Real Estate New York

Market Update November 2008

Ten Ways to Cut Energy Bills

Staying warm doesn't have to cost a fortune. Here are some ideas from the U.S. Department of Energy for conserving heat and saving money.

When the leaves start falling, you know that the heating bills are about to start rising. But keeping your home warm and cozy on chilly autumn nights doesn't have to break the bank.

The U.S. Department of Energy offers these simple tips and relatively inexpensive home improvements that will help ensure cold gusts stay out and your furnace doesn't have to work harder than it should.

The goal: Conserve energy and keep more of your hard-earned dollars in your pocket.

1. Plug air leaks with caulking, sealing, or weather stripping. Save 10 percent ($190 per year) or more on energy bills. Focus on windows, doors, outlets or switch plates on exterior walls.

2. Properly maintain the heating system. Heating accounts for half the average family's energy bill (approximately $950 per year). Make sure the furnace or heat pump receives professional maintenance each year. The small cost (about $75-100 for most service calls) will pay back in better performance all year long.

3. Install a programmable thermostat. Programming the thermostat from 72ºF to 65ºF for eight hours a day while no one is home, or everyone is tucked in bed, will cut the heating bill up to 10 percent ($90 per year), paying for a basic unit in less than a year.

4. Seal and insulate heating ducts. A system can lose up to 60 percent of its warmed air before it reaches the register (wasting $570 in warmed air per year) if ducts are not properly insulated in unheated areas such as attics and crawlspaces.

5. Insulate, insulate, insulate. Adequate insulation in the attic, ceilings, exterior and basement walls, floors, and crawlspaces can save up to 30 percent on home energy bills ($630 per year). Focus on the attic. (Heat rises.) Most homes should have between R-30 and R-49 insulation in the attic. Learn more at www.eere.energy.gov/consumer .

6. Close fireplace dampers when not in use. When in use, reduce heat loss by opening dampers in the bottom of the firebox (if provided) or open the nearest window about an inch, close doors to the room, and lower thermostat setting to 50-55ºF.

7. Let the sun shine in. Open curtains on south facing windows during the day to allow sunlight to naturally heat the home, and close them at night to reduce the chill from cold windows.

8. Stay out of hot water. Water heating accounts for 15 percent of household energy use. Reduce water heating costs by lowering the water heater's thermostat setting. Each 10ºF reduction can save between 3-5 percent in energy costs. Also insulate the hot water heater and hot water pipes.

9. Install storm windows over single-pane windows or replace them with Energy Star qualified windows. Storm windows reduce heat loss by 25 to 50 percent, and storm windows with low-e coating that reflect heat back into the room during the winter months save even more energy. Look for the Energy Star label to maximize savings. Energy Star qualified windows reduce heating and cooling bills by an average of $345, but could be higher in cold and hot climates, compared with uncoated, single-pane windows. Can't afford new windows just now? Tape clear plastic sheeting to the inside of window frames if drafts, water condensation, or frost are present.

10. Net big savings with a little label. When replacing appliances, light bulbs, electronics, or heating and cooling systems, cut energy bills by up to 30 percent ($600 per year) with Energy Star labeled products. Use compact fluorescent light bulbs (CFLs) in place of comparable incandescent bulbs. Find retailers at www.energystar.gov .

These and other improvements that impact the energy efficiency of a home can save home owners money in the short term and serve as a selling point to potential buyers later. Be sure to save receipts, documentation, and manufacturer's information.

Not sure where to begin? Try the Department of Energy's online energy audit tool at hes.lbl.gov . In the long run, a whole-house energy audit is a fool proof way to make a plan to address wasted energy and make a home operate efficiently for years to come. Visit www.natresnet.org to find a qualified auditor in your neck of the woods.

Video: Inside an Energy Audit

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Insulating Your New Home

Sealing and insulating the "envelope" or "shell" of your home — its outer walls, ceiling, windows, doors, and floors — is often the most cost effective way to improve energy efficiency and comfort. ENERGY STAR estimates that a knowledgeable homeowner or skilled contractor can save up to 20% on heating and cooling costs (or up to 10% on their total annual energy bill) by sealing and insulating.

To Seal and Insulate with ENERGY STAR:

Seal air leaks throughout the home to stop drafts,
Add insulation to block heat loss in winter and heat gain in summer,
Choose ENERGY STAR qualified windows when replacing windows.

If your attic is accessible and you like home improvement projects, you can Do-It-Yourself with help from our DIY Guide to Sealing and Insulating with ENERGY STAR . The Guide offers step-by-step instructions for sealing common air leaks and adding insulation to the attic.

