If your home has a furnace installed in the garage, it most likely is. At one of our Construction 101 classes at Volare our Town Home community in Happy Valley, this came up. We have been installing our entire HVAC systems inside the conditioned space of our homes (meaning the interior living area of the home). We realized the obvious benefits of: improved performance by reducing the length of duct work for the air to travel, by not installing ducting in the attic or crawlspace spaces as they are much hotter or colder than the air we are providing to the rooms that need it. Another benefit is, if the duct system leaks air it is only leaking into your home not the outdoors. However, it never occurred to us the air quality benefit of a furnace in the home versus the garage.

The furnace unit that is installed inside the conditioned space is a “Sealed unit” this means that the cabinet of the furnace is entirely sealed up. Unlike, most furnace units that are installed in a garage. Most people can recall being near a furnace in a garage when it started up and seeing the flame burning through the venting of the front of the furnace cabinet. What probably didn’t come to mind was that when the fan motor started up it was pulling air from within the garage. This could be including the exhaust from the car, gas fumes from the gas can, bag of yard fertilizer, etc. Anything off gassing in your garage could have its fumes spread throughout your home.

The great benefit of a Marnella Homes system being entirely with the home is that it is only pulling fresh air from the exterior of the home with the assistance of the HRV (Heat Recovery Ventilator). The HRV periodically exchanges stale interior air with fresh outside air. This provides interior air quality that is superior to any traditionally installed HVAC system. This should be especially important to anyone with children that have asthma or any other respiratory health issues.

So, should you be stuck with a traditionally installed system in your home, consider this when you are letting your car warm up in the morning and you might want to find a better place to store the gas can, fertilizer bag or anything that you smell when in the garage. However, if you are looking at buying a new home, you owe it to you and your family’s health to consider how your next HVAC system is installed.

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The next 14 days will provide what I feel is truly the “Perfect Storm” for anyone looking to buy a home.

We currently have: 1) Our Lender offering 3% of the purchase price to our Buyers for closing costs, 2) Northwest Natural Gas is offering a years worth of Natural Gas on any of the homes in the Ultimate Open House, 3) The Federal Home Buyer tax credit is still available, 4) Exceptionally low mortgage interest rates and 5) Great home values that have reset to 2002 in many areas. For instance:

1) On any Marnella Homes town homes in Volare, Golf Savings Bank is providing a Lender Credit of 3% of the Sale Price up to $20,000. This program has just been extended for sales agreements dated on or before the 1st of June, 2010 with closing dates on or before the 30th of July, 2010.
2) Northwest Natural Gas is offering a year of Natural Gas, up to $800, on our homes that we have presented in this years Ultimate Open House.
3) The Federal Home Buyer tax credit is available for qualified home buyers on transactions executed by the 30th of April, 2010 and closed by the 30th of June, 2010
4) We are seeing mortgage rates that are as low as our Grandparents took advantage of after World War II. These are rates that cannot be sustained at these low levels and will have to begin to rise.
5) Home values in some areas, like here in Happy Valley, have reset to 2002/2003 prices. If you are looking at homes under $300,000, these values have bottomed out and have shown signs of strengthening in many areas.

So, for anyone thinking about or actively looking to buy a home, the current conditions for home buying are such that we may never see again in our lifetime.

It is not surprising that when you talk with someone about our differences in how we insulate their eyes glaze over.  However, it is very important.  In a market that is no longer a “buy & flip”, but a “hold for the long term” as in years past.  Features like insulation, heating systems, quality levels of materials, etc are important for the lasting value of a home.  Considering that buying a home is only half of the transaction, the other half is when it is sold in 5 – 10 years.  What features will provide that lasting value that older homes and many of the other new homes on the market will not have.  I have commented on our testing and heating systems in the past, now I am going to talk about insulation and why blown-in bib (BIB) insulation should be an important feature to a home owner.

