire -- it just worked out that way.

"My prime goal in the beginning was simply to have a nice vacation home," she says. Maybe so, but now she owns three single-family homes and two condos, and has equity is the seven-figure range.

When Buenaventura came to the United States in August, 1984, she brought excellent English skills and quickly got work as a clerk. That lasted a couple of months until she found a job as a legal secretary. She's worked in that field ever since.

She bought her first home in 1987, a town-house condo in Norwalk, Calif. But that was the year she had her first child, son Charles, and as a single mother, Buenaventura says she wanted a real house.

"I sold the condo after less than a year," she says.

This was during the late 1980s housing frenzy, and the condo had appreciated 50 percent, to $120,000, during the short period she owned it.

She applied the sale profits to a three-bedroom, two-bath nearby, where her family -- daughter Andrea arrived a few years later -- lived for 12 years. When she sold it in 2000, the price had appreciated much more modestly than the condo had, just $45,000 more than she paid.

Catching the Wave

By 2000, when Buenaventura moved her family into their current home in La Habra, in Orange County, real estate was flying again. She got in under the high-wire, paying just $237,000. The home value has increased to $750,000.

Her first non-primary home purchase was a one-bedroom cabin near Big Bear, in the mountains out past San Bernardino. She bought it for family vacations in June 2001 and she paid $63,000.

The family only used it for a year or so before her children rebelled.

"You know how kids are," she says. "When they're younger, you can just tell them to pack up. But when they got older they wanted to stay home, close to their computers and their friends." Before that happened she had bought another cabin, intending to rent it out, not far away, for $75,000.

In 2002 she refinanced the La Habra house and her bank offered her enough extra cash to pay off the Big Bear property. She then took out another mortgage on the cabin and used the money to buy a condo in Palm Springs. She has since sold both cabins, but still owns the condo, which she rents.

Meanwhile, on the work front, Buenaventura flourished. She's now a paralegal and trustee administrator specializing in bankruptcies earning about $70,000 annually.

Getting Serious

The spark that really got her into serious real estate investing came with a pair of condo purchases in 2003, one on a golf course in Long Beach. It cost $219,000. That one, at least at first, did not work out well.

"It was a one bedroom and I found I could only get about $1,000 to $1,100 in monthly rent. Condos that size on the golf course were not much in demand as rentals," she says.

Fortunately, they were in demand to buy. She sold it for $280,000 and used a 1031 exchange to purchase another Long Beach condo, one closer to the commuter train line. She paid just $145,000 and rents it for $800 amonth.

"Those condos were a good lesson for me," she says. "The one near the train line was in an area where everybody walks, takes the metro or the buses; it was much more rentable compared with the golf course. There, only people in the higher end lived and they wanted to buy, not rent."

That experience caused her to really start thinking about real estate in bigger terms.

"The Long Beach deals really stirred the pot," she says. "I began to think, 'If I can do this all the time, that'd be great.'"

So she plowed back the surplus cash from the sale into another investment property in North Las Vegas. The $190,000 house has since gone up in value to about $270,000.

Home Study Course

Buenaventura intends to hold onto to most of her homes long-term, which makes positive cash flow from rentals an important aspect of her investment equation. She recognizes that she can't just count on real estate prices going up.

"One of my prime concerns when I investigate a property is, 'How much can I rent it for.' Then I look at maintenance costs and taxes."

If the numbers don't fall into the plus column after expenses, she looks elsewhere.

She has added another single family home to her portfolio, in Utah. And she also bought a condo in Renton Washington, but she quickly sold out after experiencing trouble renting it. She still made $27,000 on that deal.

Overall, Buenaventura has cleared more than $220,000 in gross profits on the properties she has bought and sold. And she figures current equity in her retained homes at more than a million.

Meanwhile she has returned to her original interest -- vacation properties, only now she's buying time shares on the secondary market. She bought a week at a condo in San Diego for $2,300 recently and another in Cabo San Lucas, Mexico for just $350.

"I'm planning a trip down to Cabo in a few weeks," she says.

Don't think she won't take a look at some properties while she's there.

Selling Your Home: Market/Sales Price

2006-03-02T12:29:00.000-08:00

by: Chris Cates

Whether you are planning to buy or sell a property it is important to become familiar with the terminology of real estate. In real estate the three terms that are commonly used interchangeably are value, cost, and price. Although, all are concepts relating to value, they are not the same. Let’s begin by differentiating between the terms.

Value deals with something that will happen in the future; whereas cost relates to past events, and the amount of money actually paid for the property is the price. Depending on circumstances, the value of a property may be the same, more than, or even less than the price. Several things determine the value of a property: the degree at which it satisfies a need, ratio of supply to demand, transferability, and whether a perspective buyer with need for the property can financially afford the property.

