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

Energy-Efficient Windows

I didn't realize there are so many variables build into choosing regular windows let alone the energy-efficient windows.

Why energy-efficient windows?

1. It saves money and energy. Low E-coatings, gas fills and insulating spacers and framers can significantly reduce winter heat loss and summer heat gain.
2. Protect from the winter and sun while also reducing condensation and interior fading. Frame and glazing materials that resist heat conduction do not become cold and this result in less condensation. Coatings on glass or plastic films within the window can significantly reduce the UV and other solar radiation which causes fading of fabric and furnishings.
3. Keeps your home cooler in the summer and warmer in the winter. Windows temperature are more moderate and there are fewer cold drafts. Discomfort from strong summer sunlight is reduced.
4. Rebates and credits for energy-efficient windows, doors and skylights.

The federal tax incentives for energy-efficient windows, doors and skylights, which is only good till 2007. But Congress will be voting to extend the provisions for residential energy-efficient property credits (when they return from President's day recess) on HR5351 - 'The Renewable Energy and Energy Conservation Tax Act of 2008.' None of the utility companies operating in our backyard of DC-MD-VA gives any rebates or incentives to name a few like in California, Colorado. The Federal tax incentives, via efficient windows collaborative.

• 10 percent of purchase price (not including installation cost)
• Must be installed in primary residence (not your second home)
• Max. credit is $200 for windows and skylights, $500 for doors - total max is $500
• Windows must be installed until Dec.31.2007 to qualify
• ENERGY STAR windows and skylights qualify, doors need manufacturers' statement to qualify

Tax credit is not the same as tax deduction like your 401(k) rather it is credited or use to offset tax owed, which works better than deductions.

There are important variables in the windows of the world.

• Each state have its own building code requirement. Depending on where you live, you might want to check out a couple of websites for more of the codes' information, 1) Energy Star and 2) Efficient Windows Collaborative, and 3) National Fenestration Rating Council.
• Understanding labeling: U-Factor, Solar Heat Gain Coefficient, Visible Transmittance, Air Leakage, Condensation Resistance. For explanation of the labeling terms, here.

• Energy Star windows has its own chart of key product criteria based on climate zone. Click on image to enlarge.

If you are still confused, to start with check out EFC website, where you can use the toolkit to compare energy savings and all the good criteria in choosing energy-efficient windows, even though it's designed for builders and designers. And go from there.

Factsheet: Selecting Energy-Efficient Windows in DC, Maryland, Virginia [pdf]

Sources: Efficient Windows Collaborative, Energy Star, National Fenestration Rating Council.

 

Technorati Tags: energy-efficient windows windows,doors,skylights,efficient windows,high performance windows,energy-star,energy savings,tax credit,rebates,remodeling,fenestration,energy-efficiency

No. Va. Home Sales Record Drop December and 2007

Northern Virginia had the lowest monthly December and yearly 2007 sales. Existing home sales declined by 13.06 percent year-to-date through December. What's interesting is for 2006 total number of homes sold, NVAR posted two different numbers: 1) at 20,753 homes and 2) at 22,377 homes. The second number was based on NVAR historical returns since 2000. It might be a 'typo' on the first, you think?

Using the data from NVAR historical monthly stats, the total number of homes sold in December was 1,199 units, the lowest since 2000. The total number of homes sold for the year was 18,042 declined from 22,377 units in 2006, or a 19.3 percent drop from a year before. On the other hand, prices inched up by 1.35 percent in December. The average home prices for 2007 slightly up for the year at 0.13 percent to $538,463. The average median price (use for when comparing areas) declined by 3.15 percent to $437,500 from $451,750.

Analysis

1. There's a study out there that shows how despite housing slump, prices are still high nationally. The same perspective holds true for Northern Virginia (locally).

In 2007, when you look at the average list price (the price listed on MRIS) and sold price, there is a correlation there. The difference between the average list price vs. sold price swings from 7 percent in January to 9.3 percent in December. Without looking at the specifics, it shows that buyers paid much less for than the listing price. Fannie Mae and Freddie Mac both write-off 5% of LTV on conventional loans.

