Greenwich Real Estate News - Environmental Hazards Home Buyers Need to Know

When you are buying a home, there are many things that people consider. They consider space, lightening, kitchens, bathrooms, outside decks and more. One of the things that may be overlooked but is very important is environmental hazards that can be found in the home. This will help you know about some environmental hazards every home buyer needs to know about and make sure you know how important home inspections are. This way you can rest easier and have more peace of mind knowing you and your family will be safe.

Ask your Syracuse real estate agent for advice
As a real estate agent, it is their job to know about any safety hazardous that may be in a possible home. Talk with your agent about this when buying a home and get advice about home inspections and repairs.

Asbestos
Asbestos is a mineral that has been used in insulation, covering water heaters, pipes, furnaces, and also flooring. It has been found to cause lung cancer and other problems and is mostly found in homes built before 1978.

Radon
This is a radioactive gas found in the ground and can enter a house through cracks and other openings. This can also cause lung cancer and other health concerns. Radon detectors can be bought to help buyers know if the home has radon in it.

Carbon Monoxide
This is a colorless, odorless, and poisonous gas that can be created by any burning flame that does not have enough oxygen. It can be found in home furnaces such as gas, oil, wood, and even in fireplaces. Carbon monoxide can cause death and only give people mild warnings of a headache, fatigue and nausea. Carbon Monoxide detectors are also available for home owners.

Mold
Mold can grow wherever there is plenty of moisture. This can cause allergic reactions and asthma attacks for many people. Also, some mold may be poisonous and can cause even more health problems and should be properly taken care of by a professional.

When you go searching for your next home, make sure to keep these environmental hazards in mind and get a quality home inspection and make sure to answer any questions you may have. This way you can do all you can to make sure you and your family are comfortable and safe in your new home and in the future.

Greenwich Real Estate News - Tips for Choosing Family Friendly Homes

The most important consideration when choosing a home is whether it will be right for the entire family including any children you may have or plan on having in the future. However, certain things may be overlooked when searching for the right home because there is so much to consider from the outside landscaping to how much space is inside. Here are some tips for choosing family friendly homes to make it easier for everyone. This way everyone can be comfortable and happy now and in the future.

Talk to some neighbors
Ask some neighbors about how safe the roads are and how the schools are near the neighborhood. It is also important to consider the sizes of the yards when choosing the right neighborhood and home for children. This way it will give them plenty of space to play.

Research the area
Call the local police department to ask about crime rates in the area or anything you should be aware of before buying a home in that area. It also may be a good idea to research the city about local events such as fairs that your children may enjoy attending.

Check the home for any possible child hazards
Look over the home for any possible child hazards such as stairs, basements, electrical wiring and more. Consider what you would have to do to make the home safe for your child or children.

Look into neighborhood programs for kids
Ask around about programs in the neighborhood for kids such as garage sales, parties, events and more. It is also a good idea to ask about noise conditions or a neighborhood watch program to protect your kids.

These simple family friendly home tips can help you make sure that you are picking out just the right home for you and your children or the children you plan to have in the future. This will help make everyone feel safe, comfortable and happy in their new home. This will also help provide less worries and peace of mind.

Greenwich Real Estate Market Explained

For Most Buyers, the Mortgage Market Is Healthy

The widespread notion that the entire mortgage market is in crisis is just plain wrong, say lenders in various parts of the country.

The majority of mortgage products have been unaffected by troubles in the subprime segment. Interest rates for 30-year, fixed-rated loans remain in the low 6 percent range for people with reasonably good, though not necessarily perfect, credit records, according Kenneth R. Harney, managing director of the National Real Estate Development Center and syndicated columnist.

While there is plenty of money to lend, Harney says underwriting standards are more strict than they were a year ago. Jumbo loans, for example, often require two appraisals one by an appraiser selected by the lender and the other by one working for the investor.

Similarly, FICO credit-score standards generally are higher than a year ago, stated-income mortgages with no verifications are hard to find and lenders are especially wary of excessive "layering of risk" combining low down payments with marginal credit scores and high debt-to-income ratios in markets where prices are trending lower.

Source: The Washington Post Writers Group, Kenneth R. Harney

Ask Greenwich Real Estate Broker James Martin - Greenwich Public Schools

Question:

Does Greenwich have the best public school system in the state?

