Daily Archives: October 17, 2012

High Prices Still Lock Middle Class out of Top Cities | Armonk NY Real Estate

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A median-income household can only afford a median-priced home in 14 of the 25 largest metropolitan areas in the U.S., according to research released today by Interest.com, a Bankrate company. Detroit, Atlanta and Minneapolis are the most affordable metropolitan areas and San Diego, New York and San Francisco are the least affordable.

A median-income household can only afford a median-priced home in 14 of the 25 largest metropolitan areas in the U.S., according to research released today by Interest.com. Detroit, Atlanta and Minneapolis are the most affordable metropolitan areas and San Diego, New York and San Francisco are the least affordable.

“Despite all of the talk about how homes are more affordable than they have been in decades, buying a home is still a big challenge for many American households,” said Mike Sante, managing editor of Interest.com. “Dealing with rising expenses and stagnant wages is a struggle. Even after years of declining home prices and record-low mortgage rates, median-income households are unable to afford a median-priced home in nearly half of the metropolitan areas that we looked at.”

Most Affordable Metropolitan Areas*

1. Detroit (+45.32%)

2. Atlanta (+40.00%)

3. Minneapolis (+32.20%)

4. Phoenix (+23.67%)

5. St. Louis (+23.49%)

Least Affordable Metropolitan Areas*

21. Los Angeles (-12.52%)

22. Miami (-12.59%)

23. San Diego (-25.90%)

24. New York (-29.71%)

25. San Francisco (-32.76%)

*Percentage reflects how much the median household income in a metropolitan area exceeds or falls short of the income required to purchase a median-priced home in that area

To determine each rating, Interest.com gathered the median home prices in the 25 largest U.S. metropolitan areas and calculated how much financing would be required for a buyer with a 20% down payment. They entered that amount and city-specific data on 30-year fixed-rate mortgage rates, median household income, median property taxes, average homeowners insurance costs and average household debt into the “Required Income Calculator” on Interest.com. Finally, they divided the median household income for each city by the income required to finance the median-priced home.

Median Home Price Source: National Association of Realtors, Q2 2012 study of existing single-family homes [Note: Pittsburgh was not included in that study, so September 2012 data from Real STATS was substituted]

30-Year Fixed-Rate Mortgage Rate Source: Bankrate.com, weekly national survey from September 19, 2012 [Note: City-specific data was not available for Portland (Ore.), Sacramento and San Antonio, so the national average was used for those three cities]

Median Household Income Source: U. S. Census Bureau, 2011 American Community Survey, median household incomes by Metropolitan Statistical Area

Median Property Taxes Source: U. S. Census Bureau, 2011 American Community Survey, median real estate taxes by Metropolitan Statistical Area

Average Homeowners Insurance Source: National Association of Insurance Commissioners, 2009 average premiums by state [Note: average 2009 premiums for Texas cities were obtained from the Texas Department of Insurance]

Average Household Debt Source: Experian’s 2012 State of Credit Study [Notes: did not include mortgage debt; Interest.com calculated monthly debt payments using an 8% interest rate amortized over 60 months]

via realestateeconomywatch.com

The Time-Honored Art of Splitting Wood | Chappaqua NY Realtor

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Chopping stovewood to size by hand may, at first glance, appear to be a ponderous, imprecise activity that requires little more than pure brute force. Nothing could be further from the truth, however. There is, instead, a distinct art to splitting wood. The skilled woodsman or -woman who works with — rather than against — the rounds he or she is handling can split up a lot more fuel in a given time than can some muscle-bound ox who tries to club the wood pile to smithereens. In fact, a great many experienced splitters (both chore-laden homesteaders and briefcase-laden urbanites) have honed their skills to such a point that they look upon billet-busting as one of life’s more enjoyable tasks.

Make removing ice from a windshield easier with an onion, keep a candle in the car for emergencAnd even if you’ve never split a stick, you can become an accomplished woodcracker yourself. To do so, you’ll need a few commonly available tools, the how-to basics I’ll share in this article, some rounds of ripe-for-the-opening wood — and practice.

The Tools

The instruments most often used for working up wood by hand are the single-blade splitting axe, a pair of three- to five-pound steel wedges, a middle-sized sledgehammer, and an eight-pound splitting maul. [EDITOR’S NOTE: Several manufacturers have devised variations on the standard hand tools — we’ve sized up a number of woodcracking aids in The Great Wood-Splitting Contest II]

However, it isn’t necessary to have all of these tools to begin work. I recommend starting out with a pair of wedges and that workhorse of the log-busting trade, the splitting maul (or “go-devil”). The blade of the latter implement can crack open many a billet, while the tool’s back end can be used for driving wedges. (By the way, never use the butt of an axe for pounding — its thin head may crack!)

