Fed Aid Triggers Mortgage Drop to 5.5%

The Wall Street Journal is reporting that The Federal Reserve's attempt to stabilize the housing market set off a chain reaction across the U.S. on Tuesday, dropping interest rates and quickly spurring a burst of refinancing activity by borrowers eager to lower their mortgage costs. Some brokers said it was the most activity they've seen in at least one year, although there was no way to determine the volume of refinancing.

Rates on 30-year fixed-rate mortgages dropped by roughly half a percentage point to about 5.5%, for borrowers with good credit scores and substantial equity in their homes, say mortgage brokers and lenders.

While the initial flurry of calls came from people seeking to refinance, economists predicted lower rates also will spur some home buying among bargain-seekers. The surge in refinancing will help the overall economy by putting more cash in consumers' pockets and reducing the pressure on some borrowers struggling to make payments.

Home Affordability Hits 4 Year High

The National Realty news has uncovered a silver lining in the declining market in home sales:

With home prices decreasing and interest rates holding at historically low levels, the number of potential home buyers nationwide who can afford to buy new and existing homes has reached the highest level in more than four years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) just released.

According to the third-quarter HOI readings, 56.1 percent of all new and existing homes that were sold were affordable to families earning the national median income of $61,500, far more than the 40.4 percent of families who could afford homes at the peak of the housing boom.

Tips For Bidding on Foreclosures

From The LA Times:
Foreclosed properties are piling up faster than they can be sold, but that doesn't mean buyers can snap up a great house with little effort. Quality properties in good locations now draw multiple offers when priced right. Here are some tips for extracting gems from the rubble.

Know when to lowball
If a home you want has been on the market for several weeks, it is probably overpriced, says Sean O'Toole, chief executive of ForeclosureRadar, an online seller of default data. Banks may be willing to accept a lowball offer on such properties to get them off their books, especially at the end of a quarter. The end of December is an especially good time for buyers, says O'Toole, who has bought and sold more than 150 foreclosed houses.

Be ready to compete
When an attractive -- and attractively priced -- property hits the market, lowballing can backfire, O'Toole said. Banks selling houses generally follow a formula that allows for substantial price reductions only when houses don't sell for a specific number of weeks or days. Experienced foreclosure buyers say that for high-quality homes, it's best to offer close to list price or a quick escrow, perhaps 15 days.

Here's a play by play report of a typical auction.

Treecycling Homes Without Logs

From NJ Myway:

Want a greener home? Think about wrapping it in bark.

Not so unusual in other parts of the country, but rarely seen in our neck of the woods... bark siding looks great, and signals that you are serious about recycling.

Spectrum Construction and Development is completing the remodeling on what is believed to be the first house in the state with bark siding. The pristine three bedroom home on Lake Mohawk in Sparta was purchased by a Jersey City woman as a weekend retreat.

Meltdown Slows Down Teardowns

The NY Times warns that NJ is in danger of losing it's title as our nation's number one teardown state.

That has been New Jersey’s ranking from the National Trust for Historic Preservation each year since 2002, when the trust began keeping track of how many older houses in historic neighborhoods were being demolished to make way for new and often bigger houses. In August, the trust cited 85 communities — from Alpine to Fair Lawn; from Morristown to Wykoff — where teardowns were heavily concentrated.

But since then, another trend has become a lot more noticeable — even in New Jersey. The overall economic situation and the sorry state of the housing market mean that fewer and fewer people are “throwing away perfectly good houses,” as one preservation-minded architect from Point Pleasant, Verity L. Frizzell, put it.

“Just six months ago,” said Stacey Ruhle Kleisch, who is president-elect of the American Institute of Architects’ New Jersey chapter, “it was ‘the sky’s the limit’ with my clientele. Whenever possible, it was, ‘Tear it down, and make something new.’ ”

But that is definitely “grinding to a halt,” said Ms. Kleisch, whose firm GK&A Architects is based in Rutherford. “Now, it’s, ‘Let’s see what choices we can make to save money, immediately, and over the life cycle of a home.’ ”

It is certainly not as if the bulldozers had gone quiet around the state. Last summer, for instance, a frayed but once-grand 1910 colonial on Park Street in Montclair went down abruptly after a developer bought it. The new colonial now under construction — at 4,200 square feet, slightly smaller than the old house, but outfitted with a full array of modern technological conveniences — is being marketed by Rhodes Van Note & Company for $1.85 million.