You can also hire a contractor who will use special diagnostic tools to pinpoint and seal the hidden air leaks in your home. A Home Energy Rater can help you find contractors that offer air sealing services in your area.

Sealing Leaks: Many air leaks and drafts are easy to find because they are easy to feel — like those around windows and doors. But holes hidden in attics, basements, and crawlspaces are usually bigger problems. Sealing these leaks with caulk, spray foam, or weather stripping will have a great impact on improving your comfort and reducing utility bills. Click on the house diagram to see common air leak locations that you should aim to seal.

Homeowners are often concerned about sealing their house too tightly; however, this is very unlikely in most older homes. A certain amount of fresh air is needed for good indoor air quality and there are specifications that set the minimum amount of fresh air needed for a house. If you are concerned about how tight your home is, hire a contractor, such as a Home Energy Rater , who can use diagnostic tools to measure your home's actual leakage. If your home is too tight, a fresh air ventilation system may be recommended.

After any home sealing project, have a heating and cooling technician check to make sure that your combustion appliances (gas- or oil-fired furnace, water heater, and dryer) are venting properly. For additional information on Indoor Air Quality (IAQ) issues related to homes, such as combustion safety, visit EPA's Indoor Air Quality Web site .

Adding Insulation: Insulation keeps your home warm in the winter and cool in the summer. There are several common types of insulation — fiberglass (in both batt and blown forms), cellulose, rigid foam board, and spray foam. Reflective insulation (or radiant barrier) is another insulating product which can help save energy in hot, sunny climates.

When correctly installed with air sealing, each type of insulation can deliver comfort and lower energy bills during the hottest and coldest times of the year.

Insulation performance is measured by R-value — its ability to resist heat flow. Higher R-values mean more insulating power. Different R-values are recommended for walls, attics, basements and crawlspaces, depending on your area of the country. Insulation works best when air is not moving through or around it. So it is very important to seal air leaks before installing insulation to ensure that you get the best performance from the insulation.

See Recommended Levels of Insulation to determine what is most cost-effective for your home.
For more comprehensive information, check the Department of Energy's online Insulation Guide .

To get the biggest savings, the easiest place to add insulation is usually in the attic. A quick way to see if you need more insulation is to look across your uncovered attic floor. If your insulation is level with or below the attic floor joists, you probably need to add more insulation. The recommended insulation level for most attics is R-38 (or about 12–15 inches, depending on the insulation type). In the coldest climates, insulating up to R-49 is recommended.

Sealing Ducts: In houses with forced-air heating and cooling systems, ducts are used to distribute conditioned air throughout the house. In a typical house, however, about 20 percent of the air that moves through the duct system is lost due to leaks and poorly sealed connections. The result is higher utility bills and difficulty keeping the house comfortable, no matter how the thermostat is set.

Because some ducts are concealed in walls and between floors, repairing them can be difficult. However, exposed ducts in attics, basements, crawlspaces, and garages can be repaired by sealing the leaks with duct sealant (also called duct mastic). In addition, insulating ducts that run through spaces that get hot in summer or cold in winter (like attics, garages, or crawlspaces) can save significant energy.

Learn more about improving your ducts .

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Considering Solar?

Last month's article on choosing a fuel source to heat your new home did not include Photo Voltaic (PV) as a possible source for home heating and domestic hot water plus electricity. We apologize to those who commented on the oversight.

Actually, the omission was more of a statement on the current state of the art in PV than a lack of information.

Here is a link to a new solar calculator that will help determine the cost of installation and the resulting energy output for any spot on the globe. http://www.wunderground.com/calculators/solar.html

Unfortunately, for our area the cost of installation--even with government funding--suggest an eighteen to twenty year payback--about the same period as the life expectancy of the panels.

We will have to look to the future for developments in PV technology that may bring the installation costs in line with other forms of energy.

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Buying a Home in a Down Market

Should You Wait to Buy in a Market of Falling Home Prices?

By Elizabeth Weintraub , About.com

Everybody wants to know how to best time the market when buying a home. It's just natural. Especially if you're thinking about buying in a down market where homes prices are declining. You wonder how low they will go and whether you should wait, right?

Some Home Buyers Should Buy Immediately

You're probably thinking: "Of course, she would say that. She's a Realtor, and agents always say 'Now is the best time to buy'." Well, here is why:

If you are a seller who wants to move up to a more expensive home in a down market, now could be the best time. The longer you wait to sell, the lower the price of your home could fall.
If you can arrange for alternate housing, a smart strategy is sell now, wait a few months, then buy your new home.
If you sell and buy simultaneously, you'll still be ahead of the game because the price reduction on the purchase is greater than the loss on the sale.