Answer:

In Lower Fairfield there are many school systems that perform closely in many of the standardized forms of measurement such as the SAT's etc....this information is available to the general public in school reports to which I would be happy to direct you.

It all depends on what criteria is being used to measure the "best" in the state. Like individuals, what's important to one may be unimportant to another. What criteria is important to you? Class size, teacher v. student ratios, $ spent per pupil, percent who go to college, etc, etc?

You should discuss your needs, wants, resources and impressions with the agent/broker that is representing you. That way you will receive information specific to your individual needs and circumstances.

Questions like the one asked cannot be accurately answered with the little information provided. I hope this helps.

Ask Greenwich Real Estate Broker James Martin - Commissions For Rentals

Question:

Is it standard to pay a commission to the real estate agent for a rental property in Greenwich?

Answer:

Commissions paid by the buyer or tenant should be outlined in your representation agreement and discussed. Typically, an agent representing a buyer or tenant will indicate a commission level that will be owed within the agreement. If the property was listed by another brokerage firm, there is usually a commission paid by the landlord which will cover the tenant's agent commission. If the property was not listed with another agency, then a commission may not have been paid by the landlord, leaving you owing the commission.

Either way, it is common practice that a 1 month commission is paid and split between the listing agent and the buyer/renting agent.

Greenwich Real Estate Market Explained

Is Housing Undervalued?

By DAVID RANSON

Wall Street Journal

The housing market isn't nearly as mysterious as it seems. Much public confusion stems from our failure to clearly define our terms. Take the popular, long-standing belief that housing is overpriced and unaffordable relative to income. It was said 30 years ago and it is still being said today. The key to solving this puzzle is to widen the definition of income so that it includes the increase in existing wealth. Milton Friedman, in the course of the work on consumer spending that won him a Nobel Prize, introduced a much broader, long-term measure of income called "permanent income" -- including capital gains, physical assets and factors like education that would affect a consumer's earning potential.

Permanent income grows at the same rate as wealth, and generally faster than conventional forms of income. Friedman demonstrated that households base their spending decisions on permanent income rather than on narrowly defined income, such as short-term wages. Fifty years later this idea has yet to sink into our national consciousness. Yet, in a highly developed and wealthy country such as the U.S., annual gains in the value of pre-existing assets are getting larger and larger relative to annual cash income from wages, rents and dividends.

Home prices behave the way they do because housing is not a typical consumer good. Rather, it is a capital asset for which the price is set by the markets for capital assets. These markets continually clear in a way that typical consumption markets do not, and housing is therefore being constantly re-priced. In this limited sense, real-estate prices behave like the prices of other tangible assets such as commodities. Of course, in other ways housing is quite unlike a commodity -- it is immobile, provides services such as shelter to its owners, and its price is geographically very specific. Still, the general level of housing prices, when measured as an index, is as acutely and promptly sensitive to an uptick in inflationary pressures as are other forms of financial or tangible capital.

Inflation tends to boost housing prices in the same way that it boosts the price of any tangible asset. And inflation is surely a major part of the housing-price story. Over the past three decades, the price of housing at the national level has risen at a rate similar to the growth of nominal GDP, and the correlation between housing prices and GDP is statistically significant. But the relationship between housing prices and the prices of highly inflation-sensitive assets such as commodities is much more impressive than the relationship with the economy. There is a particularly strong correlation between percentage changes in housing prices and percentage changes in the price of gold -- especially when a short time lag is taken into account.

When paper money is depreciating rapidly, as in the last five years, it is normal for tangible assets such as housing to appreciate more rapidly than usual, while financial assets such as stocks and bonds tend to perform relatively poorly. This can be understood in terms of the flow of financial capital from one economic haven to another. Capital is mobile. It flows out of assets that are vulnerable to the dollar's depreciation, and into assets that are invulnerable. Capital promotes growth and price appreciation in the sectors into which it migrates, at the expense of the sectors from which it escapes.

Instead of viewing the price performance of housing during the first half of the current decade as a "bubble," I see it as having appreciated for the same reason that the prices of commodities and other tangible assets have appreciated. In nominal dollar terms these prices have to rise in order to maintain the status quo in real terms. The rise in housing prices is one more symptom or early warning of the inflation of which the Fed (rightly) is so fearful.

