Monday, May 31, 2010

LOCAL NEWS: Mass. house, condo sales soar in April

Spurred by low interest rates and a looming deadline for a federal tax credit, Massachusetts home buyers pushed single-family home sales up 45.8 percent in April, compared with the same month a year earlier, according to data released yesterday.

Condominium buyers also moved off the sidelines of the housing market in growing numbers, driving the number of sales up 55.7 percent in April to 1,831, from 1,176 during the same time last year, according to the Warren Group, a Boston company that tracks real estate data.

As sales surged, median prices also increased, but more modestly.

Median prices for single-family homes in April rose 7.1 percent to $285,000, while condo prices went up 5.5 percent to $253,000, compared with the same month in 2009, the Warren Group said.

But despite the strong data, many questions remain about what’s ahead for the housing market.

Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies, likened the market to a sick patient being taken off life support, thanks to a strong dose of federal intervention — the situation has improved, he said, but there is still healing to be done. “It doesn’t look like the patient is going to run a marathon,’’ Retsinas said.

Barry Bluestone, dean of the School of Public Policy and Urban Affairs at Northeastern University, said many home buyers fast-tracked their purchases this spring to qualify for the federal tax credit.

“It will be interesting to see what happens in May,’’ he said, with government assistance coming to an end.

To qualify for the credit, buyers had to have a binding contract before May 1 and close on the home by June 30. It provides $8,000 for first-time homebuyers and $6,500 for new purchases by eligible longtime homeowners.

The real estate market’s recovery could also be stunted by a growing number of foreclosures, potentially flooding the market with low-cost homes and eroding consumer confidence.

But there are some indicators that might encourage home sales in the Boston area.

For instance, the state’s unemployment rate is slowly falling, and mortgage interest rates remain low. In addition, housing inventory for single-family homes has increased for two consecutive months, providing more choices for prospective buyers, according to data released yesterday by the Massachusetts Association of Realtors.

The S&P/Case-Shiller Home Price Indices also released data yesterday, reporting that 13 of 20 metropolitan areas nationwide showed price declines in March, compared with February.

Boston-area values remained flat during that period, although they were up 3.8 percent compared with the same time last year.

And David Blitzer, chairman of the Index Committee at Standard & Poor’s, said that despite improvements in home prices from last year, new data and the expiration of the tax credit point to an overall market weakening, at least in the short term.

“We don’t expect to see a boost in relative demand,’’ Blitzer said.

Jenifer B. McKim Boston Globe May 26, 2010

Sunday, May 30, 2010

OUTDOOR PESTS: Warm, Wet Spring Sets the Stage for an Early Mosquito Season

Many regions of the country are experiencing an unusually warm and wet spring—a weather pattern that is likely to foster an earlier and more severe mosquito season, the National Pest Management Association warns.

“The heavier-than-normal precipitation that many areas of the country received this spring have left areas of standing water, which are perfect mosquito breeding grounds,” says Missy Henriksen, vice president of public affairs for the NPMA. “This is cause for concern, as mosquitoes are not simply a nuisance pest but can spread dangerous diseases, notably West Nile virus, to humans.”

Symptoms of WNV infection include headache, fever, rash, muscle ache, and gastrointestinal symptoms. WNV infection can lead to encephalitis and meningitis, but as many as 80% of infected humans show no symptoms at all.

To reduce mosquitoes in your yard try these tips:

Eliminate sources of stagnant water including birdbaths, kiddie pools, swimming pool covers, barrels, and other objects that collect water.
Add a fountain or drip system to birdbaths and ponds on your property to keep water fresh.
Keep windows and doors properly screened.
Be alert when outdoors during dawn and dusk hours, when mosquito activity peaks.
Avoid wearing loose-fitting clothing, open-toe shoes, and sweet-smelling perfumes or colognes when outdoors.
Wear mosquito repellant with DEET when outdoors.

Saturday, May 29, 2010

INSURANCE: Homeowners Insurance: Are You Over- or Underinsured?

Trying to get just the right amount of homeowners insurance for your house and possessions may leave you feeling a bit like Goldilocks searching for a chair, a bed, and porridge that are just right. If you underinsure your home and suffer a devastating loss—flood, fire, theft—then you risk not being able to return to the lifestyle you’ve worked hard to achieve. Yet if you overinsure, you’re throwing money away every year on unnecessarily high premiums.

What you need is coverage that’s just right. Here’s how to get it, and it shouldn’t take more than 4 or 5 hours of your time spent reviewing your homeowners insurance policy, talking to your agent, and doing a little research.
Look before you leap into a policy
All homeowners insurance isn’t created equal. That’s why it pays to review your coverage every year to ensure your policy meets your evolving needs. Begin by understanding the types of coverage available.

Actual cash value coverage reimburses you for the value of your home based on its current condition, explains Marjorie Young, senior vice president at E.G. Bowman Co., a New York City insurance brokerage. If your home was built 10 years ago, you’d receive only the depreciated value of decade-old windows, cabinets, appliances, and so on.

Most insurers recommend the more comprehensive replacement cost coverage. With it, says Young, you’ll be reimbursed for the amount it will cost to rebuild your home like new with the same kind and quality of materials. Depreciation doesn’t factor into the settlement equation.

To get the full benefit of replacement coverage, you need to purchase enough insurance to cover the total cost to rebuild your home, excluding the value of the land. Many people make the mistake of insuring at the market value, says June Walbert of USAA Financial Planning Services in San Antonio. But the amount you could sell your home for today isn’t necessarily the same as how much it would cost to rebuild.

Construction costs play big role
Look to current construction costs in your local area for guidance. If you’ve purchased a newly constructed home in the past year, you already have the answer. The same is true if you’ve refinanced within the past year. You almost certainly paid for an appraisal during that process that likely includes three valuations: replacement cost, market value, and actual cash value.

