Items of Interest - July 15, 2006
WHEN DID YOU LAST YEAR ABOUT A HOUSING CRASH: Housing sales and starts are down from last year's peaks, will continue to decline in 2007 and may do so into 2008, economists at Fannie Mae, Freddie Mac and the National Association of Home Builders concurred this week, says Inman News. Although the housing market is slowing down with the economy, there are no signs of recession or a bursting bubble, they maintained. A slowdown in the economy could cushion the decline in the housing market by bringing an end to a series of 17 quarter-point, short-term interest-rate hikes by the Federal Reserve, the economists said. While housing prices aren't expected to appreciate as rapidly as they did at the height of the 2002-2005 boom, overall they're not expected to fall either. "Though the direction of housing activity is unambiguously heading cooler, we remain confident that the climate is still temperate and that 2006 will finish as the third strongest year ever for the national housing market," Freddie Mac's office of the chief economist concluded in its semi-annual economic outlook. Added David Seiders, chief economist at the National Association of Home Builders (NAHB): "We're going from unsustainable heat in 2005 . . . to a more sustainable pace of economic growth." Freddie Mac's chief economist, Frank Nothaft, acknowledged that some homeowners with adjustable-rate mortgages could be vulnerable to rising interest rates but noted that mortgage debt is largely protected by the value of housing stock, with homeowners continuing to build equity. Freddie Mac's economists said rising mortgage interest rates and waning demand for housing will slow the appreciation of home values to an annual rate of 7 percent in 2006 and 6.2 percent in 2007. The top economists at Freddie Mac, Freddie Mae and the NAHB all expect interest rates on a 30-year fixed rate mortgage will average 6.8 percent for the rest of the year.
AND NAR FORECASTS A MARKET AT OR BELOW CURRENT LEVELS: Home sales are projected to ease modestly but should stay within a relatively narrow range during the balance of the year, according to the National Association of Realtors. "The major housing indicators have been moving up and down within a reasonable range, which means the market should even-out just below present levels," says David Lereah, NAR's chief economist. "At the same time, housing inventory levels are balanced in much of the country, so overall price appreciation will be at a normal rate. We should see home sales rise and fall month to month, but don't look for any big shifts one way or the other." He expects existing-home sales to decline 6.7 percent from 7.08 million last year. That would still be the third-highest level on record. New-home sales should fall 12.8 percent from 1.28 million, Lereah projects, adding that housing starts could decline 6.8 percent to 1.93 million. The 30-year fixed-rate mortgage is likely to reach 7 percent by the end of the year. "The uptick in interest rates has been slowing home sales," Lereah says. "We remain concerned about the potential impact of higher interest rates in some of the more expensive areas of the country." The national median existing-home price for all housing types is expected to rise 5.3 percent to $231,300 in 2006. With more construction in lower-cost regions as well as price incentives that are helping to clear unsold inventory, the median new-home price should increase 1 percent this year to $243,300.
QUALITY IS QUESTIONED FOR CONSTRUCTION OF NEW HOMES: Quality Built, a risk management services firm in San Diego, studied new homes and condos in 27 states that were constructed by more than 900 different builders, says Realty Times. The company commonly found window flashing problems, improper roofing, missing structural hardware and other defects to be most prevalent in the eastern and southern states. Data were gathered on 20,867 single-family and 11,128 multi-family homes inspected in 2005. Among all homes, the three most common construction risks discovered in single-family homes were in the building envelope (41 percent), a defect that could lead to moisture intrusion and mold; framing and structural elements (34 percent), which can affect a building's integrity during rough weather conditions or earthquakes; and in the plumbing and electrical systems (8 percent). Using up-close, multi-family home inspections, Quality Built said life-safety defects appeared 29 percent of the time; framing and structural problems were in 26 percent of the homes; and building envelope issues existed in 23 percent of homes. The finding means some homes likely had two or more of these defects. The single highest risk problems identified in single-family homes included improper framing around windows and doors (a structural issue), building paper and house wrap installation flaws (moisture intrusion and energy loss), and missing structural connections, a major hazard.
