Madison
Tax Credit vs. Interest Rates
Thursday, August 19th, 2010 | Home Buying, Market News | 3 Comments
We’d like to expand a little bit on some remarks we’ve previously made regarding the market’s response to today’s record low interest rates. What is puzzling to us is how tepid the response to today’s rates seems to be when compared to the frenzy of buying that the tax credit created. This is because, using the time value of money, one could easily argue that today’s rates are far more valuable than the tax credit was, and yet they have not created the buying buzz that the credit did.
Consider a $200,000, 30 year mortgage at today’s rate of 4.375%. The monthly payment would be $998.57 per month. The same monthly payment will only support a $178,000 mortgage at 5.375%, which is almost exactly what our rates were a year ago. That’s a $22,000 difference, almost three times the amount of the tax credit. Another way to think about it would be a simple payback on the same house. The payment on a $200,000 mortgage at 5.375% is $1,119.94, or $121.37 per month less than the $200,000 mortgage at 4.375%. In 66 months, or just over 5 years (the minimum recommended holding period for real estate), you’ve saved the amount of the $8000 credit in lower payments (54 months for the repeat buyer $6500 credit). Over the entire life of the mortgage, if you stay there for 30 years, you save $43,693 in interest.
These are big numbers, and one would think they would be compelling. Buyers were stumbling over each other to take advantage of the tax credit, so it’s clear that people still want to own real estate at today’s prices. Why aren’t they stumbling over each other again with an even bigger incentive staring them in the face? While predictions vary as to how long these low rates will last, no one disagrees that they can’t last forever. What will likely start to push them up is a pickup in demand, which means that buyers who wait will lose two advantages they currently have: record low rates, and fewer buyers to compete with, which means prices are still likely to stay flat. Once prices and rates start upward, you’ll have missed the best of it. We’ll continue to expand on this theme in subsequent posts, in an effort to help consumers put the perceived risks of today’s environment into perspective. It’s the least we can do in these extraordinary times. (Dave Stark, Stark Company, Realtors)
Coolest Doggie Door Ever!
Wednesday, August 4th, 2010 | Home Improvements, Homes For Sale | 2 Comments
NOT JUST A DOGGIE HOUSE !!!
This doggie house actually is the front for the coolest doggie door ever!
CHECK THIS OUT!
Access ramp goes from the doggie house in the backyard to the basement inside the house.
This set up allows your dog to go in & out to without you having to lift a finger.
Super cool way for your dog to enjoy a huge fenced backyard! 
East Madison ~ Ranch ~ 718 Acewood Blvd, Madison
Friday, July 30th, 2010 | Homes For Sale | No Comments
BACKYARD OASIS! Fabulous 4 bedroom, 2 bath ranch nestled on a large lot that boasts wonderful FENCED yard with grand patio & mature trees. Open concept kitchen with dinette, breakfast bar & pantry. Cheery living room w/bay window, generous Master Suite plus private full bath & walk-in closet, gleaming wood parquet floors in bedrooms, fresh paint, new A/C & updates galore! Lower level ready for you to finish. 2 1/2 car garage w/room for your toys & workshop. Kennedy school area!! Near shopping & bus line. 1600991
406 Maple Ave, Madison ~ Cape Cod ~ Atwood-Schenk Neighborhood
Thursday, July 1st, 2010 | Home Buying, Home Selling | No Comments
ATWOOD/SCHENK NEIGHBORHOOD! LOCATION & CHARM! Red Brick 3 bdrm, 1.5 bath Cape Cod boasts gleaming hardwood floors, charming archways, natural trim & an impressive wood burning fireplace. Main floor master bdrm & sitting room can be used as a main flr family room too! Wonderful fenced yard & gardens to be enjoyed from the deck or the artfully crafted fieldstone patio. EZ access to bike path, Lake Monona, Olbrich Gardens & downtown! 1598646 Jen Stauter & Matt Kornstedt 608-345-7943 or www.HomeTeam4u.net
ADVICE FOR BUYERS AND SELLERS
Thursday, July 1st, 2010 | Home Buying, Home Selling, Market News | No Comments
BUYERS:
SELLERS:
likely within your desired timeframe. The blizzard of new inventory that’s
recently come on the market should slow down as we move into summer.