If you’re determining replacement cost without those head-starts, Walbert recommends calling several local homebuilders and asking the average square-foot construction cost in your area. If the going rate is $175, and your home is 2,000 square feet, you’d purchase $350,000 in coverage. For just a few bucks you can also order a valuation report online at a website like AccuCoverage ($7.95) or Home Smart Reports ($6.95).

Remember that any time you spend at least 5% of your home’s value on a remodeling project—or $5,000, whichever is less—you should contact your insurer to increase your coverage. Young recently did that after she revamped her own kitchen. An additional $40,000 in homeowners coverage raised her annual premium by about $40.

Don’t neglect valuables, liability
Be sure you’re also insured at the right value for your home’s contents and for personal liability. Most insurance polices provide only actual cash value on contents, says Lisa Lobo, vice president of underwriting operations at The Hartford in Southington, Conn. To get replacement cost coverage, you’ll need to purchase an endorsement. If you have valuables not covered by your policy—silverware, jewelry, furs—purchase endorsements for those, too.

Many people pay no attention to the liability coverage limits in their policies, but Walbert says that’s a mistake. If you have a dinner party and a guest falls down your front steps, you don’t want to be underinsured. In recent years the average liability claim for bodily injury and property damage has been $15,854. Walbert recently increased a homeowner’s liability coverage by several hundred thousand dollars for just $6 more per year.

If you’re concerned about increasing your premiums by adding endorsement after endorsement, ask whether you can save money by splitting your deductible, paying a higher amount for certain claims and a lower amount for others. Bundled endorsements can save you a few bucks, but only if you require them all. Take a pass on unneeded riders. Why spend $8 to $12 a year for $500 worth of refrigerated property coverage when you eat takeout every night

By G.M. Fillisko for August 2009

Friday, May 28, 2010

HOME MAINTENANCE: Your Guide to Outdoor Maintenance

If you live in the Northeast, prevent problems and preserve the value of your property with proactive outdoor maintenance.

Maintaining a house in the northeastern quadrant of the country, from New England through the mid-Atlantic, means protecting it from a triple whammy: hot summers, frigid winters, and lots of precipitation throughout the year. You’ll need to stay on top of routine outdoor maintenance to protect your home and landscape, keep everything looking great, and ensure your property retains its value for decades to come.

Clean the gutters
When leaves and other debris accumulate in the gutters, precipitation can back up and spill over the sides of the gutters, damaging siding and contributing to basement flooding. Also, water can back up into the eaves and under shingles, where it leads to rot, infestations of wood-destroying insects, and interior paint damage.

Be wary of various gutter screens and covers marketed to keep leaves out—some aren’t as efective as advertised and may actually worsen problems, according to Victor Popp, a home inspector in Hingham, Mass. The most reliable method is to keep your gutters clean by reaching gloved hands into them and scooping out the muck—or hiring a gutter company to do the job for $100 to $200. Clean at least once each fall, plus once in the spring.

Service your air conditioning system
If you have central air conditioning, bring in an HVAC contractor each spring to tune it up ($100 to $150). The technician should change filters, lubricate moving parts, check refrigerant levels, clean the condenser, and optimize settings—prolonging the system’s life and maximizing its efficiency.

Ask him whether your equipment has filters that you should replace in between services, a quick and easy process you’ll likely need to do every two or three months when the system is operating.

Protect outdoor spigots from freezing
In spring, be prepared for sudden freezes by removing the garden hose from your outdoor spigot until warm weather is firmly established. In the fall, unless you have a frost-proof spigot, close any shut-off valves that feed outdoor spigots, and then open the spigots up and leave them open.

These steps prevent any water remaining in the pipes from freezing and cracking the faucet or pipe, causing an expensive plumbing repair—and possibly a flood, too.

Seal and paint outdoor structures
Treat unpainted exterior wood—whether an arbor, a gazebo, or a picket fence—with a wood preservative sealer or stain. Apply sealer or stain at least every other year. Choose a sealer that provides three types of protection: water repellency, mildew resistance, and ultraviolet light (UV)-blocking ability. Always clean and sand surfaces thoroughly before sealing or staining.

Recoat painted surfaces every three to five years with a top-quality exterior paint. The additional cost of premium paint will be offset by reduced maintenance and frequency of recoating.

Seal your asphalt driveway
Blacktop needs to be protected from damage from sun, rain, and the chemicals that leak from vehicles. You can apply a coal-tar-based sealant yourself. You’ll need to clean the surface with a

Thursday, May 27, 2010

JUST FOR FUN: A Bus Driver's Red Letter Day

In Denmark, Mukhtar the bus driver had a birthday. He worked that day. His regular passengers had an idea:

Monday, May 24, 2010

BOOK REVIEW: Learn the 'new rules' of real estate

Book Review
Title: "Buy, Close, Move In! How to Navigate the New World of Real Estate -- Safely and Profitably -- and End Up with the Home of your Dreams"
Author: Ilyce Glink
Publisher: Harper, 2010; 304 pages; $14.99

All of a sudden, real estate has gone from the "milquetoastiest" of finance topics to the most controversial, or nearly so. Every other person you meet has an opinion about what happened, how we got here, whose fault it is and what the future holds. This transformation, this sea change, has spawned a new sub-genre of real estate books: the "new rules" book.

Titles about new rules are, frankly, no longer new. But most treat the subject in a fairly academic way, which is no longer useful. To correct this problem, real estate journalist Ilyce Glink has authored a very consumer-friendly entry to the "new rules" genre: "Buy, Close, Move In! How to Navigate the New World of Real Estate -- Safely and Profitably -- and End Up with the Home of your Dreams."

Glink, a well-known journalist specializing in real estate, credit cards and personal finance matters, introduces the book with a breakdown of the digital transformation of real estate over the last 20 years or so -- from the digitization of old-school multiple listing service printed books, which brought listing information to the people, to Craigslist.

