In this section I highlight trends and issues affecting the local

 and national real estate market, including new legislation, local news

 and topics of interest.  If you have a suggestion for a topic,

or questions regarding any of the topics highlighted below, please contact me.

 

Scroll down to view information on the following topics:

Lead-Based Paint Regulations

NAR Profile of Home Buyers and Sellers

Changes in Truth in Lending and Mortgage Disclosures

Cost vs Value Remodeling Report

Low Appraisal Values

Chester County Buy Fresh Buy Local Campaign

PA Home Improvement Protection Act

 

 

 

Lead-Based Paint and Renovations: New EPA regulations

In April, 2010 the EPA issued a supplemental rule to existing Lead-Based Paint regulations.  Common renovation activities like sanding and demolition can create hazardous lead dust and chips by disturbing lead-based paint.  Under the new rule, contractors who perform projects such as repair and painting, window installations and other renovations that may disturb lead-based paint in homes (childcare facilities and schools) built before 1978 must be certified and must follow specific work practices to prevent lead contamination.  (Home owners performing work themselves are exempt from this rule, but may still want to follow lead-safe practices.)

How can you tell if your home contains lead-based paint?  It is estimated that lead-based paint was used in more than 38 million homes until it was banned in 1978.  However, statistics show that only app. 24% of homes built between 1960-1978 actually contain lead-based paint, as its use was slowly declining by that time. Prior to that time, the older the home, the higher the probability that it contains lead-based paint: approximately 69% of all homes built from 1940-1960 and as many as 87% of homes built before 1940 may have lead-based paint. A certified inspector, risk assessor or certified renovator can test the surfaces or components being disturbed for lead using a lead test kit.  Test kits must be EPA-recognized and are available at hardware stores. The kits include detailed instructions for their use.

All home buyers, sellers, landlords and tenants need to be educated about the potential for lead-based paint hazards, and this new legislation.

For more information, go to: www.epa.gov/lead or call the National Lead Information Center at 1-800-424-LEAD(5323).

 

 

2010 Profile of Home Buyers and Sellers

The National Association of Realtors (NAR) has released their 2010 Profile of Home Buyers and Sellers. This annual report offers insights into trends in the national real estate market. Some of the interesting findings highlighted in this year's report:

- Spurred by federal tax credits, the number of first-time home buyers grew to 50% of all home-buyers this year (up from 42% in 2001 and a low of 36% in 2006).

- "Location, Location, Location" - we hear this phrase in real estate all the time, but what exactly does it mean? According to the NAR report, home buyers define a desirable location based on: quality of the neighborhood, convenience to work; the overall affordability of homes in the area; convenient to friends and family; quality of the school district; and convenient to shopping.

- The average expected tenure in a home for all buyers is 10 years, with repeat buyers and buyers ages 45 and older expecting to stay in their homes closer to 15 years.

- Not surprisingly, the internet continues to grow in importance as a source of useful information to home buyers during their search process: 81% of buyers ranked the internet as "very useful" in their home search process, while only 24% ranked print newspaper ads as highly.

- The length of the home search process has increased, from an average of 7 weeks in 2001 to 12 weeks in 2009 and 2010.

- What sacrifices did home buyers make in 2010 to finance their home purchase? Cuts in spending on "luxury" items, entertainment, clothes and vacations topped the list.

- 85% of all buyers still view buying a home as a good financial investment, with 77% of those respondents viewing the investment in their home "about as good as or better than" stocks.

- Home sellers in 2010 typically received 96% of their final asking price for their home. 43% of home sellers did not reduce their asking price, but 44% offered some sort of incentive. Homes were on the market an average of 8 weeks.

- Equity earned in home ownership varied by tenure, with sellers owning their homes only 2 or 3 years showing no increase, but significant increases for those who owned their homes longer: 26% equity earned for those who owned their home 8-10 years, 40% equity for those who owned their homes 11 to 15 years.

Please contact me for more complete information or a copy of the full report.

 

Truth in Lending, Mortgage Disclosure and Waiting Periods Have Changed

Under the Federal Reserve Board Truth in Lending Regulation (Reg Z), mortgage loan applications are now subject to new disclosure requirements. It is important for consumers to understand the impact of this new legislation since these new requirements apply to all mortgages secured by a borrower's home, including primary and secondary homes and refinancing.  The intent of this new regulation is to allow home buyers time to make an informed decision about their home loan.  However, the time it takes to complete the mortgage process will be impacted by this regulation.

