Daily Archives: January 20, 2013

Fracking for natural gas being powered by it, too | Bedford Hills Realtor



HARRISBURG, Pa. (AP) — Advances in hydraulic fracturing technology have powered the American natural gas boom. And now hydraulic fracturing could be increasingly powered by the very fuel it has been so successful in coaxing up from the depths.

Oil- and gas-field companies from Pennsylvania to Texas are experimenting with converting the huge diesel pump engines that propel millions of gallons of water, sand and chemicals thousands of feet down well bores to break apart rock or tight sands and release the natural gas trapped inside.

It’s the latest way for drillers to become consumers of the product that they are making broadly available in large amounts — and extremely cheap. Production has increased so much that natural gas has flooded the market, dragging down prices and forcing companies to pull back on their plans to expand drilling while looking for new ways to use gas.

After the conversion, the engines will run on cheaper natural gas, or a blend of diesel and natural gas. That brings down costs and, theoretically, cuts down the sooty exhaust that comes from burning diesel.

“You’re going to see this spreading quite rapidly across the industry,” said Douglas E. Kuntz, president and CEO of Pennsylvania General Energy Co., based in tiny Warren, Pa. “As the technology evolves, you’ll see more companies across the country doing more natural gas fueling of this equipment.”

A number of increasingly cost-conscious oil- and gas-field companies are already using natural gas to run their trucks and drilling rigs. But what makes the conversion of the hydraulic fracturing pump engines to natural gas particularly challenging is the sheer number of engines running at once, and the amount of horsepower necessary to power the pumps.

PGE and contractor Universal Well Services, of Meadville, Pa., are converting a 16-engine pumping unit — called a “frack spread” — so that the engines will accept a blend of 70 percent natural gas and 30 percent diesel. It should be complete by May and is estimated to cost less than a quarter of what it would if it was powered by diesel alone.

Houston-based Apache Corp., one of the nation’s largest independent oil and gas exploration companies, has worked with Halliburton Co., Schlumberger Ltd. and Caterpillar Inc. to develop similar technology.

A 12-engine unit — the first full frack spread that is operating in the field, according to Apache — just completed two Granite Wash wells near Elk City, Okla. Another unit is in the process of being completed.

“Today we’ve said, ‘we’ve seen enough testing.’ We’ve decided this is how we want to frack with all of our fleets and we’re going to start with two permanent conversions,” said Mike Bahorich, Apache’s executive vice president and chief technology officer.

PGE will be able to use field gas, drawn from pipelines that connect to its nearby Marcellus Shale wells in north-central Pennsylvania, and save trips by fuel-hauling trucks. For now at least, Apache will have to truck in compressed natural gas or liquefied natural gas to run its new frack spreads, but it hopes to start using the cheaper field gas in the future, Bahorich said.

It also may provide a way for drilling companies to improve their image on environmental issues after sustaining criticism for air quality problems around gas wells and the practice of lacing hydraulic fracturing fluids with chemicals.

The U.S. Environmental Protection Agency calls reducing pollution from diesel engines one of the county’s most important air quality challenges. Diesel engines can produce large quantities of smog-forming nitrogen oxides and soot, which can cause lung and heart problems. Soot also plays a significant role in climate change, researchers say.

Saving the truck trips will improve air quality, but the size of the benefit from replacing diesel engines with natural gas is less clear, according to environmental advocates.

That’s because new diesel engines are subject to strict environmental standards and natural gas-powered engines give off only slightly less pollution, said Joe Osborne, legal director of the Pittsburgh-based Group Against Smog and Pollution.

Regardless, the economic benefit appears enormous for an industry that used more than 700 million gallons of diesel domestically in hydraulic fracturing last year, according to Apache estimates.

The cost to convert the engines is far less than the roughly $3.5 million per frack spread that Apache can save if it completes 140 planned wells in a year with the two units, Bahorich said.

For PGE and Universal, the cost of conversion and engineering will be several million dollars, said Roger Willis, Universal’s president. After that, the fuel price savings are eye-popping: A gallon of diesel fuel costs about $3.60, while equivalent amount of the natural gas blend replacement currently costs about 47 cents, Kuntz said.