After all the credit assisted closings have occurred at the end of June,
we’ll really know where we stand. Expect demand to look much like a year
ago in the second half of the year, but without the credit assisted boost
in the lower price ranges. If you’re not within 95% of a realistic selling
price, you’re probably still wasting your time.
(Stark Company, Realtors ~ Market Source Newsletter)
Making Sense of a Confusing Market
Thursday, June 24th, 2010 | Home Buying, Home Selling, Market News | 1 Comment
A question we get quite a bit lately is, “why should we trust housing? We’ve been burned before, how do we know we won’t be burned again.
This is a great question, and I feel like I could write a book about it. It’s a question we face ourselves every day, and one that is truly fundamental. Let me offer briefly here some of the main reasons we think housing remains an asset you should trust.
First of all, the most recent housing bust was at root a product of shoddy mortgage lending creating a huge excess demand that pushed home prices in some markets far above that which would be dictated by the fundamentals. In short, a bubble. Whenever this happens, regardless of the asset class, the forces of supply and demand will eventually bring prices back in line. This process can be painful, but it is necessary, and it always happens. Once the pain has been endured, however, market fundamentals dictate that prices will stabilize, and eventually begin to rise again along with economic growth.
How do we know they will rise? Well, in the most cosmic sense, nothing is ever 100% certain, and the shorter the time span we’re looking at, the less certain we can be. However, if we make certain basic assumptions about the future, we can usually safely assume that certain things will happen over time. Here are the basic assumptions that drive our belief that housing will be solid in the future. First, housing is a very basic essential. Everyone needs to live somewhere. So as long as there are people, there will be demand for housing. Second, populations continue to grow over time, so demand for housing grows over time. Third, despite cyclical ups and downs that can make things seem uncertain, the fact is that economies always grow over time. Why? Because that’s what we as humans do every day. We work, we produce, and we try to improve our situation over time. Collectively, we naturally try to get better every day. Yes, we have our mistakes and setbacks…the last three years have been the fallout from some very large mistakes. But the market corrects, we lick our wounds, and we go back to work to try again. And over long periods of time, we grow and get better. And as we grow, our ability and demand for everything, including housing, grows.
So, if you assume over long periods of time (I’m talking 10, 20 years and more) that the population will grow, the economy will grow, and that people will always need a place to live, then we think it’s pretty safe to assume that over those same long periods, the value of our housing stock will grow. But remember…real estate is a “get rich slow” investment, and in a healthy market, prices rise at very close to the rate of inflation. We can’t guarantee that if you buy real estate today, you can sell it for more next year. But 5 to 10 years from now? We think that’s a pretty safe bet. ( www.StarkHomes.com )
Protect Yourself and Your Home from Flooding
Tuesday, June 22nd, 2010 | Home Improvements, Market News | No Comments
Flooding is the most common natural disaster in the United States. In 2007, the latest year for which numbers are available, flooding occurred in all 50 states, according to the National Flood Insurance Program, a government-sponsored pool that provides flood insurance to homeowners. Furthermore, basic homeowners insurance policies don’t cover flooding: You generally need to purchase flood policies. The key to mitigating as much flood damage as possible is to take precautions, which in many cases you can accomplish in a few hours to a few days.
First, understand the threats
Storms with hard rains: Hurricanes, nor’easters, and other storms with driving rains can saturate the ground and cause bodies of water to rise, both of which can cause flooding. Blocked drainage systems can force water into roadways or homes.
Snow or ice melt: When frozen precipitation melts, it can cause a great deal of water to saturate the ground. Without proper drainage, the water can cause flooding.
Bodies of water: When rainfall, storms, saturated ground, or other factors affect bodies of water, they may surge over banks, beaches, or other barriers, flooding streets, homes, and virtually everything else in their paths.
Levees and dams: Man-made water barriers and controls can be strained by excessive rainfall or snow or ice melt.
Protect yourself
It’s not a good idea to bet the odds—20% to 25% of flood claims came from low- to moderate-risk areas in 2007. Check with your insurance agent to see what flood insurance will cost you. And check the Community Status Book to see if your community is already an NFIP partner. The NFIP offers flood insurance to homeowners and renters whose community participates in NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding, according to NFIP.