2. On a 10-year trend, it shows how prices may have the impact on the number of homes sold.

 

The MoM price trends since 2000

The number of homes sold in 1998 was 22,264 with average sales price of $229,151. Prices have changed a bit since 2005. It stays within the same price range in the low-$500's while the total number of homes declined within the last 3 years - from 30,480 homes sold in 2005, 22,377 homes sold in 2006 to 18,042 homes sold in 2007, the lowest sales since 1998.

That means, price needs to go down a little bit more to get rid of high inventories. 

3. The silver lining for soft housing market, especially with rising foreclosures for this area, is a boon for buyers because of high inventory and lower prices.

If you look at last year trend (above), you'll see that we had an upside down market with high inventory and low number of listings that were sold.

Down the road, non-distressed owners would compete in prices with distressed property owners (the must sell) like banks, short-sales sellers, which likely going to affect pricing. Add to it the new homes. Builders need to sell their inventories. At least existing homes sales in general is better than the new home sales that plunged to a record 26% in 2007.

Okay, you get the idea.

S&P Shiller-Case forecasts for further decline in housing. This is the thing. Even if the Fed lowers the interest rate a little bit more and economic stimulus plan gets some traction, that won't help housing market much. On the interest rates' side, what the Fed is doing is lowering the Fed funds rate, that is "..the rate that banks charge against each other overnight." Banks may borrow from the Fed's money at low rate, but, consumer loans operate differently. Refinancing is up, but the cut so far hasn't translated into more purchase. Via Reuters.

The MBA seasonally adjusted index of refinancing applications soared 22.1 percent to 5,103.6, the highest since July 2003. But the index measuring applications for home purchases declined 17.7 percent to 362.0, the MBA said. [emphasis mine]

On the mortgage side, the fixed-rate mortgage, the rate is tied in to long-term Treasury bonds yield that move based on the economy and outlook. And not tied to the Fed funds rate.

The Fed can't slashed rates too deep because "..of inflation risks and dangering of dollars," according to Gross, largest bond fund (PIMCO) manager. And there is risk of bubbles, too?

Technorati Tags: new homes,NAHB,mortgage bankers association,fixed rate mortgage,distressed properties,fed funds rate,washington dc region,northern virginia,washington dc,fannie mae,freddie mac,economic stimulus plan,mris,nvar

100% Financing (No Down-Payment) Still Around?

About a few weeks ago, I posted a story based on email I received from a lender. It's about how starting this month "for declining markets, DC buyers will pay more." Washington Post chimed in on the same subject also.

Fannie Mae and Freddie Mac, the agencies that insured conventional loans [loans of up to $417,900], modified their underwriting policies to reflect the changes in the market place, because of declining housing values that hit major cities across the nation. Their decision were based on the three indexes: S&P Case-Shiller Index, NAR statistics, and OFHEO.

Effective for mortgage loans with an application date on or after January 15, 2008,Fannie Mae restricts the maximum loan-to-value ratio and combined loan-to-value ratio for properties located in a declining market to five percentage points less than the maximum permitted for the selected mortgage product. [emphasis mine]

via Fannie Mae

Yes, the new underwriting standard applies to our backyard here as well: Washington DC. That means, if you're buying a property with the intent to put only 5% down, don't be surprised if they ask you to put more money down. Under the new underwriting guidelines, you are now 'required' to come up with an additional 5% downpayment, for a total of 10% downpayment. Or, else you won't be able to close on a house.

Here's what the story gets a little twist. The conventional loan market might get hit a little bit. But, it haven't penetrated the jumbo loans (over $417.9k) yet. Defaults still low.

Via email I received from a lender associated with one of the big banks over the weekend. It looks like there are still a few 'private' investors out there who either 1) haven't learned the lessons from subprime losses yet, or 2) business is on the life support and they see the need to generate income.. like yesterday. For the reasons above, using calculated risk, they have decided to change tactic and go after a certain type of buyers, i.e. those with high credit scores. Like this one below.

