The 500-kV Transmission Line

The Virginia State Corporation Commission (SCC) held local hearings at four locations in Northern Virginia this past to take testimony on the applications submitted by Dominion Power and TrAILCo for a new transmission line that would run through Northern Virginia. Almost 300 local residents spoke at the hearings, 90% in opposition.

Opponents offered a variety of arguments against the proposal. They questioned the data and analyses on the need for power presented by the line’s proponents and raised questions about electricity reliability problems cited in the applications. Many opponents requested that an independent review be performed. Others focused on reducing electrical loads as an alternative. Some concentrated on the need for an environmental assessment. While many spoke about the personal impact of the power line on their homes, property and way of life.

There is no question that citizen testimony has had an impact on the regulatory process. There will be another public hearing in Richmond on January 14, 2008. The formal hearing is February 25, 2008, again in Richmond.

For more details take a look at the information provided by Piedmont Environmental Council or Dominion.

Going Green - It Takes a Community

In 2007, Dominion Valley made its mark in the Commonwealth as a community willing to do its part to assist the electric grid. Dominion Valley continues to rank at the top of Prince William County’s load management profile. For about three years, all new homes were enrolled in a program that installed switches on outside air conditioning units. During the summer, these switches are activated during peak demand periods to cycle units off for about 7-8 minutes every half-hour. Activation does not cause any noticeable change in the comfort level. This year, the number of households enrolled in load management nearly doubled. Now approximately 50% of the households in the Dominion Valley community are enrolled. This is the highest participation level for load management of any large community in Virginia. While there is no direct monetary incentive to participate, holding down the cost of providing power, helps reduce future rate increases.

Dominion Valley should be proud of the reputation it has earned as a community that embraces better energy solutions.

Matters of the Military Heart

As we enjoy this holiday season, I ask everyone to reflect on the many blessings of living in a country based on freedom. And as you sit with your love ones, please remember to say a pray for the service and sacrifices of Soldiers and civilians around the world. We remain a Nation at war in extraordinary and dangerous times. Our Soldiers continue to stand in harm's way protecting our freedom. While there are many links available, I hope that you take the time to send our brothers and sister a quick hello and let them know that they are never forgotten.

AMERICA SUPPORTS YOU

May each of you, wherever you are, have a safe and joyful holiday season. God bless each of you and your families, our Military, and the United States of America.

Seller Series - How Long Are You Going To Wait?

According to Money magazine, the outlook for 2008 is looking bleak. Although home prices are down 4.2% from last year, a chief economist predicts that “the worse is yet to come.” Some are saying that home prices could fall another 5-6%. Now I still believe that the strong economy and job opportunities present in the Northern Virginia area will mitigate the local situation. However, local home prices in 2008 are most likely to decrease (even if it’s slightly).

It’s simple economics: too much supply and too little demand. As of today, there are 756 properties listed in the Gainesville/Haymarket areas (320 – Haymarket; 436 – Gainesville). To put this perspective, so far in 2007, 774 properties have sold in the Gainesville/Haymarket areas (305 – Haymarket; 469 – Gainesville). So going into 2008, the market is supplying about what was demanded in 2007. Now add in those homes that will hit the market in the spring to further increase the backlog.

If you are hoping to sell a home anytime soon, it might look pretty grim. If you are waiting for prices to rebound, this will probably not occur until early 2009. And most experts think that it will take several years for homes to get back to the pre 2005 values.

If you are a homeowner who bought before 2005 and you intend to stay put for a few more years, you’ll probably still come out with a healthy profit by the time you are ready to sell. However, if you would like to sell now, I suggest that you stay ahead of the market and LOWER YOUR PRICE NOW. Else, standby for a few anxious months.

Seller Series - Just How Serious Are You?

Just how interested are you in selling your home? I know that we would love to get the prices seen back in 2005 but at some point reality must set in. Forget what the ugly house next door sold for last year or even what comparable homes are lists for today. Instead, use the going price of houses that have recently sold as a guide (ask your Realtor for help); then price your home even lower so it looks like a great deal. Best case: Your aggressive pricing attracts more than one bid, pitting buyers against one another and ultimately lifting the final price.

Payback Series - Kitchens

I know many of you may be yearning to add new upgrades to your home, but will it help the resale value? Before you hire a contractor to help increase the value of your home, find out which renovations are most likely to pay you back. For the short-term (less than 5 years), I recommend that you be budget conscious about what you’re doing. But if you’re going to stay for awhile, look for what you will enjoy.

