14 October 2009

Deadline Soon for First-Time Homebuyers

Realtors, Mortgage Lenders say contracts need to wrap now to qualify for tax credit. by Stephen Maloney

Time is running out on the federal tax rebate for first-time homebuyers as the Dec. 1 deadline rapidly approaches, but real estate experts agree it's almost too late to begin the homebuying process and hope to qualify for the rebate of up to $8,000.

Essential Mortgage Co. President Mike Anderson said first-time homebuyers who haven't yet started negotiating a final price on a home are pressing their luck.

"You'd better get in contract by Oct. 15," Anderson said. "You better allow 45 days to get everything finalized. It can be done in 30 days, but I'll tell you what, you better have your ducks in a row."

Anderson said he closed a deal from start to finish within two days last year, but the regulations entacted by the federal government to avoid another housing meltdown have slowed the process considerably.

"We have a whole bunch of different waiting periods now," he said. "You can't hold an appraisal for three business days, you have the Home Value Code of Conduct with its own waiting periods. Things are just taking longer."

Realtors nationwide are asking Congress to extend the program for at least another year, Anderson said, but there is no indication yet whether the lobbying efforts are working.

The incentive itself, however, has attracted first-time homebuyers so far.

Metairie-based Re/Max Real Estate Partners agent Tom French said the tax rebate was the deciding factor in a home sale he put years of effort into closing.

"The first one I closed on I had been working on for three years," French said. "The night that Congress approved this program he sent me an e-mail and said, 'Ok, now it's time to get serious, let's buy that house.'"

That customer figured out exactly how much of a rebate he would qualify for and already had a purpose for the money in mind before he signed the contract, French said.

"He had it all planned out," French said. "When we did his closing he said, 'That tax money is going to be new flooring in this house.' For him it was a big incentive."

Covington-based Stirling Properties vice president Barbara Shelton said more than 350,000 first-time homebuyers have taken advantage of the rebate program since its inception Jan. 1, leading to a potential backlog of paperwork as the final deadline to stop accepting applications nears.

"You're going to be crunched by the end of November with all the delays we're having if you don't hurry up and get things under contract now," Shelton said. "The biggest holdup is underwriting."

Anderson said loan applicants should be prepared to produce a wide array of documents to loan officers or expect delays.

"I would have two years' federal income tax returns, two months' bank statements and your two most recent pay stubs," he said. "If you were in college, get your school transcripts and copies of your diploma. These are the kinds of crazy things we're asking for today."

The college transcripts are looked at as proof that a recent grad is responsible enough to attend class and are analogous to a good work record, Anderson said.

Obtaining the transcripts may take up to 14 days, though, so applicants should be prepared well ahead of time, he said.

"If you're looking at the process starting from making the offer, you need to be doing that right now, in the next week or so," Shelton said. "We're already in October,so time is really running out."

12 August 2009

Condominium Market Statistics -- 2nd Quarter 2009

Multi Family Market Statistics -- 2nd Quarter 2009

Single Family Market Statistics -- 2nd Quarter 2009

Home Prices Continue Rise Throughout Jefferson Parish

After reaching their highest average selling price since May 2006 in June, home prices on the East Bank of Orleans Parish dropped nearly 12.5 percent in July and were down compared with last year. Meanwhile, prices have risen consecutively since April throughout Jefferson Parish.

Year-over-year homes prices dropped in all but three areas in the New Orleans area in July; the East and West banks of Jefferson Parish and St. Bernard Parish, according to statistics from the Gulf South Real Estate Information Network.

Homes on the East Bank of Orleans Parish were selling for an average of $215,457, down from $263,458 in June and $246,313 a year ago. However, properties were selling faster at 102 days compared with 113 a month ago and 108 last year.

St. Bernard Parish saw a slight increase to $111,226 from $110,375 a year ago, but that figure was down from $118,847 in June. However, only 27 homes were closed on in July compared with 32 in June and 28 a year ago, while the average time spent on the market surged to 139 days compared with 92 a month ago and 82 days last year.

