Momentum is picking up in the real estate market, but proper positioning in the market remains the key to drawing an offer. Chicago’s Near North Side has a shortage of inventory, but there are buyers out there and money is still cheap. Wary buyers are thoroughly analyzing the market and the home before they initiate an offer. Homes that are well positioned in the market may sell quickly or even get more than one offer. However, remember, homes today will have to be sold twice: once to the buyer and once to the bank. The National Association of Realtors reported in February the just over 30% of contracts failed, due largely to declined loan applications or failures in underwriting due to the appraised value coming in below the negotiated price. The market will continue to improve, but you may not have a successful sale if you try to push the market.
There was just an article in Reuters which talked about what is REALLY going on in the market. Recovery is in sight, but there will be several stages of recovery. We’re seeing increases in the volume of sales, and stronger prices will come down the road. Buyers who are looking to hold on to property have already entered the market: investors, second-home buyers and retirees. Across the country this has been demonstrated, as well as here in Chicago. Although wary, conventional buyers are coming back to the market to, and we can see that especially on Chicago’s near north side.
|CHICAGO FARMERS MARKETS 2012|
To find out when your favorite fruits and vegetables are ripe and ready to eat, click here for a seasonality chart!
Just another weekend? Not if you take advantage with one or more of these 5 great projects you can easily pull off for under $300.
Project #1: Add a garden arbor entry.
The setup: Install an eye-catching portal to your garden with a freestanding arbor. It’ll look great at the end of a garden path or framing a grassy area between planting beds.
Specs and cost: Garden arbors can be priced up to thousands of dollars, but you can find nice-looking kits in redwood, cedar, and vinyl at your local home improvement or garden center for $200-$300. Typical sizes are about 7 feet high and 3-4 feet wide. You’ll have to assemble the kit yourself.
Tools: Screwdriver; cordless drill/driver; hammer; tape measure. Kits come pre-cut and pre-drilled for easy assembly, and usually include screws. If fasteners aren’t included, check the materials list before you leave the store.
Time: 3-5 hours
Project #2: Install a window awning.
The setup: Summer is super, but too much sunlight from south- and west-facing windows can heat up your interiors and make your AC work overtime. Beat that heat and save energy by using an awning to stop harsh sunlight before it enters your house.
Specs and cost: Residential awnings come in many sizes and colors. Some are plastic or aluminum, but most are made with weatherproof fabrics. They’re engineered for wind resistance, and some are retractable. A 4-foot-wide awning with a 2.5-foot projection is $150-$250.
Tools: Cordless drill/driver; adjustable wrench; tape measure; level. You can install an awning on any siding surface, but you’ll need a hammer drill to drill holes in brick. To prevent leaks, fill any drilled holes with silicone sealant before you install screws and bolts.
Time: 3-4 hours
Project # 3: Screen off your air conditioner from view.
The setup: Air conditioning is great, but air conditioner condensers are ugly. Up your curb appeal quotient by hiding your AC condenser or heat pump unit with a simple screen.
Specs and costs: An AC screen is typically 3-sided, about 40 inches high, and freestanding — you’ll want to be able to move it easily when it comes time to service your HVAC. For about $100, you can make a screen yourself using weather-resistant cedar or pressure-treated wood to build 3 frames, and filling each frame with plastic or pressure-treated lattice.
Or, buy pre-made fencing panels. A 38-by-38-inch plastic fencing panel is about $50.
Tools: Hammer; saw; cordless drill/driver; measuring tape; galvanized wood screws.
Time: Build it yourself in 4-6 hours. Install pre-made fencing in 1-2 hours.
Project # 4: Add garage storage.
The setup: Shopping for garage storage solutions is definitely a kid-in-the-candy-store experience. There are so many cool shelves, hooks, and hangers available that you’ll need to prioritize your needs. Take stock of long-handled landscape tools, bikes, paint supplies, ladders, and odd ducks, such as that kayak. Measure your available space so you’ll have a rough idea of where everything goes.
Specs and cost: Set your under-$300 budget, grab a cart, and get shopping. Many storage systems are made to be hung on drywall, but hooks and heavy items should be fastened directly to studs. Use a stud finder ($20) to locate solid framing.
