Real Estate Sifter

RISMEDIA, December 31, 2009—Driving to work one morning earlier this summer, home buyer Lori Kramer was thinking about the homes she and her husband had looked at the day before. Then, she had a thought that would eventually change the direction of her home search completely. “My home at the time was listed for less than what we were approved for and it needed some work. So I wondered if we could use that remaining money to upgrade a home we were considering and make it our own,” says Kramer of Jacksonville, Florida.

From there, Kramer called her Wells Fargo mortgage consultant, Diana Diallo, who told her about the 203k program. The FHA Section 203k program is specifically designed to rehabilitate and repair single-family homes. The 203k is a single mortgage loan that provides funds to purchase a home and make repairs and improvements.

“As the market turned and we began to see more and more distressed properties, Wells Fargo, as a company, has focused its efforts on developing a more streamlined version of the typical 203k loan,” explains Diallo.

After Kramer received preapproval from Wells Fargo, she consulted with her Realtor, Shawn Norton of Keller Williams Realty, about revisiting a home she and her husband had considered earlier; it needed a lot of work, but Kramer saw the home’s possibilities and later bought it. From there, Diallo worked with Kramer on choosing a home improvement vendor. She selected Lowe’s, a decision Kramer calls “one of the best decisions we made.”

“After comparing service and cost, Lowe’s out-delivered the other vendors,” explains Diallo. “Thus, Lori chose Lowe’s to complete her remodel repairs.” And the renovations were quite extensive.

With their 203k approval, the Kramers completely renovated the kitchen, replacing all cabinets and countertops. They also revamped two bathrooms and added new carpet and fencing to the home.

“Lowe’s was fantastic and they truly deserve some spotlight for their service,” lauds Kramer. “The Lowe’s team and their contractors helped with design, offered us some great tips and helped us with materials and product selection; they did all of this and offered us the selection we wanted for an affordable price—and within 45 days from closing.” The Kramers closed on their home on August 18 and the work was completed by October 1.

“We are extremely happy,” says Kramer. “This program changed the way we looked at buying a home. Thanks to Lowe’s, our home has turned out amazing. The before and after is unreal. My kitchen is particularly amazing.

“In this market, where so many homes have been vacant for so long or gutted in some cases, this program could really change the way people are buying real estate,” adds Kramer. “I would definitely do this again—and would work with Lowe’s to do it.”

Norton agrees.

“I learned so much from working on this with Lori and Diana,” says Norton. “This really opened all of our eyes to see that you can fix something if the structure’s good and you have the right people in place to do the work.”

In many cases, homes that would qualify for the 203k loan are in nice areas but have aesthetic problems. This program—because the home improvements are built into the loan—opens the whole market to the average home buyer. “I never would have bought this home without the program—and I could not be happier,” says Kramer.

“Lowe’s was just awesome,” she adds. “From the program manager and other managers to the contractors, everyone was just outstanding. Our cabinet installer was the best—he was on point and professional. All of our contractors were so good with us. Lowe’s was great to work with, and I would love for other people to experience working with them as well.”

For more information on the 203k loan program, visit www.hud.gov or www.re-buildusa.com.

Lowe’s contractors and installers are licensed where required. For more information, please visit www.lowes.com.

RISMedia welcomes your comments and questions. Email realestatemagazinefeedback@rismedia.com.

RISMEDIA, December 31, 2009—Data through October 2009, recently released by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, one of the leading measures of U.S. home prices, show that the annual rate of decline of the 10-City and 20-City Composites improved compared to last month’s reading. This marks approximately nine months of improved readings in these statistics, beginning in early 2009.

The annual returns of the 10-City and 20-City Composite Home Price Indices, declining 6.4% and 7.3%, respectively, in October 2009 compared to the same month last year. All 20 metro areas and both Composites showed an improvement in the annual rates of decline with October’s readings compared to September.

“The turnaround in home prices seen in the spring and summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat,” says David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip. Before jumping to conclusions, recognize that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today. Further, sales of existing homes-those included in the S&P/Case-Shiller Home Price Indices-have been very strong in recent months, working off the inventories of houses for sale. At the same time, housing starts remain weak, fears that the market will be swamped by a wave of foreclosures are heard and government programs aimed at the housing market will expire in the first half of 2010.”

As of October 2009, average home prices across the United States are at similar levels to where they were in the autumn of 2003. From the peak in the second quarter of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. With the relative improvement of the past few months, the peak-to-date figures through October 2009 are -29.8% and -29.0%, respectively.

