Think Small: Getting Started As a Real-Estate Investor

Think Small: Getting Started As a Real-Estate Investor

By David Crook

From The Wall Street Journal Online

The real-estate bubble has burst. Get over it. In areas that saw big home-price run-ups in the first half of the decade, prices are stagnant, or worse. New-home inventories are up; new-home builder stocks are down.

A kind of real-estate weariness has set in. Who's the cocktail-party boor? The guy still talking about making a killing on Miami Beach condos.

Smells like a buying opportunity. Probably not right away, because there's still plenty of froth in the markets that saw the biggest price increases. But soon, you'll see the real-estate investors -- property vultures who buy when prices are low and then ride property manias to their crest -- toeing the market again.

Even in today's uncertain climate, novice real-estate investors can make money, especially in smaller properties that are easy to acquire and manage.

Let's explore some options.

In-Law Units

The most basic form of property investment is a so-called in-law unit or guesthouse on the site of your home itself, sometimes attached to the main house, sometimes not. No one has ever gotten rich renting out such properties, but they can significantly reduce the cost of homeownership. Renting out an in-law unit for $400 a month and using that money every month to pay down principal on a $350,000 30-year mortgage will shave 10 years from the mortgage term and reduce total payments by more than $165,000. And you will be able to write off all your costs on your income taxes -- including depreciation on the unit -- up to your actual rental income.

Weekend or Vacation Homes

Just as with an in-law unit, renting out your weekend house is not a way to get rich. Many of the same numbers that applied to in-law units can be applied to your weekend home, although the tax situation is decidedly different.

First, the IRS gives second-home landlords a very nice little present in that it allows two weeks of tax-free rental income a year. Beyond that, however, the accounting can be irksome. The IRS doesn't want people buying second homes and disguising them as rental properties. It has two criteria to determine whether the property is a second home (bad) or a rental (good). It's a second home if you don't rent it out at all or if you personally use it at least two weeks a year or 10% of the number of days the place is available for rental, whichever is longer.

Single-Family Homes

Throughout much of the country, the market for single-family homes is seriously out of whack. As prices fall and inventories rise, that's changing. But, compared with rents, prices are still quite high, outstripping the ability of such properties to cover their mortgage and operating costs.

Avoid this segment of the market unless you have a chance to buy a property at a 30% or 40% discount from its previous price. Don't think this is out of the question. In the late 1980s and early 1990s, when the government liquidated the real-estate loan portfolios of bankrupt savings-and-loans, speculators picked up properties for just dimes on the dollar.

Managing a house that pays for itself is what it's all about. You can do it in one of two ways: Renting or "flipping." Renting is a "buy-and-hold" strategy, while flipping calls for quick turnarounds of fixer-uppers that can be spruced up and sold quickly.

But in the current environment renting is probably the more prudent path, although it can be very difficult to make a house pay for itself at today's prices. That's because if your house carries an 80% or 90% loan, the renter will have to pay more per month to rent the house than he would to buy it.

Look at it this way: There's a handsome three-bedroom, two-bath house in Tampa, Fla., for sale at an asking price of $199,900. If you bought it with 10% down and a 90% loan at 6%, your monthly payment will be about $1,550 (that's PITI -- principal, interest, taxes and insurance). As a landlord, at a minimum, you'll want to budget at least $200 a month in additional expenses. That puts your break-even point at almost $1,800 a month. That's far more than you can reasonably expect to earn where comparable properties in the same neighborhood can be rented for less than $1,300.

But it turns out that there's a similar house available less than a mile away. This other house is roughly the same size. The difference is this one's being taken over by its lender, and the house has a mortgage loan of $110,000.

A buyer with cash can drive a hard bargain and make out very well. And the worse the market, the better for the buyer. But don't get carried away. If you simply take over an existing 90% or 95% note, you won't make any money. Let the lender foreclose and take over the place. Then lowball the lender.

Multiple Units

A housing market that saw the price of single-family homes skyrocket was not quite so generous to smaller two-family or multifamily properties. Because the universe of home buyers expanded so much in the past 10 years, the universe of renters contracted, and the market for smaller rental properties contracted with them.

In Memphis, where two-bedroom apartments in better neighborhoods rent from $500 up to $800 a month, good two-family properties can still be bought for far less than a one bedroom condo on either of the coasts. Recent prices for 40-year-old two-family homes near the University of Memphis main campus ranged from $70,000 to $110,000. Monthly payments, including insurance and maintenance, on an $88,000 mortgage (20% down on the $110,000 property) come to only about $750 a month. So renting both units at the low end of the market would result in a positive after-tax cash flow of more than $100 a month. Upgrade the units, and you can charge top-of-the-market rents of $800 a month.

Good deals on smaller buildings can be found throughout the country, even in some of the hottest markets. In trendy Pasadena, Calif., where even modest homes can sell for $400 to $600 a square foot, two-, three- or four-unit rental buildings can be bought in the $250 to $350 range.

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Think Small: Getting Started As a Real-Estate Investor

By David Crook

From The Wall Street Journal Online

The real-estate bubble has burst. Get over it. In areas that saw big home-price run-ups in the first half of the decade, prices are stagnant, or worse. New-home inventories are up; new-home builder stocks are down.

A kind of real-estate weariness has set in. Who's the cocktail-party boor? The guy still talking about making a killing on Miami Beach condos.

Smells like a buying opportunity. Probably not right away, because there's still plenty of froth in the markets that saw the biggest price increases. But soon, you'll see the real-estate investors -- property vultures who buy when prices are low and then ride property manias to their crest -- toeing the market again.

Even in today's uncertain climate, novice real-estate investors can make money, especially in smaller properties that are easy to acquire and manage.

Let's explore some options.

In-Law Units

The most basic form of property investment is a so-called in-law unit or guesthouse on the site of your home itself, sometimes attached to the main house, sometimes not. No one has ever gotten rich renting out such properties, but they can significantly reduce the cost of homeownership. Renting out an in-law unit for $400 a month and using that money every month to pay down principal on a $350,000 30-year mortgage will shave 10 years from the mortgage term and reduce total payments by more than $165,000. And you will be able to write off all your costs on your income taxes -- including depreciation on the unit -- up to your actual rental income.

Weekend or Vacation Homes

Just as with an in-law unit, renting out your weekend house is not a way to get rich. Many of the same numbers that applied to in-law units can be applied to your weekend home, although the tax situation is decidedly different.

