Yet Another Setback for Housing this Year, or No?

By Bill Primavera

The Home Guru

What would be your response if told that, after all we’ve been through in the housing crisis of the past two years, home values may continue to decline this year by as much as 15, 20 or even 25 percent?  When I read this forecast by a respected authority last Wednesday in The New York Times, The Wall Street Journal and several online blogs, my response was, “Holy Moley!”

But when I got over my initial panic attack, I reminded myself that real estate predictions are much like weather forecasts, only less reliable.  There is the national and the local outlook, as on the Today Show when Al Roker finishes his national forecast by saying, “Now let’s see what’s happening in your neck of the woods.”

Last week’s forecast neglected to check out our neck of the woods. 

Nevertheless, when Robert J. Shiller speaks, the real estate industry and consumers listen. And when he spoke last week, we really listened and moaned.

As the granddaddy of all real estate forecasters, Shiller is a Yale economist who developed the Standard & Poor’s /Case-Shiller Home Price Index to help homebuyers and investors make informed decisions.  And there are accounts that, since the beginnings of the service in the early 1980s, Case-Shiller forecasts have never proved wrong.  Substantiating that anecdotal claim would be too big a project for my purposes and, at the same time, I am well aware that statistics can be interpreted in many ways and that the aggregate does not always represent all its parts. 

Since our peak at the very top of the real estate bubble, the Case-Shiller composite is off 31.2 percent, and in some cities like Atlanta, Cleveland, Las Vegas and Detroit, home prices are below the levels of 11 years ago, and more cities are about to join that group. This means that we have a “lost decade” for housing appreciation in much of the country.

We really have to listen to who’s saying what before we believe the headlines. For instance, Karl E. Case, the partner of Mr. Shiller differs with his associate on this point and believes that the outlook is not so dire. He feels that the market is at “a rocky bottom with a down trend,” according to the Times. Favoring the latter opinion is the fact that the two-month drop in the index during November and December was about half the drop in the previous two months, indicating that the slide might be slowing down. 

Even though affordability is very high and housing is incredibly cheap, there are so many variables in determining whether we’re going to climb out of this hole any time soon.  There was optimism prompted by the surge of home sales in the fall of 2009 and spring of 2010, but that did not lay the foundation for a permanent rebound. The other variables are the backlog of distressed home sales that are now flooding the market, the uncertainties over the mortgage holding companies Fannie Mae and Freddie Mac, and the proposals afoot to reduce the mortgage tax deductions.

Whenever I want the clearest picture of local housing statistics, I consult with the managing broker of Coldwell Banker in Yorktown, Joe Monaco, who is constantly assessing housing statistics and sharing them with his agents.

“Buyers and sellers need to obtain and understand local information and not be swayed by wide geographical analysis,” Monaco said in response to the report.  “Just in Yorktown, unit sales dropped from 469 in 2009 to 459 in 2010, and the average sales price declined only $1,076 from $417,219 to $416,143. This performance provides strong promise that the market is stabilizing, a necessary prelude to recovery.”

Further demonstrating that sales data is very local, Monaco noted that in lower Westchester, the market experienced a rebound in 2010 in both unit sales and prices, propelled by lower property values from the market highs of just a few years ago and proximity to Manhattan. Some locales had a 40% increase in unit sales and a 15% increase in the average sales price in year over year comparisons.

Meanwhile, Westchester County total sales data, year over year, is pointing to a path of recovery. Unit sales in 2010 were up by 5% and the average selling price increased nearly 10 percent to $851,124 from $775,756 in 2009.

“As you can see, even in just comparing Northern and lower Westchester, performance is very local,” Monaco said.

“Many political and economic factors are involved in forecasting real estate’s future, but real jobs, consumer confidence and financing are the factors that influence consumer real estate decisions,” Monaco continued. “My position is that the American dream is still alive and well in our area, and I believe that now is the time to buy. And, I believe this so much that I’ve assisted two of my own daughters to buy homes just in the past few months.”

