U r b a n T r e k k e r

Spin Your Electricity Meter Backwards, Virginia (pt.2)

PART 2
(Continuation from yesterday's post)

Virginia

The net metering incentives in Virginia is not that straight and simple. There are wrinkles in the incentives.

• Type of renewable sources qualify for net metering covers a whole range of sources, i.e. solar thermal electric, PV, wind, biomass, hydroelectric, geothermal, muni solid waste, tidal and wave energy.
• It applies not only for residential but also institutional, commercial, non-profit, state and local government.
• The limit on size: for residential is 10 kW (kilowatts) and non-residential up to 500 kW.
• Excess is credited to the following month's bill at retail rate; or either granted annually or credited the following month. Via DSIRE.

For example, if a customer-generator bought 1,500 kilowatt-hours (kWh) from a utility during the first 11 months of the annual period, and then generated 2,000 kWh of excess electricity in the 12th month, the customer could carry forward 1,500 kWh to the following month, and the remaining 500 kWh would be granted to the utility.

• Under legislation enacted in 2007 (HB 2708 of 2006), the net-metered customer required to enter a power purchase agreements (PPA).
• Only customers of investors-owned (public co. like Dominion Power), and cooperatives eligible to apply for net meter but not municipal utilities.

This is where it gets interesting. Unlike DC and MD, the net-metered energy is available on first-come first-served basis until "..[t]he rated generating capacity owned and operated by customer-generators reaches 1% of an electric distribution company's adjusted Virginia peak-load forecast for the previous year."

Incentive and Rebate Programs

1) Arlington County Green Building Incentive to encourage the development of enviromentally-friendly buildings in Arlington based on Leadership in Energy and Environmental Design (LEED).

2) Property tax exemption for passive solar space heat, passive solar heat, solar water heat, solar thermal electric and photovoltaics (PV). We pay taxes for our property that includes cars. Here is how it works. Each locality allows to exempt or partially exempt solar energy equipment or recycling equipment from 'property tax.'

The following cities in N.Va jurisdiction that offers the tax exemption: Alexandria, Fairfax, Falls Church, Loudoun, Prince William. (Arlington does not offer this?).

3) Property tax asssessments which allow localities to assess the property of tax of energy-efficient buildings at a reduced rate.

Virginia defines energy efficient building as:

"...any building that exceeds the energy efficiency standards of the Virginia Uniform Statewide Building Code by 30%; meets performance standards of the Green Globes Green Building Rating System, the Leadership in Energy and Environmental Design (LEED) System or the EarthCraft House Program; or qualifies as an Energy Star home under federal Energy Star criteria."

The reduced rate tax assessments applied to: Residential, non-residential, industrial, low-income residential, agricultural and institutional.

4) 100% Sales tax exemption for energy-efficient products (must meet Energy Star reqs) on products up to $2,500. This tax exemption is good until 7/1/2012. Eligible technologies include: washer/dryer, dishwasher, refrigerators, freezers, dehumidifiers, ceiling fans, AC, programmable thermostats.

For other incentives here.

Having all kinds of incentive, rebate programs is one thing. Reaching the tipping point is another story. You'll be surprised to know how many of the professionals working the real estate industry have little or some knowledge to a degree about energy-efficiency techniques or conservation.

So, in a way the $4+ gas and Dominion Power 18% rate increase is good for, because it forces people to make living style adjustments.

Net Metering (Spin Your Utility Meter Backwards) & Energy Incentives for DC Region (part 1)

So you want to have your electricity meter spinning backwards. Here is an idea for you: Net metering. The idea of net metering is to install renewable sources for your home generation (small wind, solar power, etc.) and whatever excess you have will be credited back to your utility bill. Via Wiki.

Net metering is an electricity policy for consumers who own, generally small, renewable energy facilities, such as wind or solar power, or uses vehicle-to-grid systems. "Net", in this context, is used in the sense of meaning "what remains after deductions" -- in this case, the deduction of any energy outflows from metered energy inflows. Under net metering, a system owner receives retail credit for at least a portion of the electricity they generate.