First, the IRS gives second-home landlords a very nice little present in that it allows two weeks of tax-free rental income a year. Beyond that, however, the accounting can be irksome. The IRS doesn't want people buying second homes and disguising them as rental properties. It has two criteria to determine whether the property is a second home (bad) or a rental (good). It's a second home if you don't rent it out at all or if you personally use it at least two weeks a year or 10% of the number of days the place is available for rental, whichever is longer.

Single-Family Homes

Throughout much of the country, the market for single-family homes is seriously out of whack. As prices fall and inventories rise, that's changing. But, compared with rents, prices are still quite high, outstripping the ability of such properties to cover their mortgage and operating costs.

Avoid this segment of the market unless you have a chance to buy a property at a 30% or 40% discount from its previous price. Don't think this is out of the question. In the late 1980s and early 1990s, when the government liquidated the real-estate loan portfolios of bankrupt savings-and-loans, speculators picked up properties for just dimes on the dollar.

Managing a house that pays for itself is what it's all about. You can do it in one of two ways: Renting or "flipping." Renting is a "buy-and-hold" strategy, while flipping calls for quick turnarounds of fixer-uppers that can be spruced up and sold quickly.

But in the current environment renting is probably the more prudent path, although it can be very difficult to make a house pay for itself at today's prices. That's because if your house carries an 80% or 90% loan, the renter will have to pay more per month to rent the house than he would to buy it.

Look at it this way: There's a handsome three-bedroom, two-bath house in Tampa, Fla., for sale at an asking price of $199,900. If you bought it with 10% down and a 90% loan at 6%, your monthly payment will be about $1,550 (that's PITI -- principal, interest, taxes and insurance). As a landlord, at a minimum, you'll want to budget at least $200 a month in additional expenses. That puts your break-even point at almost $1,800 a month. That's far more than you can reasonably expect to earn where comparable properties in the same neighborhood can be rented for less than $1,300.

But it turns out that there's a similar house available less than a mile away. This other house is roughly the same size. The difference is this one's being taken over by its lender, and the house has a mortgage loan of $110,000.

A buyer with cash can drive a hard bargain and make out very well. And the worse the market, the better for the buyer. But don't get carried away. If you simply take over an existing 90% or 95% note, you won't make any money. Let the lender foreclose and take over the place. Then lowball the lender.

Multiple Units

A housing market that saw the price of single-family homes skyrocket was not quite so generous to smaller two-family or multifamily properties. Because the universe of home buyers expanded so much in the past 10 years, the universe of renters contracted, and the market for smaller rental properties contracted with them.

In Memphis, where two-bedroom apartments in better neighborhoods rent from $500 up to $800 a month, good two-family properties can still be bought for far less than a one bedroom condo on either of the coasts. Recent prices for 40-year-old two-family homes near the University of Memphis main campus ranged from $70,000 to $110,000. Monthly payments, including insurance and maintenance, on an $88,000 mortgage (20% down on the $110,000 property) come to only about $750 a month. So renting both units at the low end of the market would result in a positive after-tax cash flow of more than $100 a month. Upgrade the units, and you can charge top-of-the-market rents of $800 a month.

Good deals on smaller buildings can be found throughout the country, even in some of the hottest markets. In trendy Pasadena, Calif., where even modest homes can sell for $400 to $600 a square foot, two-, three- or four-unit rental buildings can be bought in the $250 to $350 range.

---------------------------------------------------------------------------------------
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Home Prices Expected to Rise, Sales to Drop Slightly in 2007

By Campion Walsh

From The Wall Street Journal Online

U.S. home sales will decline less sharply this year than they did last year, while home-price appreciation is expected to gain steam, the National Association of Realtors said.

In its latest forecast, the NAR said sales of existing homes are likely to decline about 1.2% this year to 6.42 million, following a sharp drop last year, while sales of new homes are seen falling about 9.7% to 957,000.

Because the market is starting this year at a relatively low point, even a gradual recovery of sales during the year would mean that annual totals for 2007 are likely to show no substantial improvement, according to NAR Chief Economist David Lereah.

"The good news is that the steady improvement in sales will support price appreciation moving forward," Mr. Lereah says.

The Realtors' group, which is running a $40 million ad campaign designed to encourage consumers to contact their local realtors, expects moderate price increases this year. The group forecasts the median sales price for existing homes to grow 1.5% nationally to $225,300, following last year's estimated 1.1% rise. The national median price for new homes will increase 3% this year to $248,900, according to the NAR, after estimated growth of 0.3% last year.

As builders rein in new projects to support prices, housing starts are expected to drop 16.6% this year to 1.51 million, their lowest level in a decade, the NAR said.

Mortgage Bankers Association chief economist Doug Duncan expects home prices to rise 1% to 2% annually for the next couple of years. But some markets could see price declines of 10% to 20% this year, he says, a shift from the last four to five years, when there were "almost no markets where prices were declining."

Home sales will decline 7% to 8% this year, with most of the decline in the first half, adds Mr. Duncan, who expects the market to bottom out in mid- to late 2007.

Meanwhile, the volume of mortgage applications filed with major U.S. banks rose 16.6% on a seasonally adjusted basis last week, compared with the week before, the MBA reported yesterday.

The number of applications -- for both purchases and refinancings -- increased 12%, compared with the same period a year earlier. Application volumes, on a seasonally adjusted basis, fell about 14% just before the holidays.

Applications for loans to buy homes stood at the highest level in nearly a year, according to the MBA. Applications to refinance rose about 28% from a year ago.

The average rate for a 30-year fixed-rate loan fell to 6.13% from 6.22% the previous week, which was the highest rate seen in eight weeks. The average rate for a 15-year fixed-rate mortgage dropped to 5.85% from 5.93% the previous week. The rate for a one-year adjustable-rate mortgage, or ARM, averaged 5.79%, down from 5.84% the previous week, the MBA's data showed.

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D.R. Horton's Net Slides Amid Housing Slump

By Janet Morrissey

From The Wall Street Journal Online

Home builder D.R. Horton Inc. on Tuesday posted lower profit for its fiscal fourth quarter amid land-related writedowns of $199.2 million, but the results exceeded Wall Street's expectations.

The Fort Worth, Texas, company reported no signs of a rebound in the troubled housing market and offered no outlook for fiscal 2007. Market conditions remain "challenging" in the home-building industry, Donald Horton, the company's chairman, said in a statement. The company's orders fell 25%, which is better than many of its rivals.