PGE, which plans to drill 35 to 40 new Marcellus Shale wells in 2013 all with the natural gas-powered frack spread, expects to save 750,000 gallons of diesel a year, or 55 percent of the diesel in its fracking operations.

“Keeping this frack spread busy over the course of a year, you’ll be on the positive side in less than a year,” Kuntz said.


The Best Performing Cities in 2012: Milken Institute | Pound Ridge Real Estate

The Milken Institute is out with its annual list of best performing cities and the results show that both tech and manufacturing are on the rise.

Unlike other “best places” lists, Milken’s report is not a quality of life survey. It does not focus on weather, number of golf courses or healthcare facilities, but rather on job and wage growth and the propensity for technological innovation.

San Jose, Calif. topped the 2012 list for large metros, jumping 5o spots from the previous year mainly because of the area’s exploding tech sector.

“The San Jose metro area continues to have the top regional innovation ecosystem,” according to Ross DeVol, chief research officer at Milken.

For every one tech job created in the San Jose metro area, five jobs are created in other sectors of the local economy. It has been more than ten years since the city was ranked #1.

Top 5 Large Performing Metros

  1. San Jose, CA
  2. Austin, TX
  3. Raleigh, NC
  4. Houston, TX
  5. Washington, D.C.

But the explosion of the technology industry is not endemic to Silicon Valley. Other cities across the country are experiencing a revitalization in the tech sector as the list above shows.

If you’re worried that another tech bubble may be brewing, DeVol says this time is different because today’s tech companies have “proven business models.”

Top 5 Small Performing Metros

  1. Logan, UT
  2. Morgantown, WV
  3. Bismarck, ND
  4. Odessa, TX
  5. Fargo, ND

The other major finding in the report is the uptick in manufacturing in cities across the country.

“A number of the major gainers were in the upper Midwest,” says DeVol. “Manufacturing in the United States has begun what I might to call a ‘mini rebirth’.”

Other findings in the report include:

  • Texas is losing its edge: While the state still going strong with 7 metros in the top 25, it has lost some of its stature due to slowing natural gas and oil production in the state.
  • Utah is rockin’ it: Both Salt Lake City and Provo are in the top 10 best performing cities for large metros.
  • New York is making a comeback: The city has experienced growth in the entertainment and technology industries.

The Milken Institue has conducted its survey since 1999. To read the report, click here.

What Is Middle Class in Manhattan? | Bedford Corners Real Estate

Even the landscape is carved up by class. From 15,000 feet up, you can stare down at subdivisions and tract houses, and America’s class lines will stare right back up at you.

Manhattan, however, is not like most places. Its 1.6 million residents hide in a forest of tall buildings, and even the city’s elite take the subway. Sure, there are obvious brand-name buildings and tony ZIP codes where the price of entry clearly demands a certain amount of wealth, but middle-class neighborhoods do not really exist in Manhattan — probably the only place in the United States where a $5.5 million condo with a teak closet and mother-of-pearl wall tile shares a block with a public housing project.

In TriBeCa, Karen Azeez feels squeezed. A fund-raising consultant, Ms. Azeez has lived in the city for more than 20 years. Her husband, a retired police sergeant, bought their one-bedroom apartment in the low $200,000 range in 1997.

“When we got here, I didn’t feel so out of place, I didn’t have this awareness of being middle class,” she said. But in the last 5 or 10 years an array of high-rises brought “uberwealthy” neighbors, she said, the kind of people who discuss winter trips to St. Barts at the dog run, and buy $700 Moncler ski jackets for their children.

Even the local restaurants give Ms. Azeez the sense that she is now living as an economic minority in her own neighborhood.

“There’s McDonald’s, Mexican and Nobu,” she said, and nothing in between.

In a city like New York, where everything is superlative, who exactly is middle class? What kind of salary are we talking about? Where does a middle-class person live? And could the relentless rise in real estate prices push the middle class to extinction?

“A lot of people are hanging on by the skin of their teeth,” said Cheryl King, an acting coach who lives and works in a combined apartment and performance space that she rents out for screenings, video shoots and workshops to help offset her own high rent.

“My niece just bought a home in Atlanta for $85,000,” she said. “I almost spend that on rent and utilities in a year. To them, making $250,000 a year is wealthy. To us, it’s maybe the upper edge of middle class.”