NATIVE AMERICAN HOME OWNERSHIP IS INCREASING: Home purchase loans to Native Americans roughly tripled to 45,375 in 2004, up from 14,844 the previous year, according to the latest data from the Home Mortgage Disclosure Act, says New Mexico Business Daily in Realtor magazine. Although the numbers do not distinguish between financing arranged within tribal communities as opposed to outside of reservations, the National American Indian Housing Council suspects that Native communities likely are not experiencing "proportionally higher gains." Native Americans still lag the nation in terms of home ownership. According to Fannie Mae, 41 percent of reservation households are homeowners, significantly lower than the national rate of 68 percent. Home Mortgage Disclosure Act statistics show that more than half of American Indian mortgage applicants were turned down for financing in 2004, compared with 42 percent of prospective white borrowers.
YOU TOO CAN BE A HAPPY GRIM REAPER: Buying properties from the estate of a deceased person can be a great opportunity for a real estate professional looking for bargain investments, suggests Inman News. Often these properties are sold by the probate court in order to pay the deceased's debts or to settle an estate among several out-of-town heirs. They are a bargain because the local real estate market often doesn't get wind of their availability, according to James G. Banks, author of "Creating Wealth Through Probate." Find probate properties by reading obituary and legal notices and by checking probate court public files, Inman counsels, saying the best deal is to buy from estate executors, often at big discount because they want a quick, easy sale. Warning: Generally, the property is sold as is because the executor is in no position to know the condition of the property. If there turn out to be defects, the buyer has little recourse.
FORECLOSURES CAN BE ANOTHER ROUTE TO A BARGAIN: Rising interest rates and a cooling housing market are whetting the appetite of real-estate bargain hunters and fueling interest in Web sites that list homes in, or near, foreclosure, notes the Wall Street Journal. Economists expect delinquencies and foreclosures to increase from today's historically low levels. Nationwide, the percentage of home loans on which payments were past due fell to 4.41 percent on a seasonally adjusted basis in the first quarter after rising to 4.70 percent in the fourth quarter of 2005, according to the Mortgage Bankers Association. A variety of Web sites have sprung up to cater to home buyers and investors looking to purchase properties in or nearing foreclosure. You can browse the Web sites at no charge, but getting complete access requires a weekly or monthly fee, typically $40 to $50 a month. The federal government operates its own site, www.homesales.gov, which is free and provides information about foreclosed properties being sold by the Federal Housing Administration, the Veterans Administration and the U.S. Department of Agriculture. The Journal says novices should approach the foreclosure process - and the Web sites that sell foreclosure listings - with care. Finding a good buy on a foreclosed house requires hard work and can carry significant risks. Critics say that Web sites selling foreclosure listings often contain outdated information or listings on houses that aren't ready for sale; some try to direct would-be buyers to partners with whom they have a financial relationship or to seminars and other products.
A TIDY POTENTIAL GAIN FOR BOB NEWHART: He and his wife Virginia are selling their French country home in Bel Air, Calif. For $22 million, according to the Los Angeles Times, reports the Residential Specialist magazine. The couple bought the home for $4.2 million in 1990; it has 92,000 square feet, encompassing five bedrooms, six and a half baths, five fireplaces, terraces, gardens, a pool and an executive office. And that ain't no laughing matter.
HOME SALES IN NEW ORLEANS HAVE BEEN SURGING: In a market spurred by speculators and bargain hunters, an extraordinarily large number of houses in the flood-ravaged metropolitan area are being sold, according to real estate analysts, who say volume and sales prices exceed levels before Hurricane Katrina, according to the New York Times. The higher prices are largely owing to an increase in value in suburban areas, many of which were not heavily flooded, or in dry areas of New Orleans. But flooded houses in the city are being bought as well, often at deep discounts of as much as $50 a square foot less than they would have sold for before the hurricane. "We have a stronger housing market than before," said Wade R. Ragas, professor emeritus of finance at the University of New Orleans and the president of a local consulting firm, Real Property Associates. "There is renovation activity in every ZIP code of Orleans Parish," Dr. Ragas added, "but the strongest buying activity is, in general, closest to where it did not flood or where it was under two feet of water." Across the nine-parish region that includes New Orleans, 7,506 single-family homes were sold between January and the end of last month, compared with 6,449 in the same period last year, according to statistics from the New Orleans Metropolitan Association of Realtors and the Gulf South Real Estate Information Network. The average price so far this year is $221,244, compared with $193,097 in the same period last year.