People who have high credit scores don't necessarily translate to higher income. What makes the investors (whoever they are) think that those guys qualify for higher loan? Okay, it's a cumulation of things. But, last I heard, one of the reasons many of subprime borrowers walk away because they'd seen the values of their homes worth less than what they paid for.

I don't get it.

Thought, after all the subprime scandals, we're done with "No Downpayment" programs across the board. Apparently not so.

Technorati Tags: mortgage bankers association,100% financing,no downpayment,debt-to-income ratio,loan-to-value,fannie mae,freddie mac,subprime,citi,merrill,bank of america

Northern Virginia's First Energy-Star Certified Homes

A few weeks ago, I drove by Stockwell Manor, a new homes community in the border of McLean and Falls Church and saw the big sign that reads, "100% Energy-Star Certified Homes."  The 100% Energy Star homes, peaked my interest to go back and revisit. Because sometime in 2006, I visited the community when they just opened up the office. Don't remember if at the time, they'd started marketing the Energy Star certified homes yet. Maybe they did, or didn't.

With no end sight on how high oil prices can climb, Camberley Homes, the developer really took the plunge and committed to build Energy Star certified homes. Even in today's standard, it's not 'main stream' yet. Wait a few years from now, this type of homes will be trendy by that time, especially as more and more home owners feeling the pinch.

This is probably the first Energy-Star certified community of new homes on the market in Northern Virginia that I know of. There is a few eco-friendly and LEED condos on the market. But, eco-friendly and energy efficient does not necessarily offers the same features. [We'll talk more about some other time about the differences between the two in another post]

What is an Energy-Star Certified New Homes?

According to U.S. Environmental Protection Agency information, Energy-Star certified new homes must meet guidelines for energy efficiency set by the Agency. These homes must have 15% more energy efficient than homes built to the 2004 International Residential Code [IRC], and include energy-efficient features that typically make them 20-30% more efficient than standard homes. The energy-efficiency that separates them from the regular (standard) homes.

Energy-Star Certified homes uses energy-efficient features that contribute to improved home quality, comfort, lower energy demand and reduced air pollution.

image: front-loading washer & dryer

There are six 'Must-Have' components to qualify (or certified) for 'Energy-Star' homes:

1. Effective insulation 
2. High-performance windows 
3. Tight construction and ducts 
4. Efficient heating and cooling 
5. Efficient products 
6. Third-party verification

Yes, they do have to be certified by an independent third-party rater.

The components are what separated a home from being energy-efficient versus today's not-so-energy efficient homes. Think about this, a well-sealed and properly insulated home is not only quiet, but it offers other features that aren't so much can be found in today's (or yesterday) standard homes. Things like better indoor air quality, lower utility bills and because it's designed to use less energy, it helps reduce the greenhouse gas emission. Less energy consumption equal to less strain on the grid. 

From the outside, you probably can't see the differences between a standard homes versus energy-efficient homes. But, when you get to the inside, that's when you find most of the differences.

Here are some of the specs of Energy Efficiencies that you can find in their new homes:

• Third party energy inspections to meet ENERGY STAR certification 
• Dual-zone gas heating and central AC 
• Carrier Performance Series 93% high-efficiency gas furnaces 
• 13 SEER Puron refrigerant AC 
• Carrier 5 day programmable thermostat 
• Carrier humidifier 
• 75 gallon high-efficiency water heater 
• Tankless hot water system 
• Attic spaces insulated to R38

image: Camberley Homes

There are two types of homes available at Stockwell Manor: Townhouses and single family houses. Twenty-nine single homes and seventy-one townhouses are planned. A number of homes already been built and occupied. Single homes offered approximately 3600 s.f. to 4200 s.f. of finished square feet, comes with top-of-the-line kitchen appliances, i.e. Viking Professional and Designer series appliances. Homes are priced from low $1.5 million to high $1.7 million.

Townhouses have approximately 2600 s.f. to 3600 s.f. of living spaces comes with 10' ceilings on the main level with 9' ceilings on lower and third level. All homes come with 2-car garage. These townhouses are priced from the low $900's to high $1.1 million.

