RISMEDIA, March 8, 2010—American homeowners’ confidence in their own home’s value during the fourth quarter fell to the lowest level in seven quarters, with just one in five (20%) believing their own home’s value increased during 2009, according to the Zillow Q4 Homeowner Confidence Survey. In reality, 28% of homes increased in value during the year, according to Zillow’s Fourth Quarter Real Estate Market Reports.
That resulted in a Zillow Home Value Misperception Index of negative two–the closest to zero on record since Zillow introduced the index in the second quarter of 2008, when the index was at 32. A Misperception Index of zero would mean homeowners perceptions’ were in line with actual values. A negative Misperception Index indicates that homeowners are overly cynical about their own home’s value when compared with reality. This is the first time the national index was negative.
Half of homeowners believe their own homes lost value during 2009, while 30% believed their home’s value stayed the same. In reality, 65% of homes lost value during the year, and values remained the same for 7%.
“Not My Home” Sentiment Fades as Homeowner Attitudes Shift
The results demonstrate the “not my home” sentiment that was once prominent among American homeowners has faded. One year ago, nearly half (47%) of homeowners believed values in their local market would decrease in the next six months. However, when asked about their own home, fewer than one in three (30%) believed their own home’s value would decrease.
Now that gap has shrunk, with 22% of homeowners believing their local market will lose value over the next six months and 14% believing their own home will lose value. “Homeowners are finally succumbing to the notion that, in most areas, declining home values over the past year are no longer the exception, they are the rule,” said Dr. Stan Humphries, Zillow chief economist. “Almost three times as many people believe their home’s value will increase over the next six months as believe it will decrease in value, a level of optimism that is likely to outpace actual performance in the near-term. Given recent news about the stabilization of home values in some markets, I can see why homeowners are so optimistic. However, home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don’t believe we’ll see a definitive bottom nationally until the second quarter of this year. We’re not out of the woods yet.”
About Own Homes’ Values:
Homeowners in the Northeast and West are overly cynical about the value of their home. Three-quarters (78%) of Northeastern homeowners said their home lost value or stayed the same in the past year when just over half (58%) of the homes actually did. This disparity between perception and reality resulted in a Misperception Index of -14, making Northeasterners the least aligned with reality. Western homeowners, who were the most optimistic and the least aligned with reality last quarter, did an about-face in the fourth quarter. They now are slightly cynical with a Misperception Index of -5.
For more information, visit www.zillow.com.
A: The 15-year mortgage offers you a chance to save thousands of dollars over the life of the loan. This is because the interest rate is typically lower and amortization is half that of the 30-year loan, which means that the total interest paid on the 15-year note, as compared to a 30-year note, is significantly less because of the shorter borrowing period.
Put another way, a 15-year loan accrues principal much more quickly than a 30-year loan, so you get to own your house in half the time.
However, because you are building equity faster and paying down the loan sooner, a 15-year mortgage requires higher monthly payments.
Get a lender to help you calculate the overall savings of the 15-year loan versus the 30-year mortgage. In the end, though, base your decision on your circumstances and overall financial plan, such as whether you are nearing retirement age and also will have to shell out college expenses for children, in which case a 15-year loan may not be for you. Remember that your spending habits, budget, and financial goals should all be considered before making a final decision.
RISMEDIA, August 7, 2009-When it comes to home purchases, everyone wants to buy low and sell high. “Now is the low; high is just around the corner,” says Alexis McGee, foreclosure information expert, educator, and president of foreclosure property information specialists ForeclosureS.com.
With interest rates at a 35 year low, affordable financing, and abundant inventory, it’s a buyer’s market. “There are plenty of great opportunities that make the American dream of homeownership more affordable today if you know where to look and how to make the right deal,” says McGee.
McGee offers the following tips to help you buy right in today’s market:
-Do your homework before you buy. That means know the local market, the going price in a specific neighborhood, and what kind of financing is available. You can get free information and guidance online, but beware of websites that promise instant riches for “no effort and no money down.”
-Open your eyes to the opportunities that surround you. Even cities with high foreclosure rates have motivated sellers in sought after neighborhoods-where well-priced homes resell quickly.
-Make sure you know the current prices for comparable properties in the area. With markets in flux, prices from three months ago are no longer good enough.
-Don’t be afraid to ask for a discount. To figure your offering price, don’t forget to deduct the costs of necessary repairs and rehab and your profit. If you’re buying a property with plans to turn around and resell it, deduct from your offering price the cost of buying, holding and selling the property until you find a buyer- and don’t forget to pencil in your profit.
-Don’t be derailed by marketing come-ons, gimmicks, and “insider secrets”. If it sounds too good to be true, it is.
-Beware the “great deals” at the auctions. Competitive bidding drives up prices. Instead of buying a house at discount, you could end up paying full market price or more if you factor in auction commissions and fees.
For more information, visit http://www.foreclosures.com.
A: Ask questions that will give you a sense of the architect’s style, approach to design, and methods of work. For example: What is your design philosophy? What important issues or challenges do you see in my project? How will you approach my project? What will you show me along the way (models, drawings, or sketches) to explain the project? How do you establish fees? What would be the expected fee for my project? What is your experience/track record with cost estimating? If the scope of the project changes later, will there be additional fees? How will these be justified? The Washington Chapter of the AIA offers an excellent consumer brochure that provides additional questions and useful information.