After covering the digital divide, Glink transitions into the credit crisis, the housing crisis and mortgage fraud, providing a summation of events that nicely lays the framework for lay readers to understand the New World of Real Estate she sets forth in the rest of the book.

Glink closes her intro with a key point, the third element of this new real estate geography in which we all live: the evolution of buyers into savvy, 2.0-trained, research-focused house hunters who crave information and know how to get it online.

After the first chapter, "Ten Things That Have Changed in Real Estate, Ten Things That Haven't," which focuses on some high-level general observations about how the industry changes and constants -- Glink moves into practical need-to-knows and actionable advisories for real estate consumers, driven by the changes in the industry.

In Chapter 2, "What Buyers Need to Know Now," Glink gives a brief but power-packed compare-and-contrast overview of the old standard rules of residential real estate versus the new rules for buying a home.

Sunday, May 23, 2010


FINANCE & MORTGAGE: Home loss surging in Mass.

Rate of foreclosure jumps as lenders get used to process

More Massachusetts homeowners received foreclosure notices or lost their homes in April than they did during the same month last year, more evidence that the state’s foreclosure crisis is not near its end.

The number of homeowners who lost their properties to foreclosure in April swelled to 1,372, almost 80 percent more than during the same month last year, according to data released yesterday by Warren Group, a Boston company that tracks local real estate.

The number of foreclosure petitions — the first step in the process of a lender taking back a property — jumped to 2,431 in April, a 20.8 percent increase over April 2009, Warren Group said.

Indeed, the first four months of 2010 found more homeowners in deep financial trouble than last year. Petitions through April increased to 9,008, 4.2 percent higher than in 2009. Foreclosure deeds, filed when a homeowner officially loses title to a property, were up 36.6 percent during the first four months of the year compared with the same period last year, according to Warren Group.

Saturday, May 22, 2010

MORTGAGE RATES: Discerning April jobs report’s effect on mortgage rates

Job growth in April was better than expected, yet the unemployment rate went up. The April job report's effect on mortgage rates will be hard to assess because yesterday's market turmoil distorts everything.

Nonfarm payrolls grew by 290,000, which is better than the consensus of 187,000 from economists surveyed by According to the Labor Department, 44,000 manufacturing jobs were added in April. Mining added 7,000 jobs, and construction employment grew by 14,000. The biggest gain came from temporary Census jobs; those added 66,000.

The average workweek grew by six minutes, and the average hourly wage rose by one red cent, to $22.47. Kind of interesting to see that the average hourly wage rose at an annual rate of about 0.16 percent in the first quarter of the year, while productivity rose 3.6 percent over the same period. Workers are producing more, yet earning the same. Where's the extra money going?

The unemployment rate rose to 9.9 percent from 9.7 percent. The economists polled by predicted that the unemployment rate would remain unchanged. The Labor Department explains that the labor force grew by 805,000 in April. That number counts all the people who have jobs or are looking for jobs, and it likely includes formerly "discouraged workers" who had suspended their job hunts and have now resumed the search.

On balance, this employment report shows that things are getting better and job-hunters are a bit more optimistic. That combination tends to point to higher rates on home loans. But job growth of 290,000 is rather anemic, especially when considering that 66,000 of that consists of temporary jobs with the Census. That would point toward steady mortgage rates.

The debt crisis in the euro zone, and yesterday's bizarre day on the stock markets, will probably have a greater effect than the employment report on today's mortgage rates.

By Holden Lewis · May 7, 2010

Friday, May 21, 2010

TAX CREDIT: Home construction gain likely to fade with tax credit

Despite record-low rates, sales could drop this summer

WASHINGTON — Home construction rebounded last month to the highest level in 18 months as buyers capitalized on tax incentives. But now that those tax credits have expired, builders are scaling back.

That means the homebuilding industry isn’t likely to contribute as much to the economic recovery. Analysts expect sales to fall this summer as the effect of the tax credits fades.

Mortgage rates have remained near record-low levels. But high unemployment and tight lending standards, combined with the end of the tax credits, will keep a lid on home construction, analysts say.

“Potential home buyers are a little rattled by the state of the economy and what has happened in housing over the past two to three years,’’ said Wells Fargo economist Tim Quinlan.

The rate of construction of single-family homes and apartment buildings rose 5.8 percent last month to a seasonally adjusted annual rate of 672,000, the Commerce Department said yesterday.

That’s the highest level since October 2008. It was driven by a 10 percent increase in single-family homes. The rate of homebuilding remains 70 percent below the decade’s peak in January 2006. Still, it’s climbed more than 40 percent above the April 2009 bottom.

Adding to evidence that the pace of construction will slow was the latest reading on applications for new building permits, a gauge of future activity: Applications sank 11.5 percent in April to an annual rate of 606,000. That’s the lowest point since October 2009.

A separate report yesterday showed wholesale inflation remains tame. Prices fell 0.1 percent in April. Core inflation, which excludes volatile energy and food prices, rose 0.2 percent, the Labor Department said. But over the past year, core prices have risen just 1 percent.

The absence of inflation pressures means the Federal Reserve can keep interest rates at record lows to bolster the economic recovery. Some Fed officials think the bigger risk now is deflation — a destabilizing period of falling prices and wages. The United States hasn’t suffered from deflation since the Great Depression. Still, most economists think the risk of deflation remains remote.

The results of the Commerce report show that builders ramped up to meet demand from buyers seeking to take advantage of the two tax credits: One was up to $8,000 for new buyers. The other was $6,500 for current owners who buy and move into another home.

By Alan Zibel and Martin Crutsinger Associated Press May 19, 2010

Thursday, May 20, 2010

LOCAL REAL ESTATE NEWS: City will develop ‘Innovation District’

Boston Mayor Thomas M. Menino told a business audience yesterday that the city intends to develop 1,000 acres on the South Boston Waterfront and the Marine Industrial Park into an “Innovation District,’’ and that the venture capital firm Spencer Trask & Co. will launch a start-up competition in July that will award $25,000 to a business that locates there.