If you live in a high-risk area, it’s a good idea to have a “go-bag” ready in case you need to leave quickly. It should include a few changes of clothing for you and family members, insurance policy numbers, phone numbers of your agent, your insurance company’s main number, essential toiletries, and some money to get you through a few days. It’s also wise to have an evacuation route mapped out and to have a location to which you can go, such as a loved one’s home or hotel.
Always follow the direction of local and state authorities if ordered to evacuate. Remember: Your possessions and your home are small comfort if your family is injured or worse. As a preventative measure, if you believe water will begin to accumulate in your home, shut off power at the main electrical panel in your home, says Bill Begal, owner of Begal Enterprises, a Rockville, Md., disaster restoration company. But never stand in water to do so—if the area around the box is already flooded, leave it alone.
In addition, be sure to protect yourself against contact with water, which may be contaminated, even if it looks clear.
Protect your home
Before your rainy season or spring thaw begins, there are actions you can take to protect your home.
Fix leaks and cracks immediately. Leaky roofs and foundation cracks can let water into the home more readily and weaken the structure and provide a perfect habitat for mold. When you notice wet spots on the ceiling or cracks in the foundation, fix them immediately. Check to ensure that roofing shingles are secure.
In addition, home improvement expert and retired contractor John Wilder suggests that any roof replacements include a rubber roof underlayment, which is essentially a waterproof membrane that is installed under roofing shingles to protect the structure and interior of the home against moisture. That adds a few hundred dollars to most roofing jobs, but can extend the life of a roof, says Wilder.
For foundation cracks, he recommends mortar and masonry caulk or hydraulic cement, which expands and fills gaps completely and costs only a few dollars, instead of patching with mortar or cement, which may crack again. If water is a recurring problem, be sure to investigate other solutions.
Clear gutters and drains. When gutters and drainage systems are blocked by leaves or other debris, water can’t escape and may flood the home or yard. Check all gutters and drainage systems regularly for leaves, nests, and other obstructions. Also double-check storm drains on your street, as leaves and debris can block them, causing water to collect.
Invest in a battery-powered sump pump. Sump pumps let you pump water out of your home and can be an excellent defense against flooding—unless they’re powered by electricity and the power is out. Battery-powered sump pumps are a relatively inexpensive ($150-$400) solution.
Catalog possessions. Using a digital camcorder or camera, record as many of your possessions as possible. Although traditional video and photographs are adequate, they can be bulky to carry and may get damaged if left in a flooded home. Digital files can be stored on a small USB drive and kept in your go bag or on an online backup system. Inexpensive digital cameras start at about $100. Online backup systems like idrive.com, mozy.com, or boxstr.com offer free online backup up to certain levels of storage space, then charge for more.
Move expensive items to a safer location. If you have a second floor or an attic, you may want to move furniture, photographs, and artwork to a higher level. This will protect them in all but the most severe floods. Elevate furnaces and water pumps when they’re installed, if possible, by elevating them to a height of 12 inches above the highest known flood level for your area, suggests FEMA.
The Institute for Business and Home Safety also recommends ensuring that any fuel tanks are properly anchored to prevent them from floating, which may make them more likely to rupture and release fuel into flood water. Once the power sources of system units like furnaces and water heaters are disabled and the units cooled, you can also wrap them in waterproof tarps to mitigate water damage.
Prevent sewer backup. FEMA recommends that sewer or septic lines have check valves, which allow waste to only flow one way. This prevents sewage from backing up into the standing water in the home, contaminating it with raw sewage. Check valves are $10-$15 each and available at most home improvement stores, but you’ll likely need a plumber to install them, which can cost $100 or more per valve. They’re typically installed at a point in the pipe that’s easy to access for repair, and work with most plumbing systems.
Floods are a common challenge that many homeowners will face at one time or another. However, by keeping your home in good repair, moving valuables out of water’s way, and putting good practices in place, you can mitigate potential damage.
Gwen Moran has written about real estate and finance for a number of national publications and lives near the Jersey shore, although not in a high-risk flood zone.
By: Gwen Moran @ HouseLogic.com
Madison:#1 for “top cities with Job growth in 2009”
Wednesday, January 7th, 2009 | Market News | No Comments
