When a Hawaii couple had to replace their roof, they seized the chance to become energy independent.
(Money Magazine) -- Few homeowners can get excited about a costly maintenance project. But when John and Anne Harrison needed to put a new roof on their 50-year-old Oahu, Hawaii home four years ago, they saw an opportunity.
Working with architect Paul Noborikawa, they raised the roof over the dark living room, added more windows and enclosed an outdoor lanai, giving them a bigger and lighter space that seemingly merges with the surrounding dense woods and garden.
But John had even loftier ideas: installing solar water heating and photovoltaic power to take advantage of their hometown's 325 sunny days a year. Now roof panels generate the home's electricity and heat its water.
The couple's electric bill has gone from more than $150 a month to $16, the cost of being connected to Oahu's power grid. Over the course of the year they produce about 300 more kilowatt-hours than they use, feeding the excess back into the grid.
"A lot of my motivation has to do with being an educator," says John, the retired director of the University of Hawaii's environmental center. "People learn by example."
From gloom to glow
The low ceiling made the living room dark, so the Harrisons raised the roof by three feet.
New windows ($13,500) give them a wide view of the foliage around the house, and two Pella 15-pane French doors ($2,000) bring in more fresh air. Low-voltage halogen fixtures and task lighting ($5,500) illuminate the room from all angles.
The floors that replaced the carpet are made from spotted gum ($32,000), an Australian wood that's considered environmentally friendly because of its abundance.
Where did the money go?
The new living room, roof and solar power systems ate up about 30% of the total costs. The rest went toward landscaping, a new driveway and the conversion of an unusable Japanese bathhouse into a guesthouse.
"They've done some really terrific things," says Nancy Metcalf, a local realtor with Coldwell Banker Pacific Properties. "They opened up the area so that it brings in the greenery from the yard, and although the house is surrounded by trees, you don't feel darkness. It's what people shopping in the neighborhood are looking for."
Energy-producing estate
With a solar hot-water heater ($3,750) and a photovoltaic power system ($56,000), the Harrisons produce more electricity than they consume.
Good airflow, ceiling fans and strategic landscaping mean no need for AC. When temperatures dip, the great room's fireplace (not shown) provides the heat they need.
Dos and Don'ts for an eco-friendly great room
DO rely on plate glass to connect the outside and inside visually, and set windows high to bring natural light into narrow, deep spaces.
DON'T create large expanses of glass if you live in a cold climate. At best, glass is a tenth as effective as an insulated wall for keeping in heat.
DO install low built-ins below large windows. They will give you maximum storage space - but won't compete with your views.
DON'T choose walls of glass without extending the eaves out by at least a foot. An overhang cuts down on glare, unwanted heat and window wear.
DO put in wood floors for the greatest durability. (But add rugs, upholstery and curtains to reduce the echo from hard surfaces and high ceilings.)
DON'T use plywood on windowsills or top surfaces. Solid wood costs more ($20 per running foot) but also holds up better to the sun's rays.
DO spend extra on ceiling insulation (40% more for materials). Heated air is lost through the roof; cooled air is warmed. So a hot attic strains the AC.
DON'T neglect reversible ceiling fans, which pull cool air in when it's hot outside and push warm air down when it's not ($500 to $1,000 each, installed).
DO use track lighting to illuminate a large space for less. But spend $500 per track for an extra circuit so you can light different zones separately.
DON'T place any fixtures tight to high ceilings. That's wasted light so far above your head. And lights directly over a fan create a strobe effect.
--Do's and Dont's from Money Magazine contributing writer Duo Dickinson, who is an architect in Madison, Conn.
By Kate Ashford, Money Magazine contributing writer
November 25, 2008: 10:06 AM ET
Monday, December 8, 2008
Half of modified mortgages in default again
Data raises questions if government funds might be better spent on job creation.
WASHINGTON (AP) -- More than half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again, banking regulators said Monday.