The East Bank of Jefferson Parish has seen the average selling price steadily rise 8.4 percent since April to $239,429 in July, up from $238,129 a month ago and $224,203 last year. Other market figures were also encouraging, with 159 properties sold, more than 156 in June but fewer than the 163 a year ago. Homes also sold faster at 83 days, compared with 86 a month ago and 88 last year.

The West Bank of Jefferson Parish also continued to see home prices rise for the third straight month to $155,355 in July, representing a 20.8 increase since April. July's average selling price was up from $146,068 in June and $148,601 a year ago. Properties for sale sat for an average of 71 days, fewer than 77 days a month ago and 85 days a year ago, while 72 properties sold, fewer than 87 last year.

The story was the same on the West Bank of Orleans Parish, which has seen its average selling price increase 20 percent since April. Homes were selling for an average of $179,477 in July, up from $177,762 in June but down from $185,665 a year ago. More homes were sold month over month -- 30 compared with 26 -- but fewer than last year, when 34 properties were closed on.

Prices throughout St. Tammany Parish were also down, with the eastern part of the parish seeing a 10 percent month-over-month drop and the western part seeing a 5.3 percent drop.

Homes prices in eastern St. Tammany Parish were down $185,189 from $191,472 in June and $206,307 a year ago, while the number of homes sold was also down to 74 from 90 a month ago and 99 last year. Properties were also moving slower at 110 days compared with 79 in June.

Western St. Tammany Parish also saw prices drop to $264,441 from $270,763 in June and last year's average of $279,328. More homes sold in July compared with June -- 142 over 137 -- but that was still less than last year, when 173 properties were closed on. Properties also moved slower in July at 102 days, compared with 84 in June and 85 days a year ago.

In the River Parishes, which is comprised of St. Charles, St. James and St. John parishes, the average selling price dropped after a three-month rise to $172,979 from $212,581 in June. July's price also was down from $192,643 a year ago. Fewer homes -- 64 -- were sold than the 66 in June and the 72 a year ago. However, properties were more stagnant longer, sitting on the market for 110 days, up from 105 a month ago and 108 a year ago.

neworleanscitybusiness.com 8/11/2009

29 May 2009

New Orleans asks: What recession?

BY PATRIK JONSSON AND MARY KNOX MERRILL CHRISTIAN SCIENCE MONITOR

NEW ORLEANS —— Chicago is “a wash,” says Jason Weyland, an architect who lost his Windy City job when his firm cut half its workforce earlier this year. So on this day Mr. Weyland - married, bespectacled, and crisp-suited - is on a job hunt in a city that, just a few years ago, many Americans had written off, irrevocably sold down the mighty Mississippi.

“It’s hard to believe, but New Orleans has become a legitimate city,” he says, riding the St. Charles Streetcar line to a promising follow-up interview. “It’s got jobs, great culture, history, and it’s a city where people walk, which I like.” As the anchor of Louisiana - the only state with positive employment numbers - New Orleans is back.

Drawn by its walkable streets, antique neighborhoods, and laissez-faire regulation, young American workers are flocking to the Big Easy to stay, sensing an opportunity to redraw the economy and at the same time be a part of something bigger: rebuilding the only major US city to be completely devastated by a hurricane.

In many ways, it’s a stunning and irony-laden turnaround for a city whose deep social inequalities were laid bare when hurricane Katrina flooded it 3-1/2 years ago. It’s too early to tell, though, whether New Orleans can build an urban economic model to help lead the nation out of its economic doldrums - or will wind up spinning downward on the tail end of the recession.

“New Orleans tends to zag when other cities zig,” says Michael Hecht, president of Greater New Orleans Inc., a regional economic development agency. “We’re zagging pretty good right now.”

“Think of it as the third act of our redemption story,” he adds. The irony “is that while the rest of the country is mired in recession, we have a chance to leapfrog and lead the country out of this economic mess.”

To be sure, New Orleans is far from perfect. It’s still the country’s murder capital, and social inequities and the failure of many poorer residents to return are evident in the weed-choked and snake-infested desert of the Lower Ninth Ward, where nearly 700 people died after Katrina roared ashore on Aug. 29, 2005. At the same time, tens of billions in federal recovery aid, along with state ethics reform and business-friendly tax packages courtesy of Republican Gov. Bobby Jindal, have hastened the city’s progress, some economists say.

