Monday, March 31 2014
Right at the start of the year, Google announced a surprising move. It said it was purchasing a home appliance maker most of us had never even heard of…for $3.2 billion in cash! It was a gambit that every homeowner should note, because it signals where some very smart money is headed: right where we live!
Remember, Google isn’t just famous for its search engine; it’s also frequently in the news for its forays into any number of futuristic enterprises (those mysterious barges, for instance). The appliance maker that now has Google’s billions in its pocket is called Nest Labs, Inc. Nest makes smart devices that reinvent the traditional ones every homeowner has to deal with, like thermostats and smoke detectors. “Unloved but important devices” was how the press announcement put it.
The unique feature of Nest’s products is that they collect “user behavior” data (i.e., homeowner actions) in order to provide a more tailored response. Google CEO Larry Page explained, “They’re already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe.”
The move of Google into the realm of smarter homes is part of a broader trend. In the most recent American Institute of Architects Home Design Trends Survey, there was a dramatic increase in the use of technology solutions in the home. The survey noted an increase in requests for entertainment, security and energy management systems. Energy management systems are becoming increasingly sophisticated as households are given the ability to manage their lighting and temperature over a wireless network. As electronic cars become more prevalent, electronic docking systems in the garage may also become commonplace.
How does this affect the average Evansville homeowner? As the minimum price of these systems decline, automated homes will eventually become the norm. If today it costs around $2500 to automate your home, it’s all but inevitable that similar features will fall in price (and grow in sophistication). Then, when it comes to buying a home or listing your own for sale, the amount of smart automation is bound to become a key selling point—trust Google!
The ability to operate and manage your house from a wireless devices such as your smartphone or laptop is already here…and Nest’s learning technology signals a future where our home and appliances are able to learn from our behavior and predict our needs. Keeping an eye on the future is a good idea for any homeowner, especially when you’re thinking of replacing one of those “unloved but important” devices— and most especially when you’re contemplating listing your home anytime soon. If that’s in your future, why not give me a call? As Google is in the habit of demonstrating, it’s never too soon to prepare for the future! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Wednesday, March 26 2014
It just might be that a groundswell is spreading throughout the home-buying public. In Evansville, smaller houses that used to be difficult to sell are rising in popularity, and I can guess why.
First, a little history. Back in 1950, what we would consider smaller houses were the rule: the average square footage came in at just 983 (try to imagine the ‘average’ family with 2 kids, 2 adults and Lassie all shoehorned in there!). By 2006, that figure had blown up to 2,248 square feet—and we all know about the bigger McMansions—just in time for the financial meltdown. Within the next few years, for the first time ever, the upsizing trend had begun to reverse. Only three years later, average square footage was 2,135.
In terms of size, today’s buyers and sellers are meeting in a much more balanced market. Smaller houses are no longer automatically spurned. In fact, smaller houses are the first choice for a growing number of buyers. Why?
When you really analyze it, a surprising amount of housing space is seldom used. Lifestyle changes dictate that formal dining and living rooms are much less frequently occupied. And it’s a fact that we only use a small percentage of the things that we own, so in actuality, some of many homes’ area amount to extremely high-end storage space. By getting rid of some of that unused stuff, the space it takes up can become unneeded.
The old rule of thumb nationally is that property taxes average about 1% of the value of a home. Smaller houses mean lower tax bills.
Maintenance bills can be substantially lower in smaller houses. It varies greatly by age and style, but one estimate has it that annual maintenance bills usually run between 1%-3% of total value.
Whether your hire help or handle it yourself, a smaller home can be much faster to clean. This may be less true when clutter is allowed to take over, but for those who are vigilant clutter-clearers, it means freeing more time for doing the things that you love. If you are paying someone else clean your home, it can easily equate to significant savings over the course of a year.
According to the American Psychology Association, money is the largest single contributor to stress. Nearly three-quarters of Americans admit that financial problems are their biggest source of stress. Purchasing a smaller house with an accompanying smaller mortgage can directly translate into a mellower quality of life.
A smaller house may not be for everyone, but today’s buyers are considering the advantages with a much more open minds. If you are giving some serious thought to buying or selling a home, let’s talk about the wide range of possibilities on the local market today. We are experiencing very low inventories right now. This plays out to the advantage of sellers. You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Friday, March 21 2014
Veteran housing economist David Berson, formerly of Fannie Mae and PMI Group, shares his thoughts on what the public needs to know about the housing market this year.
First, he predicts that 2014 will be the strongest year for housing activity since prior to the recession. Most economists expect an improved job market in the months ahead, with employment growth accelerating and the jobless rate continuing to fall. This will be the key factor improving housing demand in 2014, even if mortgage rates climb and affordability declines.
Additionally, demographics should start to favor housing activity. To this end, the demographic factor most affecting the residential property sector is household formation. "Household formations are affected by the job market, as people 'double-up' when worried about their job and income-earning prospects," Berson writes. "The Great Recession and the modest job recovery in the years following induced many people who might have lived independently to move in together."