 The difference between BIB insulation and batt insulation is that batt insulation is rolled up insulation that is unrolled an applied between wall studs, ceilings trusses and floor joists.  Which means that it rolls over any electrical conduit, plumbing, heating ducts, etc. and cannot fill in the entire void between the wall studs or joists.  This leaves pockets or voids where the insulation couldn’t insulate which will allow for heat to escape.  However, BIB insulation is just that, insulation blown into a wall or ceiling cavity leaving no air pockets or voids.  The result is densely packed insulation producing higher R values, cuts down air infiltration and slowing the transfer of temperature in a wall or ceiling cavity through the flow of air.  This reduces both sound transmission as well as energy loss.

BIBS installation 

At Marnella Homes, Our current wall BIB system, for our Volare town homes in Happy Valley, is tested and documented at a R24 rating.  Code only requires a R21 rating for walls and our ceilings have a R49 rating with code only requiring R38.  This is a significant increase in insulating performance.  The R value insulation ratings are used to measure insulations ability to resist heat flow. The higher the R value, the more effective it is.  For more information on what the “R” value for insulation is, see the following link: http://rvalue.net

This results in a direct benefit to the home owner in reduced energy costs.  Combined with the other performance enhancements, like a high efficiency furnace and hot water heater significantly reduce monthly energy expenses.  Money each and every month that you keep in your pocket.  It today’s world every dollar saved is important.  At Volare, our town home owners are saving on average $40 a month compared to a home built to code.  These home owners are not only enjoying a more comfortable living environment, but they have extra cash to either save or treat themselves to something well deserved.

For our potential first time home buyers out there, the $8000 Federal Housing Tax Credit that you are eligible for is coming to a close.  By the 1st of December 2009, only 3 months way, this tax credit will be no more.  However, due to the time necessary to close a home taking about 30 – 45 days, what this really means is that you will need to have your sales agreement accepted and in escrow by the 15th of October just to be safe.  Since you have only about a month and a half of shopping time left, don’t delay.  Take advantage of all that is available in the market place right now; historically low interest rates, home values that have reset in many markets to 2003/2004 prices and an $8000 government give-a-way.

Don’t be one of those who feels that the housing market has a long way to fall.  There is too much positive news coming out all over the country to counter that theory.  Remember, it only takes interest rates to move up a half of a percent to wipe out the benefit of a 10% drop in sales price.  With many markets identifying their bottoms already, waiting for deeper price cuts is a mistake that you will surely regret when the tax credit is gone and rates go up.  Which, they will.

Don’t miss out on what will be looked back upon as an opportunity of a lifetime for those willing to take advantage of it.

For frequently asked questions and more information on the Federal Housing Tax Credit refer to: http://www.federalhousingtaxcredit.com/2009/index.html

and

http://www.irs.gov/newsroom/article/0,,id=206291,00.html

I wrote back in January about the behind the scenes inspections and testing that the green high performance homes get that many don’t know about or if they do, don’t appreciate the intensity of them.  Since we continue to hear about Buyers wanting the “Best Deal” or the “Best Value”, it occurred to me that the Value of these homes is also not being realized.

For instance, 100% of the homes we build here at Marnella Homes are built to the Earth Advantage/Energy Star “Gold” level.  Our homes are extremely well sealed and with blow-in insulation achieve a very low leakage rating.  Also, with our 95%+ HVAC systems, fully sealed ducting and all inside the home in conditioned space.  Our home owners save on average $40 – $50 a month in our 1400 – 1600 sqft homes over a similiar sized code built home.  

Home owners have been sold over the years all the features that builders put in and are told how great they are and sometimes even how many years the home owner will receive a payback from these features.  What so many times doesn’t get either explained or truly appreciated by the home owner or buyer is the value of these features.  We took on the venture of Green performance building with the “What’s in it for me” approach.  Thinking just selling features to someone who doesn’t know much about the industry will tend to make their eyes glaze over.  So, we have tried to show our home owners and buyers “what is in it for them”. 