San Francisco has reported seven consecutive months of positive returns, San Diego has reported six and Los Angeles and Phoenix are close behind with five. While the two Composites were flat, seven of the MSAs reported positive monthly returns for October and two of those- Phoenix and San Francisco- were greater than +1.0%. Looking at the annual statistics, both Minneapolis and Portland are no longer reporting double-digit declines. Denver and Dallas are nearing positive territory with their annual figures at -0.1% and -0.6%, respectively.

Las Vegas remains the one market that has not seen a glimmer of hope so far this year. Prices have declined for 38 consecutive months, with a peak-to-trough reading of -55.4%. It is now barely 5% above its January 2000 level. This compares to its peak in August 2006, when the average home price was 135% above that same level.

For more information, visit http://www.standardandpoors.com/.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMEDIA, December 31, 2009—(MCT)—Most homeowners are unlikely to be building, remodeling or decorating with abandon in 2010, given the slow recovery from the recession. But if you do plan to update your home or garden, here are some trends to keep in mind.

Home decor. The sleek, sophisticated but comfortable style known as “soft contemporary” will be a key look for the New Year, said Kris Kolar, vice president of interior design at Robb & Stucky Interiors. Instead of the eclectic clutter that has been popular for a while, there will be a move toward using just one or two eye-catching accents. These “punctuation-mark pieces,” featuring hand-worked techniques that give a custom look, may include special materials such as mother-of-pearl, flame mahogany and stainless steel.

Furniture. The environmental movement is getting stronger, said Jackie Hirschhaut, spokeswoman for the American Home Furnishings Alliance. Increasingly, furniture is being built using natural-fiber fabrics, recycled metals and sustainable woods. Red will be the trendiest accent color for furniture, she predicted. And home offices will continue to boom as growing numbers of Americans work from their residences.

Color. Classic neutrals and pops of exotic brights are the key shades at Pittsburgh Paints, which recently announced four color palettes for 2010.

The “Canvas” palette includes deep gray-browns and gray-blues, muted beige and chalky white. “Pink City” offers vibrant pinks, spicy oranges, grays and chocolate-brown. “Grace” includes elegant hues such as pale butter, bronze-gold and sea foam. And “Zest” reinvents the style of Palm Springs circa 1950, mixing high-energy yellows with gray, white and black.

Landscaping. Organic vegetable gardens, like the one installed at the White House are likely to be a huge trend in 2010, said Orlando, Fla., horticulture expert Tom MacCubbin. Community gardens are a growing trend, especially those that involve children. Of all vegetables, he predicts tomatoes will be especially popular. In the landscape, perennial plants that last longer than annuals and need less care are a strong trend, he added. Trendy plants include gold mound duranta, a shrub with acid-green foliage, and perennial bulbine, which sports spikes of yellow blooms.

New-home construction. The era of the extravagant McMansion is over, said Nathan Cross of NWC Construction in Orlando. When building new homes, people are increasingly budget-conscious. “It’s back to basics. Even the pool is a no-frills deal,” he said. About the only area where homeowners may be prepared to splurge a little is the master suite. Energy-efficiency will be important. So will going green: “So long as it’s a green trend that doesn’t cost too much.” Outdoors, some homeowners will be installing fireplaces, fire pits and summer kitchens.

Remodeling. The trend toward making minor improvements to home exteriors is likely to extend into next year—for good reason. It gives homeowners the biggest bang for their bucks when it comes to selling their homes. In terms of costs recouped, eight out of the top 10 home-improvement projects this year were exterior upgrades that cost less than $14,000, according to Realtors Report’s annual Remodeling Cost vs. Value Report. A steel entry-door replacement topped the list, recouping 128.9% of costs, followed by upscale fiber-cement siding replacements (83.6%), wood deck additions (80.6%), and several types of window replacements (more than 70%). The two interior projects that landed on the top-10 list were attic-bedroom additions (83.1% recouped) and minor kitchen remodels (78.3%). The least profitable remodeling projects in terms of resale, and therefore not likely to be popular in 2010, were home-office remodels and sunroom additions.

(c) 2009, The Orlando Sentinel (Fla.).

Distributed by McClatchy-Tribune Information Services.

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RISMEDIA, December 31, 2009—Property coordinates could become as important as street addresses in the future. We may soon view property listings remotely, according to Ed Krafchow, president and CEO of Prudential California/Nevada Realty.

Krafchow spoke at a recent gathering of relocation and real estate professionals at a Worldwide Employee Relocation Council (ERC) conference in San Diego, California.

As one of three panelists who addressed current market conditions and post-recessionary environments, I was intrigued by exciting new tools now being developed for the next era.