Net income sank to $277.7 million, or 88 cents a share, in the three months ended Sept. 30, from $563.8 million, or $1.77 a share, a year earlier. Revenue fell 3.9% to $4.9 billion from $5.1 billion. The most recent quarter's results included a charge of 39 cents a share, related to writedowns on land, land options and land reacquisition costs. Still, the results exceeded Thomson First Call's estimate of 69 cents a share on revenue of $3.93 billion

The land writedowns were D.R. Horton's first. Other builders have been taking charges related to land for the past couple of quarters as deteriorating housing conditions and values have made certain land parcels no longer financially viable to build homes on.

Banc of America analyst Dan Oppenheim expects D.R. Horton to take more land-related writedowns in future quarters. He said D.R. Horton's results were better than expected because home closings held up relatively well and "represented 26 cents a share of upside." In the quarter, closings fell 7.3% to 17,261.

The higher-than-expected closings appeared to indicate that D.R. Horton was slightly more successful than other builders at stemming the tide of cancellations. This was partly offset by the company's gross profit margins, which came in about seven cents a share lighter than expected, he said.

Mr. Oppenheim said he wasn't surprised that the company didn't offer guidance for fiscal 2007, given the uncertain market conditions. "We expect that they will wait as long as possible before providing it due to the lack of visibility," he said. Mr. Oppenheim doesn't hold shares in D.R. Horton, but his firm has had an investment-banking relationship with the company in the past 12 months.

For all of fiscal 2006, earnings fell 16% to $1.23 billion, or $3.90 a share, from $1.47 billion, or $4.62 a share, for fiscal 2005. Revenue grew 8.6% to $15.1 billion from $13.9 billion.

In early trading, shares of D.R. Horton were up $1.31, or 5.9%, at $23.69 on the New York Stock Exchange.

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Declining Affordability Pushes Homes Out of Reach for Some

By Amy Hoak

From MarketWatch

http://www.realestatejournal.com

Despite low mortgage interest rates, a smaller percentage of first-time home buyers are entering the market, according to an annual profile of buyers and sellers released by the National Association of Realtors on Saturday.

During the year ending in June, 36% of all buyers who purchased a home were first-time buyers, according to the association's annual profile of home buyers and sellers. That's down from 40% a year ago. About 7,500 buyers and sellers were surveyed.

Part of the reason for the declining share of first-time homeowners: Declining affordability for those entering the market after the housing boom of the past couple years bumped up home prices, said David Lereah, the NAR's chief economist, during a news conference held at the Realtors' annual convention here. A greater number of second-home sales also may have contributed to a lower percentage of first-time buyers overall.

"I hope that it's not a trend. I hope that as affordability starts to improve we see more first-time home buyers," he said. "It's critical for the housing sector."

The percentage of single female home buyers, however, inched up in the survey to its highest level on record. Twenty-two percent of all home buyers were female and on their own, up from 21% a year ago and up from 14% in 1995. In comparison, single males accounted for 9% of home buyers, unchanged from last year.

Other statistics helped validate the jobs of the thousands of Realtors at the convention: 80% of home buyers said they used the Internet to search for a home, but 85% relied on a real-estate agent as a source of information about homes for sale. And 36% first learned about the home that they purchased from an agent, versus the 24% who learned about the home that they purchased online. Among those who used the Internet to search for a home, 81% purchased a home using a real-estate agent.

Although real-estate agents were leery of the Internet 10 years ago, fearing it would take away business, 80% of firms now have their own Web sites, Lereah said.

"What the Internet has done for consumers, potential buyers, is provide them with information, give them a comfort level," he said. "But it all comes down to you're making the biggest financial transaction you're ever going to make for 99% of these people -- and they need guidance, they need someone they can trust and who has been through this before."

From the seller's side

Reflecting the beginning of a softening market, sellers had their homes on the market for a median of 6 weeks, according to the report, an increase from the 4-week median reported a year ago. "It makes some sense: We had a boom in 2005, and in this time period, we're coming to a close and beginning to stall," Lereah said.

The typical home sold for 98% of the listing price in this year's report; it sold for 99% of its listing price a year ago. But even in this year's figures, 12% of homes sold for more than its listing price.

Nineteen percent of sellers said that the primary reason for selling their home was because it was too small, while 13% said the neighborhood was less desirable and 10% decided to move so they could be closer to their job. The typical home seller owned their home six years.

Twelve percent of sellers said they sold their home without a real-estate agent, down from 13% a year ago and 20% -- the report's recorded high -- in 1987. Of those who sold their home on their own in this year's survey, 40% said they sold the property to someone they already knew.

Of those who did use an agent, 73% used a full-service agent, 8% used a discount broker and 7% used a minimum-service agent who may have done as little as list the home on the Multiple Listing Service, the survey found.

"Limited and minimal brokerage services cater largely to owners who would prefer to sell on their own but recognize they need some level of professional help," Thomas M. Stevens, president of the National Association of Realtors, said in a news release. "These services generally are a good match for certain consumers, and help to explain a decline in owners selling purely on their own."

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What Blackstone Bet Means For Real-Estate Investors

By Jennfier S. Forsyth and Janet Morrissey and Ryan Chittum

From The Wall Street Journal Online

With its bold move to buy Equity Office Properties Trust in the largest real-estate deal in history, Blackstone Group is betting that commercial real-estate prices haven't gotten out of hand, despite a big run-up in recent years.

Blackstone's move to convert the publicly traded real-estate investment trust into a privately owned business rippled through the REIT industry, lifting shares of such companies across the board by 3.2% in anticipation of more buyouts and mergers.

Analysts said the Equity Office deal underscores a recent trend in the REIT industry: Publicly traded real-estate companies are fetching much more from private firms than they do from the public stock markets, despite a 29% increase in REIT shares so far this year. It also dispels the theory that some real-estate investment trusts are too big to buy out, said Keven Lindemann, real-estate group director at SNL Financial, a research outfit in Charlottesville, Va. A day after the private-equity firm announced it would buy Chicago-based Equity Office for $20 billion plus $16 billion in debt assumption, Equity Office's largest shareholder, Cohen & Steers, questioned whether the company was worth more. Jim Corl, Cohen & Steers's chief investment officer, said the cost of buying all the properties in the company's portfolio would value it "in the $60 range."

The $48.50 price was 8.5% more than the REIT's closing share price on Friday. The stock jumped 7.7% yesterday to $48.14.

Sam Zell, Equity Office's chairman, said in an interview yesterday that Blackstone's bid was unsolicited. He added that the stock market had "underpriced the value of this company" and that no effort was made to find other bidders. "We got what we considered to be a significant offer at a price that we considered to be very attractive, and responded accordingly," he said.