The Technique

Probably the single most important wood-splitting rule is this: Always place your to-be-broken rounds on a short chopping block. Such a base will provide solid resistance to the blows, increasing your stroke’s penetration and guaranteeing that when your maul breaks through the billet, the tool’s blade will land in wood instead of slamming into dulling earth or stones.

Once you’ve set your piece of tree up on its chopping block, stand back with your arms extended and feet planted squarely apart. (And, for safety’s sake, be sure to wear boots and sturdy long pants!) Then line up the go-devil over its intended target, wind ‘er up and swing!

Now some folks go for pinpoint accuracy by lifting their mauls straight up overhead, while others feel they gain more power by swinging the implements back around their shoulders. And one person will let his or her top gripping hand slide up toward the splitter’s head on the upswing, but another will keep both hands clenched together in a grip similar to that used by a golfer. You’ll have to experiment until you decide just which technique is best for you.

via motherearthnews.com

How to Renovate a Heritage Log Cabin Interior | Mount Kisco NY Realtor

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Renovating an old, heritage log cabin, DIY style (and inexpensively), isn’t really something I had on my bucket list.  Nor did I ever think I’d ever even live in one.  But in 2008 when I decided to pack up my son and finally leave the city to pursue my dreams of rural self-sufficient living, our old cabin was sitting there, waiting for us – and almost begging to be brought into the 21st century.

In case you haven’t read the story of our little cabin in the woods, it’s essentially this:  back in the mid-to-late 1990s, my dad found an old homesteader’s cabin while exploring the woods adjoining a piece of our family’s property and I was lucky enough to be able to buy it (or what was left of it) and have my dad step in to restore in 1998/1999.  At that time, it really was just a cabin, with a roughed in kitchen and no indoor plumbing.

Over the years, it served as a guest house (for visitors OK with sharing the outhouse with spiders!), and later, after a working bathroom was put in, a home for my brother for a few years, and finally a rental.  By the time it came for my son and I to call it home, it had been empty for awhile, with bats, weasels and mice living inside, and was in need of a serious renovation.  Being the city girl I’d become, I just didn’t see myself living in a rough, or as real estate agents coin it, ‘rustic’, cabin.  I wanted some style, some pizzazz, a home that would be featured in a magazine one day.

So we set to work, planning and visioning what it would look like by the time we moved in.  And there was a lot of work to do.  Paint, new furniture, new draperies and finishings, wood floor refinishing, modernizing the bathroom, and most importantly, a new kitchen.

Here’s what we did.

The Kitchen

The original kitchen was never meant to be used full time.  It was really rough, and not very serviceable (it had virtually no counter space).  As I worked through figuring out how I would put a brand new kitchen into an old log cabin and have it look like it belonged there, without spending a tonne of money, the guy who rents from us to have his carpentry shop on the property came to the rescue!

Log cabin kitchen renovation

Mitch is a very talented carpenter and craftsman, and he has some brilliant ideas for reusing materials and building one-of-a-kind furniture and cabinetry.  His thought was to design the cabinets so they looked like they’d been there all along – ‘cottage’ style, they call it.  So that’s what we – or rather he (I take no credit) – did.

He built all the cabinets from bits and pieces of wood he had in his supply, much of it recycled, and old louvered closet doors.  Then he applied many layers of different coloured paints he had lying around – mostly white shades and pale yellows – and finished it all with a rough sanding on edges and surfaces to give it that ‘aged’ look.  I think they turned out brilliantly.  They not only suit the cabin perfectly, but they didn’t cost much to build.

Finally, he added a custom-made spruce ‘butcher-block’ style countertop to accommodate the antique cast iron sink and drainboard, and the look was complete.

via motherearthnews.com

Denver a real estate market to watch, says report | North Salem NY Homes

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Metro Denver has been named one of the country’s top 20 real estate markets to watch next year in the “Emerging Trends in Real Estate 2013” report released Wednesday.

In its 34nd year, the commercial real estate study is compiled by the PricewaterhouseCoopers LLP financial services firm and the Urban Land Institute.