Net metering is a renewable energy incentive provided by your state and the Feds. By way of Energy Act of 2005, all public utilities are now "..[R]equired to make available upon request net metering to their customers."

Each state regulates its net metering policy differently. The five states which offer net metering  friendly policies are: California, Maryland, Colorado, New Jersey, and Pennsylvania. Maryland has a Gov who is a big proponent of energy savings, alternative energy - so that helps.

Let's see what DC region has to offer.

District of Columbia

• Net metering is available to residential and commercial customer-generators with systems powered by renewable sources (Solar Thermal Electric, Photovoltaics, Wind, Biomass, Hydroelectric, Geothermal Electric), combined heat and power (CHP), fuel cells and microturbines, with digester gas, and hydroelectric power.
• Limit on size is 100 KW. According to AWEA, homes use approximately 9,400 kilowatt-hours (kWh) of electricity per year (or 780kWh per month).
• Excess is credited to customer's next bill at utility's retail rate.
• Offers 'interconnection standard' for net metering.
• PEPCO is the only electric company delivering the services in the District.

DC is also offering state grant on its 'Renewable Energy Demonstration Project (REDP)' The DC Energy Office is looking for homeowners on its fourth solicitation round. They're offering $9,000 for renewable energy project. Deadline for filing application is August 15, 2008.

Maryland

• After it's been expanded four times, the net metering enacted in 2007 raised the maximum capacity of all eligible systems from 200 kW to 2 MW. The rules apply to all utilities. The plus is - system leased, owned by residents or businesses, schools and governments that generate using solar, biomass, or wind resources are eligible also eligible for net metering.
• Excess is credited at retail rate and carried over to customer's next bill. After 12 mos. excess is granted to utility co. at 'no' compensation to the customers. (ditto with Virginia).

Other incentives for homeowners include among other things:

1) property tax exemption if you live in Anne Arundel county when you have installed system i.e. solar water heater, solar space heat and photovoltaics (PV),

2) clean energy production credit (personal) that offers Marylanders a state income tax credit for electricity generated by 'qualified sources (keyword!)' of 0.85 cents per kWh and 0.50 cents per kWh for electricity generated from co-firing qualified sources with coal (mix sources),

3) state rebate program for geothermal heat pumps of up to $3,000 (residential) and $10,000 (commercial),

4) property tax exemption for solar water heat and photovoltaics,

5) solar energy grant program of up to $3,000 for solar water heater and $2,500 per kWh up to $10,000 for photovoltaics,

6) statewide special property assessment for solar heating and cooling systems,

and more.

Montgomery county has also clean energy rewards program which gives rebate to homeowners if they switch to clean energy of up with rebates of up to 1 cent/kWh for residential with max. limit of 20,000 kWh/year. Basically you're buying REC (renewable energy credit - and this deserves another post).

::

Note: We'll continue with Virginia tomorrow.

Resources and links:

Retail electric restructuring in DC

Energy Facts and Programs + Maryland Energy Administration

DSIRE

S&P/ Case-Shiller Q2: Wash DC Price Drop 15.4%

S&P/Case-Shiller home price index of 20 major cities show a 'record' drop of 15.8% according to CNN.

Each of the 20 metro areas covered by the index posted annual declines; nine posted record lows and 10 cities recorded double-digit drops.

Washington DC is one of the metro areas that make up the composite index. The index for the DC region declines 15.4%. As we all know that DC region includes portion of Maryland, District of Columbia, and Northern Virginia. See Northern Virginia market trends from 2007 to 2008 here.

Here's the reason why prices are down: Foreclosures.

The soaring numbers of foreclosures are helping to push down prices. Banks tend to slash prices when selling repossessed homes, since they lose money every month a house sits vacant. They must pay property taxes, maintenance expenses and utility costs while getting nothing back in return.

Those sales, in turn, tend to bring down prices in the rest of a given neighborhood, creating a vicious cycle.

image: CNN/Money

Fortunately, in our region, foreclosure sales are not so bad as in California, where 40% of homes sold during the three months ended June 30 were foreclosures. As you can see below, foreclosures sales Q2 2008 in Northern Virginia made up about 15% of the total sales. Actually sales in hoods that have been hit hard by foreclosures have picked up a bit.