Menino revealed the award during his keynote speech at the Globe’s annual Globe 100 breakfast at the New England XPO for Business conference in the Boston Convention & Exhibition Center.

In addition, Menino said that Spencer Trask would make “a standing $25,000 award’’ to an Innovation District business to help it grow.

The mayor, who was part of a panel discussion on the future of Boston business, also said that he will lead university and hospital presidents and their real estate staffs on a tour of the South Boston Innovation District this summer. During the tour, Menino said he will highlight two specific parcels in the Marine Industrial Park for which requests for proposals will be issued “real soon.’’

D.C. Denison Boston Globe May 19, 2010

Wednesday, May 19, 2010

LOCAL BOSTON NEWS: Boston church plans user-friendly revamp of famed pool, plaza

The Christian Science Church is launching a major redevelopment of its Back Bay headquarters, with plans to remake one of Boston’s most famous landmarks: the 686-foot-long reflecting pool that anchors the church’s sprawling concrete plaza at Massachusetts and Huntington avenues.

Christian Science PlazaThe church plans to build a more modern, shallower version of an infinity pool. But most significant will be the addition of a 20-foot wide path across the pool, built so that, from a distance, people crossing it will look as if they are walking on water.

“When we started this process, people said: ‘It’s so beautiful. Why would you want to change anything?’ ’’ said Barbara Burley, the church’s senior manager for real estate planning and operations. “Times are different than they were 40 years ago. It really matters to have more trees and more places to sit.’’

Another change the church will encourage: ice skating in winter on one section of the divided pool.

The new pool is part of a massive redevelopment the Christian Science leadership has been working on for more than a year. Its current plan is to build three buildings, with one taller than 500 feet. Proceeds from the lease or sale of the buildings would be used to finance the estimated $40 million redesign of the plaza and pool.

There is no firm timetable yet for beginning construction, but the church expects to release more details this summer after it concludes working with a citizens group in a process organized by City Hall.

Beyond being a signature work of modernism, the plaza and reflecting pool have become part of the public realm of Boston. So any changes the church proposes will probably be subject to intense scrutiny and undergo extensive review by city agencies.

The new pool would be a few feet shorter and use much less water than the current 38-year-old basin, which is expensive to maintain and leaking into the underground garage below it. It currently holds 1 million gallons of water, and goes through three times that much during the course of the year. Church officials said it costs $2 million a year to maintain the plaza.

The new pool would be 12 inches deep, compared with the existing 28-inch pool. Around plans call for adding benches, trees, and a lawn to make the plaza more welcoming. While community members involved in the planning process over the past 15 months have not raised major objections to the changes, some professionals caution the church to tread carefully.

Tim Love, principal of the architectural and design firm Utile Inc., said adding the path across the pool and making it shallower than the current 28 inches could rob it of its surreal qualities.

“The pool is successful now because you can’t see the bottom, and it acts as a mirror,’’ Love said. “It might be the right thing to do, but it would have to be done carefully.’’

And the church may soon face an even more involved process to get the changes to the pool approved.

The Boston Landmarks Commission is scheduled to issue a preliminary report June 22 on the plaza, in response to a petition signed by dozens of architects and others in January 2007 asking to have the site designated as a landmark. If granted, the landmark status would force the church to get the commission’s input and approval for any final design, said Ellen Lipsey, the commission’s executive director.

Tuesday, May 18, 2010

From energy tax credits to vacation home deductions, check out these tax tips for homeowners looking ahead to 2010 returns.

Tax planning for homeowners should start well in advance of the April 15 filing deadline each year. If you delay until the last minute, it might be too late to maximize tax credits and tax deductions. These tax tips for homeowners looking ahead to 2010 returns explain some of the things you can do now that’ll pay off later on your 1040.

Take a day to formulate a tax plan for the year. Depending on your circumstances, you might want to take advantage of energy tax credits or max out your vacation home deductions. The “What’s New in 2010” section of IRS Publication 17 offers a sneak peek at tax changes that might affect homeowners.

Claim remaining energy tax credits
It’s time to get cracking if you didn’t exhaust your full allotment of residential energy tax credits during 2009. Although tax credits for big projects like residential wind turbines and solar energy systems have no upper limit and are good through 2016, energy tax credits capped at $1,500 expire at the end of 2010. Eligible capped projects include new windows and doors, insulation, roofing, water heaters, HVAC, and biomass stoves.

Here’s how it works with capped federal credits: You can earn energy tax credits worth 30% of the cost of qualifying improvements, but the total tax credits can’t exceed $1,500 combined for 2009 and 2010. So if you only took, say, $700 worth of capped energy credits on your 2009 tax return, you’re still due for another $800 in credits in 2010. Some projects include the cost of installation—a furnace, for example—while others, such as insulation, are limited to the cost of materials.

Max out tax benefits of a vacation home
Use a vacation home wisely, and it’ll provide a break from taxes as well as the hustle and bustle of everyday life. The rules on tax deductions for vacation homes can get a bit tricky, but understanding and adhering to them can yield many happy tax returns.

If your vacation home is truly a vacation home meant for your personal enjoyment, as opposed to a rental-only income property, you can usually deduct mortgage interest and real estate taxes, just as you would on your main home. You can even rent out the home for up to 14 days during the year without getting taxed on the rental income. Not bad.

Now, let’s say you want to rent out your vacation home for more than 14 days in 2010, but also use it yourself from time to time. To maximize the tax benefits, you need to keep tabs on how many days you use your vacation home. By restricting your annual personal use to fewer than 15 days (or 10% of total rental days, whichever is greater), you can treat your vacation home as a rental-only income property for tax purposes.