To better understand housing-market trends, we need to clearly distinguish between real and nominal terms. I define the "real price of housing" as the ratio of the national home-price index to an index of precious-metals prices, while the nominal value refers to the price in dollars. Failure to draw this distinction can cause great confusion. For example, the annual gain in the nominal price of housing averaged 4.8% in all the years in which the Fed lowered interest rates, and averaged 7.3% in all the years in which the Fed pushed interest rates up. This calculation, at least in nominal terms, directly contradicts the popular belief that higher interest rates bring real-estate prices down. When the above calculation is repeated using the real price of housing instead of the nominal price, however, the inverse relationship appears. Higher interest rates do tend to depress real housing prices, and this can happen without any significant fall in nominal housing prices.

Expressing the price of housing in real terms not only clarifies the interest-rate confusion, it also changes the overall housing picture. The accompanying graph shows the history of the real national home-price index over the past 30 years. Notice how, during the current decade, instead of the continuing rise in nominal housing prices that made everyone so fearful, in real terms there has been a significant decline. Far from a bull-market bubble that has begun to collapse, housing when viewed in real terms has been in a bear market since the beginning of the decade.

Moreover, like the real price of oil, the real price of housing consistently reverts to the norm. In particular, housing prices have a strong tendency to rise when they have underperformed precious-metals prices. The graph illustrates how the real price of housing sticks to a steadily rising trend over the long haul, occasionally diverging from this trend but afterwards reverting to it. According to the same data, the real price of housing was 30% above its norm as recently as 2001.

Since that time commodity-price inflation has escalated, and nominal housing prices have lagged far behind. The graph suggests that housing prices are now 30% below their equilibrium in terms of the precious-metals benchmark. Any further decline in the ratio plotted in the chart would transcend the bounds of historical experience. The last time that housing prices underperformed the precious-metals market as dramatically as this was in the 1978-80 period, after which they bounced back dramatically.

We can also calculate from these data the average speed at which the real price of housing has historically converged toward its norm. It shows that norm reversion is virtually complete after three years.

All of these various empirical reasons challenge the popular view that housing prices will remain weak because they are in the throes of a "correction" from "bubble" levels. On the contrary, housing prices are weak only in the sense that, after outperforming commodity prices in the late 1990s, they have fallen behind since 2001. History suggests that housing is significantly undervalued, and nominal housing prices have a lot of catching up to do over the next few years.

Housing prices are thus much less enigmatic than they seem. The nation's wealth and its permanent income are growing consistently, and housing is the largest of all the capital asset vehicles in which wealth can be lodged. At the national level, housing prices are not bounded by the growth of wages or other forms of conventional income. Nor are they subject to "irrational" booms or busts. Instead, they respond perfectly rationally to inflationary forces that drive other capital assets and commodities. The real value of housing is much more stable than the currency unit in which housing prices are expressed.

Greenwich Real Estate News

Greenwich homes beat Dow

By Richard Lee
Assistant Business Editor
Stamford Advocate

Greenwich real estate agents have a new bullet in their belts when wooing prospective home buyers

A study commissioned by the Greenwich Association of Realtors, reviewing quarterly selling prices between 1987 and 2006, has shown that those who bought a home during that period were rewarded with a 625 percent return on equity.

That surpasses the performance of the Dow Jones Industrial Average, the Standard & Poor's 500 and the Russell 2000 during the same period, the Realtors association said.

The three stock indices recorded returns of between 450 percent and slightly more than 500 percent, Ray Kehrhahn, assistant director of the Center for Real Estate & Urban Economic Studies at the University of Connecticut School of Business, told an audience of 200 association members yesterday at the Bendheim Western Greenwich Civic Center.

During the same period of the study, return on equity in Connecticut as a whole was slightly more than 300 percent.

"Everybody knows Greenwich real estate is an excellent investment," said Kehrhahn, who conducted the study. "With the results of this study, you can talk to people about buying a $4 million home instead of a $2 million home."

"Greenwich real estate during bad economic times - the volume goes down, but prices remain stable, unlike the rest of the state, where you have significant price declines," Kehrhahn said.

Answering questions from the audience, Kehrhahn said he did not include stock investment transaction costs or dividends or the effect of taxes and reinvested dividends in his study.