THE SAN DIEGO UNION-TRIBUNE HAS AGENTS' NUMBER: From the newspaper come these pearls from classified advertising: "As you enter through the gate, up the gentle meandering drive, you know you have reached a special place;" and "Picture yourself at the center of downtown excitement. Catching afternoon rays on a sun deck high above the trees. Watching the sun set over the bay;" and "Right in the heart of our dynamic city, but radiating tranquility and serenity, this expansive estate is located in a lush canyon with views of downtown and the bay." The newspaper also unearthed this gem for a property in Newton, Mass.: "HOUSE IS UNINHABITABLE AND UNSAFE TO ENTER. Get it quick before it sells." Yeah, don't waste a minute.
WHAT GOES UP COULD COME DOWN: Homeowners who are considering adding a second-floor laundry room should plan carefully: Water damage or structural problems may result if the project is done haphazardly, notes Consumer Reports in Realtor magazine. Experts say owners should hire an architect and possibly a structural engineer to plan the space to ensure that the house will support the extra weight and vibrations of a washer and dryer. To prevent water damage, the owner may want to install a floor drain and an electronic shutoff valve, which automatically stops the flow of water when it senses a leak, thus preventing floods. Also, it's smart to install dedicated electrical and gas lines. This can be the most expensive part of the job. Finally, choose appliances that are quiet and efficient. Do your research to find out which models in your price range rank highest with consumers.
MAYBE THE GRASS ISN'T GREENER: Americans are very satisfied with their neighborhoods, according to 2005 American Housing Survey microdata released by the U.S. Census Bureau and the Department of Housing and Urban Development. The survey also reveals that the median value of a new home (built in the last four years) was $236,864; monthly housing costs were $809 last year. Among the anonymous and self-reported findings were 2005 statistics on a wide range of housing topics. On a scale of 1 (worse) to 10 (best), the percentage of householders who rated their neighborhood an 8 or above (70.4 percent) was up about 1 percentage point from 2003, the last time these data were collected. The median home value rose from $140,201 in 2003 to $165,344 in 2005. The median value of a newly built home also increased over the period, from $186,939. The percentage of householders who reported crime in their neighborhoods rose from 14.6 percent in 2003 to 15.1 percent in 2005. And this vital fact: 62 percent of the nation's 6.9 million mobile homes were single-wide, with the remainder being double-wide or larger. Jealous?
KOREANS ARE FLOCKING TO U.S. REAL ESTATE INVESTMENTS: Although home sales are slowing in some U.S. cities and economists are forecasting softer price appreciation, wealthy Koreans believe now is the perfect time to buy American residential real estate, reports the Wall Street Journal. They are betting that the U.S. dollar will strengthen, causing the value of their U.S. holdings to appreciate when converted into Korean currency, and that even slower home-price appreciation in the U.S. will continue to beat returns in Korea, where high taxes on real-estate profits discourage speculation. Although there are no data for residential real estate specifically, Korean direct investment in North America in the first three months of this year was more than $570 million, nearly half the $1.27 billion total for all of last year, according to the Bank of Korea. It includes corporate investment in stocks and bonds, commercial real estate and infrastructure. "In the eyes of many Koreans, America is the safest place to invest," says Ahn Sang Moh, an agent at New Star Realty & Management in New York, a Korean-American real-estate firm with clients in Korea.
THERE MUST BE A REASON THEY CALL IT 'BLACK GOLD': The mountain getaway of Saudi Prince Bandar is up for sale for $135 million, which could set a U.S. record for a real estate transaction, according to published reports, notes the Association Press. Real estate agent Joshua Saslove told the Aspen Times for a story Tuesday that Bandar's 15-bedroom, 16-bathroom, 56,000-square foot mountain palace - complete with a racquetball court, indoor pool and outdoor water features - is up for sale because the prince is too busy to enjoy it. The property also includes several smaller homes. Bandar has been developing it since the 1980s. Bandar has been busy leading his country's security council and spending a lot of time in Washington, Saslove said. Bandar was also the Saudi ambassador to the United States from 1983 to 2005.