The city’s relatively low population compared with that before Katrina has helped keep unemployment low, though the total workforce - 527,000 in the 10-parish greater metro area - still hasn’t reached 1980 levels.

The $14.4 billion federal levee-improvement project, a new $3 billion refinery on the city’s west side, the $500,000 renovation of the Jackson Barracks military base, and a $60 million downtown residential complex called 930 Poydras are all bucking the dreary national total for construction, which is down 13 percent from early 2007. Add to that a key port and a largely recession-proof shipbuilding industry that services mainly the Navy and the energy industry, and it becomes clearer why the city has been able to skirt economic, if not natural, storms.

“Among the places in the US that you can go, [New Orleans] is going to be one where there may be greater opportunities for employment,” says Baton Rouge economist Loren Scott, a veteran tracker of the New Orleans economy.

But entrepreneurs in New Orleans say the real reason the city has outperformed expectations is the human capital that has flowed into the city: a great migration similar to ones that cities like Portland, Ore., saw in the first half of this decade — young, highly educated, and socially conscious risk-takers looking for a “livable city” to make their marks on the world.

Some signs: Tulane and Loyola universities, despite recent hurricane shutdowns, are seeing record enrollments, and the anecdotal evidence is that many graduates, instead of leaving as they often did in the past, are sinking roots.

Two years ago, Fast Company magazine ranked New Orleans as one of the five slowest cities in the world, alongside Budapest. This year, the city had catapulted to become one of the world’s five fastest cities, according to the magazine’s editors. Despite risks of the recession overcoming the state’s gains (in March the metro area lost jobs - 1,100 - for the first time since Katrina), some economists expect Louisiana to have a net gain of 1,300 jobs by the end of the year, at a time when employment has been skidding in cities such as New York, Atlanta, Chicago, and San Francisco.

In late April, two major rating agencies upgraded New Orleans’s municipal bonds to investment grade for the first time since hurricane Katrina hit, citing “the city’s generally improving financial profile.”

Tourism and convention business has shown continued growth, partly based on what locals call the “AIG effect”: a rejection in corporate America of glitzy junkets in favor of “volun-tourism,” where convention attendees can spend a day helping citizens rebuild the city.

That sentiment has also spread to corporate investment in local businesses hoping to sell franchises, such as the all-organic Naked Pizza company.

And aside from Mardi Gras and Jazz Fest - both of which have boomed in the past two years - the city counted 14 neighborhood festivals on a recent April weekend, as this late-night city seems determined to roulez through the recession.

New Orleanian Scott Couvillon, who helps run a new “un-junk mail” marketing service called Dukky, says the city has become “an entrepreneurial petri dish” because of several factors: hands-off regulation, and “empathic” young people looking for opportunity and a “coarse existence” in a place famous for its paucity of social and city services.

In a warehouse in a run-down neighborhood on St. Philip Street, Robbie Vitrano has created a laboratory of his own: Dozens of websites are running here as part of his ad agency’s “venture marketing” effort helping start-ups conquer market share. Young cultural anthropologists and former corporate raiders work in an open, newsroom-style environment, overseen by a “Jolly Louis” flag - a version of the pirates’ skull and crossbones, showing Louis Armstrong against a backdrop of crossed trumpets.

“New Orleans has become a destination for a generation asking: ’What’s next?’ ” says Mr. Vitrano.

Katie Del Guercio left a corporate job in Los Angeles a year ago to find more meaningful work. She volunteered in New Orleans for three months and, after leaving for a trip to Europe and a stay with her family in New Jersey, she made up her mind: New Orleans would be her home.

“The city feels like a college campus for grown-ups trying to make things happen,” says Ms. Del Guercio, a manager with a progressive job-matching service called Koda.

Many city observers aren’t surprised. Errol Laborde, a local bon vivant and editor of New Orleans Magazine, likens the city’s comeback to two other historic milestones: the period right after the Louisiana Purchase and the tail end of Reconstruction, when thousands of people emigrated from the East Coast to find their fortunes in Louisiana.