Despite a nationwide drop in sales and prices, statistics show that sales of single-family homes and condominiums were higher in Greenwich in the first quarter of 2007, compared with the same period in 2006.

In the first three months of 2007, seven houses sold in the $600,000 to $700,000 range, compared with two during the same period last year

There were 27 sales of houses in the $1 million to $1.5 million range, compared with 23 last year, and 29 in the $1.5 million to $2 million range, compared with 23 in the same period of 2006.

Houses in the $2 million to $3 million range and $4 million to $5 million range and jumped from 27 to 34 and 11 to 14, respectively.

Sales in other categories remained the same or slumped

The report should be useful for real estate agents who stress to home buyers the value of Greenwich property, said association President Carolyn Anderson and president of Anderson Associates Ltd.

"For years, we've told clients that you'll love living here, and this is the best investment you'll ever make," she said, adding that now agents can respond to clients who say, "show me the numbers."

She attributed Greenwich's vibrant real estate market to dedicated agents, strong zoning, proximity to New York City, good schools and competent town government.

Peter Tesei, chairman of the town's Board of Estimate and Taxation, told the audience that he has benefited from being a Greenwich property owner, buying a condominium for $156,500 and 41Ú2 years later selling it for $365,000.

The association is fortunate to have the report, Gloria Chin-Besthoff said.

"It's a win-win for buyers and sellers," she said. "I see myself using it as one of my tools."

Greenwich Real Estate Market Explained

Do I qualify for $250,000 home-sale tax break?

Realty Tax Tips-Part 1: Rules for occupancy, divorce, death

Suppose you could receive up to $250,000 tax-free cash. Better yet, suppose you could receive up to $500,000 tax-free. Still better, suppose you could receive this tax-free money over and over again, but not more frequently than once every 24 months.

Stop dreaming. It's possible. Thanks to Internal Revenue Code 121, millions of U.S. home sellers enjoy these tax-free benefits each year when selling their principal residences. But it is important to understand the simple rules.

HOW TO QUALIFY FOR THIS TAX BREAK. Whether you own and live in a house, condo, cooperative apartment or other type of principal residence, you can qualify for Uncle Sam's most generous tax exemption. To be eligible, you must have owned and occupied your primary dwelling at least 24 of the last 60 months before its sale.

Single home sellers can qualify for up to $250,000 tax-free profits. A married couple filing a joint tax return can qualify for up to $500,000 tax-free capital gains if both spouses meet the occupancy test even if only one spouse's name is on the title.

The method of holding title doesn't matter. Title can even be held in a revocable living trust, as millions do, to avoid probate.

However, if there are two co-owners not married to each other, then both names must be on the title for each to qualify. Military and Foreign Service members have special generous rules allowing the 24-month occupancy period as far back as 15 years before the home sale.

If you bought your principal residence as recently as 24 months ago, and occupied it since then, you meet the ownership and occupancy test. The 24-month residency need not be continuous. Brief temporary absences, such as for a 30-day vacation, count as occupancy time.

However, if you acquired your home in an Internal Revenue Code 1031 tax-deferred exchange as a rental property, and later converted it to your principal residence, for such sales after Oct. 22, 2004, you must own the property at least 60 months (24 of which it must be your principal residence).

Home sellers of any age can qualify. It doesn't matter if you buy another replacement home or not after the sale. Nor does the dwelling have to be your residence on the date of sale.
For example, if you lived in your primary home 24 months, and then rented it to tenants up to 36 months before the sale, you still qualify for this tax exemption.

IF YOU HAVE TWO HOMES, DETERMINING YOUR PRIMARY HOME ISN'T ALWAYS EASY. Suppose you own a "summer home" and a "winter home," as millions of U.S. homeowners do. You spend about six months each year in each home. Both residences therefore meet the 24-out-of-last-60-months IRC 121 ownership and occupancy tests.

But the IRS says only one residence can be your "main home." This issue was vital in the tax case of Guinan v. U.S. (2003-1 USTC 50475). The Guinans sold their Green Bay, Wis., home where they spent more time each year than in their other residences. The Wisconsin home met the 24-month ownership and occupancy tests. The owners kept bank accounts and automobiles in Wisconsin.