Matthew Ostrower, an analyst with Morgan Stanley, said the price is high compared with Blackstone's recent acquisitions of Trizec Properties Inc. and CarrAmerica Realty Corp., two other office REITs. Blackstone expects to make net operating income totaling 5.5% of its purchase price for Equity Office in the first year -- the so-called capitalization rate. Trizec had a cap rate of 5.8%, and Carr-America's was 6.7%, meaning those companies came much cheaper.

Despite investors hopes for more bidders, the number of players that could buy a company as large as Equity Office is limited. "We can write a large check that other people can't write," said Frank Cohen, a Blackstone managing director of real estate, at a recent industry conference.

Blackstone is betting that corporate tenants will clamor for more space as the economy continues to expand. That, combined with construction and land costs that remain high, should keep office fundamentals strong. At the end of the third quarter, the nationwide vacancy rate was at its lowest in six years and rental rates had surged this year.

Some analysts questioned whether it was a good time for Blackstone to grab Equity Office, which has total or partial stakes in more than 500 office buildings throughout the country, after already gulping huge bites of two other office companies since July.

"I have tremendous respect for the Blackstone Group," said John Lutzius, president of Green Street Advisors, a Newport Beach, Calif., research and trading company. "But this is yet another large deal, and they have a lot of work ahead of them to rationalize all these properties that they've bought and do what they want to do with them."

Reis Inc., a New York real-estate research firm, also notes that the amount of space companies leased in the third quarter dropped significantly compared with the previous two quarters, while construction of new buildings is increasing nationwide.

If Blackstone follows its pattern after purchasing CarrAmerica, it will likely use many of the properties to borrow money, giving it a higher cash return, and sell off properties in markets where it doesn't intend to concentrate. Publicly traded REITs, which must answer to shareholders, have been reluctant to let their debt levels soar.

Blackstone's office-sector buying spree is in some respects similar to one it went on in the hotel industry from May 2004 to this February. Blackstone bought into that industry's recovery, taking $8 billion of public hotel companies ($15 billion including debt) private and wagering that revenue per available room and occupancy would rise. So far, the investment has paid off. The hotel industry set a record for profitability in 2005 and is expected to do so again each year through 2008, according to projections by PricewaterhouseCoopers.

Morgan Stanley's Mr. Ostrower says despite the trend toward going private, there is still a place for publicly traded REITs, noting that the buyouts have culled some of the weaker performers, including Equity Office.

"One thing that ties all these things together is they've generally involved companies that have very significantly underperformed for multiyear periods," Mr. Ostrower says.

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Economists Say the Worst Of Housing Bust Is Over

The worst of the housing bust is over, economists said by nearly 2-to-1 in the latest WSJ.com economic forecasting survey. But they still predict that the average selling price of a house will fall next year.

After several years of double-digit percentage increase, housing prices stopped soaring this year. The 49 economists responding to the WSJ.com forecasting survey expect home prices, measured by the government's Office of Federal Housing Enterprise Oversight index, to rise 2.8% this year and to fall by 0.5% next year. That contrasts with a 13.4% increase in 2005.

"We're nearing the end of the slowdown for most markets," said Ethan S. Harris at Lehman Brothers. Prices still have some ways to fall before they'll stabilize, but there are signs that most drastic parts of the downturn - marked by a sharp pullback in demand and new construction - have run their course.

The economists' predictions for home prices next year vary widely, from an increase of 7%, predicted by Kurt Karl and Arun Raha of Swiss Re, to a 10% decline, expected by Maury Harris of UBS. Mr. Harris, for his part, said he expects a large inventory of vacant newly constructed homes to push prices lower in the first half. Construction companies "built much more than were justified because of investor interest," he said.

While 20 economists predicted home prices would rise next year, 24 forecast a decline. Just eight of the economists forecast gains greater than 2.1%, which is their average forecast for consumer-price inflation through mid-2007. The Ofheo index, which is closely watched by economists, has never posted a year-to-year decline.

Richard DeKaser, an economist at National City Corp., a big mortgage provider, said he thinks the worst is over. "We're starting to see inventories topping out and possible declining," he said. Mr. DeKaser forecast a 4.4% increase in prices this year and a 1.8% decline next.

The housing market, of course, doesn't move uniformly across the country; some regions or individual cities often have price changes decidedly above or below the national average.

Mr. Harris of Lehman expects price declines next year to be confined to "bubble" markets, such as those in Florida, California and cities in Nevada and Arizona, where large numbers of investors have artificially inflated prices. "There's no reason for prices to be falling in areas without a bubble," he said. "People are just slowing down purchase decisions."

Allen Sinai, at Decision Economics Inc., believes the worst of the bust is over, but he feels housing remains a big risk to the economy. The housing sector subtracted 1.1 percentage points from third-quarter gross domestic product, according to preliminary numbers from the U.S. Commerce Department.

The economists trimmed their forecasts for fourth-quarter economic growth: Their average estimate puts gross domestic product growth at a 2.3% rate in the fourth quarter, down from the 2.5% rate they forecast in the October survey. They expect growth to remain at that rate through the first half of 2007 and then to accelerate later in the year. On average, the economists predicted growth of 2.8% during the second half 2007. GDP is the broadest measure of economic output.

The housing slowdown is expected to hit consumer spending, but the "consumer won't cave in and drive us into a recession," said Mr. Sinai. Steady interest rates, controlled inflation, stabilizing energy prices and a solid jobs market will support the economy, he said.

Indeed, new data released Monday indicated that weakness in the housing sector is being offset by other areas of the economy. The Conference Board, an industry-backed research group based in New York, said its composite index of leading indicators for October rose by 0.2% to 138.3, in line with expectations. September's reading was revised up to a 0.4% advance. The index is designed to predict activity in the three to six months ahead.

"People say all bubbles end in disaster, but this is a small bubble. Home prices are just about 20% too high. We need to take it seriously, but in the history of bubbles, this will go down as one of the smaller ones," said Lehman's Mr. Harris.

Among other findings in the survey:

• Economists expect a relatively happy holiday for retailers, forecasting a 5.1% rise in sales from last year.
• 
  
• Some 57% expect Fed policy to be the biggest factor in the economy and markets over the next year, topping Iraq or the budget and tax legislation.
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• Just eight of 56 economists expect the Federal Reserve to raise rates beyond the current 5.25% rate before June 2007.
• 
  
• Economists expect just 107,000 new jobs a month over the next year, down from 109,800 forecast in October and 179,400 at the high for this year's surveys, in February.

http://www.realestatejournal.com/

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If you need assistance selling your house ERA Othello Realty can share their expertise and experience with you in a friendly and professional manner. From all aspects of selling your house: from getting a qualified CMA (Comparative Market Analysis) to advising you on the presentation of your house, marketing your home online and in print, conducting an open house, showing your house within your guidelines and discretion, constant communication, negotiating the best price for your home and being with you until closing and beyond. We can also assist you in your search for a new home. Please call us at 732-364-2015. We are the realtors NJ! Look at these Listings of Homes for Sale in NJ. Marlboro NJ, and Information on Marlboro NJ.