Berson and colleagues estimate the economy is short by more than 3 million households. If the economy expands at a faster clip in 2014, bringing a more rapid rate of job creation, that should translate into more households, which in turn should raise housing demand.
Finally, Berson says mortgage availability should not worsen between now and the end of December and may actually expand.
Thursday, March 20 2014
You don’t have to tell anyone who is self-employed that there are extra costs that go with the benefits. In addition to the long hours and weight of responsibility that come with the job description, getting a home loan has always added special challenges. Now that we are into the new Dodd-Frank era of federal oversight, some of the changes warrant an early heads-up.
The 2010 legislation that went into effect on January 10 created the Consumer Financial Protection Bureau, with the function of tightening the rules lenders follow in order to discourage the issuing of mortgages that borrowers can’t be reasonably expected to be able to repay. To deliver on that worthy purpose, more proof and more paperwork will be required to support the income claimed on loan applications (here you might well be hearing an imaginary smacking sound from self-employed persons reading this and whacking their foreheads—paperwork is the bane of the self-employed).
If you are your own boss and getting a loan in Evansville is on your horizon, take heart! Just because it may be more difficult to apply for home loan doesn’t mean it’s impossible.
The new lending rules describe eight specific factors lenders should verify and document before advancing home loans. They includes the borrower’s assets, credit history, employment status and other debt obligations. The penalty for lenders who fail to do so adequately is that they may be legally liable if a borrower proves unable to repay.
For the self-employed, the extra burden can come with the requirement that borrowers be able to show consistent income (hear that forehead-smacking sound again?) The general rule is that borrowers be able to provide at least two years’ worth of personal tax returns. Since self-employed people getting a loan often have perfectly valid reasons for fluctuating annual incomes, it’s vital to talk with a broker and lender as early as possible to establish the taxable income level needed to qualify for a loan.
That talk should cover other areas. For instance, self-employed people have greater flexibility than most when it comes to reporting deductible expenses on their income tax forms. Since those same deductions result in lower net incomes, that can be problematical when it comes to getting a loan. One way to counter that problem is to demonstrate that the expenses incurred were used to buy things that will improve their business in the long term. Another approach is demonstrate that similar expenses are not likely to re-occur (particularly apt when a business is just starting up).
If you are among the self-employed—and plan on getting a loan—planning is key. Get your ducks in a row now so the loan process doesn’t derail you later. It’s never too early to call me as an early resource before we get to move on to the fun stuff—your home search! I can get you in touch with competent loan originators who will walk you through every step of the way.
You can reach me on my cell phone: 812-499-9234 or email Rolando@RolandoTrentini.com
Wednesday, March 19 2014
Keeping your kitchen looking up-to-date doesn’t have to be difficult or expensive. Contemporary home design in is all about knowing what the latest trends are and which to choose when regular maintenance calls for a change in appliances or décor.
This year, eco-friendly appliances are definitely ‘in’—as are the pops of bright color meant to create a vivid and welcoming kitchen. And as convenience features continue to evolve, those are increasingly prominent factors influencing design choices. Especially if you are planning to sell your home in the near future, there are a few home design directions that are most likely to impress prospective buyers who’ve been exploring the latest kitchen trends:
Going green is a pronounced trend, not just in home design. Using renewable, Earth-friendly materials can be a way to update a kitchen while minimizing environmental impact. A sample idea would be a sustainable bamboo parquet butcher block to grace the kitchen counter or table. They come in beautiful, rich wood tones, and when large enough to cover a substantial counter area, can warm the feel of the entire room.
Another (almost diametrically opposed) current direction is to deck the kitchen out with a few of the latest high-tech gadgets. Even if you resist an ultra-modern look, a few chic techie touches can add a dash of luxury to your home. One example: Siemens makes a multimedia ventilation hood that has a 17-inch LCD screen with options for listening to music or watching TV. It’s a creative way to make cooking more entertaining—and one that would certainly help make your listing stand out!
Bright colors have not always been popular in kitchens, but lately, appliance manufacturers have been less shy about offering exuberant finishes. You can find dishwashers, blenders, toasters, microwaves and refrigerators in bright blues, pinks, yellows, greens and oranges. It can be an inexpensive way to add a splash of color to your kitchen…although if you are planning on selling soon, in many instances I’d recommend caution: perhaps confining the color pops to bright accent pillows or colorful floral arrangements.
Copper is also an increasingly popular trend in kitchen design this year. Its natural antibacterial properties make it a practical home design element, and that cool, rustic hue looks great in warm, gold-toned kitchens. Copper sinks and faucets are both practical and stylish (although keeping them bright and shiny can be another story!).
If you are thinking of selling soon, consider incorporating one or two current home design ideas if your kitchen could use a decor infusion. Looking for more ideas? Contact me today to discuss what is making today’s homes S-E-L-L!
You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Tuesday, March 18 2014
The details seem stubbornly worrisome. Mortgage requirements have grown stricter. The Federal Reserve may or may not turn off the cheap money spigot—and if anything causes the stock market to sputter, it’s uncertainty. Occasional bits of good news in the labor picture can’t overcome the fact that unemployment remains stuck on high in many states.