Bill Primavera is a licensed Realtor® (www.PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (www.PrimaveraPR.com). For questions or comments about the housing market, or selling or buying a home, he can be reached directly at 914-522-2076.

Consider the House as a Whole for Energy Efficiency

By Bill Primavera

The Home Guru

Don’t the winters seem to be getting more severe each year?  And with the lower temperatures, we’re all thinking about how well or how poorly our houses are insulated.

Just the other day, when meeting with a landlord in front of a house I was seeking to rent for her, she looked up at the roof, then looked at other roofs on the same street and said, “I can always tell how well my neighbor’s roofs are insulated by the amount of snow on them.”

I’m hoping that she doesn’t pass by my house because the secret will be out that my attic is not insulated between the rafters.  In an 18^th century structure with wooden peg construction and hand hewn beams, the attic is an open display of the brilliant work of carpenters long ago. If I were to place panels of insulation between the rafters, I’d ruin the look that I love. Let the next owner do it, I say.

However, I wasn’t totally negligent. I did insulate heavily under the attic flooring and placed a collection of rugs on top of it. Further, I insulated the back of the antique door leading to the attic steps.

Considering how long ago the communities in our area were built up, I think it’s reasonable to assume that most of us live in older homes rather than newer ones. And since the 50s and 60s when major tracks of housing were built here, the technology of insulation has been greatly advanced. Some of us have upgraded and others have not, so our homes all have varying degrees of energy efficiency.

New products are always being created that improve energy loss and gain readings.  For instance, at a home show in the fall, I discovered a relatively new product called eShield Attic Energy Barrier that looks like the silvery material used on space suits.  And, indeed, I learned that it features the same radiant barrier technology used in space and can cut heating and cooling bills by 25 percent or more.

To learn more about it, I called Mark Sackerson, an energy consultant with Franzoso Energy Solutions which represents the product. When we met, I was cautioned that properly insulating a house is a more complex proposition than installing a single new product.

“Better insulation techniques involve evaluating the house as a whole system,” Sackerson said, “and that means looking at three types of energy gain and loss. We must consider conduction, which is what happens when two materials are in contact; convection, which pertains to air circulation; and radiation, which is when an object gives off heat and it radiates out.

“Today there is a new focus on energy saving methods that rely on testing and quantifying the air exchange a house has, identifying the air leaks that can be stopped, and improving the thermal boundary, meaning the insulation,” he added.

A major consideration in the process is the need for a certain amount of air exchange between the inside and outside for a healthy environment. Sackerson noted that at one time in the 70s, some installers were wrapping a house in materials that failed to allow for the interchange of air, trapping moisture inside which in turn led to mildew and mold problems.  

What usually doesn’t get addressed, according to Sackerson, is radiant heat gain and loss, especially in the attic.  Today that problem is addressed with as much attention as the big movement in the 1980s toward window insulation that all but eliminated the heat radiating out by creating an air space between panes, the best kind of insulator.

The eShield product, which essentially is two sheets of aluminum with a layer of fiberglass between them, is one that addresses radiant heat gain and loss in the attic space. 

The product is not sold directly to the consumer because the manufacturer insists that it be installed properly for maximum effectiveness, working in concert with the other insulation methods of the house. Also, there could be a danger where a homeowner might think that if it’s good to use this product between the rafters, it would be even better to use it also on the walls and floors, but that is not necessarily the case.  That might create a complete envelope of the attic, trapping moisture and creating mold and mildew problems.

“For a healthy environment, you don’t want to tighten your house too much,” Sackerson said. “Again, insulation must be approached as a whole system. If you come in and insulate but don’t air seal, or if you create a thermal boundary without a pressure boundary, then at best you’ve addressed only half the issue. So, it’s not a simple matter of just installing a new insulating material.”

My lesson for the day was that a house must be considered as a living, breathing whole in seeking to achieve optimal energy efficiency and an overall healthy environment.  And, that is best left to a professional energy consultant as a sort of house doctor.