If your garage is unfinished, add strips of wood horizontally across studs so you’ll have something to fasten your storage goodies to. An 8-foot-long 2-by-4 is about $2.50.
Tools: Cordless drill/driver; hammer; level; measuring tape; screws and nails.
Time: This is a simple project, but not a fast one. Figure 6-10 hours to get everything where you want it, plus shopping. But, oh the fun in putting everything in its place!
Project #5: Edging your garden.
The setup: Edging is a great way to define your planting beds, corral garden mulch, and to separate your lawn from your garden or patio.
Specs and cost: Wood and metal edging looks like tiny fencing; they’re 4-6 inches high. Some include spikes that hold the edging in position; other types must be partially buried. Cost is $1-$5 per foot.
Plastic edging can be molded and colored to mimic brick, wood, and stone. About $20 for 10 feet.
Concrete edging blocks are smooth, or textured to resemble stone. $15-$25 for 10 feet.
Real stone edging is installed flush with the surrounding grade in a shallow trench on a bed of sand, so digging is required. Stone is sold by the ton and prices vary by region. You’ll need about one-third of a ton of flagstone to make an 8-inch-wide edging 50 feet long, costing $150-$200.
Tools: Shovel; wheelbarrow; tin snips (for cutting plastic edging); work gloves.
Time: Pre-made edging will take 2-3 hours for 50 feet; stone will take 6-10 hours.
Three good reasons to warm up to a refinance this spring.
Low interest rates and new loan programs abound this spring, so if you assumed your refinancing and mortgage options were dismal, you’ll be surprised by these three offerings.
1. Refinance with new FHA fees
In a nutshell: FHA raised insurance premiums for new borrowers, while lowering fees for some existing customers who refinance, making comparison shopping with private mortgage insurance worthwhile. Mortgage insurance covers the lender against losses caused when borrowers stop making payments.
The details: FHA’s new insurance premium rates include a great deal for existing FHA borrowers — you can refinance by paying a miniscule .01% upfront fee and an annual premium of just .55% starting June 11.
The catch: The deal is only for home owners who got their FHA mortgage on or before May 31, 2009.
The latest FHA deal for new FHA customers buying homes isn’t nearly as sweet. You’ll pay a whopping 1.75% upfront fee and an annual premium of 1.25% — more if your loan is more than $625,000. For a $200,000 loan, that’s $3,500 for the upfront premium payment and $2,500 for the annual premium.
To shop the FHA deal against private mortgage insurance, see how much you’d pay for your specific loan and location using calculators from such sources as MGIC, Radian, or Genworth Financial. Use the calculators to check how your payment would change if you have a smaller or larger down payment.
Private mortgage insurance is based on the size of your down payment (5% is typically the minimum).
2. Refinance underwater mortgage
In a nutshell: If you owe more than your home is worth, you may finally be able to refinance into a lower rate thanks to the government’s HARP refinancing program.
The details: You can take advantage of historically low interest rates by using the latest version of the Home Affordable Refinance Program, which removed a previous cap on how far below your mortgage your home value can be.
The HARP program even works if you’ve been hit by the economic double-whammy of a falling family income and a falling home price. You qualify for a HARP refinance if:
- You have income coming in.
- You’ve made your mortgage payments on time every month for the past six months and have no more than one late payment in the past year.
The catch: Banks can layer their own tougher rules on top of the HARP requirements, and they’re not obligated to let you use the program to refinance your existing loan.
3. Refinance rental properties
In a nutshell: Some real estate investors have new loan options for the first time in years.
The details: In recent years, small landlords like me have had a tough time finding a bank to finance more rental property purchases. Once you had more than four rental property loans, Fannie Mae and Freddie Mac were no longer willing to guarantee your loans, even when your credit scores were top-notch and the property was able to turn a profit from day one of ownership.
Now, some banks participating in the HARP program are taking applications from landlords with multiple properties and lots of mortgages. HSBC recently agreed to look at a mortgage on a property I own in Baltimore. My current interest rate there is over 7% and if I get the HARP refinance it will fall to 4.6%.
It’s too soon to say whether the banks will actually fund me or any other landlord who wants to refinance.
