Razziblog

Renaissance and September 11

2007-09-11T09:27:00.000-04:00

On the morning of September 11, 2001, I was working in a Washington, D.C., office two blocks from the White House. Most of us were glued to the television, watching the smoking towers in New York. I took a break from the TV for a quick trip up to the roof, where I could see smoke billowing from the Pentagon. There was a report, which turned out to be false, that a car bomb had gone off near the State Department--which lay between me and my children; between me and home. We heard that the White House was evacuating, and that it was not safe for the President to return. And a friend far away in Maine messaged me over the internet to "take cover" because another plane was reported to be on its way to Washington. I did not personally lose anyone that day, but I felt the losses of others, and I will never forget.

In the following days I did the kinds of things we all did. I planted flags in my front yard. I walked through barricaded streets near the White House to get to Mass at St. Matthew's Cathedral in downtown D.C., part of a noontime crowd packed shoulder-to-shoulder and overflowing down the steps to the street. I stocked up on water and canned goods. I filled out countless "in case of emergency" forms for my children's schools. I even bought those silly anti-radiation pills.

But not long afterward, I felt a need for something different. I talked the kids into spending a Saturday visiting the National Gallery of Art. I needed to see artworks so fine that they could only be achieved through a lifetime of dedication. I needed to see evidence of creativity, and I wanted them to share it with me. It was a wonderful day.

Now, six years after the 2001 acts of hatred, we exhibit an awakwardness about September 11. We're self-conscious. Are we remembering enough, mourning enough, forgetting too much, recovering too fast? Bin Laden himself tries to stoke the memories in his own, twisted way. But my psyche doesn't need the reminders. I don't mourn that way. I have to move on. For me, focusing on creation and beauty is the best repudiation of the destruction and hatred that took primacy that day.

I would love to see a new and very different commemoration of this date. It should be a national day of art and creation. Let orchestras unveil new symphonies. Let poets recite special, new works. Let cities across the country host arts fairs, with awards for new creations. The White House could award medals for finest American creation. This wouldn't be a day for rehashed, Live-Aid scale music festivals; it would be a day for Bono and bohemians alike to unveil new works, whether they be commemorative of September 11 or evocative of something else entirely.

Creativity would be the perfect, and very American, way to rise above the destruction.

The tragedy at Virginia Tech

2007-04-17T12:01:00.000-04:00

Just a few months ago, my family toured the campus at Virginia Tech. We walked acrosss the parade grounds, learned about the "Hokie stone" that clads the buildings, ate in the dining hall, all part of the visitation routine that has become a rite of passage for American families with a college-bound kid. Yesterday, as I watched the news reports from Virginia Tech and the number of dead increased by stunning leaps--two, twenty two, then thirty three--I thought of the VT acceptance letter sitting on our kitchen counter. My daughter had already decided she would attend a different school next fall, but many of her friends will be attending Tech. Our family now knew this school. Most of these victims are only the age of my own children, and this giant American trauma hits home with us. Indeed, one of my children may yet be fortunate enough to become a Hokie someday.

Today, though, I found myself stuck on the idea of those young victims, murdered just as they were launching their lives. I thought a parent's most horrible thought: What if our children don't grow old? What if this is all there is?

There is so much pressure on teens to get into college these days; high school is anything but the carefree life of Happy Days tv or Archie comics. It's competitive and demanding and consumes their lives even outside the classroom. Even charity work becomes little more than a crass opportunity to accumulate "service hours" necessary to fill a school requirement and impress college admissions officers. But none of us ever knows which morning will be our last. We who are middle age or older understand this. And it's too much to for us older folk to accept the truth that even our strong, healthy college-age children (not to mention the brave youths in the military) face the same mortality.

I'm sure there will be changes that come about from this massacre. Life will become a little less free on campuses. Metal detectors at the doors, maybe. Administrators will try to seal off the outside world a little more, just as high school campuses have. But I'm thinking another change is in order. Maybe we need to acknowledge the roulette wheel. We need to make sure our children have the time to savor their youth and vitality, even if it costs them a few points on their SAT. Even the young can't afford to put things off.

New home construction plunged in October

2006-11-17T13:08:00.000-05:00

Sure, the news that construction of new homes fell dramatically in October is disappointing to people who've invested in publicly traded builders. It may even ding the overall economy thanks to fewer construction-triggered dollars being spent on new draperies and Home Depot splurges. But to this owner of an older home, it sounds like good news.