LOAN VOLUME HOLDS STEADY, BUT ARMS SHARE SLIDES: For the week ended July 7, the Mortgage Bankers Association says mortgage loan application volume edged up 1.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, however, activity decreased 29.1 compared with the previous week and 36.3 percent compared with the same week one year earlier. Purchase applications increased by 2.6 percent from the previous week, and refinancings declined by 1.6 percent. The refinance share of mortgage activity slipped to 34.0 percent of total applications from 35.0 percent, while the adjustable-rate mortgage (ARM) share of activity fell to 28.7 percent of total applications.
ENGINEERED DECKING MAY OR MAY NOT BE FOR YOU: The latest engineered decking materials claim to offer the rich look of a tropical hardwood deck with less maintenance and easier installation, observes the Wall Street Journal. The faux materials cost about the same as hardwoods such as ipe, cumaru (no, we couldn't make this up) and other exotic species. But some come closer than others to looking like the real thing. In the past several years, the popularity of composite decking materials - that is, those made of wood mixed with plastics or other materials - has grown. According to a survey on building materials from the National Association of Home Builders Research Center, 14 percent of products used for decking remodeling and repair in 2004 were composite material, up from 8.9 percent in 2002. Manufacturers say their new composite materials won't splinter, warp or rot. However, building experts point out most tropical hardwoods are rot and water-resistant anyway, and composites can still gray with age.
BUT WILL THERE BE ENOUGH TO GO AROUND: Take the day off Tuesday for a cooking demonstration by Tania Mercer, who will show how plants grown on the Botanic Garden terrace can be used in cooking. What could be better than sautéed nettles? She will hold forth for free from noon to 1:30 p.m., and, yes, look for her on the terrace at 245 First St. SW. Details: 202-226-8038.
INTERNET LENDER'S TACTICS ARE QUESTIONED: A lawsuit against one of the Web's premier sites to shop for a mortgage underlines the difficulty consumers can have in locating reliable financial information online, says the Wall Street Journal. The lawsuit is against Bankrate, the financial publisher behind the popular bankrate.com site that draws millions of visitors yearly through partnerships with Yahoo!, AOL and other top online companies. Bankrate provides advice, loan calculators and articles on financial topics. It supplies interest-rate data to eight of America's 10 largest newspapers, and it caters to lenders, who compete to attract borrowers by posting their deals on bankrate.com. But the company's reliability as a consumer tool is being challenged in the lawsuit filed by a former advertiser that accuses the company of allowing its Web site to become a haven for "bait-and-switch" loan pitches. Testimony and internal company documents filed with the court show Bankrate has fielded hundreds of complaints about mortgage lenders who fail to deliver the rates they advertise; one lender told a Bankrate employee a consumer would need "a direct pipeline to God" to qualify for its advertised rate. The legal battle, which began in 2002, is scheduled to come to trial this fall. Bankrate says the lawsuit is "factually and legally without merit."
RATES FALL FOR THE FIRST TIME IN FIVE WEEKS: The 30-year fixed-rate mortgage (FRM) averaged 6.74 percent, down from last week's 6.79 percent and up from last year's 5.66 percent, according to Freddie Mac. The 15-year FRM this week was 6.37 percent, down from 6.44 percent. A year ago, it averaged 5.25 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 6.33 percent this week, versus 6.39 percent last week and 5.15 percent a year ago. One-year Treasury-indexed ARMs averaged 5.75 percent this week, down from 5.83 percent last week. At this time last year, it was 4.39 percent. "June's employment report caught financial markets off guard. In response, long-term bond yields eased a bit this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Combined with the financial market's expectation of only one more rate hike by the Federal Reserve this year, upward pressure on long-term rates eases considerably. This should keep mortgage rates relatively stable for the foreseeable future."
STUDY FINDS MARYLAND HOME PRICES TOO HIGH FOR MANY: First-time home buyers who thought the cooling market would make housing in Maryland more affordable have so far been disappointed, according a study reported by the Washington Post. The study, by the Maryland Association of Realtors, found that surging home prices in the past five years outstripped more modest wage gains. That means in May, housing affordability in Maryland hit its lowest point since 2001 - a trend mirrored throughout the region. In May, the typical first-time buyer in Maryland earned $35,159, or 42.6 percent of the income necessary to buy a starter home costing $267,753. It has become more difficult to afford that home because the median salary climbed only 5 percent between May 2005 and May 2006, but the median home price rose 10 percent, according to the study. In 2001, the typical first-time buyer had 80 percent of the income necessary to buy a starter home, mostly because prices were so much lower, the trade group said. Then came the sharp run-up in prices, spawned by surging demand and an increase in nontraditional mortgages that allow people to stretch their budgets.