- Only Fannie Mae has made this change. (It’ll purchase up to 10 loans from any one investor.) Freddie Mac is still limiting single-family landlords to four loans.
- Most banks discount your rental income by 25% when making investor loans, which adds up when you have multiple properties.
But, the fact that banks are accepting applications from rental property owners is a sign the credit spigot may be reopening for creditworthy real estate investors.
Are you shopping for a refinance or a mortgage to purchase a home? What’s your experience been like?
AIR CONDITIONING EQUIPMENT: REPAIR OR REPLACE?
If you’re deciding whether to repair or replace central air conditioning equipment, assess the quality of your house’s ductwork and insulation first.
If your air conditioner is more than eight years old, repair is probably not worth the expense, unless it’s a simple problem like debris clogging the condenser unit or a worn fan belt. Still, to best weigh your repair-or-replace decision, ask your contractor to assess not just the condition of your existing equipment, but also the ducts that deliver the cool air and the overall quality of the insulation in your house. Improving those elements might increase the effectiveness of the system as much or more than installing new machinery.
Assess the efficiency of your current system
Even if your central air conditioner is just eight to 10 years old, it could suck up to twice the electricity that even a low-end new one would use. That’s because it operates at or below 10 SEER, or Seasonal Energy Efficiency Ratio, which is the amount of energy needed to provide a specific cooling output. Until 2006, 10 SEER was standard, but these days, the minimum allowed by federal law is 13 SEER. That translates to 30% less electrical consumption and 30% lower cooling bills than equipment installed just a few years ago.
For an 1,800 square foot house, a new 13 SEER unit will cost $3,000 to $4,000. You can double your energy savings by jumping up to 16 SEER, which will reduce cooling expenses by 60% over a 10 SEER unit. At $5,000 to $6,000, these super-efficient units are more expensive, but they qualify for a federal tax credit of up to $300 and possibly local incentives, too.
“Your installer can run the numbers for you to see whether it’s worth the additional cost,” says Ellis Guiles of TAG Mechanical in Syracuse, New York. “If you’re south of the Mason Dixon line, certainly, you can make up those dollars pretty quickly.”
Inspect the condition of the ductwork
You could upgrade to the highest efficiency gear available and still not feel comfortably cool on hot days. That’s because the mechanicals are only part of the central air system. The average house’s ductwork leaks 10% to 30% of its air before it can reach your living space, according to Pacific Gas & Electric. Before deciding whether to repair or replace your condenser and blower units, your technician should run a duct-leakage test, by sealing the vents and measuring how much air escapes the system.
If the ducts are inefficient, he can locate and seal the gaps, typically for $25 to $35 per vent (per “run” in industry jargon), or replace the ductwork entirely with new, insulated pipe for around $100 per run, according to Guiles. Your technician may recommend doing the duct improvements in conjunction with replacement of the mechanicals or may recommend only one or the other job.
Consider the building envelope itself
If your house is poorly insulated, it’s putting a strain on your aging air conditioner. Resolving the house’s flaws may mean that your old system will have enough cooling power to continue to do the job for a few more years. Or it may enable you to buy a smaller replacement system, lowering your upfront and ongoing energy costs significantly.
Your heating and cooling contractor should assess and, if necessary, upgrade the building envelope. For example, he might seal gaps and cracks in the outer walls and attic floor, or he might blow insulation into the walls, either of which could knock as much as 30% off your heating and cooling costs. Insulation also may get you a $500 federal tax credit, and in some cases, it may be a more effective solution to your cooling problems than replacing your equipment.
Make sure a new system is sized right
If you decide to replace, make sure the contractor’s bid includes a load calculation, which is a computer printout showing how big a system you need and why.
Air conditioning is measured by the ton, which is the cooling power of a one-ton block of ice melting in 24 hours. Some old-school installers use a ballpark estimate for sizing equipment—say, one ton for every 400 or 600 square feet of living space. But that typically leads to systems that are too big, according to Greg Gill of Action Air Conditioning and Heating in San Marcos, Calif. Not only do oversized systems cost more, but they also do their cooling work too quickly, which means more frequent on/off cycles, wearing out components and gobbling electricity. Plus, they don’t have a chance to effectively dehumidify the air.