In the case of a monthly savings, this is a direct savings over what they would be paying for utilities at any other new code built home.  Plus, even with many builders getting on the green built performance band wagon most are doing just the minimum to get their homes certified so, we are outperforming most builders in our area.  This is money that can be for that massage every month, the manicure, dinner, a movie with the family, a ski lift ticket in the winter, etc.  So, many things that these homes make easier to afford.  Because, isn’t the old saying, “a penny saved is a penny earned” more relevant today than ever before in our life time?

Now that I have addressed the actual savings, let’s look at the added value.  Using the $40 – $50 a month in savings, at today’s interest rates that is about $8,000 to $10,000 in additional value to the home. Of course, our lenders aren’t going to let you borrow more because we can show the energy savings, but wouldn’t it be great to know that you have built-in additional financial strength due to the lower monthly cost of home ownership?  I do believe that some lenders will eventually see this value and want to work with builders like us once this resonates with them. However, I am not holding my breath for this to happen anytime soon.

Lastly, now that real estate has moved back to a more traditional style of ownership, I feel that the long term value that these homes offer is also important.  Energy costs are going to continually rise so, in 5, 7, 10 years or so when we sell our homes doesn’t it seem that it will be a added value to your buyer that your home saves a considerable amount in monthly utility costs over the resale homes that will be on the market at the same time?  I think it should now and most assuredly then.

So, buying a home isn’t just the countertops, the carpet and appliances.  Sure those are the features that you can see, feel and touch, but don’t over look some of the most important features that truly create the “value” in your home.  You can always change your carpet, appliances and countertops, but it tends to be a little harder to retrofit a high performance HVAC system inside your home in the conditioned space if you are replacing a traditional system it’s not very easy to go back and effectively caulk and seal up a home that is already completed.

Please share your comments.  I would like to hear from you.

Wow, what a week for housing news.  Whether this is a flash in the pan or it is truly a sign of more great things to come, we are encouraged by it either way.  Of course, our “glass half full” friends will discredit any of the many groups reporting this, but this shouldn’t be much of a surprise.  They will claim that this is just a normal seasonal increase.  It might be, but it is still an increase.  They will claim that the only reason for the increase in sales is due to the short sales, foreclosures and deep price reductions.  Doesn’t this still mean that people are buying again and lenders are still lending?  At the end of the day, sales are still up Month over Month.

 

There was a story from MarketWatch by Rex Nutting on Tuesday the 24th.  Mr. Nutting reports,  “U.S. Housing prices rose 1.7% in January compared to December, the Federal Housing Finance Agency reported on Tuesday. This was the first increase in a year.”  I feel this is big.  Bigger than an increase in sales.  Showing the possible signs that in some markets there is some bottoming being found.  Mr. Nutting goes on, “The “unexpected rise” in January was partially due to stronger sales in some markets, the FHFA said.”

 

For a viewing of the complete story, follow this link: http://tinyurl.com/de37e3

 

There was a MarketWatch news story by Stacey Delo on Wednesday the 25th.  She discusses with USC real estate economist Delores Conway this surprise in news in the Housing data.  Ms. Conway states that the reason for this increase is really a bit of both the lower prices and interest rates that have pushed sales up Month over Month.  Still acknowledging that sales are down compared to last year.  It noted that over half of the sales that have been reported are to first time home buyers.  This is due to the affordability being enhanced by historically low interest rates and lower prices.

 

To watch this entire story, please see the following link:  http://bit.ly/QSKf8

 

We had a CNN Money News report by Paul R. La Monica, on Wednesday the 25th, that talked about how Wall Street and the Housing Sector was very encouraged by this weeks results. This story reported; “The Commerce Department reported Wednesday that new-home sales rose almost 5% last month after hitting their lowest point ever in January. Economists were expecting a decline of about 3%

This comes on the heels of two reports showing a better-than-expected gain in existing-home sales and the first increase in construction of new homes since June.”

 

John Buckingham, fund manager said, “Clearly there is interest in homes. Whether it’s in foreclosure or not, there’s still a buyer. That helps put in a floor on prices and could boost confidence.”