It tells me they buildup of for-sale home inventories will ease sooner than it would have if builders kept throwing new condos and houses on the market. It tells me prices will firm up faster than they would otherwise. I don't know when that firming up will happen--but turning off the spigot of new supply can't do anything but hasten it.

Blog blanked out

2006-11-16T10:39:00.000-05:00

Unfortunately, the blog seemed to have disappered into the Ether yesterday. If you can read this -- we're back!

Jumbo loan limits won't shrink in '07

2006-11-15T16:05:00.000-05:00

Good news today for people who will be looking for a mortgage in 2007. There's no fear that falling home prices will force more home buyers into higher-priced "jumbo" mortgages. Why would falling prices drive up the interest rate? Because only loans for amounts below the government-set jumbo threshold qualify for the cheaper financing made available through Fannie Mae and Freddie Mac. Normally, that threshold rises each year to account for rising home prices. But since home prices have fallen so far this year, there's a very good chance the government would be in the unusual position of lowering the jumbo threshold for 2007, thus driving more borrowers into higher-priced loans. To avoid disrupting the mortgage market, the regulators have decided that even if a lower threshold is warranted for 2007, they will keep the current limit of $417,000 in effect through 2007. That means buyers close to the current cutoff point don't have to rush to the closing table to wrap up their deals.

The announcement came this afternoon from the Office of Federal Housing Enterprise Oversight (OFHEO), which is the regulator for Fannie Mae and Freddie Mac, the two government-founded but shareholder-owned corporations that buy mortgages from lenders and repackage them as securities for sale to investors all over the world. Fannie and Freddie are allowed to buy only mortgages up to that government-set loan limit, and they tend to carry interest rates that are between 1/8 to 3/8 percentage point cheaper than larger, jumbo loans.

Next year at this time, OFHEO plans to even out the accounting. If home prices rise between October, 2006, and October, 2007, any decrease in the loan limit deferred from this year would be subtracted from the increase in the loan limit that would have been authorized for 2008. But if prices were to decline for a second year, the loan limit for 2008 would be cut by at least what would have been called for in 2007.

Credit for saving energy at home

2006-11-08T12:16:00.000-05:00

Thank you to Shirley Rooker of WTOP Radio's Call For Action program for mentioning an item posted earlier on Razziblog about federal tax credits available to home owners who install energy-efficient home improvements. Here's a replay of that posting:

Federal tax credits of up to $500 are available for certain energy savers purchased during 2006 and 2007. Tax credits are even more desirable than tax deductions because they directly reduce the amount of tax you owe. For example, a $100 tax credit cuts your taxes by a full $100, but a $100 deduction shrinks your taxable income and will pare your actual tax bill by only $28 or even less.

You can get a tax credit for up to 10 percent of the cost of buying (but not installing) new insulation, storm windows and doors, and on new windows that carry the Energy Star certification. (The tax credit on windows is capped at $200.) Credits ranging between $150 and $300 are available for qualified furnaces, boilers and central air-conditioners. And you can claim a credit of $300 for a new, qualified water heater.

For all improvements except new windows (for which the Energy Star seal is enough evidence), you will need to ask the sales person for a copy of the manufacturer's certification that the product complies with the program's efficiency standards. A smart salesperson will have it at the ready! Keep that certification on file with your records; you don't have to send it in with your 2006 tax return next spring. Links to IRS documents fully explaining the rules are posted on the www.energytaxincentives.org website maintained by the Tax Incentives Assistance Project, which is a nonprofit coalition of groups including the American Council for an Energy-Efficient Economy and the Alliance to Save Energy.

Next from Apple: iLost

2006-09-12T14:10:00.000-04:00

News today is that those clever folks at Apple have unveiled new iPods, including a music player that's only as big as a matchbook. And I thought the pocket-size nano was bound to meet its doom in the washing machine....

A surplus of real estate agents

2006-08-23T10:23:00.000-04:00

Check out today's article on www.MarketWatch.com about finding a good real estate agent. The article, "Agent Overload: As real estate agents compete for you, follow these tips to find the right one," quotes yours truly as well as Stefan Swaneopel, CEO of Realty U, a company that trains agents, and Patrick Woodall of the Consumer Federation of America. www.consumerfed.org.

The glamour's gone

2006-07-26T13:17:00.000-04:00

A new Harris Poll, as reported in today's Wall Street Journal, shows real estate agents and brokers coming in lowest on the list of prestigious occupations. 32% of people polled said agents and brokers have "hardly any prestige at all." Only 6% said the job holds "very great prestige." Also way down on the list are journalists, who were considered to have a prestigious occupation by only 16% of respondents. Sixteen percent said journalists have "hardly any prestige at all." Considering that I'm a journalist who writes about real estate brokers, I guess I'm doubly cursed....