Crossposted with New Homes Trekker

Technorati Tags: energy efficient appliances,energy star products,certified energy star homes,carrier appliances,puron,mclean HS,garage townhome,viking appliances,u.s. epa,stockwell manor,falls church,west falls church metro,new homes,longfellow MS,haycock ES,fairfax public schools

Regional Community News Roundup

* Md. To Add Toll to Ease BRAC Traffic [Examiner Baltimore]
"The influx of more than 10,000 households with the Base Realignment and Closure at Aberdeen Proving Ground by 2012 had some bearing on the expansion of Interstate 95 near White Marsh, according to one Maryland Transportation Authority official."

* Mass Transit Ridership up in Northern Virginia [WTOP]
"Fare increases, parking problems and crowded trains maybe forcing more Northern Virginians away from Metro."

* City Working on New On-Street Parking Plans Around the Ballpark, in Southwest, and on Capitol Hill [JD Land]
"here has been much discussion by residents and city officials over the impending "apocalypse" of traffic and parking congestion with the opening in April of the new ballpark. Residents not only in Near Southeast (all 400 of you) but in Southwest and on Capitol Hill have been waiting for the city to announce exactly how on-street parking will be handled during games, as there is great concern as to whether residents will still be able to park on their streets and won't have to deal with hundreds or thousands of cars circling the neighborhoods looking for free parking."

* Homes with a Bit of Homeland [Washington Post]
"Chuck Langpaul Jr. has been in the custom home business for more than a decade, so he thought he knew a thing or two about groundbreaking ceremonies: Hoist a shovel, snap a picture and it's done."

* FBI Probes Virginia Mortgage Scam [Washington Post]
"The sidewalks are still scrubbed and most lawns are neatly trimmed, but now the subdivision of townhouses off Route 1 in Woodbridge is pocked with empty windows and foreclosures. Federal investigators are poking around."

* Developer Pulls Back from Loudoun County Project [Washington BizJournal]
"A Loudoun County developer has withdrawn a proposal that would have brought nearly 1,000 homes to a property just south of Leesburg Executive Airport."

* Housing Boomerang [City Paper]
"By the end of September, Wilson Reynolds had finally run out of patience. For months, the Adams Morgan advisory neighborhood commissioner had pressured a landlord to make building improvements on two properties with broken locks, homeless squatters, and gang graffiti in the hallways."

Regional Community News Roundup

* Luxury Homes Selling As Briskly As Ever? [DC Examiner]
"What housing market crash? That’s what the developers of a spectacular — and spectacularly expensive — luxury home community in Loudoun County are saying when they look at their sales log."

* Montgomery Mansion to be Sold to School [Washington Post]
" It started as little more than neighborhood rumor: The old Grosvenor Estate was up for sale. But in Bethesda's development-wary neighborhoods, a juicy real-estate rumor can hit like a molotov cocktail."

* $700M Project Moves First Under JBG Urban [Cityfeet.com]
"One of the first projects in a previously announced joint venture between local developer JBG Cos and San Francisco-based MacFarlane Partners is under way. JBG and the Washington Metropolitan Area Transit Authority have broken ground on the first phase of Twinbrook Station, a $700-million mixed-use project at full build-out."

* Haymarket at Odds with County Over Developments [The Gainsville Times]
"Haymarket Landing, which would be located near the intersection of Old Carolina Road and Haymarket Drive and which would be partially within the town's borders, would add a maximum of 60 single-family homes."

* Downtown Hotels Get Elegant Makeover [Baltimore Sun]
"Bulky televisions - gone. Floral bedspreads - out of the picture. Desks where you plug in your laptop - so yesterday. Touches once found in the best hotels are going by the wayside in downtown Baltimore. The biggest hotels are spending millions of dollars to update and upgrade, to cater to tech-savvy guests and compete in a radically shifting hotel landscape."

* The Greening of My Condo Building [AIRE]
"The AIRE team's "Greening Your Condo Association" seminars and outreach are bearing fruit! Some enterprising folks from my condo building in Clarendon organized a Green Fair, held last night."