It all comes down to when you look at the big picture, low housing prices conditions creates opportunities to buy.

Weekly Real Estate News Roundup

Congress Approves Housing Bill
WASHINGTON (Reuters) - The U.S. Congress approved a massive housing market rescue bill on Saturday, offering emergency financing to mortgage titans Fannie Mae and Freddie Mac, and setting up a $300-billion fund to help hundreds of thousands of troubled homeowners.

The Puzzle of Home Price Indices
U.S. home prices declined 15.3 percent, 8 percent or 4.6 percent from April 2007 to April 2008, according to Standard & Poor's, the National Association of Realtors and the U.S. government, respectively.

Tighter and Tighter
But even borrowers who think they're well positioned to be approved for a mortgage "can't assume anything," said Guy Cecala, of Inside Mortgage Finance.

Matching Modern with Energy Efficiency
I'm in Huntington Beach this weekend taking a little r&r and didn't realize how much of the housing here is built like the townhomes above: with an urban feel -- tightly together with at least 2-3 levels.

Falling New Home Sale Bode Ill for Home Builders
The already battered home building industry got another dose of bad news Friday as a key bellwether of the sector's health showed sales of new homes and prices dipped in June, dashing hopes for a summertime housing turnaround.

Green and Green(e)
Bill Moses renovated the neglected home's exterior using composite roof shingles, recycled-denim insulation and salvaged-glass windows.

Forget AC! Cool Your Home Naturally
The turbine ventilator on top of this cupola uses natural wind power to pull warm air up and out of the building.

What's Lurking in Your Countertop (recommended reading)
SHORTLY before Lynn Sugarman of Teaneck, N.J., bought her summer home in Lake George, N.Y., two years ago, a routine inspection revealed it had elevated levels of radon, a radioactive gas that can cause lung cancer.

Use of Home Equity Hits a Four-Year Low
The amount of money Americans pulled out of their homes is at a four-year low as homeowners battle falling home values and stricter standards among lenders, Freddie Mac said Thursday.

Bank of America, Wells Fargo Say Loan Changes Rising
July 25 (Bloomberg) -- Bank of America Corp. and Wells Fargo & Co., the top mortgage lenders, told Congress they have accelerated the pace of loan modifications to avoid foreclosures amid criticism they are slow to help keep people in their homes.

FDIC Takes Over Two More Failed Banks
CARSON CITY, Nev. - U.S. regulators took over two banks on Friday and sold them to Mutual of Omaha Bank, the sixth and seventh bank failures this year as financial institutions struggle with a housing bust and credit crunch.

Thom Mayne's US Federal Building

Follow the LEEDer
Ten years ago, Portland developer Mark Edlen and his partner, Bob Gerding, were scarcely known even in their home city.

IMF Papers: US Housing Overvalued 14%, Likely to Overshoot on Downside
Research by an IMF economist concludes that US residential real estate was overvalued by 14% as of the first quarter of 2008.

Cashing In on Real Estate
Is it still possible to make money in real estate?

:: ELSEWHERE WHERE SOME THINGS are LOCAL

Tax Relief, Sans Itemizing

Successful Sellers Know How to Think Like Buyers  

Condo Association Don't Have to Pay For Damage to Units, Md. Court Says

Virginia, DC Home to High Percentage of High Impact Firms

Arrest Made in Rental Home Scam

Board Approves Future Metro Entrance  

All Quiet on the Revitalization Front
 
Eclectic and Appealing

Steve Case Searches for Another Iconic Brand

Home Sales Up in Fairfax, But Prices Still Soft
 
Board Members Approve Big Ballston Project

Housing Bill: DAP Out, New FHA for Subprime Borrowers, Loan Limits, Etc.

In case you haven't heard this. Part of the package deal that the House of Representative passed last night 'Housing and Economic Recovery Act 2008' HR 3221 (by a margin of 272 to 152) among others are 1) elimination of down-payment assistance, 2) new FHA loans for subprime borrowers, and 3) Feds backdrop for Fannie and Freddie. Previous posts about down-payment assistance or DAP, here, and here.

This bill now heads to the Senate. So expect that they'd pass this legislation with no sweat. Via Housingwire.