Value is a term, which should be used when speaking of what you think the future benefits will be from the ownership of a particular property. There are several questions that might be asked when trying to assess the value of a property:

1. What is the zoning code? What’s the possibility of it changing in the next 10 years?

2. If the zoning changes, would it impact the use of the property?

3. What are the plans for the surrounding area (a highway, shopping center, amusement park)?

4. What impact if any do the topography, climate, and location have on the value?

5. Will the value be influenced by the interest rate or property taxes?

Market value is the projection of the price the property should bring when the real estate market is competitive and open. Remember – there is a difference in value and price.

Market price describes an activity that has occurred and, as stated above, is the amount a buyer actually paid for the property. The price paid for a property is dependent on several things: motivation of the buyer or seller, location of the property, needs of buyer, and price of similar properties.

The reason to sell or buy a property is as varied as the seller or buyer and can impact the sales price. If a seller is highly motivated he may be more willing to adjust the price of the property toward what the buyer is asking. Reduction in income, financial inability to pay the mortgage, a change in marital status, too many similar properties for sale, and the desire to be removed from the responsibility of the property are conditions that could motivate a seller to adjust the sales price; thus creating an environment conducive to bargaining for the buyer. However, a less motivated seller may not be willing to negotiate his asking price, which probably is in line with the market value described above—not good for a buyer looking for a deal!

A seller’s ideal buyer is a motivated one. If a buyer, for whatever reason, is determined to purchase a particular property and is financially able, the asking price will be similar to the sales price. A situation such as this can mean little negotiation is needed and we have a satisfied seller.

The amount a property sells for has a direct relationship, normally, with the location of the property and how well the location satisfies the needs of the buyer. The more the gap is closed between how well the location of the property addresses the needs of the buyer the greater the chance the sales price will reflect the asking price and market value. A property 20 miles from the closest major highway will not be a good fit for a buyer needing to be in closer proximity to the highway. Before beginning a search for a property a buyer should identify his needs and motivation. By doing this, he positions himself for effective negotiations.

The closer the needs of the buyer matches the features of the property to be sold the greater the chance the sales price will reflect the asking price and maybe even the market value. As a seller, to identify serious and motivated buyers prepare a couple questions that will outline the buyer’s needs:

1. What features are you looking for?

2. What’s the purpose of your move? (This question will help you assess the buyer’s motivation.)

3. When would you like to close?

Today with the downsizing of many companies, some homeowners have been forced to file bankruptcy. Bankruptcy influences the price at which houses eventually sell because in calculating the asking price of a property a comparison of the sale prices of similar properties should be made. The sale prices of these homes often are lower than the market value and the asking price. If the home you are preparing to sale or buy is located near surrounding communities with high bankruptcy rates then the sales price will more likely be adjusted closer to those sale prices.

Remember: whether buying or selling a home, do not confuse the sales price, which is the actual price a property sells and the market value –merely a projection and may not reflect the selling price.

Buying your First Home

2006-03-02T12:27:00.000-08:00

by: Nathan Dawson

Buying your first home can be exciting but there is a lot to know. Buying a home will depend on real estate laws and customs where you are located but there are basic steps that every first homebuyer needs to accomplish.

Step 1- Your Finances

Establishing credit is very important especially when you are looking to purchase a large investment like a house. Your credit reports reflects how you manage your finances. Study your credit report and your financial history so you are familiar with it before applying for a mortgage. These reports will be needed for the mortgage approval process in finding out the interest rate and other loan terms.

Step 2- Familiarize Yourself with the Mortgage Industry

Do your research. Finding the right loan and lender is extremely important to your home buying success.

Choose the lender that is best for your needs but be sure to understand the loan process as much as you can before talking to a lender so you don’t feel completely lost.

Step 3- get Pre-Approved for a Mortgage

Once you talk with a lender, you should be given an estimate of how much you can afford for a house.

Being pre approved can help you in a variety of ways. So if a home seller gets two offers, one being yours with a pre approved letter from your bank saying you have been approved for the amount offered, and then there is the other person with no letter, your chances of getting the house are much better.

Step 4- Determine what you Want and what you need

Buying a home isn’t as challenging as most think. If you familiarize yourself with the real estate market and narrow down what you want and need before buying a house the process will run a lot smoother.

Be sure to understand agent duties and devotion because some real estate agents represent buyers, sellers, or both or depending on the state they can work as neutral facilitators for either party.

Step 6- Start Searching for your New Home

Your agent will most likely give you multiple listing sheets to review. You might have also picked up a real estate magazine in your area and found a house through that, shop online, or find ads in the newspaper. Other ideas can be driving around the neighborhoods that have houses for sale. Either way you look, consider these home buying search tools in your search.