 

To read this complete story, please see the following link: http://tinyurl.com/c4cxxq

 

There was also a story in Reuters by Lucia Mutikani on Wednesday the 25th.  Ms. Mutikani noted that in a Commerce Department report, ” Sales of newly built U.S. single-family homes rose at their fastest pace in 10 months in February, it said in another report.”

 

To read this complete story, please see the following link: http://tinyurl.com/cmsdpz

 

What is amazing is that these are just some of the reports out this week.  From many sources and from many perspectives, we are seeing some signs of improvement.  Most do feel that it is too early to tell if a recovery is process, but regardless of the reason, it is still good news and we will take it!

I wanted to post another entry about the Federal Tax Credit. When I first discussed this back in January, I mentioned the changes to the Federal Tax Credit that were being discussed at the time. Well, some of the changes did end up being made and with just 20 days until tax time, I felt I should visit this one more time.

If you are considering buying a home this year, take advantage of the Federal Housing Tax Credit. The Federal Tax credit is available to you for a purchase of your new home. The sooner you talk with a tax professional the sooner you can determine how much of the allowable $8000 is available to you. This amount was $7500 under the previous bill and had a requirement to be paid back within 15 years. In addition, the deadline was extended from June 30th, 2009 to September 1st, 2009. These changes were made through the last stimulus bill.

As I mentioned before, regardless of what form this Housing credit takes, the current form or modified with new changes, it is a great incentive to assist you in the purchase of your next home.

For more details and frequently asked questions about the Federal Tax Credit go to the following website: http://www.federalhousingtaxcredit.com

To put this in perspective, our town homes here at Volare in Happy Valley, start at $229,950. On a purchase, utilizing a FHA loan, the $8000 Tax Credit almost covers the $8048 necessary for the down payment. This would be almost like 100% financing with the government gifting you the $8000, with no requirement to pay it back.

Adding to this, at our meeting this week with our preferred lender from Wells Fargo, Matt stated that he was locking some buyers in at 4.5% and one of our own team just closed on a loan at 4.375%! These are mortgage rates that have never been seen before!

So, if you are considering buying a home, look into this as soon as possible. If you can purchase a home before you file your 2008 return you can claim this credit on your 2008 return. Just one of the many opportunities that exist in this housing market, right now!

For additional information on the current discussions about other tax credit changes, go to the following link: http://tinyurl.com/ddteb6

 

I have read the naysayers comments about how far they estimate (hope) the Portland market will fall by comparing us to other hard hit metro areas around the county. They pine and lament over how the market has a lot farther to fall.  Encouraging their followers to continue to rent and join them on the sidelines to watch Rome burn. 

 

However, this “glass half empty” crowd refuses to acknowledge the demand that exists for our city.  Year after year, we remain in the top ranks for most livable, most bike-friendly, most walkable, most active, etc.  So, it is no surprise to read the two stories below that have Portland the 5th most popular relocation city and 4th best housing market. 

 

This isn’t to ignore what has happened to our market, it is struggling, but it does acknowledge why Portland is still a good investment.  This is why we continue to have a quality of life that helps create lasting value for our market.  As long as we continue to have a city in which people want to live, our stock will remain in demand.  I also, believe that our recovery will be sooner than some expect.

 

So, as a life long Portlander, I continue to believe in our town.  The high rankings that Portland maintains, are no surprise to me.  I love the northwest and all that it and Portland has to offer.  It would be great if our negative friends would believe in us as well.

 

Here are two recent links for your review:

 

http://tinyurl.com/aa6j6v

 

http://tinyurl.com/dmbjn4

Wait or Buy?

February 14, 2009

I wanted to share these stories because they address multiple points of the housing market with great points in all the stories.

 

In the first story, “Five reasons to buy this year”, it discusses the affordability being the best since the index was created in 1970.  I completely support this.  I feel that we are seeing an affordability that we may never see in our life time again.