The House bill also adopts language from the Senate version of the package that would ban so-called seller-funded down-payment assistance programs; this was a hotly-contested area of difference when the Senate volleyed its version of the bill back to the House.

“We’re going to yield to the Senate on that,” House Financial Services Committee Chairman Barney Frank (D-MA) is quoted as saying in the Washington Post. “There are a lot of trade-offs in the bill.”

Seller-funded downpayment assistance allows property sellers, including largely home builders, to donate funds to a non-profit agency, which then “gifts” the funds to a borrower as a down payment on a new home. The non-profits make a tidy processing fee, while critics — and even government agencies such as the IRS — have for years blasted the practice as a legalized scam.

Some items inside the bill (incl. Senate version).

• SUBPRIME 'primary' borrowers (only owner-occupants no investors or lenders, 2nd or 3rd home) will get the chance to refinance their loans at 'significant' discount using FHA insured 30 years fixed-rate loans based on a) borrower's ability to repay or b) 90% of CMV (current market value) of the home.
• EQUITY sharing. What that means. Borrowers will share new equity and appreciation - hear this: with FHA! - which technically make 'Uncle Sam' your lender/ shareholder whatever you call it.
• SECOND lien holders will get incentive to kiss goodbye their share of the loans.
• A bag of tax incentives: for buyers (up to $7500 tax credit), $15B tax benefits, increase low income housing tax credits and help builders build affordable housing alternatives.
• Fannie, Freddie and FHA loans cap lifted up from $417,000 to $625,500 (permanent).
• $4B for community stabilization.
• It's a voluntary program. Program runs from next fiscal year October 1, 2008 to September 30, 2011.

For other goodies read here and here.

News Elsewhere:

FDIC Faces Mortgage Mess After Running Failed Bank

House Approved Housing Bill Could Send Some Relief to Valley

Bill Gross: The Housing/ GSE Bill is the Best Way Out of Credit Crisis

Housing Bill: The New and the Old of It All

N. Va Resale Homes Sold Up 165% Since January, Sign of Market Turnaround?

image: Price vs. units sold

The Northern Virginia Association of Realtors (NVAR) released their June sales report recently for resale market. This is what interesting: The total number of homes sold year-to-date up almost doubled from 716 to 1,900 homes. That's a cool 165% increase over the past 6 months! 

How can anyone miss that?

For the same period, the average sold price declined by 14.44% from $569,826 to $487,549. Clearly, when you link the two indicators together - prices and units sold - the increase in total number of homes sold has something to do with falling prices, even though prices stay flat since beginning of the year. The total number of units (or homes) sold declined 5.05% from 2,001 to 1900 homes.

The numbers also show that sellers (some of them) have come to terms with the reality of the market. The ave. sales price as percentage of list price came down from 95.71% to 93.31%. And the ave. list price for solds declined 12.24% from $595,372 to $522,512. What this trend tells basically prices have come down. From the peak, which was 2006, the average sold price have come down from $578,689 to $487,549 or 15.74%. (2005 was not the peak of the market in terms of prices - only units sold).

What we've been hearing about FHA loans slowly become serious player in the marketplace is so true. Look at the market share. FHA, VA (other than conventional financing) takes bigger chunk of market share.

Market Trends: Arlington, Alexandria and Fairfax

(The charts below shows you the movement between prices and volume or (total number of units) sold from June 2007 to June 2008.)

When you compare trends for Northern Virginia vs other jurisdictions, you can see that all real estate is local. Look at Arlington. What's going on there? It could be that during the month of February to March and April, there was low supply of homes in the upper bracket.

Alexandria tells a different story. Over a year period, home prices here stay flat while units sold almost double from under 100 homes sold in January of '08 to almost 200 homes in June. Buyers took advantage 'of closer-in' affordable homes in the City of Alexandria (less pricey than Arlington).

Fairfax county. It looks like this is where the action is. Buyers suddenly took advantage of some 'deals' on the market - which is a combination of foreclosures (bank-owned), short sale and other type of deals -  even though prices not coming down that fast and furious.