This year, it was released in conjunction with the ULI’s Fall Meeting, Wednesday through Friday at the Colorado Convention Center. The meeting is being attended by about 5,000 real estate professional from around the country.

Denver ranks 14th on the list of “U.S. Markets to Watch: Overall Real Estate Prospects.”

The report says that Denver’s housing market was not hit as hard by the housing downturn as many other cities, with fewer homes in foreclosure or sitting delinquent than most.

“Denver’s economy has remained healthy, maintaining the ability to absorb a diverse employment base,” the report notes.

PwC’s Wendy McCray, partner in the assurance practice for the Denver PwC office, said Denver’s large young population — about 16 percent are 25-34 years old — “tells people there’s good job growth and Denver’s economy is more diverse.”

The “Emerging Trends” study is based on surveys of more than 1,000 commercial real estate experts, including investors, developers, lenders and brokers.

Here are some of the city’s other rankings:

• Denver ranks eighth among promising investment markets, moving up three spots from the 2012 report, due to “strong growth potential. … An attraction is the city’s central location in the country’s southern and western regions, as well as Denver’s ever-expanding international airport.”

via bizjournals.com

Mixed news for homeowners facing foreclosure | Waccabuc NY Homes

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So-called short-sales of homes are rising, according to HOPE NOW, a private-sector alliance of mortgage investors, servicers, insurers and non-profit counselors.

The number of short-sales — when banks accept less money for a home than is currently owed on the mortgage —  crept up in August from the previous month. In theory, that’s good news because an uptick in short-sales should fewer homes going into foreclosure.

But that’s not the case yet. August foreclosure sales increased 12 percent from July, and foreclosure starts grew 14 percent. Faith Schwartz, executive director of HOPE NOW, attributed the rise to lenders clearing their foreclosure backlog, noting that many of the foreclosures have been in process for at least a year.

“The incentives for short-sales continue to increase,” she said. “The $25 billion foreclosure settlement, and the fact that many servicers aren’t used to holding on to foreclosures or [real-estate owned properties] means incentive is increasing.”

The goal is to resolve foreclosures before homes end up sitting abandoned and blighting the surrounding community, Schwartz added.

The data also suggest that more homeowners are making mortgage payments on time. The number of homeowners delinquent 60 days or more on their mortgage fell 2 percent in August, down to 2.42 million. In July, 2.47 million homeowners were seriously delinquent on their mortgages. Fewer borrowers are falling behind at least 60 days on their mortgages, and there are fewer current (30 day) defaults.

“While this is almost 40 percent lower than the all-time high of 4 million homeowners seriously past-due on their mortgage, we cannot forget there are many more who remain at risk of foreclosure,” Schwartz said, noting that short-sales are an integral part of helping homeowners. Yet many borrowers don’t know a short-sale is an option.

While short-sales, foreclosure starts and foreclosure sales rose in August, the number of homeowners who got mortgage relief in the form of loan modifications fell. Roughly 76,000 homeowners got permanent loan modifications under both both lender programs and the federal government’s Home Affordable Modification Program (HAMP). That’s down from July, when more than 82,000 homeowners received modifications from both HAMP and private companies.

Most loan mods start as HAMP modifications. If the borrower does not meet HAMP standards, they may be considered for alternative, proprietary modifications.

In total, 5.75 million homeowners have received permanent loan modifications since 2007, with more than 543,000 of those modifications occurring since January. Most homeowners who have had loans modified since the beginning of the year have done so through a lender or loan servicer.

Only 143,420 homeowners have received loan mods this year under HAMP which has very rigid documentation and debt-to-income standards. Since 2007, most of the loan mods — nearly 4.7 million — have been completed via proprietary loan modifications. Comparatively, the government’s HAMP program has modified roughly 1.1 million loans since it began reporting in 2009.

via cbsnews.com

Atlanta No. 2 most affordable housing market | Cross River NY Homes

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Metro Atlanta hasn’t been the greatest place in the country to own a home, as everyone with a devalued house in these parts knows.

There is some good news, relatively speaking, though.

It doesn’t cost that much to buy here.

Atlanta ranks second in the U.S. among the top 25 metro areas in terms of home affordability, new research from Interest.com, a Bankrate company, shows.

The median household income in the Atlanta area exceeds the income required to purchase a median-priced home here by 40 percent. That’s better than every other  big market except for Detroit, where it’s 45.32 percent.

The rest of the top five most affordable metro areas are Minneapolis, Phoenix and St. Louis.