TIPTOE THROUGH THE LILLIES: More than 75 varieties of them, as well as lotuses, will be blooming at the annual Waterlily Festival at Kenilworth Park and Aquatic Gardens on Saturday. Running 11 a.m. to 2 p.m. at 1550 Anacostia Ave. NE, the free event also features Asian dance troupes, puppet shoes, nature videos, tours and workshops. More info: 202-426-6905.
AND NAR FORECASTS A MARKET AT OR BELOW CURRENT LEVELS: Home sales are projected to ease modestly but should stay within a relatively narrow range during the balance of the year, according to the National Association of Realtors. "The major housing indicators have been moving up and down within a reasonable range, which means the market should even-out just below present levels," says David Lereah, NAR's chief economist. "At the same time, housing inventory levels are balanced in much of the country, so overall price appreciation will be at a normal rate. We should see home sales rise and fall month to month, but don't look for any big shifts one way or the other." He expects existing-home sales to decline 6.7 percent from 7.08 million last year. That would still be the third-highest level on record. New-home sales should fall 12.8 percent from 1.28 million, Lereah projects, adding that housing starts could decline 6.8 percent to 1.93 million. The 30-year fixed-rate mortgage is likely to reach 7 percent by the end of the year. "The uptick in interest rates has been slowing home sales," Lereah says. "We remain concerned about the potential impact of higher interest rates in some of the more expensive areas of the country." The national median existing-home price for all housing types is expected to rise 5.3 percent to $231,300 in 2006. With more construction in lower-cost regions as well as price incentives that are helping to clear unsold inventory, the median new-home price should increase 1 percent this year to $243,300.
QUALITY IS QUESTIONED FOR CONSTRUCTION OF NEW HOMES: Quality Built, a risk management services firm in San Diego, studied new homes and condos in 27 states that were constructed by more than 900 different builders, says Realty Times. The company commonly found window flashing problems, improper roofing, missing structural hardware and other defects to be most prevalent in the eastern and southern states. Data were gathered on 20,867 single-family and 11,128 multi-family homes inspected in 2005. Among all homes, the three most common construction risks discovered in single-family homes were in the building envelope (41 percent), a defect that could lead to moisture intrusion and mold; framing and structural elements (34 percent), which can affect a building's integrity during rough weather conditions or earthquakes; and in the plumbing and electrical systems (8 percent). Using up-close, multi-family home inspections, Quality Built said life-safety defects appeared 29 percent of the time; framing and structural problems were in 26 percent of the homes; and building envelope issues existed in 23 percent of homes. The finding means some homes likely had two or more of these defects. The single highest risk problems identified in single-family homes included improper framing around windows and doors (a structural issue), building paper and house wrap installation flaws (moisture intrusion and energy loss), and missing structural connections, a major hazard.
NATIVE AMERICAN HOME OWNERSHIP IS INCREASING: Home purchase loans to Native Americans roughly tripled to 45,375 in 2004, up from 14,844 the previous year, according to the latest data from the Home Mortgage Disclosure Act, says New Mexico Business Daily in Realtor magazine. Although the numbers do not distinguish between financing arranged within tribal communities as opposed to outside of reservations, the National American Indian Housing Council suspects that Native communities likely are not experiencing "proportionally higher gains." Native Americans still lag the nation in terms of home ownership. According to Fannie Mae, 41 percent of reservation households are homeowners, significantly lower than the national rate of 68 percent. Home Mortgage Disclosure Act statistics show that more than half of American Indian mortgage applicants were turned down for financing in 2004, compared with 42 percent of prospective white borrowers.