** data, information: MRIS, NVAR

** Northern Virginia includes Alexandria, Arlington, Fairfax, Falls Church City, Town of Vienna. The stats exclude Loudoun and PW counties.

End of Housing (Bear) Market?

For your pleasure. See the correlation between prices and total units sold? When prices dip, the number of homes that got sold up.

Buyers on the side line. This will be a wake up call.

Details coming out tomorrow. Stay tuned.

Borrowers Pay More in FHA New Risk-Based Pricing

FHA rolled out risk-based pricing last Monday, July 14. Effective July 14, all borrowers will pay UFMIP or 'Upfront Mortgage Insurance Premium' and annual premium. (h/t Alex Alquinta)

Highlights of the new FHA risk-based premium per HUD.

• UFMIP will range from 1.25 percent of the loan amount for lower-risk borrowers to 2.25% for higher risk borrowers.
• The cap on FHA insured mortgage is 2.25% on the upfront mortgage premium and 55 basis point for the annual premium.
• Borrowers with credit bureau scores must be risk classified by FHA Total's Mortgage Scorecard.
• Those in risk categories without premium shown are not eligible for FHA-insured mortgage financing.
• Borrowers without credit bureau scores need to be manually underwritten..

UFMIP for loans > than 15 years

click on image to (+)

UFMIP for loans < than 15 years

Technically all FHA loan borrowers will pay more for their loans. The other things interesting things are: 1) FHA using lower score to penalized the borrowers in case of multiple borrowers, and 2) if the other borrower falls under 'without credit score' category, then the non-traditional category is used to determine the premium.

Say, both of you are applying for the loan. One of you has credit score in the range of 700 and the other 590. The lender will then determine that the lower score - 590 - will be used for the premium.

So either way, a credit score matters more than before. That's the gist. You pay more if you credit score has a lot of dings.

However, on the flip side, FHA rewards a borrower who completes HUD-approved home buying counseling. (List of HUD approved counseling by state here)

Here is the word from HUD.

First-time home buyers who will be obtaining a mortgage with an LTV greater than 95% and whose decision credit score is in the 559-500 range area entitled to a reduction of their UPMIP from 2.25% to 2% provided the homebuyer completes HUD-approved pre-purchase counseling.

One more thing, if buying a condo and use FHA loan, condominium must be FHA approved condo which most condo buildings in our area are. But, check that site first before going FHA.

Weekly Real Estate News Roundup

image: Slate

World's Most Expensive Addresses

Cooling a House in Hot Water
Cooling a house in hot weather can be achieved by having vents high on the warm side (south side) and low on the cool side (north side).

A Virginia Based Builder in Trouble
Unable to maintain sufficient interest reserves on $94 million in debt, beleaguered Virginia-based Comstock Homebuilding Cos. has stopped making scheduled interest or principal payments on the debt and has hired Brad Foster of FTI Consulting as an interim chief restructuring officer.

Ignore the Headlines: Housing Starts Declined in June
I didn't post on this yesterday, as I assumed -- wrongly it turns out -- that everyone would understand how new building codes in NYC effective July 1 skewed the new Home Starts to the upside.

I'd Like to Power Our Home with Solar and Take Us Off Grid. Can You Help?
Question: In the near future, we are planning to renovate, remodel and expand our older home. At that time I would like to install PV cells to power our home and take us off grid.

Dulles Rail may Finally be in Virginia Future
Rail to Dulles is dependent upon federal funding, which was lost earlier as controversy erupted over a tunnel in Tyson’s Corner.

An IndyMac Borrower Speaks
I got a call from an Indymac borrower who asked that his name not be used. He and his wife bought a three bedroom townhouse in the Los Angeles suburb of Chatsworth for $525,000 in March 2006.

How Mortgage Applications Can Ding Your Credit Score

90% of Israeli Homes Have Solar Water Heaters
I recently noted that Hawaii has enacted a law that requires all new homes to install solar water heaters.

Home Auctions Surge 47% Since 2003
NASHVILLE, Tenn. - Despite the soft real estate market, Beazer Homes USA Inc. recently sold 26 beachfront condos on the Jersey Shore in 75 minutes.

