New Home Construction Picks Up in Birmingham

According to today’s Birmingham Business Journal, new home construction is starting to pick up in Birmingham.

New home construction in the Birmingham area began to thaw in February, according to recent data from the Alabama Center for Real Estate.

The University of Alabama center said 120 single-family home building permits were issued in February, a 9.1 percent increase over January.

Statewide, permits increased 20.5 percent to 659 issued in February over January, the first increase after a 10-month consecutive decline.

Read the entire article at the following link to the Birmingham Business Journal:

http://www.bizjournals.com/birmingham/news/2011/04/20/new-home-construction-picks-up-in.html

If I Sell My Home, Will I Have to Pay Capital Gains Tax?

Thanks to Charles Bates for sharing this great description of a very important question: If you sell your home, will you have to pay capital gains tax?

The IRS permits a maximum exclusion on capital gain of $250,000 for individuals and $500,000 for married couples filing a joint return who sell their home, but of course some conditions apply.

For the five-year timeframe prior to the date of the sale of your primary residence, you must meet the Ownership and Use Tests the IRS provides in Publication 523, Selling Your Home. These rules ensure you have owned the home for at least two years, and lived in the home for at least 24 months out of the last five years. Additionally, you may not have excluded a gain on your taxes from the sale of a different home within the last two years. Note that if you sell your property for less than your original purchase price, you cannot claim a capital loss.

A ‘reduced maximum exclusion’ can apply to those who must sell their home due to a change in their place of employment, health issues, or unforeseen circumstances that affect qualified individuals. In all cases, it is best to consult your tax professional or IRS guidelines if you have any questions about the taxes you may be responsible for if you sell your home.

Latest Census Information About Alabama…

The 2010 Census Information has been published for our state, with several interesting trends over the past ten years. Arcara Residential is pleased to have many choices of homes in the areas of growth! Do a property search by area to find the latest listings. Here are a few specific areas that line up with what we are seeing:

  • 2010 Census Showed that Calera and Chelsea both grew by 250%.  Check out Shiloh Creek!

  • The Fastest Growing Cities in the Jeffco/Shelby area were:
    (graphic from the Birmingham News)

  • Trussville Boomed! Population growth in Trussville was 54% over the past decade.  Visit the spectacular Brooke’s Crossing for a beauty in Trussville.

  • The three fastest growing “larger” cities (cities that started the decade with populations more than 10,000) were Helena, Trussville, and Pelham.  We are proud to feature neighborhoods in these areas such as Pelham’s Eagle Cove.

  • Hoover population soared 30% over the past decade.  Hoover’s Mayor Petelos attributes the growth to Hoover being a great place to live and raise a family, with one of the better school systems in the state.  It is amazing that million dollar views are still available in this beautiful city, such as you will find at Southpointe Ridge (with full basements, starting at $299,900). 

More detailed information and analysis is available at http://www.al.com/census/news/index.ssf/index.html.

Need a Smaller Down Payment?


While down payment requirements have increased for some programs, it is still possible to buy a home with less than 5% down…or even NO money down.

For example, FHA offers a loan program that requires as little as 3.5% down. In addition, the VA and USDA offer loans that require no down payment. Of course, there are restrictions with each of these programs that can include maximum loan amounts based on your location with FHA loans, income and property requirements for those offered by the USDA, and your qualifying status as an eligible Veteran.

In addition to those programs, keep in mind that many sellers in today’s market are willing to offer concessions, such as paying part or all of your closing costs. That can decrease the amount of funds you may be required to have to purchase your next home.

The point is that it’s still possible for millions of Americans to purchase a home with less than 5% down.

Birmingham Area Homebuilders may be Poised for Comeback

The following article by Dawn Kent was in the Birmingham News on February 3, 2011.

Metro Birmingham homebuilders could be poised for a comeback in 2011, after a steep market downturn left most of the industry battered.

During a two-week period in January, more than 50 building permits were issued for speculative single-family homes in area neighborhoods, according to data collected by Southern Exposure, a Huntsville firm that tracks permit activity. That’s up from roughly 10 a week in recent months.

The sharp uptick might be the result of seasonal factors, said Bart Fletcher, executive officer of the Greater Birmingham Association of Home Builders.

If builders want to have houses ready for the typically busy spring buying season, now is the time they start working on them, he said.

But, Fletcher added, “I think builders are more optimistic about 2011. I think that we really believe we have seen the bottom. A lot of builders have not built anything new for quite some time. We’ve worked through the inventory.”

Still, hurdles remain for an overall recovery in home building, notably low consumer confidence and high unemployment, which make buyers wary.