“It’s horrifying,” she added.

Her horror, of course, is Manhattan’s high cost of living, which has for decades shocked transplants from Kansas and elsewhere, and threatened natives with the specter of an economic apocalypse that will empty the city of all but a few hardy plutocrats.

And yet the middle class stubbornly hangs on, trading economic pain for the emotional gain of hot restaurants, the High Line and the feeling of being in the center of everything. The price tag for life’s basic necessities — everything from milk to haircuts to Lipitor to electricity, and especially housing — is more than twice the national average.

“It’s overwhelmingly housing — that’s the big distortion relative to other places,” said Frank Braconi, the chief economist in the New York City comptroller’s office. “Virtually everything costs more, but not to the degree that housing does.”

The average Manhattan apartment, at $3,973 a month, costs almost $2,800 more than the average rental nationwide. The average sale price of a home in Manhattan last year was $1.46 million, according to a recent Douglas Elliman report, while the average sale price for a new home in the United States was just under $230,000. The middle class makes up a smaller proportion of the population in New York than elsewhere in the nation. New Yorkers also live in a notably unequal place. Household incomes in Manhattan are about as evenly distributed as they are in Bolivia or Sierra Leone — the wealthiest fifth of Manhattanites make 40 times more than the lowest fifth, according to 2010 census data.

Ask people around the country, “Are you middle class?” and the answer is likely to be yes. But ask the same question in Manhattan, and people often pause in confusion, unsure exactly what you mean.

There is no single, formal definition of class status in this country. Statisticians and demographers all use slightly different methods to divvy up the great American whole into quintiles and median ranges. Complicating things, most people like to think of themselves as middle class. It feels good, after all, and more egalitarian than proclaiming yourself to be rich or poor. A $70,000 annual income is middle class for a family of four, according to the median response in a recent Pew Research Center survey, and yet people at a wide range of income levels, including those making less than $30,000 and more than $100,000 a year, said they, too, belonged to the middle.

Seven essential factors of homeowner’s insurance | Bedford Corners Homes

Photo: Thinkstock

You’ve put a lot of work into your home to make it your haven from the stresses of life. But things can happen quickly to upset that peace, such as a fire, theft, or natural disaster.

With that in mind, do you have enough home insurance to protect your home and your precious personal belongings if something bad happens?

You’d be surprised at how many people don’t have enough, says David Isaac, senior product manager at Met-Life, a provider of all types of insurance, annuities, and employee benefit programs.

“I work in insurance, but I have neighbors and relatives who just don’t know what they need to protect themselves. Many times, they end up being surprised that they weren’t covered after a certain incident even though they have insurance,” he says. “It just wasn’t enough, or they didn’t have the right kind.”

To protect your home and family, keep reading to learn about seven factors to consider when determining how much home insurance is enough.

Factor #1: The cost to rebuild your home

When the unexpected – such as a fire or tornado – comes rolling through your home, you want to build it back the way it was before disaster struck, and that’s where your home insurance comes in.

However, 16 percent of homeowners do not have enough insurance to rebuild their home if it were destroyed, according to the 11th annual “US National Homeowners Insurance Study” by market research company, J.D. Power and Associates.

But how can you make sure your house is restored to normalcy?

The Insurance Information Institute (III) recommends you ensure your home insurance covers the price to reconstruct at today’s construction costs – not what you paid for the home originally.

“For a quick estimate of the amount of insurance you need, multiply the total square footage of your home by local building costs per square foot,”  III says. You can get this information from your local real estate agent, builders association, or insurance agent.

It’s also a good idea to talk with your home insurance agent about automatic inflation coverage, which updates premiums and coverage annually to reflect the cost of inflation.

“This coverage’s main purpose is to help customers avoid inadequate insurance coverage,” Isaac says.

But beware – not all insurance companies have this in place. You need to sit down with your insurance agent to see if you do have automatic inflation coverage. That way, you can be sure that you’ll be able to rebuild your $500,000 home for what it’s worth now – instead of for the $200,000 that you purchased it for 20 years ago.

[Think a home insurance update is in order? Click to compare quotes now.]