DIY Solar Heater Collectors
Wouldn't you love to heat your home with free energy from the sun? There are simple, inexpensive, do-it-yourself solar projects that can reduce your heating bills.

Home Prices are Low but Getting a Mortgage is Tough
For first-time buyers, sinking home prices should be a good thing, making homes that once seemed out-of-reach more affordable. The trouble is: Potential home buyers face stricter standards and higher costs in securing a mortgage.

States Battle Mortgage Foreclosure Threat Chart
Frustrated by the slow pace of federal relief, states around the country are pouring hundreds of millions of dollars into their own programs to stem the rising tide of home foreclosures.

Need a Mortgage Now? Brings Lots of Cash
Are you ready to buy a house in this crazy market? Better bring a boatload of money to the closing.

Best Places to Live

Who's Watching Your Credit Score?
Thinking of refinancing your house, buying a car or signing up for a new credit card?

FROM AROUND THE REGION: DC/MD/VA

DC Releases Details 3-D Data on Google
The public can now access detailed views of domes, crevices and corners of every building in D.C.

Report Compares BRAC Sites
Fort Belvoir's preparation for the incoming throngs of defense department workers in 2011 is almost in full swing, and this week's public release of an environmental assessment puts the Army one step closer to making a decision on where the final piece of the puzzle will be placed.

Companies Going Green

McLean is No. 8
CNN.com has listed McLean as No. 8 on a list of the "Top 25 top earning towns" in America.

Board to Vote Allowing Rental Units in Homes
WASHINGTON (Map, News) -   The Arlington County Board is scheduled to vote tomorrow on a zoning proposal that would allow rental units in single-family homes.

Eisenhower East Designs
Remember that colorful Master Plan of Eisenhower East we showed you a few weeks ago?

'Pent Up Demand' Signals Housing Rebound F.C.
The City of Falls Church and its inside-the-beltway neighbors will not suffer the continued slide in real estate values that some officials suggest could leave Fairfax County with a stunning, overall 10 percent decline in taxable assessments next year.

Washington DC #6 America's Most Walkable Hoods

The cheapest, easiest and healthiest way to counter the $4 a gallon gas is to walk. A new study released by walkscore.com, identified America's Most Walkable Neighborhoods. The findings is based on analysis of 2,508 neighborhoods in the most populous U.S. cities. The most populous US cities includes major cities like San Fransisco, New York, Boston, Seattle, Washington DC, Portland, OR.

The Walk Score algorithm works by identifying the closest grocery stores, restaurants, coffee shops and other amenities near a given address. The neighborhoods were weighted by population and assigned a Walk Score between 0 and 100. Walk Scores greater than 70 indicate neighborhoods where it’s possible to get by without owning a car, while scores of 90+ qualify as a “Walker’s Paradise.”

“As Americans look to reduce their environmental impact and ease reliance on cars, the appeal of walkable communities continues to grow,” says Christopher Leinberger of the Brookings Institution. “People increasingly value the convenience and connectedness that vibrant, walkable communities offer – and the health, safety and environmental benefits are icing on the cake.”

Here are the 'Top 10 Most Walkable Neighborhoods' according to Walk Score. (in bracket is the score)

1. San Fransisco (86).

2. New York (83).

3. Boston (79)

4. Chicago (76)

5. Philadelphia (74)

6. Seattle (72)

7. Washington DC (70). Most walkable neighborhoods: Dupont Circle, Logan Circle and Downtown.

8. Long Beach, CA (69)

9. Los Angeles (67)

10. Portland, OR (66)

On the bottom 40 are Memphis (#35), Oklahoma City (#43), Indianapolis (#42), Charlotte (#39), and Jacksonville (#40). To see the full city ranking list here.

In addition to the city ranking, Walk Score also identified 138 Walkers' Paradise which are neighborhoods in the largest 40 US cities that scored in the highest bracket - 90 or above. New York leads the pack with 38 walkers paradise.

In our backyard we've got a couple good walkers paradise. Dupont Circle with walkable score of 99, Logan (98), downtown (97), U Street corridor (97), Mount Vernon Square (95), Adams Morgan (93), Kalorama (92), and Friendships Heights, MD (90).