Good contractors use load-calculating software that factors in such data as the number of windows in your house, the thickness of insulation, the configuration of the attic, and the building’s orientation to the sun. It produces not only an exact tonnage requirement, but determines how much cool air each room needs. All bids (get at least three, from licensed, well-regarded companies) should include this one-page printout.
CEILING FANS: KEEP YOUR COOL; SAVE MONEY, TOO
A ceiling fan can lower the feel of a room’s temperature by 8 degrees, which means you can raise the thermostat and save on air conditioning bills.
Keep house cool at low cost
Ceiling fans use just slightly more energy than a 100-watt light bulb, and new Energy Star-rated fans use about half that–saving you up to $165 in energy costs over the life of the fan. For every degree you raise the air conditioning thermostat above 78 degrees, you can save 3% to 8% on cooling costs.
Size does matter
With any ceiling fan, the goal is to move more air—measured in cubic feet per minute (CFM)—with less effort, or fewer revolutions per minute. For example, a fan that’s 36 to 42 inches in diameter might have a top speed of 300 rpm; a 52-inch fan moves the same amount of air at 220 rpm.
Size matters more than the number of blades. Go for the biggest fan that will fit the space. Putting in a dinky fan to make it appear inconspicuous often has the opposite effect–and is a missed opportunity for cooling comfort.
Here are general size guidelines from the American Lighting Association:
|Room Size||Fan Size|
|Up to 75 square feet||36” or smaller|
|Up to 144 square feet||36” to 42”|
|Up to 224 square feet||50” to 54”|
What price comfort?
Prices for ceiling fans range widely, from $20 to $100 for basic, two-switch varieties, to $3,000 and up to $12,000 (yes, really) for entire fan systems consisting of several high-end fans integrated into an architectural design.
However, most folks will be happy in the $200 to $600 range, which gets you a better-designed machine and warranty. Extras, such as designer shades, polycarbonate blades, and special finishes for woods and metal, can tack on a few hundred dollars.
What to look for
- Blade pitch. The wider the blade (5 inches is good) and the higher their angle–called “pitch”–the more air gets moved. Higher-end fans have a blade pitch of 12 to 14 degrees.
- Blade finish. Make sure the factory has treated the blades with a moisture sealant to prevent wooden blades from warping and peeling, and metal blades from scratching and tarnishing.
- Motor quality. Better fans come with motors that have sealed and lubricated ball bearings, which require little maintenance, if any. More expensive models feature heavy-duty windings, precision engineering bearings, and die-cast housings, which vibrate less and are good-looking.
- Energy Star-rated fans. To qualify, fans must have a minimum airflow of 1,250 CFM on low speed and 5,000 CFM on high speed. They must come with a minimum 30-year motor warranty; one-year component(s) warranty; and 2-year light kits warranty. Energy Star-rated fans are 50% more efficient than conventional ones.
Fans to be used outdoors or in high-humidity areas such as bathrooms or laundry rooms must be damp-rated or wet-rated.
In the US there are over 12,000 homes are selling every day , and nearly 9,000 buyers are receiving mortgages every day. Last month the Wall Street Journal reported, “Homes sales data provided fresh support for the view that the strong start to the spring home buying season, marks the beginning of a recovery, not a temporary blip due to unusually warm weather.” The spring market is typically the strongest market, and we have seen a lack of inventory. The decrease in supply has been driven by two factors: foreclosure property not yet released to the market and an increase in demand as rates remain low and consumer confidence rises.
Saving water in your garden translates to saving money on your water bill. Here’s how to practice garden water conservation and still have a gorgeous yard.
1. Choose native plants
Native plants have had eons to adjust to the area’s normal rainfall, soil, and climate. Once established, they require little or no watering. Start your research on native plants at your local cooperative extension or botanical garden.
Websites such as eNature.com or H2ouse can help you find the best species for your location. Portland-based PlantNative has a handy database of nurseries nationwide that specialize in native plants.
2. DON’T SUPERSIZE PLANTS
The bigger the plant, the more water it might require. So don’t plant shrubs genetically programmed to grow bigger than you need.