Why is that a big deal? In addition to mortgage interest and real estate taxes, rental-only income properties are eligible for a slew of other tax deductions for everything from utilities and condo fees to housecleaning and repairs. Deductions are limited once personal use exceeds 14 days (or 10% of total rental days), so get out your calendar now to strategically plot your vacations.

Take advantage of tax breaks for the military
In salute to members of the armed forces serving overseas who want to purchase a home, the

Monday, May 17, 2010

JUST FOR FUN: Why Television Is So Wrong

Television is a drug. from Beth Fulton on Vimeo.

MORTGAGE & FINANCE: Avoid Home Equity Loan and Refinancing Scams

Refinancing a mortgage to a lower interest rate can make sense for some homeowners. So too can taking out a home equity loan against the value you’ve built up, perhaps to finance a kitchen remodel or pay Junior’s college tuition. What doesn’t make sense is losing your home because you fall for home equity loan and refinancing scams such as loan flipping and equity stripping. Although scam artists can be very convincing, homeowners who know what to look out for are less likely to become victims.

Loan flipping
Loan flipping is a scam targeted at homeowners looking to get money back when they refinance a mortgage. This is often referred to as a cash-out refi. Scammers take advantage of this desire to tap the equity in a home to pay for things the homeowner couldn’t otherwise afford.

A cash-out refi in itself isn’t a scam. For some, it’s a smart way to borrow. What is a scam is when a lender, after receiving a few payments, comes back to you with an offer of another refinance, this time to fund a vacation or a new car. The easy money is difficult for some homeowners to turn down.

Many borrowers don’t realize how much they’re paying in fees to refinance. The U.S. Federal Reserve estimates the settlement costs on a typical refi to be 3% to 6% of the loan amount. Loan flippers often charge much more, plus they may quietly roll the settlement costs into the loan to disguise the total charges. Take a day or two to get quotes from several lenders and compare terms.

Loan flipping ultimately leaves you with more debt and more years that you’ll owe on that debt. When the equity finally dries up, you might not be able to afford your higher monthly payments and another refinancing will be impossible. You could be forced to sell your home.

Equity stripping
Equity stripping can occur in several ways, but at its heart is a scam artist who gains ownership of your home, borrows against it or sells it, pockets the proceeds, and disappears. You’re often left with a hefty mortgage balance and no place to live.

A telling sign of equity stripping is a lender that offers more loan than you can afford or that encourages you to pad your income on a loan application. Homeowners with low incomes but a good amount of equity built up are prime targets because they otherwise would have a hard time borrowing. According to the U.S. Federal Trade Commission, a lender that’s pushing a home loan with too-high monthly payments is likely counting of foreclosing on the property when you fall behind.

Sunday, May 16, 2010

INSURANCE: Renting Out Your Home? Get Landlord Insurance

Maybe you’re moving up to a bigger home and holding on to your former residence as a rental property. Or maybe you’ve tried to sell your home without success. Whatever the reason, if you’re thinking about renting out your home, you need to look into landlord insurance.

Homeowners insurance covers your house if it burns down, your possessions if there’s a break-in, and medical and legal bills if someone gets hurt on your property. Problem is, homeowners insurance might not offer protection if you decide to rent out your home. Landlord insurance does. Set aside half a day to research policies.
 Renting out your home raises risks
Homeowners insurance typically covers owner-occupied, single-family residences, says John W. Saunders, president of Slemp Brant Saunders, an independent insurance brokerage in Marion, Va. When your home doesn’t meet that definition because it’s being rented out regularly, it’s no longer covered.

Most homeowners policies will cover an occasional short-term rental if, say, you’re going away for a few weeks, says Dave Millar, a partner at Riley Insurance Agency in Brunswick, Me. “But if you have a summer home you’ve decided to use as an income property and are putting different people in there every week,” he explains, “that’s a lot higher risk for the insurance company.”

The risk is also higher for both you and your insurer when you rent out your home on a full-time basis. You have an increased responsibility for injuries on the property, whether to your tenants or your tenants’ guests, says Bob O’Brien, vice president of Noyes Hall & Allen Insurance in South Portland, Me.

Insurers also experience more claims on tenant-occupied properties because tenants typically don’t care for properties as well as owners would. Renters are less likely to either identify or report maintenance needs, says O’Brien, and may be unfamiliar with a home’s systems like the location of the water shut-off.

Look into landlord insurance
When you decide to become a landlord, inform your insurer and ask about a specific landlord

Thursday, May 13, 2010

JUST FOR FUN: The Food About You

Food about you - Annecy festival 2010 from Alexandre DUBOSC on Vimeo.

Alexandre Dubosc honors the Annecy International Animated Film Festival, on the occasion of its 50th anniversary, by baking it a completely ordinary chocolate cake using completely ordinary cooking methods

MORTGAGE & FINANCE: Development agency’s troubled loans swell

The Massachusetts Development Finance Agency — a quasi-public agency that lends money, makes grants, and develops government property to stimulate new investment — has seen a surge in troubled loans because of the weak economy.

MassDevelopment was forced to write off $2.3 million in loan losses in fiscal year 2009, the largest amount in seven years. And more than a half-dozen of its other loans are seriously delinquent. Taxpayers provide some, but not all, of the loan money.

Community development lenders “have been hit pretty hard over the past 18 months,’’ said Toby Rittner, president of the Council of Development Finance Agencies, an industry group based in Cleveland. The troubled loans reflect the difficulties faced by many lenders in the wake of the crumbling housing market and high unemployment.

Yet despite the increase in troubled loans, MassDevelopment officials said the losses so far have been less than feared, given the intensity of the economic downturn and the size of the agency’s $114 million loan portfolio. Moreover, MassDevelopment said it hasn’t been forced to cut back on new loans, which total about $40 million a year.

Like other local lenders, MassDevelopment has probably benefited from the fact that the state’s housing market and employment have been stronger than in some other parts of the country, such as California and Nevada.