For more information about energy efficiency, Mark Sackerson can be reached at 914-271-4572. 

Bill Primavera is a licensed Realtor® (www.PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (www.PrimaveraPR.com). For questions or comments about the housing market, or selling or buying a home, he can be reached directly at 914-522-2076.

Which Is Best?  Stick-Built, Modular or Panelized?

By Bill Primavera

The Home Guru

 Before I got into the real estate business and subsequently starting writing about housing, I had always thought that stick-built homes offered the best kind of construction in terms of quality and flexibility of design. I had felt that modular homes, or “pre-fab” as I called them, were a secondary choice with awkward layouts, dictated by the width of a cubicle designed to travel down a road on a flatbed.

After learning something about the differences between them, I now know that I had some woeful misconceptions about the two, and the term panelized, which refers to homes constructed from prefabricated flat panels, had not entered my vocabulary.

Which is the best kind of construction?  “Let’s put it this way, says Bob Frissora, “if you’re buying a new car, would you prefer that it be built in a factory or in your driveway?” 

Frissora should know what he’s talking about as owner of Arcanna Homes, a company headquartered in an historic building in Peekskill, who for some years has built panelized homes, both modest and opulent, throughout the region and other states. Frissora prefers panelized construction to modular because he says it offers greater flexibility in the design process.

According to Frissora, panelized homes offer a product that is fabricated under ideal conditions in an efficient way. Each worker at the factory has been trained to do a particular carpentry job and, through experience, has become an expert in that particular aspect of home construction.  The state-of-the-art machines produce panels that ensure the home is built precisely square and dimensionally correct without room for human errors. 

Advanced technology and a controlled work environment produce a more energy efficient, durable home resulting in a better, more inherently green product.

“After the panels arrive at the site and we assemble them, there is very little construction material waste,” says Frissora.  At the same time, Mother Nature is foiled because the panels of a house are connected and sealed within a day or two, free of the warping, mold, mildew and squeaking that adverse weather may cause when a home is stick-built.

“And, compared with modular homes, there is greater flexibility in the way a panelized home is finished once the basic frame is constructed,” says Frissora. “The owner may choose to do much of the finishing work that would normally be done in a factory with modular homes, but this is not always the best course of action,” he warns.  “If a client has family and friends who have committed to get the job done, but don’t show up when they say they will, the job will never get done. And if professional subcontractors are hired to do the plumbing, electricity and tiling, the work is not necessarily coordinated in an efficient way.

“If the subcontractors are all working independently, you have their schedules to worry about, not knowing if they consider another job more important than yours,” Frissora explains. “And finishing up a home can have significant delays because of this.”

Frissora says that with his turn-key projects, it usually takes about six weeks for the panels to be constructed at the plant and, with all the supporting work, from clearing the land to all the custom work, a house can be up in four to six months.

When I first heard the term panelized homes, I naively envisioned small 4’ or 8’ wide panels like the sizes available for plaster board and fencing. But Frissora says that panels can be quite long, more that 30 feet, and quite high, to accommodate a 10-foot ceiling.  And there are even concrete panels with insulation for basement construction.

Because a regular modular home is delivered in pieces, as completed oblong sections, the maximum size of a room is limited by the width allowed on the roads and bridges leading to the site.  That sometimes can produce the boxy “feel” of a prefabricated interior design. But more creative manufacturers and designers can produce a more fluid floor plan, although the double thick wall between sections has yet to be solved, if ever. 

With panelized homes, utilizing all flat panels, delivery is easier in that each numbered panel is stacked side by side on a flatbed.

“The bottom line in choosing to build a panelized home is a more consistent construction schedule and greater flexibility in design,” Frissora concludes.

To know more about panelized homes, Bob Frissora can be reached at 914-788-0700, and his company’s website is www.arcannahomes.com.

Bill Primavera is a licensed Realtor® (www.PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (www.PrimaveraPR.com). For questions or comments about the housing market, or selling or buying a home, he can be reached directly at 914-522-2076.