YOU TOO CAN BE A HAPPY GRIM REAPER: Buying properties from the estate of a deceased person can be a great opportunity for a real estate professional looking for bargain investments, suggests Inman News. Often these properties are sold by the probate court in order to pay the deceased's debts or to settle an estate among several out-of-town heirs. They are a bargain because the local real estate market often doesn't get wind of their availability, according to James G. Banks, author of "Creating Wealth Through Probate." Find probate properties by reading obituary and legal notices and by checking probate court public files, Inman counsels, saying the best deal is to buy from estate executors, often at big discount because they want a quick, easy sale. Warning: Generally, the property is sold as is because the executor is in no position to know the condition of the property. If there turn out to be defects, the buyer has little recourse.
FORECLOSURES CAN BE ANOTHER ROUTE TO A BARGAIN: Rising interest rates and a cooling housing market are whetting the appetite of real-estate bargain hunters and fueling interest in Web sites that list homes in, or near, foreclosure, notes the Wall Street Journal. Economists expect delinquencies and foreclosures to increase from today's historically low levels. Nationwide, the percentage of home loans on which payments were past due fell to 4.41 percent on a seasonally adjusted basis in the first quarter after rising to 4.70 percent in the fourth quarter of 2005, according to the Mortgage Bankers Association. A variety of Web sites have sprung up to cater to home buyers and investors looking to purchase properties in or nearing foreclosure. You can browse the Web sites at no charge, but getting complete access requires a weekly or monthly fee, typically $40 to $50 a month. The federal government operates its own site, www.homesales.gov, which is free and provides information about foreclosed properties being sold by the Federal Housing Administration, the Veterans Administration and the U.S. Department of Agriculture. The Journal says novices should approach the foreclosure process - and the Web sites that sell foreclosure listings - with care. Finding a good buy on a foreclosed house requires hard work and can carry significant risks. Critics say that Web sites selling foreclosure listings often contain outdated information or listings on houses that aren't ready for sale; some try to direct would-be buyers to partners with whom they have a financial relationship or to seminars and other products.
A TIDY POTENTIAL GAIN FOR BOB NEWHART: He and his wife Virginia are selling their French country home in Bel Air, Calif. For $22 million, according to the Los Angeles Times, reports the Residential Specialist magazine. The couple bought the home for $4.2 million in 1990; it has 92,000 square feet, encompassing five bedrooms, six and a half baths, five fireplaces, terraces, gardens, a pool and an executive office. And that ain't no laughing matter.
HOME SALES IN NEW ORLEANS HAVE BEEN SURGING: In a market spurred by speculators and bargain hunters, an extraordinarily large number of houses in the flood-ravaged metropolitan area are being sold, according to real estate analysts, who say volume and sales prices exceed levels before Hurricane Katrina, according to the New York Times. The higher prices are largely owing to an increase in value in suburban areas, many of which were not heavily flooded, or in dry areas of New Orleans. But flooded houses in the city are being bought as well, often at deep discounts of as much as $50 a square foot less than they would have sold for before the hurricane. "We have a stronger housing market than before," said Wade R. Ragas, professor emeritus of finance at the University of New Orleans and the president of a local consulting firm, Real Property Associates. "There is renovation activity in every ZIP code of Orleans Parish," Dr. Ragas added, "but the strongest buying activity is, in general, closest to where it did not flood or where it was under two feet of water." Across the nine-parish region that includes New Orleans, 7,506 single-family homes were sold between January and the end of last month, compared with 6,449 in the same period last year, according to statistics from the New Orleans Metropolitan Association of Realtors and the Gulf South Real Estate Information Network. The average price so far this year is $221,244, compared with $193,097 in the same period last year.
THE SAN DIEGO UNION-TRIBUNE HAS AGENTS' NUMBER: From the newspaper come these pearls from classified advertising: "As you enter through the gate, up the gentle meandering drive, you know you have reached a special place;" and "Picture yourself at the center of downtown excitement. Catching afternoon rays on a sun deck high above the trees. Watching the sun set over the bay;" and "Right in the heart of our dynamic city, but radiating tranquility and serenity, this expansive estate is located in a lush canyon with views of downtown and the bay." The newspaper also unearthed this gem for a property in Newton, Mass.: "HOUSE IS UNINHABITABLE AND UNSAFE TO ENTER. Get it quick before it sells." Yeah, don't waste a minute.
