Buy A Home... or Two

Some insightful words were said at the CNBC/Institutional Investor conference by American hedge fund manager and Paulson & Co. founder/president, John Paulson.  He firmly believes that, in the next 4 to 7 years, we can expect the strong recovery in the housing market to continue:

"It’s not too late to get involved. I still think buying a home is the best investment any individual can make. Affordability is still at an all-time high."

Additionally, Paulson stated that one should, "Buy a home and, if you can, buy a second home."

June Home Sales Slightly Down

After the three-and-a-half year high in May, sales of existing homes dipped slightly in June.  The June sales number lowered 1.2% to an annual rate of 5.08 million compared to 5.14 million in May, according to the National Association of Realtors.  It is good to note, however, that compared to June of 2012, sales are up 15.2% - a fantastic figure.

Why the dip now?  It is likely that the rising mortgage interest rates alongside a lack of inventory has something to do with it.  June's Chicago-wide supply was 2.8 month's of inventory at the current sales pace - down a whopping 57.4% from this time last year.  The market still highly favors sellers.

Many sellers see the surface facts and believe that in a seller's market with limited inventory, they can make more money by overpricing their property.  Sellers are urged not to get too confident with the current conditions, however, especially with the recent slowing in home sales.  Additionally, there is nothing that will turn a buyer away quicker than an overpriced property.  (Click here to read why)

Sellers Beware: Overpricing Can Be A Huge Mistake

With rising market prices, many sellers have felt the urge to overprice their properties to get a good deal out of the trend. Overpricing a property can be a huge mistake when coupled alongside a low inventory and rising interest rates, as this is something that can easily turn buyers and investors away. This is a really discouraging notion, with the housing market just beginning to come back nicely.

We have had the most success, repeatedly, by pricing competitively.  Generating high interest, getting multiple prospective buyers in the door, is the single best way to negotiate the best sale price for the home seller.  

Asking prices, according to Trulia, have dramatically jumped up and continue to accelerate at a rapid pace. Year-over-year prices jumped 10.7%, Quarter-over quarter 4.1% (16.4% annualized), and month-over-month 1.5% (18% annualized).

An 18% increase in home prices within the next 12 months is highly unlikely under any circumstance. It is more likely that in a more expensive market, price appreciation will slow and inventory increase. Purchasers often set out with a pre-set budget anyway, so it is unlikely that they will bite at the higher property prices anyway - not when there are other prices available to them, and market analysts to tell them what is overpriced.

The bottom line: don't get carried away with the "increasing prices" headlines of the past few months.

Waiting to Buy Could Be Costly

A figure recently released by the KCM blog supports what statistics have been suggesting about the rising price of home ownership over time.  In short, the cost of homes is climbing, and at the same time, the cost of borrowing money is climbing, causing the total cost of home ownership grow at a notable rate.

KCM compared approximate mortgage interest rates from this time last year to this year, using a 10% increase in price values to allow for the general upswing in housing prices over the past year (many areas going up by double digits).  Here is what they found:

With the cost of borrowing money going up right alongside the cost of homes going up, home ownership is only getting more expensive over time.  Playing the waiting game, in this instance, will not likely be in your favor.

The Good News
Is it too late?  In a word, "no".  Home prices are still well below their 2006-2007 peak prices, and it will continue to take some time to reach those levels.  Interest rates are also, from a historical perspective, very low.  That said, all indicators suggest that home prices are continuing to climb, and with interest rates growing in tandem, the time to act is upon us.

5 Ways to Cut Your Summer Energy Bill

In the hot months of summer, energy bills can skyrocket with efforts to stay cool.  Here are Zillow's 5 simple ways to cut your energy bill without undergoing renovations.

Clean your filters
A simple cleaning of your filters can help your air conditioning to run more efficiently.  This should be number one on your list, as a clean filter can lower your A/Cs energy consumption by up to 15%!

Some filters can be cleaned, but many have to be replaced.  Central air conditioning filters can be located along the length of the return duct.  Consider cleaning these monthly during the summer months.  Room air conditioning unit filters can be located in the grills that face your house.