For this series, let’s take a look at KITCHENS.

Typically, kitchens are the most expensive of all rooms to remodel, but you’ll also enjoy a big gain in sales price – as most as 80% of what you spent (according to Remodeling magazine Cost vs. Value Report 2007).

If resale is your top priority, go for broad appeal.
· When replacing or adding cabinets, use lighter woods and nothing too contemporary.
· Stick with features and finishes common to your neighborhood and to the kind of house it is. Don’t put granite countertops in a starter home, for instance.
· Ask local salespeople what sells best.
· Change out cracked and stained countertops, but not always with pricey granite. Less expensive options include ceramic tile and concrete.
· Select up-to-date appliances. If you’re on a budget, visit retailers that sell secondhand appliances or those almost as good as new.

If your taste runs more contemporary and you’re longing for pendant lighting and zinc countertop, that’s OK, but plan to enjoy the room before the house goes on the market. Then hope that someone with your tastes show up. (Remember it is a buyer’s market)
Keep in mind that if the kitchen is shabby to begin with, any upgrades will help impress potential buyers

Next time, we’ll take a look at BATHROOMS.

Fed Cuts - It's Only a Band-Aid

Many people believe that the government shouldn't get too involved in bailing out the mortgage loan industry. After all, they sort of brought it on themselves. Some want promises of further rate cuts or infusions of cash from the Fed. Increasing, more experts are pointing to alternative options to the way that we Americans generally view mortgage lending. One item of interest is shared-appreciation mortgages. According to Boston.com:

These mortgages, which are relatively rare in the United States but more common in the United Kingdom, offer lower interest rates in exchange for some of the upside potential on the house. For example, a lender might offer a 6 percent interest rate instead of an 8 percent rate, in exchange for 50 percent of the increase in the value of the house at the time of eventual sale.

This will be very "out of the box" to the typical American home mortgage borrowers. After all, it's all about ownership. But there are definite advantages. The main advantage is that you might be able to get a second mortgage home loan (which are getting more and more difficult to come by) to refinance out of the awful loan that put you in danger of foreclosure. And you still get part of the increase in the value. It's not as thought the mortgage lender gets 50% of the total value; only a portion of the increase is at stake.

A change in the lending industry is definitely needed. Government intervention will only work for so long. If fundamental changes aren't made, then we'll be back here again in another 10-15 years.

Who's benefiting from the Fed rate cut?

Good news, the FED cut the rate by one-quarter point to 4.25%. Bad news, the market responded by saying “Not Enough” and dropped by almost 300 points. While investors are a little moody about wanting more, consumers will see lower rates on auto loans, and even on credit cards. And it’s a great time to have gold. But how will this affect the housing market?

One area that will benefit fairly soon, though, is the area of jumbo loans. These rates should come down, making them more affordable for still-expensive real estate markets in major cities. And, some homeowners with adjustable rate mortgages may benefit. As loans reset over the next year, they will do so to interest rates that are lower than originally expected. For some, that means that the higher mortgage payments will be manageable, possibly forestalling thousands of foreclosures.

For some, however, the Fed rate cut will be of little help. Borrowers who have subprime loans may not be able to refinance to the lower rate, due to credit risk, and others may not be able to because many subprime loans come with prepayment penalties which they would be unable to pay.

Relief in Sight for Forecloures?

Last week the Mortgage Reform and Anti Predatory Lending Act of 2007 passed out of the House Financial Services Committee with the support of nine Republicans. It's far from perfect, but it represents a small step in the right direction. The mortgage industry is fighting it tooth and nail.

The bill, H.R. 3915, will reform mortgage practices in three areas.

1. The bill will establish a federal duty of care, prohibit steering, and call for licensing and registration of mortgage originators, including brokers and bank loan officers.
2. The new legislation will set a minimum standard for all mortgages which states that borrowers must have a reasonable ability to repay.
3. The legislation attaches limited liability to secondary market securitizers who package and sell interest in home mortgage loans outside of these standards. However, individual investors in these securities would not be liable.

Finally, the bill expands and enhances consumer protections for “high-cost loans” under the Home Ownership and Equity Protection Act and includes important protections for renters of foreclosed homes. In case of foreclosure, any successor who takes over the property will have to honor preexisting leases. Tenants without a lease will have at least 90 days before being required to vacate. In addition, the bill will require counseling for certain first time homebuyers and incorporates anti-steering legislation.