WHAT GOES UP COULD COME DOWN: Homeowners who are considering adding a second-floor laundry room should plan carefully: Water damage or structural problems may result if the project is done haphazardly, notes Consumer Reports in Realtor magazine. Experts say owners should hire an architect and possibly a structural engineer to plan the space to ensure that the house will support the extra weight and vibrations of a washer and dryer. To prevent water damage, the owner may want to install a floor drain and an electronic shutoff valve, which automatically stops the flow of water when it senses a leak, thus preventing floods. Also, it's smart to install dedicated electrical and gas lines. This can be the most expensive part of the job. Finally, choose appliances that are quiet and efficient. Do your research to find out which models in your price range rank highest with consumers.
MAYBE THE GRASS ISN'T GREENER: Americans are very satisfied with their neighborhoods, according to 2005 American Housing Survey microdata released by the U.S. Census Bureau and the Department of Housing and Urban Development. The survey also reveals that the median value of a new home (built in the last four years) was $236,864; monthly housing costs were $809 last year. Among the anonymous and self-reported findings were 2005 statistics on a wide range of housing topics. On a scale of 1 (worse) to 10 (best), the percentage of householders who rated their neighborhood an 8 or above (70.4 percent) was up about 1 percentage point from 2003, the last time these data were collected. The median home value rose from $140,201 in 2003 to $165,344 in 2005. The median value of a newly built home also increased over the period, from $186,939. The percentage of householders who reported crime in their neighborhoods rose from 14.6 percent in 2003 to 15.1 percent in 2005. And this vital fact: 62 percent of the nation's 6.9 million mobile homes were single-wide, with the remainder being double-wide or larger. Jealous?
KOREANS ARE FLOCKING TO U.S. REAL ESTATE INVESTMENTS: Although home sales are slowing in some U.S. cities and economists are forecasting softer price appreciation, wealthy Koreans believe now is the perfect time to buy American residential real estate, reports the Wall Street Journal. They are betting that the U.S. dollar will strengthen, causing the value of their U.S. holdings to appreciate when converted into Korean currency, and that even slower home-price appreciation in the U.S. will continue to beat returns in Korea, where high taxes on real-estate profits discourage speculation. Although there are no data for residential real estate specifically, Korean direct investment in North America in the first three months of this year was more than $570 million, nearly half the $1.27 billion total for all of last year, according to the Bank of Korea. It includes corporate investment in stocks and bonds, commercial real estate and infrastructure. "In the eyes of many Koreans, America is the safest place to invest," says Ahn Sang Moh, an agent at New Star Realty & Management in New York, a Korean-American real-estate firm with clients in Korea.
THERE MUST BE A REASON THEY CALL IT 'BLACK GOLD': The mountain getaway of Saudi Prince Bandar is up for sale for $135 million, which could set a U.S. record for a real estate transaction, according to published reports, notes the Association Press. Real estate agent Joshua Saslove told the Aspen Times for a story Tuesday that Bandar's 15-bedroom, 16-bathroom, 56,000-square foot mountain palace - complete with a racquetball court, indoor pool and outdoor water features - is up for sale because the prince is too busy to enjoy it. The property also includes several smaller homes. Bandar has been developing it since the 1980s. Bandar has been busy leading his country's security council and spending a lot of time in Washington, Saslove said. Bandar was also the Saudi ambassador to the United States from 1983 to 2005.
LOAN VOLUME HOLDS STEADY, BUT ARMS SHARE SLIDES: For the week ended July 7, the Mortgage Bankers Association says mortgage loan application volume edged up 1.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, however, activity decreased 29.1 compared with the previous week and 36.3 percent compared with the same week one year earlier. Purchase applications increased by 2.6 percent from the previous week, and refinancings declined by 1.6 percent. The refinance share of mortgage activity slipped to 34.0 percent of total applications from 35.0 percent, while the adjustable-rate mortgage (ARM) share of activity fell to 28.7 percent of total applications.