“We’re seeing a similar combination of new money and a pioneer spirit in New Orleans today,” says Mr. Laborde.

But there are still concerns about the city’s current state of affairs and direction. Housing advocates say that in the process of courting a new workforce - whether college grads from other cities or Hispanic laborers - the city has focused less on helping the displaced and largely African-American population plug into the new jobs dynamic.

And while new apartment complexes are going up with the help of federal and state tax credits, the hardest-hit areas - the Lower Ninth Ward, New Orleans East, and Holy Cross among them - are still struggling to rebuild.

But even on the racial disparity front, there’s some good news: The city’s focus on charter schools is paying off with test scores showing a narrowing racial gap. “There’s a disconnect between the reality of the economy in New Orleans and the wage structure of the jobs it provides,” says New Orleans-based Kalima Rose, a senior associate at PolicyLink, a national advocate for housing equity.

But she’s also optimistic. “I’m thinking we’re going to see over the next four or five years a continued return of neighborhoods and historically displaced people who want to come home but are still trying to organize how to get the resources to do it,” she says.

As far as lessons learned, experts say, New Orleans does give a glimpse into how federal aid - whether recovery money or a major stimulus package - can spark localized growth.

On the other hand, Washington’s current policy trajectory - higher taxes for the rich and added regulation for industry - seems to run counter to the Louisiana experiment, which is largely based on lower corporate taxes and less regulation, especially for entrepreneurial enterprises.

Still, New Orleans can offer at least one glimpse into how to recover from an economic shock: In a word, insouciance, says Richard Sutton, a banker-turned-royal-cheesemonger-turned-New Orleans entrepreneur.

“Historically, New Orleans people don’t necessarily care what the rest of the world thinks or does,” says Mr. Sutton, whose St. James Cheese Co. has grown rapidly since he relocated here from London after Katrina. “People here are really asking: ’What recession?’ ”

27 May 2009

Chinese Drywall -- How Can You Know?

If you are going to have any home "tested" for Chinese Drywall, please use EXTREME caution. We do not allow our Licensed Home Inspectors to "test" for Chinese Drywall. There are simply too many variables and way too much information (some correct and most incorrect) circulating about Chinese Drywall.

Testing can be complicated. The time the drywall was shipped to the home, installation of the drywall product, humidity or moisture in the air currently and the type of repairs needed, can each affect the test results.

An initial, intensive screening (performed by a microbiologist or other qualified personnel) should be undertaken in each room of the house. This screening should include air sampling both inside and outside of the home, including inaccessible areas like inside wall cavities and the attic. It should incoporate visual inspections of corrosion that may confirm a serious condition. It should also include a health profile in order to identify physical reactions by occupants to contaminants inside the house.

Upon completion of the screening, the client should receive a verbal explanation of the results and a copy of the screening report (this document will be critical should any legal claim progress). The client would know at that point whether the home contains contaminants from Chinese Drywall and the extent of the problem, should it exist. If there is a problem, the client should contact an attorney. Based on the level of contamination, the client may consider vacating the property.

If you don't have an attorney, we can recommend one of several local attorneys handling Chinese Drywall litigation. We will recommend that the attorney contact us so that we can discuss the estimated cost to remediate the property versus the cost of the full Chinese Drywall test. This additional testing is required to prove the claim in court. Understand that in order to comply with laboratory requirements in a full test, a 12" x 12" sample of drywall must be taken from each spot at which the compounds were registered. Each sample would be at a prepaid cost to the homeowner of between $1,200 and $1,800 per sample, plus labor. Because the sample size is 12" square, substantial disruption to the house will occur as a result of the testing. We are concerned that gases, previously inside the walls, now have a means of escaping into the home, entering breathing space and potentially complicating health issues.

We are prepared to support our finding in both Federal and State court. Both the President of our company and our Microbiologist are classifed as "expert witnesses" in either court.

Our concern is first and foremost, the client's safety. Please make sure qualified people are performing appropriate tests to determine if a hazard exists. Call us at 504-486-8500 for more information.

Sincerely,

Mit Miller

Office Manager

Gurtler Brothers Consultants