Lending also continues to be tight, which means many builders can’t get financing for new projects.

That’s been true throughout the recession, Fletcher said, as a number of area homebuilders have exited the market. In early 2007, membership in the local homebuilders association peaked at 551; it is now down to about 245.

The group does not cover 100 percent of area home builders, he added, and some may not have officially closed their companies.

“Some may have dropped their membership, but their corporation remains intact,” Fletcher said. “They’re just not doing any work.”

To help put them back to work, the homebuilders association has been meeting with U.S. Rep. Spencer Bachus, chairman of the House Financial Services Committee, for help in communicating with regulators. The group is trying to determine where the brakes are being applied when it comes to lending in an effort to loosen the purse strings, Fletcher said.

“The type of lending environment that is necessary to keep small- to medium-size builders in business, that’s just not happening right now,” he said.

Despite such an environment, there are green shoots in the market.

In December, new single-family home sales rose 17.5 percent, the Commerce Department reported. It was a strong finish to a year that had the lowest total of new home sales on record, at 321,000, since the records started being kept in 1963, according to the National Association of Home Builders.

While discussing the sales rise, NAHB officials cited concern over declining inventory.

“.¤.¤. It means that the critical lack of acquisition, development and construction financing continues to pose a tremendous obstacle to medium- and small-sized builders across the country, thereby slowing the arrival of a true recovery and the jobs that could generate,” the group’s chief economist, David Crowe, said in a prepared statement.

According to local real estate analyst Tom Brander, the Birmingham area’s inventory of new homes for sale totaled 1,078 in December, a 14.6 percent decline from November.

By comparison, Brander’s statistics show the local new home inventory hovered around 3,300 in early 2007, before the market tanked.

Meanwhile, the vast majority of the 50-plus new home permits pulled in metro Birmingham from Jan. 7 to 21 are tied to Fort Worth, Texas-based home builder D.R. Horton.

As one of the nation’s largest homebuilders, publicly-traded D.R. Horton is in a better position to capitalize on a rebounding market, since it doesn’t have to rely on banks for financing individual projects, as smaller companies do.

Locally, D.R. Horton is building new homes in areas including Hoover, McCalla, Leeds, Moody and Pelham, according to the permit information collected by Southern Exposure.

Birmingham-based Signature Homes, which has continued to build and sell homes at a healthy clip throughout the recession, also accounted for a portion of the recent uptick in permits.

The company is working on four new communities, in addition to ongoing work in Hoover’s Ross Bridge and Chace Lake communities, said Chairman Dwight Sandlin and President Jonathan Belcher.

The new communities include Water’s Edge at Bent River, a Hoover neighborhood where homes start just below $200,000, and Miller Hill in Vestavia Hills, where lots are being developed and home prices are expected to range from the high $300,000s to the low $400,000s.

Signature Homes also is building in new communities in Calera and Chelsea.

Last year, the company’s home starts were up 40 percent over 2009, despite a drop off in the last half of the year that was caused by the expiration of last spring’s federal tax credits for homebuyers.

And so far this year, the company’s January sales are up 40 percent over the year-ago period.

“We’re looking for a really big year,” Sandlin said.

As for the area’s overall new home market, Sandlin points to declining inventory and says he expects builders to start filling in those gaps.

It’s moving toward a “new normal,” he added, nowhere near the super-heated housing market of 2005 and 2006, but toward the healthier levels of the early 2000s.

“There’s pretty good stuff going on,” he said. “It’s not great, but we’re headed in the right direction.”

Home Staging is All the Rage!

Home Staging is the art of decorating a home to sell quickly and for top dollar. In the Birmingham and Huntsville areas, we are lucky to have SWAG Home Staging and Design close by to perform this magic for homeowners and realtors! Thanks to Erin Dunavant from SWAG for passing along these home staging tips. Erin can be reached at erin@swaghomestaging.com, swaghomestaging.com .

Home Staging Tips, by Erin Dunavant

Home staging is all the rage… and with reason! Staged homes sell much quicker and for higher prices than homes that are vacant.

If your home is vacant (that is, unfurnished), you should definitely consider the possibility of staging it. A professional home stager can make small rooms appear more spacious, awkward spaces feel usable and lofty floor plans feel cozy. A staged home will stand out among the competition and is more likely to be remembered at the end of a long day of showings.

There are many good reasons to stage a home. First, staged homes photograph better, which is critical for today’s Internet-driven buyer. Staging also helps the buyer imagine how a room can be furnished; it’s common knowledge that the vast majority of buyers do not have the vision to mentally furnish and decorate a vacant room. A staged home also appears to be occupied, giving a measure of security as well.