A brokerage cartel?

2006-06-19T19:07:00.000-04:00

If you're in need of a pep-talk before you try to negotiate your real estate broker's commission down a percentage point or two, read the report released today by the Consumer Federation of America, "How The Real Estate Cartel Harms Consumers and How Consumers Can Protect Themselves." Their complaints about the industry are hardly new ones (state real estate commissions populated by brokers, industry resistance to discount and limited-service brokers, delayed disclosure of who an agent represents in a given transaction). CFA's report says, "Sellers can often persuade brokers to knock one percentage point off the standard 6% or 7% commission and possibly even two points if the home is expensive or brokerage services are limited. Moreover, they should insist that if their broker double-dips (receives the share of commission paid to the seller's agent and to the buyer's agent) the commission be reduced another percentage point or two." CFA's Executive Director Stephen Brobeck says double-dipping brokers should receive no more than 4% commissions.

Aahhh, trees

2006-05-30T18:53:00.000-04:00

I've found that www.zillow.com now has a 3-d view available for my home, in addition to the straight-down from a satellite views that had been there before. These low-altitude fly-by photos are being taken through Microsoft's Virtual Earth program. It's cool--and creepy--to see these shots of your own home. Ours were taken midwinter, within a few weeks after a snowfall, judging from the sand still left on the roads. The shadows indicate that the fly-by was around 10 or 11 a.m., and since both cars were parked in their usual spots, it was most likely on a Saturday. Luckily, the bare tree branches are still dense enough so you can't see directly onto our porch or patio. The view from the south was shot more recently--a dense canopy of green leaves obscures practically the whole neighborhood. Privacy is such a precious, fragile thing, and it's so easy to lose. I'm starting to think about how we might add more tall evergreens to our landscape.

What a way to thank veterans

2006-05-23T12:08:00.000-04:00

If a novelist wrote it, you wouldn't believe it. But today's newspapers report that a home burglary in Maryland earlier this month could expose 26.5 million U.S. veterans (including some spouses) to a serious risk of having their identities stolen. The burglars took computer files containing names, birth dates and Social Security numbers--a data trifecta that can be used to set up phony credit accounts using a stranger's name and good credit history. What should you do about it? Stand watch over your credit accounts, that's what. And you'll have to be on guard for a good, long time. There's no telling when somebody might choose to use that data to go on a spending spree. Take advantage of the free credit reports that federal law requires be made available to consumers. You're allowed one free report each year from each of the three major credit bureaus. (You can spread the requests out over a couple of months, to better monitor changes.) Go to www.annualcreditreport.com to make the request. Another option is to enroll in the "Score Watch" service offered by the Fair Isaac Co., a company that sells credit scores to lenders. A sudden change in your scores could very well indicate that an impostor is using your good name. That service costs $79.95 per year (with a three-month free trial) or $7.95 per month, with a three-month minimum. You'll find it at www.myfico.com.

What if inflation returns?

2006-05-18T13:46:00.000-04:00

Could inflation really be coming back? Stock investors certainly thought so over the last week. Higher-than-expected Consumer Price Index numbers are being blamed for much of the Dow Jones Industrial Average's 437-point fall over the course of just one week. And long-term interest rates are inching up at a faster rate than short-term rates, another sign that investors see inflation ahead.

What might this all mean for housing markets? Inflation, historically, has been kind to real estate. Home values tend to stay a couple of steps ahead of the inflation rate, and homeowners repay their mortgages with dollars that are worth less than when they borrowed them. Rates on a 20- or 30-year fixed-rate mortgage can be expected to jump, though, should inflation return. And if the stock market starts to look less promising than it had during the first 4 1/2 months of 2006, investors may once again decide that real estate is a better bet than stocks, which would firm up home prices. If you think inflation really is poised to return, this could be an opportune time to buy a property at today's softer prices (perhaps from a condo-flipper who's been scared silly by the real estate market's turnaround), and lock in your costs with a long-term, fixed-rate mortgage before rates go higher.

