Green Real Estate in Idaho

All evidence to the contrary, we are fast approaching “summer” which will bring with it some higher temperatures, at least we hope it will. While Boise and the Treasure Valley are not unbearable, it isn’t uncommon to see sustained summer temps in the high 80’s/mid 90’s. By my recollection we usually have a week in late July or early August where we regularly break 100 degrees as well. Thankfully, we’re situated in a high desert area, so even when it’s hot it’s still a dry heat. This is much more manageable in my humble opinion, humidity is bad, bad, bad.

Of course, even a dry heat needs to be regulated, especially to keep your home comfortable for yourself, your family, and any friends who may be stopping by. There are quite a few ways that you can improve your ability to cool your home in the heat of the summer. Many of these make great weekend projects if you are a do-it-yourself type. If getting your hands dirty isn’t your cup of tea, any handyman can make short work of these without breaking the bank.

Without further ado, let’s tear into the details so that you can get your home ready for summer!

* Think WHITE

– White paint, blinds, roofing tiles, etc. reflect heat away from your home. By adjusting your blinds in east-facing rooms in the morning and west-facing rooms in the afternoon you will help your home’s A/C function more efficiently.

– If you’re getting a new roof, consider white shingles. They look a little strange (most seem to be black/brown) but it will likely make a very noticeable difference in the indoor temps. Be sure to check with your HOA depending on where you live to ensure you’re not getting yourself into trouble down the road.

– Not a white item, but along with roofing, check your attic spaces for suitable insulation. Moving from 3″ to 12″ of attic insulation could cut cooling costs by up to 10%

* Move AIR

– Stagnant hot air is much less tolerable than moving hot air. While most designers seem to hate ceiling fans, they can be a great way to move air and make a room feel 5 to 7 degrees cooler. A power estimate I saw online puts the most power hungry fan, running 12 hours a day, at $10 or less per month for electricity.

– Can’t stand ceiling fans, consider a portable fan (available at any big-box or hardware store) that you can place strategically and remove when no longer needed.

– Summer mode for your ceiling fan should be pushing air downward.

* Don’t Generate HEAT

– Face it, it’s easier to maintain a pleasant indoor temp if you’re not generating an abundance of heat in the first place. Anymore we have so many gadgets and appliances plugged in that generate radiant heat constantly that it makes a serious impact on the temperature of your home, even when off.

– Keep appliances, lamps, or other “hot” items away from your thermostat. These items will convince the HVAC system that it needs to continue cooling due to the inflated temperature near the thermostat and increase wear on the system.

– Keep those lights off, where possible switch to compact fluorescent bulbs as they generate the same amount of light without nearly the heat and consume less energy.

– Try to avoid generating heat in the first place. The biggest culprits are likely going to be your oven and your dryer. Operating these appliances in the mid afternoon, when it’s already hot as the sun in your living room will make it that much harder for your A/C to maintain a comfortable temperature. Where possible, try to do the bulk of your drying in the morning when it’s still cool. Avoiding the oven in the afternoon can be tough, consider warming leftovers in the microwave or focus on salads, sandwiches and anything that won’t require major cooking if it’s really hot. Who wants a hot meal when it’s 100 degrees anyway?

* Landscape, Landscape, Landscape

– Landscaping around your A/C unit to provide shade (without blocking airflow) will help it operate more efficiently.

– Pergolas and trees that shad east-facing windows in the morning and west-facing windows in the afternoon will help to keep the heat outside in the first place. Face it, you’re going to plant things in the yard anyway… you might as well place them so that you get the maximum benefit for your $$.

Depending on how many projects you tackle, you should be able to make at least a small dent in your utility bills and make your home that much more comfortable at the same time. Seriously, there are better things for you to do with your money than sending it to the power company. An ounce of prevention is worth a pound of cure!

While you might not know that we’re already deep into spring time here in the Treasure Valley based on the weather, the calender doesn’t lie and neither does the bump we’re seeing in the market. Historically, the Treasure Valley real estate market is very cyclical with slower times in the late fall and winter months and a vigorous revitalization in the spring and summer which peaks in late July.