The more immediate issue, though, is what to do about the millions of people who live in homes that are in danger of going under in the coming tidal wave of foreclosure. One proposed bill that would allow bankruptcy judges to amend the terms of home mortgages. As the law stands, the terms of a mortgage on a yacht or a vacation home can be adjusted during bankruptcy, but the primary residence is off-limits.

Developing …

United We Stand

Let’s remember those Americans who fought and died to give us the freedom we enjoy today.

On this day in 1941, the Japanese empire attacked the U.S. at Pearl Harbor and crippled the Pacific fleet; sinking five battleships, destroying 200 planes, and killing 2,344 men. As we observe this anniversary, let’s not only pay tribute to those who were there when the brutal attack occurred, but also to those who fought to avenge the many deaths – and to turn back the forces of tyranny.

Part of the value of remembering Pearl Harbor is in recalling the fierce, impenetrable unity of Americans following the attack. We responded as one. We were not separated by divisive politics and inflammatory rhetoric.Today, the threat of terrorism and the courageous effort in Iraq should be uniting forces, but we are seeing once more the growth of dangerous divisiveness between citizens. Too many people condemn their fellow Americans – question their patriotism and love of country -- because they subscribe to political philosophies different from their own.

Conflicting opinions, differing philosophies and the freedom of thought and expression is what sets us apart from those countries living under totalitarian regimes. On this anniversary, let’s pause to pay tribute to the heroes of Pearl Harbor, pledge ourselves to a renewed spirit of unity that has always made America great.

Renting vs. Buying

"The true foundation of republican government is the equal right of every citizen in his person and property and in their management." --Thomas Jefferson to Samuel Kercheval, 1816.

I believe that the single greatest gift that this wonderful country offers is the fundamental right to own land. It was arguably the basis of our Constitution. But it still makes me scratch my head when I see so many folks still renting. You can read a good article on Renting vs. Owning here.

But let’s look at some quick numbers on the home front. In general, a nice 3 bedroom apartment in Northern Virginia will run you $1500 - $2000 depending on the location. Let’s split the difference and say $1750. The average sales price in Prince William County for 3rd quarter 2007 was $395,000. The current 30-yr mortgage rate is around 5.8%. You can play with the number using the Ginnie Mae website and determine what fits your personal profile.
As I see it, with 100% financing and staying 5 years, so long as home values increase at least 1.2% annually (remember I saw almost 12% over the past five), buying wins out. I don’t have a crystal ball, but I’ve got to believe that the market will do better than 1.2%.

So if you are now renting, plan to stay longer than 5 yrs in the area, and have the monthly cash flow support, I have to ask: “Why are you passing on the your greatest American right? The right to own land.”

Buyer Series - Get a Realtor!

I love America! It is filled with opportunity and “can-do” pride. Add this spirit with the knowledge available through man’s greatest invention, the internet, and there is nothing that one can’t accomplish. Never before in history has so much information been available to so many. With such empowerment, it leaves a lot of folks to become “experts.”
With the internet, I can create my own legal documents. I can manage my own stock trades. I can even figure out my own medical problems. All without talking to a lawyer, trader, or doctor. The same is true for home buying. With the internet it is possible to research homes in another town, compare prices, size, features, etc. without ever speaking to a real estate professional.

Realtor.com has a great article on the various reasons why buyers should use a Realtor. And you can read through various internet articles that discus how knowledgeable Realtors are with the market and how they can guide you through the information. A good one is written by Crissie Cudd.

However, I think it’s very simple. When my little girl was a baby, my wife always took her to the pediatrician when she got sick. It was such that if she got a little cold, she got a check-up. I use to play the “cheap husband” role by thinking we were just wasting money on co-pay over a runny nose. But many times that little runny nose turned out to be the early signs of an ear infection. Could I have diagnosed the ailment on WebMD? Maybe, but it was nice to have a doctor at my side to reassure me when I’m right and back me up when I don’t know what I don’t know.

As you are about to make the single largest purchase of your life, don’t you want to have someone by your side that provides you similar professional coverage? And the best part is that, typically, there’s no co-pay. For the most part, the Seller is going to pay your bill. Talk about Universal Real Estate Coverage!