But the U.S. District Court ruled it was not their primary residence because the sellers never filed income tax returns from Wisconsin. As a result, they had to pay $45,009 capital gain tax on the sale of their Wisconsin home.

The IRS says principal-residence indicators -- if you own more than one residence -- are (1) place of employment; (2) principal abode for the taxpayer's family members; (3) address on taxpayer's federal and state income tax returns; (4) location of taxpayer's banks; (5) automobile and driver's license registrations; (6) voting location; and (7) civic affiliations, such as taxpayer's religious organizations and other membership groups.

LITTLE-KNOWN BENEFIT FOR DIVORCED AND SEPARATED HOME SELLERS.

Many divorced and separated couples are not aware they can still qualify for up to $500,000 total tax-free principal-residence-sale profits. If one divorced or legally separated spouse (called the "in spouse") qualifies for the $250,000 tax exemption by owning and living in the home at least 24 months of the last 60 months before its sale, the other spouse (called the "out spouse") can also qualify for up to $250,000 tax-free home-sale profits when the home is eventually sold.
This little-known tax break is often used when one spouse stays in the home until the children become 18 or 21 and the home is then sold with the profits divided between the ex-spouses.

ADJOINING VACANT LAND SALE CAN ALSO QUALIFY. Another little-known benefit of IRC 121 allows the sale of a vacant lot adjoining the principal residence to qualify for this tax exemption. However, the adjacent principal residence must be sold within 24 months before or after the lot sale.

UP TO $500,000 TAX-FREE HOME-SALE PROFIT IN YEAR OF SPOUSE'S DEATH. Although a surviving spouse should not rush to sell the principal residence in the year of a spouse's death, IRC 121(b)(2) permits use of the exemption up to $500,000 in the year of a spouse's death if a joint tax return is filed. In limited cases where a surviving unmarried spouse maintains a household for dependent children, this tax benefit may be available for two additional tax years.

However, a surviving spouse who inherits the deceased spouse's share of the principal residence should be aware he or she will receive a new 50 percent "stepped-up basis" to market value on the date of death. In community property states, the surviving spouse usually receives a new 100 percent stepped-up basis to market value if both spouses held title.

PARTIAL EXEMPTION IF YOU DON'T MEET THE 24-MONTH OCCUPANCY TEST. If you occupied your principal residence less than the required 24 months, but the reason for your home sale is (1) change of employment site meeting the moving-cost tax-deduction rules; (2) health reasons; or (3) unforeseen circumstances, you can qualify for a partial exemption based on the number of occupancy months.

The "unforeseen circumstances" rules are still evolving. The IRS allows these acceptable reasons: (1) divorce or legal separation; (2) death in the immediate family; (3) unemployment; (4) decreased income with the homeowner unable to pay the mortgage and basic living expenses; (5) multiple births from the same pregnancy; (6) damage to the home from a natural or manmade disaster or terrorism; and (7) condemnation, seizure or other involuntary conversion of the property.

If you qualify for a partial exemption, and you occupied the principal residence 18 of the 24 required months, for example, then you qualify for 75 percent of the $250,000 or $500,000 exemption.

TWO WAYS TO AVOID TAX ON MORE THAN $250,000 OR $500,000 HOME-SALE CAPITAL GAIN. If you will have a principal-residence-sale capital gain exceeding the $250,000 or $500,000 exemptions, there are two ways to avoid tax:

1. The first method is to convert your home into a rental property. Then it qualifies for an Internal Revenue Code 1031 tax-deferred exchange for another rental or business property of equal or greater cost and equity.

Most tax advisers suggest renting your former principal residence at least six to 12 months before exchanging it. IRC 1031(a)(3), known as a "Starker exchange," then allows selling the property, having the sale proceeds held by a qualified intermediary third-party beyond your constructive receipt, designating the replacement property within 45 days, and completing the acquisition within 180 days after the old property's sale.

2. The second method, allowed by IRS Revenue Procedure 2005-14 effective Jan. 27, 2005, allows use of both IRC 121 and IRC 1031 in a single property sale. This slightly complicated ruling is retroactive to tax years for which the statute of limitations has not expired.

Gain is first excluded under IRC 121 up to $250,000 or $500,000, and the remaining gain then can qualify for an IRC 1031 tax-deferred exchange. An example of this procedure applies where the principal residence was converted to a rental and then the property is "down traded" for another rental property after claiming the IRC 121 exemption.