Before you buy, research at the library or online how tall and wide mature shrubs will grow. A Leyland Cypress, for instance, could grow to 20 feet in a few years, overkill if you only need a 5-foot hedge.
Also, don’t overcrowd plants: Follow label planting instructions. Fewer plants require less water. And flora that looks sparse at first will fill the area in a few seasons.
3. PILE ON THE MULCH
Mulching around plants is a great way to reduce water loss. Mulch also cuts down on water-stealing weeds.
Natural mulches include compost, bark chips, and pine needles. Save money by spreading your grass clippings and ground-up leaves on flower and vegetable gardens. These organic mulches gradually break down and add nutrients to the soil.
Inorganic material, such as landscaping paper, rocks, and pebbles, are a more permanent option, although they can heat up too much in some climates.
4. MAKE PATHS POROUS
Garden paths made of porous material allow rainwater to seep into the ground and nourish plant roots, not run off into the street.
Use gravel, pebbles, non-mortared concrete pavers, or spaced bricks. Beware, however, that weeds will grow between paving materials. To keep down weeds, line the walk with landscaping paper (or even newspaper) before you pile on the porous material.
5. LOSE THE LAWN
A green lawn is a suburban ideal that drinks more than 20,000 gallons of water each year.
You can keep those cool blades under your feet and save water by planting drought-resistant varieties. Bermuda and buffalo grass, for instance, require 20% less water than fescue or bluegrass, according to the University of California Cooperative Extension.
Keep grass long to shade roots and retard evaporation. Mow less often; and when you do, raise the height of your mower blade to 3 inches.
6. PUT THIRSTY PLANTS TOGETHER
To save water, group plants into watering zones. Place the thirstiest plants near the house where they can drink roof runoff. Farther out, make a “transition zone” for plants that need supplemental drip irrigation.
Farther still is a “natural zone” for native plants that can survive on rainfall alone.
7. PLANT AND WATER WHEN IT’S COOL
New plants and transplants need far less water if you put them in the ground in early fall or early spring when it’s cooler. By summer, they’ll have established a deep, healthy root system that needs less watering.
Water in the cool of the morning, when you’ll lose less water to evaporation than in the heat of the day. Resist watering at dusk; wet foliage during the night encourages fungus and mildew growth.
8. DO DONUTS
Trees and shrubs need extra water during their first couple of years to help roots take hold. An efficient way to keep roots moist is to mound several inches of soil into a donut-shaped berm. Make the berm the width of the tree–including branches.
Use a hose or bucket to fill the donut dam to the top. Water will absorb slowly instead of running off.
Another option: Attach a $25 to $30 drip irrigator bag to the tree. It looks like a plastic flotation tube and releases water slowly over several hours.
9. FOLLOW THE SUN
Before you plant, get to know how–and how long–the sun bathes your garden. Determine patterns of shade and sun.
Use dry-soil plants in sunny areas, and use plants that require more water in shady areas where evaporation is slower.
10. CREATE THE ILLUSION OF WATER
A good way to conserve water in the garden is to capture rain water from your roof in a rain barrel. During a moderate rainfall, a 25-by-40-foot roof can shed 600 gallons per hour.
All you’ll need is a capture system (roof gutters and downspouts), a storage system (large-capacity barrels) and delivery system (garden hose).
Also, use rainwater to fill water features, which calm your nerves and attract birds and butterflies. Use a recirculating pump to keep the water flowing; replace evaporation with your rain barrel supply.
Does “natural” mean organic? Should you buy anything labeled “non-toxic”? Here are the truth and eco-facts about many of the green terms you find on product labels.
What’s really green? Soon you’ll have a little more confidence about green product marketing claims, such as “biodegradable” and “recyclable”: The Federal Trade Commission, which sets standards for the use of environmental claims in its Green Guides, is getting tougher on green terms.
Proposed revisions to the Green Guides will make it harder for companies to make unsubstantiated green claims about their products.
So when is all this happening? An FTC official we spoke to says the revisions may be final this summer. Until then — and even after then, since the guides don’t have the force of regulation — put on your skeptic’s hat when you shop and be prepared to research labels before you buy.