Consider the "Loss" on Selling Your Present Home

For example, say your present house is worth $300,000, but because of high inventory and few buyers, you must reduce your price by 10%. So, instead of receiving $300,000, you would get $270,000 and "lose" $30,000.

Consider Your Real Profit

Now, consider this. Say you bought this home 10 years ago and paid $100,000. You're still ahead $170,000, less costs of sale, aren't you? (This ignores monthly payments, but you would make those if you were renting, too.)

Consider the "Savings" on Buying Your New Home

If you are planning to move up to a $500,000 house, which is located in the same distressed market, you could probably buy that house at that same 10% discount or $450,000. This would mean you had saved $50,000.

Review of Selling and Buying Numbers

So you "lost" $30,000 on the sale of your home
But you "made" $50,000 on the purchase of your new home
Doesn't that put you $20,000 ahead?

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Market Statistics as of November 1, 2008

This graph represents average sale versus list prices

We can't say this enough: Dire predictions of doom and disaster on the national level do not seem to apply to the stable real estate market we enjoy here in the Capital Region.

Both the average sold and list prices are significantly above levels for both 2006 and 2007--plus the number of sales is higher then last year before the subprime crisis hit the markets.

In a balanced market such as the one we now have, homes are affordable and the threat of a declining market is aliviated.This can provide an excellent buying opportunity due to reduced competition (only 504 sales) and increased willingness on the part of sellers to negotiate based on their perception of a declining market.

In addition, the average asking price to sale price has risen from 96.54% in September to 96.99% for October. This means that sellers are getting more than they bargained for.

Mortgage Rates and Trends

The link to up to the minute New York State mortgage information seems to work better than presenting the actual graph.

Click for up to the minute mortgage rate information

Buyers' versus Sellers' Market Report

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The graph above shows the number of sales in a given month divided by the number of homes on the market in the four main counties of the Capital Region. After a brief dip into seller territory in July the market has once again returned to favor buyers.

As you can see, the market remains in buyer territory, though not quite as solidly as last month.

*This ratio can be used to determine whether we are in a buyers' or sellers' market as indicated in Dennis Maier's article on Market Timing featured in eZine Real Estate. In general, if it would (theoretically) take less than 6 1/2 months to sell the current inventory it's a sellers' market. If it would take more than 9 months to sell all the homes on the market it's a buyers' market.

Architectural Coach: Lustron Homes

These factory-built homes, which peaked in popularity after World War II, are made completely of metal - from their roof tiles to their interior walls.

Lustrons, prefabricated ranch-style houses made entirely of steel, are collectibles not unlike old record players or vintage automobiles. For buyers who value history and novelty in their homes, Lustrons are an option that's sure to please.

More than 2,500 Lustrons were built starting in 1949 during the post-World War II housing boom, when the demand for housing by returning GIs outstripped supply.

Hundreds have been destroyed by tornados and floods since they were last constructed in 1950, but their biggest threats are bulldozers.

“They're really fascinating,” says Tom Fetters, author of Lustron: The History of a Postwar Prefabricated Housing Experiment (McFarland & Co., 2001), who first got hooked on the houses when he helped his daughter make a scale model of a Lustron with a removable roof for a high school history project in 1986.

“They're still waiting to be discovered,” says Fetters, who has created an online registry http://www.lustronregistry.org/ of Lustron homes. “I find one every three week through listings or on the Internet. I may not personally get out there, but I'm still finding houses that haven't been reported.”

Chicago engineer Carl Strandlund is the man behind the Lustron home. Standlund obtained a federal loan in 1947 to mass-produce all-steel, enamel-clad houses, Fetters says. His project was supplemented with additional loans from the Reconstruction Finance Corp. in 1948 because the U.S. government was eager to aid GIs returning from the war.

Strandlund, founder of Lustron Co., got his marching orders to produce 20,000 pre-fabricated homes at a former aircraft factory in Columbus, Ohio.

"Denial ain't just a river in Egypt" --Mark Twain

America is in one of the worst housing crisis in history, yet 49% of U.S. homeowners believe their home's value has increased or stayed the same over the past year, according to Zillow's Q3 Homeowner Confidence Survey .

In reality, 74% percent of homes have lost value in the past 12 months, according to preliminary findings in Zillow's Q3 Real Estate Market Reports, which will be released Nov. 12. (However, here in the Capital Region our homes are in the 26% that have retained most of their value--Ed see above)

Other findings from the survey:

Supporters of Republican presidential nominee John McCain have more confidence about their homes' values than supporters of Democratic nominee Barack Obama.
Fewer people expect to buy or sell a home in the near future:

Three percent plan to sell their home in the next six months, down from 5 percent last quarter.
Three percent plan to buy a home, down from 4 percent in the second quarter.