Factor #2: The cost to replace your personal belongings

Another factor to consider is what your home insurance will cover for the items inside your home if they’re stolen. So if a burglar breaks into your home and takes your television, how much will your insurance company pay you for another?

This can be a tricky question, says Isaac. It depends on what type of television you had, and whether or not your insurance covers replacement cost or the cash value of the item.

With an insurance policy that covers replacement cost, you could receive the latest flat-screen television – even if the set that was stolen was 10 years old. That’s because the policy refers to the original price of the item, regardless of how old or outdated it might be. But with an insurance policy that only covers cash value, you would get only what the television is valued at today. And because of inflation and the advances in home electronics, a television you bought for $2,000 two years ago is likely worth a lot less now.

So, if you’re trying to get the cheapest home insurance policy possible, a policy that covers cash value is a better option – since a policy that covers replacement cost comes with a higher premium, Isaac notes. “But at a time of loss, you will feel in a much better position to replace most of your stuff if you had the more expensive policy that includes replacement of personal property,” he says.

[Is your home well protected? Click to get an updated home insurance quote now.]

Factor #3: The cost to cover your valuables

So your insurance company will cover your personal belongings, but what about more unique – and expensive – items? Let’s say a diamond ring has been passed down to you from your late mother, for example. It’s worth at least $10,000. You cannot find it anywhere. Will your home insurance replace it?

Unless you added what’s called a rider or endorsement policy to your standard insurance, don’t bet on it.

That’s because every standard insurance policy has limits on the coverage for expensive items. For example, jewelry is usually only covered up to $1,000 to $2,000 within a standard home insurance policy, according to III.

But don’t worry – that doesn’t mean your valuable items will have to be left uninsured. For items that are worth more than the amount that your standard policy would cover, there are riders that you can add to your homeowner’s insurance that provide additional coverage beyond the regular policy.

And the rider can be written out for items like jewelry, artwork, watercraft, gun collections, and other valuables that are not covered normally, says Isaac. These items are typically appraised and in the event of a loss, the insurance company will pay you the appraised amount.

[Need some extra coverage for your valuables? Click to compare home insurance quotes now.]

Factor #4: The cost of damage from floods and earthquakes

Floods and earthquakes can be devastating catastrophes that destroy property. But these natural disasters are not covered under a standard home insurance policy, so you need to buy special flood or earthquake insurance for protection.

And not having flood or earthquake insurance can be a risky gamble for certain folks, Isaac says.

“You need to analyze where you live and what is around you,” he adds. “Floods can occur anytime, anywhere with flash floods from heavy rains or dikes breaking.”

Take Hurricane Irene, which came ripping up the East Coast in 2011 and flooded homes, for example. During that year, fewer than one out of 10 homeowners carried flood insurance in New England and the mid-Atlantic states, according to the J.D. Power’s annual insurance survey.

Just like floods, earthquakes can cause devastating damage as well, especially if you live in a state like California, which is notorious for earthquakes.  

So, if you live in a region that is prone to natural disasters, talk to your insurer about what your coverage options are.

[Think you may need some extra coverage? Click to find the right home insurance now.]

Factor #5: The cost to live after a disaster

Here’s another thing to think about: If disaster strikes, whether it’s a natural disaster, a fire, or something else, where will you live and how will you stay afloat financially if your home is destroyed?

You might end up in a hotel or have to rent an apartment, but you’ll still have to make mortgage payments even during the rebuilding period. So where does the money come from for essential living expenses like meals, clothing, cell phones, and other crucial items after you have lost everything?

“Most home insurance policies allow a small amount to help out people with their increased cost of living while they aren’t in their home,” Isaac says. “But they won’t cover you forever.”

In fact, most standard home insurance policies will cover up to 20 percent of the policy on the house, he adds. And in many situations, you can increase the temporary living expenses for a small addition to your premium.

But ultimately, every policy is different, so you really need to talk with your insurance agent about how much coverage you need. Discuss a lot of “what ifs” and understand what will be protected in those situations.

[Click to compare home insurance quotes now.]

Factor #6: The cost if someone sues you

Your sweet little great aunt falls on your stairs and breaks a hip and an ankle. Two weeks later, a lawsuit is delivered to you by her attorney.