If your home needs staging during the marketing process, ask your real estate agent to contact SWAG Home Staging & Design. Yes, it’s another added expense, but for the right house – worth every penny!

Below are a few Staging Tips to help get you started:

Disassociate Yourself With Your Home.

Sellers need to realize: This is no longer their home; it is a house. Make the mental decision to “let go” of your emotions and focus on the fact that soon this house will no longer be yours. Say goodbye to every room as each space will be need to be transformed into a product.

De-Personalize.

Pack up those personal photographs and family heirlooms. Buyers can’t see past personal artifacts, and you don’t want them to be distracted. You want buyers to imagine their own photos on the walls, and they can’t do that if yours are there! You don’t want to make any buyer ask, “I wonder what kind of people live in this home?” Rather you want buyers to say, “I can see myself living here.”

De-Clutter!

People collect an amazing quantity of junk. Consider this: if you haven’t used it in over a year, you probably don’t need it. If you don’t need it, consider donating or throwing away unnecessary items. Be sure to remove all books from bookcases and pack up all knickknacks. The most valuable space in a home is the kitchen; therefore, clean off the countertops & remove all items from the refrigerator. Put essential items used daily in a small box that can be stored in a closet when not in use. Think of this de-cluttering process as a head-start on the packing you will eventually need to do anyway.

Rearrange Bedroom Closets and Kitchen Cabinets.

Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means to take a little time to alphabetize spice jars, neatly stack dishes, turn coffee cup handles facing the same way, and line up shoes.

Rent a Storage Unit.

Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room’s purpose and plenty of room to move around. You don’t want buyers scratching their heads and saying, “What is this room used for?”

Remove/Replace Favorite Items.

If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won’t want it. Once you tell a buyer she can’t have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.

Check Curb Appeal.

If a buyer won’t get out of her agent’s car because she doesn’t like the exterior of your home, you’ll never get them inside. Contact SWAG Services, LLC for all your lawn maintenance needs such as:

  • Mow the lawn. Edge the Yard. Blow off the Side Walk.
  • Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion.
  • Trim your bushes.
  • Make sure visitors can clearly read your house number.

SWAG Home Staging & Design has an organized system to help start the process of preparing the home for sale and it begins with the Staging Consultation. This Home Evaluation will diagnose and recommend special room-by-room enhancement instructions. Additionally, SWAG will supply you with suggestions on repairs/improvements that will benefit the property and suggestions on how to prepare the home to sell. We are a unique service provider, in Birmingham & Huntsville, with the goal of maximizing your profit potential.

7 Ways to Prevent Water Damage

Gary Davis  from Farmer’s Insurance  shared the following tips about preventing household water damage.

Did you know? Ninety percent of household damage is the result of water damage and flooding.  Broken water pipes are a major contributor to that figure. Electronic items are destroyed. Rugs, curtains and clothes are ruined. Electric shock risk is dramatically increased. At the very least, you’ll spend days cleaning up the mess, getting rid of the resulting mildew smell and getting your pipes fixed so you can resume your water service.

7 Ways to Prevent Water Damage

  1. Check your water heater annually for rust or leaks.
  2. Replace washing machine hoses every five years.
  3. Check washing machine control valves every five years.
  4. Locate the turn-off valve for your city water supply. Learn how to operate it.
  5. If your water bill is abnormally high for no apparent reason, do a complete inspection of your water system.
  6. Do not pour grease of any kind down your sink or disposal.
  7. Winterize outside water faucets during freezing weather and disconnect outside garden hoses from the faucet.

 

For more information, Gary Davis suggests visiting this link – http://www.farmers.com/flood_damage.html

Summer Energy-Saving Tips

Everyone just got a big summer power bill and it is still hot outside. We hope these hints will help you save on your power bill until the cooler weather gets here.

Follow these simple, cost-effective tips to stay cool and reduce summer energy bills:

  • Turn In. Turn On
    ENERGY STAR® qualified room air conditioners use up to 25 percent less energy than a standard new model and up to 40 percent less energy than a model that is more than 10 years old. Look for a high Energy Efficiency Ratio (EER). Units with high EERs cost less to operate. Turn in your old, room air conditioner to your local waste management facility and turn on a new ENERGY STAR air conditioner.
  • Size it Right
    A properly sized air conditioner will operate more efficiently and dehumidify more effectively. An oversized unit will cycle on and off more frequently. Short cycling reduces an air conditioning system’s life, and a short cycling system will not reduce humidity effectively. Undersized equipment can reduce the efficiency of air distribution and accelerate wear on system components, leading to premature failure.
  • No Dirty Business
    A dirty filter will increase energy use and can damage the air conditioner leading to early failures, so check the filter every month and replace as needed.
  • Work in the Morning or Evening
    Use ovens, washing machines, dryers and dishwashers in the early morning or late at night when it’s generally cooler outside. Use a microwave oven to cook, or barbecue outside, if possible.
  • Chill Out in the Shade
    A unit operating in the shade uses as much as 10 percent less electricity than the same one operating in the sun.
  • Don’t Forget the Adoring Fans
    ENERGY STAR qualified ceiling fans can help cool a home without greatly increasing electricity use. They improve airflow and create pleasant breezes.
  • Just Chill When You’re Home
    For central air conditioning, a programmable thermostat allows homeowners to automatically adjust to a more comfortable temperature when they are scheduled to be home. Homeowners can set the temperature to use less cooling when they are normally away. Residents save three percent on energy costs for each degree they turn up the thermostat from 72 degrees. ENERGY STAR window and through-the-wall room air conditioners also typically include programmable thermostats or timers.
  • A Home Needs Shades Too
    Block out heat by keeping blinds or curtains closed during the day, especially on south facing windows.
  • Take the Whole-House Approach
    Houses work as a system. Insulation, heating and air-conditioning, air sealing, water heating, ductwork, windows and doors all work together to determine efficiency. A Home Performance with ENERGY STAR contractor can perform a home energy assessment to help residents map a plan to improve a home’s energy efficiency.
  • Turn It Off
    Save electricity and reduce waste heat by shutting off lights. Seldom used home electronics should actually be unplugged from the wall. Items like DVD players, VCRs and cordless phones use 40 percent of their energy while in the off position to power functions like clocks and remote controls.
    Additional tips for:

APPLIANCES
Use your microwave oven as much as possible in the summer rather than your regular oven. You’ll stay cooler and save energy.
When buying appliances, compare yellow EnergyGuide labels, not just prices, to make sure you buy an energy efficient unit.
The size of your pan should match the size of your burner for the highest efficiency.

  • Dishwashers
    To save even more energy, defer use until off-peak hours, after 6:30 pm and before 9:30 am.
    Put full loads in the dishwasher and use the “energy saving” setting for the drying cycle, or let dishes air dry to reduce energy use.
  • Clothes Washers
    Do your laundry during off-peak hours, after 6:30 p.m. and before 9:30 a.m., and hang your clothes outdoors in the summer.
    When doing your laundry, use a cold water wash on full loads.
    Clean the lint trap regularly to keep it running more efficiently and make sure the exhaust isn’t blocked.
    Horizontal-axis clothes washers (front loaders) are far more gentle and effective on your clothes, and are much more energy efficient when compared to traditional clothes washers.
  • Refrigerators/Freezers
    Defrost your refrigerator regularly so it can operate more efficiently, and do so only on weekends to avoid peak load.
    Vacuum and clean the condenser coils, motor and evaporator pan of your refrigerator once or twice a year, and leave space between your refrigerator and the surrounding walls and cabinets to allow air to circulate around the coils.
    Keep your refrigerator away from the stove and heat registers. By being next to those items, you’re making your refrigerator work twice as hard and decreasing its overall efficiency.
    Test your refrigerator and freezer by placing a thermometer inside for an hour. The reading should be as follows:
    Refrigerator 36-38%
    Freezers 10-15%
    Select a refrigerator/freezer with energy-saving features. It will use 20% less electricity than the standard model, saving you approximately $60 a year.
    Avoid purchasing used refrigerators, as an older refrigerator often uses more than three times the energy of today’s models.
    Make sure the seals on your refrigerator, freezer and oven doors fit tightly.

Home Improvement in the Fall

I liked the points made in this article in Handyman Connection…

Look on the Bright Side: Combat Gray Days with Colorful Interiors
As the summer season turns into fall, you can count on a few things: school will be in session, football games will be played, and your home will need a few fix-ups before colder weather sets in.

As the weather turns colder, you can anticipate spending more time indoors. However, you still can keep an upbeat “summer attitude” by introducing vibrant colors to your home’s interior.

Many scientific studies have established links between colors and moods. Blue is generally regarded as peaceful and calming. Red is associated with energy and action. Green symbolizes nature and can create a refreshing, rejuvenating feeling.

“More and more homeowners are opting to use bold colors as they renovate or redecorate,” says Joel Bell, vice president of Marketing for nationwide home improvement contracting network Handyman Connection. “Whether they have their own ideas or get advice from a certified handyman, homeowners have more alternatives than ever before for bringing color into their homes.”