SUMMARY: Internal Revenue Code 121 is a very generous tax exemption up to $250,000 or $500,000 that can be used over and over but not more often than every 24 months for qualified home sellers. For full details, please consult your tax adviser.

Greenwich Real Estate Market Explained

Turnaround expected for U.S. home builders
ECONOMIC OUTLOOK MARKETPLACE by Bloomberg

International Herald Tribune
Author(s): Matthew Benjamin And Rich Miller

The home-building industry is about to stop hurting the U.S. economy and later this year may start to help it.

The housing demand that is beginning to stir may be unleashing faster growth. While housing will not add much to the expansion before the end of 2007, it is becoming less of an impediment as price cuts, incentives and lower mortgage rates bring more buyers into the market.

"The worst of the drag on the economy from construction is behind us," said Chris Varvares, president of Macroeconomic Advisers in St. Louis, Missouri. As a result, he said, growth should pick up to an annual rate of more than 3 percent in the second quarter, from 2.25 percent in the current quarter.

That would reduce pressure on the Federal Reserve to reduce interest rates, disappointing bond investors who are anticipating that the Fed's chairman, Ben Bernanke, and his colleagues will cut them as soon as May.

The yield on the 10-year Treasury note rose to 4.65 percent Friday from 4.42 percent Dec. 4 as strong job growth and rising incomes prompted bond investors to scale back their bets on Fed rate cuts. Meanwhile, shareholders in home-building companies are already taking heart: An index of housing shares soared 11 percent in the final two months of 2006, outstripping the 2.9 percent advance in the Standard & Poor's 500.

"Investors are very forward looking, and there's a sense among them that a change in momentum in the housing market is approaching," said Robert Curran, managing director at the credit rating agency Fitch in New York.

Sales of existing homes rose in October and November, the first consecutive monthly gains since late 2005. New-home sales are up too, helping pare the number of unsold properties to 545,000 from a record 573,000 in July.

Builders still view conditions as poor, according to a December survey by the National Association of Home Builders/Wells Fargo. For the third month in a row, though, the survey showed an increase in the number of builders forecasting higher sales in six months' time.

Toll Brothers, the largest U.S. builder of luxury homes, "may be seeing a floor in some markets," said Robert Toll, the chief executive. Buyer "deposits and traffic, although erratic from week to week, seem to be dancing on the bottom or slightly above." The long-term prospects for the U.S. housing market are more favorable than in other countries that experienced similar housing busts, said Mark Vitner, senior economist at Wachovia.

Housing prices surged this decade in Australia and Britain, peaking earlier than in the United States. Falling prices and sales in those countries proved to be only a temporary drag on economic growth, followed by rapid recovery.

The United States may fare even better, because its younger population and higher rate of immigration create more room to increase rates of home ownership, Vitner said. "Housing recessions didn't bring about the end of the world in those countries, and our demographics are much more favorable," he said.

The industry may take its time getting up off the bottom.

"In the wake of the boom we had and the bust that we're having, it wouldn't surprise me to see a long period of not much growth in housing because that's what it needs to rebalance supply and demand," said Richard Berner, chief U.S. economist at Morgan Stanley in New York.

A revival of home building will not add to gross domestic product at anything like the pace of mid-2005, at the height of the housing boom, when residential construction accounted for more than a third of the economy's 3.3 percent growth rate.

Varvares at Macroeconomic Advisers predicted that home building would contribute just 0.1 percentage point to growth by the fourth quarter of this year. Still, that would be a big improvement from the third quarter of 2006, when housing pulled growth down by 1.2 percentage points to an annual rate of 2 percent.

David Seiders, chief economist at the National Association of Home Builders in Washington, expects the industry to do much better. He sees home building adding as much as 0.7 percentage point to fourth-quarter growth.

Behind the improving outlook: More people are able to afford homes. The rate on a 30-year fixed-rate mortgage has remained less than 6.2 percent since mid-November, down from 6.8 percent in July. Applications for mortgages to buy homes at the end of December were up 8.3 percent from their low for 2006, in October. The median price of existing homes, which account for 85 percent of the housing market, was down 3.1 percent in November from a year earlier, the fourth consecutive monthly decline.