 

It also quotes, Duane Andrews CEO of Clear Capital, “You buy for a quality of life…don’t buy on speculation”.   He goes on to say, “I wouldn’t buy a home expecting the market to rebound quickly in the next 10 years.”  We have been telling people for some time that we are back in a traditional real estate market whereas you will be planning on living in your home for at least the next 5 -7 years.  So, buy something that you will truly be happy in, and enjoy in the years to come, not just a home that has a great price tag on it.  There is truly a difference in a great price and a great value.

 

To review the complete story and related stories see link below:

http://www.marketwatch.com/news/story/story.aspx?guid={01DA1B93-91D1-49E4-A1B1-0ACA9CE66FF4}

 

In the next story, “Five reasons not to buy a home this year”.  It refers to the concern over prices continuing to fall this year.  They might or will and in some markets there may still be more decline into late ’09 or early ’10.  However, anyone that actually thinks that they are going to time the bottom of this market is fooling themselves.  Plus, with only an increase of .5 percent in interest wiping out any savings a 10% decrease in value would realize.  I don’t see much value in fence sitting.  Especially, in the least hit areas like the Northwest, a home buyer will have more to loose than gain to wait out this market. 

 

It is quite possible that once we find the trough in this market, it probably isn’t going to be appreciating at a rapid pace.  However, rates can’t stay at the level they are for very long due to the threats of inflation.  So, even if we see modest gains in values, rates will go up and the affordability that we are realizing today will be gone.

 

I think these are all good points to consider in buying a home in the current market.  I think you need to look at all aspects of your own financial situation. Does your budget have the cushion to sustain surprises?  Do you feel comfortable with your job situation?  Any prudent competent person would consider these. 

 

This story quotes a renter that decided to rent because he wasn’t planning on staying in one place for more than 5 years. We discuss this with prospective home owners in our sales office on a regular basis.  Real estate is back to a long term traditional investment.

 

To review the complete story and related stories see link below:

http://www.marketwatch.com/news/story/story.aspx?guid={22185FBD-7F44-4A49-A604-A29D4225E122}

 

 All good points however, all come to the same conclusion, if you are considering buying a home that you will be in for longer than 5 years that is within your means, it is the time to buy.  I hope you will take the time to read these stories and come to your own conclusion.

Or anyone who has not owned a home in the last three years.  If you are considering buying a home this year, take advantage of the Federal Housing Tax Credit.  The Federal Tax credit is available to you for a purchase of your new home.  The sooner you talk with a tax professional the sooner you can determine how much of the allowable $7500 is available to you.  The great news is that there are possible revisions to the original Housing Stimulus measure of last year.  On Tuesday the House of Representatives passed H.R. 1 that removes the repayment requirement of the housing tax credit which currently has to be paid back within 15 years.  Also, on Tuesday the Senate Finance committee passed their version which eliminated the repayment requirement of the credit, but additionally extended the dead line from June 30th, 2009 to September 1st, 2009.  These changes are exciting and hopefully soon we will see what the final outcome is.  Regardless of what form this Housing credit takes, the current form or modified with these new changes, it is a great incentive to assist you in the purchase of your next home. 

 

For more details and frequently asked questions about the Federal Tax Credit go to the following website: http://www.federalhousingtaxcredit.com

 

To put this in perspective, our town homes here at Volare in Happy Valley, start at $229,950.  On a purchase, utilizing a FHA loan, the $7500 Tax Credit almost covers the $8048 necessary for the down payment.  This would be almost like 100% financing except the $7500 is interest free, if the requirement to repay doesn’t get removed with new legislation.

 

So, if you are considering buying a home, look into this as soon as possible.  If you can purchase a home before you file your 2008 return you can claim this credit on your 2008 return.  Just one of the many opportunities that exist in this housing market.

 

For additional information on the current Stimulus package and other tax changes go to the link below:

http://www.marketwatch.com/News/Story/Story.aspx?guid=e513d57088144f24b74650d2dbd0b235&siteid=nwhpf&sguid=pEra3NiK_Ea0EyuFa0GCYA