For More Homeowners, Threat From Lightning Is a Worry

By M.P. McQueen

From The Wall Street Journal Online

The cost of homeowners' claims for damage due to lightning strikes is soaring because of the burgeoning number of high-end electronic items and appliances in the average home, insurers say.

Hartford Financial Services Group Inc. says that the cost of claims the company paid due to lightning strikes rose 77% between Jan. 2001 and July 2006, even as the number of claims fell in the period by nearly half. Some of the nation's largest insurance companies, including State Farm Insurance Cos. and Nationwide Mutual Insurance Co., also say they're experiencing a similar trend.

Insurers partly attribute the higher losses to the growing number of home-theater systems, plasma and high-definition television sets, game consoles and personal computers in the average American home -- which all can be fried by a surge of voltage in a home's electrical wiring that can occur from a lightning strike. Rising rebuilding costs are also a factor because in the worst instances, lightning torches the house either from overloading appliances or from a direct hit.

A State Farm spokesman says the company believes policyholders are filing fewer claims for lightning damage -- and other losses -- because of fear their rates will go up. But the claims they do file are larger.

Janice Dlatt, of Buffalo Grove, Ill. learned about lightning the hard way. She and her family suffered $10,000 in losses when a lightning strike burned out their hard-wired home-alarm system, heating and air-conditioning system, ceiling fans, TVs, VCRs and phones. "I consider ourselves lucky because my house didn't burn down. It was a small strike with a lot of voltage. It actually hit the flue from the furnace on the roof," she says.

Lightning strikes in the U.S. also cause an average of 6,100 residential fires and $144 million in direct property damage, according to the National Fire Protection Association, a nonprofit code- and standard-setting group.

Homeowner's insurance policies cover damage from electrical storms, less the deductible, but insurers say much of it could be avoided with the proper precautions.

A lightning-protection system can help save your gadgets and your house and in some places, may be a requirement under local building codes. The system, which provides a safe path for electricity to follow and discharge, should be installed by a qualified and licensed electrician and in compliance with local building codes and guidelines of the National Fire Protection Association (NFPA standard 780) and Underwriter's Laboratories, the safety organization. The system includes a lightning rod or air terminals at the top of the house that can be disguised to look like a weather vane and wires to carry the current down to grounding rods at the bottom of the house. Installing such a system costs about $1 to $1.50 per square foot for the average U.S. home.

A whole-home surge arrestor installed near the main circuit-breaker panel or the electric meter helps prevent excess voltage from passing through the house's wiring, damaging electrical equipment and possibly starting a fire. A whole-house arrestor system, which averages from $150 to $500, is also a job for a professional electrician.

As for doing it yourself, surge suppressors that you plug into electrical outlets help prevent excess voltage from damaging specific appliances and equipment. True surge suppressors shouldn't be confused with ordinary power strips that don't offer protection. Surge suppressors cost an average of $12 to $30 in hardware and appliance stores. They should have a label that reads UL standard 1449 and have a suppressor voltage rating, or SVR, of 330 volts. The lower the SVR number, the better the suppressor will be at protecting appliances and electronics.

Suppressors deteriorate with age and after a surge. Some have audible signals or flashing lights to indicate when they have worn out and should be replaced.

"If you are going to pay $2,000 for a new TV, spending $20 for a new surge suppressor is a good investment," says Richard Roux, senior electrical engineer at the NFPA.

A simple solution would be to unplug your devices before electrical storms. And to cut your chances of being shocked yourself during a storm, avoid using electrical appliances, corded phones and plumbing during lightning and thunder, safety experts say. It's safest not to shower, do laundry or wash dishes, either. Electrical storms are most likely to occur during the summer and in the South and Southwest, but occur across the U.S. and throughout the year.

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REITs Are Sitting Pretty in U.K. With Prospect of Takeover Deals

By Molly Dover

From The Wall Street Journal Online

LONDON -- First it was the booming U.K. commercial-property market. Now the prospect of takeover deals could send the country's property stocks even higher.

The catalyst is the U.K. government's decision to allow the launch of real-estate investment trusts beginning Jan. 1. REITs will give a bevy of tax breaks to companies that adopt the new structure and make it easier for them to buy up other property companies. In the past three months alone, four deals have been announced, and the Dow Jones U.K. Real Estate Index has surged 14%, compared with a 7.6% rise in the FTSE 100 stock index.

While the heady gains mean some property stocks now trade at very high premiums to their portfolios' net asset values, fund managers and analysts are unperturbed. They say property stocks remain attractive because they are already priced to reflect higher net asset values expected when REITs come into effect.

Mike Prew, property analyst at Lehman Brothers, said in a note to clients that NAVs were "depressed by layers of costs which we think will prove inappropriate for the post REIT world." He estimates that NAVs will rise by an average of 8% following conversion. This, combined with the expected sharp increase in values in their property portfolios when they are revalued at the end of the year, should mean those that convert to REITs will trade broadly in line with NAV.

To be sure, the bull market in property stocks could fizzle if U.K. interest rates rise and the global economy slows. The Bank of England is widely expected to raise its key lending rate by a quarter percentage point to 5% early next month. Tim Wheeler, chief executive of industrial-property specialist Brixton, told Dow Jones Newswires that he was concerned individual investors could be jumping into property stocks with unrealistic long-term expectations and without understanding the cyclical nature of the property market. Though property prices have been rising for three years and show no signs of abating, he warned that the rise can't continue indefinitely.

So far, 15 companies have announced their intention to convert to REITs, and many more are expected to follow next year. Unlike the listed property companies of today, REITs will pay no corporation or capital-gains tax as long as they distribute 90% of their income to shareholders as dividends. Purchases of rival firms will also be free of capital-gains taxes, so it is cheaper to acquire properties this way rather than individually.

Buyers acquiring properties through a corporate structure will avoid a 4% tax on property purchases, known in the U.K. as stamp duty. Companies that want to convert to REITs must pay a one-time, 2% charge on the value of their assets.