Peter Primavera, a vice chairman of the Urban Land Institute in New Jersey, says that although he perceives a lull in teardown activity, that does not translate into a halt.

“When the stock market is up,” Mr. Primavera said, “old houses go down. Now, things are bad on Wall Street and fewer houses are being taken down. But the overall dynamic is still in place of people wanting to build new, big McMansions when they have the money to do so.”

Green Areas Lower Health Gap Between Rich and Poor

From The Lancet via The Washington Post:

Health inequalities between rich and poor people are much lower in areas that have lots of green space, such as parks, forests and playing fields, a large British study finds.

In areas with the most green space, the health gap between the richest and poorest people was about half as large as that in the least green areas -- an incident rate ratio (IRR) of 1.93 in the least green and 1.43 in the most green. IRR is a measure of how much higher the rate of death is among the poorest, when compared with that among the richest.

The difference in IRR for circulatory disease was even larger -- 2.19 in the least green areas and 1.54 in the most green. The study was published in this week's special issue of The Lancet, which focuses on social determinants of health.

"This study offers valuable evidence that green space does more than pretty up a neighborhood; it appears to have real effects on health inequality, of a kind that politicians and health authorities should take seriously," Dr. Terry Hartig, of the Institute for Housing and Urban Research at Uppsala University in Sweden, wrote

(graphic from 19th Century map of Northern Essex Co.)

Montclair Makes Forbes Latest Top 10

It may not be a boom, but, given regional problems, it's a good market to be in. Montclair joins Berkeley; Bedford, Texas, and Kennesaw, Ga. on their list of suburbs with the best conditions for sellers. Among the highest in median sales prices at $672,000, Montclair also has the lowest percentage of price declines(27%).

Forbes looked at the suburbs in the country's 75 largest Census-defined metro areas based on the last 90 days of sales activity. Since a metro area can contain hundreds of suburbs, they narrowed it to those cities with an inventory of at least 75 homes on the market.

How New Jersey Voted

In case you're thinking of moving to a town with politically compatible neighbors,
The Star Ledger has compiled a Red Vs. Blue map for this week's Presidential Election.

Appealing Time to Lower Your Property Taxes

The current issue of Realtor Magazine has some practical advice for the majority of homeowners who have seen their property's value decline as their tax bills continue to rise:

If, after a review with a residential broker or appraiser, a home’s assessed value seems out of line with current market values, the home owner should undertake an investigation to determine what might have caused the incorrect valuation. Here are some steps for your client to follow:

1. Arrange a visit with the local tax assessor and request a complete copy of the home’s tax records. Property record cards are public records and are universally available.

2. Pay particular attention to the market comparables listed on the property record card. These recently sold homes are the basis for the assessor’s valuation of your client’s home. Visit those houses or view them online, and compare them to the client’s house.

3. Take the appropriate equalization ratio and multiply the market value you believe appropriate for the home by that rate. If the number is lower than the current assessment, your client should file a tax appeal.

NJ Landfills Comvert Methane into Energy

From The Huffington Post:

The Kearny site is among 21 landfills in New Jersey where methane gas produced by decomposing garbage is used as fuel to generate electricity, according to the state Board of Public Utilities.

One of New Jersey's leading environmentalists envisions the state's landfills someday making more use of the sites by installing wind and solar power to supplement methane.

"We see landfills as potential New Age energy plants because you can combine all three and create a steady source of power _ and not everybody wants a windmill in their backyard," said Jeff Tittel, executive director of the New Jersey chapter of the Sierra Club.(graphics from ncgreenpower.org)