Daily Archives: October 17, 2012

US housing construction up 15 percent in September | North Salem NY Real Estate

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U.S. builders started construction on single-family homes and apartments in September at the fastest rate since July 2008, a further indication that the housing recovery is strengthening.

The Commerce Department said Wednesday that builders broke ground on homes at a seasonally adjusted annual rate of 872,000 in September. That’s an increase of 15 percent from the August level.

Applications for building permits, a good sign of future construction, jumped nearly 12 percent to an annual rate of 894,000, also the highest since July 2008.

The strength in September came from both single-family construction, which rose 11 percent, and apartments, which increased 25.1 percent.

Construction activity is now 82.5 percent higher than the recession low hit in April 2009. Activity is still well below the roughly 1.5 million rate that is consistent with healthier markets.

Still, the surge in construction suggests builders believe the housing rebound is durable.

Builder confidence reached at a six-year high this month, according to a survey by the National Association of Home Builders. The group’s index of builder sentiment rose to a reading of 41. While that’s still below the level of 50 that signals a healthy market, it has steadily climbed over the past year from a reading of 17.

Sales of new and previously owned homes have been slowly improving this year, and home prices are starting to show consistent gains.

Record-low mortgage have encouraged more people to buy. And the Federal Reserve’s aggressive policies could push long-term interest rates even lower, making home-buying affordable for the foreseeable future.

Housing is expected to keep improving next year. But many economists say economic growth will stay muted until companies step up hiring and consumers start spending more.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the home builders group.

via finance.yahoo.com

How to Protect Yourself Against Bad Landlords | Mount Kisco NY Real Estate

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Bad landlords are bad news, and they come in many different types. They can make you hate living in an otherwise perfect apartment. However, it’s not easy to spot a bad landlord before you move in. Here’s how you can take steps to protect yourself, in case you’re stuck with one of the three most common types.

Type 1: The security deposit grabber

This landlord will consider your security deposit his from the get-go and will look for any excuse to keep your money when you move out.

Protection: Conduct a thorough walk-through before moving in.

Protect yourself against future problems before you move in. During the initial walk-through, make sure you document every flaw you find with your new apartment, even if it’s something that can’t be fixed, such as a stain on the countertop. Make sure to take pictures when you find something wrong, so you’ll have documentation. That way, if the landlord blames you for the problem, or tries to keep your security deposit, you have proof that the problem existed when you got there.

A few areas needing special attention:

  • In the living, dining and bedroom areas: Are hooks left on the wall from a past tenant’s framed picture? Even if they’ve been painted over, write it down. How about the carpet? If it’s worn out, write it down. Also, ensure all lighting fixtures, outlets and switches are in proper working order. Inspect doorknobs and doors, windows (glass, locks, check that all will open and stay open) and window coverings. Also, remember to look through the peephole; this will often get painted over.
  • Kitchen: Test every burner on the stove, plus test the oven. Inspect your refrigerator and freezer for cleanliness and dents and dings. Ensure that all of your cabinets will close, and that all of your drawers glide smoothly. Check countertops and cupboards for chips and stains. Check your dishwasher, sink and faucet. Finally, inspect windows, electrical outlets, etc, as you did in the living room, dining room and bedroom.
  • Bathroom: Check the shower for mildew, as well as the grout around the tub. Flush the toilet to make sure it runs properly and make sure it does not leak. Verify that the faucets work and do not drip. Make sure your towel bars are securely affixed to the wall, and that the toilet paper holder is in place. Again, the key here is to verify the basics of the room.

Type 2: The intrusive landlord

This landlord does not respect your privacy or boundaries.

Protection: Establish a cordial distance from the start.

One of the worst kinds of landlords is the one who feels free to stop by at all hours, ostensibly to check something in the apartment or maybe just for a friendly chat. This typically happens when you rent a single unit in a private house or in a small rental building, and your landlord lives on the same premises. The landlord tenant-relationship can get too close, and you lose your privacy. If that happens, it is difficult to re-cast the relationship without hurt feelings, and you may end up having to move.