The new data raise questions about whether government money may be better spent on creating jobs, rather than averting foreclosures, said John Reich, director of the federal Office of Thrift Supervision office at a housing industry forum sponsored by his agency.
"I do have concerns about allocating federal resources" Reich said.
However, many experts claim the bulk of loan modifications don't actually provide much financial relief for borrowers.
The government's data don't include enough detail about the types of the loan modifications that were made, said Sheila Bair, chairman of the Federal Deposit Insurance Corp. "The quality of the [modifications] are not what they should be," she said.
The U.S. economic picture has darkened over the past month. One in 10 Americans with a mortgage is either behind or in foreclosure, and more than 500,000 jobs were lost in November.
Unemployment stands at 6.7%, and the worldwide credit markets have only improved modestly from the freeze that led Congress to approve a $700 billion bailout before the election.
Discussion on Monday's focused on how broad the government's intervention should be, rather than whether the government should play any role at all. The U.S. is on track for 2.25 million foreclosures this year.
"We need a bottom-up approach, in my view, by modifying people's mortgages and helping them stay in their homes," said New Jersey Gov. Jon Corzine.
Corzine called for a three to six month halt to foreclosures while the government works out a more aggressive plan.
Mark Zandi, chief economist at Moody's Economy.com, said the public is likely to be more sympathetic to efforts to assist troubled borrowers, because the link between the foreclosure crisis and the sinking economy is increasingly clear to most Americans.
"It's now in every corner of the country," Zandi said. "I think that people understand that this is a broader issue."
During an interview that aired Sunday on NBC's "Meet the Press," President-elect Barack Obama declined to say how large an economic stimulus plan he envisions. He said his blueprint for recovery will include help for homeowners facing foreclosure on their mortgages if President George W. Bush has not already acted when Obama takes office next month.
For nearly a year, some consumer advocates, lawmakers and think tanks have advocated a dramatic government response. The effort, they say, should be similar to created the Home Owners' Loan Corp. in 1933 to help borrowers refinance troubled home loans during the Great Depression.
The Bush administration has focused mainly on voluntary industry efforts to modify loans, and those have not stopped the surge in foreclosures.
WASHINGTON (AP) -- More than half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again, banking regulators said Monday.
The new data raise questions about whether government money may be better spent on creating jobs, rather than averting foreclosures, said John Reich, director of the federal Office of Thrift Supervision office at a housing industry forum sponsored by his agency.
"I do have concerns about allocating federal resources" Reich said.
However, many experts claim the bulk of loan modifications don't actually provide much financial relief for borrowers.
The government's data don't include enough detail about the types of the loan modifications that were made, said Sheila Bair, chairman of the Federal Deposit Insurance Corp. "The quality of the [modifications] are not what they should be," she said.
The U.S. economic picture has darkened over the past month. One in 10 Americans with a mortgage is either behind or in foreclosure, and more than 500,000 jobs were lost in November.
Unemployment stands at 6.7%, and the worldwide credit markets have only improved modestly from the freeze that led Congress to approve a $700 billion bailout before the election.
Discussion on Monday's focused on how broad the government's intervention should be, rather than whether the government should play any role at all. The U.S. is on track for 2.25 million foreclosures this year.
"We need a bottom-up approach, in my view, by modifying people's mortgages and helping them stay in their homes," said New Jersey Gov. Jon Corzine.
Corzine called for a three to six month halt to foreclosures while the government works out a more aggressive plan.
Mark Zandi, chief economist at Moody's Economy.com, said the public is likely to be more sympathetic to efforts to assist troubled borrowers, because the link between the foreclosure crisis and the sinking economy is increasingly clear to most Americans.
"It's now in every corner of the country," Zandi said. "I think that people understand that this is a broader issue."
During an interview that aired Sunday on NBC's "Meet the Press," President-elect Barack Obama declined to say how large an economic stimulus plan he envisions. He said his blueprint for recovery will include help for homeowners facing foreclosure on their mortgages if President George W. Bush has not already acted when Obama takes office next month.