1. “Organic”: a green term that really means something
Organic is the one term in our list that’s federally regulated — by the U.S. Department of Agriculture, to be specific. Product makers making this claim must prove their stuff is “produced without antibiotics, hormones, pesticides, irradiation, or bioengineering.” Period.
FTC is cracking down on these terms
2. “Recyclable.” After the new guidelines are adopted, a manufacturer can use this term without a caveat only if a substantial majority of communities nationwide have facilities that can actually recycle its product. Before you buy, do your homework to see what you’re able to recycle locally. Also, take a closer look when a product claims to be “recycled” (a term that’s not covered in the Green Guides).
What you really want to look for is “post-consumer recycled” content. These products have been diverted from the landfill, so you’re truly helping reduce the waste stream when you buy them.
3. “Biodegradable.” When you see this term, you think, “Great, I don’t need to worry about throwing this away; it’ll break down naturally.” But many products labeled biodegradable need ideal composting conditions to break down — and some won’t degrade even then.
The FTC’s new guidelines require that products or packaging labeled “degradable” break down within a year in normal disposal conditions.
Heads-up: That means the term likely won’t apply to anything you’d throw in the trash, because items simply don’t degrade in landfills. It’s far better to reduce waste in the first place than to expect it to disappear.
4. “Compostable.” In the future, products with this claim shouldn’t take any longer to break down than the rest of your compost pile.
5. “Non-toxic.” The FTC’s new guidelines say that non-toxic claims should mean the product isn’t harmful to humans and safe for the environment. But research the product online if the label is vague. And definitely don’t assume kids or pets can ingest it safely.
The fuzziest green term of all
6. “Natural” is unregulated by the government. It’s not interchangeable with organic or healthy, although manufacturers want you to think if it’s natural, it has to be good for you, right? Not so much. Take ammonia. It’s a naturally occurring compound, but it’s also a toxic pollutant. Without context, the word natural doesn’t mean much.
A label to help you decide
When you’re just not sure about a product’s claims, look for certification by a reputable third party — like Scientific Certification Systems.
Its green-and-blue SCS label provides some reassurance that a product lives up to its claims. SCS sets tough standards for the terms biodegradable and recycled content, according to BuildingGreen, an independent company that educates building professionals on green certifications. And the label has been around a long time.
Some SCS guidelines:
- SCS only certifies liquid products as biodegradable — cleaners, detergents, and soaps that break down completely in natural conditions in 28 days.
- Recycled products include a wide array of building products — windows, doors, insulation, carpets, tiles, and more — so seek them out.
Chicago’s real estate inventory is low, with less than 6 months worth of inventory. Well maintained homes that show perfectly and are priced at the market are selling in weeks. A lot of homes (discounted and not discounted) have sold this year. This is reflected by the increase in sales volume across Chicago’s north side, and prices are showing signs of stabilizing. These are positive signs of improvement, but we are not totally out of the woods yet. At the end of June, 111 leading financial analysts are predicting a further drop of .4% before the end of the year, and it’s expected that Chicago and Illinois will have another wave of distressed/discounted property come into inventory – especially after the election.
Election years can be tough on growth because of the uncertainty of which party and who will next be in office, but the following year is better. On a national level, we can expect modest increases as part of this recovery which indicates that things are starting to turn the corner. By the end of 2013, we can expect a gain of 1.3 which when you take away the .4 drop leaves a 1% gain. To put this into the context of the question whether to sell or hold, let’s take a look at some numbers. If your home’s present value is $300,000, you’d have an increase of $3,000 by the end of 2013. If your home’s value is $500,000, then it would be about $505,000 by the end of 2013.
Whether you stay put or decide to rent out our home, there are other factors to consider: your home will 1 year older – may require decorating and updating, taxes may go up (no longer eligible for homeowner exemption), routine and/or emergency maintenance and how many other people are waiting to do sell – will you have more competition? If you become a landlord, consider that the tenants will likely not keep your home as nicely as you did and your home will not show as well as it did when you lived there – especially if it’s vacant. If you bought near the bubble and haven’t paid down much of the principal on the loan, the other important factor to weigh is whether you will be better able to absorb the loss that will come with selling. Will you be able to save more than you stand to gain by waiting?