If My House Is Dusty, Am I a Bad Person?

By Bill Primavera

The Home Guru

If we are made from dust and shall return to dust, as the Bible tells us, does that give us a pass to live with the stuff in between time? While dust is inevitable, it horrifies some of us, as though its presence on our furniture and floors tells the world something unflattering about us, not only as housekeepers, but as human beings.  And some of us just don’t give a damn.

 I remember an interview long ago in The New York Times in which an eccentric artist said she hadn’t dusted her apartment in over 30 years, saying that “after the first two years or so, you really can’t tell the difference.” That kind of empirical research really impresses me. 

And in the HBO movie "Grey Gardens," Jackie Kennedy Onassis’ aunt and cousin, Edie Beale and her daughter, also Edie, are depicted as living in absolute squalor in a neglected ramshackle house, with garbage strewn throughout and a hoard of cats and raccoons relieving themselves on the floor. When Jackie arrives to help remedy the situation and registers her shock at the condition of the property, Edie dismisses the condition of her living environment by saying simply that her daughter “hasn’t been keeping up with the dusting.” 

Is inattention to dust the first degenerative step to chaos in the home? Maybe for some, depending on their mental attitude about it, and in turn, how unkempt homes can affect its occupants.

A recent survey revealed that 83 percent of us are happier in a clean house and the act of cleaning itself gives 57 percent of the population a feeling of satisfaction. Further it shows that 38 percent of women and 24 percent of men experience real stress living in a messy environment.

It would seem that, especially in these harsh times, dusting and cleaning can be therapeutic. Psychologists have found that there is a marked difference in mood before and after doing cleaning, just as with a therapy session.

According to Carol Nemeroff, Ph.D., Associate Professor of Psychology at Arizona State University, this psychological boost may be derived from biological programming to clean out our nests. “And, because we know that good hygiene leads to good health,” she said, ‘cleaning may ultimately be related to a basic survival instinct.”  Wow, get out that dust rag.

For those who don’t mind living with a coating of dust on their furniture and appliances, it may be motivating to know that dust is composed largely of our own flaking skin cells! Now that we know what it contains and that it can cause real stress, does this explain the expression, “uncomfortable in our own skin?”

Add to our skin cells other flaky stuff like fabric fibers, dust mite excrement, hair, pet dander, pollen, regular dirt, debris and micro particles, and you have a pretty nasty brew that can give people with allergies and breathing problems a real hassle.  

But beyond the psychological and unhealthy effects of dust, it can do real physical damage to most everything it lands on, from furniture surfaces to those things it clogs up like computer keyboards and vents.

There are both fancy and simple ways to get rid of dust. The fancy way is with an air purifier of which there are two types: those with fans that pull air through filters that trap the dust and those called electrostatic precipitators in which an electrical charge is applied to the dust drawn into the device and captured on oppositely charged plates. Both are available as either portable units, which offer varying degrees of effectiveness, depending on the model, or as whole-house systems. Prices range from $100 for a portable model to over $1,000 for a whole-house system.

But, among the houses I've listed or sold, I was aware of only a couple that had a whole-house air purifier system. So, unless people are plagued by allergies, I suspect that most of us dust with old-fashioned elbow grease, using either regular rags or one of those new magic dusters to which particles cling, such as the Swiffer Sweeper or Pledge Grab-It Cloths. Because the latter option can be expensive, a regular rag can be made just as effective if dampened before use and shaken out frequently.

I definitely do not recommend a feather duster because it merely spreads the dust around until it lands again on the surface of things.

It’s funny how the exploratory process can affect you. As I sit at my computer, I’m very aware and uncomfortable in the knowledge that between the keys of the keyboard is a lot of trapped dust.  Are the raccoons soon to follow?

Bill Primavera is a licensed Realtor® (www.PrimaveraHomes.com), affiliated with Coldwell Banker, and a marketing practitioner (www.PrimaveraPR.com). For questions or comments about the housing market, or selling or buying a home, he can be reached directly at 914-522-2076.