You might not believe it, but this kind of scenario happens all the time, says Isaac.

“Accidents happen. Unfortunately, those who are injured can be your neighbors or friends at one point. If something tragic occurs, you need to have enough liability insurance,” he says.

To protect yourself, you might want to consider taking out an umbrella policy or a personal excess liability insurance policy – both of which can often be bought separately from your home insurance. This type of policy can give you $1 million or even more coverage to help pay for judgments against you by a judge or jury in the lawsuit, says Isaac. It saves you from paying out of pocket or having to sell your home or belongings to pay the settlement.

The III states that most home insurance policies provide a minimum of $100,000 worth of liability insurance, but recommends that homeowners have a least $300,000 to $500,000 worth of protection.

Housing Starts Make Fitch a Believer | North Salem NY Real Estate

Just two weeks after declaring home prices are overvalued by 10 percent, Fitch Ratings said yesterday that December’s solid single family housing starts and an unexpected jump in multifamily starts are clear signals that 2013 should begin strongly for U.S. housing.

Single family housing starts came in at 616,000 for December, which was on target with Fitch’s expectations. However, multifamily housing starts vaulted to 338,000. This increase may be attributable to good weather and the aftermath of Hurricane Sandy. However, it should be noted that the multifamily numbers were strong in most regions of the United States.

‘Most housing macros continue to grow, helped by favorable affordability and buyer psychology,’ said Managing Director Robert Curran. ‘The major public builders are pacing the industry as reflected in their net orders and backlog.’

On January 4, Fitch said home prices were overvalued and price growth is not being driven by fundamentals but by technical factors that could easily change. The ratings service said national prices are, but will likely drop by no more than 2 percent due to inflation.

Yester Fitch said its housing forecasts for 2012 have been enhanced since the last quarterly data was released. Fitch estimates that single-family housing starts improved about 24 percent, new home sales rose approximately 20 percent, and existing home sales grew 10 percent. Fitch envisions housing growth to be somewhat less robust this year.

Fitch projects 2013 single family-starts to expand 18 percent, new home sales advance 22% and existing home sales should increase 7 percent.


N.Y. newspaper removes online map of gun-permit holders | Armonk Homes

A White Plains, N.Y., newspaper has removed an online interactive map that detailed who has handgun permits in two counties. The posting of the map on the paper’s website last month had sparked outrage and prompted changes in state law to give permit holders greater privacy.

The Journal News map showed the names and addresses of people with pistol permits licensed by Westchester and Rockland counties.

Journal News President and Publisher Janet Hasson said Friday the decision to take down the map came in response to a provision in New York’s new gun law that was passed last week. The law also gives permit holders a way to request that their personal information be kept private.

Hasson criticized the new rule as overly broad, but added in a letter that “we are not deaf to voices who have said that new rules should be set for gun permit data.”

Still, a snapshot of the map — without the names and addresses — has been kept on the paper’s website “to remind the community that guns are a fact of life we should never forget,” she wrote.

The new law, signed Jan. 15 by Gov. Andrew Cuomo, also stopped the release of permit-holder data for 120 days. The Journal News had been battling Putnam County to release the names and addresses of permit holders, but officials there had refused.

The state government’s top open-records official had warned that refusing the request would be illegal.

In her letter to readers, Hasson said the paper published the interactive feature using public information after the Newtown, Conn., school shootings, because the “Journal News thought the community should know where gun permit holders in their community were, in part to give parents an opportunity make careful decisions about their children’s safety.”

“Sand States” are Still the Wettest | Cross River Real Estate

Some 10.7 million homeowners, or 22 percent of all residential properties with a mortgage, were in negative equity at the end of the third quarter of 2012, down by 100,000 from the second quarter. But the “sand states”, the states that dominated foreclosures for years, still account for a lion’s share of underwater borrowers.

With the addition of 100,000 borrowers, the total number of borrowers who moved from negative equity to positive equity by September reached 1.4 million year-to-date. An additional 2.3 million borrowers had less than 5 percent equity in their home, referred to as near-negative equity, at the end of the third quarter, according to a new analysis from CoreLogic.