Not afraid to move up

2006-05-18T10:11:00.000-04:00

Clearly, the housing market in my little suburb near the nation's capital has changed. There are more homes on the market than I've seen in years, and my real estate agent has sent me the third notice about price reductions (plus a hardwood floor re-do) on a nice Victorian she's been trying to sell since winter. But I wonder if the weaker market has actually encouraged more owners to put their homes up for sale--and not for the usual reasons of financial hardship. Look at it this way: In last year's buyer's frenzy there was a real risk for move-up buyers that they could be stranded without a home. They could sell their homes in a heartbeat--but then they'd have to jump into that wild sellers' market and pay too much for a replacement. Without a compelling need to sell, it was simply too risky to give up a good-enough old home, so many owners stayed put. This year, they can see that it's going to be harder to sell their home and that they may get less for it than they would have last year. But with a big equity cushion under them, that may be tolerable. At least they see a good supply of move-up homes available to them once they finally get the old place sold. And if the move-up home's price declines along with the old home, the difference is a wash, anyway.

Which first, wind or water?

2006-05-12T13:28:00.000-04:00

In Gulf states still trying to recover from Hurricane Katrina, there's a battle between consumers and insurance companies over which force damaged homes first: wind or water? You see, wind damage is covered by homeowners' policies, but flooding isn't. If a hurricane-driven storm surge floods your home, you're out of luck...unless you have special flood insurance. But if the wind blows your roof off and then the rain ruins your belongings, that's usually covered. The lesson for homeowners at the start of this year's hurricane season: If wind causes damage to your home, document that fact pronto. Get photos and a record of the date and time, to ensure that any unavoidable water damage that follows the wind damage will be covered. The other big lesson: If there's any reasonable risk of flooding at your home, buy federal flood insurance now. There's a 30-day waiting period before it goes into effect. Policies are available through ordinary homeowners insurance companies. For info about flood insurance: www.floodsmart.gov

Homeownership numbers slip

2006-05-11T17:25:00.000-04:00

It really is harder to own a home, especially if you're young. High prices and rising interest rates are starting to chip away at the nation's homeownership rate. The share of Americans who owned their home peaked in late 2004/early 2005 at just over 69%. But the U.S. Census Bureau reports that number has slipped a bit, down to 68.5% in the first quarter of 2006, a decrease of 0.87%. Homeownership rates are lowest, under 65%, where homes are most expensive, the Northeast and West. (That was true even during the peak of the boom.) More worrisome is the recent slippage among people younger than age 35. Their homeownership rate shrunk most during the first quarter, slipping 1.9% to a rate of 42.3%. Compare that to people age 55 or older--more than 80% own their own homes, a number that hasn't changed significantly since the peak of the boom.

You CAN guard your phone number

2006-05-08T14:04:00.000-04:00

It turns out there is a way to get to online listings from www.Prudential.com without giving up your phone number. If you go through Yahoo, http://realestate.yahoo.com/ you do not have to register to browse and map the listings. If the main photo makes you want to see more, however, you'll need to register to get access to extra photos.

Where the listings are

2006-05-08T11:24:00.000-04:00

My neighbors and I were surprised to see a new "For Sale" sign appear on the front lawn of a home just two doors down from my own. We hate to see this nice family move away, but it gave me a good excuse to check out the listings available at www.prudential.com. It's the company you reach when you click on "Real Estate" on www.yahoo.com. Prudential's PR person had recently boasted to me that their revamped site couldn't be beat for its stock of up-to-date listings.

First, let's go over what I didn't like about www.Prudential.com. As with most broker-run sites, I first had to supply my name and full contact info, plus details on my home-buying intentions. I noted that I was just browsing, but could not opt out of providing my home phone number. My options for preferred calling time (day/evening, etc.) did not include "please don't call." I clicked "anytime," and it wasn't five minutes later that I had a live person phone me up, asking if there was any way they could help me, and offering to put me in touch with some local agents. Their efficiency is impressive, if a little spooky, but telephone is the last way I want to be contacted by practically anyone who doesn't have refrigerator priveliges in my kitchen.

The good news: Not only did they have a good share of listings for my little suburb (which is such a small community that we're often overlooked by online services), but they had the listing info--complete with the price and half a dozen photos--for my neighbor's home. That was about 24 hours after the "For Sale" sign appeared on the front lawn. Impressive. But I wish they'd give me a "do not call" option.

Beds reaching new heights

2006-05-05T11:47:00.000-04:00

At least they're reaching new heights in terms of dollars. More from furniture industry expert W.W. "Jerry" Epperson, Jr.: As mattresses have grown bigger and thicker over the past 10 years and queen size has replaced "full" as the norm, we may be seeing a leveling out in the size explosion. Many older homes simply can't accommodate anything bigger. But price is another matter. Mattresses and box springs costing $3,000 to $4,000 may become typical, with prices going as high as $12,000. Some shoppers are spending more on the bedding than on all the furniture in the room, combined. Next thing to watch for: Mattresses made of gel.