Of course, Detroit is hardly the symbol of economic success, and Phoenix has had major housing issues.

The least affordable markets: San Francisco, New York, San Diego, Miami and Los Angeles.

Housing affordability is key concern nationally, and nationwide a  median-income household can afford a median-priced home in only 14 of the 25 largest markets, the study found.

Mike Sante, managing editor of Interest.com, said, “Despite all the talk about how homes are more affordable than they have been in decades, buying a home is still a big challenge for many American households.”

Sante continued, “Dealing with rising expenses and stagnant wages is a struggle. Even after years of declining home prices and record-low mortgage rates, median-income households are unable to afford a median-priced home in nearly half of the metropolitan areas that we looked at.”

via blogs.ajc.com

Housing Prices and Income Inequality | Katonah NY Homes

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Why is the gap between rich and poor in America yawning ever wider?

The issue is urgent. As my colleague Annie Lowrey writes, there is growing evidence that income inequality impedes economic growth.

And one interesting explanation boils down to the high price of housing.

A recent paper by researchers at Harvard University argues that the prohibitive cost of living in the areas with the greatest economic opportunities has forced low-wage workers to migrate instead to areas with inferior opportunities.

“The best places for low- and high-skilled workers used to be the same places: California, Maryland, New York,” said Peter Ganong, a doctoral student in economics, who wrote the paper with Daniel Shoag, a professor of public policy. “Now low-skilled workers can no longer afford to move to the high-wage places.”

In this account, people aren’t moving to the Sun Belt because they want to live there. They are moving because they can’t afford to live in Boston. And the result isn’t just second-best for them; it also slows the pace of economic growth.

Basically, the economy works best when people can move where their skills are most valued. But for low-skill workers, the high price of housing means the cost of living in those places often exceeds the benefits of working there.

The trends are beautifully illustrated by three time-lapse graphics.

The first shows that average incomes by state converged between 1880 and 1980 as low-skilled workers moved to wealthier states. The second shows the pattern of migration, which has changed significantly over the last 30 years.

The third shows the increase in land-use regulations in rich states.

And here’s the crucial point: It doesn’t have to be this way. High housing prices are the result of public policies that discourage new development. Those policies are generally embraced by the residents of wealthy areas, who benefit, at least in the short term, from restrictions on the supply of new housing. But this paper is one more reason to worry about the long-term economic consequences.

via economix.blogs.nytimes.com

Inventories Have Fallen for 27 Months | Armonk NY Realtor

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Month-to-month inventories have now fallen for 27 consecutive months, according to the monthly RE/MAX National Housing Report. Inventory was 29.1 percent below September 2011 and may have contributed to the drop in sales from August.

The inventory of homes-for-sale in September fell 5.3 percent from August and 29.1 percdent from inventory levels seen in September 2011. Month-to-month inventories have now fallen for 27 consecutive months. While a shrinking inventory is certainly causing home prices to rise, there’s also a concern that it may also be limiting sales. Given the rate of sales in September, the average Months Supply was 5.5, about two months lower than the 7.7 average seen in September 2011. Very low Months Supply continues to be seen in San Francisco, CA 1.3, Los Angeles, CA 1.7, Orlando, FL 2.6, Denver, CO 2.6, Washington, DC 2.8, Detroit, MI 3.0, San Diego, CA 3.2, Seattle, WA 3.2 and Miami, FL 3.3.

In September, the average Days on Market for sold homes was 81. This is unchanged from August, but represents a drop of 13 days from the 94 day average in September 2011. September represents the fourth month in the last 12 months with a Days on Market average below 90, and the lowest average since June 2010. The Days on Market average continues to fall in many markets due to very low inventory. Days on Market is the number of days between first being listed in an MLS and when a sales contract is signed.

While shrinking inventories are is certainly causing home prices to rise, there’s also a concern that it may also be limiting sales and creating bidding wars in some markets, RE/MAX said. September home sales fell 17.5 percent from August, but remained 0.5 percent higher than sales in September 2011. September is the fifteenth consecutive month with sales higher than the same month in the previous year. Of the 52 metro areas surveyed this month, only 29 saw higher sales than one year ago and just 6 saw double digit increases including: Albuquerque, NM +40.9 percent, Chicago, IL +24.1 percent, Raleigh-Durham, NC +22.1 percent, Providence, RI +22.1 percent, Nashville, TN +21.0 percent and Denver, CO +11.4 percent .

via realestateeconomywatch.com