Together, negative equity and near-negative equity mortgages accounted for 26.8 percent of all residential properties with a mortgage nationwide in the third quarter of 2012, down from 27 percent at the end of the second quarter in 2012. Nationally, negative equity decreased from $689 billion at the end of the second quarter in 2012 to $658 billion at the end of the third quarter, a decrease of $31 billion. This decrease was driven in large part by an improvement in house price levels. This dollar amount represents the total value of all homes currently underwater nationally.

Rising home values also pushed the equity Americans have in their homes higher than at it was at the onset of the housing crash five years ago, according to the December HUD Scorecard. Homeowners’ equity reached $7714.3 billion, a 5.2 percent increase over the second quarter and an 18 percent increase over the level of $6526.9 in the third quarter of 20011. In 2007, homeowners’ equity reached $1.02 trillion, but fell to $7050.9 billion in 2008, according to the quarterly Federal Reserve’s Flow of Funds report.

Negative equity has been a major cause of foreclosures and short sales. Even three years after the height of the foreclosure flood in 2010, a handful of states that were reasonable then for the majority of the foreclosures are the same states that today are home to an overabundance of underwater homes.

Nevada had the highest percentage of mortgaged properties in negative equity at 56.9 percent, followed by Florida (42.1 percent), Arizona (38.6 percent), Georgia (35.6 percent) and Michigan (32 percent). These top five states combined account for 34 percent of the total amount of negative equity in the U.S.

Of the total $658 billion in aggregate negative equity, first liens without home equity loans accounted for $323 billion aggregate negative equity, while first liens with home equity loans accounted for $334 billion.

Third quarter highlights included:

  • 6.6 million upside-down borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $214,000. The average underwater amount is $49,000.
  • 4.1 million upside-down borrowers possess both first and second liens. The average mortgage balance for this group of borrowers is $298,000.The average underwater amount is $82,000.
  • Approximately 41 percent of borrowers with first liens without home equity loans had loan-to-value (LTV) ratios of 80 percent or higher and approximately 61 percent of borrowers with first liens and home equity loans had combined LTVs of 80 percent or higher.
  • At the end of the third quarter 2012, 17.1 million borrowers possessed qualifying LTVs between 80 and 125 percent for the Home Affordable Refinance Program (HARP) under the original requirements first introduced in March 2009. The lifting of the 125 percent LTV cap via HARP 2.0 opens the door to another 4.6 million borrowers.

Luxury Sellers Hang Tough on Prices | Waccabuc Real Estate

Even though the time it takes to sell a luxury property has increased to as long as 260 days in Chicago, 287 in Miami and 197 nationally, fewer sellers are cutting prices.

Wintertime sluggishness has slowed luxury markets across the nation. Days on market have been increasing in nearly every major market tracked by the Institute for Luxury Home Marketing, and inventories are at a seasonal low, down from 27,600 properties in June to 18,400 in January.

Rather than falling with the end of the summer buying season, low inventories have placed upward pressure on prices, which have risen from a median of 1.11 million in September to 1.23 in January, according to ILHM data.

Perhaps as a result of strong prices, sellers are not responding as they normally do in the winter by cutting prices to generate interest among buyers. In fact, fewer are reducing prices today than when days on market were lower last summer.

The percentage of homes on the market that have lowered their asking price at least once over the past 90-day period has fallen 10 percentage points since the end of the summer, from 31.4 percent of properties to 24.4 percent. This statistic illustrates how many listed properties may be behind the “price curve” – listed at a price above what the market is willing to pay for similar properties. Even in strong seller’s markets, the percent price decreased will be 10-12 percent, so some repricing of individual properties is common in any market. In weaker markets, this value begins rise into the teens, 20 percent, 30 percent, and higher. Percent price decreased is an insightful gauge of demand levels in the residential housing market.

The National Association of Realtors reported that sales of luxury homes spiked in the final months of 2012 as high-end homeowners rushed to take advantage of lower tax rates before January 1.

Many sellers wanted to cash in on their homes before a widely expected capital gains hike — to 20 percent from 15 percent — that was part of the fiscal cliff budget deal. According to the National Association of Realtors (NAR), sales of homes valued at $1 million or more spiked 51% in November compared with a year earlier.