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Tuesday, March 16, 2004

Empty-Nester Canadians Need A Fresh Outlook

by PJ Wade

The multi-bedroom, multi-level home most Canadians end up in was originally selected for its size and location as an ideal place to raise children. Have those who want adult housing made the necessary mind shift to find the designs and styles that will serve them in their decades-long retirement?

When shopping for a house to raise your family in, you looked for enough space to allow a young family to run wild without trampling you in the process. The North-American ideal of "my own room" dictated you buy one bedroom for each child plus a bigger one for you and your spouse to hide out in -- that added up to a three-, four- or five-bedroom home.

Multi-level living enabled you to keep your sanity and your hearing when seven-year-olds, and eventually seventeen-year-olds, gathered to "hang out" and blast out the latest tunes. Storage space was important because the kids never wanted to part with toys, books, sports equipment and all the other stuff that keeps the garage, basement and closets filled to overflowing.

With children grown and gone, do you still need or want the kids' multi-bedroom, multi-level home? Aren't you a little nervous that all that space will act as a magnet and draw the kids back, perhaps with their own children in tow?

If your home is keeping you cash poor, taking up too much of your time and energy or is not located in your ideal setting, you may be settling for too little. In fact, if you are just very used to the place, it may be time to shake up your life and find a home that is chosen just for you (and a partner if you have one).

The good news? The Canadian real estate development industry has discovered that people want to live active, involved lives in retirement -- often even more exciting lives than they lived as moms, dads and employees.

The real estate, development, construction and renovation companies and professionals believe there is a lot of money to be made from experienced spenders like yourself who want somewhere suitable to live in during their 20, 30, 40 or more active, healthy years ahead.

Construction techniques and materials have changed dramatically since you were last in the housing market. "They don't build 'em like they used to" means they build 'em better in many respects. You can now have climate-controlled comfort without drafts and chilly corners. Central air conditioning is almost a standard feature now. Roomy bathrooms with luxury add-ons galore mean no more banging your elbows when combing your hair or having to store towels a cold walk down the hall.

If you are hooked on computers, check out the "smart home" features that can be added to allow centralized security, energy conservation and many time-saving opportunities. You computer hold-outs should take a look at these features anyway. What seems outrageous today is very easy to get used to and quickly becomes indispensable. Remember your first reaction to a microwave oven or a fax machine? Could you live without them now?

The range of ownership choices is growing slowly. In most urban areas, you can find a few alternatives to freehold, or outright ownership of the house or townhouse, that may not take all your capital from the sale of the family home. For instance, in a condominium, you own your unit and share ownership of the rest of the building(s), amenities and land. A condominium unit can take many forms -- a loft space, townhouse, bungalow, a combined office, a high-rise suite or anything else a developer thinks people want to own without putting all their money into their property. And that's one big advantage of condominiums. Because you share ownership of the land, you can get a better location and more amenities for a much lower price tag than solo buying would get you. Cooperatives and life lease arrangements usually have relatively lower price tags since you have less defined ownership rights. And then there are the many variations on renting...

As spring returns to Canada, get out and explore new home developments to learn your full range of choices. Visit home shows and design centres in your area to find out what's new in interior design as well. Knowing what your options are will help you decide whether to stay and renovate or start on a new adventure. Understanding the choices buyers face in your area will also help you prepare your home for resale if you decide it's time to cash in and move on.

Published: March 16, 2004

Related Articles:

Canadian News

"The Canadian Connection"

PJ Wade, The Improvement Coach, is a business strategist and an internationally recognized authority on retirement and the Maturing Marketplace (= baby boomers and seniors). PJ's firm, The Catalyst, provides strategic communication and educational services to the financial, healthcare and housing sectors - and the clients they serve.Author of 6 books and over 850 published articles, PJ's current books are Have Your Home and Money Too, "the owner's manual for your home," (Wiley, ISBN 0-471-64400-5) and Caring for Your Aging Parents (Coles, ISBN 0-7740-0613-7). PJ is a widely-known and often-quoted financial commentator and a popular strategic speaker. For more, visit http://www.thecatalyst.com.

Copyright © 2004 Realty Times. All Rights Reserved.

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Las Vegas Closes The Bet On Homebuyer/Investors

by Blanche Evans

Las Vegas, Nevada home prices have hit the jackpot, but new builder's rules may slow down speculative homebuying and nothing is slowing down occupant homebuyers.