When you’re considering brightening up your home with new wall coverings, here are the primary materials you have to work with:

• Paint: for areas where people gather, such as living or family rooms, warm colors such as reds and yellows promote sociability. To create a feeling of calmness and serenity, bedrooms should feature blues or greens. A different color on one wall, known as an accent wall, can make a design statement without dominating the room. Lighter colors will make a room seem larger, while using complementary colors can add dimension and additional depth.
• Wallpaper: wallpaper offers the advantage of multiple colors in a single pattern, which allows you more options in choosing your furnishings and accent pieces. Dark colors or dense patterns can seem confining in smaller rooms, so be sure to obtain a wallpaper sample and see how it looks in the room before you decide.
• Tile: although generally associated with the bathroom or kitchen, tile has become a more popular design element for introducing color into other rooms as well. Patterned tiles can be an especially effective complement to dining or transitional rooms.
Depending on your skill level, you may be able to tackle these projects yourself, or you can consult with a local professionally licensed handyman to discuss details and receive a cost estimate.

“It’s amazing how a bit of color can make a big difference in a room’s appearance — and your attitude, too,” adds Rocchetta.

So keep the “blues” at bay during the chilly months by looking on the bright side — and adding some color to your home.

8 Worst First-Time Home Buyer Mistakes 2010

This very current article by Amy Fontinelle describes eight mistakes commonly  made by first time home buyers:
Aug 3, 2010

Are you gearing up to buy your first place? Shopping for a home is exciting, exhausting and a little bit scary. In the end, your aim is to end up with a home you love at a price you can afford. Sounds simple enough, right? Unfortunately, many people make mistakes the prevent them from achieving this simple dream. Arm yourself with these tips to get the most out of your purchase and avoid making 8 of the most costly mistakes that could put a hold on that sold sign.

1. Not Knowing What You Can Afford

As we’ve all learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don’t already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on. Don’t forget major expenses that only occur once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you’ll know how much you can spend on your new home each month.
If you end up looking at homes that are outside your price range, you’ll end up lusting after something you can’t afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can’t afford the type or size of home that you desire and that you need to work on reducing your monthly expenses and/or increasing your income before you even start looking.

2. Skipping Mortgage Qualification

What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved for a loan before placing an offer on a home. If you don’t, you’ll be wasting the seller’s time, the seller’s agent’s time, and your agent’s time if you sign a contract and then discover later that the bank won’t lend you what you need, or that it’s only willing to give you a mortgage that you find unacceptable.
Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the several thousand dollars that you put up when you went under contract.

3. Failing to Consider Additional Expenses

Once you’re a homeowner, you’ll have additional expenses on top of your monthly payment. Unlike when you were a renter, you’ll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace).
If you’re interested in purchasing a condo, you’ll have to pay maintenance costs monthly regardless of whether anything needs fixing because you’ll be part of a homeowner’s association, which collects a couple hundred dollars a month from the owners of each unit in the building in the form of condominium fees.

4. Being Too Picky

Go ahead and put everything you can think of on your new home wish list, but don’t be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated decor, make some repairs to the home, or forgo that extra bedroom. Of course, you can always choose to continue renting until you can afford everything on your list – you’ll just have to decide how important it is for you to become a homeowner now rather than in a couple of years.

5. Lacking Vision

Even if you can’t afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away. Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.

6. Being Swept Away

Minor upgrades and cosmetic fixes are inexpensive tricks are a seller’s dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or staging that you’ll end up paying $40,000 for. If you’re on a budget, look for homes whose full potential has yet to be realized. Also, first-time homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

7. Compromising on the Important Things

Don’t get a two-bedroom home when you know you’re planning to have kids and will want three bedrooms. By the same token, don’t buy a condo just because it’s cheaper when one of the main reasons you’re over apartment life is because you hate sharing walls with neighbors. It’s true that you’ll probably have to make some compromises to be able to afford your first home, but don’t make a compromise that will be a major strain.

8. Neglecting to Inspect

It’s tempting to think that you’re a homeowner the moment you go into escrow, but not so fast – before you close on the sale, you need to know what kind of shape the house is in. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house’s physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.

Conclusion

Buying a first home can seem stressful and overwhelming, and it isn’t without its share of potential pitfalls. If you’re aware of those issues ahead of time, you can protect yourself from costly mistakes and shop with confidence.
For many people, a home is the largest purchase they will ever make, but it need not be the most difficult.

All information on this website is deemed reliable, but not guaranteed, and may change without notice. Any square footage is approximate.

Property of Arcara Residential, LLC; 771 2nd Street; Helena, AL 35080