Home Buying Search Tools

1. Consider houses that others may overlook
2. Get out there to see what’s out there
3. Look into public versions of multiple listing service web sites
4. Search for real estate agent web sites
5. Browse real estate search engines and networks
6. Find for sale by owner properties
7. Look at magazine and newspapers in print
8. Find foreclosed homes

Step 7- Handle Pre-Offer Tasks

When looking at houses be sure to look at its structure and features which can help determine if its something you want or not.

Step 8- put in an Offer

There's no one specific set of instructions that cover all the differences in real estate laws and customs that exist throughout the United States, so when putting in an offer on a house, it will depend on your location.

Step 9- House Inspections and Other Tests

Some states allow home inspections before the final contract is signed where as in other states inspections take place after the contract is signed. No matter when you have to do them, it's very important to decide which inspections and tests you want done.

Discuss with your real estate agent or if you don’t have one, then an advisor to find out when inspections should happen and if additional types of testing are needed for a specific area.

Step 10- Avoid having to Correct Last Minute Problems

As the closing date approaches, everyone involved in your real estate transaction should be checking the progress on a daily basis. That way if a problem arises it can be taken care of right away.

Step 11- Closing

Closing, also called settlement, is the event that transfers ownership of the property from the last owner to you.

Happy house hunting!

FHA rule changes ease home buying

2006-03-02T12:20:00.000-08:00

By J. STAAS HAUGHT Staff Writer, Press of Atlantic City

Published: Thursday, February 16, 2006

Recently revised appraisal guidelines and price caps should make it easier for many home buyers to secure a favorable mortgage through the Federal Housing Administration's lending programs, but word is just starting to reach the market.

The Department of Housing and Urban Development on Jan. 1 removed many of the appraisal barriers that kept sellers from entertaining FHA-loan structured offers for fear of needing to make costly repairs and left first-time buyers struggling to find an affordable home.

The FHA ditched a decades-old system of requiring the seller to repair minor cosmetic flaws, like chipped paint, missing handrails and cracked window panes. Instead the agency's appraisers now use the same appraisal sheets as most conventional lenders, focusing instead on mechanical and structural defects that could pose a safety threat

The housing authority also increased by more than 15 percent the maximum price allowed on an FHA loan. FHA mortgages are attractive to first-time buyers because of low down-payment requirements, relaxed rules on applying gifts to the purchase and managable interest rates on the loan

Agents, lenders and appraisers all agree the new rules will put more buyers into affordable homes and add more loft to the already soaring local market.

“It's going to develop exceptional opportunities for rehab properties and fixer-uppers,” said Mary Lou Ferry, owner of Ventnor-based Farley and Ferry Realty. “Buyers will able to acquire properties at better rates and with less upfront expense and we'll keep that momentum in the market.”

She said sellers and agents also will stop looking at an FHA loan as a deal-breaker.

“FHA is not really an obstacle anymore,” Ferry said.

A spokesman for the New Jersey office of HUD said opening doors for home buyers was the point behind changing the rules. He said while the old guidelines were meant to protect both buyer and lender, the agency admits they often proved too cumbersome for sellers.

“What they did is give the market a good reason to stay away from FHA loans and properties,” the spokesman said.

Jim Malamut, vice president of Atlantic Coast Mortgage, in Pleasantville, said both buyer and seller will now find FHA loans attractive.

“The new guidelines put more risk on the lender than on the appraiser, but if the house is worth the price it's going to be easier to get them in it,” he said. “And anything that helps people afford a home is a great thing.”

HUD also increased its price caps to better reflect local markets. Last year, the maximum price allowed on an FHA purchase was $172,632 for standard areas and $312,895 for high-cost areas. Today, those figures are $200,160 and $362,790. Locally, the price caps for Cape May, Ocean, Cumberland and Atlantic counties all now exceed $300,000.

Malamut said even though the guidelines have been in place for several weeks, agents and lenders are just now seeing the interest.

“Now that it's been a month or so, people are familiar with it. You've got people who went under contract in January just finishing up closing, so word's just getting out,” he said. “Plus you've got agents just starting to learn what's going on with the FHA guidelines so they're just now telling their clients about it, too.”

An FHA letter sent to mortgage lenders in December said the agency would also start accepting “as is” appraisals and remove several mandatory inspections, including for termites, on wells and septic systems, and for homes near heavy agriculture areas or near dumps, junkyards, landfills, factories, gas stations or dry-cleaning operations.