"Las Vegas is still experiencing approximately 7000 new residents a month and demand for homes and condos is still very strong," says Realtor Bruce Hiatt. "We get frequent calls from clients and prospective clients asking how much higher can home prices go. When we think we've seen a residence price point we find ourselves observing how that expensive home three months ago seems like a bargain now. We've seen major appreciation in the past 12 months and now we are seeing builder pricing velocity beyond belief."

Hiatt says, "On February 28, one major builder in Summerlin held their grand opening and 24 hours later, their new home prices increased a gigantic $150,000! While that revised price is for December 2004 delivery; nonetheless, is this builder truly a fortune teller for future home prices in Las Vegas? We don't think the appraisers are going to be happy campers over this, and yet buyer demand continues even at this crazy price point for this builder. So in Las Vegas, that 1900 sq ft single story home will now cost you $602,000 before lot premium and before upgrades! That's still an OK price compared to California's housing market, but nonetheless it is a record for Las Vegas at this price per square foot. This price increase has created a significant gap between existing home sale prices and new home prices. Therefore, we believe the next 6 to 9 months will see significant price increases for the resale housing market as a result of this major new home price increase. With just a handful of years left before we exhaust buildable land in Las Vegas, it is no doubt that the scarcity of land is one driver of these price increases. It is also no doubt that the Manhattanization of the Las Vegas Strip is about to take off like a rocket. There are more luxury condos on the planning horizon including Conrad, Trump, and another very cool community near the Palms casino that we know will sell out fast but so far no concrete details."

Hiatt says, "We are not happy about the new home builders' rules for buying new homes in Las Vegas. You can only buy a new home if you are the primary resident. No investors and no second home purchases are permitted. You cannot buy a home for your relatives. Second, you will most likely be asked by the builder to sign an addendum to the contract which requires you to occupy the home for 12 months after the home is closed in your name and you cannot sell or rent the home until the 12-month period is over. Many builders are now placing cash buyers ahead of those financing home purchases. We know of one builder who ranks your position on their 1000 person waitlist in order of cash buyer, if you already live in Las Vegas, your choice of lender, your credit scores and several other factors. Further, some new home builders are placing onsite loan officers in their offices to immediately pre-approve you when you walk into the sales office and the results of that analysis will help determine where you get placed on the long waiting list.

"We are now seeing hundreds and in some cases thousands of names on waitlists to buy a new home in Las Vegas," he says.

"In January of 2004 the price increases have started to accelerate, rising greater than 2 percent in most (1990 and newer) areas," says Realtor Sean Brown. "The under $400,000 market is experiencing a severe supply shortage. Builders' waiting lists average an easy nine months, if you can get on a list. (Many lists have more than 1,000 people on them with less than 200 houses available). Multiple offers is definitely the norm, and most transactions are above list price. It is not unusual to see a house sell $20,000-$60,000 above the listed price."

"Between October and December 2003, we had a slight dip in the number of multiple offers being made on houses and the days on market seemed to move toward a week instead of the 1-3 days it had been," says Brown. "The doubling of the sales transfer tax on October 1st may have caused a slight intensification of sales through September and a subsequent decline in sales post Oct 1. As of January 2004, it seems the frenzy is back on with a more intense furor. I've seen a house listed at $240,000 sell for $300,000, and that included an addendum stating the buyer would automatically agree to pay the difference between the sales price and the appraised price."

Published: March 16, 2004

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Blanche Evans is the publisher of Agent News and the associate editor of Realty Times, the Internet's largest independent real estate news service. She is the author of two best-selling real estate books: The Hottest e-Careers In Real Estate, Real Estate Education Company, an Internet marketing primer for real estate professionals, and homesurfing.net: The Insider's Guide To Buying And Selling Your Home Using The Internet, Dearborn, a consumer homebuying and selling guide. In 2000, she was recognized by the editors of REALTOR(r) Magazines as one of the "25 Most Influential People In Real Estate," and in 2003 when the "Most Influential" list was updated, she was recognized as one of nine "Notables." She is also a frequent contributor to "Your Money" on CNN fn.
E-mail Blanche at: blanche@realtytimes.com

For more articles by Blanche, Click Here

Copyright © 2004 Realty Times. All Rights Reserved.