“We are watchful, but not worried,’’ said Laura Canter, a MassDevelopment executive vice president.

The losses are hard to predict. Consider the case of Lawrence’s aging industrial district.

More than four years ago, Massachusetts economic development officials struck a deal to help brighten the area, lending $1.8 million to a partnership to convert two old mill buildings into a center to host foreign manufacturing companies.

Lawrence officials had strongly supported the 80,000-square-foot project, hosting a dinner for Irish and Canadian companies to tour the facility, dubbed the South Canal International Business Center. The partnership had lined up more than a dozen tenants, including a trade association representing Canadian wood products companies and Campbell Glass, a firm that specializes in replacing large stained-glass windows in churches in Northern Ireland.

But soon after opening in 2007, the South Canal Street project hit trouble, including the loss of tenants, infighting among partners, and late payments on the loan. After the partnership stopped paying the loan, MassDevelopment foreclosed and auctioned the property off in November.

Wednesday, May 12, 2010

REMODELING & TAXES: Is remodeling a kitchen tax deductible?

If a home improvement project is tax deductible, remodeling a kitchen could cut down on the amount of tax you need to pay. Although savings are always welcome, you need to be aware of the guidelines laid down by the IRS regarding this. Knowing these guidelines could save you a lot of problems later on.

Remodel and Repair
Repairs to a home are not tax deductible. This is firmly enshrined in US tax law. If you have to fix a broken floor, for example, you can’t claim for it. However, if fixing the floor is part of a larger plan for remodeling the kitchen, you probably can claim it as a tax deduction.

Remodeling the kitchen is classed as a home improvement as it adds value to the home itself as well as improving the living amenities of people living in the house. There are a number of different categories of home improvement that can claim tax deductions.

If it’s for medical reasons, such as giving disabled access to the kitchen, then under most circumstances this would qualify as a home improvement. If you need to undertake any repair projects in the kitchen, fold it into the remodeling work as it can help you claim everything as a tax deduction.

Because of the complexity of the regulations in place, it can be difficult to know exactly what qualifies as a tax deductible home improvement when you’re remodeling a kitchen. You need clarification before you start the project. If you’re using a contractor, talk to them as they might be able to advise you. Bear in mind, however, that contractors aren’t tax experts. Your accountant should also have the answers. Alternatively, talk to your local IRS office who will be able to offer definitive answers.

The IRS also produces brochures to offer advice to people who are remodeling a kitchen (or other parts of the house) and will gladly supply you with them. Always bear in mind, however, that remodeling needs to be a home improvement and not a home repair.

Tax Credits
Many types of home improvement, which can include kitchen remodeling in some circumstances, can qualify for tax credits. It’s important to understand the difference between a tax deduction and a tax credit. A tax deduction comes off of income so you pay less tax. A tax credit comes directly off the amount of tax owed so it can actually mean you pay less in tax than with a tax deduction. If you’re adding double pane windows or better heating and cooling equipment, these items qualify for tax credits.

Keeping Records
If you’re planning on claiming a tax deduction when remodelling a kitchen, make sure you keep all the receipts together with notes on what each one is for. This way, if the IRS questions you on the project, you’ll be able to produce complete documentation to back up your claim.

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Monday, May 10, 2010

JUST FOR FUN: Awesome Upside Down Guitar Playing

HOME MAINTENANCE: 6 Ways to Unclog a Tub Drain

Over time, every tub drain will most likely become clogged. Hair, grease and other debris will accumulate in the drain, gradually stopping the water from flowing. Ideally, you will make clearing the drain a regular part of your household maintenance but in reality, most people won’t do anything until there’s a problem. There are a number of chemical products on the market that claim to quickly unclog drains. Alternatively, you can call a plumber. However, there are also a number of ways you can unclog the drain yourself without resorting to chemicals or an expensive local contractor.

Tools and Materials
Kettle and hot water
Round plunger
Coat hanger or thin wire
Baking soda
Plumbing snake
Wet/Dry vacuum cleaner
Hot Water

Water that’s hot but just short of boiling (in other words, hotter than through the tub faucet) can clear drains that aren’t fully clogged. Allow a kettle to heat just shy of boiling and pour the contents directly down the tub drain. Allow it to stand for 15 minutes and follow up by using a round plunder on the tub drain.

Remove the Stopper
The stopper on the tub drain should pull out or screw out easily. Remove it and clean the underside where debris will have accumulated. With this out of the way, take a bent coat hanger or piece of thin, rigid wire and poke it down into the drain, pulling up hair and other items that usually make up some of the clog. Keep working until you’ve removed the material clogging the drain.

A plunger is the first tub drain clog remedy for most people and every home should have a round plunger that can be used on sinks and bathtubs. With the drain stopper removed, press it down around the tub drain to form a seal and plunge up and down several times. You can create a vacuum and make the plunger more effective by blocking off the tub overflow. Repeat if necessary. Where the clog isn’t too bad, heavy plunging will usually clear it.

In a pitcher, combine 1/3 cup vinegar with 1/3 cup baking soda. The mixture will immediately begin to fizz. Pour it down the tub drain as quickly as possibly to allow the mixture to react with the clog. Allow to stand for 10 minutes then flush with hot water. You'll be able to see if the treatment has cleared the clog successfully or not. Repeat as necessary to remove the clog completely.

If you have regular problems with the drains in your house, a plumbing snake can be a good investment. It’s a steel cable with a spring that can be extended down the drain of a sink, tub, or toilet and is around 15 to 25 feet long. You can buy one at most hardware stores. To clear the clog in the tub drain, feed the snake down the drain slowly. For plumbers, a snake is the clog-clearing tool of choice.

Take your wet/dry vacuum and set it to liquids. Remove the filter and any inside bag and cover the vacuum vent. Put the hose over the tub drain and switch on the vacuum. The vacuum cleaner will suck up the debris in the tub drain and isolate it in the cleaner receptacle.