Type 3: The non-responsive landlord

This landlord is nowhere to be found when the heat stop coming in or shower turns into a trickle.

Protection: Stay calm, firm and document.

Make sure you first approach your landlord (or property manager) in a calm, friendly tone. Explain what you need fixed. When you realize that no one is making an attempt to fix the problem, you know you are stuck with a non-responsive landlord and need to take additional action.

Additional up-front protection: If you live in a large building or apartment complex, try to befriend your maintenance person — a nice tip on the move-in day can really pay off! Usually the maintenance person will be able handle minor fixes, like unclogging toilets, draining air from the radiator or replacing hard-to-reach light bulbs. You may be able to bypass the landlord entirely.

However, for bigger and more expensive problems like a chronic leak in the ceiling when it rains or replacing a window that won’t shut properly, you’ll need to get the landlord or management company to approve and finance the fix. If they are unresponsive, don’t give up. Continue asking for the fix in a firm tone, but also start documenting every instance you contact the landlord (or management company).

If there is still no response, you need to send a formal demand letter (you can find templates online). Explicitly state the problem, the dates and times you have reported it to management, and their ignoring of your request or their denial to fix it. Then send this letter to the landlord’s business address, using certified mail with a return receipt. Unless the problem is serious (lack of heat or water, for example), give the landlord or management company 30 days to fix it. If that doesn’t work, send another letter. This time, give them 15 days. If still no response, repeat. The third time, give them seven days. Use certified mail with a return receipt every time. If nothing has happened, you now have the documentation necessary to take the landlord to court.

Hopefully, you’ll find a nice apartment with a good landlord, and you’ll never have to deal with bad landlords. However, as you move into your apartment, it does not hurt to take steps to be prepared if the landlord turns out to be less than perfect.

via zillow.com

Carolwood Estate Hits Market for $90 Million | Cross River NY Real Estate

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TheAgencyRE.com

A new addition to the most expensive homes list just hit the market, according to the Los Angeles Times.

Listing a home for $90 million is a big deal — even in the pricey Holmby Hills area of Beverly Glen, where the median home value hovers around $1.4 million.

Perched on North Carolwood Drive, the Carolwood Estate is in good company; it’s located near Fleur de Lys (priced at a hefty $125 million), Michael Jackson’s final home (priced at $23.9 million) and the Owlwood Estate, which is rumored to be privately listed at a jaw-dropping $150 million.

Historically, the property is even more significant as it once was Walt Disney’s estate.

The media company mogul had a barn on his estate to hold his projects, in particular a miniature steam train that would eventually lead to his plans of Disneyland.

When Disney passed away, his wife, Lilly Disney, continued to live in the home on the property. When she died, the property was taken over by the Walt Disney Foundation, which eventually sold the home to investor Gabriel Brener.

Due to asbestos concerns, the Disney home needed to be torn down, but Diane Disney Miller, the daughter of Walt Disney, asked Brener if she could move the Disney barn off the property. The structure was dismantled and reassembled in Griffith Park, where it is now a museum.

Brener then began construction on his private home, Carolwood Estate. Measuring 35,000 square feet, the home was finished in 2001 and has 8 bedrooms and 17 bathrooms.

According to the listing by brokerage The Agency, the home opens with a “two-story oval foyer with plaster-veneered walls, crown molding, and statuary and verde jade marble flooring.” A grand staircase off to the side leads to rows of suites used as children’s rooms.

Each room in the main living area has 12-foot ceilings and 3-inch thick mahogany doors. Marble fireplaces, crown molding and other high-end details round out the rest of the home.

The listing is held by real estate agents Jay Harris and Mauricio Umansky of The Agency.

via zillow.com

30-Year Fixed Mortgage Rate Holds Steady | South Salem NY Real Estate

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Mortgage rates for 30-year fixed mortgages remained flat this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.26 percent, unchanged from this same time last week.