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How To Get The Edge When Selling This Spring

by Michele Dawson

Experts predict this year to be another busy one. The National Association of Realtors says existing-home sales are projected at 5.92 million this year, second only to 6.10 million in 2003. New homes are seen at 1.04 million sales, while housing starts should total 1.78 million in 2004.

"The silver lining now is that interest rates probably won't move much until late in the year when the unemployment rate is expected to drop to 5.4 percent," said NAR chief economist David Lereah.

Lereah said the 30-year fixed-rate mortgage should creep up very slowly, reaching 6.3 percent in the fourth quarter.

"Keeping interest rates close to historic lows will sustain very strong home sales, which should be only a few percentage points below last year's record," he said.

How you develop your selling strategy will depend on the market in your area. In some regions, there are more sellers than buyers, meaning you'll really need to make your house stand out from the rest.

"Although the first-time buyer market in Austin proper has remained fairly strong, the Lake Travis area market has moved at a slower pace than the lower priced markets," said Ron Helle, a Realtor in Lake Travis, Texas. "There have been fewer buyers and more sellers than during the boom period which ended in 2000. While the overall market is slightly lower than it was in 2000, the market has shown some significant recovery in recent months."

In these instances, you'll want your house to sparkle and stand up to the buyer's home inspection. Some ways to do that include:

Make any necessary structural repairs. You may want to consider hiring a professional inspector to give the house a once-over before you put it on the market. That way, there shouldn't be any surprises down the road once a potential buyer makes and offer and conducts their own inspection. A home inspection should cover drainage conditions, your home's exterior, the chimney, decks, the roof, windows, doors, plumbing fixtures, furnace, air conditioner, insulation, ventilation, electrical, heating, and plumbing systems.

Check out your shingles, make sure there aren't any loose ones.

Repair and paint your gutters.

Shampoo your carpets.

Repaint any dingy-looking walls. Keep colors neutral to attract a broad base of would-be buyers.

Clear out the clutter. Let buyers see the kitchen countertops. Have closets just half full so they look larger, clean out the garage, get rid of the knickknacks. And if you have a lot of furniture, put some of it in storage. Less furniture will make the room appear larger.

Make a great first impression. A potential buyer's first impression is what is know as curb appeal. Keep the lawn mowed, trim the bushes and shrubs, clean the front windows, place a nice welcome mat out, make sure there's no clutter by the front door, clean out the spider webs, leaves and other debris near the front door and, speaking of front doors, make yours look great -- whether it's by painting it, cleaning it, hanging a seasonal wreath or adding a stylish new handle.
If you're selling in a hot sellers' market, then you'll still want to follow the above suggestions, but you'll have more leeway in your negotiations. But experts say it's important to not get greedy and to set a fair price. In many areas, like Vermont, if a house is in good shape and priced right, it will sell.

"The real estate market in Central Vermont has been very active this spring," said Margaret Henkel, Rutland County, Vermont. "With mortgage rates still near all-time lows, buyers can get more for their dollar than ever. Homes priced to accurately reflect today's market values and that are in good condition sell very quickly. Today's buyers are looking for homes that are well maintained and ready to move into."

But in the Dallas/Fort Worth area, home prices fell three percent in January and another three percent in February and sellers are adjusting accordingly.

"A lot of people are taking price reductions," Jennie Ling of Virginia Cook Realtors told the Dallas News March 10. "The ones that do cut their prices are often finding that buyers will step up to the plate."

Published: March 16, 2004

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Give Your Kitchen A Boost When Selling

What To Do If You Have To Move In A Hurry - And Still Have A House To Sell

Create A Grand Entrance When Showing Your House

Based in California, Michele Dawson has extensive experience as a reporter and editor and now specializes in housing and real estate matters.

Copyright © 2004 Realty Times. All Rights Reserved.

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Would You Choose A Mortgage With A Higher Rate?

by Peter G. Miller

It was Friday and the world's best loan officer was on the line:

"Hey, rates are down again. Want to refinance? he asked.

You bet.

It would seem that the matter of picking a mortgage is largely guided by just a few baseline issues: What's the monthly cost? What's the total projected expense over the life of the loan? What's the up-front cash cost? Can I prepay in whole or in part and without penalty at anytime? Can the rate change during the life of the loan? Are there any "gotcha" clauses? Etc.

But for many people financing and refinancing involves something more than numbers and percentages.