* Some of McLean's Finest Homes to be Open for Touring [Sun Gazette]
"Peruse four of McLean's most interesting and well-decorated houses at the Woman's Club of McLean's 41st annual Holiday Homes Tour."

* Fairfax Home Sales Continue Anemic Runs [Sun Gazette]
"When is a nearly 27-percent decline in home sales a reason to celebrate? Perhaps when, the month before, the decline had been 35 percent."

* Supervisor May Vote to Annex Land to Leesburg [Loudoun-Times Mirror]
"The Board of Supervisors could vote Nov. 20 in favor of annexing 2,500 acres of land into Leesburg's town limits."

$2 Trillion of Mortgage Slashed?

Every single day you turn around, another bank writes off some multi billion dollar from their subprime assets because of the value of their complicated asset-backed securities [SIVs] plummeted. At first, it is estimated that banks would write-downs $400 billion from their assets.

Then this one: The possibility of banks cutting back $2 trillion of mortgage.

The impact of the U.S. mortgage market crisis on the underlying economy could be "dramatic" as leveraged investors may need to scale back lending by up to $2 trillion, according to investment bank Goldman Sachs (GS.N: Quote, Profile, Research).

via Reuters

"Honey, I shrink the buyers."

The impact would be what? Dramatic. That's an 'understatement.'   The impact will be huge! For the most part -- banks, the Fannie-Freddie of the world plus other quasi government organizations -- are the major source of funding.

Even with historically low interest rates, the market is not moving at the speed of light. There is that. Then $400 billion write-offs. And then, you take $2 T off from loaning it to the market. The outlook?

It would bring housing.. to its knees.

On the other hand, if I were a buyer today, I would run and get a loan approval. Start shopping and buy a home before the source of money dries up.

 

Image: Jumbo mortgages comps in pricey CA, via Market Watch

 

Real Estate Market News Roundup

* Mortgage Crisis May Slash Lending Up to $2 Trillion [CNBC]
"The mortgage crisis could have a "dramatic" impact on the overall economy by forcing banks and other financial institutions to cut back their lending by as much as $2 trillion, a Goldman Sachs economist said."

* The Money Machine Breaks Down [Fortune]
" Two things stand out about the credit crisis cascading through Wall Street: It is both totally shocking and utterly predictable. Shocking, because a pack of the highest-paid executives on the planet, lauded as the best minds in business and backed by cadres of math whizzes and computer geeks, managed to lose tens of billions of dollars on exotic instruments built on the shaky foundation of subprime mortgages."

* Foreclosure Filings, No Slow Down Yet [CNN/Money]
"Three states, California, Florida and Ohio, continue to dominate new foreclosure filings, as most of the nation saw increases in the third quarter, according to a new survey."

* New and Improved VA Mortgages Look Better in a Difficult Market [Washington Post]
"Veterans Day presents an opportunity to take a look at an important benefit available to military veterans and active-duty personnel, the zero-down payment VA mortgage."

* Housing: Why all the Huffing and Puffing? [Business Week]
"In the past few weeks, news and forecasts surrounding the housing decline—which began in 2005 and is projected by S&P Economics to bottom during the first half of 2008—appear to have renewed worries."

* After the Housing Bust [Smart Money]
"THERE'S A SAYING whispered among grizzled real estate vets: Don't try to catch a falling knife. It's a tricky move, and if it's not timed perfectly, the results can be bloody."

* Sweet Deals on New Homes [Kiplinger]
"During the housing boom, new-home builders were like the hosts with the hottest invitation in town. They could raise prices with every newly opened phase of a development and display a "take it or leave it" attitude toward buyers."

* When Home Builders Hit the Skids Consumers Deal with Uncertainties [Real Estate Journal]
"The tumbling housing market is claiming a new class of victim: customers of insolvent home builders."

The Builders In Trouble

Last week, the big banks had to write down huge losses because of subprime. Now it's the builders turn. S&P cuts the bond ratings of 6 of the nation's biggest builders: Lennar, Centex Group, Pulte Homes, Ryland Group, Standard Pacific Corp. and D.R. Horton.