Key elements of the new legislation include:

- Early Disclosure: Mortgage lenders must provide good faith estimates of loan costs within 3 business days after the consumer applies for a loan. Consumers should be aware that the lender may not collect any fees before the disclosure is provided, except for a "reasonable" credit report fee.

- Waiting Period: After the consumer receives the early disclosure, a seven business day waiting period is required before closing.

- APR Changes: Any change in a fee or rate that increases or decreases the annual percentage rate (APR) of the loan by more than 0.125% will require new disclosures and an additional waiting period of 3 business days before closing the loan.

Home buyers, sellers and their agents should be aware that these new regulations will have precedence over the contract closing date or borrower's request.

 

Cost vs. Value Remodeling Report

Published annually, Remodeling Magazine's Cost vs. Value Remodeling Report compares the average cost for the most popular remodeling projects versus the value retained at resale. Since real estate values and costs vary by region, this report not only provides national averages, but also breaks down the data by region and even for several major cities. An important note to consider when reading this report: local market trends and factors that affect overall home values in an area - such as location and school district - will also affect the cost recouped for a remodeling project. In an area where home values are falling, one could expect that the cost of a remodeling project may be less than the national or regional average. In many local Chester County and Main Line neighborhoods, however, prices have stabilized and demand is increasing, and therefore the value of a particular project may be more than the regional or national average. For example, in the area with larger homes that sell to primarily "upscale" buyers, if most other homes have expanded "gourmet" kitchens and "luxury" master baths, these renovations may recoup more than the national or regional average, since buyers in that area "expect" homes to have these features.

A prudent note of caution: Always be careful not to "over-improve" your home versus the neighborhood. If you are considering a remodeling project specifically for its resale value, I advise contacting a local realtor to talk about pricing and trends in your area. Predicting the "value" of a remodeling project at resale is not as simple as the numbers in this report might imply.

 

For more information click on this link:  http://www.remodeling.hw.net/2010/costvsvalue/national.aspx

 

"Low" Appraisal Values

Have you recently refinanced your home and been surprised by the "low" valuation you received for your home? Has a neighbor tried to sell their home, only to have the deal fall-apart when the appraised value turned out to be less than the sale price? Decreased home values are only part of the story.

In 2009,  new appraisal laws took effect under the Home Valuation Code of Conduct (HVCC). The intent of the law was to prevent "undue influence" from third parties (such as mortgage companies) from affecting appraised values. However, several unintended consequences of this law have also arisen, including:

- slower turn-around time for appraisals;

- less experienced appraisers; and,

- appraisers unfamiliar with the local area making less accurate appraisals.

How can problems be avoided? Despite a common misperception in the industry, there is nothing in the law that prevents real estate agents from sharing comparables with appraisers. This is a practice I follow and have found effective in avoiding problems.

 

Chester County Local Food Guide & Buy Fresh Buy Local Campaign

Do you know where to find the freshest, locally grown foods in Chester County? The Chester County Agricultural Development Council has published a local food guide, including a list of farm stands and farm stores, community supported agriculture cooperatives, farmers' markets and more. 

The Local Food Guide is part of the "Buy Fresh Buy Local" campaign developed through the FoodRoutes Network, a non-profit organization supporting local food systems and promoting sustainable agriculture. For more information and to print a PDF version of the Chester County Local Food Guide, go to:

http://dsf.chesco.org/agdev/cwp/view.asp?a=3&q=636821

Other resources include:

www.BuyLocalPa.org - search for local food resources by county or zip code.

www.LocalHarvest.org - find family farms and local sources of sustainably grown food.

 

PA Home Improvement Consumer Protection Act

The Pennsylvania Home Improvement Consumer Protection Act became effective July 1, 2009, but many homeowners are not aware of this important piece of legislation and how it may protect them. The Home Improvement Protection Act requires contractors who perform at least $5,000 of home improvement work per year to register with the PA Attorney General's office. This registration includes proof of at least $50,000 in liability insurance, disclosure of prior license suspensions or revocations, and disclosure of prior crimes, fraud and bankruptcies related to any home improvement transaction. The Act also addresses key elements of the home improvement contract including down payment, change orders and right of rescission.

While this legislation is an important step forward in protecting consumers, the Attorney General cautions that this registration process does not guarantee the integrity of the contractor or the quality of work.   The Attorney General recommends that before under taking any home improvement project, that consumers still check the contractor's references thoroughly, obtain multiple bids and check with the Better Business Bureau: http://www.bbb.org/

For more information regarding the Act, and to see if a particular contractor is registered, go to the PA Attorney General's website: http://www.attorneygeneral.gov/hiccon.aspx or call the toll-free hotline: 1-888-520-6680.