"There will be consolidation because REITs can trade more efficiently than non-REITs," said Boudewijn van Loen, Amsterdam-based fund manager of the €1.3 billion ($1.6 billion) F&C Real Estate Securities Fund, a Luxembourg-based mutual fund that invests in U.K. property stocks.

Mr. van Loen favors Great Portland Estates PLC, Derwent Valley Holdings PLC and Shaftesbury PLC, which specialize in central London offices and shops, and Hammerson PLC, an office and retail specialist. He expects all to convert to REITs and says the first three are contenders for either being taken over or agreeing to a merger.

Great Portland has already announced it is in discussions to merge with central London rival London Merchant Securities PLC, and analysts suggest Derwent Valley may also consider a merger.

"They have the potential to really profit from growing market rents and demand in the West End market, which has a high barrier to entry," Mr. van Loen said.

Great Portland, Derwent Valley and Shaftesbury all trade at sizable premiums to net asset value, ranging from 22% to 79% over NAV. But Mr. van Loen said the stocks are fairly valued. He said stock prices reflect a recent surge in central London property prices in the past six months that will be reflected in semiannual portfolio valuations as of Dec. 31.

Great Portland stock has gained 11% in the past three months, while Derwent Valley has added 15% and Shaftesbury has climbed 19%. Hammerson has risen 12%. London Merchant has soared 35%.

Other merger targets could be companies that are unlikely to convert to a REIT in their current form because they don't fulfill the conversion criteria, such as no single shareholder owning more than 10% of the company. Mr. Prew identifies CLS Holdings PLC and Daejan Holdings PLC as the most likely candidates. CLS specializes in office property with long leases, while Daejan invests in offices, shops and residential property predominantly in London. CLS has climbed 15% in three months, while Daejan has risen 10%.

Residential investor Grainger Trust PLC, which said in June that it was unlikely to convert, last month received an approach from private property company Regis Group PLC and Merrill Lynch & Co. While the original offer was rejected, the pair, along with private property company William Pears Group, are putting together a second bid for Grainger, whose stock has soared 34% in the past three months.

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Maybe Boomers Aren't So Keen On Second Homes

By Amy Hoak

Baby boomers may not be as in love with second homes as once thought.

The rate of second-home ownership among 50- to 60-year-olds has remained flat during the 12-year period between 1992 and 2004, according to a report sponsored by Radian Group Inc. and the Research Institute for Housing America of the Mortgage Bankers Association.

Early boomers were no more likely to own a second home than older generations of homeowners. Those who do have a second home are using the residence on a limited basis, too: One-half spend two weeks or less and two-thirds spend four weeks or less per year in their second home, the report found.

About 12% of second-home owners said they intended to sell their main home and eventually use their second home as their primary address -- debunking speculation to the contrary.

The study, "Housing Trends Among Baby Boomers," was conducted by Gary V. Engelhardt and released during the MBA's annual convention Monday in Chicago.

Information for the report was pulled from a variety of sources, including U.S. Census Bureau information and the 2004 Health and Retirement Study, which is funded by the National Institute on Aging.

"There have been relatively few scientific studies on second-home ownership and mortgage activity," Doug Duncan, MBA's chief economist and senior vice president of research and business development, said in a news release. "The report indicates that baby boomers are not acting differently than their parents when it comes to second-home ownership. However, the baby boom cohort is so large, even if they follow typical buying patterns, they will have significant impacts on many local housing markets."

The study found 43 million U.S. households headed by someone age 50 or older owned their main residence and 6.6 million homeowners of that age group owned a second home. Those second homes were often located in well-known vacation areas.

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Hopes rise along with new buildings in Asbury

Asbury Park Press on 04/13/06

And not all the progress is on beachfront

BY NANCY SHIELDS
COASTAL MONMOUTH BUREAU

ASBURY PARK — Like the rebuilding of a team, the progress the city was making in the first year or so of its comeback was hard to see.

There were still many negative stories, sad happenings. The old way of doing things in Asbury Park fought hard not to let go.

But five years later, officials and residents appear to have stayed the course, and reports of progress — more visible, more measurable — have been mounting.

"This is one of the most positive times we've had in the city, possibly in 30 or 40 years," Mayor Kevin Sanders said earlier this week. "New stores, restaurants, waterfront construction, restored houses throughout the city."

"The apathy is gone from Asbury Park," he said. "Everyone's talking about its appeal. They say Asbury Park is the new gold rush."

Last week, the City Council and its beachfront redeveloper announced a new agreement that requires Asbury Partners to invest $6 million in the next two years to renovate the Fifth Avenue Pavilion and make important exterior renovations to Convention Hall, the Casino and the power plant. Designs for the costly interior renovations of the boardwalk buildings must be completed by September 2007.

Although the City Council had seen progress with the new condominiums now visible on the waterfront, officials were concerned about the lack of investment to get permanent renovations under way on the historic buildings. The city and developer negotiated in February and March and say they now have time lines, financial requirements, penalties for nonperformance and an agreement to stay in close communication as the work progresses.

Leadership lauded

"I can't stress to you enough how important the leadership of the city is right now in making this happen," said Glenn Scotland, a city redevelopment attorney. "This is probably only the second time in my career where we had public officials stand up, take a position and be willing to stick by it under the enormous economic pressure being placed on them by the developer.

"It is such a delicate balance to extract what is the proper equity in a deal and to recognize we want to be strong, treated fairly, but don't want the deal to go away," Scotland said of the negotiations. "And we compliment Asbury Partners on their willingness to go through this. It's very difficult to change a paradigm, especially in the business world . . . They stepped up big time."

Late last week, Metro Homes, the third developer brought in by Asbury Partners and the city to build waterfront condominiums, announced that C-8, the steel skeleton that became a symbol of the failed redevelopment all through the 1990s, will be imploded April 29. A new 224-unit condominium high rise, the Esperanza, is planned for the site.

Some officials and residents are talking about making the long-awaited demolition a celebratory event.

In the midst of the waterfront activity, downtown merchant Clark Mitchell, 37, co-owner of the Be Green vegetarian cafe on Cookman Avenue, said he has some reservations over the pace of redevelopment.

"With all the redevelopment, I think we just have a wait-and-see attitude," Mitchell said. "We don't want to get too excited about it."

"The downtown has problems — a parking problem — but there are a lot of good people putting good businesses here," he said. "All the downtown needs really is more — more businesses."

But for himself, he said he could not be happier with the restaurant he moved from Belmar in 2004.

"I do well here," Mitchell said. "All anyone wants here is progress. If it looks like it's going forward, it doesn't have to have been done yesterday."