The 30-year fixed mortgage rate hovered between 3.18 and 3.28 percent for the majority of the week, dropping to the current rate this morning.

“Last week, rates moved down slightly after the weak jobs report but remained essentially flat after Monday’s stronger-than-expected retail sales figures,” said Erin Lantz, director of Zillow Mortgage Marketplace. “Although this is a fairly busy week for U.S. economic data, we expect rates to remain in this low range as the market awaits the European Union Summit on Thursday and looks for positive news that might offset renewed uncertainty about the health of the European economy.”

Additionally, the 15-year fixed mortgage rate this morning was 2.64 percent, and for 5/1 ARMs, the rate was 2.59 percent.

What are the rates right now? Check Zillow Mortgage Marketplace for up-to-the-minute mortgage rates for your state.

*The weekly rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

via zillow.com

Diane Keaton Adds New Book Called ‘House’ to Her Housing Collection | Bedford Hills NY Real Estate

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A Kinderhook, NY house featured in Diane Keaton’s new book. Source: The New York Times

Source: Rizzoli

Serial house flipper Diane Keaton, who has also been known to light up the big screen and fashion pages with her uniquely quirky style, has a new book.

It’s called “House,” and the coffee-table offering by arty book purveyor Rizzoli doubles down on Keaton’s outsized reputation as a housing connoisseur, which we have blogged about time and again, thanks to her perfectionist precision in buying, restoring and selling homes built by renowned architects such as Wallace Neff and Ralph Flewelling.

Keaton’s flipping work includes the magnificent 1927 Spanish colonial in Beverly Hills that she restored then sold. According to the Los Angeles Times, that home was later used as the set for the pilot of the show “The New Normal,” whose co-creator Ryan Murphy had bought the home from Keaton. The Academy Award-winning actress’s influence was felt in designing the studio sets for the series:

Production designer Tony Fanning said Keaton, a well-known preservationist, was a big factor on the Monterey-influenced interiors. ‘She inspired me,’ Fanning said. ‘Her book California Romantica: Spanish Colonial and Mission-Style Houses really shows her love for, and understanding of, how clean and stark and minimal the interiors are meant to be.”

Diane Keaton and her collection of clown paintings. Source: Parade

In between all her own buying and selling, including her latest home in Pacific Palisades that she purchased earlier this year for $5.75 million, Keaton had time to produce the new book, which came out this week.

In “House,” Keaton showcases high-concept houses where repurposed existing structures are key elements or where new houses take their cue from iconic architectural forms.

In an interview with The New York TImes Magazine, Keaton says her love of old homes has not changed: “What’s fun about this particular book is to see who’s working now and what they’re doing with modern structures. These houses are very charming to me.”

Like all things Keaton, the homes and structures she features in “House” could be construed as a kooky woman’s penchant for architectural oddities. However, it doesn’t take too long to realize that she has a keen and disciplined eye that takes account of the offbeat or idiosyncratic only to affirm those elements as essential to American taste, design and, ultimately, culture.

A home in Sagaponack, NY designed by Annabelle Selldorf is included in Keaton’s new book. Source: The New York Times.

via zillow.com

How Much Income Do You Need To Buy A House? | Pound Ridge NY Real Estate

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Source: flickr user images of money

If you’re in the market for a new home, chances are you’ll have to compromise at some point along the way. Maybe you’ll have to commute a little farther than you’d like in order to get the best value for your money. Or perhaps you’ll forgo a huge backyard to be closer to the city.

And when it comes to finances, you might find a disparity between how much house you want and how much house you can purchase given your gross monthly income and other factors.

Home loans are made against your ability to repay. While the mortgage loan is secured against the house, it is really made against your income. That’s what mortgage lenders look for — income to offset liabilities.

Simply put, the amount of income you need to purchase a house will vary by your payment comfort level, including any other monthly debt obligations you might have.