ENGINEERED DECKING MAY OR MAY NOT BE FOR YOU: The latest engineered decking materials claim to offer the rich look of a tropical hardwood deck with less maintenance and easier installation, observes the Wall Street Journal. The faux materials cost about the same as hardwoods such as ipe, cumaru (no, we couldn't make this up) and other exotic species. But some come closer than others to looking like the real thing. In the past several years, the popularity of composite decking materials - that is, those made of wood mixed with plastics or other materials - has grown. According to a survey on building materials from the National Association of Home Builders Research Center, 14 percent of products used for decking remodeling and repair in 2004 were composite material, up from 8.9 percent in 2002. Manufacturers say their new composite materials won't splinter, warp or rot. However, building experts point out most tropical hardwoods are rot and water-resistant anyway, and composites can still gray with age.
BUT WILL THERE BE ENOUGH TO GO AROUND: Take the day off Tuesday for a cooking demonstration by Tania Mercer, who will show how plants grown on the Botanic Garden terrace can be used in cooking. What could be better than sautéed nettles? She will hold forth for free from noon to 1:30 p.m., and, yes, look for her on the terrace at 245 First St. SW. Details: 202-226-8038.
INTERNET LENDER'S TACTICS ARE QUESTIONED: A lawsuit against one of the Web's premier sites to shop for a mortgage underlines the difficulty consumers can have in locating reliable financial information online, says the Wall Street Journal. The lawsuit is against Bankrate, the financial publisher behind the popular bankrate.com site that draws millions of visitors yearly through partnerships with Yahoo!, AOL and other top online companies. Bankrate provides advice, loan calculators and articles on financial topics. It supplies interest-rate data to eight of America's 10 largest newspapers, and it caters to lenders, who compete to attract borrowers by posting their deals on bankrate.com. But the company's reliability as a consumer tool is being challenged in the lawsuit filed by a former advertiser that accuses the company of allowing its Web site to become a haven for "bait-and-switch" loan pitches. Testimony and internal company documents filed with the court show Bankrate has fielded hundreds of complaints about mortgage lenders who fail to deliver the rates they advertise; one lender told a Bankrate employee a consumer would need "a direct pipeline to God" to qualify for its advertised rate. The legal battle, which began in 2002, is scheduled to come to trial this fall. Bankrate says the lawsuit is "factually and legally without merit."
RATES FALL FOR THE FIRST TIME IN FIVE WEEKS: The 30-year fixed-rate mortgage (FRM) averaged 6.74 percent, down from last week's 6.79 percent and up from last year's 5.66 percent, according to Freddie Mac. The 15-year FRM this week was 6.37 percent, down from 6.44 percent. A year ago, it averaged 5.25 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 6.33 percent this week, versus 6.39 percent last week and 5.15 percent a year ago. One-year Treasury-indexed ARMs averaged 5.75 percent this week, down from 5.83 percent last week. At this time last year, it was 4.39 percent. "June's employment report caught financial markets off guard. In response, long-term bond yields eased a bit this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Combined with the financial market's expectation of only one more rate hike by the Federal Reserve this year, upward pressure on long-term rates eases considerably. This should keep mortgage rates relatively stable for the foreseeable future."
STUDY FINDS MARYLAND HOME PRICES TOO HIGH FOR MANY: First-time home buyers who thought the cooling market would make housing in Maryland more affordable have so far been disappointed, according a study reported by the Washington Post. The study, by the Maryland Association of Realtors, found that surging home prices in the past five years outstripped more modest wage gains. That means in May, housing affordability in Maryland hit its lowest point since 2001 - a trend mirrored throughout the region. In May, the typical first-time buyer in Maryland earned $35,159, or 42.6 percent of the income necessary to buy a starter home costing $267,753. It has become more difficult to afford that home because the median salary climbed only 5 percent between May 2005 and May 2006, but the median home price rose 10 percent, according to the study. In 2001, the typical first-time buyer had 80 percent of the income necessary to buy a starter home, mostly because prices were so much lower, the trade group said. Then came the sharp run-up in prices, spawned by surging demand and an increase in nontraditional mortgages that allow people to stretch their budgets.
TIPTOE THROUGH THE LILLIES: More than 75 varieties of them, as well as lotuses, will be blooming at the annual Waterlily Festival at Kenilworth Park and Aquatic Gardens on Saturday. Running 11 a.m. to 2 p.m. at 1550 Anacostia Ave. NE, the free event also features Asian dance troupes, puppet shoes, nature videos, tours and workshops. More info: 202-426-6905.
posted by Service You Can Trust Team at
6:00 AM
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