Council members, led by Councilman Ed Johnson, are working at the committee level to develop plans to return Springwood Avenue to a commercial and residential thoroughfare and make needed improvements to the city train station on Main Street.

Other city concerns

Redevelopment isn't the only issue in the city.

A second event planned for April 29 is a hope and empowerment rally for city children which will start at 12:30 p.m. at Springwood Avenue and Memorial Drive. A march is planned to a recreation area between the Bangs Avenue School and the Middle School, where a youth talent expo, games and other activities will be held. There will be opportunities for young people to register for summer jobs.

As for the school district, which will see four people elected to its nine-member school board Tuesday, member Frank D'Alessandro, who is not up for re-election this year, believes the district "finally has stability."

"We're building on stability, brick by brick," D'Alessandro said. "Our district has fallen into the depths, and we're trying to lift everyone out. It's taking time. We haven't performed any miracles. But we have a foundation and what we needed more than anything was stability."

And within the Police Department, officers say their department has united under the new leadership of Deputy Chief Mark Kinmon. The officers' Police Athletic League joined the city in starting up a biddy basketball league for 60 third- to fifth-graders and plans to build on that program's success.

Police Inspector Chris Van Buren, the PAL president, said PAL is working on starting up an amateur boxing program for teenagers and young adults and may lease second-floor space in the former YMCA building on Main Street, now owned by REI Group.

"There's a room on the second floor that we're looking at that's perfect for what we want to do," Van Buren said. "The REI group gave us a lease which our attorney is reviewing. We're trying to tighten it up so that if they happen to sell the building, we'll have a leg to stand on. We want to be able to negotiate with the new owner if it happens."

But, Van Buren added, "this program will definitely happen."

Police also are working with a new community group that met last week after a peace rally was held on DeWitt Avenue to try to end gang violence that saw one young man shot to death on DeWitt Avenue in November and a second young man killed almost on the same spot late in March.

"As far as I see right now, because of what's going on — the events organized for youth and biddy basketball and PAL — I think things are turning around for children in Asbury," said Denise Richardson, the mother of seven daughters, who owns a home with her husband, Carl Richardson, on Ridge Avenue and is an administrative clerk in the Monmouth County Health Department. "My 7-year-old was a mascot before and is going to be a cheerleader this year for Pop Warner," she said.

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Manasquan: A hometown feel

Asbury Park Press 09/14/06

The borough has long been home to people of varying income levels, but that diversity is becoming less apparent as affluent newcomers are knocking down older, smaller homes to make room for much larger ones, Mayor Richard Dunne said.

People who could once afford to own property here might now be priced out of town, he said. "I'm here, so it's OK,'' joked Dunne, who moved to the borough 26 years ago after spending summers in Manasquan since the 1950s. Dunne is 70 years old and has been mayor for three years.

Although the construction of new homes has also increased traffic, the borough has still been able to maintain its small-town charm, said Mary Hennessey, 61, who has owned a home here with her husband John McDill for about nine years.

"There is a lot of building going on so there is more congestion, but it still has that wonderful hometown feeling,'' she said.

Dunne said many of the people moving to Manasquan are couples in their 30s and 40s. They've been attracted by the borough's intimate size … 6,200 residents, according to a 2005 U.S. Census estimate - and its respected public school system, he said.

While many recent home buyers have settled into established neighborhoods dominated by year-round residents west of Watson Creek, others have bought property east of the creek, a section of town traditionally occupied by summer rentals.

More expensive homes means more property tax revenue for the borough, but Dunne said the additional income has been offset by the increasing number of new families with children who attend public school and require tax money to educate.

It may seem that Hispanic immigrants also have moved into the borough - the almost daily gathering of day laborers waiting for work on Main Street might give that impression - but they haven't.

The workers, all men, commute from Asbury Park, Belmar and elsewhere. Some workers said they take the NJ Transit North Jersey Coast Line to the station across the street from the Acme and 7-Eleven parking lots on which they stand.

In regard to the number of people who live in Manasquan, Dunne does not understand why the latest Census estimate cut the population by 109. The borough's population has most likely grown since the last census in 2000, he said.

Still, he figures there is only room for a few hundred more.

"I'd be very surprised if it reached 7,000,'' Dunne said.

-- Nicholas Clunn & Intern Claudia Vargas

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The demographics: affluence, long commutes, rapid growth

Asbury Park Press 2/09/06

Everyone, it seems, wants to live in Marlboro.

The township's population has grown rapidly in the last several decades. From 1960 to 2000, according to the U.S. census, Marlboro's population has increased by an average of 709 people per year. The most dramatic spike in population occurred between 1980 and 1990, when 10,414 new residents moved in.

Roughly 40,110 people live in Marlboro now, according to the Monmouth County Planning Board.

Marlboro is, statistically, a wealthy municipality. The median income of all New Jersey households was $55,146, according to the 2000 U.S. census; the Monmouth County median was $64,271. The median income of a household in Marlboro, by comparison, was $101,322.

There is a price to be paid for these higher salaries, however. The average commuting time of a worker living in Marlboro is 48 minutes, according to a recent study conducted by the U.S. Census Bureau and Birdsall Engineering.

The study also found that the largest share of Marlboro's work force (39 percent) is employed in the service industry, being involved mostly in professional and scientific services. Nearly 3,000 people, or 15 percent of Marlboro's labor force, work in finance, insurance or real estate.

A criticism often heard at public meetings in Town Hall is that the township's high cost of living prevents many children of Marlboro residents from living there after college. Another hurdle is that there are few apartments and rental properties in Marlboro, just 386 to go around. The vast majority of housing -- 82 percent -- consists of single-family detached homes.

Frank Romito came to Marlboro from New York City in 1978, looking for a "country" setting in which to raise his kids and run a business. He runs the San Remo pizzeria at Route 79 and Tennent Road, an area frequented more by locals who have been in town for years.

"When I moved here, Marlboro was a beautiful town, a good place to raise kids," he said. "People were friendly. Now, everything has changed. It's not a matter of too many people moving in -- it's the businesses, all the strip malls.

"It's still a good place to raise a family, but it's overcrowded," he said. "It's too late to change that. In my opinion, this township, they want to push the old people out and bring in the new -- because they can afford the homes, the taxes."

According to the U.S. census, most of Marlboro, 83 percent, is white. The town's Asian population has grown steadily in the past decade and now constitutes nearly 13 percent of the total population.

Although anecdotal evidence suggests that Marlboro's Jewish population has grown by leaps and bounds in the past 20 years, it's difficult to say with certainty just how large the influx has been.