Important terms

Mortgage payment: Principal, interest, property taxes insurance and mortgage insurance, if needed

Consumer debts: Minimum payment obligations on things such as auto loans, credit cards, student loans, personal loans and installment loans

Other debt obligations: Alimony and/or child support or any other court-ordered repayment obligations

Running the math

Here’s a simple formula to calculate the amount of income you’ll need to purchase a home:

Target mortgage payment + consumer debts ÷ .36 = Gross monthly income needed to qualify

Most lenders limit your debt-to-income ratio (how much of your monthly income pays debt) to between 36 percent and 45 percent. While the exact ratio varies by lender and loan type, it’s best to base your calculations on the lower end to ensure that you won’t overextend yourself financially.

So, if your target mortgage payment is $2,000 per month and you have consumer debts of $300 per month, you will need $6,388 gross monthly income to offset your housing expenses and consumer obligations.

Down payment

Your down payment is another important factor in determining how much income you’ll need to buy a home.

Consider the following loan scenario using a purchase price of $300,000 (assuming no other debts) and the current rates on Zillow Mortgage Marketplace.

Conventional loan

  • Down payment: 5 percent ($15,000)
  • Interest rate: 3.26 percent
  • Approximate mortgage payment: $1,770
  • Gross monthly income needed: $4,916

So at the end of the day how much income you need to purchase a home is predicated on your monthly income, consumer debt obligations and down payment.

Impact of debt

For every dollar of debt, you will need double that in income. So if you have a $300 car payment, you’ll need at least $600 per month or more in income to offset that debt.

Debt erodes income, and less income translates to less purchasing power.

So, does buying a home make sense?

Yes, so long as the amount you can borrow from Personal Loan Lenders for your desired purchase price is in sync with your debt obligations and, of course, your down payment.

via zillow.com

Why Prize Investment Properties Are No Prize | Bedford Corners NY Real Estate

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Here’s a little real estate investing secret that few rental property investors know: The fancier and more prize location of a property, the worse the cash flow. In fact, most “prize” properties are going to have negative cash flows. And that’s not a smart way to invest your hard earned cash equity dollars.

Consider the options

Let’s look at an example. You want to buy about $500,000 worth of real estate, and with a 25 percent down payment plus costs, you’ll need about $150,000 in cash to close the deal. You have two choices:

  1. A swanky downtown San Diego condominium for $500,000, or
  2. Three nice moderately priced boring suburban $165,000 condominiums.

Now most people would think location, location, location and want to buy the prize downtown. That’s because their only investment criteria is that they want to buy real estate in hopes that it will go up in value. And the problem with that strategy is that they are totally missing the most important piece of rental property investing — the cash flows the property can produce.

Immediate cash flow

In reality, moderately priced cash flow positive condominiums are the best location, location, location, and here’s why.

A $500,000 downtown San Diego condo would probably generate negative cash flows of about $1,000 per month. That’s $12,000 per year — ouch — on a $150,000 cash investment or negative 8 percent return on the investment.

A moderately priced $165,000 suburban San Diego condo would probably generate positive cash flows of about positive $250 per month. Multiplied by three condominiums — so apples to apples on the $500,000 investment — is positive $750 per month. That’s positive $9,000 per year on a $150,000 cash investment, or positive 6 percent return on the investment.

See the difference? You can allocate your hard-earned $150,000 of equity into either a fancy prize property with negative cash flows of $12,000 per year, or into moderately priced properties with positive cash flows of $9,000 per year. That’s a difference of $21,000 per year on $150,000 equity investment into $500,000 of real estate.

Building wealth

If you’re hoping appreciation in value will make up the difference on your negative cash flow property, good luck with that. To be fair, over long periods of time, most real estate should appreciate in value about the same percentage each year. But as you can see, cash flows can be very different, and that’s where you earn your wealth!

You might assume that because rents increase and mortgages stay constant, the fancy prize property would turn positive one day. This is true, but it would take about 40 years until the fancy prize condominium owner really got their first dime of positive cash flow.

Think that through and pencil out your real estate deal before you take the plunge. Some properties are just much better wealth-building investments than others, primarily due to the cash flows.

via zillow.com