Sunday, May 9, 2010

SELLING: Selling? Make a good impression, especially online.

If your home is currently for sale or you’re planning to put it on the market, you surely know times are considerably tougher than they were even a couple of years ago. If you can’t wait out the market, here are some tips to make the selling process go more smoothly.

PRICE THE PROPERTY ACCURATELY. REALLY. Markets and the prices houses fetch are very local, says Colette Casey-Brenner, sales manager at Coldwell Banker’s Arlington office. What’s true in one town could be different the next town over. “You really have to look at the location of the property and the type of the property,’’ she says. “When you’re looking at comparables, you have to see what’s sold in the past three months. Look at your competition and what’s under agreement.’’

Buyers are savvy, Casey-Brenner adds. Many have been looking for a while and are ready to write out a check when they see the property that offers the most value for what they want. Sellers have to be ready for that.

CAST THE WIDEST NET YOU CAN. You want to get the word out to as many buyers as possible, Casey-Brenner says. The Internet is obviously critical, since whoever ends up buying the property could be very local or searching from afar. Today, photos and video almost serve as a first showing, she adds, so it’s a good idea to consider staging and, of course, to de-clutter, just as you would for an in-person showing.

And what if your home isn’t in the best shape? Posting photos might help potential buyers make a long-term plan: They’re buying a house they can afford now, and perhaps can budget to update the kitchen in a few years. Or, if the house needs more substantial work, posting photos can save sellers the time involved in dealing with buyers who aren’t interested in putting in that much work, Casey-Brenner adds. (Not to mention that omitting photos might raise big red flags to searchers.)

DISCLOSE UNDESIRABLE FEATURES BEFORE THEY’RE REVEALED SOME OTHER WAY. Deferred maintenance is a deferred cost, particularly in a tight market, says Meller. “If

Friday, May 7, 2010

BUYING: 10 things to know if you're buying a home now

If you're buying a home right now, you have plenty of reasons to feel good: Interest rates are low, and housing prices around Boston, while not the mind-boggling bargains you might hope for, are overall considerably lower than they were at their peak in 2005. And while the $8,000 homebuyer tax credit expires Friday, there are lots of good deals to be had.

With the sales season under way, we canvassed local real-estate brokers and housing market specialists for tips and broader home-ownership wisdom

1. Get your financing in order
This bit of advice topped the lists of most of the brokers we talked to. Given tighter lending practices — and that it's a competitive buyers' market — would-be buyers need to have their ducks in a row so that they're ready when they see the right home. "The seller wants to know that if they do accept the offer, that barring catastrophic title issues or inspection issues, the deal is going to go through," said Gary Dwyer, broker-owner of Buyer Agents of Boston. Amy Meller, broker-owner of the Sudbury-based, recommends having a full pre-approval within the past 30 days. "Six months is no good anymore, because the rules keep changing," she says.

2. Understand your time horizon
As a shorter-term buyer, you might consider whether the place is a good investment, and if it's the kind of property that's going to be attractive for the next buyer. "What concerns you now is going to be a concern in a few years," Hillman says. A house near train tracks, for instance, is probably not what most people are looking for. But for someone who's planning to stay longer, a good school system or larger lot size might make up for the trains thundering past — especially, perhaps especially, if the buyer grew up near train tracks and got used to it.

3. Know the overall market conditions

Investigate what comparable properties have sold for over the past three to six months, Dwyer advises. If you're working with a buyer's agent, he or she should know what fair-market value is, not just the list price.
If you're not working with an agent, sites with pricing information such or could help.

4. Search and buy within your means
This bit of advice is always true, but if the housing crisis has taught us anything, it's that buying with the expectation that prices will continuously go up — and that if you can eke out the payments each month, you'll be in a good spot in the long run — isn't such a good idea. "Buyers can start looking too high and have a pie-in-the-sky idea of what they can afford," says Meller. Start looking at properties you can honestly afford, she advises. If you're very lucky, things could change: A parent could decide to help out, for instance. If you buy at the very top of your price range, Meller adds, "it's hard to make it all feel right in the end."

Wednesday, May 5, 2010

SELLING: Price it right to sell

Seller has window of opportunity to price it rightMany sellers are in denial about the current value of their home, particularly if they bought within the past five to six years. The market peaked in the summer of 2006, and home prices dropped significantly in most areas from 2007 through 2009.

Sellers often see no harm in asking a higher price -- one based on their needs or desires rather than what the market will bear. "We can always come down" is a common refrain. Letting your home sit on the market at a price that's too high can result in price reductions and a lower sale price, especially if the market is still declining.

Today's homebuyers are nervous, pragmatic and well educated about the market. Not only are buyers cost-conscious, fewer buyers can qualify for a mortgage than was the case in 2006 due to recent credit tightening. Many who bought in 2006 couldn't qualify for the same mortgage today. There is a smaller pool of motivated, financially qualified buyers than there was several years ago. These buyers have an edge in most markets.

Buyers want to know how long a listing has been on the market. If it has been on the market for some time, they wonder why it hasn't sold. Is there something wrong with it? A high price can signal that the seller isn't motivated. Buyers don't want to waste their time. Don't waste yours as a seller if you aren't serious about selling at current market price.

No one knows for sure when the housing market will turn around. Many economists think we've hit bottom or are close to it. Analysts also forecast that home prices will bump along the bottom for some time. They don't expect a quick rebound.

Tuesday, May 4, 2010

BOOK REVIEW: Stay stylish while 'greening' your home

Book Review
Title: "Restore. Recycle. Repurpose. Create a Beautiful Home"
Author: Randy Florke with Nancy J. Becker
Publisher: Hearst Books, 2010; 192 pages; $24.95

When I think of country-style decor, good things do not come to mind. I think of oak dinette sets with heart-shaped carved chairs and gingham chair pads. I think of walls stenciled with teddy bears voguing around needlepoint sayings. I think: raffia. Need I say more? I thought not.