The last demographic study conducted by the Jewish Federation of Greater Monmouth County in 1997 found that of the county's 70,000 Jews, 60 percent live in the western end of Monmouth County. And according to Howard Gases, the center's executive director, the increase of new Jews into western Monmouth County prompted the federation to build a new office two years ago within the Jewish Community Center of Western Monmouth County, in nearby Manalapan.

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If you need assistance selling your house ERA Othello Realty can share their expertise and experience with you in a friendly and professional manner. From all aspects of selling your house: from getting a qualified CMA (Comparative Market Analysis) to advising you on the presentation of your house, marketing your home online and in print, conducting an open house, showing your house within your guidelines and discretion, constant communication, negotiating the best price for your home and being with you until closing and beyond. We can also assist you in your search for a new home. Please call us at 732-364-2015. We are the realtors NJ! Look at these Listings of Homes for Sale in NJ. Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ.

Confidence Builder: Make the Most of Newly-Constructed Homes

By: Eric Yablonsky

For the aspiring homeowner, there are always some unknowns to navigate. For home-seekers looking to buy a newly-constructed home, they must also contend with fierce competition, as well as the uncertainties of buying a house, in many cases, that doesn’t even exist yet.

Heightened demand has accelerated new construction. Advancing technology has allowed the selection of homes based on virtual tours of the future home’s plans. Such options can help the consumer build their house to their every preference, while making it as accommodating in real life as it is promising on paper.

There are ways to minimize such uncertainties and focus on the new home’s potential rather than potential problems – and these aren’t limited to the structure itself. Many of these common sense preparations are ones in which the services of a real estate sales professional, such as an ERA Real Estate professional, can be a major help and a big relief. At the most basic level, such a professional can help you determine whether it’s the newly-built or the pre-existing home that best suits your search.

Start from scratch. Your agent can help you decide what design options not only fulfill your needs but best fit your budget and your home’s resale value. He or she can also help you to familiarize yourself with the new neighborhood; guide you throughout the construction process; and get you set up with crucial services like moving companies (one of many major tasks a nationally-known business can group in a single program, such as ERA Real Estate’s Select Services).

Check into the builder’s track record. You can do this by visiting other developments they’ve constructed and by speaking with the residents. Also, you may want to contact the Better Business Bureau to learn about their reputation and how long they’ve been in operation.

Know the neighborhood. Visit your local town planning office and look into what will be built nearby in the near future – where there’s some construction growth there may be more, and you’ll want to decide what kinds you wish to live around.

Understand what’s in your contract. Do what you can to protect a favorable mortgage rate from the financial fluctuations that can occur over the course of construction. Get a thorough home inspection. And, obtain the most reliable professionals to help you in these potentially complicated tasks.

Determine if “new is for you.” Despite the shiny, new bells and whistles associated with a new home, you might prefer an existing house. Purchasers of existing homes avoid contributing to suburban sprawl, enjoy the stability of established neighborhoods and infrastructures, and don’t need to worry about today’s fast-paced home construction industry. New home buyers, on the other hand, may be most attracted to the ease of brand-new homes with minimal maintenance concerns and a pre-planned neighborhood structure.

One happy medium an agent might steer you toward is the brand-new home that’s already built. While this may be a rarity in a booming market, your real estate professional can help find one for you that can help eliminate surprises. Not to mention, it will likely fast-forward passed the inconvenience of other unfinished homes still in the construction phase around you.

With the right preparation and advice, the new-home route can lead to ready-made happiness rather than built-in headaches.

Author: Eric Yablonsky is president of ERA Othello Realty in Lakewood NJ and a licensed real estate broker.

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Please call us at 732-364-2015 and see what ERA Othello Realty can do for you and your real estate needs. We specialize in handling all aspects of real estate transactions throughout the New Jersey. Whether you wish to buy a home or sell a home we will be there every step of the way. From searching for your dream house, finding the home, negotiating the price, assisting with financing, inspection and at the closing ERA Othello Realty can help you buy your home. We list homes for sale in Freehold NJ, Jersey Shore real estate and many other New Jersey properties for sale. We are the realtors NJ!

Save More Than Energy: The Cost-Efficient Home

By: Eric Yablonsky

The energy-efficient home is moving from the horizons of futuristic planners to the agenda of current homeowners.

It’s not so much a matter of newer technologies – though alternate energy sources like solar and geothermal are making considerable inroads in the modern home. It’s more a matter of improvements on very familiar furnishings and appliances. Put simply, these options save by losing less.

It may be well worth it to give your home an efficiency upgrade. First, you’ll want to figure out what needs fixing. To identify problem areas, contact a qualified professional and get an energy audit of your home. Some upgrades are simple and less expensive. For example, one common problem is insulation. The Environmental Protection Agency (EPA) says that proper ceiling insulation alone can reduce your heating bill by as much as 20 percent. Other energy draining can be solved by replacing old fixtures with more modern and efficient models. Windows, doors and skylights equipped with sealed double or triple panes also reduce heating and cooling costs, and are features for which utility companies often offer rebates.

The EPA notes that air leakage from gaps in your home’s structure – holes for plumbing and wiring, for instance – accounts for 25 to 40 percent of the energy a common home uses for heating and cooling. Similar troubles come from inadequately sealed duct joints and otherwise inefficient, older heating and cooling systems. All can be repaired or replaced.

Even conventional systems such as ventilation can release enough heat from your home to cost a fortune in unnecessary bills. Upgrading these systems can pay for itself – and later pay off as an attractive resale value when possible buyers of your home want to benefit from this form of savings.

And when you’re ready to go from finding the problem to fixing it, the government doesn’t just supply the bad news – it provides some solutions, as well. The EPA’s “Energy Star” rating has appeared on numerous products, identifying efficient appliances and other home furnishings that enable vast savings. Energy Star central air conditioners can save 20 percent on cooling bills.

Studies have shown the resale advantages of homes with lower energy costs. Look for such solutions, and buyers will be more likely to look into your home. Your utility bills, Energy Star fact sheets and other documentation can be attractive proof to present to prospective buyers.

In the short term, you can save on some of these improvements even as they enhance your home’s value. In addition to offering expert advice and home-selling solutions, real estate brands such as ERA Real Estate, feature the Select Services^SM network of national and local vendors with leading household products, often at a discount.

Consult a local ERA Real Estate professional on how to navigate the options and opportunities available for the energy-conscious homeowner. Your investment in the future can have many returns right in the present.

Author: Eric Yablonsky is the president of ERA Othello Realty in Lakewood, NJ and a licensed real estate broker.

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