Mike Brennan, managing member of real estate appraisal firm Brennan Colangelo Appraisals LLC, in Galloway Township, said removing those inspection requirements allows appraisers to focus on more important concerns.

“It loosens up a lot on cosmetic stuff, stupid things that on a conventional loan you wouldn't worry about,” he said. “Before, with FHA we would have to write down a tripping hazard because a dog or pet clawed at the carpet near a door. That would have to be fixed before it could be sold. That kind of thing just made it harder on everybody.”

Brennan, who also is a real estate agent, said some agents would steer clients away from FHA loans because of the stringent guidelines. But, under the new rules, he expects more people to lean that way when they can.

Drew S. Fishman, president of the Atlantic City and County Board of Realtors, agrees, saying the local market's growth over the last few years left many buyers out of the running.

“Even if they accepted the old FHA guidelines, the (asking prices) went up so high that you weren't even in the FHA loop,” he said. “These are all positive changes, now. We probably won't see it out on the islands because of median prices there, but mainland properties certainly could fall into these categories.”

Real estate agent Eileen Raynes said her recent move to Rosenthal Realty, in Margate, has her working more with first-time home buyers and the new guidelines make finding them a home easier.

“It certainly removes some of the stigma of an FHA loan. Once we get over that, we can really start to look at different properties,” she said. “It's a whole new market for the buyer, the seller and me, as well.”

http://www.pressofatlanticcity.com/index.html

The Economy | Franklin meets housing market

2006-03-02T12:17:00.000-08:00

By Andrew Cassel
Inquirer Columnist

I keep trying to put Ben Franklin back on the history shelf, but he just won't go. For somebody 300 years old, Philadelphia's favorite Founding Father has some awfully contemporary things to say.

Check out this passage from Franklin's autobiography, for instance:

"There are croakers in every country, always boding its ruin. Such a one then lived in Philadelphia; a person of note, an elderly man, with a wise look and a very grave manner of speaking; his name was Samuel Mickle.

"This gentleman, a stranger to me, stopped one day at my door, and asked me if I was the young man who had lately opened a new printing-house.

"Being answered in the affirmative, he said he was sorry for me, because it was an expensive undertaking, and the expense would be lost; for Philadelphia was a sinking place, the people already half-bankrupts, or near being so; all appearances to the contrary, such as new building and the rise of rents, being to his certain knowledge fallacious; for they were, in fact, among the things that would soon ruin us.

"And he gave me such a detail of misfortunes now existing, or that were soon to exist, that he left me half melancholy. Had I known him before I engaged in this business, probably I never should have done it.

"This man continued to live in this decaying place, and to declaim in the same strain, refusing for many years to buy a house there, because all was going to destruction; and at last I had the pleasure of seeing him give five times as much for one as he might have bought it for when he first began his croaking."

Just like today

The more things change, the more they stay the same.

Shift forward a couple of centuries. Imagine the young Franklin setting up shoppe in Old City, say around 1980.

Now imagine a latter-day Samuel Mickle, putting the new kid straight about the city's sorry-looking prospects.

(You don't have to imagine hard. Just recall the infamous billboard posters of those years, which tried to attract tourists with the arresting-yet-pathetic message: "Philadelphia isn't as bad as Philadelphians say it is.")

Anyway, suppose Ben were reflecting in 2006 on that chance meeting a quarter-century ago and wondering what Mickle had paid for that Center City condo he finally gave in and bought.

Turns out Franklin had it right, as usual.

Assuming the price of Mickle's new pad was typical of house prices here, it would have cost him about five times as much as a typical Philadelphia house in 1980.

That's according to the index of local housing prices compiled by researcher Kevin Gillen at the Wharton School.

Indexing the price increases

Gillen's index shows that the median price for a city home rose from the low $20,000s in 1980 to about $110,000 last year.

That's more real estate appreciation than in the nation as a whole, where home prices since 1980 have multiplied a bit less than fourfold.

One could conclude, then, that, over the long term, Philadelphia hasn't done so badly. But of course, the story is far from finished.

Markets, as Franklin also knew well, go up and down, and yesterday's boom can be the source of tomorrow's bust.

If anything, Philadelphia has recently suffered a shortage of Samuel Mickles. Croakers were scarce as prices for lofts and townhouses broke records. Not long ago, I heard a Center City broker brag that, for the city's trendiest digs, "$2 million is the new $1 million."

But that could change. Prices are no longer soaring, if not actually falling, both in Philadelphia and nationwide. Sales have slowed, and the inventory of unsold homes and condos is rising as mortgage rates rise and buyers turn cautious.

Some market-watchers say we should expect the flat prices and slow sales for some time. And they're the optimists.

The croakers may yet have their day.

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The Economy | Franklin meets housing market