Incredible shrinking furniture?

2006-05-04T10:11:00.000-04:00

You'd better take your tape measure the next time you shop for furniture. Some manufacturers are making the depth of "case goods," such as bookcases and cabinets shallower, says industry expert W.W. "Jerry" Epperson, Jr., a founder of the Mann, Armistead & Epperson investment banking firm in Richmond, Va. Why the shrinkage? It's not to accommodate your decor; it's so the furniture fits more easily in shipping containers from Asia. "Always be suspicious of a showroom with big potted plants next to the furniture. They're trying to camouflage the fact that the pieces are set six inches away from the wall (to disguise the shallower depth)," says Epperson.

Get credit for saving energy at home!

2006-05-03T11:38:00.000-04:00

With the costs of electricity, natural gas and heating oil soaring, it's time make those long-though-about improvements to your home's energy efficiency. And, just for improvements made during 2006 and 2007, the federal government is offering a tax credit of up to $500 to help pay for the job. (Tax credits are even better than tax deductions because they directly reduce the amount of tax you owe. A $100 tax credit cuts your taxes by a full $100. If it were a $100 tax deduction you'd reduce your taxable income by $100, and shrink your tax bill by only $28 or even less.)

You can get a tax credit for up to 10% of the cost of buying (but not installing) new insulation, storm windows and doors and new Energy-Star-certified windows. (The tax credit on windows is capped at $200.) Credits ranging between $150 and $300 are available for qualified furnaces, boilers and central air-conditioners. And you can claim a credit of $300 for a new, qualified water heater.

For all improvements except new windows (for which the Energy Star seal is enough evidence), you will need to ask the sales person for a copy of the manufacturer's certification that the product complies with the program's efficiency standards. Keep that certification on file with your records; you don't have to send it in with your 2006 tax return next spring. Links to IRS documents fully explaining the rules are posted on the www.energytaxincentives.org website maintained by the Tax Incentives Assistance Project, which is a nonprofit coalition of groups including the American Council for an Energy-Efficiency Economy and the Alliance to Save Energy.

Second thoughts for move-up buyers

2006-05-02T12:22:00.000-04:00

You may find yourself with a typical dilemma facing homeowners who'd like to move up to a better home, but who don't absolutely have to move. You don't want to sell your current home unless you've found just the right home to replace it. Often, the solution is to buy the new home and then place the old one up for sale. It's always a risky strategy, after all you very easily could end up owning two homes for a while. (I know; I've done it myself, and owning two is no fun at all.) But a new survey from RealEstate.com should give you pause before going that route.

They surveyed 550 homeowners who simultaneously sold and bought a home over the past five years. (That boomy period may have been the easiest time ever to sell a home in the United States.) Results show that 42% said the uncertainty of not knowing how quickly their home would sell was difficult--or even more difficult than they expected. Sixty-two percent of them were successful in closing the sale on their old home and move into the new one without a significant lapse in time. The rest either had to move to a third, temporary, home or ended up owning two residences for a while.

Most, 78%, said they had no regrets about the course they took. But, among those who would have done things differently, men were more likely than women to say they would have sold their old home before making an offer on a new one, and women were more likely than men to say they never would have moved at all. Remember, this is the opinion of people who were trying to sell a home in a time when homes in most communities were selling faster than beer in a ballpark. In today's slower market, it's reasonable to expect the process to be even more stressful.

In the beginning.....

2006-05-01T12:57:00.000-04:00

Welcome to the beginning of Razziblog, what I hope will be a friendly forum for the exchange of independent intelligence on a broad range of housing and other personal finance issues. I'm the author of The Fearless Home Buyer, Razzi's Rules for Staying in Control of the Deal, which was published in January, 2006, by Stewart, Tabori & Chang. For the full scoop on that book, I'll refer you to www.fearlesshome.com.

The book is the product of about 20 years as a news reporter covering every nook and cranny of the home-owning, home-buying and home-selling landscape. With this blog I hope to offer whatever insights I can about the issues all of us face dealing with mortgage lenders, insurance companies, tax collectors, home-improvement contractors, real estate agents, moving companies, and whatever else comes up. If we're all lucky, the rest of the community will add to the mix the stories of their problems--and their best ideas about solving them.