Archive for April, 2011
Study:Homeowners Recoup Solar Investment Upon Sale
INDUSTRY NEWS, TIPS FOR BUYERS, TIPS FOR SELLERS
Appraisers have struggled valuing homes with expensive solar arrays for loan and sale purposes. A recent study found homeowners who spend thousands on solar systems get all of the investment back and in some cases more than was spent! However, new home builders who incorporated solar weren’t as lucky.
The soon-to-be-released study was conducted by Lawerence Berkeley National Laboratory. Researchers analyzed sales of 2000 solar homes in California from 2000-2009. The resale values were compared to 70,000 comparable non-solar homes. Here are some of the findings:
- Solar systems added $5.50/watt on average
- Systems installed on existing homes saw their home values increase by $6/watt
- Solar systems cost about $5/watt to install
- New homes equipped with solar only returned $2.30-$2.60/watt
- The typical home solar system generates about 3.1 kilowatts and adds $17,000 in value
The study is welcome news to companies that sell solar systems. It is also expected that appraisers will embrace the study as supporting an increased value determination for homes equipped with solar. More importantly, homeowners are saving money and being “green”.
Builders surveyed about the significant discrepancy between returns on solar in new vs. existing homes state they view solar as one attribute among many green features added to the home. On the other hand, homeowners who invested thousands on a solar system, then sell, expect to recover their investment. Apparently, home buyers see the value of solar and are willing to pay more than a similar home without solar.
This will give solar installation companies something to crow about as they explain the pro’s and con’s of buying an expensive solar system. I suppose if enough homeowners opt to buy solar, we can postpone building more power generating facilities!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
NEARLY 30 YEARS LOCAL SALES EXPERIENCE
Home Ownership Remains The American Dream
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS
Despite the housing bust and the foreclosure mess, a recent study by Pew Research Center revealed 81% of Americans still believe homeownership is the best long-term investment. That figure is down only slightly from the 84% of respondents who strongly or somewhat agreed to the same question in 1991. 2142 adults were surveyed in early March 2011.
Here are some other interesting findings:
- 47% of the 1222 homeowners surveyed said their home is worth less now than before the recession began
- 31% said their value is the same
- 17% said their home is worth more
Overall, home prices nationwide are down about 31% from pre-recession levels according to the S&P/Case-Schiller Index. However, homeowners still have a more optimistic outlook on owning vs. renting. Only 31% of renters strongly agree homeownership is a good long-term investment compared to 41% of homeowners.
The sample group consisted of respondents as follows:
- 57% own a home
- 30% are renters
- 13% have other living arrangements such as living with family
Only 24% of renters say they rent by choice. The overwhelming majority would prefer to own if they could. An associated question regarding long term financial goals showed a high correlation between “being able to live comfortably in retirement” and “being a homeowner” instead of a renter. 80% of respondents rated both as extremely or very important.
The “wealth effect” created by the market bubble during which time home prices soared 137% changed consumer behavior. Spending and borrowing surged during the run-up in prices then quickly reverted back to more sane behavior once the bubble burst.
One final conclusion drawn from the study is the longer people have been homeowners, the more likely they believe homeownership is a good investment. They also correctly believe the bubble led to inflated home prices unaffordable to young Americans in their 20’s and 30’s.
The value drop in the Redding/Shasta County area is closer to 50%. The fact that the majority of local home buyers today are first-time buyers and investors confirm this studies findings-homeownership is still the American dream!
530-224-6767 0r 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER DOWNTOWN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
Realtors Publish New Shasta County Road Atlas
It was years in the making, but the 2011 Shasta County Road Atlas is hot off the press and available for purchase. Not only does it cover Shasta County, but portions of Trinity and Tehama Counties. The map book consists of more than 70 pages of glossy maps and indexes in a spiral binding. The maps sell for $20.
The Shasta Association of Realtors contracted with Vestra Resources here in Redding to produce the map book. Realtors proofed the map in an effort to make sure it was as accurate and up-to-date as possible. The last map book produced by Compass Maps was more than 6 years old. That company went out of business.
Realtors know a good map book is a handy tool even with GPS and navigation units becoming more and more popular. These map books are favorites with emergency service providers, delivery truck drivers, contractors or anyone who travels in the north state for sales or service.
You can purchase a copy at the Shasta Association of Realtors office at 840 Remor Street. Call 223-0410 for directions!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
CORNER OF COURT AND PLACER IN REDDING
Credit Score Damage From Foreclosure Alternatives Outlined
HOME LOANS, SHORT SALES, TIPS FOR SELLERS
FICO released an analysis of credit score damage caused by short sale, deed in lieu of foreclosure and foreclosure. The bottom line is all three alternatives result in no significant difference in credit score impact. However, the better your credit score was before the delinquencies, the longer it will take for your credit score to fully recover.
The study found:
- The negative impact on one’s credit score depends on the starting score
- Regardless of the action taken, all three strategies result in about the same credit ding
- Declaring bankruptcy has the largest negative impact on anyone’s credit score
- Expect to wait 7-10 years for your credit score to fully recover from preforeclosure levels
- Short sales completed with a deficiency to the lender will result in 30-35 additional point drop compared to a short sale where there is no deficiency
Variables that determine how large of a drop one can expect include whether the borrower:
- was 30 days or 90 days late on payments
- Had a higher or lower credit score before foreclosure avoidance startegy implemented
- whether there was or was not a deficiency loss on a short sale
- whether foreclosure or bankruptcy events occurred
FICO does not divulge details about the formula used to generate credit scores. The actual credit score impact depends on many other factors so it is possible for more or less damage depending on individual credit profiles.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
Redding Real Estate Market Update Q1
SHASTA COUNTY, SHORT SALES, TIPS FOR BUYERS, TIPS FOR SELLERS
The first quarter of 2011 is in the books! The Redding residential home market has been very stable thus far in 2011. 1242 homes were available for sale in early January. Today, the number of active listings stands at 1260 today compared to 1424 a year ago . Spring usually brings a spike in the number of homes listed for sale.
Pending home sales are up considerably from the beginning of the year. 494 homes are in escrow compared to 344 in early January on par with sales levels for the same date in 2010. Of the nearly 500 homes in pending escrows, nearly 200 are bank owned (REO’s) and 136 short sales. That works out to precisely 2/3rd’s of homes in escrow being distress sales - about 10% higher than a year ago.
Homes priced under $250,000 account for more than 80% of pending sales. 453 homes have closed escrow year-to-date, about 10% ahead of last year’s pace. The number of REO listings is up 77% from one year ago. Short sale listings are down nearly 10% over the same time period.
Investors and first-time home buyers make up the majority of purchasers in today’s real estate market.First-time buyers benefit from low interest rates and the fact housing affordability is way up in this part of California. However, buyers must have great credit, documentable income and, as one local lender recently joked, be willing to “bring their entire filing cabinet” to me so Ican prove your ability to repay the loan. A significant number of investor buyers bring all cash to the closing table avoiding the headaches and hurdles created by overzealous underwriters wishing to cover their hind end!
One last thought, some banks are working hard to get borrower’s loans approved, others are working hard to find an excuse to deny them a home loan. Ask your Realtor for lender referrals to avoid losing time and money working with the wrong lender.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESIONALS
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE
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