According to Vada Hill, Fannie Mae's Senior Vice President and Chief Marketing Officer, the mortgage industry has traditionally viewed borrowers by their status as first time buyers, repeat buyers or those refinancing.

"In terms of needs, motivations and fears," says Hill, "there are many more similarities than differences among these three groups."

But the choice of a loan -- and a lender -- is actually more complex. Many borrowers are motivated by factors other than such customary measures as rates and terms.

A nationwide study of 9,300 consumers by Hill, including more than 700 African-American and 600 Hispanic households, shows that borrowers can be placed in six categories:

Financially Challenged
Affluent, Angry and Ignored
Technophiles
Friends and Family
Technophobes
Financially Confident
Within these groups there are differences between whites, African-Americans and Hispanics. Among various findings, Hill's study shows found that "the motivator of 'Getting a Yes' is of critical importance to African-Americans in shopping for a home loan."

The desire to get a "yes" leads to three marketplace realities for African-Americans, says Hill.

"First an aversion to using their bank as the vehicle for obtaining a mortgage."

"Second, an overwhelming reliance on the Realtor and mortgage broker."

"Third, the criticality of working with someone of the same race in this process."

In effect, the Hill study says that psychology is important. People want a loan approval, they'd like the best possible mortgage but they want something more: They want to be respected, they want to be treated fairly and they want their dignity.

The result of such perspectives is that some borrowers will pay higher rates because getting to yes -- institutional acceptance -- is as much or more of a priority then getting the best possible rate and terms.

Why does this happen?

You can see in Hill's findings a reflection of the realities which long dominated the lending process. In the not-too-distant past, getting a mortgage was an effort where race, religion and nationality were barriers to approval.

For example, basic appraisal textbooks were updated in 1977 to say that "it was once common practice to examine the racial, religious or ethnic composition of a neighborhood in an effort to detect any sign of nonconformity or change. Such an approach is now regarded as misdirected and the use of factors relating to the racial, religious or ethnic composition of a neighborhood in arriving at a conclusion of value is now deemed an unreliable practice." (See: "Appraisers Institute Settles Suit," The Washington Post, Nov. 19, 1977)

In 1980, an industry policy statement concluded that "the value attributed to the property is not dependent upon the homogeneity of racial, religious or ethnic characteristics of the neighborhood...and the lack of such homogeneity in a neighborhood does not cause a diminution of value." (See: "Agreement Set In Rights Case Against Lenders," The Washington Post, Jan. 26, 1980)

In other words, race, religion and such had been routinely used to determine home values. Values were lowered when neighborhood demographics changed. Such things were not folklore, rumor, legend or hearsay; they were real, the standards of the day.

The policies of the past impact us now. In Texas, for example, a 2002 study by Consumers Union found that "among borrowers earning more than $60,000 annually and borrowing less than 2.5 times their reported income, 16.7 percent of Whites refinanced using a high-cost subprime company, 30.9 percent of Hispanics and 46.9 percent of Blacks. Consumers Union found very high subprime penetration rates (exceeding 40 percent) among upper income Black borrowers refinancing homes in predominantly Black neighborhoods."

It might seem as though past discrimination is now ancient history, but there's plainly less inter-generational abundance to pass on when the assets of those who came before were devalued for discriminatory reasons, something reflected in today's household wealth numbers.

"In 2000," says the Census Bureau, "the household median net worth was $79,400 for households with a non-Hispanic White householder, $7,500 for households with a Black householder, and $9,750 for households with a Hispanic householder."

Hill's point, of course, is that lender marketing efforts cannot be maximized without understanding the motivations and history which drive today's borrowers. There's more to such motivations and history, as Hill explains, than one's status as a new buyer, move-up purchaser or someone seeking to refinance.

For more articles by Peter G. Miller, please press here.

Published: March 16, 2004

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When It Comes to Bad Credit, There Are No Overnight Fixes

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Study Shows Broker Fees Vary by Race, Sex, Education, Shopping Style

Marking 35 Years of Fair Housing

Peter G. Miller, also known as OurBroker®, is the author of six real estate books -- including The Common-Sense Mortgage -- and is the original creator and host of America Online's Real Estate Center. Mr. Miller welcomes your questions, comments, and news releases via e-mail at peter@ourbroker.com.

Copyright © 2004 Realty Times. All Rights Reserved.

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