This year is no different, in fact early spring sales got a terrific shot in the arm with home buyers seeing the expiration of their tax credit incentives drawing to a close. The vast majority of home buyers taking advantage of this opportunity were focused on the $110,000 to $180,000 price points and they came out in droves before the end of April (2010) at which time they had to have an executed contract on their property of choice to qualify.

Some agents and analysts lament this activity and appear to anticipate a dramatic drop in activity post tax credit. While this opportunity for buyers did accelerate many first time buyer time lines I do not anticipate closings to plummet. Buyers late to the party will be closing throughout May and June. Individuals and families that are buying up or buying down were less likely to be affected by the tax credit and are more likely to be focused executing their move later this summer. While activity in the entry level housing market (sub $200,000) has probably peaked, sales will continue and likely we’ll see homes at higher price points coming under contract during the summer.

The issue that continues to plague this and every market is the amount of distressed property that must be absorbed. The number of distressed homes for sale, short sales or REO/Bank Owned, outnumber traditional resale and have for months. This continues to put downward pressure on prices. Prices have stabilized considerably but the “fire sale” pricing of short sale and REO homes will likely depress prices for the foreseeable future, at least the next several years.

Why will things continue for the next several years you may be asking… well, the reason is simple. Before the sweeping mortgage reforms, most home buyers opted for 3, 5, or 7 year ARMs meaning that in X number of years the fixed mortgage APR becomes adjustable. Since most homes purchased in the last 5+ years are now underwater these homes will likely wind up as future bank owned or short sale listings. Thankfully, interest rates continue to be at all time lows, realistically there is no way they will stay here for ever. I’m the first to admit that I am no financial guru, but to see rates at 6% or higher in the next 12 months doesn’t seem at all unrealistic. 6% is still a fantastic interest rate, but when buyers become used to 5% there will be a crunch when rates rise.

It will all work itself out. Bottom line is that prices are down, interest rates are fantastic, and the amount of home that your money will buy is downright incredible. While many sellers will not like what the market will support in the sale of their home, if they are buying up the returns (in the form of savings) can far outweigh them.

So… interesting air quality news in the Treasure Valley this past week. The Treasure Valley Air Quality Board Council submitted a proposal last year to the Idaho Legislature (which was approved) to modify the requirements for vehicle emissions testing. Currently, as I understand it, all vehicles are required to be tested annually to ensure that their emissions are not negatively impacting the air quality here in the Treasure Valley. Since the valley here is essentially a huge bowl, we have been known to experience inversions with poor air quality when the weather conditions are right and the air stagnates.

Currently, or previously as the case may be, vehicles were tested annually at a fee of between $10 and $15 (depending on testing station). Vehicles that did not pass their test were required to be serviced and re-tested in order to maintain their registration. I say this with some certainty, but am unable to say for sure as I can find no information about this on the
emissiontest.org website, and of all the vehicles that I have ever owned, none have ever failed the test. Apparently, maintaining vehicles in good working order appears to do wonders for ensuring that they run with some degree of cleanliness. Unfortunately, I can’t say the same for other drivers here in the greater Boise area. I’m sure that many of you have been stuck behind the old clunker blowing blue smoke out the tailpipe, or the weekend warrior’s version of a monster truck that belches smokes constantly. Choking on fumes in traffic, it was always at least a small (ok, very small) consolation to know that hopefully those vehicles would fail their emissions test and get some service at SOME point. Well, with the new regs on the books, that may not be the case, at least not quite.

From 1984 to present, all vehicles manufactured on or after 1965 were to be tested annually. The new law states that all new vehicles for the first four years will be exempt along with hybrids and cars older than 1981. All vehicles that do require testing (built between ‘81 & 2006) will be tested every other year. Call me crazy, but if you’re going to exempt cars from testing, doesn’t it make more sense to exempt vehicles early in their lives when they’re the most likely to be running well with minimal maintenance? The first 5, 10, 15, or even 20 years make more sense to my keen unscientific mind for a pool of vehicles to be exempted. But everything built before 1981??