RISMEDIA, August 3, 2009-Most news reports point to the subprime lending mess as the cause for the housing slump. But home sellers should know that plenty of people with good credit are simply cautious buyers, which can keep sales down.
In most areas it’s a buyer’s market, so people can be picky. “Most buyers in this market will try to re-negotiate based on the findings of their home inspection. If the seller is unwilling to make repairs or lower the price, they walk away,” says Kathleen Kuhn, president and CEO of HouseMaster.
“More and more home sellers are getting a pre-listing home inspection that helps identify potential deal-breaking issues before the house is listed on the market,” Kuhn says. “This way, sellers can fix problems and worry less about a buyer walking away later in the deal process.”
According to Kuhn, the following are “The Fearsome Four” when it comes to real estate deals:
Roofing Concerns: A new homeowner does not want the expense of roof replacement shortly after closing. Many sellers believe that if their roof is not leaking it is in acceptable condition. However, underlying issues can exist.
Electrical Problems: Some panel models were discontinued and might even pose a fire hazard. Although they are straightforward to replace, the potential fire risk can be scary for prospective buyers.
Structural Issues: Fortunately, major structural issues are the least common defect found in homes, but when they do occur, they can be costly to repair. Note that a professional home inspector won’t assess the extent of repairs needed when these conditions are found. Structural engineers and other professionals should be consulted to get specifics on the scope of repairs needed.
Synthetic Stucco or Exterior Insulation Finish Systems (EIFS): Overall EIFS can be effective, economical alternatives to traditional stucco. Unfortunately installation issues often lead to trapped moisture behind the siding, causing mold and extensive deterioration. In many cases the siding has to be replaced, often with a different type of siding which can cost tens of thousands of dollars.
“Sellers lose some advantage when they are caught off guard by issues, even minor ones. In a market where every edge counts, sellers can use tools like pre-listing home inspections and repair records to show that they are conscientious and have taken appropriate steps to sell responsibly and competitively,” Kuhn says.
By Jacqui Markowitz
RISMEDIA, August 3, 2009-As social networking continues to infiltrate our daily lives, it is becoming increasingly difficult to ignore the numerous social networking systems that are out there. For many, social networking is a way to connect with friends and family but it has also become a source of a broad range of information.
I recently wrote a blog talking about my crazy, busy life. It seemed to be an appropriate topic because I came in to work on Monday exhausted from the weekend. I had started out early on Saturday at Lowe’s, buying a paint scraper and sandpaper to refinish my backyard table. I went to the nursery for flowers. And then I recovered my chairs, tacking on new fabric. My thumb is still numb as I write this. Sunday was another full day. Made a birthday brunch for my daughter, shopped for her birthday gift and visited my in-laws. There is an even bigger list of the things I didn’t do.
I came to a conclusion as I was writing the blog. I seem to have a potent brew “on the go” that is bubbling over with equal parts of procrastination and rationalization. The procrastination most definitely has to do with putting my life on hold and the rationalization, well, that is how I get away with it. So, I’ve decided to give myself the gift of an hour a day that is carved out just for me. My plan is to walk. Walk away my stress. And, to leave my cell phone at home.
My theory is that this gift of time that I will give myself will allow me to give more to everyone else. I think that is true. I think that when we feel good about ourselves and about doing things that foster our personal happiness then we are better equipped to radiate that joy to others.
When I returned to work after the weekend, I had tons of messages from Twitter from people who are following me. I’m not sure I really get Twitter. I’m not really sure anyone gets Twitter, but, I do know that I’ve become a Twitter snob. I don’t like it when people overtly advertise on Twitter. I don’t mind checking out what they are doing, but I think its poor Twittiquette to sell me on something in 140 characters or less.
The really cool thing about Twitter, however, is that it gives you immediate celebrity status.
RISMEDIA, August 3, 2009-When it comes to searching for the right property, prospective homebuyers have a list of ‘wants’ and ‘don’t wants’ of items they can’t live without, and those they would rather not see in our around their home. Power lines are one feature that rarely appear on an owner’s want list, as many people believe they will affect the value of the property. However, a recent article published in The Appraisal Journal’s summer issue reports that a property’s value is not affected when the home is located close to high-voltage transmission lines, or when those power lines are visible from the home.
“High-Voltage Transmission Lines: Proximity, Visibility, and Encumbrance Effects,” by James A. Chalmers, PhD, and Frank A. Voorvaart, PhD, cites a study of 1,200 home sales in Massachusetts and Connecticut from 1998 to 2007. The study also found that a transmission line easement adjoining a home’s property had only a small negative effect on the sale price.
“In the four study areas examined here, there is no evidence of systematic effects of either proximity or visibility of 345-kV (kilovolt) transmission lines on residential real estate values,” the article states. “Encumbrance of the transmission line easement on adjoining properties does appear to have a consistent negative effect on value, although the statistical significance with which it is measured varies.”
The authors note that researchers and appraisers may mistakenly attribute a negative price impact to proximity, while the true impact is associated with the transmission line easement.
“The professional literature cited, combined with the results reported here, support the position that a presumption of material negative effects of HVTLs (high-voltage transmission lines) on property values is not warranted,” the article concludes.
For more information, visit www.appraisalinstitute.org.