For nearly a year, some consumer advocates, lawmakers and think tanks have advocated a dramatic government response. The effort, they say, should be similar to created the Home Owners' Loan Corp. in 1933 to help borrowers refinance troubled home loans during the Great Depression.
The Bush administration has focused mainly on voluntary industry efforts to modify loans, and those have not stopped the surge in foreclosures.
Sussex County, Delaware Home Sales - as of December 7, 2008
Real estate in Sussex County, Delaware has not slowed down. The market is moving, at a fairly reasonable pace, too! Local professionals and REALTORS predict we may have indeed hit the bottom of the market. Only time and statistics will tell. Here is a breakdown of what has sold so far this year.
Single Family - 1,493 (compared to 1.462 on 12/1)
Condo / Town Home - 591 (compared to 584 on 12/1)
Mobile - 274 (compared to 269 on 12/1)
Multi - 4 (no change)
Lots / Land - 319 (compared to 312 on 12/1)
Farms - 7 (no change)
Commercial - 57 (compared to 56 on 12/1)
A total of 51 real estate transactions closed in the past week, bringing the total for the year thus far to 2,745. The average list price, as of October 31, 2008*, was $374,225, with an average sales price of $348,199. Homes are selling at 93% of list price and are averaging 190 on the market.
*November stats should be released and available by mid week. If you would like to know those figures immediately, please comment on this post. Otherwise, check back next Monday for the latest figures. Thank you.
Single Family - 1,493 (compared to 1.462 on 12/1)
Condo / Town Home - 591 (compared to 584 on 12/1)
Mobile - 274 (compared to 269 on 12/1)
Multi - 4 (no change)
Lots / Land - 319 (compared to 312 on 12/1)
Farms - 7 (no change)
Commercial - 57 (compared to 56 on 12/1)
A total of 51 real estate transactions closed in the past week, bringing the total for the year thus far to 2,745. The average list price, as of October 31, 2008*, was $374,225, with an average sales price of $348,199. Homes are selling at 93% of list price and are averaging 190 on the market.
*November stats should be released and available by mid week. If you would like to know those figures immediately, please comment on this post. Otherwise, check back next Monday for the latest figures. Thank you.
Friday, December 5, 2008
Bailout Efforts Now Focus On Main Street, Not Banks
Attention Santa Claus: The financial bailout has a new address—It's Main Street, not Wall Street.
Having thrown trillions of dollars at Wall Street and the financial sector, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson now appear ready to do the same for Main Street, with a spate of proposals to help homeowners and the housing market.
In what seemed like a well-choreographed, one-two punch this week, Paulson floated a trial balloon for a plan to ease mortgage rates to stimulate new home buying while Bernanke offered a number of proposals to address soaring home foreclosures.
“It looks like they're finally getting serious about doing something, which is important,” says Robert Brusca, chief economist Fact & Opinion Economics. "There are different remedies for different circumstance and enough programs out there for enough people. I’m encouraged.”
Brusca is among the many analysts who have criticized the Bush administration—and Paulson in particular—for doing too little for homeowners struggling with a housing recession and a credit crunch, while aggressively bailing out banks, brokerages and financial institutions such as Citigroup [C 7.71 0.31 (+4.19%) ] and AIG [AIG 1.94 0.10 (+5.43%) ] at great expense.
That crisis management focus, however, has changed recently, perhaps because of pressure from the Democratic Party following its overwhelming general election victory and a worsening foreclosures rate that is making a bad economy even worse.
The new effort also undescores policymakers' frustration and apparent failure to lower borrowing costs and spur lending, despite a variety of unusual moves, which has included policy reversals.
“This really is the gang that couldn’t shoot straight,” says NYU professor Lawrence White, who previously served as a White House economist and savings and loan regulator.
Managing Mortgages
Criticism and second-guessing aside, the heightened efforts—which began with the Fed’s announcement last week that it would buy some $600-billion in mortgage-backed securities—has already helped the mortgage market by lowering rates.