Taken from the Ada County Air Quality Board’s own website:

Over half of all vehicular pollution comes from only 10% of the vehicles. By identifying the dirtiest vehicles and getting them fixed the emissions testing program has been able to reduce vehicular pollution by about 18%.

Only time will tell if this shift in testing younger vehicles, every other year will have a negative impact on the air quality. But call me crazy, it doesn’t seem like a brilliant idea to this driver. The other kicker in parting… unless you drive an older vehicle, you won’t even save any money. Annual testing can be had for $10/year, bi-annual testing will be capped at $20 and as testing stations will now no longer test 15 years worth of vehicles and those that are tested only come by every other year, I would expect that it will be much harder to find sweet deals on pricing.

It’s been on the hearts and minds of many as we draw closer to the end of November deadline for the current First Time Home Buyer Tax Credit. Would the tax credit be extended, would it be expanded, should I wait and hope that it’s better later… All of these are questions that I have heard in the past few months as first time buyers scramble to put a plan in place to get across the finish line on their home purchase to take advantage of this program.

Before we get into the nittygritty of the program, I think it’s important to point out that this program does not, in my opinion, put people into homes that they can’t afford. I believe that some commentators have made this leap in logic to get attention for themselves, their opinions, or their websites despite the fact that there seems to be no merit to the claim. The tax credit is just that… a tax credit. It has no bearing on the buyers qualification in the eyes of the lender or underwriter and is not something that will directly increase their purchasing power. This is not to say that there are not unscrupulous buyers and lenders in the world that continue to try to play the system, but I think trying to blame the tax credit is a joke. What the tax credit DOES do is pull FIRST TIME buyers (and now existing home owners) into the market and off the fence. If you’re sitting on the couch thinking you should probably consider buying a house sometime in the next year or so, this credit has proven to be a strong incentive to get people moving forward and off the sidelines.

Now, let’s get into the heart of what happened today. As of yesterday the House and Senate had sent the bill to extend jobless benefits (which includes the home buyer tax credit) up to the White House. Earlier today, President Obama signed the bill into law. The tax credit measures within this bill, now law, extend the credit through April 30, 2010. Qualifying purchases must occur on or after January 1, 2009 and on or before April 30, 2010. One new caveat is that in cases where a binding sales contract is signed by April 30, 2010, and the home purchase is completed prior to June 30, 2010 will also qualify. Raise your hand if you think that last part might get ugly… Of course there are income limits. Previously these were $75,000 for single taxpayers and $150,000 for those married filing jointly. For sales occuring after November 6, 2009 those limits have been raised to $125,000 and $225,000 respectively. One item that has not changed, the $8000 tax credit is reserved for first time home buyers.

The ray of sunshine for existing home owners that want to/need to make a move is that an expansion of the tax credit has been created just for them. A $6500 tax credit will be available for existing home owners purchasing a principal residence after November 6, 2009 and on or before April 30, 2010, or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010. (The more I type that last part the uglier it gets). You qualify if you have owned and resided in a home for at least five consecutive years of the eight years prior to your purchase date. The income limits are the same as above, $125,000 for single tax payers, $225,000 for those married filing jointly.

In both instances, the tax credit amount is calculated to be 10% of the purchase price up to $8000 or $6500 respectively. Depending on your market… it’s probably going to be hard to get anything less than the max. Not many homes available in the Treasure Valley in the sub $80,000 price point. The tax credit continues to be “refundable” as in even if the tax payer has no federal tax liability they can claim the credit and will receive a check for the rebate. For complete details check out the Federal Housing Tax Credit official website.

Hopefully the expansion of the tax credit will continue to improve market activity for homes in higher price points, typically outside the buying power of many first time buyers. So, if you are considering up-sizing, downsizing, first time buying or anything in between give me a call and let’s get the process started. April 30 will be here before you know it. Don’t wait to the last minute and miss out on a golden opportunity!