All of this should be bad news for the housing market in Evansville, except for one overriding factor: apparently, American consumers aren’t buying it.
Despite uncertain economic news, consumers’ overall expectations for the housing market remained steady. The Federal Reserve Bank of New York’s monthly Survey of Consumer Expectations, issued last week, found that most expect home values to continue to climb through 2014. The uncertainty factor remains largely stuck in neutral, pretty much as it has for most of 2013.
The survey found more nuggets of good news likely to affect the local housing market. There was no reported change from last month’s report that close to 20% of respondents say they are likely to change residences in the coming year…similarly, the previous month’s finding that 44% predict their personal wealth will increase remained steady. Taken together, the two factors could likely indicate that a healthy number of home buyers will be looking for housing of greater value than that at their current address.
Fannie Mae’s most recent monthly National Housing Survey echoed the positive findings among consumers: “Notably, respondents’ home price expectations climbed significantly in February—with 50% saying home prices will go up in the next year…” Their finding of more volatile consumer attitudes was mainly attributed to momentarily high energy expenses caused by unexpectedly frigid winter weather.
Whether or not the national statistics accurately reflect local consumer dispositions, they provide a backdrop that bodes well for the impending spring selling season. Soon we’ll be entering the time of year which traditionally results in a considerable uptick in Evansville’s housing market activity – which may be prime time for determining whether this is the moment to make a change in your own residential outlook. For more pinpointed, up-to-the-moment details about your own neighborhood’s housing market profile, give me a call! You can reach me on my cell phone 812-499-9234.
Tuesday, March 11 2014
Real estate offices have been gearing up for the imminent spring selling season, the time when local listings swell to meet the expected surge in buying activity. I sometimes put quotes around ‘selling season’ because so many factors go into home sales that it can be slightly misleading—we do sell homes all year long, after all!
But there is a lot of truth (and historical verification) to the idea that springtime brings a burst of new listings and accompanying selling activity. There can be lots of reasons why that happens, but this past weekend, area homeowners who were reading The Wall Street Journal might have seen some extra reasons to hurry up and add their homes to the local listings.
Some of those reasons have to do with weather; some with the economy.
The front page of WSJ’s Weekend Edition headlined the first piece of long-awaited good news: “Job Rebound Eases Fears of Spring Stall.” It explained that Friday’s payroll numbers showed upticks despite the widespread harsh weather that should have knocked them down.
Most economists had been on the fence about whether the years-long weak economic recovery would continue. Even though the previous two months of slowing growth had been attributed to the ‘endless winter’ blanketing much of the nation, it wasn’t clear that underlying weakness wasn’t also present. But the sudden improvement in the job picture, even as the weather failed to lighten up, was an unexpected event—one that could “ease worries” about the likelihood of a fundamental slowdown. In fact, forecasters were beginning to project that the negative economic effects due to the unusual weather (estimated at a loss of 1%) may be more than restored when the sun returns. Spring conditions are now expected to add an additional 1.2% to second quarter growth.
Even a slight rise in the unemployment rate was greeted as hopeful news. What sounded like a negative turns out to be the opposite: more people were returning to the workforce, a sure sign that workers see jobs beginning to reappear. Jobs have always been tied to real estate listing and sales activity, so this year, the NAR’s website truism may be on the mark:
“Spring brings rain and flowers – and possibly extra green in the final sales price of your home.”
Thursday, March 06 2014
It can be perplexing—and not least because it’s one of the least-discussed details you run into when buying a home. The issue is flood insurance, and it’s sometimes first brought to the fore when you are buying a home in Evansville that you would not have thought was on a “flood plain.” If it is, it’s going to require flood insurance before the bank will sign off on a loan.
As we only see from time to time, devastating floods can strike when and where least expected: sometimes, in areas where that ruinous flooding is unprecedented. In 2005, when FEMA paid out over $17 billion in flood claims, it once again became clear why flood insurance is absolutely necessary. Here’s what you need to know about flood insurance if the home you are looking at is in a flood plain.
The Zone Matters
FEMA assigns different zones within a single flood plain. For example, homes that are located on the bank of a creek may be assigned to Zone A, ( floods highly likely). Homes that are further away from a water source may be assigned to Zone Z, (lower risk). Naturally, Zone Z premiums are a good deal more affordable than premiums for Zone A. In fact, if your home is in a Z zone, you may even qualify for a special price break for two years before full premium goes into effect.
Figuring Out the Cost
Unlike car or home insurance, you won’t find a better rate on flood insurance by shopping around. The federal government sets flood premium rates based on factors like the zone, the home’s value, and the value of its contents. You may choose to insure the home only, but it’s seldom a good idea to leave contents without coverage. Any local insurance agent specializing in flood insurance will be able to assist you in determining the cost of the policy; they will also answer any questions you may have about the process.
Making Your Decision
Buying a local home that turns out to be on considered within a flood plain means factoring in some added insurance expense, and possibly even potential risk to your personal items. But when the house is right, and your heart is absolutely set on the property, it’s a dollars-and-cents calculation. I’m always at the ready to help my clients clarify this and all other the other details that go into buying a home in Evansville. You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com