Criticism and second-guessing aside, the heightened efforts—which began with the Fed’s announcement last week that it would buy some $600-billion in mortgage-backed securities—has already helped the mortgage market by lowering rates.
“Absolutely. For the first time in a long time we are seeing the market reacting to the issues,” says a somewhat ecstatic Melissa Cohn, CEO of the Manhattan Mortgage Company. “Borrowing costs in general are just too high, even as real estate prices have come down.”
Cohn says customer call volume is up 300 percent since the Fed announcement last week.
For the first time this year, the average rate on a 30-year mortgage appears to be safely and solidly below 6 percent m—and headed lower.
For the first time this year, the average rate on a 30-year mortgage appears to be safely and solidly below 6 percent m—and headed lower.
As CNBC first reported, the Treasury plan under consideration would buy securities underpinning loans guaranteed by Fannie Mae and Freddie Mac with the goal of pushing rates to as low as 4.50 percent.
For many in the industry, that appears to be a magic and powerful number.
The National Association of Realtors estimates that a drop from 6 percent to 4.50 percent will result in the purchase of 750,000 new homes, on top of what’s now a 5-million annual pace.
On a $200,000 house, bought with a 10-percent down payment, the difference in monthly payments is $912 vs. $1079.
“Buyers will jump in if affordability improves,” says the group’s chief economist Lawrence Yun. “The first step is to stabilize prices and absorb the inventory. As long as home price continue to decline there's very little chance of any recovery.”
Fighting Foreclosures
Any recovery is also dependent on stemming the tide of foreclosures, say industry players and analysts, which is what makes the government’s new two-prong approach promising.
Any recovery is also dependent on stemming the tide of foreclosures, say industry players and analysts, which is what makes the government’s new two-prong approach promising.
Previous measures to address foreclosures through loan modification and other kinds of forbearance, such as the Hope for Homeowners program, have been largely ineffective, according to observers in both the private sector and government.
Another obstacle to modification has been the vast securitization of mortgages, creating a multi-party dynamic to negotiation and modification.
Bernanke's proposals Thursday addressed that and touched on other key concepts such as the government purchase and refinancing of troubled mortgages in bulk, increasing the affordability of monthly payments—which might include the government assuming some of the cost of the write down—and offering more attractive inducements to lenders and firms that service the loans.
“The government becomes the lender and restructures the loan to make them sustainable,” says the American Enterprise Institute’s Alex Pollock, who was CEO of the Chicago Home Loan Bank for about a decade and recently advised Congress on the housing issue.
“Step by step, it looks like we're getting back to the 1930s’ Home Owners Loan Corporation,” he adds, referring to the government’s Depression-era entity that wound up with about 20 percent of the country’s mortgages on its books but still managed to show a profit at the time it was shut down.
Second Guessing
Though the recent measures were generally well received, there's no certainty they'll be implemented. What's more, the probable cost is unknown.
Though the recent measures were generally well received, there's no certainty they'll be implemented. What's more, the probable cost is unknown.
More generally, government involvement of that scale worries some for both economic and ethical reasons.
Skeptics say lower rates alone won't be effective , given the deteriorating condition of the economy.
And, as with the financial sector’s bailout, such measures put too much taxpayer money at risk while rewarding excessive risk-taking by borrowers and lenders. That could anger responsible taxpayers and homeowners, especially since the government's latest proposals lack any provisions for refinancing sound mortgages.
Others worry about the potential for fraud and exploitation, as well as the unintended—and negative—consequences of government intervention in the free markets, particularly at a time when some say there are signs individual real estate markets may be nearing or even at a bottom.
“To what extent does this prolong deflation of the housing bubble,” says independent banking analyst Bert Ely. “It’s one of the things I find troubling about a lot of these programs.”
The answer to that question, of course, as well as the overall effectiveness of the measures won’t be known for some time.
People like mortgage broker Cohn, who’ve seen their business trampled by the credit crunch, are ready to make a leap of faith.
“Everyone is looking for stabilizing factors in the economy,” she says. “The way to save the economy is by saving Main Street.”
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