One company, Cybercity3D (see sample URLs provided at the end of this article), has developed the capability to tour properties through Google Earth, allowing prospects to view the property in its context or setting. “In its context” is a distinction that could make searching for property by its content—or data—obsolete.

Peering into the future, Krafchow, a well-known promoter of cutting-edge technology and ERC-recognized technological leader, believes the time is coming soon when we’ll use property coordinates to have a sort of “Wii” viewing experience. Prospects will fly over communities of interest with the ability to see the speed limit on the subject’s street…proximity to schools…grocery stores…the closest java joint.

In his ERC conference talk, Krafchow described using our PCs to “fly” into the neighborhood, park in the driveway, enter the front door and walk upstairs to see the view from the second-floor bedroom window. Current technology brings us to street level, but will soon offer 3D viewing inside and around the home. Buyers can inspect the backyards and interiors of potential new homes from their old homes. But is the experience real enough to make a purchase decision—or at least eliminate certain properties from consideration?

This possibility is especially exciting from the relocation industry’s perspective. Corporate employers typically cover transferees’ home-finding expenses for one five-day trip for homeowners (less for renters). But employers often grant exceptions to extend the home search duration upon request. Could virtual showings speed up this process to benefit transferees and employers? Initial destination-area trips typically include orientation tours and previewing potential new communities, but not always enough time to finalize a home selection. What if the “down time” in between trips could instead become valuable home-search time using agent-provided coordinates and consultation from afar? An added bonus: the entire family may participate in the new home selection. It might go like this:

“Typical Transferee Family” settles in after dinner to view nine potential homes, along with their agent, who participates from the destination area. Zooming down to the first property, they find the street approach appealing. The home is on a cul-de-sac and has an ample, private lot and mature trees. Pleased, they “fly” around back where a large deck and in-ground pool sits in a landscaped, level lot. Perfect, except for a large object looming behind and over the trees at the end of the property. Moving in closer, a bright yellow water supply tower soars above the mid-summer foliage. Unable to envision ever enjoying the backyard, they see no need to go inside and move on.

Property #2 offers exterior appeal, but the front door opens into a narrow hall, leading to a cramped kitchen with little cupboard space and dated appliances. Upstairs, the layout and decor is also not to their taste and they agree to move on.

Over the next two hours, six other homes are eliminated for reasons including proximity to a heavily traveled road and back yards lacking privacy. But the agent now has a very clear idea about features critical to this family and next week’s final home finding trip is shorter and productive.

For transferees, eliminating properties in virtual space clearly reduces time and travel stress. For employers, potential avoidance of additional cost and policy exceptions administration is welcome and each benefit with productive, focused employees on the job sooner. As agents, you must still research potentially suitable properties, but will spend less time escorting potential buyers to rejected properties. For so personal a decision nothing may really replace being there. But being able to speed search progress by early elimination of unacceptable properties is the next best thing.

Other types of real estate purchasers screening for specific property traits will greatly benefit by virtual viewing technologies, too. Investor-buyers of rental properties and REITS requiring particular features, those sensitive to mixed-use zoning or seeking the perfect high-rise view will also find this a time-saving technology.

CyberCity3D provided URLs for two sample residential properties currently on Google Earth; you may need to download Google Earth plug-in to view. (3D interior views not yet viewable from Google Earth’s Virtual Viewing of 3D listings):

Property Address: 80 Lau Awa, Lahaina, HI

http://www.cybercity3d.com/buythatroof/preview.php?id=-215&userid=1021

Property Address: 18305 Calle Stelina, Rancho Santa Fe, CA:

http://www.cybercity3d.com/buythatroof/preview.php?id=0&userid=1018 RE

Peg Guinta, CRP, is projects director for RIS Consulting. For more information, please e-mail peg@rismedia.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMEDIA, December 31, 2009—(MCT)-Consumer confidence rose for the second straight month as more Americans expect the nation’s economy to improve in 2010, the Conference Board reported recently.

The New York-based research organization’s confidence index climbed to 52.9 for December 2009, up from a revised 50.6 in November. Confidence had been expected to rise to 54.0 compared with November’s original reading of 49.5, according to a MarketWatch survey of economists.

The Conference Board’s Expectations Index jumped to 75.6 from 70.3 in November, reflecting more optimism about the future. Yet the Present Situation index, a gauge of how consumers feel now, fell to 18.8 from 21.2—and remained at a 26-year low.

“In general, the survey suggests that individuals are more optimistic about where the economy is headed than where it stands today,” said Jim Baird, chief investment strategist for Plante Moran Financial Advisors. Lynn Franco, director of The Conference Board’s consumer research center, agreed. She said consumers are “rather pessimistic about their short-term prospects.”

(c) 2009, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

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