With the exception of Standard Pacific, five of the six sell new homes in Washington DC, Maryland and Virginia market. Interesting how the builders try to blame it on the media instead of looking at both external and internal factors. The market indicators -- overbuilding, high inventories, slow sales, tighter home loans underwriting -- clearly contributed to the financial losses. Especially, the big builders that are publicly-owned companies. Who knows what happen to usually privately-owned small home builders. 

Start with Toll Brothers. Their business is on the pricey luxury new homes. Toll Bros. got hit on three front: cancellations, drops in average sales prices, and drops in signed contracts. It reported a 36% drop in year-to-year revenue to $1.17 billion. They had 417 cancellations for the quarter with only 250 new orders. Its cancellations actually lower than the fourth quarter of 2006 with 585 cancellations. Nevertheless, their cash-on-hand is higher than their peers.

Hovnanian's cancellation rate stands at 40%. Since they sold more than half of its homes in the 3-day fire sale, sales have gone down since then. Cancellation on the three day sale is below average, however expect rate that to grow. Since they do it the first time buyers are accustomed to discounts and incentives. They want more of it. All the co. care right now is to cash flow rather than profitability.' That means, their cash on hand is really low. To survive they needed to raise cash quick. That translates to: Opportunity for buyers. Got that?

How so? Because raising cash is a priority, Hovnanian will do whatever it takes to get them there -- reduce prices, give incentives and discounts -- to MOVE their inventories! That's how they'd do it. Starting with this sale [below].

WCI got hit pretty bad. They have a big liquidity issue. Their market is in the higher up range. Like Foster's Run in McLean, where priced of homes are in the above $3 million range. In this market, if you're on higher up market, it is tougher. Buyers would rather walk away from their deposits than got stuck with $$$ loans for 15 or 30 years? Revenues from their bread-and-butter product, single family homes, down by 25.9% from last year. To save cost, 575 employees are to get pink slips by end of the year. What's more - BBOL reports that the company is in violation of their loan covenants. Not good. With the violation, if no agreement is reached with their lenders, technically the "..lenders can foreclose on their collateral and demand payment in full." Like domino effect, the action could trigger other lenders to demand full payments. With little cash to survive if the lenders pull the plugs on them, they might face bankruptcy.

Searching for deals? Go straight to new homes constructions. There are plenty of supply out there. Outside the beltway area, Prince William county is 'the place' to find expansive supply of new homes. Fairfax, Loudoun has plenty, too. But not as expansive as in PW. These guys are in 'the business.' They only make money when they sell homes. They need to unload their inventories quick (sale) to stay in business. That's why, it's easier for them to offer you whatever you can think of -- discounts, incentives -- than the regular Joe homeowner. A homeowner doesn't have to move unless the lender foreclose the home.

And the last few remaining new homes or condos usually have better deals than auction.

 

Technorati Tags:  wci ,  d.r.horton ,  ryland ground ,  wci communities ,  foster's run ,  mclean ,  bbol ,  centex ,  lennar ,  pulte homes ,  m/i ,  custom homes ,  custom builders ,  luxury homes

Home Construction Starts at Lowest Level in 14 Years

Ouch! Not a good news coming from the home building industry for now.

However, the good news is this: If you look at the long-term outlook, less number of homes build would eventually create a healthy housing market. It would balance out the number of new homes. Supply vs. demand. And only home builders with strong balance sheet will come out strong out of this market.

U.S. home construction starts fell in September to their lowest level in more than 14 years, while consumer prices rose at the sharpest rate in four months, separate reports showed on Wednesday.      

......

U.S. home construction starts fell 10.2 percent in September, while building permit activity, a sign of future construction plans, also dropped to the lowest level since mid-1993, a government report on Wednesday showed.

The Commerce Department said housing starts set an annual pace of 1.191 million units in September, lower than the 1.285 million units expected by economists. It was the lowest pace for housing starts since the March 1993 rate of 1.083 million units.

via Reuters