Insulate as much as you can
While Chicago residents certainly think about insulation during the winter to keep the cold, sometimes people forget that insulation is just as important during the summer to keep the cold in.  Proper insulation can reduce costs by as much as 20%.

What is the best place to insulate?  Believe it or not, your attic should be one of the first places you start; temperatures can climb up to 140 degrees during the summer, which will leak down into your home.

Shade your windows
Awnings, window shades, and blinds can be an easy energy-saving tool.  While it does not block any actual air from leaking into your home, the shade alone can help conserve your energy.

Awnings are particularly useful in reducing solar heat gain (up to 65% on on south-facing windows, and 77% on west-facing windows).  Keeping highly-reflective blinds completely closed on a sunny day can reduce heat by up to 45%.  Curtains can help too, but their effectiveness varies depending on fabric type, color, and backing.  Drapes with medium coloring and white plastic backing can reduce heat gain by 33%.

Use a Smart Thermostat, and Set it as High as Possible
The ability to program your thermostat can easily help reduce your energy bill.  Set your thermostat as high as possible - the smaller the difference between indoor and outdoor temperatures is, the less energy you will be using.

The newest thermostat available, The Nest, is a $250 thermostat which learns your thermostat preferences as you use it.  After about a week, it can anticipate when you will change your thermostat and what you will change it to.  You can also control it remotely from your smartphone or computer.

Turn it Off and Unplug
Plugged-in devices suck about $100 from your bill every year, according to the United States Environmental Protection Agency.  Computers alone can account for 2-3% of your energy bill.  Sleep modes do help, but it is even better to flip off a power strip or unplug altogether.  Consider the Smart Strip which can sense inactivity and automatically flip switches off.

8 Alternatives to Granite For Your Kitchen

When it is time to remodel a kitchen, most people turn to granite for their countertops.  In fact, according to a survey conducted in 2012 by Harris Interactive on behalf of The Marble Institute, 75 percent of homeowners looking to remodel their kitchens within 2 years said they were going to go with granite.

Granite is certainly a good, secure option.  It is highly durable and its good looks will last awhile.  However, it is still highly expensive and heavy, and requires quite a bit of upkeep.

Zillow has come up with a thorough list of 8 Kitchen Counter Options That Will Make You Forget Granite.  Here is a breakdown of their list:

Carrara Marble

- White or blue-grey marble
- Softer than granite
- Does stain and scratch, creating a "warmer" patina as it undergoes the aging process
- Often used in sculpture and building decor, particularly in Italy

Wood

- "Butcher block" is the most common type used, but other woods such as cherry, bamboo, zebra wood and iroko have been used
- Highly durable
- Wear on the wood give the counters a nice patina
- Some maintenance required to prevent drying of the wood

Soapstone

- Smooth, matte, natural stone
- Soft-grey to Charcoal in color
- Acid and heat resistant
- No special cleaners needed
- Oils can be used to enhance the stone's look

Engineered Quartz

- 95% natural quartz, 5% polymer resins
- Super-hard, low-maintenance, natural-looking
- Comes in a variety of colors
- Relatively scratch and heat resistant

Concrete

- Many colorizing and stain techniques available
- Can add embedded stones, tiles, silicone chips to create a unique counter
- Highly durable: scratch-resistant and heat-resistant
- Extremely heavy
- Can be damaged by acidic substances, and must be sealed and maintained to resist stains

Glass

- Versatile and easily customizable
- Can endure high-heat
- Wont stain
- Non-porous, making them very hygienic
- Under-mounted sinks not recommended

Stainless Steel

 - Complimentary to many of today's stainless steel appliances
- Stain and heat-resistant
- Can be scratched or dented
- Other metal countertops fall in this category: copper, pewter, zinc

 Solid Surfaces

- Can look like natural stone
- Less expensive and require less maintenance than real stone
- Can be created with no seams
- Heat and moisture resistant
- Easy to Clean
- Can be scorched and scratched


If you are looking to remodel your kitchen, give me a call or send me an e-mail and we will put you in touch with some experts in the field.