One quick flip through "Restore. Recycle. Repurpose. Create a Beautiful Home" ("RRR"), by Country Living Magazine editor Randy Florke, with Nancy J. Becker, and I stand corrected. Pleasantly so.

Apparently, while many of us were sleeping, with urban chic dreams styled by Pottery Barn, Restoration Hardware and Design Within Reach (which my circle fondly refers to as "Design Not Quite Within Reach," but a girl can dream!) country-style got a little -- scratch that -- a lot more chic itself!

And it got greener, too. RRR is all about inspiring readers to undertake their own home beautification odyssey, inside and out, using -- excuse me -- reusing everything from chimney bricks to appliances, glassware to vintage board games.

In RRR, it's extremely hard to tell where the reuse for purposes of being environmentally responsible ends and reuse for the point of creating a somewhat shabby, certainly chic, vintage look and feel begins. In fact, I'd go so far as to say there's really no line -- this book personifies that Webbiest of decor terms: eco-chic.

This meticulously organized and photographed book starts off indicting the mega-, maxi-, extreme, school of design that seems to drive so many home improvement shows and decor shows, which have created a new genre of voyeurism devoted to watching people demo and throw out cabinets and finish materials (ostensibly winding up as fodder for the landfills).

Florke weaves together a justification for RRR, from timely environmental concerns, timelier concerns about spending and being frugal, and a fresh note of emphasis on enjoying the activity, the process of customizing your home with reused materials.

Following the introduction, Florke and Becker spend a couple of pages up front briefing readers on various green design and construction terms that will be used throughout the book. It's a quick but effective primer, glossary-style, with terms including off-gassing and carbon neutral: key concepts for green home-improvers.

The organizational scheme of the rest of the book mirrors the organizational scheme of the homes it promises to recreate. It opens up with entryways, focusing on creating a warm welcome to your home with rugs, reclaimed flooring, strategic storage and smart lighting - including some ways to use old school chandeliers with new-age, energy-efficient "swirl" light bulbs without the jarring visual disconnect.

It moves next to kitchens, the nouveau-farmhouse style of which it instructs readers on creating, impeccably, reusing and repurposing everything from appliances to countertops. (Old school farmhouse was all dark oak and teddy bears -- new school is white cabinets, plate racks and butcher block counters.)

RRR then covers living rooms, bedrooms and bathrooms before moving on to home offices, outdoors and then devotes a full chapter to some basic principles and tenets for living -- and remodeling -- green.

Advisory: There are cowboy boots, hats, vintage pork country-store adverts and even dusty rose florals in this book. If that's your flavor of flourish, you'll love it. But even if it's not, there's so much in this book that you'd stand to miss if you let the occasional "Western-y" item scare you off.

A good 80 percent of the images in this book could just as well be off the pages of any city-chic decor glossy -- see: Country Living mag.

And, actually, given the vast proportions of "reclaimed' and "vintage" items that are marked up to the high heavens by the most popular design brands, RRR -- designated on the cover as "a Country Living Book" could just as well be used by the urban-chic set as a guidebook for cost-effectively reclaiming and reusing materials to fabulous effect.

Tara-Nicholle Nelson Inman News April 27, 2010

Monday, May 3, 2010

LOCAL NEWS: Housing data mixed, but called good sign

February prices in area up from 2009, but down over Jan. 2010. The Boston area housing market is bouncing along the bottom. 
That’s what several housing specialists concluded after the release yesterday of new data that show home prices in February were up slightly compared with the same month in 2009 but down from more recent months.

Home prices in the Boston area were 1.8 percent above February 2009 levels but down 1 percent from January 2010. The year-over-year increase is driven by a four-month surge in home prices that began in April 2009. But prices then started retreating in August.

Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies, said the local housing market is stabilizing and overall signs are positive. “All the signs are the signs of recovery. It’s clearly not as good as it is going to be a year from now.’’

But Barry Bluestone, dean of the school of Public Policy and Urban Affairs at Northeastern University, said the housing market is being pushed in two different directions by opposing economic forces. Low interest rates, lower housing prices, a federal tax credit that expires this month, and buyers buoyed by an improving economy are combining to bolster the market. Pushing against that, however, is a growing pile of foreclosed homes that sit on the market, depressing prices. Foreclosure deeds jumped 51.4 percent to 1,389 in March from the prior month, according to the Warren Group.

“If we didn’t have so many of these foreclosures, one would expect housing prices would have stabilized a little more swiftly,’’ said Bluestone.

Nationwide, home prices are also nudging upward, according to the Case-Shiller index. In February, housing prices for the 20 major US cities in the index increased by 0.6 percent compared to a year ago, the first year-over-year increase since December 2006, according to S&P. The Case-Shiller index is viewed by many housing specialists as the most reliable barometer of housing prices because it measures repeat sales of the same home.

Karl E. Case, cofounder of the Case-Shiller indices and a retired Wellesley College economics professor, said Boston probably will see a recovery more quickly than many areas of the country because the state did not have the same problems with overbuilding as other parts of the country. Nationwide, housing values dropped about 30 percent since 2006, according to Case-Shiller data, while in the Boston area, home prices are down about 17 percent from the peak of the market here.

“I think it is at bottom,’’ Case said. “I think it will stay there for a while and, with luck, we have a chance for a good, solid recovery.’’

Boston was one of nine cities to show year-over-year housing increases, including San Francis co, San Diego, Washington, D.C., and Denver. Eleven cities showed price declines, including Las Vegas, Seattle, and Tampa.

Today, the Massachusetts Association of Realtors is expected to release data for March that will show continued pickups in both the number of houses sold and the prices paid for them.

Kevin Sears, a Springfield real estate broker and president of the state association, said prices and sales are increasing partly because 2009 numbers were very low.

Jenifer B. McKim Boston Globe April 28, 2010